By Jim Singer and Mark Langsfeld, jim.singer@atkearney.com, ml@listenlogic.com

Want to read something scary? Here’s an excerpt of a review on Quiznos posted on a popular restaurant review site:

…[I] had asked for cheese bread an  was given white bread… he told me that I dint tell him but I surely remember telling coz that is how I always take my stuff… the tomatoes on my vegi sandwich were also not fresh…he was very rude. I surely will not return to Quiznos…

What we find scary about this post is not necessarily what you might think. We’re not (much) put off by the grammar, syntax, or spelling. We’ve suppressed our inner English teacher and clicked our heels together three times, saying, “The customer is always right. Regardless of the form of expression, the voice of the customer is a treasure.”

Nor are we scared by the length or vitriol of this rant (of which we’ve quoted just a portion). We know that bad experiences can and do happen in any business. And we know that people can be upset by those experiences, needing to vent.

What we find a little bit scary is the immediacy: Until not too long ago, word of mouth was often slow and limited to a fairly small circle. But today the potential reach of a customer’s response is practically unlimited.

And what we find really scary are the exponentially-growing ripples of this single customer response. Once posted, this voice can become a magnet for other disgruntled customers — and it makes absolutely no difference where they are located or when or what their own experiences were.

In a new study, A. T. Kearney and ListenLogic have looked at the impact of social media on retail customer service. Our results suggest that most businesses have a long way to go before they can even understand their current social media presence — let alone understand how to use that information.

Remember the early days of the Internet, when everyone was trying to build a customer-friendly website, but nobody knew what one looked like? It took years to sort out that mess. Sadly, our study — analyzing the social conversations occurring around 65 top U.S. multichannel retailers — found that pattern is being repeated today in social media.

We focused particularly on customer service because we know that a majority of retailers see customer service as a mission-critical function. In order to survive, retailers have had to master customer service in their stores. And we’re thus convinced that they would be horrified to see the responses to the post cited above.

Ten people commented. One said, “You should follow up with Quizno’s head office.” Another said, “The veggies are always suspect at Quiznos. I stopped eating there a long while ago. Sorry for your bad experience.” (Note that last sentence: not just commiseration, but empathy.) And a third: “I stopped eating at Quizno’s because they almost always get my order wrong… I can get a combo meal at Subway for at least $3 cheaper, where they actually listen to what I want!” Commiseration, empathy, and now advice on which competitor to switch to. How can Quiznos (and we found many other companies faring equally badly) be so ineffective at social media?

We found that customer service differs in social media because the environment is not only rapidly evolving but also autocatalytic. (Recall your high-school chemistry: in an autocatalytic reaction, a product is a catalyst for the reaction itself, meaning that once it starts, it can feed on itself.) In social media, a message’s “target” is also the collective author. And so if you want to interact with that target, you need a new set of tools to evaluate the different kinds of messages and their potential importance.

Easier said than done: a vast majority of social-media posts are nonsense. Only 5% of the 11.5 million posts we analyzed (on a variety of social networks from blogs to Facebook) were actually legitimate social conversations generated by real consumers. The rest were spam, spoofs, coupons and miscellaneous corporate propaganda unrelated to brand image. So we developed a framework to eliminate the garbage and measure customer service along four dimensions:

1.    Tonality: The ratio of positive to negative or neutral posts
2.    Influence: The potential reach of a positive post or recommendation
3.    Engagement: The number of people who acknowledge or respond to a positive statement
4.    Resolution: The impact of perceived outcomes associated with customer service issues and the likelihood of creating a repeat customer

Using these dimensions, our results displayed a large variance across brands. In tonality, the average company’s score was just 12% positive commentary— as a rule, people are more prone to discuss their negative experiences — but these scores ranged from 1% to 63%. In engagement, one top performer was the gourmet burger joint Red Robin: its positive reviews generated a strong similar reaction from other burger fans. For example, consider this excerpt from a blog post about a family’s visit to a Red Robin:

We were slightly confused when they came with our meal [first], typically appetizers come first right? Well before we could even say anything our waitress came running over and apologized. That's right, she apologized. I mean who does that anymore?... So we were stunned. I mean it wasn't a big deal to us. But then the manager comes over and apologizes as well, and said the meal was on them.

This post generated 12 responses that either added additional positive comments about Red Robins or expressed interest in dining at one.

In resolution, a strong performer was Home Depot, as demonstrated by the following example from Yelp:

When I asked Home Depot why there weren't any faucets [to the sink they delivered], they said the handles are sold separately. The sales person never told me this. Wouldn't this have been a useful piece of information when I ordered the faucet???... I also ordered a pedestal sink from them which was delivered -- smashed! It took them 4 weeks to replace it. All in all, they stink!

This post is followed by a response:

Hi Jaimee, I apologize that happened to you and I will be letting store management know what happened. How can we make this right for you? Please email me at s…@homedepot.com Thank you!

In short, some companies are handling the social-media dialogue well, creating a virtuous cycle in which comments on the Internet lead to a better customer experience and the customer experience leads to a more positive Internet presence. And yet it would be too simple to say that other retailers can use their successes as models. Why? Because a premature determination of best-practice models is exactly what has led to problems in the past.

Anyone remember MySpace? The platform is now a digital also-ran of the social media universe, but a few years ago it had media experts agog. And a few years before that, large consumer packaged goods companies such as Kraft invested in developing content for SecondLife, which some experts also prematurely determined to be a big and enduring thing. Mastering social media is not about simply trying to mimic a current darling such as Zappos. Instead the first step has to be mapping your own digital wilderness.

What are your customers saying about your products and services online? How much do you let customers — who are, after all, social media’s primary content creators — control the dialogue? How are you infusing this real-time information into your enterprise – via systems and operations? By asking questions like these, you can begin to make sense of the social media noise and build competitive advantage.

After all, only a business that can evaluate its own position can improve it. The same principle holds for social media: only a company that understands a conversation can join it.

Jim Singer is a partner in the consumer industries and retail practice of A.T. Kearney, based in New York City. He can be reached at jim.singer@atkearney.com. Mark Langsfeld is co-founder of ListenLogic, a social business intelligence firm based in Philadelphia and San Jose. He can be reached ml@listenlogic.com.