Social Media Companies Disappoint Investors, with One Exception


When social media companies first went public, they were popular and seemed like a good bet to many investors. Indeed, some pundits called it a social media gold rush. Investors expected the companies to disrupt advertising and media to the tune of billions of dollars.

But in the last year, almost every single social media stock has fallen. Twitter stock rose 7% when co-founder Jack Dorsey was named CEO earlier this week, according to a USA Today article by Matt Krantz.  Twitter went public on Nov. 7, 2013 and shares closed at $ 44.90 apiece. But the share price has fallen 39% since then.

Yelp’s shares have fallen “a crushing 70% over the past two years,” writes Kratz. “Analysts are calling for Yelp’s adjusted profit to fall 35% this fiscal year to 43 cents a share.”

Linked in is down 16% in the last year. Kratz notes that social media stocks are fairing worse than the market as a whole. Indeed, Linkedin has fallen “four times as much as the 4% decline in the broader Standard & Poor’s 500.”

The one social media company that has grown in value on Wall Street is Facebook. “Shares of the giant are up an impressive 20% this year, which make it a standout not just among social media but the broad market,” writes Kratz. Facebook shares were traded for $ 94.01 on Monday and they have almost doubled since their first public offering. “Adjusted profit is expected to jump 17% this year at Facebook,” writes Kratz.

Why are social media stock prices falling? “The performances illustrate the way investors are questioning whether social media companies can keep their growth rates vigorous enough to justify their valuations,” writes Vindu Goel and Mike Isaac in the New York Times. “The stocks of all three companies [LinkedIn, Twitter and Yelp] had traded at relatively high levels, reflecting Wall Street’s giddy projections. Yet all three shattered that perception in their own way. And while many of these stocks are often volatile, with investors on edge about the weak economy, interest rates and other issues, shareholders increasingly have little tolerance for the slightest misstep.”

And why is Facebook fairing so well? “Facebook continues to pull away from competitors by adding users to its main social networking site, as well as its Instagram photo-sharing app and WhatsApp messaging service. The company also is making money off newer lines of business, like video advertising,” writes Goel and Isaac.

image by shutterstock

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How To Disappoint Customers on Social Media: A Cautionary Twitter Tale


It all started with just one tweet.

I had read an interesting article on Barclays Kenya‘s refocused customer experience efforts. So naturally, I pulled up Twitter and fired off a tweet at the bank, curious to know what their customer experience efforts were behind the scenes.

Love your customer focus, @Barclays_Kenya.

A few hours later, I got a reply from the bank, thanking me for the shout-out. And that’s when things got hairy.

A customer jumped on it.

@PeopleMetrics what customer focus? @Barclays_Kenya have not responded to my tweet for days. I have banked with them since 2000.

An actively disengaged customer running wild on Twitter. This person is never going to refer Barclays Kenya to his friends and family and he may actively encourage his network to avoid the bank at all costs.

I checked the bank’s Twitter page and saw that they had responded to his request, only after he called them out on it.  Unfortunately, his issue was complex and he remained dissatisfied with the resolution being offered through the social media platform he had chosen to use.

The result was a customer that was so starved for attention that he reached out to a complete stranger to help get it fixed.  When a customer is engaging with people outside of your company to get something done, alarm bells should be sounding.   Why did this happen and what could the bank have done to avoid the situation?

Customer Experience Banking Service Twitter Example

The bank’s Twitter bio positions itself as a channel for dealing with customer service issues.

So naturally this customer was unhappy when he didn’t receive a response without his prompting. His tweet fell through the cracks. But why? Because the brand was sponsoring a sporting event and those managing the Twitter feed were busy promoting that event. They were posting photos, scores, and facts – all well done, but they were failing to listen and respond to their customers while the energy and focus was targeted at promotions and brand building.

@PeopleMetrics @Barclays_Kenya my issue is still unresolved. I guess it will take time for me to get Internet banking. I will wait. 6 days?

Best Practice: Consider setting up two separate social accounts – one for dedicated customer service and one for brand building.

On Twitter, you can only send direct messages (a non-public message) to users that are following you.

This is especially useful when someone needs to give out some secure information, such as a phone number or an account number.

But, you can only communicate privately if you are both following each other.

The customer was following the bank’s Twitter – but they weren’t following him back. This failure to reciprocate meant he could not send information directly to the bank. He also directly called out this issue on Twitter.

@PeopleMetrics @Barclays_Kenya it took 6 days and your tweet. I can’t even DM them because they are not following their customers. Focus?

Best Practice: Ensure those managing your Twitter account know to follow customers immediately so that they can engage with them privately and thus receive the information they need to solve their problem more quickly.

Five days later, I asked him if his problem had been resolved. He said no – and that they hadn’t even called him yet, even though he had sent them a direct message with his phone number.

@PeopleMetrics not yet. @Barclays_Kenya have not yet called despite having DM’d my number. Customer focus!

For shame!

After all of this hullabaloo on their social media source, you would think the squeaky wheel would have gotten the oil.  But no, they still haven’t fixed his problem.

Best Practice: Prioritize following up with customers who are shouting out loud in the social world.  Jump on it quick, finish the job, and check in with them to ensure their satisfaction.   When issues are complex, talk to your customers – a conversation with a real human can go a long way to making that customer feel cared for.

We all have stories where engaging with a brand on social media has helped to turn a negative experience into a positive, memorable event – a story we tell with pride to others.

But success for these brands depends on much more than simply setting up their Twitter handle and inviting people to ‘tweet us’. The moral of the story is that a social channel without a strategy is worse than no social channel at all.  Define the purpose, set your response standards, train your customer service reps and establish metrics before you open yourself up to the masses.

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