Mktg 746 - Vince Carr

1. Managing Feedback in Social Media
Professor Brey
Vince Carr
2/13/2012

2. General Overview
In recent years, it has become apparent to any company that strives to be successful; they must engage
their commerce in social media. With that, there also comes the huge responsibly of managing
feedback in the social arena from a business perspective. What steps does a company need to take to
be an effective player in the social commerce to maintain its sustainability without getting burned?
Here the author will explore the background of social commerce, how to maintain sustainability using
social commerce and what steps a company needs to consider when stepping into this complicated
maze. A few examples of this can be reflected in different manners in which two businessesrecently
handled negative feedback through social media. The first examples is a small business owner of a Bed
& Breakfast in Woodland Park, CO and the second example is relates to the fast food restaurant chain
McDonalds. The article will expound an example with an interviewee, the impact of on the business
landscape, potential future changes to the trend and what is needed to maintain a competitive
advantage in the social media environment.
History of Trend
The history of social media as described by Online Schools can be tracked back over 30 years ago, when
the first email was sent in 1971. In 1978, BBS (Bulletin Board Systems) exchanged data over phone lines
with other users. Also in that same year, the first copies of early browsers were distributed through
USENET, and early online bulletin board. In 1994, one of the webs first social networking sites GEOSITES
is founded. The concept allows for users to create their own websites. The first chance users were able
to personalize their own online experiences occurred in 1995, through a website called THEGLOBE.COM.
On this website the users were able to publish their own content while interacting with others with
similar interest. Instant messaging was popularized by AOL in 1997. In 2002, FRIENDSTER is launched
pioneering the online connection of real-world friend; it had 3 million users in its first 3 months of
operation, followed by MYSPACE in 2003. Facebook is launched in 2004 as way of connecting college
students, with more than half of the Harvard College students signing up in the first month. The most
recent feature added to social media was the introduction of Twitter in 2006. Although social media
may have started slowly in the 1970s, it has certainly seen with most significant changes in the last 10
years. These trends have driven the opportunity for consumers to socialize their experiences with
products and brands in ways that have a direct and immediate impact on a business.
Impacts Occurring Due to this Trend
As the history above reflects, social media has a significant impact on the way consumers communicate
on daily basis. The reach of social commerce impacts any company that does business, both internally
and externally. Along with engaging in social media comes the issue of reputation. Here are some basic
facts about the impact of social media on companies as described by Bonfire Social Media. Before
purchasing goods, 70% of consumers consult a review before purchasing a good or service. Traffic on
the top 10 review sites has grown 158% in the last year. When a purchase was made, 97% of those
consumers did so because they found the reviews to be accurate. Before a purchase is made 51% of
consumers use the internet in as part of their decision making process. The information found on the

3. internet is determined to be 92% more confident than what the consumer could get from a sales clerk
or other source. Online consumers trust the recommendations from people they know by 90%, versus
not knowing those folks. The average consumer mentions specific brands over 90 times a week in
conversations with family, friends and co-workers. Thirty-four percent of consumers have turned to
social media to air their feelings about a company, while 26% express dissatisfaction, 23% will share a
company or products they like. Given these statistics, can see the importance of managing and
monitoring what is being said about a company or a product.
To be a sustainable company in the modern world of social commerce and social media, companies
must have a very strong understanding of how to approach business in these venues. Erik Linask
explains in his article titled “Making Sense of Social Media,” the process companies need to follow to be
prepared for doing business in through social media and social commerce. He explains how a lot of
companies just start a Facebook and/or Twitter page, but do not really do much more than that. Social
media leaves a lot of vulnerability to a company’s brand, product or services offered. To have a social
media presence, he recommends taking three preliminary steps. One, companies need to know what is
being said both positive and negative both internally and externally. The second step is to take this
feedback to determine what the current state of the company’s perception by its consumers. The third
step is to building“awareness” to the conversations that are already taking place. Without taking these
initial preliminary steps, a company cannot truly determine the scope of their opportunities.
The second phase of Linask’s recommendation to be successful in the social media environment is to
take the information derived from the preliminary steps and to create a business strategy around social
media. This strategy will revolve around what is beings said, who is saying it, where it is being said and
how they are saying it. These will become the drivers of a social media strategy for any business. Linask
also stresses the importance of collecting and utilizing data from social media. This data can be the used
for business intelligence moving forward when evaluating an existing strategy and what tweaks need for
continued success.
Case Example #1
The first case example revolves the owner of a small business called Pikes Peak Paradise. The business
has been in operation since January of 2007 in Woodland Park, CO. The owner, Mr. Ron Pijutof this Bed
& Breakfast, has became painfully aware of the importance of having a website for his B&B and well as
creating a Facebook page for his business. He has even taken a few classes on social media and how to
get his business out on the web. Along with the website, Mr. Pijut has also joined numerous website
and internet services such as Google to ensure his business shows up on initial searches for his B&B. At
one site in particular, TripAdvisor.com, his B&B has a Four-Star rating (out of five stars). However that
rating was impacted and brought down to a Two-Star rating due to one negative comment by an
international guest he had last fall. The small business owner was not prepared on how to handle the
negative feedback, and therefore had a difficult time recovering from this negative feedback.
Case Example #2

4. The second case study reflects the recent story put out the Associated Press published on February 12,
2012 by the major US fast food restaurant chain McDonalds, where a poorly designed radio commercial
was aired. The commercial said “eating a Chicken McBite was less risky than petting stray pit bull,
shaving your head, naming your son Sue or giving friends your Facebook password.” The ad was only
aired for a few days in the Kansas City market before the company started getting significant blowback.
A campaign against the ad was quickly circulated on social media sites. A Facebook page was quickly
developed called “Pit Bulls Against McDonald” which quickly received 8,200 “likes” on the page. On the
other hand McDonalds was prepared for such an incident as was able quell the negative impact much
quicker than Mr. Pijut’s negative feedback.
Organization Perception – Overview
In each of the above examples, the process was handled much differently. With regard to Pikes Peak
Paradise, the owner was caught off guard and ill prepared to deal with the negative feedback he
received from one customer. McDonalds has a systematic process in place for addressing these type of
negative publicity. McDonald’s process was used to calm the situation as quickly as possible.
Organizational Perception – Case Example 1
The Bed & Breakfast owner was caught off guard by this negative feedback and spent many hours
talking with the website Tripadvisor.com where the negative comments were listed. Mr. Pijut wrote a
rebuttal to the negative comments, and wrote a letter of apology to the customer offering a few free
nights stay if this customer was to give him a second change. In additional, the owner requested some
of his other customers to please provide honest testimonials of their experience when they stayed at
Pike’s Peak Paradise to increase the positive recommendations and reduce the significance from the one
very negative posting. These approaches did increase his star rating back to a “Four-Star,” however took
a significant amount of time and effort, which took away from dealing with the day-to-day operations of
running a B&B.
Organizational Perception – Case Example 2
McDonalds on the other hand, having a very advanced social media strategy and action plan in place
was able to quickly blunt the severity of the results of running a poorly designed radio ad. As soon as
the negative response occurred on social media sites, the company immediately started posting
apologies to the sites where people were expressing outrage. In addition McDonalds provided a well
publicized toll-free phone number for outraged customers to hear a pre-recorded apology. McDonalds
response was immediate and unambiguous and apologetic. The Animal Rescue League of Iowa is
commented as saying “I am pleased that they pulled the ad after their customers spoke out about it.
Not all companies listen so closely to their customers, so I appreciate what they did and so quickly.”
McDonalds was to reduce this negative image and keep the situation from ballooning out of control.

5. Direct Application to Case #1
As with Case Example #1, a similar instance could occur with the small business owner of his or her own
restaurant. If the owner develops a website for the business, reflecting the location, menu, specials,
however does not prepare for customers who have a bad experience at their venue; this could have
significant impact on the business and the bottom line. A struggling new business, such as a restaurant,
depends heavily on positive reviews and positive press. If the small restaurant does not incorporate
resources to monitor feedback, have a strategy in place to respond effectively and efficiently when and
if negative press occurs, than they may find themselves out of business.
Direct Application to Case #2
With the second case example provide addressing the McDonalds radio ad; this same process plays out
by most major corporations who have a well established strategy when dealing with negative publicity
when dealing with social media. This same strategy can be applied in the services industry such as an
express carrier like Federal Express or UPS. In the case of FedEx, a courier is seen throwing a Dell PC
monitor over a fence, rather than carefully handling the shipment. The video went viral on YouTube and
because FedEx has a structure in place to address these types of negative social media events, the
company was able to put out a statement apologizing for such behavior quickly via social media.
According to an article in The Guardian, more companies are using Facebook, Twitter, YouTube and
blogs to promote their goods. Along with that, more companies are taking a more serious to having
detailed and sustainable operations to monitor and run these social media outlets. From a year ago,
only 120 major companies were involved in social media that number has now jumped to 250 major
companies a year later.
Interviewee Results
In determining the impact of how not to manage social media in a social commerce environment, the
author chose to interview the owner of Pikes Peak Paradise. In this interview, the author spoke to Ron
Pijut, who was able to explain in detail how his lack of preparedness, how it caused him to be flat-footed
and required him to spend an exurbanite amount of time and stress trying to put out the first caused by
one very negative comment. As mentioned, the owner is a paying member of tripadvisor.com, where
perspective and existing customers are able to review or write comments about his B&B. As a member,
Mr. Pijut is able to write detailed responses to any comment, negative or positive. The owner was asked
about increasing his footprint on social media, which would include revising the current webpage;
starting a Twitter account, possibly creating a blog page and allowing the booking process to go online.
Because of the work that was required to rectify the one negative comment, Mr. Pijut is very
apprehensive about increasing his business through social media content. Mr. Pijut does not believe he
has the resources to manage the level of involvement required. The owners does believe increasing the
social media content will increase business, but believes the cost/benefit must be balanced out with
hiring a third-party social media consulting firm.

6. How Business Landscape Impacts Trend
Having a strong grasp on doing business via social media is critical to the success of such a venture. Is it
important for business owners who chose to go the social media route to have a structured plan of
action should they need to react to negative feedback. Just having a Facebook, Twitter, Blog or
membership through various consumer websites is not enough, there must be a plan to react quickly
and assertively when action is required. As consumers turn more and more to social media to express
themselves on products and services, businesses need to be prepared for increased social media
interactions.
Consumer Segments Specifically Impacted
All business that chose to do business via social media or even for those who do not, still can be
impacted by the growing trend of consumers using social media to discuss a product, service or
company. It is the trend of the future and companies must be prepared and accept the importance of
know how this media can impact their business or products. The drive to continue use social media
forward is only going to continue to grow as people become savvier with social media as a medium to
communicate. Additionally, the younger generation is almost well nuanced in the social media/social
commerce, sobusinesses need to accept they need to be one stop ahead.
Potential Future Changes in the Trend
For companies to stay ahead of this social media / social commerce trend, they must focus on the
recommendations of professionals in the marketplace. As Erik Linask discusses in his article, finding out
what customers are saying about a company or product is the first question that must be asked. He
explains the importance of knowing where it’s being said, what’s being and how it’s being said.
Evaluating these initial points is critical to devising a strategy that works for the business both internal
and external to the social media atmosphere. Linask also stresses the importance of having the right
people to monitor the social commerce aspects of the business. Just as it is important to properly train
a salesperson before selling a company’s goods, it is equally important to have experts manage and
monitor the social commerce operation of any business. Having experts on the front line of the social
media curve is critical to future of this trend.
What is Needed to Maintain Competitive Advantage
Along with devising the right strategy, companies also need to prepare for the future of social media /
social commerce. This can be done through data mining the information that is being posted on various
sites concerning the company, its brand and/or services. By evaluating the data that is out there,
companies will be better prepared to adjust current strategies and provide the goods and services
customers are looking for. This way, companies can work on a more proactive business model than a
reactive business model.

7. References
Linask, Erik. Making Sense of Social Media.TechZone 360.30Jan12.
http://www.techzone360.com/topics/techzone/articles/2012/01/30/261062-making-sense-
social-media.htm 12Feb12.
Manning, Sue. McDonald Bitten by Advertisment.Greenbay Press Gazette.12Feb12.
http://www.greenbaypressgazette.com/article/20120212/GPG04/202120600/McDonald-s-
bitten-by-advertisement 12Feb12.
OnLineRepuation Management: Managing Negative Social Media Review. 08Sept11. Bonfire Social
Media. http://bonfiresocialmedia.com/online-reputation-management-managing-negative-
social-media-reviews/ 12Feb12.
Pijut, Ron. Personal communication.12Feb12.
The History of Social Media.Online Schools.http://www.onlineschools.org/blog/history-of-social-
networking/ 12Feb12.
Yeomans, Mathew. The Sustainable Blog – Communicating Sustainability via Social Media has Become
Mainstream. 08Feb12. http://www.guardian.co.uk/sustainable-business/blog 12Feb12.

8. Bio Page:
Ron Pijut is the single owner of Pikes Peak Paradise in Woodland Park, CO. He has been in business
since January 2007. Prior to starting his own business, Mr. Pijut worked and lived in St. Louis, MO when
he worked at various roles within Union Pacific Railroad from 1990 to 2004 as a team leader. Mr. Pijut
graduated from University of Missouri, with bachelor’s degree Business Administration with a focus in
Marketing in 1989. Mr. Pijut is also president of the Bed and Breakfast Innkeepers of Colorado from
2010 through 2012. The business website is called: pikespeakparadise.com or
http://www.facebook.com/pages/Pikes-Peak-Paradise-Bed-and-Breakfast/57969443069