With the advent of social media and the rise of mobile smartphone technology, consumers are in the driver’s seat, posting their customer experiences in permanent, online forums and providing instant customer feedback that is increasingly visible
to the public. To get in front of these trends, traditional, relatively passive Voice of Customer programs have the opportunity to evolve into highly actionable Social Customer Experience Management (Social CEM) solutions.
The most advanced and commercially advantageous Social CEM includes not only the process of gathering one way customer experience feedback, but also the ability to provide true two-way
dialogue that drives local and immediate improvement efforts, drive positive online and offline customer advocacy, increase same store sales and increase Customer Lifetime Value (CLTV). Social CEM is about moving beyond “interrogating” customers about their experience with brands and creating an ongoing dialogue
where customers become “co-creators” of the brand by becoming active, engaged advocates. This paper is about how brands are transforming their businesses by using Social CEM.
The Current State of Customer Experience Management (CEM)
Measuring customer experiences is really about understanding the sum of a series of touch points, the gestalt of one or several moments of truth that drive an overall perception of the individuals involved and the product purchased or consumed, juxtaposed against the channel engaged and the expectations of the brand.
Customer Experience Management (CEM) is how a company manages those interactions with customers. CEM has emerged as a “space” or methodology in retail parlance, as it provides a means to manage and create loyalty, and higher customer lifetime values (CLTV) – where customers buy more goods and services
over longer periods of time, positively affecting revenue, profits and margins. By contrast, not managing CEM can lead to increased operational costs as well as negative word of mouth and customer attrition. Social CEM acknowledges that with social media the impact of either positive or negative customer experiences are
more immediate, tangible and amplified and as a result, must be integrated in the customer experience management program.
“It is an old adage in business that “you can’t manage what you don’t measure”. Many companies do not effectively measure, communicate and hold their front line agents accountable to continuously improve their customer experiences. They may collect
customer experience data, but the time and distance from feedback to a customer evidencing any tangible improvement is so long that most consumers who provide feedback do not believe any good comes of it. This is evidenced by Consumer Insights research done by Empathica showing that only 46% of respondents believe that feedback is used to improve the customer experience. This can only
be the result of two factors: 1) a lack of transparency and communication from the brand outwards on what the score is and what’s being done about it, and 2) a poor understanding and execution of the improvements needed at the local unit (i.e.,
store, restaurant, branch, dealership, etc.) level. As a result, the revenue boost and/or cost cutting goals of CLTV have often not been met and customer experience improvements remain an elusive goal in many companies.
Whether taken seriously or not by the executive suite, customer experience metrics have always been important indicators for the success of a company. What’s changed and made customer experience management a vital, bottom-line business
initiative in today’s world is that digitally connected consumers are far more vocal about their customer experiences and have a more far-reaching impact than ever before. With studies showing 78% of consumers trust recommendations versus only 14% who trust advertisers’ messages, managing on/offline customer experience
has never been more important.
When today’s consumers post information about their customer experience online, they can reach thousands of people in mere seconds. And those posts remain online as a permanent record of customers’ experiences. If, as is often the case, the customer experience is “off”, the company is in danger of not only losing the
future revenue of the customers who posted, but also the revenue from hundreds if not thousands of other customers who read about how the brand’s products or services didn’t meet customer expectations and subsequently choose not to buy from the brand. In addition, the lack of improvement in the business can result in
increased operational costs dealing with customer complaints, the source of which could have been rectified if recognized and corrected based on ongoing customer feedback.
The rapid adoption of social media and mobility has left most companies organizationally challenged to adopt new approaches in how they design and improve customer experiences and drive customer loyalty and advocacy. Utilizing a systematic approach to Social CEM can provide real-time feedback for the corrections and adjustments required by the business as well as to build an ongoing,
online customer advocacy program. Companies can use Social CEM to drive high quality interactions and provide end-to-end customer experiences across all communication channels (online and mobile) as well as in face-to-face (F2F) brickand-mortar locations such as in retail stores, restaurants, hotels, bank branches and auto dealerships. However, making these changes requires not only a change in how leadership views customer experiences, but also the empowerment of the various functional departments who are being measured by customers to actually make the changes required to deliver exceptional customer experiences.
The Transformation of the Customer Experience
In the last decade, consumers have rapidly adopted disruptive, online technologies. Customers went from being limited to visits to a brick-and-mortar location to researching and comparing a company’s products and services via Internet
searches and review websites followed by in many cases making the purchase online. A shift from brick-and-mortar shopping to e-commerce signaled a new way to communicate with customers, SMS text messaging over mobile phones is not just a way to interact with friends; it is increasingly a means for companies to interact
The advent of handheld devices like the smartphone and iPad, have forced an evolution in how consumers and businesses communicate. Today, handheld digital tablet technology makes mobile communications available and useful at every age.
Unlike generations before now, even kindergarten students are indoctrinated into this new paradigm. These future customers grasp for their parents’ smartphone or tablet computer as if it was a link to life itself. Along with handheld devices, social networking sites continue to proliferate. Facebook, Twitter and Pinterest along with dozens of new, well funded entrants into the field allow consumers a direct line.
Wondering how marketing and customer service can collaborate with customers on social and traditional channels? Here's how in this webinar!
The key to f-commerce ROI is to make sure incentives resonate with ambassadors, influencers, and customers so that they drive sales on the brand’s behalf. That’s why I recommend as one of the first steps in social media strategy is to put yourself back into the mindset of being in school. Go and study some brands that are doing it.
Brands that are in the midst of social commerce have found that when they use some of the same techniques as in regular sales processes, there is an increase in interaction. Those techniques can be:
Specific calls to action
Creating a sense of urgency through limited availability or blackout dates
Incentivizing social actions by offering discounts or special access
Here’s an example of how this can work. Let’s say you offer a coupon for your product. The catch is that 500 coupons have to be redeemed before I can get my deal. If the brand creates a way for the customer to share the deal with their Facebook connections, then more people will see the deal. If you have targeted the right demographic with the right offer, within hours or days the 500 coupons will be redeemed. It’s the action of one customer sending the deal within Facebook to hundreds of their connections that makes the f-commerce recommendation distribution process profitable.
Brands can increase their return on their investment by integrating e-commerce functionality with the word-of-mouth strategies we talked about in Chapter 13. What’s great about the social networking software is that the tools to implement those strategies are there. Some tactics are:
Offer contests where when the customer clicks on the Like button, they land on the Facebook store
Post ads, promotions, flash sales, pop-up offers to Wall and link those to the Facebook Shop
Combine “deals of the day” or product announcements with links to product details in the f-commerce shop
The Value of a Facebook Fan
There have been a couple of companies that have calculated the value of a Facebook Fan. In part, the reason why this had not been calculated before is because we needed more data to understand what dynamics affect other dynamics. It takes a while for a social network to get set up before it can be monetized. That is something that has stumped many business people who look at the investments that have been made in social networks. Millions and billions get poured into it, with the rest of the world wondering when they will begin to make money. In addition, to have enough data to watch for patterns also requires that the social network have some legs under it.
A company called ChompOn released a study on the calculations they did on the value of shares, Tweets, likes, and follows in the context of e-commerce. ChompOn works with 50 partners including Blackbook Magazine, JDeal,and Beyondtherack to offer Groupon-like crowdsourced coupons.
They used data from these daily deals to examine the conversion rate and action for deals they shared on Facebook and Twitter. They found the value of a Facebook share is $14 and the value of a tweet is $5.
For shares and tweets, ChompOn was able to directly attribute sales to the original action and took the total revenue attributed to each action and divided it by the total number of shares/tweets.
By comparison, ChompOn says the value of a Facebook “Like” is $8 and the value of a Twitter Follow is $2. For likes and follows, ChompOn estimated attribution by looking at traffic references and subtracting out purchases made through shares/tweets as well as purchases made through direct traffic. Of course this data is a bit tenuous and anecdotal. And it’s important to note that this analysis does not capture the long-term value of customers over time or the customer lifetime value we were talking about early in this chapter.
Syncapse is another company that calculated the value of a Facebook Fan. They looked at the differences in behavior and motivation between fans and non-fans to understand the true value of a fan. They looked at:
Product Spending: The ability to understand the methodology of increasing product spending
Loyalty: The ability to understand the available means to influence and promote brand loyalty within a target audience
Propensity to Recommend: Probability and propensity for word-of-mouth recommendations leading to sales
Brand Affinity: The impact on brand perception and recall
Media Value: Efficiencies of earned reach and frequency via the Facebook platform
Acquisition Cost: Efficiency of fans in enticing others to participate and drive organic membership
They polled 4,000 people who were self-identified as fans or non-fans of Nokia, BlackBerry, Motorola, Secret, Gillette, Axe, Dove, Victoria’s Secret, Adidas, Nike, Coca-Cola, Oreo, Skittles, Nutella, Red Bull, Pringles, PlayStation, Xbox, Starbucks, and McDonald’s.
The results were that consumers who are fans are more valuable to organizations across all variables than those who are not fans:
On average, fans spend an additional $71.84 on products for which they are fans compared to those who are not fans.
Fans are 28 percent more likely than non-fans to continue using the brand.
Fans are 41 percent more likely than non-fans to recommend a fanned product to their friends.
They also found that no two brands fan values are the same. But what is reassuring is that because they were able to track behavior, they could see the trends that make a fan more valuable than not.
They noted that fan value can vary widely by company and product. Factors influencing this variability include product purchase price, purchase frequency, product purchase cycle, product category, brand equity, and underlying brand strength.
A fan base is unique and comprises different levels of influencers and customers. Syncapse observed that how much a fan participates with a brand can change the value. For instance, an average fan may participate with a brand ten times a year and will make one recommendation. But, an active fan may participate thirty times and make ten recommendations. The impact this has on fan value can be quite dramatic.
In the case of Coca-Cola, the best-case scenario for fan value reaches $316.78. But it is $137.84 for an average fan. This degree of variability in the value of a fan must be a major consideration in determining how brands address different types of fans in efforts to move them up the value ladder. The strategy needs to be focused on how to reduce fan variability while moving the average fan value to the active end of the range.
Facebook Can Be the Decisive Factor for Commercial Success
The Social Commerce IQ™ Genius Index was created with analytics data and the accompanying survey findings. Facebook figured prominently in the results. The social commerce index was broken down into four levels of social commerce maturity. Genius level included brands that represent the most socially-advanced on Facebook, typically having the highest engagement rates and offering shopping offers that were relevant to their customers in the brand’s news feed. In next lower category, Superior Level, the brands typically had fewer status updates and moderate engagement on their Facebook pages. The next category Challenged The brands in this category typically had few status updates, low engagement and little to no shopping status updates or applications/ tabs on their Facebook page. And the lowest category, the Deficient brands had no engagement, new fans and rarely sent updates to their fans. The top-scoring retail brands with Social Commerce IQ™ scores according to this study are: GameStop, Victoria’s Secret, Walmart, Sephora and Clinique.
All the top scorers in this study were shown to maintain a high level social currency for their brands through Facebook. Based on the data collected, here are three of most significant takeaways:
Status Updates Increase Sales– publish news about sales events, not coupons as a primary driver of fan engagement on Facebook. This is especially true for luxury retailers.
Ask Customers to “Like” After Buying—People buy then “Like”, not “Like” then buy – most Likes come from people who have already bought the product, i.e. liking is a post-purchase activity.
Likes Drive Sales— Facebook has driven at least 22 million sales transactions in the U.S. as a result of customers “liking” their products. In general, 35 percent of consumers on Facebook tend to buy a product if it has been Liked by other members.
The power of keeping engaged with your customers is key to social commerce success. Facebook is clearly the leading platform for managing a productive dialogue with customers. With its newly empowered f-commerce tools and platforms, it not only affords brands a wide variety of the opportunities to stay connected to the marketplace but also to collect and incorporate customer information to make the conversation even richer and more profitable for all concerned.
Want more? You can get my book here: http://www.amazon.com/Like-My-Stuff-Products-Facebook-ebook/dp/B005Y23KLK
Process, strategy and research are all necessary ingredients to a successful business. However, the key to really selling a product and keeping employees engaged – or if you prefer to stick with the in-the-kitchen analogy of “making your dish crave-worthy” – is creativity.
So what are some small business tips and tricks to amp up the creativity?
Yes, Everyone Can Be Creative
First off, “creative” professionals aren’t the only source of creativity within a workplace. Whether you’re an Accountant or Copywriter or a Customer Service Specialist or Art Director, creativity is in everyone. Why? Because everyone can teach you something you didn’t already know or offer you a different perspective that you otherwise might not have considered. And in business, it’s all about learning and experiencing. Never sell any employee short on his or her creative potential.
Provide a Creative Atmosphere
If the movie Office Space taught us anything, it’s that human beings weren’t meant to sit for hours in little cubicles completing incredibly mundane tasks only to be told they weren’t doing them right or fast enough in the first place. So, knock down those walls – literally and figuratively – and breathe some life into your company’s environment. Take a cue from some of today’s most innovative businesses, such as Google, Facebook, and candy company Mars, and offer office environments that make employees feel more at-home. Consider conference rooms with fun, off-the-wall themes like a superhero room, or install a dart board or ping pong table to encourage breaks and socializing. At the end of the day, employee output is only as good as management input. Just because work is serious business, doesn’t mean it can’t be fun, too.
Get to Know Your Employees’ Interests
Companies are comprised of people from all walks of life with varying hobbies and interests. Fostering employee relationships and communication outside of daily work talk and small chitchat is pivotal for a boss to uncover hidden creative talent within employees. Just because your receptionist is soft-spoken and neat at the office, doesn’t mean he or she isn’t comfortable getting dirty and expressive on a weekend painting bender. Don’t judge a book by its cover. Jobs are what we do; they don’t make us who we are.
Acknowledge Effort and Respect Failure
Challenging the status quo of a company can be risky, but it can also incredibly rewarding, if done correctly. Other than the bravery it takes to go against the grain, challenging employees to give their all is a perfect way to kindle a creative fire throughout the office. It’s the same principle of working out at the gym with a partner: you’re there to push each other and exert your best efforts to achieve results. If you step up your game at work, it has the potential to ignite contagious productivity throughout the entire company. Be the leader of change you hope to achieve in the company. It’s easy to become complacent with “the way things are” simply because that’s all we’ve known. But many times, there are better ways to achieve success. However, keep in mind that with risk and challenge also comes failure — which isn’t the devil in disguise we all tend to make failure out to be. Failure is part of living and working. You live. You learn. You grow.
About the Author
E.J. Dealy is CEO of The Company Corporation, which assists entrepreneurs and small business owners in forming business entities. The Company Corporation does not provide legal, financial, or tax advice.
- Constellation ResearchVP & Principal Analyst, presentDr. Natalie evaluates the customer experiences of brands and helps the Marketing, Sales and Customer Service departments evaluate their strategy, technology, processes and resources to increase the customer life value of their customer base.
- BambooEngine.comAdvisory Board, presentStrategist advice on company positioning; funding; marketing, sales and customer service
- InfiniGraph.comAdvisory Board, presentStrategist advice on company positioning; funding; marketing, sales and customer service.
- Instructor MEMES Summer Institutes at UCLA Anderson & UCLA ExtensionGuest Lecturer, 2011 - presentTeaches executives and graduates how to use social and digital strategies, processes and technologies to increase the customer experience.
- Executive Business Strategy Advisor & Social Customer Experience Industry Authority & ConsultantChief Paradigm Shifter, 2011 - 2014Help companies determine if they have the best technologies to execute their strategies to make amazing customer experiences.
- Forrester ResearchMarketing, Sales and Customer Experience Analyst, 2008 - 2010Evaluation of CRM - Marketing, Sales and Service technologies to determine which vendors rank the highest amongst hundreds of options for brands as well as help brands determine what strategies and technologies they need to deliver the best experiences to their customers.
- PriceWaterhouseCooppersManagement Consultant
- Hitachi ConsultingManagement Consultant
- Benchmark PortalManagement Consultant
- General ElectricEngineering Management
- General MotorsEngineering Management
- Hughes ElectronicsEngineering Management
- Weber Shandwick WorldwideGlobal, Digital Strategy and Measurement, 2010 - 2011
- Dylte.comAdivsory Board, 2013Strategist advice on company positioning; funding; marketing, sales and customer service.
She teaches courses at MEMES Summer Institutes at UCLA Anderson and Marketing and Management Courses at UCLA Extension as well as on-line courses on these topics.
She has spent her careers looking about how businesses interact with their customers and their employees and she provides companies with the best way to create environments that foster loyalty, motivation and innovation.
Dr. Natalie has focused on numerous customer-facing technologies, including CRM, Customer Service and Social Media.
- University of Michigan
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