Ernan’s Insights on Marketing Best Practices

Monday, February 28, 2011

Relationship Marketing Innovators: 5 Best Practices at Threadless.com

THE PROBLEM: How do you transform your organization's relationships with customers? How do you get them to see your organization as a gathering-place, a destination for constructive interaction with others? We discussed these questions with Tom Ryan, CEO of the community-driven on-line apparel retailer Threadless.com.
ThreadlessTHE SOLUTION: Implement Threadless’ Five Relationship Marketing Best Practices.Threadless sells tee shirts in very large numbers to a fanatically loyal on-line community. The art for the tee shirts is sourced from a worldwide community of artists and designers. Once the art is submitted, the community of over 1.4 million registered users cast their votes, which helps management decide which designs go on to become Threadless tee shirts.
Per the Sloan Management Review: 95% of those purchasing from Threadless.com have voted and posted comments, before making a purchase.
Each of CEO Tom Ryan's five principles is a potential game-changer. When implemented as part of your organization's overall strategic plan (not just the marketing plan), his five ideas will transform your organization from a transaction-driven enterprise to a relationship-driven one.
BEST PRACTICE #1. Funnel passion. "Accept that great ideas can come from anywhere," Ryan advises, "either from employees within the company or from customers and fans outside the company. We believe that passion and ownership over an idea are the most critical factors to making it successful. Is your organization set up to capture and funnel passions? Or do you have to pitch up from corporate layer to corporate layer to get an idea cleared?"
BEST PRACTICE #2. Make marketing a conversation -- and don't take yourself too seriously. In other words, skip the hard sell -- or any sell -- when using social media tools to interact with your community. As Ryan observes: "It's very common for marketers to think of consumers who use social media tools as having grabbed hold of a huge megaphone. Marketers then try to grab that megaphone back, and use it as a broadcast tool so they can sell very large groups of customers. It's more useful to think of social tools as being like a telephone line, something you use to reach out to connect meaningfully with one person at a time."
BEST PRACTICE #3. Make your product your marketing. Look constantly for ways to make your product or service interesting enough for people to talk about to others. Ryan notes: “We like to think of our shirts and designs as entertainment content, as stuff that is so interesting that it starts new conversations and attracts good word-of-mouth on its own.”
BEST PRACTICE #4. Empower your customer -- usually the benefits outweigh the risks. Ryan says, “we include our community in virtually all aspects of our business”. They submit the designs, they vote on them, they critique them, and they buy the products. As a result, they have a vested interest and a sense of ownership in what the company does.

This may be of interest: Sales and Service Excellence, article titled: Do You Trust Your Customers?
Click here to see the PDF.
BEST PRACTICE #5. Act human. Authenticity, Ryan warns, is non-negotiable for today's marketers. "It’s about treating your customers as you’d want to be treated. In keeping with that, we let folks at Threadless speak to customers in a voice that is truly theirs, but also represents the company."
Try This:
Implement all five of Threadless’s best practices.
Turn your customers into a community -- and engage them to participate in many aspects of your company's operations, including product and service development.
This change will carry two transformational benefits: First, the quality of your understanding of your customers' needs and expectations will increase exponentially.
And second, customers will change how they view your company. They will shift from viewing you as a "supplier" of products/services to a company that offers relevance, personality and (yes) friends with whom they choose to communicate over time!

Monday, February 21, 2011

Why Is Opting Out of Online Tracking My Problem?

Most Web users are surprised, and then alarmed, when they realize how closely marketers scrutinize their online activities. That alarm has triggered a new and powerful consumer privacy movement, one that has led to an impassioned national debate: Should marketers be able to track consumer’s online behavior without explicit permission from the people they are tracking?
I believe that this debate is focused on the wrong question.
The real issue is not whether we, as marketers, should give consumers the opportunity to “opt-out” of tracking technology that monitors their actions. The Do Not Track movement reflects not merely a policy question, but rather a turning point in the evolution of the Internet. It is a seismic shift that will leave some companies on the proverbial “ash heap of history.”
If we hope to survive and thrive in today's market environment, where consumers have more power than at any time in human history, the question we really should be asking is this: What should marketers do to motivate consumers to make a conscious decision to “opt-in”?
We should not place the burden on consumers to “opt-out” of activities they may consider intrusive. We, as marketers, should assume the burden of developing compelling value propositions regarding the many benefits of behavioral tracking and, as a result, engage business and consumer decision makers to opt-in.
In this age of empowered, social media savvy consumers, it is our responsibility to create marketing that motivates consumers to engage at a deeper level with us, based on the value we can provide. We need to create a Reciprocity of Value equation whereby consumers can trust us to deliver a more personalized online and offline customer experience based on the additional information they opt-in to share with us. That is the essence of an opt-in relationship.
Of course, some marketers have raised concerns about the possibility that significant numbers of consumers won’t opt-in. I don’t share this concern. I am confident that today’s legitimate marketers have the creativity to effectively communicate the myriad benefits of behavioral tracking and drive large numbers of opt-ins. Solid brands don’t have trouble building strong Twitter or Facebook followings, why should they have trouble getting people to opt-in?
Based on extensive experience, we know that people who actively choose to opt-in will provide rich information regarding their preferences. This detailed customer generated information enables marketers to provide targeted and relevant communications and offers as determined by the individual preferences of consumers. This is a major win for consumers and marketers.
Results from over 100 Voice of Customer relationship research efforts we have conducted for companies such as Microsoft, NBC Universal, IBM, and many Growth companies, indicates that there are five criteria consumers have as they evaluate whether to opt-in to sharing in-depth information with a marketer. They are:
1. Consumers have to trust that the company will adequately safeguard their information and use it in a responsible way.
2. “Responsible” means that consumers must believe that their information will not be rented or sold to third parties.
3. “Honor my preferences” reflects the expectation that their “opt-in” self-profiled preferences will be used to drive increasingly targeted communications and offers... and suppress those that are not relevant per the expressed preferences of individual customers.
4. The value consumers receive in exchange for providing in-depth information must be obvious and compelling. To overcome the legacy of receiving untargeted and irrelevant communications, consumers must see an obvious improvement in relevance. This expectation of relevance applies both to their online experience and subsequent email, direct mail, etc. If the value is not obvious, consumers will assume you have betrayed their trust and expectations.
5. Consumers must see proof that the company will be able to deliver on requirements 1 through 4 above, not just once, but consistently over time.
Whatever form the Do-Not-Track regulations finally take, I predict that the marketers who survive and thrive will be those of us who consistently meet the five requirements above. I am confident that marketers today have the skill and creativity to communicate the compelling value they can provide to consumers who don’t merely decline to opt-out, but actively choose to opt-in.

Monday, February 14, 2011

Egypt's Social Media Revolt: Is Your Company Next?

THE PROBLEM: Disengaged consumers are using social media resources like Twitter, YouTube, and Facebook to stage large-scale revolts against companies big and small.
THE SOLUTION: Make sure your organization is prepared to play by the open-dialogue rules of social media. You need to engage consumers through the channels of their choice ... and then respond to their feedback quickly, tactfully, and politely.
Last March, the Nestlé company's Facebook page was deluged with protests from users critical of the company's environmental practices. Some protesters left messages on Nestlé's page using Facebook profile pictures that were based on parodies of Nestlé trademarks.
These revised logos portrayed the company as both an abuser of the environment and a practitioner of cruelty toward animals. The Nestlé Facebook moderator, apparently irked by the appropriation of the company's intellectual property, started posting rude messages threatening certain users with deletion.
The question for marketers: “Is inappropriate behavior on the part of some Facebook users a reason for the company to start insulting them?”
The answer is “no.” Attempting to censor fellow users of the social media space, or ordering on-line protesters with whom we disagree to cease and desist, simply doesn't work.
Nestlé assumed it had more control over the social media space
than anyone actually does. At the end of the day, Nestlé's arrogant
posts had not only galvanized an even larger base of protesters, but also kindled a P.R. nightmare.
Part of the price we pay for participating in the social media space is an acceptance of the basic principle of open dialogue. Yes, that means putting up with people who say nasty things about our company. It also means thinking carefully before responding to criticism.
Case in point: A moviegoer in Minnesota had a bad experience at the multiplex, and wrote the company via e-mail to complain about it. The response she received from a senior executive used profanity and told her, crudely, to take her business elsewhere. She posted the executive's crass e-mail response to her complaints on her Facebook page. Within 72 hours, a host of outraged readers—over 3,300 of them—had joined a grassroots campaign to boycott the cinema. A tidal wave of bad press followed.
The question is: How can marketers prevent such social media revolts from emerging in the first place? By doing what Mubarak refused to do for three decades: Listen.
Start by recognizing that PR, marketing, and customer service all OVERLAP in the social media space. Therefore, make sure they have tight/real-time, communication linkages within your company.
Beware the "Mubarak Syndrome": Give up the idea that you can "control" or censor social media participants.
Recognize that even harsh social media feedback is helpful and can teach you.
Do not cop an attitude. Listen.

Monday, February 7, 2011

Manipulating Customer Service Ratings…What’s Going On?

I wanted to share two recent experiences with my family’s automobiles and the ensuing manipulation of the Customer Satisfaction process.
A few months ago, we had one of our cars serviced. We were then told to fill out the Customer Satisfaction form with perfect scores for the Service department!
Recently, we bought a new car. The experience left something to be desired, and I said so in the Customer Sat survey. Yesterday, the sales rep left a message on our home voice mail stating that she was very upset that I had not rated her well. She then blamed us for ruining her day!
What’s going on?
Do these major automotive companies have so little faith in their cars, dealers and service departments that they have to manipulate the process? Surely the manufacturers know this is going on. So why aren’t they taking action?
Do manufacturers and dealers have a common goal of making the customer satisfaction ratings look good for advertising purposes?
Read about the 7-Point Customer Service Bill of Rights!
Back to my story. In the first instance, we had the car in for routine maintenance. The next day, we received a call from the dealer asking if everything went well. We said yes. The rep then told us that a survey was coming in the mail and that we should answer all the questions with a “5” for satisfaction, as that would really help out the dealer. So much for the value of the service department customer sat data!
Now for the story about the new car purchase.
Everything was fine except when we picked-up the car. This is always an exciting moment, but it was spoiled for my wife and me. First, our sales rep could not show us how to operate the brand new, high tech navigation, climate control and surround sound music systems, all of which were major selling points for this car. No one else was available to help. That left us frustrated and disappointed.
Then, as we were at her desk signing the final documents, our sales rep and her associate had a heated argument about some office issues that had nothing to do with our purchase. We sat there in the middle of their verbal cross-fire.
"The Voice of the Consumer: Does Everyone Hear It?" by Dr. Ichak Kalderon Adizes, CEO/President, Adizes Institute. Read the article in his blog.
Two weeks later, when the customer satisfaction questionnaire arrived by mail, it seemed to offer an anonymous response since my name wasn’t on it. I answered the questions and explained that this had not been an optimal experience. However, because our sales rep had emphasized that she wanted to get good ratings, I was much more diplomatic than I should have been.
Imagine my reaction when my wife played the voice mail from the sales rep thanking me for having ruined her day and her ratings.
How else can these companies improve except though customer feedback? And what about the implied confidentiality of the survey I returned?
The Takeaways:
arrow Take a careful look at your customer sat process. Are the questions the correct questions? Will they get you the “right” answers or the real answers?
arrow Are there opportunities for employees to manipulate the process, to get the “right” results?
arrow What is done with the results? Are they used internally to ask the tough questions and make changes, or are they fodder for advertising slogans and sales brochures?
arrow If your customer sat questionnaires say or imply that responses will be confidential, then honor that, so customers won’t feel punished for taking the trouble to submit honest feedback.