Hotel Resort Fees: Sales, Deception and Short-Term Gains at the Expense of Reputation

Posted on April 29, 2012 by teds

I’ve written about the negative association of nickel and diming on brand experience and loyalty but there’s a related topic that’s becoming more common and drives me nuts: resort fees.

It seems that, to keep rates looking low and win eyeballs on third party travel sites, hotels from Vegas to Disneyland are adding in mandatory fees presented on arrival which cover the obvious and not necessarily the used (I’ve seen them for gyms, pools, etc) with no choice but to agree.

Deception exists when perceptions are not set.

It’s bad enough when you have to pay for the obvious (how many people want WiFi versus in-room coffee) but when something is mandated upfront, it must be in the buy box, the sub-total — right in front of the customer. Sticking it in the fine print of a corporate is about as transparent as making it up at the time of check-in.

The implications to brand & the bottom line are no small addon.

Gaming the customer can return a short-term gain but we must consider the long-term result that follows our experience and the reputation it creases.
Price may lead the buying process but 5 full or empty stars sit right next to it and the impact shows. I don’t have hard numbers but inline comments from TripAdvisor, Yelp, Expedia, and even Hotel sites paint a clear picture of how, after a resort fee enters the equation, negatives go up, perception of value goes down. That game causes the equation to shift.

This is not just true of hotels either. Any time a customer is forced into something after the fact — whether its required component to an electronics device not put in the box, an unexpected servicing need, or whatever, it’s going to leave a bad taste to the customer and give them a reason to cry out to the world that is always listening.

As comments shift from accolades and experiences to tips and warnings, the very issue which the resort fees are mean to skirt (pricing perception) becomes the focus as people become that much more aware, and comparison focused as they fight to understand the true (all-in) value being offered.

Social must be a part of the entire corporate culture.

While social is often caught up in the Facebook/ Twitter/ Google+ channels, it is really the buzz word that sums up focusing on reputation both as the spread of knowledge and the reality of immediate experience.

By thinking “social” outside of marketing it it’s possible to see beyond a single channel… A resort fee augments revenue and tricks sales today, but businesses to not survive on today alone thus what happens to experience, reputation, social must be just as important to sales and ops as it is to a marketing team. Companies cannot survive working in isolation.

When people are surprised by a forced cost it trumps everything else… Even if the value remains great.

The best way to target your ads is to ask the viewer.

Posted on April 9, 2012 by teds

I decided to plan a trip to Yosemite last night (excited!). After picking out new gear from REI I happened to pull up VEVO to scan the music video community. Ironically almost every pre-roll spot I had was Carnival Cruises’s “Land vs Sea” series which shows a middle aged couple fussing around trying to camp and then a vacation later, relaxing on a cruise ship. If you saw the purchases I made that night you’d get why I said it was ironic — my goal is to be exactly the opposite of what the ads were showing: I go outdoors to practically get lost, a pool day and easy dinner is great at times, but not an alternative to what I had booked.

This brings us to how advertising currently works.

First off I had switched devices using a service with no login so there was almost no way Carnival could have known I was looking at camping gear to either target towards me or away from me.

Second in their buy the frequency cap was obviously high enough that I kept seeing their spots. Since the creative changed frequently I’ll assume this was intended but it upped the effect.

Third advertising has become so network driven that companies often have no idea where their spot even is. I’m not entirely sure Carnival ever intended to target hard rock and pop video audiences with this ad or at all.

The big point here is that my preferences had no opportunity to make it to Carnival. Carnival does a good job engaging in social platforms but advertising (not just theirs) remains almost entirely one way and let’s face it, VEVO does not (and should not) put my camping affinity as the #1 insight to understand.

Privacy has always been cited as the block for getting smart with ads but that’s because we want everything to be done behind the scenes in a stealthy, “we tracked you and you didn’t know it” way.

One ad in to my viewing I would have gladly told Carnival to reach someone else just as I do all the time on Facebook ads with the little [x]. It’s not that they were dead wrong in reaching me, that’s going to happen, it’s that it kept happening. The same is true with TV. How many ads do you see that are totally irrelevant ans yet repetitive (and I’m not talking getting that blanket awareness effect for Coke Zero, I’m talking vocational schools when you have a PhD)? Lots and your chance to tell them? Zero. What’s the mighty “ROI” for those advertisers? Probably also near zero.

I’ve been to Brazil and the Bahamas in the last 12 months, much as we want our message to be a hit on the first impression and to figure out exactly who to reach to get the best response that’s not always possible — sometimes we don’t know who we’re reaching and sometimes who we’re reaching is not who wants our service right now.

But once we do show up the feedback loop works to tell us what to do next yet it’s not being used. We’ve got 3 variations of TVs on the market, a new type of media player every day but where’s the remote with the “no thanks” button? It’s time to build a dialogue into advertising, not to share the ad, not buy from the ad, but to make sure it’s the right ad.

If you’re sorry to see a customer go, don’t tell them it using a script.

Posted on March 6, 2012 by teds

This morning I got a call from a subscription based service I’ve used off and on over the past few years and recently cancelled with. The called opened as telemarketers so often do with a quick intro and an immediate before-you-can-say-hello lead into his pitch… But then the rep said something which just struck me wrong: we’re sorry to have lost your business. Right before he started into the next line of the script.

Now let’s step back and look at the other side of the picture: Just about every major brand has caught on to the idea of “engagement”, everyone wants to “have a conversation”, to “be authentic” and “get connected”. But authenticity remains a tactic relegated to a channel; it’s still social media vs marketing vs retention vs business.

This company already had a dialogue with me on Facebook that was actually pretty useful — they responded quickly, other customers even chimed in some agreeing and some suggesting that I had the wrong expectation, awesome [note: social to CRM still = huge opportunity ]. But why would they then call me and read a script to try and jam an offer down my throat?

It’s not that we should abandon every sales technique to simple have a casual chat with people but rather that we have to really accept that we’re making this shift in social channels because people have changed. No one cares if their interaction is via a Facebook post, a tweet, a cashier at the retail store or the retention team, in every case the expectation for what we as marketers call transparency is the same. Good business is good business.

So when we talk about bring social to the entire organization it doesn’t just mean get everyone a Twitter account. It’s about looking at the transformation in consumer expectations that’s happening and addressing that across the entire company because it impacts the entire process.

Had this rep opened with the same intro but asked me why I left I probably would have told him. Had he been given flexibility by his supervisors and autonomy to decide how to respond to my answer – to see if I was right to upsell now or simply file a note for later instead of being tasked with trying to close everyone no matter what into a reactivation his brand could have built goodwill and been the subject of this post in an inverse context.

Reputation isn’t made on a social network; it’s built by the product, by the service, by the value of the entire chain. Improving perception, getting reviews, driving sharing and all those related benefits that so desperately want from social means taking a social approach far outside the marketing cubes… otherwise we just fall flat on our face: one channel on its own is not change.

Social starts at the ground level: Changing how we approach “experience”

Posted on January 25, 2012 by teds

This week while at a big box retailer I overhear a store manager telling her assistant manager to “not call backup unless it was absolutely overwhelmed and necessary”, talk about a way to approach customer experience. For the manager this is the everyday challenge: use as few people as possible to cover a myriad of activities all while the lights are on and customers are walking in. At the same time hundreds of miles away at corporate, that same retailer has a growing team dedicated to bringing the brand’s positive value to light through social channels – two track that simply don’t line up.

The approach, and the comment aren’t unique this one retailer or retail at all but rather it’s just one example of the growing gap that exists between how companies operate at the point of interaction and the growing focus on customer experience in corporate.

As this discussion was taking place I could see the lines growing… and yet employees were visibly scampering around to other parts of the store, backrooms, and out the frontdoor for their current task. Some consumers waited and filed the experience away into their own head while others likely chatted about the long waits to whoever they were with on the spot or when they got home and then of course there are the few people who pulled out their smartphone and shared it with the world right then and there. But no matter how they acted, no matter what the, tickets / cashier or any other store KPI may have been, the perception of the store was impacted.

Just about every company has or is in the process of creating a team tasked with building reputation and yet these teams are often kept away from the process where impressions are actually made, left trying to leverage the good outcomes and mitigate the bad ones. For stores, call centers, even web teams, the focus is often on the same metrics they’ve known for years: items per basket, cashier efficiency, upsell dollars – drive the bottom line. It’s not the two sides are at odds with each other, it’s simply how they look at the world – social attacks experience to drive results while stores look at results to determine what to do in experience.

When the idea of social business first started to catch, we could only see as far as our team – how do we in corporate marketing get more people talking, how do we drive more reviews – agencies did this, brands did this, I did this, well did this – it was, at the time, the right way to go. But now we know better, we know that while we may say “social”, we don’t mean what happens at Facebook or Twitter, we mean what happens at the store, with the returns call center, during the tradeshow that creates the experience which will make it to Facebook.

So when we talk about bringing “social” to the entire company it doesn’t just [just] mean get everyone on Twitter to respond to questions, it’s about changing the culture, the metrics, the very way we do business. We have to think about what’s going to make our reputation against what we want out of our business – is our price point low enough to really be able to get away with long lines? Is our service really what we think it is?

Social should start in corporate, it should be managed by a team, defined and run as a part of everyday operations but that’s not where it ends.

Customers form their opinions at every interaction point and the impact of each positive or negative is huge – even if it’s never put out with a public comment that the corporate team can see. This requires a complete shift; we can’t assign reputation to a small team and leave those on the floor who actually make it ignorant of the realities of the market. To improve reviews, shares, likes – social, we have to improve the experience first.

Stop the addons, the nickel & dime fees… Price “all-in” for your bottom line & your reputation

Posted on December 13, 2011 by teds

Free Shipping: just about every retailer has it and many marketing tests have shown that even if you reduce the total price of an order by a couple bucks, people still go with the site that doesn’t have that specific line-item or even up their basket to get to the free threshold. Shipping is an afterthought, a line, a fee and like all fees we as shoppers feel like its being snuck in on us. People hate fees. Yet as ecommerce find overwhelming success in removing one fee, we seem to be adding new ones all over the place in an attempt to keep our base price looking low. All for what?

The best way to increase your profits or your loyalty is not to make your customers worry about the next addon fee: doing that merely drives them to check the other guys and blog, tweet and bash everyone every over every dime. There’s a reason why people are using the shopping cart and then leaving it so frequently (71%): they have to get that far just to know the actual costs.

The implication of nickel and diming is direct to the bottom line when someone passes by and less obvious with implications to brand reputation, loyalty and repeat business.

One could argue that we as consumer are as much to blame for fees as sellers are: after all we’ve bought into and encourage price wars through our hyper-comparative shopping and we will go to extreme lengths to save what amounts to pennies [like a Starbucks run to prep for a long line at Costco for gas]. But consumers been frustrated with the fee system for years now and more and more brands are turning this into a major win:

- Southwest airlines: A favorite for many regional and infrequent travelers and even though they’re considered a low cost carrier, the truth is they’re often not the cheapest but they’ve baked in costs that others charge averaging the impact out and turning burdens like lugging a bag into a positive which lets them run more efficiently.

- Washington Mutual [now Chase]: Granted WaMu’s mortgage arm didn’t do so well but remember how fast people, especially students and those living paycheck to paycheck, moved over when they announce no fee checking? Everyone copied it and when BofA tried to buck the trend with a Debit card fee this year, it cost them the homepage of CNN.

- Disneyland: Tell someone the price of a ticket and there’s a moment of shock but compare it to other theme parks and its clear what is Disney is doing. Yes, you can buy a meal or a tshirt and even charge for a few fair style games now but they don’t charge you for rides or fast passes, they’ll let you bring in lunch and you can come and go as you please while their competitors take a smaller upfront cost and then hit your wallet all day long.

- Amazon: Sure their base price is at the bottom of the list to start with but that’s the point: their base price is their price for almost every customer. There’s no shipping, there’s no electronic waste fee – it’s all baked in… I’m mighty interested to see what they do when they end up with tax in the majority of states; last I checked it was just 6.

All these brands share a common attribute: they’re popular.

It shouldn’t surprise us that the businesses which buck the trends to cater consumer’s perceptions do well. Hardcore shoppers, the really frequent fliers, the uber geeks, they all find the actual cost differences and stir up the pot here and there but most people aren’t looking to dive that deep.

So while so many businesses focus on how to out feature, out upgrade, out message, they’re missing the simple point that people want to feel like they got their money’s worth and that’s as much about the how the bill looks and what the social stigma of the brand is as the actual price they paid.

“I love Black Friday!” Dissecting the motivation beyond the shopping phenomena

Posted on November 25, 2011 by teds

It’s somewhere between midnight and sunrise and as I pause my Black Friday research for another caffeine break [after more than a dozen destinations spanning two malls and three counties, there’s been a number of those], I’ve found myself asking one question: what is it that has propelled Black Friday to reach almost as much notoriety as the holiday it follows?

What it is that makes people line up 6, 12 even 24 hours in advance? Is it the deal? Being able to claim first in line?

Certainly price has always had a lot to do with it and even more so in this economy as evidenced by the degree of the deals being offered and the scrutiny they’re getting. But only a few get the $199 doorbuster TVs while hundreds more wait in line knowing they’ll be picking at far smaller deals – there has to be more. At the end of the day we’re talking about sacrificing personal comfort, a traditional Thanksgiving dinner [or at least a long conversation after it] for something that can often be matched online and savings that amount to just a few dozen dollars on items that are hardly necessities.

Great Deals + Sharing = The Black Friday Experience

If we put aside our brand / marketing hats for just a minute, pull out the social science degrees so many of us spent years working on, and put ourselves in the shoes of consumers I think we can see that the success of Black Friday it boils down to our social nature. No doubt the deal is essential but looking at the person to your right and left and realizing that you all share the same goal changes things from a deal into an experience, something you don’t have to quantify the measurable ROI from and are willing to do not just once but year after year. Add in the exclusivity — whether it’s a limited count doorbuster or making a “sacrifice” to just be there and it’s not surprising that many people find the whole event to be, well, fun. Seeing how Black Friday checkins, social comments and posts have grown even faster than the lines is certainly a testament to our desire to participate with others about what really amounts to nothing more than shopping.

As I talked with people tonight and heard their excitement, even saw a few faces walk out the store after hours of waiting without a purchase or disappointed look, there’s no doubt that for businesses to thrive in this market means going beyond the price war and building on the sense of adventure, chance … of the Black Friday experience. In the race for the customer, the bottom price is not where you want to try and make your stand and yet without offering anything but a deal, its where so many have ended up to the point that 30% off no longer feels special.

As Black Friday Becomes an Event, Success Will Depend on More than Price

But this year with the big transition towards 12am openings, I saw new ideas being tested out there. Best Buy ran movies at select locations; Food Trucks were called in by malls, and straight giveaways like free water are becoming more and more common. It’s personal too: I watched security guards and store employees spend hours outside chatting and standing alongside the crowd when they could have just as easily remained inside their warm stores. All of these actions speak to the link between our customers and our brands – you can call it an incentive, a hook, but the result is that its building community and giving people a sense brands are relatable.

As we see more consumers take part in this communal shopping event, more stores will get into the early openings and offers will increase making it even more important to be seen in the right light, to be more than just a place looking to take people’s money but instead offering up a little empathy, some excitement and perhaps soon a free cup of coffee in exchange for 12 hours of someone’s time.

Of course 8 hours in line are quickly forgotten as the doors open and people rush as fast as they can “walk” towards that big offer – but as I watch people filtering out of this store and back to their cars, it’s clear that the experience is as much a part of their excitement as the savings that exist at 3:30am.

Service: It goes a long way… how AT&T kept my iPhone 4s business by being honest

Posted on October 7, 2011 by teds

A little background….

6 months after getting the iPhone 4 I took it rock climbing and put a nice big crack in the front. Everything worked but needless to say I’ve been counting down the days until the new version was announced… 5, 4s, 2011… As much as I wanted the curved design, the features were almost irrelevant.

But while my upgrade decision has been stable, my carrier choice, not so much… Not [just] for the usual AT&T complaints but because half of my new apartment flat out doesn’t get a bar of service. So, while my contract may not be up, it seemed worth the termination fee to make a jump.

And then came an [unexpected] great customer service moment

After reading tweets from @DannySullivan and some “unknown” friends, I prepared for a battle on the phone, to push through a wall of counter arguments from one of AT&T’s “resolution specialists” [seriously, that’s their I.V.R. greeting] and all the usual drama you expect when calling a company. My experience has always been that these “service” battles actually make it easier to cancel out of sheer frustration, but none the less, it’s a painful experience to know you’re walking into.

But after a few minutes on hold and giving out all of my personal information again the rep didn’t fight me. Instead he merely asked what the issue was and when I explained the lack of signal coverage, he apologized. Rather than going into a pitch, he then told me the cancelation cost [$325 - $10 / month of service was $175 for me] and how to cancel to insure a smooth transition of my number, how to get a hold of AT&T after the change for any issues, etc. Only as he was finishing up did he finally throw in a “I realize this won’t fix your signal issues but if you want to stay I can offer you a small credit off your bill, if not…”

Attitude. That’s what good service is about.

The rep offering me $75 wasn’t a deal breaker; heck that’s well less than a month of service between my minutes, texting and data + tethering package. Verizon’s service doesn’t work great here either [why there’s poor coverage in a “upscale” apartment community with 750+ units is beyond me] but between their trade-in programs, a better service reputation, and just being a different experience I was willing to jump ship despite the added cost until the rep, and thus AT&T, demonstrated commitment to me as a customer. Sadly commitment has become a rare thing these days.

The rep did everything other than what I expected. He was polite and legitimately apologetic. He provided the information I wanted first, an offer last. And when I took him up on it, he made the process seamless, taking the order, getting the right information, providing the little details [like the fact that the phone may just show up after the 14^th despite what websites say]. As icing on the cake, he also noticed that – for a reason which he didn’t know – I’m getting another $75 credit from AT&T in a few months for having an iPhone with my particular history… a retention bonus… we all know keeping a customer is far cheaper than replacing them.

iPhone ordering makes for great case studies because, between millions of experiences, you have the best and worst service scenarios all coming together around one constant. The apple website should be a prime example to every single etailer of how you make a shopping experience – the selection process is about a solution, not a shopping cart; the up-sells appear as value-adds and never stand in your way; the form fields are minimal and rarely error on a legitimate entry [like a special password or unique address]; and between split payments, multiple-financing options, and gift cards, it’s just as flexible as shopping in store. On the other hand you’ve got stories from the carriers of nightmare hold times, conflicting upgrade information, insanely high costs, near arguments over account features, discrepancies in warranty offerings & information… all in one ordering experience.

I didn’t expect to have a blog-worthy experience in upgrading a phone but what AT&T did goes beyond their service, iPhones or the cell industry – the sad reality is that we, as consumers, have come to expect our opinions to be practically ignored, to be hard-sold by someone reading off a script with 3 different levels of service and to be brushed aside with generic response. Despite all the talk of being social & transparent, most of customer service is still about getting the issue to a “closed” status rather than actually engaging to understand, acknowledge and learn from the issue.

The truth is you can’t always fix the root problem a customer is having but when you allow your reps to be honest, friendly, informative, and let them decide how to handle a negative based on their expertise doing this hour after hour, you do what customers don’t expect… care.

——————

Unfortunately I didn’t get the rep’s name; but if anyone from AT&T reads this, email me and I’ll give you the order number as he deserves a thanks.

Solid execution: Delta gets smacked by soldier’s viral video, responds & changes policy in hours

Posted on June 8, 2011 by teds

So it’s only been a few hours since my post on Delta Airlines snafu with a group of soldier’s over baggage fees which turned into a viral / pr crises in just a few hours. Not only is the issue all over Twitter, Facebook and news sites but the video from the soldier’s has passed 200,000 views at last count.

So while my first post was really about empowering your ground-level employees to avoid bad customer experiences, whether they go viral or not, Delta has turned this into a great example of how you should handle social incidents.

While nothing can erase the negative impact this will leave, Delta’s social [and business] teams have been on their toes and acting quick to avoid making this into a “United Airlines Breaks Guitar” hit. Sure the PR will continue against them, more articles will come, it won’t be good but for an organization of this site and legacy, they’re playing their cards well. Let’s take a look…

Yesterday a video was posted about an issue costing 38 soldiers $2800 in fees. As quick as the video became shared, Delta was in the mix with a response from “Rachel” apologizing & reaffirming the policy just before midnight EST.
This morning Delta wakes up to see it’s full-blown-viral with major social network and media coverage creating over 200,000 YouTube views.
By 1pm EST Rachel has an updated post with an updated policy: 4 checked bags for military traveling in economy on orders. The post reaffirms Delta’s involvement & programs for the military. And Rachel also threw in a personal statement as an Army wife and 12 year employee of Delta.

It’s been less than 24 hours and Delta has out two blog posts, has changed a world-wide policy and has allowed a personal message to float into the middle of it.

Like I said, this won’t end the problem and frankly, adjusting one policy does not fix the underlying issue where the system often prevents employee from making the “right” decision but Delta has taken a strong step to mitigating the issue and, more importantly, having a voice in the spread of it every step of the way.

By moving quickly blogs, tweets, mainstream media are all adjusting their story to mention Delta’s response and changes while the story is hot. As hard as it is, this is critical and very well executed by Delta… The longer you wait, the colder the issue and the less your response is seen so, from a social crises management perspective, kudos to their social team for being on top of the video, their business for being flexible enough to run and make a decision when one needed to be made — even if it’s just one gesture it’s a big one at the right time.

For more thoughts on crises communication management in a social world, check out my previous post about the Urban Outfitters social media incident.

Policy or not. Have you empowered your employees do to the right thing?

Posted on June 8, 2011 by teds

This morning I caught a post on the Huffington Post about how a group of soldiers who had come from Afghanistan and just come off an 18 hour layover had been charged $2800 in excess baggage fees [including one guy's weapon case] by Delta Airlines. Writing this post now it’s grown to be the Huff Pro’s homepage and the YouTube video of the soldier’s interactions [yes, they filmed it] now has over 170,000 listed views. It’s a rough day to be in Delta’s PR room.

But this isn’t just about Delta. It’s about how we as “corporate” set policies that potentially lock thousands of our employees into a position where they are forced to do things that get our brand to the front page of major news outlets in a social media disaster.

Without a little trust and room for flexibility, your employees can become your enemies.

Now that’s not to say Delta was wrong here. As they’re social team said in their response [good job being upfront on this on Delta, apologizing and publishing your facts]: they’ve got an agreement and a policy and have to think about scale. Similarly, just because someone has a video camera or threatens to blog or tweet or cause you negative PR, that doesn’t mean you should bend the rules in the least. When I hear about PR or Social activity as a threat my reaction is always to follow the letter of the rule… but what if the rule is bad? What if the video camera isn’t a threat but capturing a policy that reflects a brand who doesn’t get it? Can your employees act to do the right thing?

Airlines are an easy example because things so often go wrong, both in and out of their control. Rough for their social media managers, good for blogging on.

I can recall one instance where a flight I was going to take was clearly going to be rerouted [the airline we were going too closes at 11pm night, at 10 we hadn’t taken off]. When I suggested they call the shuttles in advance, the response was a very friendly, very polite: we’re not allowed… The rest of the line was irrelevant: good, smart employees without power may as well be replaced with… well kiosks.

This doesn’t end with bending rules either. How about creation? Just last night I was talking with a good friend about his job managing a profitable store in the retail service sector and what digital could do for them. Here you have a smart, dedicated manager looking push his brand forward and yet he’s afraid that growing the business will actually hurt him. Again there’s nothing wrong with corporate setting digital or social policies, running programs and centralizing – that’s a good thing. But when the supervising store manager has been given no social program, no idea who to contact about one and is fearful of just trying things, you’re losing opportunity.

We’ve all got bottom lines and scale to think about but sometimes the decision made at 30,000 feet doesn’t reflect what’s necessary right on the ground. Sometimes the desire to get all of the experts in a room and talk over the corporate strategy is stifling the local branch that is ready to act now and doesn’t know if they can.

It boils down to simple thing: trust. We ask a lot of our employees but don’t want to trust them with discretion and whether it’s the frontpage of one of the world’s largest news outlets or just an upset customer who tells their 135 Facebook friends, a lack of latitude can go a long way in hurting business.

Social media can not fix the world but it is a pretty bandaid

Posted on April 27, 2011 by teds

This morning in stumbled on an awesome infographic from @TWCableHelp about their social support process. I have to hand it to Time Warner, the explination is well executed and the stats are impressive – big kuddos to their social team. Problem is, I live in an community with over 750 units that Time Warner serves and I can’t recall hearing many [any?] positive comments about them. Their support team’s doing all the right things yet it’s not fixing the perception problem.

As social has gone from something the business world laughs at [anyone who pitched the value of a user community before 2006 knows what I’m talking about] to the place where everyone has to be we’ve lost a little clarity in the middle – [corporate] social doesn’t fix your underlying problem, it merely treats the symptoms.

Got a defective product? The one you replaced for Sally via twitter is just going to break again.
Service keeps going out? Facebook updates don’t make your 2 million fans any happier, just wise enough to know to head to a friend’s house to use their alternative provider.
Activists don’t think you’re up to par on ethical values? A couple blog comments won’t reverse that

What social can do, and does a great job of, is allowing you to bandaid the issues. If you’re lucky the cut is small enough that the bandaid holds it back and let it heal back up. You can’t increase product quality via twitter but you can issue a recall, troubleshoot issues and resolve them in near real time. That’s a great and thanks to 1:1 interaction earns you back some of the credibility you lost – the scar however does not go away.

But for every customer who tweets, facebooks, yelps, blogs or posts openly many more complain in “social silence” – that is to say, they post or share a comment to a network you can’t see, can’t measure and can’t touch. That’s where the problem festers and eventually grows from a couple bad experiences to a bad perception.

What Time Warner’s social team is doing should be applauded. It’s the right step for their support / marketing department to help upset customers on their own terms and something I wish more brands I used did; but it only helps as far as a bandaid can.

Many of us, probably all of us, are guilty of driving social programs that try to mask a deeper problem. I’ve certainly done it. And why not? It’s a direct solution, something we can do fast, and justify back with engagement counts and posts. In a world where executives and shareholders want to see us all using the latest and greatest social media is what gets the funding, the attention. But you can’t scale responding to problems. You can’t hire enough nice people or give out enough coupons to make up for a problem that won’t go away.

Instead of building up autonomous social support teams with the blessing of the C-levels, that momentum and interest needs to be taken into improving the full experience. Product to fulfillment to marketing to support. Only then can a company really expect their social support team to be empowered enough to be able to help grow the business, otherwise we’re just stuck with bandaids and eventually those fall off.

Related reading (aka others have said something like this before me)

Social Media & customer service: Are you scalable? – Smart Blogs

Are You Using Social Media as a Band-Aid for Poor Customer Service? – Right Place Marketing

The social media band aid mentality – The Email Guide