Halfords vs Wiggle – the difference between a social brand and a social business
What is it about being a social business that has contributed to online bike retailer, Wiggle’s, healthy increase in revenue of 37% in 2012 in comparison to competitive giant Halfords’ growth of only 8.2%?
Halfords IS a social brand; it commands a healthy presence across five social platforms with a large following on Facebook and Twitter. As a brand it is active on these platforms and engages with its following, and customer service queries are responded to.
However, Halfords is NOT a social business. Halfords fails to communicate with its consumers in ways that increase the brand’s reach, encourage engagement or raise awareness. In social typically this means number of fans, interactions and platforms, but translate this into social business measurement and these metrics become attributed to financial growth.
So how is it that being a social business can be attributed to revenue and brand value?
When it comes to business, being social is not simply about social media although media can sometimes be the mirror to your internal practices. To be a social business is to have a business that internally sings to the same tune by means of ordered and structured communication. The measurement of which can be aligned to business results that are tangible and result in brand value growth.
Compare the two brands’ activity and presence on social platforms and the online newcomer Wiggle visibly performs better than Halfords. Compare again, the revenue of both brands from 2011 – 2012 and Wiggle has increased revenue 28.8% more in 2012 than Halfords. Measure this to the comparative operational profit difference of 1.7% in favour of Wiggle and consider that Wiggle was founded in 1999 (Halfords was established in 1892) and it is possible to align the increase in social growth to Wiggle’s increase in brand value.
Here’s how being a social business ensured Wiggle such financial success and growth in 2012:
1. Better knowledge sharing – Outcome: efficient resolution of customer queries. Wiggle is able to deal with customer enquiries and customer service issues directly in social media. The resolution of customer issues is streamlined, as there is access to answers and service operators are accountable at customer-facing level. Comparatively Halfords customers frequently complain of unresolved issues both in store and online. Answers are clearly difficult to come by and as such employees are unable to be efficiently responsive.
2. More connected employees – Outcome: rapid customer service issue resolution. Infrastructure that allows for all areas of the business to communicate internally creates an environment for problem solving and dissolves any silos that may occur due to a lack of information. The result of which is an increase in problem solving and the efficient resolution of customer service issues. Once your staff are activated, their ability to provide a more genuine service will become transparent. Wiggle communicates quickly with direct messages to resolve consumer issues and responds to Facebook comments within the hour. Halfords directs enquiries to an external email address and their response time averages at 12.3 hours with an inconsistent range of response times anywhere between 12 minutes and 49 hours.
3. Increased innovation – Action: agile product and services evolution. Employees empowered by communication are more likely to invest their energy within their work. By opening up the floor to all levels of collaboration there is an opportunity to multiply the skillset of your employees and the possibility for a brand to evolve together, which ultimately means business actions informed by the people that know it best from shop floor to the board room.
4. Improved brand reputation – Action: activation of brand advocates internally and externally. Wiggle is known for their customer service, and highly regarded for how efficiently the process of purchase to delivery is carried out. This is demonstrated online, and reinforced by the increase in revenue for 2012. The transparency and swift response of customer issues demonstrates a business that reacts to customer needs, by meeting customer expectations. Halfords often fails to resolve issues online. This breaks down the transparent and visible communication between consumer and brand. The result of which is that expectations fail to be met and brand reputation is altered before consumers even enter the store.
5. Lower operating costs – Action: shared resource and increased productivity. Streamlining communication internally and externally via knowledge sharing, problem solving and innovation adds up to the cutting of costs accumulated by inefficiency. Demonstrated by Wiggle which has reported a higher operational profit of 10.62% in 2012, 1.7% higher than Halfords.
6. Deeper customer relationships – Action: consumer/brand collaboration. Both brands post on their Facebook page approximately at the same rate, however, Wiggle’s posts command on average of 184.8 more likes per wall posts than Halfords. In qualitative terms the comparison is just as transparent. Halfords customer responses are prescriptive, almost automated in nature and fail to resolve customer issues. Wiggle responds rapidly and often resolves consumer problems on the page. Content is themed and follows a general tone of voice which is inline with the brand, there is a more personal approach to communication and often the page interacts with related content that is not ‘strictly business’, in other words Wiggle collaborates with the audience by means of shared communication where Halfords broadcasts with little engagement.
Internal activation of social business builds a better understanding from employee to customer from the bottom up and informs the brand’s internal practices: what products are working, what parts of the customer journey are failing, where are there hurdles that can be simply remedied, it exposes the large pool of available intelligence and enables brands to activate these new avenues collaboratively.
Once the social barriers of a large organisation’s communication are tackled there is an opportunity to activate your own employees to resolve issues autonomously, to create new structures and work with consumers to build a new relationship that lives up to consumer expectations. The result of which is financial gain as demonstrated by the majority of the Top100 brandz who have all adopted agile reactive social business practices in order to guarantee growth within the challenging economic climate that is the reality of the future.
Laura Dinneen, head of strategy at BLOOM Worldwide