CASH RULES EVERYTHING AROUND ME

For this post I’m going to try something different. I’m going to attempt to change my writing style from highly explanative to short sharp and to the point, based on some feedback I have been given. Here we go.

This weeks topic is social media technology and how it is put to use on an organisational level and why. McKinsey’s report entitled, The social economy: Unlocking value and productivity through social technologies explores the concept of value creation in an organisation through social technologies. It identifies 10 ‘Levers’ that an organisation can use to generate value. These 10 levers are compartmentalised into 6 organisational functions including marketing and sales and customer service which I will further explore through the case study of Rapha.

The Company: Rapha

Rapha is a clothing company dedicated to serving the cycling community with the finest garments in a world where comfort is everything. Their products are expensive but carry with them an air of prestige, the feeling of being part of an elite club, something which the company makes very good use of through their social media platforms. The company started in 2004 and has gone from strength to strength. Initially offering a bib, jersey and cap the company has grown to offer a full range of cycling garments with a casual line and supplying for the talented pro cycling team, Team Sky. They market with well composed images of cyclist in extreme environments and in varying degrees of pain.

McKinsey's sources of value creation: Marketing and sales

[4] Market research and Customer insights

The founder of Rapa, Simon Mottram, began researching what his customers wanted well before Rapha formally became a company. In the 99u article Mottram tells of his frustration at not being able to find exactly what he wanted in cycling apparell. What Rapha produces causes a clear divide on social media between the Rapha aficionado and the Rapha detractor. Mottram highlights this fact as an opportunity to learn from their loyal customers, listening to their gripes and their praise and interacting with them. He also acknowledges that having vocal detractors keeps the brand in a constant tension, which can only work to keep it relevant.

Using the detractors comments on social media would help Rapha identify and clarify its point of difference, as one mans reasons for refusing to buy a jersey is another mans reason to throw money at Rapha. Its identifying this that gives Rapha their value. As a company that rides the knife edge of popularity well, Rapha would strive to monitor it customers through social media to better their product and service, learn more about their market and look for opportunities to improve.

[5] Use Social Technologies for Marketing communication/Interaction:

Rapha have become masters of harnessing social technologies to add value to their company through marketing and customer interaction. They have a multi pronged attack which includes a prominent Facebook presence with over 100k followers, multiple Instagram accounts with regional focus, an interesting Pinterest account. They do have a google+ profile which they don’t seem to use who can blame them though.

• FACEBOOK

The Rapha Facebook page is one that is well managed both in content and communication. It is updated daily will brand relevant content ranging from photosets to invitations to the many Rapha hosted races globally. They also post many pictures of their consumers being involved in their hosted events, providing a candid look into the races they hold. The page generates a very healthy view rate and customer communication/interaction is frequent. There are posts where customers praise the brand, and also ones where criticism or complaints are made, all of which Rapha attends to promptly. These two image highlight this perfectly.

• INSTAGRAM

Rapha has a parent Instagram handle @rapha, but also Instagrams for each business subset including @raphacycleclub showcasing their global network or cycling clubhouses, and @rapha_australia, @rapha_n_america, @rapha_uk and @rapha_europe which share images relevant to their regions including races, invitational ride and sales opportunities.

As I mentioned Rapha is not cheap, you are looking at $200+ for a jersey and $250+ for most of their bibs which means a matched kit usually comes in around $500. Initially these prices back in 2004 seemed ludicrous to most and for that reason their sales started slow. Through a well managed social media front the company is now projecting profits of over £26m by tapping into the market of cyclists with a keen eye for detail and quality and a healthy disposable income.

[6] Lead Generation

Through Rapha’s Facebook and Instagram accounts they would be able to monitor their customers basic details ranging from general location and name to birthday and relationship status depending on account permissions. Using these details, they could begin to individually target their followers with content and purchasing offers. For example if a followers anniversary was coming up, a sales representative could contact the customer and offer a 2 for 1 deal on a mens and womens kit package. If the offer was used, Rapha would have 2 customers representing their product, who would tell others of the experience as brand ambassadors. This potentially lucrative strategy could be what attracts customers to the brand in the future, as the promise of a personalised service along with great quality product would set them even further apart from others in the market.

[7] Social Commerce

I like the way Rapha thinks. They realise that the people who are going to spend a lot of money on their clothing probably want people to know about it, even people on the internet who won’t see them in their Rapha kit in person. To facilitate this gloating Rapha have given customers the ability to log into their online store and share their purchases across Facebook, Twitter, Google+ and Pinterest. 

The perfect way for people to announce to the world that they have just bought a piece of the Rapha hype. They also present the user with items to “pair” with their purchase when using the online shop.

As the customer is able to use their Facebook login in the Rapha webstore, the company could tailor the products displayed to the customer based on the customers history of preference. letting them know when a particular item is on sale that they have been lusting over, or showing them new products that would aid in their specific riding discipline. Targeting individuals with specific products would be a great way for Rapha to leverage their social media. It is hard to say if this is already in effect or not.

Mckinsey gives us some food for thought when considering social technologies internally and externally to an organisation. They can either be an after thought, or be harnessed to create value for the company in a way that is only fully being realised. Most companies are beginning to realise there is money to be made, cash money.