Yatra, Myntra, Chumbak: Why they swear by social media

New Delhi: While doing business in India has moved from having a shop or a manufacturing unit to finding an identity and space online, one thing that hasn’t changed is the importance of personal relationships.

Traditional businesses in India have always thrived on personal relationships - your neighbourhood bookstore, the stationary shop, or even the clothes store round-the-corner - and, even as many move towards expanding or starting new set-ups on the Internet, the emphasis on one-to-one interaction remains.

It is not surprising then, that we, increasingly, see this philosophy permeate into the way many small and medium-sized businesses function. Unlike big businesses - that may already have a set customer base, a solid reputation and high brand recall- small and medium-sized businesses need to be more out-there, building their brand, reaching out to every prospective customer and nurturing relationships. And while there may be traditional ways of doing this, many businesses are turning to social media to fulfill these functions.

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Earlier, businesses used more traditional methods like print advertising, mailers, TV commercials and door-to-door marketing, but now many are giving serious thought to their social media strategy - a method both expansive in terms of reach and limited in terms of money that needs to be spent - which sometimes yields benefits that outweigh their monetary and human resource investment.

WHY GOING SOCIAL MAKES GOOD BUSINESS SENSE

Companies like Myntra.com, an e-commerce fashion retailer, which uses Facebook, Twitter and YouTube as channels to acquire new customers, increase engagement and create strong brand credibility has strong numbers to prove a working strategy. According to a case study by Facebook, the company saw a 120% increase in transactions, a 75% increase in total website traffic in the last six months and a 300% increase in reach among fans in the last three months, from Facebook alone. The study also said that 25% of its revenue was directly attributable to Facebook. The company’s strategy for Facebook was to increase awareness of new products and drive sales, to build brand loyalty through response to customer service inquiries and to launch exclusive promotions and contests.

[caption id=“attachment_608503” align=“alignleft” width=“380”] Style Mynt’s’Dress up personality’ - a monthly series that explores different style personas and gives tips on how to identify and dress up according to your personality. Picture: Myntra’s Facebook page[/caption]

The company said it uses social media as an enabler and amplifier of various functions - like marketing, customer support, content marketing, product and to a certain extent, even sales -than as a separate entity, or just as media. “From a media standpoint, it is important because unlike other media, it is not about us broadcasting, it involves customers talking to us, about us, and all of this happening in real time,” Manu Prasad, Head - Social Media, Myntra.com told Firstpost.

Vivek Prabhakar, social media head, Chumbak, a Bangalore-based design company couldn’t agree more. Social media, according to him, is meant for businesses like Chumbak and the company harnessed the opportunities that the Internet presented. Its presence on platforms like Twitter and Facebook, have helped it gain popularity and recognition.

“In fact, we had our Facebook page way before we actually launched and ended up doing sneak peeks and stuff. That helped get the word around pretty early on. It was what help us in the first few months of launch,” said Prabhakar.

Prabhakar said the platform enables his team to have a two-way dialogue with customers on everything from products to appreciation to mashing of ideas to customer service issues. “The key is that we never push products down our fans throats. We talk about stuff that, if Chumbak were a person would talk about. For example, we talk a lot about design, animation, travel .. stuff that we love- maybe 10% of that talk would be about our products. Existing customers can reach us to say nice things about us, as well as complain. For prospective customers, our interaction with them on social helps by setting the tone,” he said.

EXPANDING CUSTOMER BASE

Having a social media presence for many small businesses also has a promotion aspect by way of what many will agree is the most powerful marketing tool: word of mouth advertising.

“Our strategy is quite simple: it’s to be social. However silly it sounds, its true. Conversations are a part of our DNA and that’s something that shows in our social media strategy as well. We feel that in today’s day, where the average person has so much access, it’s really important for our business - especially since it’s the easiest way to get your word out there (read cheapest, too!),” Prabhakar told Firstpost.

[caption id=“attachment_608512” align=“alignleft” width=“380”] Chumbak specialises in fun, eccentric theme-based products. Pic: Chumbak’s Facebook page.[/caption]

Chumbak, run by husband-wife duo Vivek Prabhakar and Shubhra Chadda and specialising in colorful, fun and eccentric products based on the theme of India, sees 30% of its website traffic from Facebook. The company, which was launched in March 2010, doesn’t have its own store but retails through 150 stores across the country and through its website www.chumbak.com. What started as a store for funky magnet souvenirs now has a product line that boasts of apparel, accessories, stationery, home and lifestyle products.

The company uses its Facebook page to drive awareness of product lines, announce new product launches and crowdsource ideas for new products. It also engages with its fan base by showcasing new products under the “Brand New!” tab, gives fans “sneak peeks” of upcoming products, promotes special offers and discounts, holds contests and enables customers to directly get in touch through the “Contact us” tab.

Myntra’s Prasad said that social media advertising is an important and integral part of their business strategy as “Social has the ability to harness word of mouth much better than any other media. In this era of abundant communication, signals from trusted friends carry much more weight than traditional advertising.”

The company believes that customers these days are publishers themselves and its important to give them an experience they will propagate as publishers. “We use a tool called ‘GetSatisfaction’ on our social networks to expedite resolution of customer queries. A public resolution of issues also builds trust among those who are watching these interactions and these also gain us customers,” Prasad opines.

OPERATIONAL ADVANTAGES

For companies, tracking a Return on investment (RoI) in the digital space is also a lot easier. While a large chunk of target audiences may not be reachable exclusively through digital advertising, there are very clear advantages to using social media tools. RoI calculations in social media are clearer, and the granularity to which one can optimize campaigns is a lot higher. In addition, user demographics are more accurate and targeting in general is a more accurate affair when compared to traditional advertising or other digital channels.

“Traditional advertising is a lot harder to directly attribute sales and as a result, optimization of campaigns in traditional advertising is both an art and a science. As a result, return on investment calculations in traditional and digital is very different,” Prasad said, adding, “Return on investment from social media channels has seen a steady growth over time. In the case of Social Media advertising/Digital advertising, we almost have “run-time” numbers when it comes to RoI and this allows us to continuously optimize campaigns over time till we have tweaked the campaign for the particular target group.”

While Chumbak does not believe in looking at RoI because “our social media presence is worth more for the qualitative points - such as conversations, the quality of conversations and the feedback - we get”, the company has seen a five-fold return on investment in total advertising spend with Facebook, a very high degree of repeat purchases among fans of their FB page and sees 25% of its revenue coming from Facebook users and fans.

“What we have achieved is pretty good recognition of the brand after having spent close to nothing on popularising it,” Prabhakar of Chumbak, told Firstpost.

BEING SOCIAL GIVES COMPANIES THE BUZZ

The social media platform also gives well established brands the opportunity to consolidate their strong position and keep the “buzz” around the brand alive. Case in point being travel portal, Yatra.

Yatra.com was founded in 2006 and took a good four years to get on to social platforms. But going social enabled the company to boost its emphasis on customer service and experience.

“In terms of customer outreach, we can look at how many people are coming to Yatra’s social media communities in case of a complaint, as opposed to going to complaint forums. This number increased initially, because people found a place to complain on, and then over the months, we’ve been trying to reduce the overall number of complains by addressing them, and managing public perception of our redressal itself,” said Pratik Mazumder, Head of Marketing, Yatra.com.

The most important thing that has come about with the company’s social presence on sites like Twitter and Facebook is quicker redressal of consumer complaints which translates into more trust and brand value. “This has led to potential and existing customers to reach out to us on social platforms in case of any queries or even complaints. They know they will be heard, and resolving a complaint equals to retaining a customer,” Mazumder told Firstpost.

[caption id=“attachment_608518” align=“alignleft” width=“380”] Yatra.com’s republic day promo.[/caption]

Yatra has 569,000 likes on its Facebook page and frequently offers special promotions on travel bookings and holidays through it. It also often uses pictures sent by customers as its cover photo, which is used to respond to customer enquiries and emails. The page also has interesting facts about places, quiz questions and apps like the “Happy Travel Jigsaw” where fans can solve puzzles. Additionally, it has tabs which are used to run cross-promotions with other brands that deliver value add to their customers. Yatra also guarantees a response to customer queries within 12 hours.

All these initiatives by the travel portal has paid off handsomely.

According to Yatra, it generates Rs 55,00,000 per month in transaction from Facebook fans, more than 150,000 people see content on their page every day and 3,500 stories are created by page users each day.

The company, which has an annual advertising budget of approximately Rs 50 crore, spends only 1 percent of it on social media advertising - but the gains it receives are worth much more.

“There is a significant traffic that comes to Yatra.com via social media sites like Facebook & Twitter; asignificantportion of this traffic has purchased from the Yatra.com website, thereby providing revenue ROI from social media. On a brand level, Yatra.com has been rated as one of the buzziest brands in it’s category - mind you, this is social buzz,” Mazumder said. In 2011, Yatra.com was adjudged having the highest “share of voice” in the Indian e-travel space by NM Incite (a Nielsen/McKinsey company) beating older competitors such as cleartrip.com and makemytrip.com.

“Social media gives the power to the customer; that is a clear-cut advantage over traditional media. Social media engagement with the customer is now imperative for any business that wishes to be seen as modern and new age. In an industry that solely depends on internet you cannot miss a chance to talk to your customer,” said Mazumder.

Thus, while the place and method of doing business changes with generations, technology and the Internet - some things never change. Like the need for personal relationships in a business and the realisation that customer must be king.