Ernan’s Insights on Marketing Best Practices

Monday, October 31, 2011

LinkedIn Fatigue? VW Doesn't Think So

THE SITUATION: There’s been some discussion recently that a broad and expanding "social media fatigue" has set in, ( for example, click here) ... and that even users of established sites like LinkedIn are in danger of burning out and disengaging from marketing messages appearing in these media.

LinkedInTHE CASE STUDY: Volkswagen proved in an innovative user-referral campaign that LinkedIn remains a
viable and important tool for marketers. The campaign's success suggests that recent news reports of a decline in interest in social media channels like LinkedIn may actually reflect boredom with irrelevant, untargeted content -- a long-standing problem consumers have had with "spray and pray" marketing messages delivered in many different media.

Too many companies try to "sell" on LinkedIn, and forget the necessity of providing a sponsored platform for expressing feelings and opinions within a specific targeted audience, as Volkswagen's "company page" has done for upscale Indian professionals. When the content is relevant and connected directly and credibly to a customer's personal experience and network of acquaintances, the bottom-line results can be stellar. Volkswagen's results bear this out:

* Over 2500 recommendations of VW autos were generated by the trusted peers of specific users, using LinkedIn's well designed, easy-to-navigate "company page" feature in combination with paid Recommendation Ads. Read more about LinkedIn's "company pages" in this LinkedIn page, and in this overview from B2B Voices ... and find out how Recommendation Ads work in this equally intriguing LinkedIn case study.

* VW's recommendation total represents an increase of over 500% compared to the target number the company was hoping to generate.

* The recommendations were generated in a very brief timeframe -- less than 30 days.


Marketing Takeaway #1: LinkedIn's potential for marketers remains robust ... as long as we make sure our messaging remains relevant to the experiences, opinions, and relationships of individual users.

Marketing Takeaway #2: Target your audience carefully. If you're trying to sell low-end consumer home maintenance products as impulse purchases, LinkedIn's upscale audience of aspiring, skeptical professionals isn't the right audience.

Marketing Takeaway #3: Remember that old-fashioned "spray and pray" campaigns will only bore and alienate users -- not just in LinkedIn, but everywhere else as well.

Marketing Takeaway #4: Consider incorporating LinkedIn's "company page" feature and Recommendation Ads into your social media plan. These tools give your customers the opportunity to follow your company and create personal recommendations for specific products and services.

Monday, October 24, 2011

5 Best Practices to Improve Customer Service

Your whole enterprise depends on them ... but if your front-line service people feel like they're on the low end of the totem pole, your customers are going to feel that way, too. It is never too late to change that dynamic!

Good Customer ServiceI believe that great customer service is the responsibility of every team and department within the organization, every working day. With that in mind, I would like to share five best practices based on working with world class customer service teams at companies like QVC, Hewlett-Packard, Cross Country Home Services, and Life Line Screening, among others.

Best Practice #1: Celebrate the Victories. Remember to highlight what your top service performers do well. If it's been a while since your customer-facing team members were credited for doing something right, change that!

Best Practice #2: Give Front-Line Service People More Authority and Respect Within Your Organization. For instance, you might provide people the autonomy to spend up to a certain dollar amount to resolve customer problems ... and then turn those employees who spend those corporate dollars effectively into internal role models for the rest of your organization.

Best Practice #3: Re-examine Your Compensation Plan. If the pay your customer service personnel receive is not commensurate with what your company says about its belief in good customer service ... then you won't attract top notch people who can deliver on that promise!

Best Practice #4: Create an Effective "Soft Skills" Training Plan. Too often, customer service people know all about the technical and product/service feature issues, but have not received thorough and on-going training on people skills and effective customer engagement. Make sure they get that training!

Customer Service Wow!: Last Saturday, my wife and I dined at the top rated restaurant, Le Bernardin. She enjoyed a wonderful crab meat appetizer, and unbeknownst to me, had found a very small piece of crab shell, which she left on the plate. A few minutes after the plates were cleared, the senior waiter came over and offered the Chef's sincere apologies for the piece of crab shell. We were surprised, since my wife had made no complaint.

We asked how the Chef knew about this. Apparently, the bus boy had noticed the (little) piece of white shell (on the white plate) and told the senior waiter, who told the Chef, who immediately sent his apologies.

Think about the level of training that caused the bus boy to notice the small piece of crab shell and initiate this escalation...without the customer even complaining.

This was a Saturday night, every table was booked, and we received the Chef's apology within minutes!

How can you achieve this level of real time, proactive customer service in your organization?

Best Practice #5: Do a Skill Set Assessment. Take a closer look at the people you're putting on the customer service phone or face to face on the front lines. If some of those people are simply not cut out for the empathetic, "people-first", task of hearing customers out, making them feel heard, and cheerfully solving their problems, you need to reassign them to other departments. This will lift the morale, and strengthen the customer focus, of everyone who remains.

THE MARKETING TAKEAWAYS: Implement these 5 best practices. Measure results. You should see a significant increase in: results, customer satisfaction and employee satisfaction.

Monday, October 17, 2011

Netflix: 3 Marketing Takeaways We Can Apply

It is hard to say whether, during its short lifespan, Netflix's recently abandoned Qwikster spinoff was more loathed or ridiculed among customers. The reversal of plans to split Netflixthe company in two (following a similarly unpopular price hike), resulted in Netflix's second global PR meltdown in less than a month. Yet I see, in the decision to abandon Qwikster, three "silver lining" signs that the company is hopefully getting back on the right track.
Silver Lining #1: Netflix is listening to the customer. Qwikster would have required millions of customers who wanted both streaming and video access to maintain two separate accounts and field two sets of bills. The (belated) recognition that this would cause major inconvenience to customers suggests that management listened, finally, to the growing chorus of discontent and made the right decision.
Silver Lining #2: Those customers angry enough to leave due to the controversial price hike have already left. The company can now focus on keeping its remaining 20 million-plus customers happy. It is better positioned to do that, I believe, than much of the coverage of the current furor has suggested. Netflix still offers a great on-line viewing experience and a huge array of DVD choices.
Silver Lining #3: "Core" customers appear to have finally stopped shouting. Significant portions of the Netflix user base either never took part in the on-line complaint frenzy, or have settled back into a less-furious routine with the company. As one user wrote on the Netflix blog,
"Finally, someone at Netflix listened to reason and to the customers. I was telling my mom yesterday that I was going to cancel after a 6-year relationship. Now it looks like I will be staying, at least for now."
The Netflix 3rd quarter earnings report is due on October 24. It will be interesting to hear the latest trends.
Three marketing takeaways from this extraordinary story.
Marketing Takeway #1: Maintain open channels for customer feedback. Netflix has definitely done this with its blog, and deserves recognition for that.
Marketing Takeway #2: When you drop the ball (and Qwikster was a major dropped ball), admit it. Netflix not only did this, it changed course quickly based on the Voice of the Customer feedback it received.
Marketing Takeway #3: Don't mistake the (loud) minority for the Voice of the Customer. Yes, there has been a good deal of shouting on-line, and there will be more. Sometimes, though, shouting is background noise.

Monday, October 10, 2011

Steve Jobs: Two Major Lessons for Business Leaders

RIP Steve - You brought beauty and wonder to our lives.As I stood outside the Apple store and looked at the letters, flowers and apples people had left there, I knew there had to be some important lessons we as business leaders should learn from the remarkable life of Steve Jobs.

A quote from this excellent New York Times article by James B. Stewart, which I read later that day, helped me to identify the takeaways:

"How did (Jobs) take a commodity and turn it into one of the most iconic and desirable objects on the planet? ‘ Steve Jobs and Apple never — ever — wanted to be a low-margin commodity producer,' Donald Norman, a former vice president for advanced technology at Apple and author of Living With Complexity, told me this week."

And so did this potent quote from Jobs himself, also from the Times article:

"In most people’s vocabularies, design means veneer. It’s interior decorating. It’s the fabric of the curtains and the sofa. But to me, nothing could be further from the meaning of design. Design is the fundamental soul of a man-made creation that ends up expressing itself in successive outer layers of the product or service."

Following are two lessons for corporate leaders, inspired by Jobs' remarkable career and the two quotes.

LESSON #1. A truly customer-focused experience is about designing every aspect of the experience to be the finest possible. It’s not about settling for “acceptable/good enough” Jobs didn't let concerns about the cost of the product, for instance, block him from developing a completely differentiated customer experience. This resulted in a higher-priced product compared to the undifferentiated competition.

Today, many companies express concerns about “spending too much on customer service”.

If we fool ourselves into believing that  "good enough" is all we should invest in the service interaction, in product design, or anywhere else, we will only perpetuate mediocrity. Hiding behind the mantra of "cost containment”, or the myth that "customers won't notice”, will prevent you from delivering a competitively differentiating customer experience.

LESSON #2. Don’t treat the customer experience as a "quickie" transaction meant to drive short-term sales. Look at every interaction a customer has with your company as an opportunity to move beyond the transaction and build a relationship. Examine all the opportunities for delivering a customer experience exceptional enough to create not only a repeat customer, but also an advocate for your brand. Look closely at how you can better leverage:

arrow The power of positive word of mouth recommendations on purchase decisions.
arrow The moment of purchase.
arrow The interval between purchases, which may last for months or years. How do you provide customer appreciation and value throughout this phase?
arrow Customer service and technical requests.
arrow Renewal solicitations.
arrow All the other opportunities to demonstrate that the customer's relationship with your company is special.

THE MARKETING TAKEAWAY: If Steve Jobs could transform what others saw as a commodity-driven tool called a computer into a source of passion and pride for customers ... what can you do to make buyers of your product or service passionately proud?

If this can be done for a computer, why can’t it be done for an insurance product, which has more intrinsic personal value to the consumer, or a cellular service, or a health care product or service ... or your product or service?

This week, customers around the world left moving personal tributes to Steve Jobs at Apple stores that are, let us remember, the sales and service facilities of a very large global corporation. What company’s sales or service centers could claim anything remotely similar? Clearly, Apple products touched those customers at a deep emotional level.

The emotional connection Jobs created goes straight to the bottom line: Apple’s market capitalization is now $347.3 billion, and its profit margins are 33%.

Monday, October 3, 2011

Facebook's Makeover: Breakthrough or Big Brother?

Last week Facebook announced its new Timeline feature, which makes it easier for users to see what people in their network are doing, reading, and listening to.

Facebook - Facelift?The Washington Post has called the result "a comprehensive and curated version of your entire history on Facebook." The feature is now optional, but will eventually become Facebook's default profile.

The new developments at Facebook bring at least three important advantages to marketers.

MARKETING ADVANTAGE #1: MORE RELEVANT MESSAGING. The redesign and the new media partnerships that follow in its wake make it easier for marketers to launch more targeted, relevant marketing mesages to Facebook users, based on the increased number of preference points users are able to express. Most consumers, I think, would  prefer to see relevant advertising than be forced to pay for all the services and content they are getting via Facebook.

MARKETING ADVANTAGE #2: A BETTER ENVIRONMENT FOR ON-LINE PUBLISHERS. Both Timeline and the new emphasis on Facebook apps help publishers of free content to create more diverse offerings and to reach a broader audience. One entrepreneur I spoke to observed: "As a publisher of free content, I don't think people necessarily have a right to consume anything and everything they want on line, all the time, at no cost. There is a cost. What Facebook or any provider is really saying to you every time it lets you access all this incredible content without charging you for it is, 'If you are going to use this service, we need to know a lot about you for targeted, relevant advertisers to take action on -- because that's the best way we know of to keep our service free for you.' "

MARKETING ADVANTAGE #3: ONE STEP AT A TIME. Facebook is doing both marketers and consumers a big favor by rolling out Timeline slowly. Everybody who uses Facebook needs time to become familiar with the new features. (Here's an overview from Business Insider of the upcoming changes.) A whole lot is changing here; at the same time, though, most of the users I have spoken to seem to feel that the new features are simply a logical extension of the kind of sharing that people are already used to on Facebook. The whole company, after all, is premised on giving people the opportunity to share a wide array of information.

Even with these advantages, however, I am concerned about two issues.

CAUSE FOR CONCERN #1: NO EASY OPT-OUT. Facebook users, in my opinion, must already jump through too many hoops in order to stop sharing information about their behavior and choices with marketers. It seems likely that this trend will continue with Timeline, and that the only realistic way of "opting out" of a given campaign will be to quit using Facebook altogether.

CAUSE FOR CONCERN #2: PRIVACY PROBLEMS? I am no expert in the privacy field, but a rising chorus of concern from people who are experts suggests that Timeline presents some troubling "Big Brother" questions about consumer privacy  (See these posts from the Washington Post and ZDnet, for two good discussions of some of the as-yet-unresolved privacy issues.) 

After every major redesign of Facebook, privacy concerns tend to loom large, and then fade into obscurity. That may well happen this time around, too ... but Facebook should still do a better job of contributing to the debate and explaining how it plans to protect user privacy.