Your mission is to turn spies into special agents

  • “To catch a thief, it takes a thief” find out why from an ex-hacker, here
  • Find out how brands should deal with online and social problems in our Q&A with Eric Roach chief executive at XYDO, here
  • Discover the attributes of a customer-obsessed company, here
  • “Consumers are much more likely to listen to a message from each other in social media terms than they are from a brand” says Mumsnet co-founder, read more here
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Have you come across “hacktivists”? If you aren’t already tackling them, beware. The chances are that they are already watching you. With brands like Sony, Marks & Spencer and Travelodge all experiencing security breaches over the past few months, “consumer espionage” is causing alarm in the corporate world.

Consumers unhappy with companies’ behaviour, services or policies are ready to publicly damage their brands. Just this week Fox News saw its Twitter account taken over to broadcast false news. In April, Sony’s PlayStation Network and Qriocity services came under attack, leading the brand to warn 77 million PlayStation gamers that the security of their personal and financial information was at risk. In May, Sony’s database was hacked a second time, leaving 25 million consumers vulnerable and costing the business an estimated £100m.

Former hacker Gregory Evans, now a security analyst at Nationalcybersecurity.com, warns: “Hacking into a system is no different to somebody sitting down and playing on their Nintendo Wii or Sony PlayStation. They’re doing it just because they can.”

Consumer espionage falls into two categories. The first involves hacking or virtual attacks on companies. Hacker groups such as LulzSec and Anonymous collectives have been attacking businesses online in order to embarrass them, steal consumer data or bring classified information into the public domain (See A Hacker’s View, below).

On the “softer” side of consumer espionage, the technique is manifesting itself as acute public analysis or outright criticism of a brand’s behaviour, products or services on the likes of Twitter and Facebook, dedicated websites such as ihateryanair.org or online communities such as Mumsnet.

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The viral nature of the online world ensures that negative attitudes travel fast and can spread to millions of people around the world.

Mumsnet is one example where consumer power has seen the website and its users wield great influence on the brands serving its demographic. The Mumsnet parents post their own product reviews and throw their weight behind campaigns. They even influence political policy with their feelings about brands, such as the site’s push for the government’s recently published Bailey Report on the commercialisation of childhood.

Mumsnet co-founder Carrie Longton says that consumer-facing companies now need to collaborate far more with their target audience in the marketing and production of their products and services. This is to ensure they don’t fall prey to consumer espionage and avoid any nasty backlash from their target audience (See Viewpoint, below).

It is not just the large number of consumers that Mumsnet reaches, it is the fact the site reaches a high number of influencers. These individuals, who tend to be very sociable and vocal, have the passion and ability to influence the opinion of countless others. One way of countering consumer espionage is to identify online influencers and develop close relationships with them.

By encouraging brand advocacy, businesses can avoid the spread of negative comments and instead enjoy a wealth of positive endorsements.

Brands should identify who these influencers are within their markets and how they behave. Research by media agency MEC highlights the importance of one such group. The study talked to 130 young “Femail Creators” from around the world – 16- to 24-year-old women who create social content such as blogs, tweets, video uploads or regular forum posts. Femail Creators actively try to drive conversations on the social web and are three times as likely as other women their age to try to influence people by changing their opinions.

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The study found that 56% of 16- to 24-year-old women online are Creators, compared with 43% of all women online. It also found that their behaviour is much like brand behaviour – a passion for creativity, selling their ideas to others, a constant output of new content and a desire to engage and broaden their audience.

In some categories, such as technology, entertainment, fashion or health and beauty, these Creators are among the most influential sources of information and advice for others. Sixty per cent have posted their opinions about products and services during the past month; 53% do so to make sure other consumers pick good products. They actively try to change brand behaviour with 52% posting their opinions to get companies to improve their performance.

It isn’t just women who are using social networks as soapboxes to make their opinions about brands known. When traditional media were gagged from naming the subjects of the recent gaggle of super-injunctions taken out by high profile celebrities to block the reporting of their private lives, ordinary people revealed their identities on Twitter.

An account named @injunctionsuper tweeted the details of six injunctions. The tweets gave details of cases relating to footballers, actors and TV presenters and were subsequently retweeted by hundreds of Twitter users making a mockery of the so-called super-injunctions.

As users retweeted the details, the hashtag #superinjunction started to trend, ensuring that tens of thousands of Twitter users would be alerted to the account and able to read the details of the legal cases.

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Social media channels can aid consumer espionage or breed brand advocates, depending on what consumers reveal about you on the sites. Eric Roach, the founder of news-based social network XYDO, believes that ensuring advocacy is all about listening to your consumer.

“Today is the golden age of the consumer and they want to be heard,” he says. “Because of the transparency of the online world, consumers can post complaints as well as compliments. Social media can play a key role in managing a company’s reputation. It allows marketers and customer service reps to listen and interact” (See Q&A, below).

The rise of consumer espionage has led many brands to move the views of their customers into the heart of their company’s strategy. Forrester Research recently published a report entitled Competitive Strategy in the Age of the Customer. The study looks at how empowered customers are disrupting every industry, how that now matters more than any other strategic imperative and how successful companies will now need to be customer-obsessed in order to have the edge on competitors.

Luca Paderni, vice-president principal analyst of the marketing and strategy group at Forrester Research, explains: “Consumers can now be considered on the same level as the brand. This has been slowly happening over the last five years. The real ’eureka’ moment came two or three years ago when we saw social media starting to take over.

“People had the opportunity to raise their opinions and saw that they were not alone in them. Consumers started to build a consensus. The fact that you have peers who think the same way as you about a brand raises the profile of the consumer vis-à-vis the brand.”

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Paderni argues that although brands claim to be customer centric, most people inside these organisations focus on internal processes and goals instead of really trying to understand who their customer is (See The attributes of a customer-obsessed company, below).

“With the advent of digital technologies, the only hope for brands is to master customer data,” believes Paderni. “You need to understand that your only competitive advantage is going to be a very in-depth understanding of customer groups, down to the single customer that interacts with you.”

Companies such as Dell, Intel and Gatorade have all created social listening centres to track real-time insights about their brands because, according to the report, being obsessed means tracking customer needs that change by the moment, based on trends, competitors’ moves and word of mouth. Social chatter is the early warning system for disruptive change.

Simon Shipley, communications strategy manager at Intel EMEA, agrees: “We made a very important strategic decision several years ago where we agreed that we didn’t just want to be active in social media, but we wanted to be considered a leader in the industry.

Having a ’social listening centre’ is very important as it allows us to develop an informed marketing strategy to help bring our brand to life.”

Shipley explains that its centre informs the company about what customers are saying but also on the right tone and style of speech to use when talking about the brand. “This can help our search engine optimisation and search engine marketing strategy by supplying relevant keywords or meta-tags for us to use.”

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The centre also provides Intel with a tool to manage listening in a consistent fashion around the world. “This allows us to achieve a comparative level between our different markets,” says Shipley. “This helps assess global programmes, their impact and fan engagement all the way through to crisis management.”

Manish Mehta, vice-president of social media and community at Dell, adds that his brand’s social media listening command centre “makes customer conversations across the web visible as they happen and highlights their power”. And he claims: “This has persuaded executives throughout the organisation to place a great emphasis on listening to customers.”

Forrester’s Competitive Strategy in the Age of the Customer report claims that these types of strategies will be ever more important in the future. Whether consumers choose to use “hard” methods like hacking to expose corporate flaws or “soft” techniques to undermine brand messages through social media, those businesses not responding to this environment will flounder.

“The risk is that brands will have less and less people in the customer base who are going to be loyal to them,” warns Forrester’s Paderni.

And even worse, says former hacker Evans. “It’s this small group of people saying ’let’s do this’, no matter what the cause. They don’t like anything – and they feel they have the power to shut things down.”

With so many people out to get brands, they need to ensure that whatever their consumer critics find, they react to this in the right manner. In this way, spies can be turned into advocates.

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A hacker’s view

“To catch a thief, it takes a thief,” says former hacker Gregory Evans, now a security analyst at Nationalcybersecurity.com. “The problem with big corporations is that they have no real security people working for them – they have IT managers.

“All these companies hire these guys with fancy degrees, who have never hacked a system before. Ryan Cleary, who was recently charged with a string of hacking attacks, is 19 years old and comes from Essex. He doesn’t have a degree. So why was he able to hack into some of the biggest corporations in the world?

“Sony went online and it got hacked. It then got shut down for weeks. It came back online and it got shut down again. The reason is that it used IT managers to design its network and when it got shut down, it used IT managers to bring its network back up and hackers were able to shut it down again.”

Evans believes that the recent string of corporate hacking from groups such as Lulz Security (LulzSec) which has targeted high-profile corporations and government agencies, means that brands need to get tough dealing with consumers breaching their operations.

The LulzSec group is a splinter group from Anonymous, a larger and more politically motivated collective that first surfaced in 2008. Anonymous gained mainstream notoriety last year when it hit companies including PayPal, Visa, Amazon and Mastercard in revenge for cutting off payments to the WikiLeaks website.

“Top priority is to steal and leak any classified government information, including email spools and documentation. Prime targets are banks and other high-ranking establishments. If they try to censor our progress, we will obliterate the censor with cannonfire anointed with lizard blood,” said a statement from the shadowy group.

“They call themselves ’hacktivists’ and say they’re trying to be whistleblowers, hacking in to show companies that their security is weak, or to steal information to show to the public. They’re not. This is an excuse for these people to hack,” claims Evans.

If brands don’t take action by getting hackers on their side immediately, says Evans, then consumer espionage will be a growing problem. “IT managers are like army personnel. And hackers are more like Navy Seals or Special Forces. They don’t need a big team. Use five good hackers and they can do the damage of 1000 people.”

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Q&A

Eric Roach, chief executive, XYDO

Marketing Week (MW): How can brands best protect themselves from consumer espionage online?

Eric Roach (ER): When a complaint arises, companies should immediately address that concern and turn a disgruntled customer into a company advocate. Online conversations will happen about your brand whether you participate or not.

MW: How can brands best avoid a backlash by consumers in the social media space concerning their behaviour or policies?

ER: When interacting in the social media space, it’s important for companies to be transparent and authentic. Nothing will upset the online world quicker than an organisation that comes across as disingenuous.

If a company is being criticised in the social media space, then the best strategy is to admit fault, reveal the steps that are being taken to fix the problem, listen and interact as much as possible.

Companies should also consider consulting with their online constituents prior to large announcements or new product launches. After all, active online customers can serve as a “free focus group” that can help brands avoid potential pitfalls.

MW: How should brands handle consumer espionage in the social media space?

ER: A brand’s social media representative should interact and address concerns as much as possible. However, if a customer is acting irrationally and abusively within an online setting, it’s often best to ignore those comments and move on to more sincere questions and concerns being raised.

MW: Is consumer espionage in the online space particularly dangerous because of its ability to spread news fast and worldwide?

ER: If a brand is attacked on any media platform, then it can be quite damaging. However, online attacks can be particularly dangerous as they’re often not moderated or fact-checked and are solely opinion-based. The viral nature of these attacks can extend the life of a negative story.

Brands can’t afford to not spend time becoming familiar with their audience. It makes sense that if you are going to sell a product or service, you need to understand those who will one day purchase or use it.

MW: Which brands find it hardest to deal with consumer criticism of their behaviour online?

ER: Those that are heavily regulated by the government or which risk potential litigation as a result of what would be considered transparent communication. For example, a healthcare or insurance provider can’t directly comment on a customer’s complaint about their treatment without, in some cases, risking a violation of legal restrictions.

MW: Do you expect this to change as brands become more familiar with online platforms?

ER: Many brands in various industries are realising the impact social media has on their business. As this realisation increases and more social media tools become available, companies will become much savvier in managing and protecting their brand image in online settings.

The attributes of a customer-obsessed company

1. Be nimble, emphasising speed over strength

Customer-obsessed companies embrace management structures that permit rapid pursuit of customers in new markets and new channels. Rather than defend turf, companies following these strategies continually seek ways to pivot the business to gain new opportunities.

After all, speed matters. When Toyota responded slowly to the charges of defects in its accelerator pedals, automotive site Edmunds.com found that consumer intent to purchase the company’s products fell by almost 50%.

2. Be flexible, valuing versatility over lock-in

Lock-in mechanisms, such as mobile phone contracts, proprietary technology and frequent flier programmes, don’t create loyalty, they just create barriers to leaving. Customer-obsessed companies worry more about being flexible to meet customer needs and less about ways to block their users from fleeing.

3. Be global, embracing worldwide supplies, demands and markets

Your current and emerging competitors are finding new markets. They’re obsessing about how to tap the 800 million new middle-class customers that Goldman Sachs predicts will rise in Brazil, Russia, India and China and are ready to make substantial brand investments in multiple categories. These forces undermine companies that concentrate on sourcing and selling from a home-country perspective only.

4. Be smart, providing information-rich services over dumb products or transactions

The new consumer uses channels – especially mobile – to seek information everywhere, instantly. They scan the barcodes in your store and know your competitors’ prices; they get a flash message when his favourite band is spotted in town.

If you’re customer-obsessed, then your every product and service needs a halo of quickly updated information in the cloud, as well as apps and pages to deliver it in a customised way to smart devices.

Source: Competitive Strategy in the Age of the Customer (Forrester, June 2011)

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Viewpoint

Carrie Longton, co-founder, Mumsnet

Brands no longer carry out 80% of brand communication. Nowadays, if you find something good or bad, you tell the world. That’s social media for you. Everyone tells everybody everything, all the time.

Certainly in social media, there’s got to be a lot more authenticity and more transparency. In one click, you can be on a company’s website and you can find out all about it.

People also care about the ethics of a company and what they’re doing. We’ve got a whole Family Friendly Programme, which companies are signing up to, that concerns not just their external face, but what’s happening internally, what their policies are.

Those on Mumsnet are curious and want to know what’s going on with brands. Some people say: “Oh Mumsnet, they are quite clever and savvy” and it can be quite scary, but equally it’s very powerful. You get those early adopters on your side and they will do your marketing for you.

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While we can still have relatively traditional advertising about whether a particular washing powder works or not, people want to know and experience that for themselves. They’re not going to necessarily just listen to companies telling them stuff.

Consumers are much more likely to listen to a message from each other in social media terms than they are from a brand.

We have a Mumsnet panel of 2,500 members. We recently helped Innocent drinks with the product and packaging of their Kids Juicy Drink. You’re so much more likely to tell people about it and buy it if you’ve been involved with the creation and the marketing too.

You’ve got to see all criticism as an opportunity. This is the TripAdvisor generation. They are used to criticism online. And if it’s sorted out, that miserable experience will become a positive one.

It’s the same on Mumsnet. Someone comes along and says to an electrical goods brand: “That vacuum cleaner’s button is in the wrong place, it will drive people nuts.” The company says: “Crikey, thanks so much, that’s such useful feedback. Would you like to come down and talk to our engineers? They’d love to hear from you. We’re really sorry you felt that way, perhaps we could do this/that.” Suddenly, the fact that someone’s engaged with you and listened to what you’ve said could turn a bad experience into a good one.

But if you’ve got a product that isn’t very good, that isn’t value for money, that isn’t good quality and you’re trying to get a cheap and quick endorsement, it isn’t going to work.

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