Corporate Britain joins the social network

Companies are becoming more tuned into the potential of social networking. But can they make it pay? Nick Clark reports

As well as answering questions about how to get hold of clutch bags and the availability of loafers in size seven, the Facebook page of clothing store Next is dealing with an unhappy customer.

Kirsty's order turned up missing two pairs of navy shorts, and she is not very happy – but within the hour the issue had been resolved without anyone needing to pick up the phone or send an email.

Companies are increasingly hitching themselves to social networking sites like Facebook, whose users are now upwards of 750 million, and Twitter, which has 175 million.

"Everyone knows that Facebook is one of the most popular websites on the internet," says Dan Cryan, ananalyst with Screen Digest. "In simple marketing terms it is good practice to be where your audience is."

According to statistics from market research group Nielsen, 90 per cent of internet users value the opinions of their friends, while 70 per cent trust the opinion of strangers posting online, giving companies an incentive to publicise new products through social networks. Yet, they are no longer simple marketing tools.

"Companies are increasingly taking social networks seriously," says Joshua March, co-founder and chief executive of Conversocial. "Many are plugging their call centres into Facebook and Twitter."

However, as they invest in what marketers call "building engagement" a new study shows that companies have to tread carefully to avoid blunders. The report, drawn up by Conversocial, a company that provides companies with social media management, tracks how well the top retailers in the UK use Facebook to engage with customers – and it includes some surprising results.

The study tracked the level of customer service among the top 10 "liked" companies on Facebook. Topshop is the most followed retailer in the UK with 1.3 million fans on the social network, with River Island in second place at 902,000.

But with all the free advertising comes the complaints. "Companies need to be on constant damage control duty," warns Conversocial. "If you do not challenge or resolve public condemnations of your brand, these opinions could sway current or prospective customers against you".

It is surprising then that the two retailers with the most fans were among the worst in the top 10 at dealing with customer queries and complaints, with Topshop taking on average close to eight hours to respond and River Island taking even longer.

Worse, at the bottom of the top 10 on this test is an online retailer. Amazon, Conversocial found, just did not bother responding at all. Its fan page is full of marketing and not much else. Amazon did not respond torequests for comment from The Independent yesterday either.

"On some pages we found large numbers of queries and complaints that were left unanswered. During our week of investigation, Amazon did not reply to a single query, even though they were regularly putting out marketing messages," thereport says.

Mr March thinks the study shows companies need to change the way they deal with customers using social networking sites. Many have only just begun to realise the importance of responding if the company has set up a Facebook page or Twitter account.

"The complaints are now completely public for anyone who clicks on the page, as are the company'sresponses," Mr March warns. "What started as a marketing tool has quickly emerged as a two-way conversation."

Even for companies that are quick to respond, Conversocial points to the logistical difficulties of "isolating questions and complaints from huge volumes of less critical comments".

River Island, for example, moved to prevent complaints from becoming visible by disabling its wall. But then customers posted complaints under its marketing updates instead.

Still, the move by companies to use social networking as a customer service channel is a recent one that has yet to be fine-tuned. Somecompanies are beginning to bring in dedicated staff with social media training.

Mr March adds: "Some companies are really putting serious resources to this: if a company can show a page full of happy customers that is a great marketing tool – less so if it's the opposite."

There have been some attempts to measure the success of socialnetwork campaigns: Starbucks says engagement on Facebook boosted UK sales of its Christmas drinks by 15 per cent last year.

Yet, at the moment companies are mainly in the dark about how much return they receive from social networking. More than half of them are "unsure" of the returns, according to the World Federation of Advertisers.

That hasn't stopped companies experimenting with different uses for Facebook and Twitter. "Anecdotally, we hear that Facebook is being used for customer engagement, while Twitter is seen as a broadcast medium for getting messages out there," says Mr Cryan. Google+ is yet to be opened up to company pages.

Few companies are using Facebook as a fully-fledged sales channel yet. But some have experimented with setting up "f-commerce" stores on Facebook, including ASOS in the UK. Procter & Gamble and Levi's have also tested the water.

"These have had pretty low take-up so far," Mr March comments. "In general there are huge possibilities for social commerce by pulling in social data and recommendations into e-commerce sites, but just sticking an e-commerce store into Facebook doesn't really add value to customers," he points out.

Groupon's drive onto Facebook and Twitter

One business depending on social networking to drive sales more than any other is Groupon, the discount vouchers company launched in the US and now growing rapidly in Britain. Rebecca O'Sullivan, social media manager for Groupon UK & Ireland, explains.

"It is essential as it is intrinsic to the whole business model. As many of our deals only stay on the site for 24 hours, they need to be marketed quickly and customers need answers to their questions instantly. Social media tools are the perfect vehicle for this.

"We have over 40 Facebook pages and 40 Twitter accounts – representing the cities we work in – and we also have a blog.

"There are eight people in the social media team, in a number of roles including planners, blog editors, executives, analysts, designers, developers and social media customer service representatives. This is a sales channel that can reach people who may have missed our newsletters or have not had the chance to look at the site on a given day.

"It is also crucial for engagement – creating a dialogue with customers while a deal is active. Many people who are interested in buying a deal may have questions about it – and we can answer these questions quickly through social media. It can also get people talking and excited about the deals, as we often post them with questions attached, encouraging customers to participate.

"Social networking services are also very important for customer relationships. Often, questions about a deal fall into certain categories common to acertain deal.

"Social media hence allows us to effectively address the concerns ofseveral customers all together – saving both us and them a lot of time."