Social Media and the CEO: Does Twitter know more than Henry Ford?

In a recent blog post, Andy Mott brought up some excellent points about silos and skewed compensations plans in marketing departments.

I want to take this idea a step further. If only this were just confined within the marketing (or any) department. An even bigger problem is when different groups within the same company have different incentives that jeopardize your relationship with the customer.

Second only to intellectual property, a company’s most valuable resource is its customers. Not just the new customers we’re constantly chasing, but existing ones as well … especially in the age of social media, when your triumphs and foibles are just a click away from becoming a huge sales generator or PR disaster.

“Any customer can have a car painted any color that he wants so long as it is black.” – Henry Ford

As an experienced business leader, customers = valuable is not a breathtakingly new equation to you. But, why, then, in an era of social media, do so many companies still treat customers the way they did in the early industrial age? In other words, does the mission serve the process, or does the process serve the mission?

Take the airline industry, for example. Customers hate to be nickeled and dimed, yet every major airline does it. They charge fees for checked bags, phone reservations, curbside check-in, and snacks and beverages.

And they have to, right? It’s how they make money. Except … they don’t make money, do they? It is the rare airline that has not been through bankruptcy protection, let alone turned a consistent profit.

That rare airline is Southwest, which charges no fees, yet has been profitable for 37 consecutive years.

Everything is marketing

Those mainline carriers spend millions on advertising, with beautifully shot, heartstrings yanking commercials poetically telling us about how they keep us “United.” But every time someone has to pull out a crisp Andrew Jackson just to get a bag on a plane, how much do you think those ads matter?

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To the savvy CEO, everything is marketing. From the fees charged to customers to the accounting department collecting on a late payment. Because even if you’re not promoting it with slick ads during prime time,  your customers and former customers are doing the promoting for you thanks to social media marketing – Twitter, Facebook, YouTube.

Instead of going through the litany of social media marketing disasters you’ve probably already read about (and will be to future marketing textbooks what the Nova was to our marketing textbooks), let’s seek to answer the question at the root of this challenge – how do your protect the investment you’ve made in your brand by keeping customers happy while continuing to grow that top-line revenue number?

Make it lucrative and make it possible:

  • What gets measured gets done. What gets incented gets done well. – You may say you’re customer-focused, but do your comp plans back you up? From top to bottom, does every MBO (Management by Objectives) document, every incentive plan, every compensation package, every corporate policy put the customer first?

Take a look at the recent financial meltdown. Investment banker compensation was based on fees generated from assembling financial products, not the performance of those products for the customer…

These people contend that Wall Street’s pay structure, in which bonuses are based on short-term profits, encouraged employees to act like gamblers at a casino — and let them collect their winnings while the roulette wheel was still spinning.

Compensation was flawed top to bottom,” said Lucian A. Bebchuk, a professor at Harvard Law School and an expert on compensation. “The whole organization was responding to distorted incentives.”

“On Wall Street, Bonuses, Not Profits, Were Real”, Louise Story, The New York Times

  • If everyone is in marketing, empower everyone like a marketer. – Marketers, at the very least, have tools and (in a best-case scenario) juicy budgets to entice, please, and sell customers. Why should other employees be any different? And, besides, if you’re going to make customer satisfaction part of everyone’s comp plan, you have to make it possible for them to reach that goal.
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The prima example of this is The Ritz-Carlton. This luxury hotelier puts its money where its customer-focused mouth is. Every employee can spend up to $2,000 to make a guest satisfied. That is a corporate policy that puts the customer first with no questions and no doubt and helps employees live up to what is clearly more than just a cleverly worded motto – “We are Ladies and Gentlemen serving Ladies and Gentlemen.”

Yes I know that The Ritz-Carlton is a very high-end luxury hotel that has the margins for this kind of thing. And, while we’re on the subject, yes those robes are particularly fluffy and comfy. But get creative. Anyone can do this on an applicable scale….

  • Do you allow customer service reps to solve problems or do you treat them like a 1980s-era teenager trying to make a long-distance call?
  • Do you give customer-facing employees an opportunity to share customer plaudits and grievances with product marketing, product development, someone somewhere sitting in a corner office?
  • How hard is it for someone in front-line manufacturing or production to stop the process when QA isn’t 100% met?

It’s banal, it’s hackneyed, it’s Businesses 101, and it’s certainly not new to you…however, the best way to protect your marketing investment (and make it thrive) in the age of social media marketing is to remember that the true boss is always the customer.

Related Resources

Holistic Marketing Optimization: What’s more likely to show up on Twitter?

The Compounding ROI of Sequential Conversion Increases: How one company took a small gain and multiplied it tenfold

Social Media Marketing in Four Steps: A methodology to move from sporadic to strategic use based on research with 2,317 B2B and B2C marketers

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7 Comments

  1. Pree says

    Very good writeup. The Ritz-Carlton examples has been used multiple times to encourage business owners to develop better customer service. I feel their system is true and your are right. Their methods can be applied within any scale or model of business.

  2. Scott Monty says

    Hey Daniel,

    You raise some great points here. We’re glad that Ford Motor Company has come a long way since Henry Ford’s time and that we’re committed to not only producing vehicles that are best-in-class in fuel economy, quality and safety, but we’re also working with our dealers on the importance of the customer experience.

    A quick word about that oft-used quote of Henry’s, if I may. That quote only referred to a limited time in the Model T’s history. From 1908-1914, the Tin Lizzie was available in blue, red, green or gray.

    It was only when he instituted the assembly line that he had to reduce the color choices – primarily because the black paint dried the fastest. You see, old Henry was trying to produce as many vehicles as he could in order to satisfy customer demand. So he really did have the customer in mind.

    Now, if you want to do another post on the anti-crowdsourcing screed from one of his other quotes, “If I asked my customers what they wanted, I would have made a faster horse,” that might be a whole other topic. 😉

    Scott Monty
    Global Digital Communications
    Ford Motor Company

    1. Daniel Burstein says

      Thanks for your comment Scott,

      Extremely impressive social media monitoring from Ford. Most companies are having problems just managing impressions of their brand today. You are managing impressions from 100 years ago! Chevy could learn a lot from you.

      So my hats off to you, sir. And thanks for adding some context to the quote.

      Your next blog post idea is something I’ve been noodling with as well, although actually I was thinking more about Steve Jobs and Apple. Your Henry Ford quote points to the fact that there is a fine line between listening to the customer and having the customer tell you what to do, between focusing on the marketplace’s true needs and what customers think they want at a point in time.

      I think testing helps in this situation. You can’t just ask customers what they want, you must also measure their real-world actions.

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