The Ultimate Ad

If Mad Men is to be believed, the difference between a successful brand and a failure is the perfect ad: one witty line, the perfect image; an overall feeling that captures and captivates the target audience and converts them into customers. The world hasn’t changed that much since the Mad Men days (though we’re thankful for somewhat more egalitarian work environments).

Sure, ads evolved from TV and radio spots into online banner ads, automated emails and ads that follow us around the Internet based on our searches and clicks. But in the end, it’s still a company broadcasting a message to prospective customers — one-to-many — and is limited in its effectiveness as consumers’ patience with advertising dwindles.

Social media, both the structured and unstructured kinds exemplified in Yelp and Twitter, respectively, has flipped that world upside down. Major brands have an official presence on these services, but it’s the individuals behind the brands, including executives, spokespeople and even independent-but-enthusiastic fans, who wield the influence. And for small retail and services businesses, perhaps nothing is more influential than a genuine review. Individuals sharing their experiences on the Internet build a many-to-many graph of experiences that’s hugely powerful.

The most powerful thing about user-powered social media is also its biggest gamble: lack of control.

With searches for services moving to the mobile device and becoming more in-the-moment as you are out and about, many transaction decisions are made with a quick view of a business’ star ratings. A single star increase can change the fortunes for a new restaurant, while a scathing indictment can sink a product on Amazon. All of this depends on the authenticity of a review, with the effects amplified further when the reviewer is someone familiar — a friend, neighbor or relatable stranger.

Much has been written about how profoundly social media affects interpersonal interactions. What may be less clear is that the impact of social media on businesses is no less profound. For companies trying to participate in the flow of online conversation, the most powerful thing about user-powered social media is also its biggest gamble: lack of control.

Real-time reacting

Historic attempts to help companies manage their reputations online focused on reducing the impact of negative language, with some risk. Yelp never succeeded in killing the rumor that companies can pay to have bad reviews removed. Services like advertise techniques for deflecting attention from lawsuits and customer complaints, while some networks simply run ads for competitive services alongside bad reviews.

This has turned the term “reputation management” into a bad word, and scared off many businesses from pursuing it as part of their marketing strategy. But to do so completely would be to leave a powerful arrow out of their quiver.

This is the power of the reputation economy, and businesses are trying to adapt sufficiently: Amazon’s vendors actively build up their feedback after selling a product and Yelp instituted vendor-response capabilities as a way to mitigate negative reviews. These can help address issues, but, more importantly, show customers that the vendor is paying attention. If handled well, this might not only save a company’s reputation on a transaction, it can help gain a loyal customer.

But living in the land of Twitter, businesses also need to keep up with what has become rapid-pace consumer feedback; a recent survey found that 42 percent of consumers complaining via social media expect companies to reply within an hour.

As a result, solutions for real-time engagement have emerged in the form of social-media analytics, live-chat customer service and feedback through surveys. Established software companies like Google, IBM and Survey Monkey are highly invested in these areas, and there are a slew of live-chat services to deliver real-time customer service through a website. Furthermore, companies like Seller Labs and Get Satisfaction have developed entire platforms dedicated to managing customer feedback.

Getting ahead of the game

These services aren’t proactive, resulting in a missed opportunity for brands to better connect with consumers. It’s difficult for businesses to attract and retain customers amidst the noise created by competitors. Even big brands with hundreds of branches struggle to market in a hyper-local way, with unique messages that will resonate in each geography.

What’s emerging now is a philosophy on more enterprising engagement. Instead of waiting to react to negative consumer feedback, companies can use services to engage customers before they hit “Tweet” or “Write a review.”

If you catch a bad experience quickly, you have a better chance of correcting things and making a customer happy.

These platforms learn about customers, connecting with them directly both during and after a transaction, then requesting feedback. In building empathy with someone there is perhaps no tool more potent than a genuine request for feedback. Sophisticated alerts and monitoring help businesses act on negative feedback quickly and directly, increasing trust.

Companies like Medallia aggregate analytics and real-time response services, creating hubs of customer service monitoring. Our most recent investment, BirdEye, adds yet another layer. In addition to centralizing tools, it amplifies positive, local and relatable messages rather than camouflaging bad reviews. When a customer has a positive response, BirdEye syndicates it where possible, or creates case studies, referenceable stories or marketable content. This helps others in the same locale hear about the great experience their neighbors had, and showcases the businesses that care deeply about their customers.

In this way, you are monitoring and managing a customer’s experience as it happens in real time rather than after the fact. If you catch a bad experience quickly, you have a better chance of correcting things and making a customer happy. More importantly, if your customer is having a good experience, the platform encourages them to tell others about it at the right moments in the interaction cycle.

This brings us back to Mad Men. Media empires are built on access to vast quantities of ears and eyeballs — even the social web monetizes by showing promoted messages and content alongside our baby pictures and emails. Authentic reviews and other customer-generated content will dramatically outperform “produced” advertising.

This approach could eventually overcome the broadcast-oriented, one-to-many default of traditional marketing — picking up along the way the vast distribution of major media channels, but with a more genuine and relatable message. Every customer interaction then becomes either a chance to learn and improve, or a ringing endorsement. And that’s something more useful than any copywritten ad could ever be.