Wednesday, May 16, 2012

How Social Media Saved the Day for Hyatt Hotels

By Ruth Han @han_ruth

Companies are setting up Facebook and Twitter accounts to latch onto the social media trend and engage their customers, hoping it will transfer into incremental revenue.  However, as case studies have shown, many companies are unprepared for the various unexpected events that could occur on social media; for example the ChapStick Facebook fiasco.  You can read about it here if you are unfamiliar with it.

Similar event happened to Hyatt 18 months ago, but took a very different turn.  The story started with a customer finding a leftover box of Mexican food gone bad in his fridge upon checking in.  The customer responded by taking a picture of the leftover and tweeting it to @HyattConcierge, and headed out to dinner.  Within a few hours (when the customer was in the middle of his appetizer), he received a phone call apologizing for the mishap, and offered him a free breakfast for two.  He was further greeted with a bottle of wine and a hand-written card upon returning to his room.  The experience has turned the customer into a customer for life to Hyatt, and also provided positive publicity for the hotel.

While the ChapStick case may be seen as a warning to all marketers, the Hyatt case study showed how companies can use the social media to detect problems in the early stage and resolve it before it snowballs into a larger fiasco.  The lesson?  BE PREPARED when launching social media!  Without proper guidelines and company infrastructure set up to deal with customer’s various voices online, your company could be treading on thin ice, without knowing when the next social media fiasco will strike.

Here are some actions your company can take to ensure you’re covered for the danger of social media:

1. Set guidelines: Have a clear guideline for all employees, from frontline to back office, to follow.  What do they do when customer complains about your product?  Should they escalate the complaint to their manager, or can they resolve it firsthand?  What’s the time frame each complaint should be handled and responded to?  These guideline forms the foundation for your company in the face of unexpected event.

2. Be prepared for potential failure: Always be prepared for unexpected happenings online.  Any action taken by the company may result in a backlash from your customers.  Draw out a list of possible reactions from your customers before taking actions, and be sure your team is ready for them.

3. Mean it when you apologize: No matter how prepared your company is, there will always be some time when you make a mistake.  In those events, be sincere and apologize to your customers in a way that shows you care about their opinions.  Dancing around the mistake and offering a half-hearted apology won’t get you anywhere (as seen in ChapStick’s case).

In a nutshell, while social media can open up tremendous opportunities through interacting with customers, marketer should also be aware of the flip side of the new channel.  Whether your company scores high or falls flat in the next social media crisis depends on how prepared you are in the field.

Further reading: I recommend Managing the Unexpected: Resilient Performance in an Age of Uncertainty, a book we recently studied as a part of the Integrated Marketing Communications curriculum.  This book goes into depth to show how companies can follow the “Five HRO Principals” and strive under the impact of unexpected events.

Ruth Han is a graduate student in the Northwestern Medill IMC marketing program and specializes in social media strategic planning and data analytics. Ruth will be graduating in December 2012.  Ruth can be reached through twitter @han_ruth.

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