CHCanada Case Study: Behold the Fruits of Transparency and Engagement

This is a true story of social media success that didn’t take long to generate signs that it was indeed working. This is one of my best examples of following social media rules of engagement to work in the brand favour. The reason this success is so profound is because its marketing team, while well versed in utilizing online (search, display, affiliate) marketing to achieve clear ROI success, did not necessarily see social media as a venue to achieve similar results.

Columbia House was a traditional direct mail company, whose strong foundation of measurability, attribution and ROI were key pillars that drove its success for many years. Technology and industry changes ie the decline of music CD consumption…Apple’s introduction of the iPod… and the subsequent move to cheaper MP3 downloads, left the music industry scrambling to monetize artists and their music. This, in turn, necessitated Columbia House to focus more efforts on movie sales. Despite its long tenure and strong presence in the movie entertainment distribution business, it had also met with criticism from users in areas regarding claims of negative option, unfair shipping charges, and challenging customer service issues.

So a new company was started in Canada –> with a new business model that responded to many of these consumer claims in hopes of starting fresh, recruiting a new support base and migrating its loyal customer base. The new company launched November 2008 and its positioning has been evident on their website to this day: “CH Welcome to the NEW Columbia House..You spoke, we listened…No more unwanted shipments..”

Initial social insights were conducted around the brand and its competitors in the weeks before launch to validate the new business model. What CHCanada discovered was a wealth of passionate conversation both positive and negative about the very topics (…and then some) that instigated the business change. Unlike traditional research, the comments were in social media spaces for the world to see… and remained unchalleged and unresponded. The company noticed, at the same time, the number strong advocate discussions that had gone unleveraged. What CH had realized was that a comment posted many months ago could strongly influence those who had seen the discussion for the very first time. These strong conversations could very well hamper a successful launch of the new business model. In addition, as is the plight of most Canadian subsidiaries, any strong changes implemented locally were still “blips” in the overall map and did little to positively impact the overall Columbia House brand…the US parent that still retained the original business model.

The key to ensuring a successful launch of was to provide voice in the social sphere and prove to its customers that it had truly changed before it could hope to acquire new customers. So CHCanada began engaging in conversation. We quickly identified three forums where strong discourse existed about Columbia House. The most difficult efforts included confronting its detractors. Honesty, transparency, and humility were the order of the day. Applying this strategy has allowed forum members to welcome CHCanada to the thread. By letting forum members understand what CH had done to change, and by openly asking people for their honest opinions and questions, CH has been able to eventually build trust as evidenced by the length and tenure of each thread—> all of them with a range of 700 – 1200 posts starting from as early as January 2009. Along the way, not all forum members were not so quick to welcome CHCanada with open arms. It’s not surprising they “googled” each of our names to validate who we were and what we were saying. From time to time we have been met with accusations of SPAM and have been banned from sites. But overall, our presence in key forums has made an incredible impact on CHCanada’s reputation, its organic search listings, and has resulted in ever increasing positive sentiment in favour of CHCanada vs. its US parent. This topic cloud is indicative of the positive consumer perceptions surrounding the brand.
Within a short period of time, CHCanada was able to translate its participation into strong business results. Rob Weatherall, Marketing Manager of CHCanada has indicated, “Entering into the realm of social networking I knew this was something that needed to be done but was quite skeptical what impact it would have on my business. Within a couple of months of launching our program with Isobar, I clearly saw the positive impact this media was going to have. Social networking not only provided an open line of communication with customers, it also provided a product/offer testing arena, an ever-ready focus group, a source of testimonials, and for this business – our highest value customers.”

Highest value customers –>traditionally resulting from strong customer relationship management but developed over a long period of time. Now imagine applying the same principles to social media and experiencing the same effects in half, or even a quarter of the time! Who would ever have thought that by talking to customers, marketers would be able to take out the guess-work of their initiatives or implications of their analytics reports . Ask the customers what they want and give it to them! It’s that simple. And they will come…..And they came in droves. CHCanada initiated a free-shipping promotion in September because its customers asked for it. The result: The company witnessed the highest single sales of the year, with sales equivalent to half the month of August.

And the success continues. Twtpoll surveys have become a strong crowdsourcing vehicle to gauge consumer preferences. Responses for surveys have been strong with momentum starting from the moment of posting. Social media has allowed CH Canada a very inexpensive test-and-learn vehicle for promotions. Varying test components has allowed CH to pull off another successful FREE shipping promotion of late: resulting in the second highest sales day of the year.

Rob Weatherall summed up his experience this way: “The best form of advertising is word-of-mouth – what better way to get your message out than through social networking. Without the knowledge, expertise and passion Isobar brought to the table, this business would most likely have continued to avoid, out of ignorance, what has turned out to be an extremely smart business move”.

Taking a quote from one of the fourm members, “while i haven’t ordered from chcanada in quite some time, i still frequent the thread and certainly appreciate the comments and inititiave shown by the chcanada staff. when is the last time you saw an amazon or futureshop/BB rep come in and ask us what we like? NEVER!! “
Another one says, “ I’m amazed at how much they try to make everyone happy & take in their input. They’re doing a great job at trying to get everything right.”

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