[Lee Joo-hee] Love affair of a business

Social media has created a world of its own, not just in the social realm but also in commerce.

Scrolling through the Instagram app, for instance, at least one out of 10 Instagrammers are so-called “star Instagrammers,” having gained popularity by sharing everything from their food and clothes to basically their lives via carefully composed photos with captions bordering on bravado.

Their followers indulge in vicarious satisfaction, even forging comradery among themselves for their shared interest and admiration.

With such a sturdy pool of followers, many of these stars are also seen utilizing their influence to promote products, either from company sponsors or those they have developed.

While some choose to maintain a tight pool, some others have gone onto reap profits that compare well to established mid-sized firms.

Unique to these commoner-turned-SNS celebrity-turned-entrepreneurs is that their sales platforms are simple. Their responses are real time via comments, direct messages and live broadcasts, all the while remaining approachable to their target audience by continuing to share their life stories.

It is the prototypical example of customer relationship marketing that every other bigger company has striven to achieve through the years by applying every known strategy related to advertisements, customer service and rewards programs.

Creating brand loyalty by forming a relationship with customers is the ultimate goal of a business, as not only does it guarantee return customers, but it also creates the grapevine effect, with them referring the service or product to their friends, family and colleagues.

Securing a relationship with the customer is also pivotal in establishing a long-term vision by learning the patterns of the target market. Even late Steve Jobs, co-founder of Apple, had said, “Get closer than ever to your customers. So close that you tell them what they need well before they realize it themselves.”

Numerous studies have researched the power of relationship marketing.

Renowned marketing professors Jagdish N. Sheth and Atul Parvatiyar of Emory University have stated that consumers engage in relational market behavior because they want to simplify their buying and consuming tasks. Through it, they want to simplify information processing, reduce perceived risks and maintain cognitive consistency and a state of psychological comfort, they said.

This theory can be supported by other notions that people tend to create emotional bonds with brands and therefore become loyal when their needs are met, as explained by many that cite Maslow’s Hierarchy of Needs. People seek the benefits of self-actualization at the top of the pyramid, when their other basic needs such as physiological needs, safety, love, belonging and self-esteem are met.

But tapping into such customer emotions as an established business entity is no easy task, as people -- aware of the firms’ fundamentally commercial motivations -- are naturally disinclined and judgmental.

A company may just be wanting to learn more about them (collect consumer data), but the abundant number of marketing calls, suggestion pop-ups on their platforms and routine service check-ups end up frustrating customers.

And even when, or if, the company succeeds in winning the hearts of the customers, the close relationship has the reverse effects as well.

Recently, the Instagram community was buzzing with a controversy surrounding one of its stars. Her merchandise had been flying off the shelves, until a few negative reviews regarding one of the products blew up into an on-line chastisement of the seller’s motives and even her lavish lifestyle. These once-faithful followers believed she owed what she had achieved to them.

The real-time after-sales service system that had helped catapult the business to success boomeranged, as the comments section was filled with one hateful comment after another.

After several weeks, the seller did manage to bounce back, braced by the unwavering pool of other loyal followers, but mostly due to what she later commented was her conviction in the quality of her items.

After all, relationships may be fluid, but a product is tangible.

Larger businesses, domestic and foreign alike, operating in Korea or anywhere else may face a similar irony, in that through their years of customer relationship, demands for their social responsibility and serviceability sometimes override their original purpose.

Entrepreneur Anthony K. Tjan has pointed out in his Harvard Business Review post that many businesses spread services and resources so evenly across their customer base and that this enables the “least desirable customer to use a disproportional amount of sales, marketing and customer service resources.” He advised that companies actually weed out such customers, and dare to go against the norm that “the customer is always right.”

More companies are now expanding on their customer relationship marketing to adopt data-driven marketing.

Born from the customer relationship management software, DDM automates the analyses and even actions for the optimal media, messages and audiences based on the development (and hence more cost-efficient) quality and quantity of marketing data. It is facilitated through revenue, CRM, data, web and solutions such as Google Analytics.

In short, with the advances of marketing and advertisement-related technologies, companies are now moving to identify “real” customers, keep them closer and, well, stop wasting time and money on others.

Samsung is one such firm, with its advertisement affiliate Cheil Worldwide recently launching Cheil DnA Center, short for Data & Analytics, dedicated to DDM.

The love affair between a business and a consumer will be never-ending. If we are to remain engaged, knowing what to expect will help keep it healthy.


By Lee Joo-hee

Lee Joo-hee is the business editor at The Korea Herald. She can be reached at jhl@heraldcorp.com. -- Ed.