EXPANDED SOCIAL CIRCLES

Because of social networking, Yoder says that customers are no longer just relying on information from a company or an agent advisor to form opinions on a brand or product.

Rao adds that in insurance transactions, consumers have always had a relationship of trust with agents.

“But what we see happening with social-networking groups is that consumers hear from each other—not in a physical presence, but a virtual presence,” he says.

Feedback via word-of-mouth is no longer limited to the experiences of a close circle of friends and family. That circle has expanded through social networking so that “friends” now include consumers around the country.

And, as Rao says, “You trust your friends and family far more than anyone else—even if these friendships exist only online.”

Yoder explains, “People have always looked to those they know [to form opinions on a company]; the evolution today is clearly that the boundaries of where that information comes from and the depth of the connection—and the information that one can gather from the networks—has changed dramatically and has a greater affect on how the customers experience their interaction with companies and each other—and how advisors also experience that interaction with the carriers.”

Since customers are making purchasing decisions based on the experiences of a wider circle of fellow consumers, Yoder says companies have to look at how they facilitate each interaction and focus on delivering a positive experience for customers. Further, he says companies must understand the customer experience as a whole, “even in places [where the company] may not be.”

Rao says, “If something bad happens to a consumer, in the earlier days [the consumer] would probably just tell a few of the folks that they meet, whereas now, today, they can just broadcast it and it can be picked up by various people—and before you know it, in a 24-hour timeframe, your company brand could be tarnished substantially.”

Companies, says Rao, should monitor sites through which consumers communicate so that when something negative happens, the company can respond immediately and have a genuine response. If it’s the company’s fault, Rao says, the company should accept fault and try to neutralize the problem.

“What companies often tend to do,” he says, “is they go through the whole chain of command.” He notes that the process can take 24 to 48 hours—and in Internet time, that may already be too late to repair any damage that has been done to the brand.

GOOD NEWS CAN TRAVEL JUST AS FAST AS BAD

But it is not only bad news that gets amplified on the Internet. Yoder says the presentation will not only discuss the expanded scope of interactions between companies and consumers in the age of social networking, but will advise on how to drive a positive response on the social networks.

“What are the attributes you’re trying to promote to the market?” Yoder asks. He explains that companies can measure if they are establishing those sentiments in the segments they are targeting, and also can raise awareness and position by leveraging social media and networking.

Consumers can even help amplify companies’ efforts through blogging and sites like Facebook, Rao adds. For example, each person who becomes a “fan” on an insurance company’s Facebook page might induce dozens of his friends to check out the site and become fans—and future clients—in turn.