Internet users in Chile and Argentina are the number-one fans of Facebook in Latin America, according to a study by digital marketing firm comScore. The report titled, "Online Social Network Statistics in Latin America 2011," showed that Facebook had a 90% penetration rate among Chile's 6.5 million web surfers in March, while social networks were used by 80% of Argentina's 11.3 million Internet users. What's more, the study concluded that in both Argentina and Chile, users devote one-quarter of their time online to social networks.
Clearly, the phenomenon of Facebook, Twitter and LinkedIn has made a deep impression on Latin American societies. Andres Bursztyn, director of the information engineering department of Argentina's National Technological University in Buenos Aires, says the impact on companies in Argentina has been so great that "social platforms today have partially replaced traditional channels — [such as] press, radio and television — and become the preferred means for companies to contact their customers and promote their products and services." He adds that companies have realized that social networks offer a unique, and perhaps revolutionary, opportunity to forge links with consumers.
This has been the experience of Atrapalo.cl, the Chilean travel and leisure promotion agency that operates exclusively on the Internet. Gonzalo Fernández, the firm's general manager, says social media platforms "bring people closer to the company; especially Facebook. [Facebook] makes it more pleasurable to communicate with customers and it has opened up new dimensions with respect to consumers, such as the possibility to launch games or contests and to try out products."
Atrapalo.cl's engagement efforts have enabled the company to win a significant base of followers in a short period, Fernández adds. Nevertheless, he notes, basing a marketing strategy on social platforms is highly challenging. Nowadays, firms are being forced to become much more creative in the way they capture new customers. "In this sense, Facebook helps a great deal because it is a very natural and spontaneous channel of communication. It does away with the rigid concept of the call center, where operators respond by using a pre-established telephone protocol."
Yerka Yukich, general manager of IAB Chile, a Chilean institution that promotes and develops the digital media sector, says "many Chilean companies are taking advantage of the attributes of social platforms as a virtual call center through which they channel their customer service and resolve questions and complaints."
However, the most valuable part of the social network model is that the sites enable companies to communicate instantaneously with many potential customers, according to Ivan Vallejos, co-founder of Qnowit, a Chilean IT firm that develops high-level business software. "In minutes, people can directly link to the manager of a specific company through Twitter or LinkedIn; something that in the real world would take months, even in the most optimistic scenario."
Real Time Compliments — and Complaints
The natural spontaneity that is involved with using Facebook or Twitter also presents some business challenges, however. For one thing, customers can now immediately relate unpleasant experiences with a company, or complaints about a firm's products or services, notes Gustavo Zurita, academic director of the University of Chile's department of economics and business. "That means the company is obliged to respond very quickly to any possible demands from its customers."
If a firm doesn't proceed carefully, it may wind up "attacking" its own brand, Zurita adds. "That's because social networks, as a channel of communications, are too free and are completely unregulated. That opens up room for users to comment about any sort of topic they want."
Fernández agrees that social networks can become a "double-edged sword" for businesses. There are times when a user is upset about something that doesn't really correspond with the facts. Take, for example, "someone who has reserved a flight with a fare that is nonrefundable by the airline, and who is aware of this restriction at the time he buys the ticket. Yet without thinking [about the facts], that person [later] makes a negative comment [about the airline] on Facebook or on Twitter, and that [comment] spreads rapidly. At the end of the day, this becomes a piece of news that winds up hurting the [airline's] brand a great deal. We call this [sort of phenomenon] 'false evidence,'" he says.
On other occasions, a customer may have genuine reasons for being upset, and instead of directly contacting the company to lodge his or her complaint, airs that grievance on Twitter or Facebook, notes Fernández. According to experts, social media is transforming customers into "prosumers," a combination of the words "producer" and "consumer" that refers to anyone who produces information about a brand, product or service.
The trend today is for companies to rely on "community managers," who monitor and measure web traffic relating to the brand, Yukich says. Indeed, Atrapalo.cl has implemented a round-the-clock system to monitor what people are saying about the company on the Internet. "We believe that it is healthy to establish clear procedures, and this has been an excellent warning system," Fernández says.
Quickly overcoming negative comments on the web is not the only challenge facing companies these days. Other problems involve learning how to understand the nature of social networks, and using them assertively to meet the goals that the firm wants to achieve.
"One of the main mistakes that companies in Argentina have committed is their failure to distinguish which social network is appropriate for what they want to communicate or distribute," Bursztyn says. For example, he suggests that Twitter, which limits updates to 140 characters or less, is not the best tool for launching big marketing campaigns, compared with Facebook, which offers a lot more space for description. "When it comes to the impact of contacting clients, perhaps Twitter or Facebook are a very good vehicle, rather than LinkedIn, which is more suitable for contacting professionals and recruiting."
According to Bursztyn, many companies are misusing social networks. "That is something natural, and it occurs whenever a new technology is launched in a market." There is always a period of adaptation during which companies learn how to use the new technology. "Today, for example, human resources consultants in Argentina are having a lot of success using LinkedIn when it comes to recruiting personnel."
Vallejos of Chilean IT firm Qnowit says one mistake the company made early on was "failing to understand the real essence of Facebook when trying to promote our own network of friends for products in such a specialized area as computers. That had unfortunate results: a very low rate of membership, and little commitment on the part of our followers."
He adds that "another step backward" was to engage in small discussions through Twitter with followers of Flygonet — a social network created by Qnowit that focused on tourism. "These discussions only ended by diminishing the power of our brand."
The Qnowit team has learned valuable lessons from these episodes, and the company is currently reformulating its strategy "with the experience of having spent three years using and learning from social networks," Vallejos says. "Today, we take advantage of the best of these powerful tools; especially LinkedIn and Twitter, for the development of marketing and the search for talent and potential business partners."
Capitalizing on the value of networks
Despite this learning process, Zurita is not confident that all companies are moving in the right direction. Until now, he notes, companies in Chile have achieved a greater media presence by using these tools. "However, they have not derived any real advantage or value from these [second-generation Internet] tools. Companies are definitely not capitalizing on the social networks."
"There is a huge difference between the people who follow these companies [on social networks] and those people who express views about global subjects and strategies such as HidroAysen [on social networks]," Zurita points out. The success of a company does not depend on whether or not it has a presence on Facebook or Twitter, he adds, but rather on what kind of added value it can offer to its customers through social networks.
HidroAysen is a project that would construct five hydroelectric plants in Chile's Patagonia district, one of the world's largest natural reserves, and it has been met with widespread opposition by the country's population. Organized through Twitter and Facebook, many people recently took to the streets, protesting against approval of the project, and sparking disturbances all across Chile.
Vallejos agrees with Zurita, adding that the social networks of today are not those of the future. "The future lies in thematic networks, through which people establish relationships based on common issues and interests, reflecting the social relationships that are developing in the real world."
If the natural evolution of social networks lies in a call to muster widespread interest in a particular topic, how might companies deploy social platforms to provide greater added value to their businesses? The answer, according to Bursztyn, is to adapt the resource of social networks to the needs of companies; not to "force companies to adapt themselves to this resource."
Put differently, Zurita suggests, for example, that supermarkets might create social networks to provide their customers with access to customized information. "In my personal experience, I would really like to join the network of a supermarket and have them show me my record of consumption for past months or years, including graphics; and possibly give me a chance to get advice."