Coca-Cola Teaches The World To....

"Participating in the community of the consumer."I love that phrase.
Written by Paul Greenberg, Contributor

"Participating in the community of the consumer."

I love that phrase.  That's the way Jim Keyes, Blockbuster CEO described their Facebook group - which is for the most part, despite all our conversations to the contrary, is what most people think of when you say "community" or "social network" now.  As I'm sure you can guess, there are hundreds, perhaps thousands of businesses who are using the most popular social networks to create groups, or pages, or fan sites to develop an external - beyond their own firewall community. They are going to where the customer lives, but not necessarily where they shop.  Ecommerce is not Facebook's strong suit.

But these fan pages on Facebook are nothing more than a segment of a strategy for customer engagement when a company does it right though there are incredible Facebook groups that function as powerful engagement engines for some companies.

For the sake of developing the evolving Social CRM  models, I'm going to discuss and deconstruct some of the pieces of the Coca-Cola social CRM strategy - though I doubt they call it that.  This won't be complete. Its just to indicate two things that they've done that are just right and how they've utilized existing resources in combination with the new ones to do that.

BTW, I'm hoping assuming that I'm going to get a geographical uptick in page views from Atlanta. :-)

Coca-Cola Loves Its Fans

On the simplest level, In creating a Facebook group for your organization, you're banking on a number of things:
  1. That your customers actually use Facebook.
  2. That they can be informed via the Facebook tools provided of the existence of your group - in addition to your own normal communications channels
  3. That they will find what you are providing to be enough interest to make your community a regular stop when they are logged in to Facebook.
  4. That the customers will opt in to being updated about the continuing activities of your community.
  5. That they have no objection to Facebook owning the knowledge of their activities in your group as an asset and as part of their Facebook "customer record" also known as their profile.

The benefits of these external community pages can be well worth it if you are willing to accept that you don't control the source - in this case, Facebook.   Marketing and loyalty are one of the areas that profit from this kind of external community. Customer service can be served by these kinds of communities though Facebook pages are not necessarily the best vehicle for that. There are sites like GetSatisfaction that provide external customer service communities created by either the customer or employees of the company, that serve this function.  Additionally, companies like TiVo have seen the value in Facebook as a supplementary site for garnering and capturing customer service issues and data.

But Coca Cola, oh, baby, oh baby, oh baby.  Check it out.

Things Go Better with Facebook - Coca-Cola's Fan Club

Coca-Cola established their Facebook "fan page" in September 2008 and from then to June 2009 recruited 3.4 million fans. (As of today, it had 3,497,642). Actually, this isn't entirely accurate. What they did was find a page that had been created by a couple of 29 year old Coca-Cola fans and, rather than sue them which is what one of the youngsters feared, instead worked with the two fans to build the page up. But this wasn't a case of buying the page. The creators became an intimate part of the continued development of the page.  Coca-Cola had a savvy understanding of the benefits and the limitations of a Facebook group.  They understood that Facebook was a site that their customers used, not one that the company owned.  Coke wanted to be unobtrusive and leave it a "fan club." While I'd say that they aren't unobtrusive any longer, they have been entirely successful because of their understanding of how Facebook works and their intelligence when it comes to collaborating with their fans.

While the founding fans still use the pages, Coca-Cola has a wide range of interactions on the page. They use it for promotions. They track the conversations of their customers through the postings to the Facebook wall and to the discussion groups. They give fans "exclusive sneak peeks" at things like the Coca-Cola iPhone Facebook app which makes those fans feel like they are on the inside of something.

When it comes to the visual arts, they don't just have generic or random photo uploads. They wield photos like artists use brushes.  One album will be an archive of historic Coke photos evoking nostalgia. Another will be a birthday album of Coca-Cola employees celebrating a birthday - Coca-Cola's - but as informal shots at a beach. They also allow fans to upload their own Coke related photos to the site.

Think of what kind of brand image is projected in just the way the photo archives are used.  "We are a company with an immensely proud tradition that not only can stay up with the contemporary but are also personable and intimate with you, our customers. We want you to know us and we want to know you."

The brilliance of the fan page doesn't stop with photos. If you look at the Wall updates, they are in Italian, French, English, Spanish; two or three languages I can't figure out and even when in English, reference Coke in Macedonia, Thailand, Romania, and France.  "I'd like to teach the world to sing, in perfect harmony...."  (I know you know that one).

What the brand leaders at Coca-Cola, particularly the Director of Worldwide Interactive Marketing Michael Donnelly, realized is that if you let the fans control their own conversation and support it, you can build something substantial and engender advocacy in ways that weren't even a glimmer several years ago. What that translates to is 3.4 million fans, the second largest fan "club" on Facebook, second only to President Obama with over 5 million (by June 2009).  According to PageData, Coca-Cola recruits between 0 and 3500 per day with the median numbers somewhere in the 1500 range. That's per day.

It would be nice enough to see this fan page which actually lets the members guide it, though with input from Coca-Cola,  if that were all there were to how Coke views the social customer. But they have a much more comprehensive engagement strategy. They understand that the customer doesn't just want engagement. They want personal engagement. Hence the brilliantly conceived and so far so good executed Coca-Cola Free Style - their new vending machine. fountain dispenser Yeah, vending machine fountain dispenser. (Update: Thanks for the correction goes to Ray Crockett, Director, Communications, Coca-Cola, NA)

Coca-Cola Freestyle

If nothing else, Coca-Cola is innovative - and the aptly named Freestyle gives you a hint of that.

Freestyle is Coke's new vending machine fountain dispenser.  Its not innovative because it takes your quarters a.k.a. dollars to get soda (or as those from the Midwest keep trying to call it "pop") or "healthy" drinks from it.  It's innovative because it actually allows you to customize your drinks - with up to 100 combinations including, for example, if you really, really want it, raspberry orange Diet Sprite.

First things first. Here's how it looks - very cool - though a bit too much like a contemporary Maytag washing machine -but an undeniably trendy one.

But what it does has nothing to do with cleaning clothes. This thing is remarkable for three reasons.

First, it gives the customer the choice of over 100 selections of drink combinations customized (modularly) that include soda, diet soda, sparkling water, tea, health drinks etc. - several of which have never been sold in the U.S.

Second - it is tied into an IT backbone that allows it to wirelessly send information to an SAP system that not only tracks the personalized drink preferences of the customers using the machine but also manages the inventory - "oh, Freestyle is almost out of Coke Zero, needs refill."  All of this data is tied back to the SAP supply chain and CRM systems in the back.

Third - it is an incredibly innovative use of RFID and one of the first that really indicates how valuable RFID can be.

For some discussion on this, I got Mickey Brazeal, Assistant Professor of Marketing at Roosevelt University and author of the 2009 book, RFID: Improving the Customer Experience, to opine on how RFID and Freestyle work together:

"It's easy to add wireless communication and data processing to a vending machine.  Such a machine could respond intelligently to individual customers and to changing situations.

"It could know what it's running out of and arrange to be replenished efficiently, the way an RFID smart-shelf can.  Tags on individual products or ingredients talk to a reader that orders replacements as necessary.  The replenisher doesn't have to carry in everything - only the stuff that needs replacement.  And the system isn't perpetually running out of the most popular items.  People who use vending machines are very often in a situation where there is no alternative, and an out-of-stock is a bad customer experience - much worse than in a store where you can usually just choose a different brand.

"It could figure out which combination of products generates the fastest sales or the largest profits in a particular location.  It could offer products (drinks) in different sizes and create the package mechanically immediately after its button is pushed.  It could offer different products in the morning than it does in the afternoon.  It could authenticate the items loaded into it, and make sure that no counterfeit or unauthorized product is sold.  This is a level of control over remote vending machine servicers that marketers have not always been able to assert in the past,

"It could accept payment cards and, through the payment card, offer loyalty points that are recorded automatically, and that generate an occasional free vend.  It could use a group of ingredients to customize the product for each individual customer.  Why should a machine offer six flavors instead of sixty, or six hundred?   It could recognize a customer by his payment card, and serve up "my usual", like a neighborhood bartender.

"The Coca-Cola initiative is a big first step.  It will use ingredient cartridges to create, on the spot, the beverage ordered by the customer.  Because it doesn't have to contain the finished product, it can offer a huge range of flavors - about 100 in this case.  It will authenticate the ingredient cartridges and prevent the use of counterfeits or competitors.  It will track inventory and summon the service person with specifics about what is needed.  It will shine a light on the item that is to be replaced so that no mistakes are made.  The customer uses a touch screen to select the right item.

"When you can choose from a hundred flavors, it's hard to see the process as mass marketing.  It starts to be less about the product brand (Diet Coke vs. Coke Zero), and more about the retailer brand (all these flavored waters from the Coca-Cola company.)

"It might create more use-occasions:  breakfast-at-your-desk beverages, bubbly waters with lunch, a Coke at the afternoon break.  People who are stuck with a "vending room" in a remote location start to see it as less of a sacrifice.  Suddenly it's not so much the low end of the foodchain.  Maybe it replaces some of the pilgrimages to Starbucks.

"Right now, if you hate the stuff in the vending machines, tough luck.  In this new world, the vending machine will try very hard to find out what you like, and when and where you want it, and make certain it never runs out.

"Down the road, there are potential environmental advantages as well.  If such a machine could be attached to a local water source, then the fuel-guzzling business of trucking around products that are mostly water would be unnecessary.

"Vending machine soft drinks from Coca-Cola have a loyalty program where the purchaser can find the number inside the cap, go to a website, record the number, and collect a micro-microcredit toward premiums.  But it's an awful lot of work to earn one two-hundredth of a baseball cap, and therefore has limited participation.  A payment card could make the points process automatic.

"The next step is a store-sized vending machine - an entire convenience store without employees.  If you only have to restock the items that have sold out, you can do it with a single daily replenishment trip.  Services will be sold automatically as well.  Imagine an unattended car wash.  The door opens in response to an RFID tag on the customer's windshield.  Soap and water are dispensed automatically.  Brushes and buffers whirl as the car reaches the right spot.  And the tag on the windshield picks up the check.  Frequent users get big discounts.  Almost all the car wash business is frequent users.  And it's sold as a relationship.  Transaction customers can't even get in."

....Customers Go Better With Coke

Okay, so think about this. Coca-Cola is working with a strategy that has as parts of it, social networking use and the use of technology tied tightly into CRM and SCM. They tie these pieces into a matrix that interweaves with their loyalty/advocacy programs (I'll talk about those in a future post). But what frames all of these seemingly disparate pieces is their interest in providing an optimal and personalized customer experience - in whatever venue the customer is. So the customer can socialize with other customers around the coolness of Coke or the nostalgia around Coke on the Facebook page. Then they can go take a break (at least in Atlanta, Coca-Cola HQ where Free Style is being tested) and go to Free Style touchscreen, punch in their customized quaff and then return to Facebook to talk about the coolness of Free Style.  Wow.

What are two apparently disparate parts are actually tied together by Coca-Cola's corporate commitment to its customers to making them advocates, not merely committed Coke gurglers. The experience is built around "fan" engagement in all facets - Facebook to Free Style.  Smart move, from a very smart company.

Editorial standards