Tag Archives: employment equity

Woolworths: Social Media case study on how to build and break customer relationships!

Woolworths is a leading retailer, that attracts a shopper profile at the LSM 7 – 9 level, and has always stood for quality.  Its CEO Ian Moir has had a bad year to date, having experienced the negative power of Social Media three times this year already, the latest furore no doubt given him the biggest headache. There is no doubt that the furore that its employment advertising has created will become an important case study in Social Media Marketing, and will guide many other corporates in how to deal with negative sentiment expressed in Tweets, on Blogs, and in Facebook comments.

My attention to the issue was first attracted when I read a Tweet by Woolworths’ Digital Editor, highly regarded Sam Wilson, who previously was the editor of Food24, Parent24, and Women24, writing as follows: ‘Guys, I am white. I am currently interviewing white people. This @WOOLWORTHS_SA white racism thing because we comply with BEE? Weird’. It came across as a Tweet expressing her displeasure at her employer’s employment policy, and it only made sense when the story broke about Woolworth’s recruitment advertisements specifying population group requirements for the positions it was advertising. The story was launched last week on Facebook and thereafter on the blog of Justin Harrison, who calls himself an ‘Internet entrepreneurial pioneer’ on his Blog, but who has not been heard of by most local social media folk, maybe because he operates from Durban.  It got so bad on Woolworths’ Facebook page that it removed the comments containing ‘hate speech’. Last Thursday Woolworths posted a note on its Facebook wall, announcing that it was closing it down due to the overwhelmingly negative and unbelievably harsh vitriol posted, a move supported by more than 2500 likes (out of 204000 ‘likers’):

“Woolies fans,

Disabling our wall was not a decision we took lightly and not one we’re particularly happy about. But when your page becomes little more than a platform for a well-orchestrated campaign of hate speech, we owe it to our customers not to subject them to such vitriol in our own house.

We have, in a variety of channels, repeatedly refuted the claims being made against us. We have also allowed thousands of comments on our Facebook page, debating the pro’s and con’s of Employment Equity as a national debate… deleting only overt hate speech and comments inciting violence.

However we’ve always put our customers first… and many, many customers have asked us to stop hosting this vitriol. We will re-open our page as soon as we think we can resume reasonable discussion”.

Yesterday the wall was re-opened, and new negative comments have been posted on the Facebook page, where most of the debate appears to be concentrated, with little mention of the issue on Twitter.  Interesting is the vast number of (mainly negative) comments about the Woolworths debacle on a new Facebook page called AAA Anti-Affirmative Action, with close to 3500 likes, reported on by The South African Newspaper published in London, which referred to Woolworths’ and SAA’s employment policy problems. The newspaper also reported in the same article that the ‘National Chairman of the Australian Protectionist Party, Andrew Phillips called upon both the Federal Labor government and the Opposition to unanimously support the introduction of sanctions upon South Africa’.   The sanctions are motivated by Mr Phillips, whom most Australians who posted comments about this story say they have never heard of, on the grounds of the government not having created an ‘equal opportunity’ society in this country.

Earlier this year Woolworths was embroiled in a Social Media war about its vintage soft drink range bearing a close resemblance to Frankie’s, which Woolworths was forced to remove from its shelves after the Advertising Standards Authority found that the retailer’s ‘Good Old Fashioned’ pay-off line was too similar to that of Frankies. Initially Woolworths denied copying any aspects of Frankies’ drinks.  In a third incident, Woolworths was criticised for launching Halaal hot cross buns over Easter, which caused a furore too. The sponsorship by the retailer of MasterChef SA was said to erase the damage which the two earlier Social Media disasters had caused, but Woolworths did not come out of the reality TV series unscathed, its Woolworths Pantry guest food blogger recipes causing controversy initially.

Woolworths reaction to the employment advertising furore, which has led to a call by trade union Solidarity for customers to boycott Woolworths, and which was echoed in the thousands of Facebook comments, smacks of old world corporate disaster management PR spin, rather than being Social Media driven:

*  Posted its employment policy, in accordance with the Employment Equity Act, which applies to all companies with 50+ employees, on its Facebook page on the same day:

“Over the past few days, we’ve been accused of racist employment practices. We’d like to state the facts:

• Like all South African companies, Woolworths has a role to play in transformation. For this reason, SOME positions (where there is under-representation) are designated for EE groups.
• The designated groups are Blacks, Coloureds, Indians, women and people with disability.
• As per the Employment Equity Act of 1998, Woolworths is expected, like all SA companies with more than 50 employees, to plan our workforce by race, gender and disability.

• Our workforce is diverse and includes people of all races (Black, White, Coloured, Indian), gender and disability.

We appreciate the value diversity brings to our business and the need to contribute to levelling the playing fields for certain groups of South Africa’s population”.

*   Sent a personalised e-mail entitled ‘The difference between Rumour and Fact’ to its cardholders, with a similar content, and an sms to those customers who are not on e-mail.
*   Placed an advertisement in the Sunday Times, Rapport and City Press on Sunday, with a similar message.
*   Wrote an expanded version of the content as a letter to the ‘Readers’ Forum’ of Business Report, an odd platform to use to address his ‘Dear Woolworths customer‘, when it was possibly the shareholders he was trying to placate, given the knock that the Woolworths share price has taken in the past week (the letter is the same as the one sent to its customers by e-mail)!
*   Received public media support from Labour Minister  Mildred Oliphant for its ‘unwavering effort to genuinely address transformation in the workplace through the implementation of employment equity’.

In our opinion, the response by Woolworths has been very corporate, very reserved, very defensive, and not in keeping with Social Media marketing principles of engagement and two-way communication, a similar reaction it delivered in the Frankies affair.  One wonders how one Facebook post and subsequent blogpost by Harrison could have unleashed such a storm, his message obviously touching a raw South African nerve amongst the shoppers that make up the bulk of Woolworths’ target market.   Surprising was the blogpost written on the 2oceansvibe blog, which lambasted Harrison for using the Woolworths issue as a means to gain more Followers on Twitter and other Social Media platforms, and writing in detail how Harrison had allegedly bought Followers some years ago. This led to a strong outburst of comments against 2oceansvibe, accusing it of being linked to Woolworths and/or Woolworths’ digital media agency Quirk, defending the Woolworths brand (denied by owner Seth Rotherham), and criticising 2Oceansvibe for pointing a finger at a Social Media player when it itself had been criticised for selling advertising for its radio station on the basis of highly inflated listenership fingers, forcing Rotherham to deny the allegations contained in the close to 200 comments received to the blogpost!

The Woolworths’ website does not explain its BEE employment policy, nor does it contain the public statements made in the media by its CEO in its Careers section or elsewhere on the website.  It clearly has been edited, as its introduction page invites one to click onto a link to see the career opportunities, but when does so, no jobs are listed. Now one is invited to call the retailer to check out its employment opportunities!   Woolworths should use its website proactively to communicate with its staff, potential staff, and customers!

Seemingly sensible advice to Woolworths comes from Harrison: ‘Woolworths is clearly in a spin over how to deal with this issue and they would do well to learn from SAA’s mistake. Issue a public apology and revert back to the hiring policies to be fully inclusive and based purely on experience and ability‘.

For Woolworths specifically, a platform such as Twitter should be used for engagement.  The retailer has become very poor at acknowledging any feedback about in-store problems, expressed by its Tweeting customers.  There is no apology if there is communication, and there is no follow up to communicate with the customer telephonically after the Tweet, as Pick ‘n Pay has become reasonably good at.  A company that once had the Social Media lead has become reactive and defensive, and has lost its standing due to the Social Media wars, rather than walking tall and engaging with its customers in a credible and warm manner. This is a surprise, as its Head of Online Nikki Cockcroft has an impressive background, including CEO of Primedia Online, 365 Digital, and Prezence Digital before she started at Woolworths just over a year ago, and given Sam Wilson’s experience in engaging with a similar target audience at Media24 previously.

Woolworths needs to go back to basics to better understand how to maintain customer relationships via Social Media.  Successfully building up a large army of Twitter Followers and Facebook Likers is no guarantee that the same seemingly loyal customer audience will not turn against the retailer if it is not in touch enough with its customers, and offends them, as the past ten days has shown!

Chris von Ulmenstein, Whale Cottage Portfolio: www.whalecottage.com Twitter: @WhaleCottage

Cape Town Routes Unlimited does not spend enough on Marketing

A heavyweight delegation from the Western Cape Department of Finance, Economic Development and Tourism, members of the Board of Cape Town Routes Unlimited, and ‘stakeholders’ of the organisation attended a presentation at the Table Bay Hotel last week, to receive feedback about Cape Town Routes Unlimited’s performance in the past twelve months, and its way forward.  Attendees also received a copy of the 2009/2010 Annual Report, a detailed document of the activities of the body which states that its “core business is marketing communications”.  It is a shame that so little of the organisation’s budget is spent on beneficial marketing on behalf of the tourism industry in the Western Cape.

The problem with handing out the Annual Report is that it reveals information which is not always to the benefit of the organisation, even though its “honesty” is commendable and meets accounting procedures.  A greater part (52%) of the R 38,5 million annual budget which Cape Town Routes Unlimited received from the Western Cape province in the past year, supplemented by R 15 million from additional special project income generated, was spent on administrative expenses rather than on marketing, which is bad news for the tourism industry in the Western Cape, which has seen the worst year ever, with most provincial tourism businesses having been detrimentally affected by the World Cup, by the strong Rand, and therefore by a reduced number of bookings. 

The importance of Marketing to the organisation is highlighted by the fact that the CEO, Calvyn Gilfellan, is also the Chief Marketing Officer.   He has three Marketing Executives reporting to him:

David Frandsen: Executive Manager – International Marketing: Europe and the Americas and the Convention Bureau 

Itumeleng Pooe: Executive Manager – International and Domestic Marketing: Africa, Asia, and the Middle East

Romeo Adams: Executive Manager – Marketing and Organisational Support 

In the Annual Report, each of these executives feeds back what their performance has been relative to targets set at the beginning of the financial year.   It is a shame to see how much of their time and action was directed at meeting administrative requirements in the preparation of the Annual Report as well as the financial reporting.   Many of the targets they set themselves seemed rather low, so that it looks good on paper when many are exceeded.   I was shocked to see the declaration of salaries of the Executive Management, and how some of these have increased in the past twelve months.   Gilfellan’s annual income is listed in the financial statements at just under R1 million (up by 6,6 % on the year before).  The Marketing Executives earned between R692000 – R839000 in the past year (close to R58000 – R70000 per month), salaries which seem way above the norm, especially when the industry cannot see much benefit of the work done by Cape Town Routes Unlimited!  Even the directors are paid emoluments, some as high as R26000.

In summary, Cape Town Routes Unlimited lists as its tourism marketing achievements in the past year the following: R20 billion of tourism business generated through international trade shows; organising the ’67 minutes for Nelson Mandela’ birthday celebration; close to 400 media mentions valued at R162 million, reaching 107 million persons – these are very bold claims!; Summer Welcome campaign; regional tourism road shows; organising Tourism Month; hosting VIP delegations; a green tourism initiative; SMME Marketing Support programme; receiving bookings at its Visitor Information Centers (set up in the Waterfront in opposition to Cape Town Tourism) to the value  of R2,4 million; a Google Adword campaign; a campaign with CNN; and an e-mail campaign in the Benelux countries.   Conventions are lucrative for tourism business in the Western Cape, and for Cape Town in particular, nine conferences having been secured for the next three years, to be attended by 5650 delegates, with R55 million in economic impact.

The recent upheaval caused by provincial Minister Alan Winde’s announcement that he wants to amalgamate Cape Town Tourism and Cape Town Routes Unlimited was not addressed by the Minister when he spoke at the meeting.   Cape Town Routes Unlimited Chairman Peter Bacon was critical of the separation between the two tourism bodies in his ‘Chairperson’s Review’: “… following the City of Cape Town’s withdrawal of its financial support and decision to mandate Cape Town Tourism to market the City and provide visitor support services on the ground. This effectively gave rise to the creation of a second Destination Marketing Organisation with the resultant confusion, duplication of effort and wasteful expenditure.”   Bacon does praise the closer co-operation between the Western Cape province, the City of Cape Town (which steadfastly is supporting Cape Town Tourism for the marketing of the Mother City) and municipalities in the province.   Cape Town Tourism is not mentioned by Bacon in this context.  Bacon states that the province is working on:

*  a clear vision for the development of the tourism industry

*  a single strategy with clearly defined roles, responsibilities and deliverables.

*   business plans for Cape Town Routes Unlimited,  Cape Town Tourism and other regional tourist organisations aligned to the goals and strategy of the province,

and this will lead to a Memorandum of Agreement to be signed between the Province and the City in the next twelve months, he writes.     

In his Chief Executive Officer’s Review, Gilfellan writes: “One of our organisation’s greatest achievements during this challenging year was that it established itself as a credible and authoritative voice in tourism”, on the basis of media comments requested from the organisation.   Many will question his claim.  He states that industry challenges are the following:

*   “overcoming the effects of the worse (sic) economic crisis to hit the the industry in 60 years

*   The slow pace of transformation and diversification of the industry

*   Stunted growth in our traditional core markets of the UK, Germany, Netherlands and France

*   Limited marketing resources compromising our global competitiveness, and

*   Institutional disarray leading to the current role confusion, duplication and possible fruitless expenditure.”

Gilfellan also looks to the future in his review, and calls for “a speedy resolution to the protracted institutional calamity”, referring to the problem between his organisation and Cape Town Tourism; Events, Sports and Business Tourism will capitalise on the World Cup; new target markets like Brazil, India, China, Russia, the Middle East and Africa must be targeted; a tourism community in which business, labour, government and the communities unify around a common vision and partnership;  embracing technological advances in marketing; promoting the principle of a ‘quadruple bottom line’, encouraging the tourism industry to pay attention to social responsibility, environmental sensitivity, economic imperative, and climate change.

In providing such detail to the industry, one can request Cape Town Routes Unlimited to connect with its stakeholders more frequently than once a year at a function; to allow stakeholders to ask questions so that a dialogue can be created at such functions; to inform stakeholders about achievements as frequently as possible, so that they can help spread the word about the work of the organisation (Cape Town Tourism is excellent at this);  to address the imbalance in “employment equity” by gender, occupation and population group; to improve its market research techniques, a weakness it shares with Cape Town Tourism; to contain any duplication in its marketing activities relating to Cape Town that is already managed by Cape Town Tourism; to address the non-sensical brand “Cape Town & Western Cape”;  and to speak to tourism leaders about how it can more effectively direct its marketing budget to the benefit of the industry, being Events, Events and more Events in the seasonal winter months. 

I am very impressed with Minister Winde, and how approachable he is – he has no airs and graces, picks up a phone to make a call to a tourism player with an opinion, is embracing social media with a Twitter account (@AlanWinde), and reads and comments on blogs related to tourism.  As an outcome to the presentation, hearing stakeholders reinforce how poor business is, he promised to set up a meeting to address the poor bookings issue, especially given the feedback from World Travel Market held in London last week that our country has priced itself out of the market.

Chris von Ulmenstein, Whale Cottage Portfolio:  www.whalecottage.com  Twitter: @WhaleCottage