How Companies Sponsor, Listen in and Learn From Chat RoomsPublished: August 01, 2001 in Knowledge@Wharton
When Chrysler wanted to promote buzz soon after it introduced its new stylized PT Cruiser, the company realized that many of its hippest potential customers would access their information on the web.
But executives at the auto company didn’t want to make their web pitch sound completely canned. Pure marketing lingo and breathless advertising would not go over well with a sophisticated Internet audience, the executives reasoned, so they decided to put up chat rooms and discussion boards on the Chrysler corporate website.
"We used several [approaches]," said Jay Friedman, vice president of marketing for LiveWorld, which provides interactive online services for businesses. "We did online chats with Chrysler people and customers about the PT Cruiser. And then we let customers talk with each other through discussion boards. It allowed Chrysler to draw an audience to create some good buzz about the PT Cruiser and I think it helped a lot of people get interested in the car."
Wharton marketing professor David Reibstein doesn’t see much downside for companies setting up chat room or discussion board services. At a presentation he attended last month by Procter & Gamble, company officials talked about the usefulness of this type of site, pointing out, for example, that "many of their customers were learning from each other," said Reibstein. Even if negative comments come up in the online discussions, he added, companies seem willing to live with that for what they feel is a positive overall experience of talking about products and services.
Marketing professor Peter Fader has a different opinion. He’s not so sure that a company-sponsored online discussion – be it real-time chat or a do-it-at-your-leisure discussion board – is worth much. "I’m a huge cynic about all this," said Fader. "I recall debates with CEOs of companies back in the Stone Age when people believed that the Internet would solve everything.
"The thinking was that people would be sitting around talking about, say, the Ford Taurus, online and then those same people would go out and evangelize about the Taurus on Ford’s behalf," he said. "Companies claimed that their customers would be their best sales people. Some companies showed me research suggesting that people who go into these kinds of chat rooms buy more stuff than those who don’t. Well, of course. That’s obvious. But I can’t see why that would make them better ‘salespeople’ than anything that typical offline word-of-mouth would achieve," Fader said.
Friedman suggested that company-sponsored online discussions are more effective for some companies than others. "We ran chats for HBO for ‘The Sopranos’ and ‘Sex and the City’," said Friedman. "Part of their need was to expand their brand franchise and get more people to talk about, and increase awareness of, these shows.
"Pharmaceutical companies are other places where the dialogue is leveraged," he said, noting that pharmaceutical company chats may deal first with diseases and information about them. "People like to talk about health and wellness issues and it pays pharmaceutical companies to listen to that." In order to sell their products, pharmaceuticals need to educate the public; part of this is learning what the public already knows, he added. Chat rooms are "a soft marketing approach."
It’s not just consumer goods, entertainment or pharmaceutical companies that are taking this approach. At the Wharton School, discussion boards recently set up for both prospective and admitted students have been a great way to help market the school and its programs, according to Alex Brown, associate director of MBA admissions.
"We recognize that our candidates are also people considering and being admitted to other good MBA programs and that they are already talking about Wharton to each other through other media," said Brown, who set up the discussion boards. "Even two years ago, business schools really controlled the dialogue between themselves and each candidate. But with new technology evolving, we are recognizing that candidates are talking to each other about what we offer and how it compares to other schools.
"So the question was: Should we take that next step and host those discussions or ignore them," he said. "If the conversation was occurring anyway, why not try to participate and embrace that rather than let the rumor mill take over."
Prospective and admitted students now have discussion group portals where, for example, matriculating students are encouraged to help answer questions from prospective students about everything from where to live to what courses to take to how the school stacks up against Stanford, Harvard, Kellogg, Tuck and others.
"We are a product just like a car or a financial service and we want everyone involved to have a chance to get different perspectives about [us]," said Brown.
But that plethora of perspectives could also have a few negatives – and even falsehoods – interspersed. "Some companies will be more sensitive to what gets said and will put moderators into the chat rooms or discussion boards to influence the level of discussion," said Friedman. "Generally, the less-established companies are more worried about bad things in a chat room. The 50- or 60-year-old companies are less concerned."
Sony Music, he added, expects its fans to be very vocal and "very passionate" in their comments, and that doesn’t worry them. So, too, the airlines. "They know that a lot of the discussion will be about lost baggage and flight delays. But they [aren’t that] worried about it, so long as they know how people feel."
Fader, however, thinks the whole idea of company-sponsored discussion boards is at best self-serving and not really a genuinely useful or distinctive customer service. "Let’s say I want to buy a digital camera. I could go to the Nikon site and chat with other Nikon users, but wouldn’t I rather go to a neutral site? Wouldn’t I rather get unbiased opinions?
"I would hesitate to draw any conclusions about chat on a company-based website. Those are squeaky wheels seeking grease on those sites. And who knows if the company is monitoring the discussion or steering it in a direction that the company desires?
"But I can see how it might be standard pretty soon – if one company is doing it then everyone has to," Fader added. "I guess there’s nothing to lose. It’s a cost center like a return policy or a description of your shipping charges – something that you need to provide to your customers, but not something that will necessarily boost your sales numbers."