We were recently working with a technology client we'll call Company Z (we've changed some specifics to keep client confidentiality - but the story is true) and they found out, through Leximancer analysis, that their very happy clients were happy for different reasons which had huge implications for strategic planning and deployment of resources.

Company Z is in a good place. Profits are solid. Things are running smoothly. Customers are happy. Being a smart company, they didn't rest on their laurels and sought customer feedback.

The marketing department spent dozens of person hours (sound familiar?) crawling through comments to find patterns and insight.

When we sat down with Company Z, we took the same data they spent a couple of weeks on, uploaded it in a few minutes and we found that customers in the United States were satisfied for one reason and customers in Canada were satisfied for another reason.

Apparently U.S. customers like the service, but can't find parts. In Canada, it was the exact reverse.

You could hear the jaws drop.  Not only did Leximancer find the same information in a few minutes that it took them weeks to sort through, it discovered something they had no idea was in the data. That is what it means to uncover the why, not just the what. That's the power of Leximancer.

"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.

Food for thought indeed.

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

The answer is highly likely NO. The reason is that a customer makes their purchasing or defection decision based on the basis of perceived value of service package being offered at that time rather than simply their current levels of satisfaction. They have relationships with more than one service provider because they perceive each relationship to offer specific value to them.

On the other hand, some customers just get bored and want to try something new, even though, they are extremely satisfy with what they currently have. So, it's unavoidable for some highly satisfied customers to switch to another brand or provider, just only because they are getting bored and changing things around their life. Unfortunately, this is the normal human behavior that cannot be prevented from happening. Moreover, it should not be too worried about this problem, because it also happens to other competitors as well. Especially, if the company is loyalty leader, most of them tend to convert to you, which might be more than what you lose.

However, there are solutions.

First, a company should create switching and exit barriers, so that, it would mentally add additional cost to customer when they were deciding defection, and, therefore, it would less perceived value.

Second, a company should maintain their performance and relationship with customers. If the company is the real deal and do better job than the competitors, the customers will quickly find out that they had made a mistake, since they already have a reference point (experiences from the company) to compare with what they have now (experiences from competitors). Hence, they will find the way to return (aka, win-back).

In conclusion, it's very difficult to have zero defection rate. Anyway, a company must not be discourage even their super-satisfied customers will convert to other competitors, because it's their nature. On the other hand, a company should keep working on further improving customer relationship and create exit or switching barriers, but it must not be too much that customers feel very frustrated if they really want to exit or switch. Lastly, exited customers should still be treated as if they are still customers in order to win them back, and they will stay with you for a long long time.

Cross-Functions Team must consist of talented people who know and understand clearly what day-to-day operations have been perform in the reality (not in a book or Standard Operating Procedure). Top management can be included as motivator and driver of the team, but should be limited to only a few, because they usually knows things in the book, but not the level that the customers experience. Normally, when people from different functions are put together to solve a problem, there will definitely be so-called "Finger Pointing". Usually, this will drag the discussion away from "Solution" and running into "Conflict" in amazing speed. If the cross-functions team was not properly formed, for example, some ones or some departments are missing, but involve in the problem somehow, the missing one would most-likely to be pointed to end the discussion. Yet, the problem is still unsolved, solution is never come out.

Then, when we analyze customer's problems, we should evaluate the feeling of the CFT toward the problem. This could be based on number of customers who complaint about the same problem, comparison to competitors and vision of the company. Some problems may be just because this customer is too demanding to be satisfied, however, it has to be trade-off with profit that such customer is generating. From considering these factors, the CFT will be able to adjust their own feeling, could probably caused by emotion, toward the group feeling, which would be more realistic and accurate to be used to create the best solution, which optimize profit and maintain sustainable growth.

What are the values of the products to the customers?
What are the customers feeling about the products (comparing to other competitors)?
What are the customers expected from the products?

Simple question, but never been easy to answer. Does everyone in the company understand the meaning of these 3 quetions, what current reponses from customers are, and, more importantly, what can we do to improve the response. Additionally, marketer can learn from the response to understand the customers better and to further improve customer satisfactions and customer loyalty.

To find out the answer of those quetions, there are 2 ways of getting the answers:

1. Information System (CRM) - if you want to focus on existing customers
2. Market Research - good mixture of both quantitative and qualitative reserch will give understanding of customers for both existing customers (for in-dept understanding), and external customers (potential customers and competitors' customers).

However, once we understand our customer needs and expected values, the next step is how should we do thing differently and what changes do we need to get better customer satisfaction or customer loyalty. To answer this question, it depends on value of the product and the way that user experience it.

For example, if the product was bottle water, customers would experience the value of the bottle water by seeing the bottle shape/design, looking at the price/promotion, opening the bottle, tasting it, and, perhaps, taking it with them in their bag pack. So, what you need to change is substantially about your product, price, promotion and place. On the other hand, if your product was a service, customers would experience the value of the service by preferred channels (e-mail, phone, walk-in, etc.), self-serving through internet (how easy/simple/effective e-service is), talking to an service/sale agent, waiting for an agent and getting their problem solved, etc.

Through the different ways of experiencing the value of product/service, marketer need to understand this in order to fix the right problem to, ultimately, improve customer satisfaction or customer loyalty.

You probably heard of Zappos' customer service, right? It has been making the blogosphere rounds lately with things like "pay your employees to quit", "empower your agents", and "deliver exceptional customer service across all interactions". Their approach to Customer Service is legendary and they do a tremendous job of implementing all best practices they can get their hands on. However, if you were to do the same and implement all best practices known to humankind, you probably won't be seen the same way. This is because you would be seen as a copycat, not an original, and not given the same credit for what you do. Why? Because you did not use Customer Service Excellence as a differentiator, rather as another way to get and retain customers. And that is the critical differentiation (no pun intended).

To become a master at Customer Service, to truly excel at it you have to find your differentiating factor. The one thing that will set you apart from every one else. That's it. There is no preaching about how you must do a multi-channel implementation, or whether you cannot last longer than a week without collecting feedback. If you look at what you do, learn your strengths and work on your weaknesses -- and constantly strive to maintain that differentiating factor you are guaranteed to succeed.

Are you differentiated? Tell me what you are doing differently and how it has proven successful for you...

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!".

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!

"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.

1. The hottest trend, Root Cause Analysis (RCA). This is where close to all of the attendees seem to be spending their time and efforts today. We had several discussions on Knowledge Management Optimization, Analytics, Metrics and Measurements and all the issues that matter to correctly diagnose, quickly, the root of a problem, and how to quash it (also, quickly). There were countless best practices and case studies shared by SSPA members -- alas, they all pointed to the same results: if you create the environment and processes to quickly identify a problem, solve it, document and share the solution you then achieve the higher levels of customer satisfaction, reduce costs of support, and improve operations. We shared with members our experiences in optimizing KM to improve the content management and speed of response, and we got great reception... and lots of head-nodding. If this event is any indication, you are quite busy right now working on your own methods and models for improving the speed of response of problems, and leveraging your work.

2. In the very-interested-but-not-yet-hot category we observed lots and lots of conversation about feedback management and customer experience. There seems to be a consensus that "there is something there", but almost no one was yet moved to action. There is, still, lots of confusion and lack of strategies about the best way to move forward. Again, lots and lots of head-nodding occurred during presentations on feedback and discussions on how to move forward. We see this as a near-term (2-3 years) hot topic, but not yet reaching the same level of understanding, and adoption, as root-cause-analysis. Stay tuned to this blog for more on feedback management and experience management - we have great things planned!

3. Finally, the elephant in the room: Web 2.0. Yes, Web 2.0. The most talked about, discussed, and argued subject. Wikis, collaboration tools, forums, engaging clients as active members as opposed to passive receivers, leveraging web services to improve operations -- you name it, it was discussed and covered at some level or another. Of course, as I said, it was the elephant in the room (in reference to the analogy of several blind people in a room asked to describe an elephant): we heard so many different descriptions of what it was, how to use it, what to do, and success levels and stories that we walked away, probably, more confused than before. It is not very clear that there is consensus as to what Web 2.0 refers (although Allen has pointed out that McKinsey's 2007 Web 2.0 survey at least does a good job listing out the various technologies under the Web 2.0 banner) -- but there sure is consensus as to the importance of all its components. We saw predictions, and made our own, that see Web 2.0 becoming THE hot-button topic for the next five years... and it will likely become so. We had discussions where root-cause-analysis and Web 2.0 shared the spotlight, we saw vendors introduce it as the next revolution, and we share the enthusiasm... if only we could all agree on what it is that we are enthused about.

As you can see, your projects and internal discussions are probably not far from where the rest of the industry is moving. I just have two questions for you (and would welcome your comments and your emails):

1. are you in the same boat?

2. what was your experience?

Let us know what you think of our observations and how they match your current problems - we would love to talk some more about what you are doing, and what we are working on.

Sometimes, we lull ourselves to sleep in the peace of knowing that the mailer we just sent went directly to the very focused demographic we intended it to go to. Or that we addressed a hot issue on our blog. Or that our e-newsletter was one of the most robust we've created.

The thing is, while these things may be true, our relationships with customers may not have improved one iota. Implementation and execution do not necessaarily result in improved relationships.

I read a lot of marketing blog posts that intend to scare readers with some obscure insight that supposedly undermines convention. That's not my intention here. I'm writing this more as consumer than a marketer.

You see, I am loyal to very few companies on a personal, consumeristic level.

Why? Well honestly, I just really don't care too much about the grocery stores I shop at or the fast food restaurants I eat lunch at. These places are faceless commodities to me, and I'd turn my back on any of them if a better deal came along and not think twice about it. The same thing goes with department stores, book stores, online music services, airlines, toy stores, home improvement centers (although there is definitely one I will refuse to go to—Home Depot), and I could go on and on.

Despite my fickleness, I have been absolutely loyal to one establishment moreso than any other I can think of in my life, and that establishment is a small car stereo operation here in Tulsa called Car Toys. I've mentioned my guilty pleasure of car audio in past posts. Much of this love is attributable to Andy at Car Toys.

Let me list a few reasons I have been so loyal to this shop:

1. I absolutely knew that Andy would not try to rip me off. Let's go beyond using the fuzzy, nebulous word "trust." That word is merely symbolic. Here's what it means: on multiple occasions, Andy told me that the equipment I was eying was unnecessary, or that I could get just as good equipment from a cheaper brand. At times, he even told me that the equipment I was really looking for could be found elsewhere. And do you know what I did in response? I spent thousands of dollars at Car Toys, because I knew that the things Andy was selling me on were the right things for me, my car, and my car audio goals.
2. Andy listened to me, even when it was obvious that I was not immediately in the market for equipment. I know that sometimes, he had to be contemplating turning the other way when he saw me coming in the door. I took a great deal of his time as I was considering a purchase, but even when I wasn't and it was clear that I wasn't, he made himself available to me, and he listened to everything I told him. And somehow, amazingly, he saved all of that information up so that when I was ready to buy, equipment selection was often a no-brainer.
3. I knew that the equipment I purchased was high quality.
4. I always knew what I was in for. No surprises. When car audio legend Gary Biggs built my front speaker pods, I knew exactly what it was going to run me per hour for his hands to touch my car. When I moved toward a competition system which required a massive wiring upgrade, I knew before the purchase that this often overlooked aspect of car audio would add hundreds to the price tag. I think that the most I paid over and above an estimate was maybe $20 for clay that had to be added to my pods for reinforcement.

While I am an avid supporter of all of the marketing initiatives I mentioned at the beginning of this post, I can also say that the thing that kept me going back to Car Toys was not merely a battery of tools. It was the fact that Andy had connected these tools to me on a personal level. That's the key. That's what's missing so often.

When you implement CEM and CRM programs, you're not finished! In order for a loyalty program to promote true loyalty, it's got to be more than just a discount card. Blogging and other social media cannot be arbitrary acts. As Laura Spencer notes, in order to get potential customers reading your company blog, you've got to blog about topics that interest your readers. And in order to know that, you've got to know your audience. When I use the word "know," I don't mean, "have a good understanding of analytics available to you about a representative demographic" (although you should anyway). I mean, "listen to individual customers (even when they aren't buying), prove that you're never going to rip them off for a commission, provide a high quality product, and do all of these things with no surprises. Every time, without exception.

Honestly, I think it's just plain silly to think that a business can have a relationship with clients without having a conversation with them. And no, an e-mail blast is not a conversation. Here lies the challenge: how does this conversation take place? Maybe a blog, sometimes, for a small audience who is privy to and comfortable with such a medium. I really don't know.

If you've endured this tireless post, I want to know what's happening out there to build real relationships successfully-ones that, were I to ask your clients and customers, they would agree with you that indeed, a true relationship does exist. Is it that cashiers are spending time finding out about customers' families and interests? Is it that executives work "on the floor"? I really don't know, but I think that however it is accomplished effectively, it's not cheap, it's not simple, and it's not without timely, repeated, personal engagement.

I jump through hoops all day. We all do. It's annoying, but we have reconciled ourselves to them: the mindless processes that were implemented, who knows how long ago, because of an isolated incident that caused someone high in the food chain to get burned.

Typically, when we think of Services Marketing, we think of customer service, value-added service, branded service, relational service, etc. Interactions resulting from these are what would be considered "front-end" initiatives in services marketing.

On the "back-end" are the logistical concerns. In Services Marketing, the back-end includes the processes that promote interaction between service providers and their clients; for example, mailing and call list creation, location planning, and provider education. They also include the creation of a sequence of events that most effectively, efficiently connect a service provider, be it a cashier, a front-desk clerk, a financial services counselor, an educator, a minister, or civil service employee with the right client.

Unfortunately over the years, humans have been removed from this aspect of service provision. In light of this, it is absolutely essential that these logistical considerations, which I'll just refer to as "connection processes," be absolutely targeted, focused, effective, and free from superfluous activity (previously referred to as "hoops"). I mean, if you're going to remove the human aspect, it had better be good, right?

A key to auditing connection processes is that of a services blueprint that necessarily consists of a customer-touchpoint flowchart. This blueprint comes from conscientious evaluation of all customer contacts available and their efficacy in accomplishing the mission of the company. This goes beyond financial nuts and bolts to address attitudes and positioning, points of failure, adaptivity, customer loyalty, and employee empowerment, among other aspects. And in its most elemental form, a customer-touchpoint flowchart addresses the very steps performed by the customer in accomplishing his goal, as well as front-line service employee (FLSE) action that is visible to the customer, FLSE action that is not visible to the customer, and support processes that are not visible to the customer (Pires and Stanton; also, thanks to Zeithaml, Bittner and Gremler).

I realize the idea of sitting down and creating a flowchart seems arbitrary, but it is my guess that many marketers are unable to list all of their company's customer touchpoints-especially those implemented long ago by people who no longer work at the company in question-which means that some touchpoints, such as this one described on The Consumerist, are at best inconvenient and at worst, catalysts for discontinued service.

Ineffective customer touchpoints arise for a variety of reasons. I've already mentioned one (higher-ups got burned). They also arise to help fend off litigation. These are not always bad, but perhaps less effective than they could be. Some show up around employee review time as a token of one's work. Some exist simply because they "always have."

Some traditionally shoddy touchpoint culprits include service calls, ticketing, waiting rooms, checkout lines, parking and orientation, guest services, transaction processes, and one that should be of grave concern for marketers: new accounts.

There are obviously many more, and to simplify and wrap up this already lengthy post, the payoff for evaluating these touchpoints is that of differentiation that leads to loyalty. Of course, when drawing up a touchpoint blueprint, it's important to be painfully honest and critical of the connection processes your company already has in place. Try to anonymously go through these processes yourself multiple times to assess their effectiveness. Doing so may lead you to a combination of otherwise unassuming changes that ultimately transforms your front-line service.

What experiences have you endured and what hoops have you had to jump through to initiate and/or complete an FLSE transaction? How have you seen companies creatively transform an otherwise meaningless or mundane point of contact into a creative connection process that will keep you loyal?

References: "The Role of Customer Experiences in the Development of Service Blueprints," Guilherme Pires and Patricia Stanton; Services Marketing, Valarie Zeithaml, Mary Jo Bitner and Dwayne D. Gremler

As we leave behind this model, we must focus on a new one with features to provide for the retention of our customers (i.e. make them happy). I propose the four pillars of this new High Quality Customer Service (HQCS):

Customer Centric - do what customers need you to do

Integrated - make sure it all works together, from one single location

Knowledge-Based - have the best possible solution available at all times

Iterative - you won't get it perfect the first time, but you will be moving forward

Alas, these four pillars are the reason we cannot fix what we have - no matter how much we try. They are all tightly intertwined and need each other to operate effectively. The best way I can find to relate this model is comparing it to a house that needs remodeling. If you ever bought a "fixer upper" and tried to bring it up to current days you know what I am talking about. Forget about those wonderful recessed lights you must-have, fix the electricity first. New appliances for the kitchen? not with that antiquated breaker box. Building your dream home-office? Guess not without changing the entire wiring in the bedrooms... pretty much everything you want to do to make it better will be tied to a main system, in this case electricity and wiring, or another. Try to fix a sub-system (like, deploying email) without putting new wiring (knowledge) and boooom! there goes your fuse box (in your case, your churn rate just increased)!

If you want to improve your customer service you must approach it as neither a band-aid fix (implement one more thing and see what happens), nor a forklift maneuver (change your entire customer service department). You must approach it as you would a renovation project for a new house - look at the main parts, make sure they work well, then begin to work on a sub-system.

If you have some questions about the best approach, I'd be more than happy to look at your blueprints -- er, strategy and help you get there.

Esteban Kolsky

As marketers, we spend our professional lives trying to understand our consumer and yet when the first genuine opportunities for online conversation arise - we run a hundred kilometres...

Jaffe asks "Why Are We So Afraid of Conversation?"

It seems one-way broadcast marketing has created a mindset of treating customers as alien beings to be viewed only through one-way mirrors at focus groups. And perhaps it is this mindset that is the biggest barrier to harnessing the extraordinary opportunities that the online channel presents!

So where do these fears come from? And how do we resolve them?

Lets examine some of the common barriers that we hear to making a start...

Loss of control

Starting a conversation will open the flood gates, the chaos will be unbearable...

The good news: there are ways of framing conversations, calibrating the speed of conversations and several other techniques that keep some influence if not control with the brand.

The bad news: get used to it - a little creative chaos is inevitable and might be good for the brand!   

"The more in control we are, the more out of touch we become. But the more willing we are to let go a little, the more we're finding we get in touch (with consumers)."

-  A.G. Lafley, CEO, Proctor & Gamble, ANA Conference

Embarrassment!

What if I make a fool of myself? What if I am criticised? On the public record forever!

Well here is a fundamental human fear!

Sorry, it doesn't matter. If you don't join the conversation, it will happen without you. Don't take the criticism personally. So long as you are truthful - there should be nothing to fear in public discourse. 

Don't know what we don't know! 

I just don't know enough about this social media stuff yet! 

Sorry, consumers can't wait. Sure it's overwhelming - it's akin to drinking from a fire-hose! Particularly for those of us that are not of the digital generation. But jump on board its an exciting ride!

Keeping-up with those pesky consumers

What if we set expectations with our consumers that we can't live up to? 

Conversing with your customers should be a managed process where expectations are set carefully and where honesty and integrity are fundamental. Honest mistakes will be accepted by consumers if trust has been built over time. 

Brands today have to be OPEN;

• On-demand
• Personal
• Engaging
• Networked  

At the end of the day, participating in this brave new world of marketing cannot be done in half measures. Consumers will see to that and events will overtake us. Inertia - driven by the reasons cited above - will be the biggest challenge.

And remember, brands don't have to be perfect. Start a conversation today! 

It pays to remember that customers are individuals with distinct needs, customization of products and personalization of service goes a long way in winning the customer’s hearts. Simple acts like discussing their requirements, communicating regularly with them, maintaining contact lists will not only keep you in your customer’s mind frame but also involve them in the communication process. These interactions eventually lead to a burgeoning sense of loyalty and finally more sales.  

Customers that offer their loyalty will usually go that extra mile to do business with you, they may be fine with traveling a little more and paying a little bit extra but at the same time they will demand a higher level of service as compared to those who are one-time shoppers. Your customer-facing staff and your contact center executives should be at the forefront of your customer loyalty initiatives.

The man waits.  And waits.  And waits.  The till attendant sees him but is more concerned with finishing a conversation about last Friday’s pub-crawl.  This riveting dialogue – presumably with another ‘employee’ – is of first importance.  The customer is secondary; an interference, an impertinence, a fly on the ointment of another day’s pay-cheque.

So, conversation ended, a financial transaction occurs.  There are no words exchanged (to the customer).  There is no meeting of eyes, no friendly smile, or no exchange of repartee.  No bag is offered.  No time is taken.  No repeat custom will ensue.  Not that anyone cares.

Well, reader, I care.  For I am that man.  This incident happened on Tuesday.  And I’ve had enough. 

Towards the end of last month I delivered at two day course on Customer Experience Management at Queen's University Belfast.  CEM is based on the insight that the customer-provider relationship is centred on factors that transcend the financial and the functional.  Providers of goods and services must realise that a customer craves emotional value from the transaction.  Once this is catered for, customer loyalty and word-of-mouth marketing follow like juice from ripe grapes.

During this workshop I asked my international audience a question.  Alright, so we instantly suppose that our American cousins go overboard with their ‘missing you already’ mentality.  But if it’s a straight choice between this and the ‘couldn’t care less’ approach we are used to, which would you choose?

To my everlasting astonishment, the class was fairly evenly split.  I thought we would all plump for the American version, as shallow and sentimental as it might seem to the non-fluffy NI mindset.  Why?  Something is better than nothing.  Especially in the area of customer service, too much (if there is such a thing) is always superior to too little.

I’ve learned a great lesson from this.  Here, we get the standard of customer service we deserve.  As Dr Phil would put it, you teach people how to treat you.  A lifetime of putting up with crap has lowered our level of disgust and that is what we receive in return for our hard earned cash.  And if you don’t know who Dr Phil is, then you’ve still got a lot to learn from our successful, powerful and wealthy cousins across the Atlantic.

Personally, I don’t give a stuff if some hyper-keen till operator comes across as saccharin and schmaltzy.  I don’t care about ‘authenticity’ in that context.  If I want authenticity I’ll read a book by Jean-Paul Sartre or some other depressive.  What I do want is damn fine service, not a proposal of marriage.  I want to see good manners, a respectful attitude, and a positive outlook. Otherwise, I want another shop.

Is anyone out there with me?

Us Aussies love our points and prizes! We collect points when we use our credit cards, when we buy our groceries, when we travel, when we stay in a hotel, just about every chance we get. Partly because so many organisations give them to us.

Which raises the point of this post; why do organisations run these potentially expensive programs? Research I have seen suggests that the main reason retailers run loyalty programs is "because their competitors do" (Leenheer & Bijmolt).

But even in markets where programs are seen as a cost of doing business, only noticeable by their absence, we contend that you can do a better job of producing a return from your program if you take the time to build a strategy first.

The framework we use is deceptively simple - find the answer to 4 questions:

1. Which customers? Working out what types of customers your program will be aimed at is the first step. Unless all of your customers are identical, there will be differences which you can utilise to make the program more effective. Do not assume the target should always be your most valuable existing customers; their volumes typically mean they will be well rewarded anyway. For example, the Journal of Marketing found light buyers responded better to a retail program and recommended '...a need to consider consumer idiosyncrasies when studying loyalty programs and illustrate consumers' co-creation of value in the marketing process.' (Liu 2007). Get your customer analytics team involved right up front.
2. What behaviours? What actually do you want the target customers to do? Reward that. Nothing else. Sounds really obvious right? Then why do credit card loyalty programs reward behaviour that is the least beneficial to the issuer (spend big, pay no interest) and airline frequent flyer programs best reward customers who fly the most miles for the least money. Be clear what you really want the customers to do.
3. How much money? If the target customers behave the way you want, how much incremental profit will you make? Time to do some numbers, starting with the 'size of the prize' if the program is effective at causing the behaviour you are after. Clearly you should aim to spend less on the program than it incrementally can produce if you get everything right.
4. How do I include partners? Few organisations can provide the ubiquity of points earning opportunities that will make a program irresistible for members. What other brands would logically support the program to mutual benefit of member, partner and you?

With clear consensus on these 4 points, it is much safer to then move into detailed program design.

Recruitment and retention of community members is of course critical to the success of online customer communities. It is certainly not a case of “build it and they will come”!

How do you get a handle on a “healthy” level of engagement?

The answer to this needs to be strongly qualified by the objectives that you have for the community (refer last Post!). If your community is delivering strong insight or innovation results with minimal community numbers but adequate sample sizes, then driving additional engagement is less of a concern. If word of mouth marketing is the objective, then identifying as many advocates as possible becomes a priority. 

Regardless of objectives, measurement and numbers play an important part – “if you can’t measure it, you can’t manage it”. So where does one start...?

Measuring engagement is still at a rudimentary stage and generally limited to quantitative measures (traffic!) rather than qualitative measures. Numbers involved in broader online communities are a good starting point and the ratios quoted by Forrester are useful. As a rule of thumb we use 90:9:1 - where 90% of those invited do not get involved, 9% observe only and 1% contribute.

Our experience to date says that branded communities should do better than this – particularly when the conversation vehicles include surveys that are pushed to members. We have seen participation rates anywhere from 10% to 30% in these environments.

We do believe that the relative percentages of customer involvement varies quite dramatically as brand categories vary. Our 30% was a sporting club client, where passions run high.

The guys at Copernicus report "High Customer Involvement" rates that vary between 13% and 55% of customers as categories go from low involvement (toilet paper) through high involvement (retirement planning). We find that involvement with the brand (category) relates directly to active participation rates in a branded community.

How do you go about gauging engagement or participation? 

Embarking on customer engagement online seems overwhelming at first – there are just so many possible ways of proceeding.

Keeping clear about objectives and priorities – as obvious as this might seem – is the best advice from our experience. The objective essentially becomes the conversation and shapes the audience or community.

Possible objectives broadly fall into two categories - insight and engagement. 

Detailed objectives might be as follows:

• Identify new trends in the marketplace 
• Innovate products or services
• Develop new ideas for existing customer programs
• Test new marketing ideas or programs
• Support product launches
• Improve customer processes
• Understand customer segmentation more deeply
• Develop word-of-mouth programs
• Collaborate more effectively with field representatives or channel organisations
• Keep your customer culture consistent  

Note the last two take a broader view of customer - tackling customer facing staff or channel partners.

For some inspiration on objectives and approaches, see Eight great applications win Forrester Groundswell Awards

Once you have identified the objective and the target community - useful reality checks are:

• Is the potential community large enough to achieve the objectives?
• Are there sufficient topics of interest to maintain engagement?    

You may ultimately want to run multiple communities with logical links between them - eg providing opportunities for more engaged members to move into communities with more interactive options or topics that match their profiling.  

Engagement for engagement's sake is a risky path whatever the longer-term objectives might be. Whilst this might excite the creative urge of your Digital Agency - if you start without an end in mind, chances are that your efforts will flounder.

Any experience with this? Please let us know!  

Why your brand needs to be part of the online conversation

The secret is out – people are talking about your brand online without you!

Hardly a revelation to most marketers. But it is the extent to which this happens and the ease with which people want to converse about brands online that is the real revelation.

I am regularly talking to clients about online customer communities and in my rush to meet with them often the last thing I include in presentations are examples of brand conversations that are occurring without their involvement.

Typically, at the last minute, I google the brand for blog material – grab one positive example and one negative. It is hardly a vote of confidence in my time management but I have not been let down yet by this habit! There is never any shortage of material. And usually it features responses to brand commentaries and the ratings of these responses.

After regaining their composure, the response of our clients is typically to broaden their objectives for an online conversation. At the very least they are motivated to have a seat at the table – “what you don’t know can hurt you”.

This is particularly relevant to managing risk, where early reaction to a corporate initiative is not as anticipated. Better to wear the damage in an online Panel of thousands than a national rollout to millions.

I challenge you to google your brand now or better still – set up a google alert – you might just be moved to join the conversation!

Tim’s last post looked at research on the impact of embeddedness in online customer communities – which has prompted me to look at some of our client’s communities for examples.

The Australian Football League (AFL) stirs passions that probably only locals can really understand so when we had the opportunity to assist the AFL’s oldest Club to establish a member community – we knew we had some promising ingredients.

Melbourne Football Club is possibly the oldest professional sporting club in the world (please prove me wrong!!) and is celebrating its 150^th anniversary this year. The Club was keen to celebrate the anniversary in style and to use the milestone to achieve record membership numbers.

We had identified, in some customer segmentation and modelling work, a segment that we dubbed “passionate partisans” – representing people with both strong track record of membership and attendance at games. We also uncovered from focus group work that this group had a strong desire to engage more with the Club and to recruit other members.    

The Club’s membership last year stood at about 30,000 and so facilitating this “engagement” looked horribly like something that needed to be automated. We were able to do this with a technology platform sourced internationally.

Back to Tim’s post on embeddedness...

Members were invited by email to participate in an Advisory Panel to help shape the future of the Club and to assist in planning the Club’s 150^th Anniversary. The first three Panel surveys achieved between 20% & 30% response rates.

The quality of the engagement was also impressive – to one open-ended question, the Club received over 1000 ideas – all progressively voted and ranked on by the community. 

The principles used in the Club’s communications to Panel members were:

• Recognition. We (the Club) have some ideas about xxx but we value your opinions as Advisory Panel members...
• Contribution. I (the Member) can contribute & will be seen to make a contribution by my peers. I am listened to and can make a difference – “bragging rights”. 
• Value. As an Advisory Panel member I am an “Insider” and will receive information before those outside of the Panel... 
• Feedback (Action!). We (the Club) have listened and here is what we have done or are doing about it.

The results for the Club have been some very quick insights. And as for the members? Melbournfc Marketing Manager - Jennifer Watt - says that members have been known to introduce themselves as "Advisory Panel Members" at Club events.

Sounds a lot like embeddedness!

This post by Wendy Piersall at Inspired Business Growth has had me thinking for almost two weeks now about customer feedback. You see, in my youthful idealism, my solution to grasping the elusive prize known as Customer Opinion is to simply to have a face-to-face conversation with all clients and customers, record insights gained, pass them around, evaluate, react (which includes doing nothing at times), and reevaluate. Sounds great, but how realistic is it to expect a face-to-face with every customer when evaluating service provision in a corporation like Wal-Mart? I think Wendy may have a solution.

My thoughts seemed to be reaffirmed this past week in a timely e-mail exchange I had with Ian McKee at Vocanic (blog, The Power of Influence). The question arose about the validity of the Net Promoter Score. For those unfamiliar, NPS is a services marketing evaluation that revolves around a single question: how likely are you to recommend this company to someone else? I had never been challenged to contemplate this question until Ian asked me straight out my thoughts on it. I've always respected the metric, but when I had to articulate an opinion about it, my response was that, unless I was for some reason bound to only a single diagnostic, NPS is simply too limited. Sure, one of the great things about NPS is that it encapsulates so many subjective opinions in a simple, quantitative score. But wouldn't it be great to crack the shell of NPS and hear all of those individual, specific, subjective opinions?

Enter Twitter.

I'll admit, this concept requires a lot of fleshing out, (I'd love to hear your comments on this), but I was wondering if somehow, Twitter could branch out into a {gasp} formal customer feedback tool? This is essentially what goes on now on Twitter, but in a random manner that is tough to monitor completely. I'm thinking some sort of Twitter console on site, or maybe a talk-to-text type thing so that people don't have to put their groceries or doggie bags down to use a keyboard. At least provide a link to a Twitter "group" under the company's name on a card or customer receipt so that people can go home and provide their subjective responses in a sentence, phrase, or whatever form of raw, unprocessed feedback they desire. Essentially, Twitter would simply be aggregating all of the blog posts and tweets people are already posting anyway into one place where company managers and other customers could see. Scary.

The beauty of Twitter is that it is conversation. It is essentially word of mouth. It's real thoughts, not a scale from 1 to 10. It's convenient. And it's only 140 characters long-short enough that most people can endure responding and most managers can endure reading.

How could this idea be fleshed out some more? How could providing Twitter feedback be made to be ultra-convenient in such a scenario? How could responses be aggregated? What about moderation? How seriously could/should company managers take responders who execute ad hominem attacks on individual front-line service employees instead of commenting on the actual service experience? And what about Twitter purists who may see the commercial use of this form of social media as a sellout? Is something like this already out there? Twitterverse is a start-can it be adapted?