Anybody Home? The Power of Online Presence

We are all familiar with the real world impact of “presence” – and the powerful clues to social context that it provides…

Ok, ok, some examples.

Do you think twice about entering an empty restaurant surrounded by thriving atmospheric venues?

Do you feel a lift in adrenalin at one of the world’s great sporting venues filled to capacity with screaming fans? (I was lucky enough to be at the Melbourne Cricket Ground in 2005 for the mighty Swans victory…).

On the other hand, have you read about the great European soccer clubs who have had to play matches in stadiums without fans able to attend – due to previous fan behaviour? Can you imagine the (lack of) atmospherics and adrenalin in an empty stadium?

You may also be aware of how just the act of observation can influence behaviour – the so-called Hawthorne effect observed in controlled studies. Or at a more intense level of scrutiny or adulation, the commonly referred to “fishbowl” effect. Think Michael Jackson (apologies) or Hollywood starlets…

So if these are real and quite powerful phenomena in the real world – how does this all relate to our experience online particularly in online communities?

Clay Shirky describes the decision to join an online community in the following manner…

Any new claim on your time must promise something of value – and presumably some higher value than something you already do… But it is not a promise alone. You must not only assess that it will be of value to you but “will enough other people feel as I do to make it take off?” Shirky calls this the “plausible promise”.

And once you have joined such a site you will be looking to assure yourself that this is indeed a healthy and active site worthy of your time.

This, of course, is the same power of presence we recognise in the real world just adjusted to the foibles of the online environment. Just remember, that “on the internet, nobody knows you are a dog…”

And it is a similar phenomenon to the power of recognition, reputation and embeddedness mentioned by Tim that can ultimately develop in online communities. But it has to start somewhere, and just knowing that “somebody is home”, that “there is a pulse” provides a very powerful and necessary context.

So, to continue our line of inquiry… have you been to social websites where…

You can immediately see a number of recent member generated comments…? (thebuzzexchange, everydaymatters)

The number of registered members or members currently online is displayed? (essentialbaby)

Have you been to a “social” website that measures contributions, has leader boards or recognition badges? (digitalministry) Did this perhaps lift your adrenlin levels and competitive spirit just a smidgeon…

My case rests, your honour.

Community Scripts: Tell Us a Story!

The importance of framing your online community with a story should not be underestimated.

Fournier and Lee illustrate this as follows:

“A script suggests a set of behaviors that are appropriate for a particular situation. Companies can design brand communities by establishing and reinforcing a base script and then layering on new scripts over time.

Vans, a maker of skateboarding shoes, initially sold its products to tight-knit surfer and skateboarding communities. Building direct relationships with these groups and cultivating lead users within them reinforced an implicit Tribe script. By sponsoring competitions and skate parks, Vans introduced the Performance Space script. And through skateboarding clinics and demonstrations, the company added features of the Sewing Circle.”

Some community script examples:

The Tribe:

A group with deep interpersonal connections built through shared experiences, rituals, and traditions.

The Fort

An exclusive place for insiders to be safe and feel protected.

The Sewing Circle

A gathering at which people with common interests share experiences, provide support, and socialize.

The Patio

A semiprivate place that facilitates in-depth, meaningful connections.

The Bar

A public space that grants reliable although shallow connections.

The Tour Group

A way to participate in new experiences while staying inside a comfort zone.

The Performance Space

A place where members can be sure of finding an audience for their talents.

The Barn Raising

An effective way to accomplish tasks while socializing.

The Summer Camp

A periodic experience that reaffirms connections.

What is your community script?

Hen’s teeth? An Australian company with high Net Promoter Scores…

 

Australian NPS study

 

Back in 2006 the Melbourne Business School researched Australian customer satisfaction / loyalty using Net Promoter Score (NPS) as the metric. They looked at a range of service and product categories and found generally poor NPS results (apart from Broome being a great holiday destination).

This research has recently been (coincidentally) updated in this report which looked at the NPS in Australian Banks, Insurance, Mobile, Health Insurance and online shopping.

Several of these categories overlap with the 3 year old MBS study and I thought it would be good to look at how some of our national icons have progressed in the last 3 years – from a customer perspective. No illusion of precision here as I am sure the customer samples are not apples to apples, but illuminating never the less.

So – some example changes in NPS follow…

Banks

Bendigo topped both studies with an NPS of +7 in 2006 and +33 in 2009 for a whopping increase of 26!

ANZ went from -24 to -5 increase of +19

St George went backwards from -29 to -30 decrease of -1

Westpac from -39 to -18 increase of +21

NAB from -42 to -30 for an increase of +12

CBA, last in both studies, from -54 to -39 for an increase of +15

Property Insurance – generally has improved

APIA was not in the 2006 study but overwhelmed the field with NPS of +69, world class

AAMI from -22 to +5

RACV from -25 to +2

NRMA from -33 to -10

CGU from -41 to -15

GIO still at the bottom but moved from -53 to -20 a +33 increase!

Health Insurance – generally getting better, but still low as a category

HBF on top, from -15 to -4

HCF from -30 to -18

MBF from -46 to -23

NIB from -27 to -23

Medibank from -48 to -30

Mobile Phones

Virgin with a bullet! From -29 in 2006 to 0 in 2009

Vodafone from -26 to -4

Three from -24 to -7

Optus from -34 to -22

Telstra still at the bottom but up 10 points from -44 to -34

Overall, there appears to have been a general improvement in customers’ willingness to promote Australian companies in these categories. But this is no cause for celebration – there were only 7 positive scores in the 2009 study and only 2 companies achieve world-class scores; APIA and Bendigo Bank.

Time to look to your Customer Experience Management (CEM) efforts integrated with your Customer Relationship Management (CRM) systems to improve your Net promoter Score (NPS) in this world of Three Latter Acronyms (TLAs).

Designing for the Social Web

A hat-tip to James Breeze at Objective Digital for recommending the book “Designing for the Social Web” by Joshua Porter.

This book describes a simple prioritization scheme for designing social web applications called the AOF Method. AOF stands for Activities, Objects and Features and the method is made up of three steps:

1. Focus on the primary Activity – What is your audience doing?

2. Identify your social Objects – What are the objects that people interact with while doing that activity?

3. Choose your core Feature set – What are the actions people perform on the objects and which are important enough to support in the web application?

There are some very interesting insights in this book and an approach demonstrated by plenty of real-life examples.

An important starting point is focusing on the primary activity – rather than perhaps the more intuitive “know your users”. Porter’s point is that paying attention to the people you’re designing produces a never ending list. A deep understanding of the specific activity that you are supporting with your design is far more productive.

The social applications that are the most compelling tend to excel at a single activity: sharing photos (Flickr), shopping (Amazon), managing a project (Basecamp), sharing videos (YouTube).

Another important lesson is that “personal value precedes network value”. In our rush to get to social network value it is very easy to forget that you must first deliver personal value to an individual. As Del.icio.us’ founder Joshua Schacter points out, the major value of the site was “memory first, discovery second”.

With this in mind, Porter then talks about “identifying your social objects” (eg. photos, videos, events, products, jobs, news stories, auction items, bookmarks) and “finding your verbs” (eg for video: play, stop, edit store, share, comment on, embed) in order to define your core feature set.

And then, of course, all wrapped up in some advice that I’m sure most of us are guilty of not following: just say NO in the face of too many features. Accept only the most important features and keep the others on the back burner until they are truly necessary!

Online Communities and Brand Site Design

Have you checked the traffic to your corporate website of late? And if you have an online customer community or even an industry forum frequented by your customers – have you checked out the traffic to those sites? It is pretty clear that customers have a strong message for traditional corporate websites…

Forrester analyst Josh Bernoff asks what does that mean for the traditional corporate websites:

- Does the brand site become the community?
- Does the brand site have a prominent link to the community? (Much like Dell)
- Does the brand site remain completely separate from the community?

I suspect that in the longer term there will be pressures to integrate social functionality seamlessly into corporate websites so that customers can remain in active mode – rather than having move to another part of a website to somehow switch from passive to active persona. Active mode will just be expected and will be “chips to play” for most brands. For strong brands with demanding interactive customers this will of course happen sooner rather than later.

However, it does raise some interesting questions of how you design websites for both informational and interactive/social requirements – without one requirement detracting from the other.

On-line Service Quality

The pioneering authors of SERVQUAL have turned their attention to online shopping service quality and the result is a measurement instrument that we think has ‘legs’; E-S-QUAL

Research on service quality has typically concentrated on services delivered by people; the instruments that have been widely used for measuring service quality may not be appropriate or useful when evaluating the quality of no-people e-service.  And many of the commonly used measures of online behaviour are just that – behavioural – frequency, time and click-based.

At the same time, Satmetrix & Reichheld’s Net Promoter Score (NPS) has proven to be an effective foundation for integrated customer relationship / service programs. It does a great job of highlighting when things are going well or badly (or unremarkably) but does not tell you, on its own, what exactly is the cause / appropriate action.

Mmmmm… an opportunity?

The E-S-QUAL instrument measures 4 empirically derived dimensions important to customer perception of e-service quality (Amazon and Walmart sites were used to confirm the instruments’ validity and reliability);

1. Efficiency: The site can be used easily and quickly
2. Fulfillment: The site fulfills its promises about order delivery and item availability
3. System Availability: the site functions properly
4. Privacy: The site is safe and protects customer information

  The E-RecS-QUAL instrument measures the 3 dimensions important to service recovery quality following service failure;

1. Responsiveness: The site handles problems (and returns) effectively
2. Compensation: The site compensates customers for problems
3. Contact: Assistance is available through telephone or online representatives

E-S-QUAL also measures Perceived Value received on the site – NPS seems to be a valid alternative to these questions.

Idea – combine the 2 into a single instrument for the measurement and management of service quality while shopping online. Customers could tell you what they think and why, so you know what remedial action is required.

Social Sigma or Getting Close to Your Customers

Well you’ve probably heard of Six Sigma or perhaps even lean Six Sigma but what about Social Sigma…(no, not Social Stigma!)

Just when you thought it might be safe to listen to another Analyst here comes Social Sigma – a process to improve the customer experience by looking at their online activities.

But let’s just roll-back for a minute. You will recall of course that Six Sigma is a data-driven methodology that provides businesses with the tools to improve the capability of their business processes. The ultimate aim is to increase profits by eliminating variability, defects and waste that undermine customer loyalty.

Social Sigma uses continual online feedback from your customers to perfect your products. So pretty much the branded online communities that we discuss on this blog plus any other feedback that can be garnered from the social media universe. This data – from blogs, forums, polls, surveys etc – is analysed and fed back across the company to inform everything from product development to sales, marketing and service to improve the customer experience.

So you might say that our new fangled term – Social Sigma – is really just the traditional concept of customer feedback updated to leverage online communities and the social networking phenomenon more generally. You might even wonder why we need to invent a new term to cover the concept of staying close to your customers…

The acid test for our newly acquired jargon will be whether the disciplines and techniques of Six Sigma can start to drive real value back into the organisation – speed to insight, innovation and advocacy. If the term facilitates this – by somehow providing credibility to a new discipline – then perhaps it will pay its way!

And as pointed out by George Colony (CEO, Forrester Research) the reason why social sigma works is “because the social network for a company is trusted and interested – they have a stake in improved services and products and have built-in incentive to contribute time and ideas to the cause.” And “Companies who fail at social sigma will claim to be listening but will fail to incorporate ideas from the social network into its products. They will be faking it – and customers will figure that out quickly.”

The parallels between authenticity and quality are interesting and are also explored by Gilmore and Pine in their book “Authenticity – What Customers Really Want”. They see rendering authenticity in the experience economy as the new consumer sensibility – as important as improving quality is to a services economy.

Membership Organisations and Social Media

It would be easy to say that customer engagement is core business for just about any business. Easy, but not particularly instructive.

The truth is that the degree of customer engagement required or desirable is going to vary by category and from business to business. Do I really want a deep and ongoing relationship with my gas utility? (Answer: only when things go wrong!)

There are some categories, however, such as membership based organisations – eg. sporting, professional and industry associations where customer or member engagement are clearly and unequivocally core business.

The passion found in sporting clubs such as the Australian Football  League and the vocational self-interest inspired by professional or industry associations such as the Australian Society of CPA’s represent an asset to membership organisations that is by and large untapped. And the uptake in social media and online communities frankly should represent the “elephant in the room” to these organisations.

Lets take your typical industry or professional association.

These organisations are often faced with several diverse challenges given their size including:

• The annual membership acquisition and retention tread mill
• Event driven schedules that require “all hands to the pump”
• The sponsorship deal that could make or break the bank
• Staff turnover that reduces critical IP from the organisation (and the occasional “ground-hog” day!)
• How to represent members in the appropriate political forums
• How to identify what members really want so that the Association can remain relevant
• How to get geographically scattered members engaged with the Association and other members

The last two points here I would argue are core business to these associations and are critical to resolving all other challenges.

My experience with associations is often turning up to events every month or so – with very little context around the topic or my relationship with the association and a “hit or miss” with satisfaction with the of the event. Now, you could rightly say that you only get back what you put into these organisations. However, it is 2009, and the threshold to participating and contributing just got a whole lot lower with the “social internet” and the collaborative tools now available.

Setting up and running an online community for such organisations is a relatively straight forward task – with the right specialist advice. Public communities such as Linked-In and Facebook too often fragment from “official” sites and have very few controls around identity and analysis. However, there are hosted open-source platforms available where you can create your own unique site at minimal cost. Creative look and feel can remain the same – meaning that the user has a seamless experience moving from the associations website to various community forums, blogs, polls, surveys etc And whilst some new roles are created internally (eg online community manager) there is inevitably a medium term reduction in headcount and spending devoted to  less efficient forms of communication and research.

For me, as a member, I now have a website resource where:

• Every other member is a potential resource
• There are no geographic boundaries to interaction and collaboration around special interests
• I can express my opinion and preferences instantly (subject to moderation)
• Due to profiling and groups, communication is far more tailored to my interests
• I can qualify the nature of events prior to committing valuable time
• I can promote myself to colleagues (career opportunities!)

From the associations viewpoint, you then have an online community where:

• Opinions, ideas and preferences (polls, surveys) deliver quick, unequivocal feedback from your most passionate members to keep the Association relevant
• Interest in events and new offers can be tested
• Collaborative forums and groups with a specialist focus can be far more effective and efficient (and in-view of the Association)
• Geography becomes less important (perhaps reducing unnecessary regional infrastructure) and special interest groups become the primary focus
• Sensitively handled, sponsors can be involved – creating potentially a new revenue stream

For more detailed ideas, you may wish to check-out the “Top 10 Ways Associations can Use Online Communities to Increase Member Acquisition and Drive Revenue.”

Sound too good to be true? Perhaps, but if ever there was a category waiting to benefit from social networking – it is staring our local associations in the face!

Social Media: What’s in a name?

What’s in a name? Well, a lot it seems, if you are setting the scene for an ongoing discussion.

Take this blog site for example…  we are talking with marketers, customer activists (eg other bloggers!) and indeed anyone interested in how brands can engage with customers and prospects online to achieve their marketing objectives. And… in a manner that represents a genuine exchange of value!

Bit wordy isn’t it! A label would be handy…

What are we discussing? Social media, online communities, online marketing, digital marketing, conversational marketing, customer engagement, customer experience management, CRM, web 2.o … Take your pick!

And the problem is that so many of these terms come with their own baggage – their own worldview, preconceived assumptions and  frames of reference.

The term “social media” appears to have gained significant currency but has the baggage associated with traditional media and the mindset of something you push one-way at the consumer…

“Online communities” and “social networking” don’t say enough about the brand’s purpose or context.

“Conversational marketing” is getting closer to our purpose but is a cumbersome term that does not appear to have gained currency.

One term that I spied recently from a leading digital agency website had me intrigued: “Social influence marketing“. It was however badged everywhere with a trademark sign. You have to laugh… some marketers will never quite understand the “social” component of this topic!

“Web 2.0” – well you have alienated half of your potential community who see this as too “techie”…

“CRM 2.0 -” – is this like putting lipstick on the pig? And by the way, customers don’t want their relationships managed.

And anything ….x.0 (CRM 2.0, Marketing 2.0, Enterprise 2.0…) is starting to look just a little too slick and contrived don’t you think? If it didn’t work in the last version, why is it going to work this time. That’s a negative place to start…

Customer Experience Management (CEM) – there is a growing body of knowledge and experience around this domain that complements CRM very nicely. But as a term, its only part of the story and it looks a bit old and tired. As a customer in 2008, having my experience managed sounds more like passively viewing the latest Hollywood blockbuster?

Apologies if this sounds a little too cynical… but the truth is, I don’t think we have the best label yet!

And for so long as we cannot express our endeavour in a concise term, there will be missed opportunity!

So this is our challenge – what term do you have?!

Amplifying the “Voice of the Customer”

The term “Voice of the Customer” (VoC) is a very useful term for initiatives designed to improve customer experience but it is also a term that has been bandied about in a very loose manner. So it is good to see from Bruce Temkin (Forrester) some definition of terms and analysis of how the concept can be translated into practical action!

The use of online communities to amplify and validate these VoC initiatives I believe can take these initiatives to new levels of effectiveness.

Bruce Temkin provides the following definition for a VoC Program:

“A systematic approach to incorporating the needs of customers into the design of customer experiences.”

He then identifies five distinct levels of activities in a VoC Program: (my comments in parenthesis)

1. Relationship tracking. Organisations need to track the health of customer relationships over time… Why is this important? Because an easy-to-grasp report card helps align everyone in the organisation around a common purpose. And focuses investments in key areas that correlate with improvements.

This, of course, is the challenge addressed by metrics such as Net Promoter Score. Online communities can make these efforts more dynamic by incorporating NPS results into subsequent conversations and prompting – eg. “why did you vote the way you did”; “how can we increase the propect of you recommending to a friend in future…”.  

2. Interaction monitoring. Every customer interaction – from an online transaction to a call into the call centre – is important. Firms need a way to monitor how effectively they handle these customer touches. This can provide detailed (& immediate) feedback to/about frontline employees and help spot problematic trends.

Incorporating this touchpoint feedback into an online community setting – helps to validate how widespread or problematic the feedback is and may of course prompt suggested improvements.

3. Continuous listening.  Structured feedback through customer surveys provides enormous opportunities for analysis. But this (data only view) should be supplemented by executives regularly listening to customers – such as listening to calls in the call centre, reading blogs, reading inbound emails and visiting retail outlets.  

We would argue that online communities can take this to another level with the more social component (customers talking to customers as well as the brand) and with the use of voting and ranking as appropriate. 

4. Project infusion. Projects that affect customers should incorporate insights about customers. Despite the clear need for this type of effort, many companies lack a formalised approach for infusing customer insights into projects. To make sure that this doesn’t happen, some firms are incorporating customer insight steps in the front-end of their Sigma processes.

One simple step… ask the online community! Employees and/or customers. “Is this project a good idea?” “Are we missing something?” “Could this project be executed in a more effective manner?”. Particularly in a pilot or scoping phase – this type of feedback can represent a great form of risk mitigation.

5. Periodic immersion. Every so often, it’s valuable for all employees – especially executives – to spend a significant amount of time interacting directly with customers or working alongside frontline employees. These experiences which should be al least a half day, provides an excellent opportunity for the company to question the status quo.

Whilst nothing will ever quite match dealing with a real live customer in the flesh – online communities are a pretty raw form of customer feedback and interaction; and with so much business be conducted remotely these days (employee-to-employee as well as employee-to-customer) online communities are a very efficient way for a vast number of employees to “stay in touch” with reality. 

Social Media Assets in a Downturn

Bruce Temkin describes the two paths that businesses can take in hard times:

1. Manage their way through it
In this approach, executive teams react to market conditions by making widespread cuts in an attempt to maintain short-term profitability targets. After the recession lifts, these firms will often need to rebuild their employee and customer relationships.

2. Lead their way out of it
In this approach, executives intensify their company’s focus on the long-term purpose of the firm  and make targeted cuts in areas that are not core to that purpose. After the recession lifts, these firms are set for a quick shift into growth mode.

Of course, defining the “non-negotiable purpose of the firm” is brought into very sharp focus in recessionary times. This is the real acid-test of the company mission statement. The doubts begin to surface. “How close do we really need to be to customers and how much will it cost?” “How much Is the customer experience really a differentiator for us?”

 A timely reminder of Jack Welch’s quote:

 

“An organisations ability to learn (about customers) and to translate that learning into action rapidly is the utlimate competitive advantage.” 

 

In the case of social media, the business case can be surprisingly resilient, compared to other channels in the marketing mix.

 

Josh Bernoff describes a strategic approach to measurement of social applications in a downturn. In particular, he urges us to think in terms of assets, not campaigns. Your online community, blog, ambassador program – will, if successful, be growing in value and utility over time.

From what we have seen happening with our clients over the past two years – I would strongly endorse this approach.

Consider the following for your business case:

 

Discounts vs reasons to buy

Consumers need strong(er) reasons to buy in a downturn. The reflex action of traditional marketing campaigns is to discount prices, but this can have larger implications for your brand. Experience with ratings and review products such as BazaarVoice is that customers are often pursuaded by the relevant and credible word of mouth by people like them. They have a new excuse to buy.  

 

Discounts aren’t as important when they find a product, service or experience that is a “must-have” based on the reviews they read. Customers feel confident making a purchase when they read reviews, answers and experiences from others.

 

Quickest path to insight 

Our experience with online communities is that having an “always-on” group of passionate consumers is an asset of considerable (quantifiable) value. Got one of those intractable marketing questions – ask the community!

 

Now this may not sit well with research purists (& we are not advocating the replacement of sound market research…) but consider the practical benefits. You will know the answer within 24-48 hours – often with samples in the thousands. The focus group suddenly looks like a slow & costly solution that doesn’t always scale and uses “professional” participants with little connection to the brand!

 

And by the way, I am not talking a simple fixed response survey. The real value in “asking the community” is to have open ended questions where customer generated ideas are presented back to the community for voting and ranking. This way the most popular and important ideas rise to the top - all within the 24-48 hours.

Maintaining and growing innovation

Innovation is, of course, a soft target in a downturn. So if your business is reliant on a steady stream of product development and innovation (and arguably, who isn’t?) what more cost-effective way could their be in asking your online community or involving external talent in the innovation process. See Wikinomics and The Wisdom of Crowds for inspiration here. 

 

Customers supporting customers – scales

I have talked about economies of scale in relation to customer support previously. Dell reduced their online customer moderation and support from a headcount of 30 to 5 over a period of years - and against a backdrop of ever-increasing community numbers and particpation! At first this seems counter-intuitive – until you consider that: well considered responses by the customer service reps can be read by everyone in the community and responses by a small percentage of “embedded” customers become a significant contribution to the overall customer support effort.   

 

User generated content – scales

Genuine customer-generated content brings new customers to your site while converting the ones who are already there. And promotions that include this type of content tend to increase average order value – no mean feat in hard times. And much like the customer support customer example – the investment in user generated content scales very well. Increasing customer generated content begets customers and more customer generated content – with a relatively fixed level of overhead costs.

 

Low cost of failure

OK, OK… not one for the official business case! But just between you and I, many social media initiatives are relatively cheap and the results quickly known. Provided care is taken with reputational risk this means that failure (or success!) can slip under the radar until forgiveness must be asked for.  

 

The bottom-line - in an economic downturn, with shrinking budgets and a retreat to “core purpose” – have the asset value in your social media applications identified well ahead of time! 

Net Promoter Score: Conversational Compass!

We have talked previously about Net Promoter Score as a simple measure in helping a brand to discern changes in the perceived customer experience. Not surprisingly therefore, NPS can be an extremely useful measure in online communities – providing a simple tracking device - helping us to interpret results and suggesting future directions.

NPS can be measured at several different levels: brand, sub-brand, category, product line, program etc over time and against a multitude of demographic and behavioural data. Identifying the large variances is where it gets really interesting…

In a recent example, we found that differences between Brand NPS and that of a newly introduced program were insignificant at a national level but that differences of program NPS accross national outlets varied dramatically. This pointed to possible poor execution of the program in some outlets or perhaps other more deep seated problems at these outlets. 

An online community also informs NPS as a segmentation device. What sorts of ideas are initiated or supported by Promoters? What is important to Neutrals? How could we “neutralise” Detractors? When combined with transactional data this becomes extremely powerful. The question then becomes: which ideas are supported by which NPS segment and what is the likely impact on purchasing behaviour…

As a conversational technique, the NPS question also suggests great follow-up questions, for example - why did you respond the way you did? And what would improve your NPS rating?

Our experience is that NPS helps to keep a strong quantitative framework around some very rich qualitative data. And It certainly lends weight to that old management credo: “if you can’t measure it, you can’t manage it”.

Dealing with Customer Attention Deficit Disorder (CADD)

If it wasn’t before, then make no mistake, customer attention is the new currency for marketers.

We are media animals it seems. The more access we get to media and content, the more we discover an insatiable appetite for information and entertainment. It is commonplace for people of all ages to consume multiple media at the same time with television, internet, newspapers, messaging and other media frequently overlapping.

Where will it all end I hear you ask?

Well for one, it seems inevitable that average total media consumption will very likely to exceed average total waking hours! However, the more immediate take away is that media will increasingly be consumed with partial attention – refer exhibit A above – something that we have all witnessed in our lounge rooms.

For those of us involved in sales and marketing, this has been known for some time. But it does represent a very new ball game.

Seth Godin captures this very nicely when he reminds us that whilst “first impressions” are still crucial – we have no idea at all when that first impression is going to occur.

This of course highlights the importance of a consistent, authentic customer experience and identifying customer predispositions in search of a “story”…

For those of us in sales, the power of repetition is also of no great surprise in this environment!

Beyond this however, how else can be we effectively deal with CADD (Customer Attention Deficit Disorder)?

Well, one virtue of the “new consumer” is that the more aggressive strain of the species will engage online – both identifying their predisiposition and perhaps even that they are paying attention!

Furthermore, for every 1 of these aggressive initiators online, there are 9 who will respond and 90 (the rest of us) who will lurk in the background observing this online activity (90:9:1 Rule). This becomes very important when brands are the topic of conversations and where we “lurkers” or “apathetics” are becoming less likely to trust a brand and more likely to trust “someone like me” online.

The bottom line?

Not withstanding the off-line world and actually talking to your customers in the flesh…  in a world of customer attention deficit disorder – any online conversation about your brand is a gold-plated opportunity worth cultivating!

Scary: unfiltered conversations with customers!

CRM ’sort of’ focused some companies on their customers and what they think, CEM makes it explicit but has yet to drive the software sales (and therefore hype?) of its alter ego.

But if a company embarks on a strategy of opening conversations, with their customers, through social media/online communities, the attitudes, feelings and ratings of those pesky customers become almost unavoidable.

And confronting to the average organisation with functional silos in their structure.

If CRM and CEM come under the general heading of Relationship Marketing, consider how difficult we make it for our customers – imagine having a friend who only remembers every second or third conversation. Or who recognises you in the office but treats you like a stranger in the bar.

That’s what we do when we let lines of business promote their own products without an overarching customer communication framework and a single view of what we do with each customer.

Which unfortunately puts us back at the traditional stumbling block; for CRM and now CEM – cultural change. The mind-numbing difficulty of changing the way an organisation plans and thinks, moving from the product as the starting point of everything – to putting the customer in the centre of key processes.

Let’s be honest, few organisations have succeeded at this.

I find the immediacy of conversational marketing helps – direct customer response is more personal and impactful on management than (sometimes) de-personalised market research. It is harder to ignore.

It may have the unexpected effect of making it easier to convince managers to have a passion for the customer; the critical success factor for Relationship Marketing.

Have you had success in changing executive attitudes by exposing them to undiluted customer interaction?

p.s. I found this great quote in a Forrester report by Bruce Tempkin that also helps reassure executives, “It’s not about making customers happy. It’s about focussing on the profitable customers and making them happy. It’s not about getting customers to sing kumbaya.”

Online Communities: Where left brain meets right brain

One of the most fascinating aspects of social media and branded online communities in particular – is the intersection (collision?!) between the spontaneous expression of people (consumers, customers, members etc) online and the driving need for corporations (brands, companies, associations etc) to distill structured meaning & insight that they can act on. Yes, the real world played at fast pace…

Several innovative brands (eg. Dell, Proctor & Gamble, Starbucks, Arts & Entertainment) have understood the power of this opportunity – and have learnt, invariably through trial and error, how best to harness it. Not surprisingly, there are traps for beginners!

The first and perhaps most obvious challenge is, of course, to get people to the community site and to keep them coming back! This challenge lies not only with the strategic thinking behind your site but with the nature of your creative (content!). The overwhelming advice from the experienced hands here is to remind yourself that it is “the community’s” site and that “what’s in it for them” should be front of mind! The research also points to developing embeddedness as being critical to this challenge.

The nature of this challenge - content – is also one for some creative right brain thinking (and reacting!).

However, there is equally a trap in establishing a highly engaging site, with embedded members – that leaves the marketer wondering why they have established the community forum in the first place… 

The recently appointed Digital Agency gets to trial every gimmick (game, competition, animation etc) at its disposal but the marketer is left wondering “So what happens now?!”

The challenge here is to make sure you have the right technology platform - a “back-office” to accomodate the structured analytical data you need to make sense of the community. Please adjust to left brain and read on…

To be useful, insight should not be anonymous. You need to identify individuals and types of individuals (you remember, segments!). You can then understand which ideas are preferred by which individuals or which segments and vice versa. Not only that, you can respond individually and appropriately to those who care about a specific idea and its related follow-up action.

And what about the definition of an idea in the first place – do you really want to analyse the same idea expressed in 50 different ways? Your back-office needs to have the ability to group ideas into themes and to filter for those that are worth analysing – without losing the power of the customer’s words in the process.

And what’s the point of using social media if we cannot accommodate the selection and ranking of ideas – this is the very structure that we as marketers have been after. Afterall, one of the major benefits of these communities are the “ideas we hadn’t thought of”.

So, the back-office needs to accomodate “user-generated” ideas that can be progressively presented back to the community for voting and ranking; in such a way that each idea (or theme!) is given sufficient “time at bat” (for baseballers) or “time at the the crease” (for cricketers) to be statistically significant. If you say this quickly enough, it becomes easier. The real point being that it is a piece of complexity that should be covered by your technology platform! 

The bottom line is that online communities need a healthy dose of both left and right brain thinking to be successful! A wierd and wonderful combination of qualitative and quantitative data and more importantly, a forum that can generate genuine customer advocates.

“First we create our structures and then they create us”

Happy employees make for happy customers, right?

Quite apart from the research, it just seems to make sense. 

 

And of course, it runs a little deeper than that. If we hold a mirror up to our organisations – most managers are what you would call “transactional leaders” – as noted by Shaun Smith:

“They believe that employees are hired labour and see their relationship as a transactional arrangement at best with little loyalty on either side. Tranactional leadership tends to deliver compliance but not commitment. If you want people to stay you have to bribe them through increased pay and perks.

By contrast, Robert Stephens, founder of the Geek Squad, believes that a company today is like a social network that has ‘temporary custody of talent’, and that you have to build in social links to help unite talent around a common purpose. In other words you have to create an environment of learning and fun if you want people to stay with you.

 

In Robert’s view, it is absolutely fine if your people leave to advance themselves, but not for any other reason. He also believes that ‘recruitment is the most authentic form of advertising’ and so goes out of his way not to ’sell’ the Geek Squad to candidates but to tell it like it is as part of the recruitment process – the need for dedication, devotion to duty, hard work and obsessive attention to speed and quality.

 

If we look at how market places evolve and companies compete over time, the centrality of belief shaping reality becomes clear. A good example is MP3 players. If you believe that they are purely functional, then that is how you will compete and your culture will mirror that, focusing on costs and features primarily. You will tend to manage by the numbers.

 

If you believe that you can add value through service, as Apple did with iTunes, then marketing assumes greater importance and brand loyalty and market share will be your focus. If you believe that customer experience is greatest differentiator, as Robert Stephens does, then the culture you need is likely to be more engaging and emotional (EQ rather than IQ) and experiential itself. This is where Apple is heading with its retail stores.”

Food for thought indeed.

As Winston Churchill said, “First we create our Structures and then they create us”.

 

If the leaders of your organisation do not believe that the customer experience is a critical differentiator then don’t be surprised if customer-facing employees are also unenthused – and hard to hang on to.

Facts are stubborn, but statistics are more pliable*

We are devout believers in the data driven market credo; ‘why guess when you can know?’ This means we keep a weather eye open for case studies and research that will move the decisions we make with our clients from the gut to the head (with or without blinking .

The recently published Relationship Marketing – part of the Relevant Knowledge Series from MSI - is the mother load. Mr Palmatier analyses 97 different empirical studies covering 38,077 different commercial relationships. Head spinning stuff for relationship marketers!

At the risk of over-simplifying, (and being too dry for a blog like this), the summary ‘Best Practices: ways to build & maintain strong customer relationships’ is worth disclosing;

• do not let conflict go unresolved
• assign customers a dedicated contact person
• spend most of your budget on raising the skills of your ‘boundary-spanning’ (aka service) staff
• focus on social (person to person) and structural (system integration with customers) programs
• minimise the use of financial (discount) programs
• let your boundary spanners (sales people) control social programs but not the structural & financial ones
• if your sales staff churn rate is high, make an effort to get them to be consistent in approach and focus more on structural programs
• early in the relationship, focus on amount, frequency & quality of communication
• measure relationship; quality, breadth, composition and growth/velocity regularly. Especially velocity (is the relationship improving or decaying, not just its current state)
• audit your own organisation to make sure you are aligned to relationship marketing – strategy, leadership, culture, structures and control, business processes

But for me the biggest insight is Mr Palmatier’s insistence that if a customer relationship is not growing, it declines. If you cannot grow the relationship, go for efficiency and being ‘easy to do business with’. There is no such thing as maintaining relationships – according to the facts.

The Australian Direct Marketing Association held its annual 3-day forum last week and this ‘make marketing evidence based’ message was consistent from almost all presenters, including yours truly. Sounds like we are finally getting the message. Now all we have to do is follow our own advice!

At the conference I managed to catch up with an old friend – Terry White who is the Chief Innovator (great title) at Amway Japan. Terry – ‘Marketing used to be 90% magic. Now it is 90% science and only 10% magic’ – and he does not mean statistics, he means facts.

* Mark Twain on customer analytics

Beware Your Brand Tags Are Showing

My link of the week has to go to www.brandtags.net recommended to me by Paul Kennedy over at mjw advertising.

The basic premise behind this site is that a brand exists entirely inside people’s heads. Therefore whatever it is they say it is, is what it is. With over 760,000 tags submitted, this is a very interesting version of the “wisdom of crowds” – more like the “crowd speaks – it is what it is!”.

The Power of First-Person Narrative

How many internal sales and marketing presentations leave you thinking “well I can’t fault the logic but it leaves me cold… Where is the story, where is the inspiration, the emotion; how can I visualise that really happening?”

Even the most left-brain analytical thinkers amongst us, love a story – a bit of colour and movement…

One of the often surprising discoveries with online communities is exactly this – the power of first person narrative (now there’s a clinical description!). Not the language of a corporate marketing brochure but the pure unadulterated voice of a customer.

The intensity of a story told in first person can be striking- especially when it is about your brand.

David Bean characterises first-person feedback as:

• Focused on the personal
• Comprises the majority of input
• Contains rich descriptions
• Explores unexpected topics
• Details the “why” of an event or opinion
• Reveals opportunities
• Expects responses
• Provides early warnings
• Affects, most likely, other people; and
• Impacts revenue

Anyone scanning social networking sites or popular blogs for an hour will likely find a slew of first-person narratives that meet all the criteria listed above.

And the volume of this free-form correspondence is enormous: with approximately 75 to 100 million blogs and 10 to 20 million internet discussion boards and forums in the English language.

This is a huge challenge (and opportunity!) that companies face today. Structured data – via data warehouses and business intelligence systems only go so far. This foundation of customer data – who, what, how, when – lacks critical customer information about “why” – floating above the fact plane in unstructured data.

Brings me back to that next corporate sales presentation of yours – why don’t you try a few colourful quotes from your online community - that speak to a few stakeholders in the audience! You may detect a pulse in the room afterall!

Online Communities and Economies of Scale?

After computerising every customer touchpoint that we can lay our hands on over recent decades – a return to treating customers individually in online communities doesn’t always sit well.

“Surely this can’t be an efficient use of resources; where’s the economy of scale in answering an individual blog comment …?!”

Well, fear not – there is light at the end of the tunnel and some great case studies emerging now that demonstrate the efficiencies and scale that can be delivered through online communities.

An example retold in Groundswell is that of Dell:

“When started their most recent support forum in 1999, they knew they’d need moderators. They pulled 30 support reps off the phones and converted them into forum moderators. Those support reps answered questions online, just as they had been on the phone.

Already, Dell was getting more efficiencies, since each answer could be read by dozens or hundreds of other people searching for it on their support forum.

Now, five years later, the support forum is many times larger than it was then. And the number of moderators is no longer 30. Its five. And that’s because the members of the community are moderating it themselves.”

We are seeing the same in marketing forums as they mature. The more embedded the members, the more likely you will see self-moderation, and a genuine desire to assist members.

Marketing with your best customers – now that’s a different kind of scale economy!

And compared with that IVR system or that CRM application – I dont think it is just a quantitative issue, I suspect the qualitative (customer experience!) outcomes might also be instructive.