MIT Sloan School of Management

MIT Sloan School Working Paper 4935-11

Leveraging the Web for Customer Engagement: A Case Study of BT’s Debatescape

Wanda Orlikowski and Simon Thompson

© Wanda Orlikowski and Simon Thompson

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CENTER FOR Massachusetts INFORMATION Institute of SYSTEMS Technology RESEARCH

Sloan School Cambridge of Management Massachusetts

Leveraging the Web for Customer Engagement: A Case Study of BT’s Debatescape

Wanda Orlikowski and Simon Thompson

May 2010

CISR WP No. 380

© 2009 Massachusetts Institute of Technology. All rights reserved. Research Article: a completed research article drawing on one or more CISR research projects that presents management frameworks, findings and recommendations. Research Summary: a summary of a research project with preliminary findings. Research Briefings: a collection of short executive summaries of key findings from research projects. Case Study: an in-depth description of a firm’s approach to an IT management issue (intended for MBA and executive education). Technical Research Report: a traditional academically rigorous research paper with detailed methodology, analysis, findings and references.

CISR Working Paper No. 380

Title: Leveraging the Web for Customer Engagement: A Case Study of BT’s Debatescape Author: Wanda Orlikowski and Simon Thompson Date: April 2010 Abstract: Web 2.0 technologies offer a number of capabilities that can help companies do business in new ways. Leveraging those capabilities, however, requires experimentation to learn what strategies, approaches, and applications work and don’t work, and which can generate sustainable business benefits. One area of experimentation is in the use of social media to engage with external customers, particularly coupling these media with CRM capabilities. In this case study, we describe BT’s experiences with social CRM, showing how innovating business practices with Web 2.0 technologies can yield a range of business benefits.

Keywords: Business Innovation; CRM; Social Media; Technology Experiments; Web 2.0

9 Pages

Massachusetts Institute of Technology Sloan School of Management

Center for Information Systems Research

Leveraging the Web for Customer Engagement: A Case Study of BT’s Debatescape

(CRM) capabilities. Companies are increasingly Social Media and Customer Engagement realizing that as interactions within social media Realizing the business value of Web 2.0 tech- expand (and likely accelerate as the millennial nologies is an uncertain and challenging en- generation comes of age),3 there is an increased deavor and many organizations are engaging in probability that such interactions will concern a variety of experiments to learn what strategies, specific company products and services, and be approaches, and applications work and don’t read by many people around the world. As a work, and which may help them generate 1 recent article in The New York Times observed, sustainable business benefits. One such arena “A Twitter post can in theory be seen by of experimentation is the use of social media to millions, and thus packs more punch than an e- engage with external customers. Blogger Brian mail message or a phone call to a store.”4 Solis notes that this application of Web 2.0 technologies reflects the growing recognition One of the companies on the forefront of that “social media has slowly evolved not only experimenting with social CRM is BT Group plc as a new content publishing, sharing, and (BT), the world’s oldest communications company, discovery medium, but more importantly as a founded as Great Britain’s General Post Office in peer-to-peer looking glass into the real world 1868, and privatized in 1981. Today, BT is one of conversations that affect the perception, engage- the world’s leading providers of communications ment, and overall direction of brands.”2 solutions and services, operating in more than 170 countries. In this study, we describe BT’s inno- One way for companies to leverage social media vation with social CRM, showing how ongoing for customer engagement is to couple social experimentation and careful attention to the media with customer relationship management

3 Stan Schroeder, “The Web in Numbers: The Rise of Social 1 See Wanda Orlikowski and Stephanie Woerner, “Web 2.0: Media,” April 17, 2009: http://www.rainierdigital.com/the-web- Experimenting with the Connected Web,” CISR Research in-numbers-the-rise-of-social-media-mashablecom/ Briefing, Vol. IX, No. 5, May 2009. 4 Stephanie Rosenbloom and Karen Ann Cullotta, “Buying, 2 Brian Solis, “Twitter and Social Networks Usher in a New Era Selling and Twittering All the Way,” The New York Times, of Social CRM,” March 20, 2009: November 27, 2009: http://www.briansolis.com/2009/03/twitter-and-social-networks- http://www.nytimes.com/2009/11/28/technology/28twitter.html? usher-in/ _r=1&hpw This case study was prepared by Wanda Orlikowski of the MIT Sloan Center for Information Systems Research and Simon Thompson of BT Innovation and Design. This case was written for the purposes of class discussion, rather than to illustrate either effective or ineffective handling of a managerial situation. The authors would like to acknowledge and thank the participants at BT for their contribution to the case study. © 2010 MIT Sloan Center for Information Systems Research. All rights reserved to the authors.

multiple potentialities of Web 2.0 technologies customers wanted to talk to us, they’d can help build a business case for investing in come to us. And a few of us have—over these technologies to engage with customers. the past probably about a year or so— been trying to force the opinion that Using Social CRM at BT actually, we should be taking ourselves to Customer relationship management is a critical where our customers are and therefore activity for BT Retail, the main line of business engage with them on their terms and their that interacts with direct customers, both preferred location as opposed to waiting residential customers (BT Consumer) and com- for them to come to us. So we were trying mercial ones (BT Business). In the past few to find a way to, I guess, firstly, identify years, Customer Service within BT Retail has what our customers were saying, and launched a number of initiatives that leverage web where they were saying things, and then tools to reach customers, including enhanced secondly, to find a way to interact with website offerings, dedicated discussion forums, them in those domains, but importantly to and online community portals. Using web tools keep all of the interactions manageable to reach customers is part of a broader vision to from within a customer service environ- build what Nader Azarmi, BT’s Chief Technol- ment here. ogist for Intelligent Systems Research, calls “the The Debatescape infrastructure was thus de- predictive enterprise.” Such a vision recognizes signed to offer service to customers posting to a that there is considerable intelligence in the variety of social media sites. Two problems had interactions that people are having online in to be overcome to develop this infrastructure: various communities about the company and its the first was to find all of these customers who offerings. This intelligence, as Azarmi notes, “is were expressing their “pain” on the web and very valuable. And we need to somehow under- then focus attention on them; and the second stand and capture and incorporate that into our was to develop a process that operationalized decision making and act upon that.” the problem resolution and made it traceable Aligning with this vision, scientists within BT and scalable. Research have been focusing on social media The Debatescape technology that was built by a and recently have developed a customer service team within BT Research uses RSS feeds, open infrastructure—known as Debatescape—that application programming interfaces (APIs), and allows support agents to interact with and assist content-scraping tools to obtain and pool user- customers who are posting on third party forums, generated content from online forums, blogs, blogs, and Twitter. Debatescape provides a chan- and social networking sites such as Twitter, nel to customers that harnesses Web 2.0 tools to Facebook, and YouTube. Using a natural lan- deliver on BT’s philosophy that it wants to guage analyzer, Debatescape sorts and classifies interact with its customers wherever they are, the content into various categories, and then with whatever media they are using. transfers the actionable events to designated Debatescape was motivated by the realization customer service agents in either BT Consumer that BT was increasingly missing out on an or BT Business. These agents then take action important aspect of customer contact. Graeme on the customers’ questions or problems and Stoker (General Manager of Digital Care at BT post their resolutions or responses to Debate- Consumer) recalls, scape which then streams these replies back to the originating sites with the appropriate BT We have come to acknowledge that there credentials (see Exhibit 1). was a lot of discussion about ourselves and our products and services going on Debatescape has been running within BT Retail outside of the BT domain all over the big since February 2009, and as we discuss below, bad Internet, and traditionally BT has experiences to date suggest that things have been very much of the opinion that if been going reasonably well. We interviewed Orlikowski and Thompson Page 2 CISR Working Paper No. 380

key business leaders from both BT Consumer normal complaints, so avoiding such practices and BT Business to understand their experiences can be particularly valuable. so far, and to learn how they justify engaging An additional arena of cost reductions arises with social media in their customer service through leveraging responses in social media. operations. That is, once a customer question has been answered publicly, others with similar problems Justifying Social CRM may benefit, thus decreasing overall interactions Based on our interviews, it is apparent that the with BT service agents. As Jonathan Denison business case for investing in social media has (General Manager for Systems and Innovation been justified in various ways. To help make at BT Business) observed, sense of the multiple criteria being used, we found it useful to categorize these in terms of The hope is that once you have answered a the Shareholder Value matrix developed by Hart question in public, when someone then and Milstein.5 The matrix is defined by two searches for the problem using Google, they dimensions that represent the two primary may find the answer. tensions faced by any organization: realizing The use of social media in BT is still in trial short-term results while also creating conditions mode, but the initial results are promising. In for future growth; and cultivating core internal BT Business, for example, ten weeks of capabilities while also remaining open to fresh Debatescape usage has generated an estimated perspectives and emerging technologies from ROI of 181%; that is, use of the technology has the outside. These two dimensions produce four cost £105K but produced £190K in returns. In quadrants representing the four distinct perfor- addition, there have been some retention mance elements that are crucial to generating benefits. Jonathan Denison (BT Business) indi- shareholder value over time: cost, reputation, cated that: innovation, and growth (see Exhibit 2). We’ve seen quite a bit of evidence of Cost customers saying they’re going to go to the competition or they’re really unhappy with The performance dimensions in the bottom left BT and then we’ve surveyed them after quadrant of the matrix focus attention internally we’ve been in touch with them and helped and on near-term results. Business value is resolve the problem, and a lot of customers generated through achieving operational effi- are saying that they’re less likely now to ciencies. For BT, social CRM represents a move away from BT, so we think we can potentially cheaper, easier, and quicker way to prove a reduction in churn. interact with customers. Traditionally, most cus- tomer contact in companies such as BT is via These benefits are expected to increase as the the voice channel. And servicing customers this interactions with customers evolve over time. way is expensive. The web based infrastructure Jonathan Denison (BT Business) added, and flexible resourcing model that have been On Twitter for example, we’ve seen a shift adopted to facilitate social media support in BT from customers saying things about BT, are perceived to be more efficient by BT, but and us jumping in to help them, to quantifying this has proven difficult. customers suggesting to other customers Similarly, reaching out to customers early may that they contact us, to then customers, stop them from escalating matters to the themselves, just directly coming to us via Chairman or CEO. High-level escalation is the medium. So, it’s changing extremely considerably more expensive to deal with than quickly.

5 See Hart and Milstein “Creating Sustainable Value” (Academy of Management Executive, Vol. 17, No, 2, 2003: pp. 56–67).

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Reputation increasingly seen as imperative for any business This performance dimension in the bottom right that provides customer service. Graeme Stoker quadrant of the matrix focuses on the near-term, (BT Consumer) observed, “We just can’t afford and concentrates on relations with external not to be in this space.” At stake is the perception stakeholders such as customers and suppliers. of the company and its reputation in the market Without appropriate attention to these stakeholders place. He explained, and their concerns, the firm’s legitimacy and We have to drag ourselves from being, efficacy in operating may be challenged. To the you know, BT the old-fashioned, tradi- extent that social media sites are increasingly tional, incumbent telco—big, lots of where customers are showing up and having customer service problems, the company discussions about products and services, then everybody likes to bash over the head—to these online forums represent a potentially being a progressive, customer demand-led serious reputation risk—and opportunity—for organization. any company. Traditionally, the assumption in customer ser- Recognizing the power of social media to vice has been that “if customers wanted to talk influence BT’s reputation was a primary influence to us, they’ll come to us.” But in the light of in the development of Debatescape, which was social media, this assumption requires some designed to allow BT to participate in online updating, and BT Consumer has realized that its conversations instead of simply leaving customers reputation can be enhanced by engaging more to express negative opinions about BT products or directly with its customers on social media sites. services publically. The technology was motivated by a sense that the company’s voice was absent Early results on the BT Consumer side suggest that from the online conversations, and what emerged positive word of mouth is being generated through was a recognition that BT needs to be part of the the use of Debatescape. Brooke Molinaroli (Head conversations, balancing the debate with their side of Digital Care Design, BT Retail Customer of the story. Debatescape was thus designed to be Services) reports that to date there have been an engine that facilitates a corporate presence in approximately 23,000 interactions with customers the online conversations. As one of the lead using Debatescape over a nine-month period. developers of Debatescape explained, Typically the team has been responding within three to four hours of the original posting. On a The idea is that we can project an rolling three-month basis, approximately 50% of authentic image of our operations onto these users report being “extremely” to “very the debate.… We have no ownership on satisfied” with the interaction. Importantly, many these debates and we can’t shut them of these users post back to the forums to indicate down, but can we balance the debate with their satisfaction, thus helping BT’s brand image. the real story? … And in fact, if somebody A recent comment on Twitter noted: “This is great searches Google, they find all these how good Twitter is; I said I was upset being cut incidents where people are simply saying, off & there BT was, wanting to help. Hats off for ‘Well, it’s awful, I can’t get this to work’ BT.” Furthermore, some customers are sharing and someone from BT is saying, ‘Can I their positive experiences on other sites. For help?’ and ‘Here’s how I’ll help,’ and that example, a recent posting on silicon.com read: provides a very powerful message, I think, “The last time I had a problem with my BT of the perception of the company, projecting broadband line at home, I mentioned it on Twitter. authenticity into the debate. Within minutes, BT—which is on Twitter, too— Reputational justification for using social CRM was asking me about the problem. That’s an 6 thus focuses on connecting with external example of great customer service.” stakeholders in a way that enhances a company’s reputation, legitimacy, identity, and brand. It is 6http://www.silicon.com/technology/networks/2009/07/09 /why-your-business-should-use-twitter-39449784/

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Innovation For BT, social media offer the potential to be an This performance dimension in the top left important new channel through which the quadrant of the matrix is focused internally but company can learn about its customers, build concerns longer-term operational effectiveness. loyalty, and grow sales. Jonathan Denison (BT It is intended to help focus attention on the Business) observed, development of skills, capabilities, and practices We definitely feel as if engagement with that will ready the firm to perform successfully customers and trying to find different in the future. As a new medium of interaction ways to engage with customers both from and one that is growing rapidly in usage and a sales point of view and from a functionality, social media offer some powerful marketing point of view and the one-to- and pioneering capabilities that may be har- one nature of the social media stuff is nessed to improve customer service. Two parti- going to grow and will become in- cularly interesting and novel characteristics are creasingly important. the asynchronicity and persistence that come with the use of social media to do CRM. Such growth is likely to be slow as the majority of BT Retail customers are still interacting with Asynchronicity. A disadvantage of the voice the company via the telephone. But increasingly channel is that it requires both the customer and the company is encouraging its customers to use the service agent to interact synchronously. the BT website, to access FAQs, to use the With social media, interactions can be managed online BT forums, and to chat online with cus- asynchronously. Customers can post a problem tomer agents. Customers engaging with BT on a forum and while they get on with their online are also the customers that are likely to lives, the customer service agents can be engage with the company through Debatescape. resolving their issue. For some customer prob- Over time, the number of customers who will lems (e.g., those requiring troubleshooting), seek customer support through online forums synchronicity will continue to be necessary, but and social media is likely to increase, and by for a large number of other issues or queries, investing in Debatescape and online customer customers’ time may be freed up when they use service agent skills at this early stage, BT is social media to engage with service centers. positioning the company to be ready to engage Persistence. As interactions on social media sites with many more customers via a range of are textual, an automatic record of each interaction different social media sites in the future. exchanged between a customer and a service agent is generated and archived. Such ongoing Challenges of Social CRM documentation of online conversations produces a Working with social media has proven to be visible, searchable, growing, and persistent somewhat challenging, largely because this is a repository of questions and resolutions, while also new way of working and interacting with cus- increasing the transparency and thus the tomers, and effective norms, practices, and accountability of all the parties involved in the assessment criteria are still unsettled and being conversations. defined. Four primary challenges were evident in our interviews with the managers at BT: skills Growth and mindset; speed and visibility; unpre- This performance dimension in the top right dictability and vulnerability; and system growth quadrant of the matrix is focused on the future and status. and looks externally to a firm’s relations with its various outside stakeholders. It seeks to identify Skills and Mindset the growth trajectory that will allow the firm to Given the public and textual nature of social move into new markets, build new products and media, the skills and mindset required by technologies, and develop new relations with service agents dealing with customers in this (potentially different) customers and suppliers. novel way will have to change. New practices

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and norms of interaction more appropriate for I think what is new as well is just how quick the new medium have to be developed. Jonathan it is. And it’s also very, very upfront, do you Denison (BT Business) explained, know what I mean? You’re there and sometimes it’s very public when people are The main hurdles have really been around saying things… As you know, social media getting our advisors to the right way of is one of those things where bad things go thinking. So, understanding the style and viral very quickly, so you sort of have to tone to use and understanding the lan- have more impetus and that does put a guage that’s most appropriate for the different kind of pressure on the situation. medium, that’s been the biggest challenge because we’ve come from a very stable Graeme Stoker (BT Consumer) similarly environment. … So much is different. I observed that “As volumes have grown, we’ve mean the obvious thing is just the style of really had to make sure that an important piece the conversation. A lot of companies had is just sort of the whole speed and respon- a very formal customer service culture… siveness. In other channels, [the response] ‘Let whereas in this kind of medium, people me pass you on to someone else or I’ll get back just expect it to be fast and kind of quick to you later, or I’ll phone you tomorrow’ may and short but friendly and also human. work, but that doesn't really cut it [in social media].” Another set of issues concerns cross-training and being multi-skilled. Online customer service Unpredictability and Vulnerability agents tend to need more general expertise than specialist knowledge. As Graeme Stoker (BT A third challenge mentioned by the BT managers Consumer) observed, in managing social CRM is the unpredictability of the workflow and the vulnerability that comes Given the nature of what we’re doing [on from working in a new and relatively unproven Debatescape], the [agents] have to be way. Jonathan Denison (BT Business) explained, jacks of all trades. Whatever the cus- tomer’s problem is, they need to be able to One of the things which my operational pick it up, take ownership of it, and colleagues have found difficult is the resolve it.” unpredictability of it. So, if you think about it, we’ve come from an environment which Similarly, Jonathan Denison (BT Business) has been stable over many years—we know noted, exactly when calls/emails are going to come And you’re also making sure that the in; we know when they’ll peak; we know advisors are really trained to be able to exactly how we need to resource it; we counter anything that comes their way… know exactly what coverage we need, at Whether it’s a query about the broadband what time of what day, etc., etc., etc.—to product or a PR query or a general enquiry something which is completely unknown about their bill, we need to make sure that and that really has unsettled our oper- the team is equipped to handle that in the ational management colleagues. … And all most appropriate way. So that’s been a big these things that you do in call centers and difference. in customer service environments, all of a sudden the rulebook’s been thrown out the Speed and Visibility window.” Interacting on social media is very public and With respect to vulnerability, the BT Consumer tends to be rapid, so the expectations of speed staff recently encountered firsthand the and responsiveness, as well as tone of voice and “bleeding-edge” of contemporary social media politeness become accentuated and exacerbated. when they discovered that one of the social Jonathan Denison (BT Business) commented, networking sites that that was being used to interact with customers had suspended BT’s Orlikowski and Thompson Page 6 CISR Working Paper No. 380 account. Brooke Molinaroli (BT Retail Cus- to their customers… It didn’t fit with our tomer Services) noted, brand image.” You quickly realize how vulnerable and System Growth and Status fragile this whole thing is. So basically, it was about 6:30 on Wednesday night, and Finally, a significant challenge currently being we’re making our plans to leave, and all experienced by the Debatescape team is how to of a sudden one of the advisors said, ‘Oh scale the system and transition it from pilot status my God, Brooke, come here, come here.’ to operational system. Initially, Debatescape and And she clicked on the social media site social CRM at BT were seen as part of the and basically it said, ‘We have suspended experimental innovation activity that BT, like your account due to suspicious activity.’ many large companies, invests in within its corporate R&D program. However, the system As it turned out, this suspension had been an rapidly became perceived as ‘business as usual’ error made on the side of the social media site for the staff managing and executing customer and BT’s account was restored in under a day. care through its channel. As dependence on the But not before this error had produced consid- system grew, the expectations of performance erable anxiety within BT Consumer, generating and reliability also developed. When the many hours of frantic activity through the night Debatescape trial was started, it was possible to trying to reach the social media site’s employees take the system down for an upgrade and most so that they would restore the account. of the users barely noticed the interruption. After This incident highlights the tenuous nature of six months, if the system becomes unresponsive current social CRM technology. Debatescape because of excessive load or becomes unavailable operates on a cloud infrastructure that BT does at any time of the day or night, the users notice not control or own. For BT managers to sud- right away and start complaining within minutes. denly realize that they have no input or The growth and scale of such systems pose a influence over the operation of a critical part of couple of implications that require careful their service infrastructure is a real culture consideration. shock. BT has no SLAs with social media sites First, functionality that is introduced into a that are a core part of the service it is running. system during its trial phase in the belief that it Some of the social media sites that Debatescape would be used occasionally and out of normal relies on do not have contact centers or people operational hours can become critical to the to call that can provide 24/7 support. This actual operation of the system. The customer increases BT’s exposure and risk. contact centers that introduced Debatescape had Graeme Stoker (BT Consumer) observed another well-established patterns of shift work and a 24/7 vulnerability having to do with customer inter- culture, and Debatescape was rapidly appropriated action on social media sites, one akin to cus- into this way of working. This meant effectively tomer poaching. He explained, that there were no “off hours” for additional func- tionality as operations were necessarily impacted One of our competitors started seeing the as a result. For example, running reports and customers that we were posting to, where doing backups within Debatescape both caused they were saying that they were having problems in this regard, imposing either problems with our service, and one of our substantial database overhead (in the case of competitors started writing to them and system reporting) or substantial bandwidth over- trying to encourage them to move over to head (in the case of backups). Second, a pilot them.… Our reaction was ‘That’s inter- team that is not funded to provide 24/7 coverage esting. How do we respond to that?’ In the can quickly become overstretched in the always- end we decided not to respond. We just on social media world. Debatescape achieved carried on and tried to satisfy the 99.36% availability during its first nine months of customers and decided not to do the same

Orlikowski and Thompson Page 7 CISR Working Paper No. 380

operation, but despite this there were many opportunities are being deliberated, the team complaints about outages and slow response running Debatescape is still required to deliver times. effective 24/7 service with the resources that were allocated when the activity began. How to Transitioning an experimental pilot system to effectively transition from experimental pilot operational status can be very difficult as the status to a fully-supported system without dis- final requirements and shape of the system are rupting the value currently being generated is necessarily unknown at the start of the thus a significant challenge. development. In the case of social media, there was an explosion of interest that generated a Conclusion wave of support leading to systems such as Debatescape. Some social media systems have While BT is continuing to learn from its initial clear revenue generation propositions and com- implementation of Debatescape, the focus, design, panies find they can easily fund and support operations, and results offer interesting and such systems through the revenues produced. important insights into the business opportunities Cost saving and customer service initiatives, and challenges of using social media to interact however, are more difficult to manage and directly with customers. In particular, the initiative justify as it takes time for their contributions to we have described here suggests that social media be visible and accessible to the organization. have the potential to provide business benefits And where such initiatives are unexpectedly along all four of the dimensions of shareholder heavily utilized, additional funding may be value—cost, reputation, innovation, and growth. needed sooner than anticipated. Corporate fund- Of course, the emergent nature of Web 2.0 tech- ing for innovation activities are often fully nologies, the rising demographic of “digital allocated within a particular reporting period, thus natives” (the millennial generation), and the press more money can often only be found at the cost of of shifting business practices suggest that these stopping other activities. Yet, underfunding an benefits will change over time. There is con- innovative pilot can compromise its potential siderable evolution and change likely in this success and undercut the lessons learned from the space for some time, so experimenting with initiative. social media and learning how to effectively leverage the web for customer engagement must As the opportunities and environment around be ongoing. Debatescape have evolved, so have BT’s plans for it. At the time of writing, there are a number of options under consideration such as integrating the system into the corporate infrastructure, selling the

intellectual property rights to a third party, or licensing it to a third party. Even as these

Orlikowski and Thompson Page 8 CISR Working Paper No. 380

Exhibit 1 Architecture of Debatescape

Exhibit 2 Shareholder Value Framework (from Hart and Milstein, 2003)

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