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Rise of Consumer – The New Brand Guardians

Posted by Ken Martin July 14th, 2011

With the rise of social media into the mainstream marketing mix, it’s not surprising it’s now overtaken Email in terms of on-line duration (4.6 vs 4.4 hours per week). This peer-to-peer engagement equates to circa 3.8 billion+ weekly interactions via Facebook/Twitter alone.

Although this volume of social communication is noteworthy,  it’s the impact on consumer brand perception that’s more significant.

Consumers now control the brand agenda

The power of consumer word of mouth has long been acknowledged within the marketing mix.

- Brand opinion holds much more weight from someone you know (90% of people are more likely to trust a  recommendation if from a friend). First Direct, with 61% positive net recommendation rate, the highest of any UK bank, have built their whole brand/service proposition around this insight.

- Negative brand experiences travel faster and much further than positive. We only have to look at events of the last week to see the impact consumer power can have on a UK publishing brand with 168 years heritage.

However, since social channel usage is now firmly part of every day consumer culture, the word of mouth factor has now even more importance.

Our role as marketeers

We therefore, need to manage and leverage consumer conversation via the following four ways:

1) Insight: Listen to what consumers are saying about your brand, and view social as a continuous real time focus group (for relatively low cost). Gatorade have made socially generated insights integral to their brand strategy, with their impressive listening capabilities well publicised on YouTube.

2) Manage:  Consumers are now just as likely to feedback via Twitter/Facebook as your official service channels. Since this communication is visible and impacts perceptions of others, integrate social into the core brand/service proposition, and pro-actively manage your community. Airlines such as Virgin Atlantic  are a great example, since they actively seek, acknowledge and deal with passenger/potential passenger queries and complaints.

3) Engage: Your fans and followers are also likely to be a key segment of your brand advocates. Think of ways to reward/engage them further to help shape the brands future, such as new product trial or marketing feedback. An example is Rightmove.co.uk, who canvassed their Facebook fans on what new functionality they would like to see on their website, and received many valuable suggestions.

4) Amplify:  Social should not be viewed as a vertical ‘silo’ as per the old broadcast/media model. Social will cut across and impact every brand communication whether intended or not (via Comments, Tweets and Shares). Therefore incorporate it into the campaign idea, and leverage social reach. The well publicised Old Spice Man activity from 2010 is a classic example of amplification in practice.

Ulitimately, this means that although we can obviously instigate the conversation agenda via communications, the power and a brands real destiny, now firmly lies in the hands of the consumer.

Ken Martin – Senior CRM Consultant
Follow me on Twitter @MrKenM

Tags: Amplify, brand, Consumer Listening, CRM, Engage, Facebook, Insight, Marketing Mix, service, Social CRM, Social Media, twitter

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What is CRM in 2011?

Posted by Tom Burrell January 4th, 2011

So, what is CRM in 2011?

Despite being a discipline which is over 20 years old (1), there is still much confusion in the business community as to what CRM actually is. So what is CRM in 2011? Some think of it as a software platform, some think of it as data and emails, others think of it as customer retention, while yet others think of it as customer service. The answer is they are all right….and wrong. 

Why so?

Before I get into this, I want to share a few definitions of CRM from some of the leading thinkers on the subject:

“A philosophy and a business strategy, supported by a technology platform, business rules, processes and social characteristics, designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted and transparent business environment.”
Source: Greenberg.P (2010), CRM at the Speed of Light

“Customer relationship management (CRM) is a business strategy to select and manage the most valuable customer relationships. CRM requires a customer-centric business philosophy and culture to support effective marketing, sales, and service processes. CRM applications and integrated data solutions enable effective customer relationship management”
Source: Perez.J.M (2009) Customer Relationship Management in the Age of the Socially-Empowered Customer

“CRM is a business strategy which proactively builds a bias or preference for an organization with its individual employees, channels and customers resulting in increased retention and increased performance”
Source: Carlson Marketing Group

All of these definitions are great. They clearly incorporate the fact that CRM is about managing customer relationships, incorporates all business units and require a CRM strategy before a technical implementation. However I think it can be put a little more simply:

“CRM is about driving mutually beneficial interactions with your target audience in order to create a positive relationship, so that they drive greater value*” LBi CRM, 2011
Therefore:

• CRM incorporates all stages in the lifecycle from awareness, through consideration, purchase, loyalty and advocacy
• CRM incorporates every channel from direct communications such as email, to broadcast and social media and technologies
• CRM incorporates every Department from Marketing to Sales to Service and Technology

This is because all of the above present opportunities to deliver mutually beneficial interactions, create a positive relationship and as a result to drive customer value.

*I use the term value here since CRM is about driving behaviour beyond simply spend or share of wallet and incorporates the value generated from social influence, advocacy and word of mouth.

Why Strategy comes first and technology comes second

What this means is that is absolutely critical to define your CRM Strategy before identifying what technology you need and how it should be configured. Based on a 2009 survey from Forrester 47% per cent of all CRM Solution projects fail to meet their objectives. There are 2 key reasons for this:
1.      There is no clearly defined CRM strategy in advance of deployment of the solution
2.      As a result the wrong solution is chosen and deployed

When we say CRM strategy what we are talking about is the relationship management strategy. That is

• How we will respond to a customer’s engagement with us, be that direct or indirect (by direct I mean how we will respond when a particular customer calls the centre or emails sales with a particular query. By indirect I mean how we will respond if a customer makes a certain action from which they don’t necessarily expect a response eg views specific content on a website)
• How we will use data gathered from multiple sources to power our side of the conversation
• What are the most important things to capture and drive dialogue about

In effect answering the question: How will we drive mutually beneficial relationships with our audience?

Data

Often it comes back to data. Why? Because data drives relevance and in a social world – data drives the conversation. Data is going to be ever more important in 2011 and data scientists are going to have a seat on almost every table, as Mashable have so eloquently elaborated (3). Having an understanding of customer’s interests, preferences, habits, channel behaviours and interaction history can have a massive impact on what the brand says and how the brand interacts. Truly understanding the customer is critical to driving a mutually beneficial relationship and key to driving value. Segmentation, personalisation (across multiple channels including email, website, client service and sales) and test and learn approaches all enable brands to optimise how they interact with individual customers. Having a clear understanding of the customer’s part in their conversation with us, enables us to respond in the right way.

Take the following example:

Jon goes into a bakery and requests croissants. The bakery has made lots of French bread recently, which is it is keen to sell. The bakery ignores Jon’s request and tries to sell him French bread. Jon leaves the bakery.

Now this seems rather absurd. However this is exactly what is happening with many brands currently. A customer goes onto a brand website, expresses interest in a product (e.g. croissants) and then all customer communications and interactions are about another product (e.g. French bread). We have come across this many times across many industries. Brands that are better set up to use available customer data will deliver much greater business performance. In fact a recent QCi study shows a clear relationship between CRM performance and business performance (2). The better CRM performer you are the better your business performs.

So what about Social media?

Social media is an important component of CRM, since it presents the opportunity to engage collaboratively with prospects and customers in ways that other channels do not. Social Media is truly interactive. Social media usage in CRM or the now commonly used term “Social CRM” can be broadly classified into 3 distinct areas:
1.      Promotion: Using advocates to promote product to non-owners.  Ocado, O2 ratings and reviews and Logitech are good examples here.
2.      Service & Support: Proactively support communities with service issues. BT and many of Right Move’s clients are good examples here.
3.      Innovation: Use customer communities to develop innovative product ideas. Mystarbucksidea is great example of this.
However what is clear is that Social CRM does not replace traditional CRM – it merely becomes part of the wider channel mix, which in combination enables a mutually beneficial relationship to be nurtured over time. LBi believe in blending traditional and social CRM thinking to deliver a holistic approach to CRM strategy and implementation, communications and data planning and CRM solution and data management.

So what does this mean?

Those who think CRM is a software platform / data and emails / customer retention / customer service – are right, because all of these elements are important parts of CRM. However, CRM incorporates much more than just these individual elements; it encompasses and brings together every channel (including social), all lifecycle stages and all internal departments.

CRM is an industry which is thriving as consumers become more demanding and expecting of high quality brand engagements (and as companies have to work harder to make their marketing budget deliver). To achieve this requires CRM technology; however it is important to define the CRM strategy before CRM technology is implemented. Data is absolutely critical to delivering mutually beneficial relationships because it enables relevance. Managing complex and varied datasets is critical to successful CRM. Finally Social Media is a valuable channel which CRM does and will continue to utilise, however Social CRM does not replace Traditional CRM. In fact Social CRM is a small part of a much bigger CRM picture.

Tom Burrell is a Senior CRM Consultant at LBi London, with a strong interest in Social CRM, CRM Technology and using insight to optimise customer conversation. He is also a passionate Villa Fan!
Follow him on twitter @TomBurrell
Follow LBi UK CRM on twitter @LBiCRM

References
(1)     http://blogs.techrepublic.com.com/tech-manager/?p=1750

(2)     CMAT is a range of tools and methodologies that provide a detailed, objective benchmarked assessment of an organisation’s capability to effectively manage its customers. A Qci study (leading research and analysis consultancy) examined 21 companies CMAT performance (12 of which were from financial services sector). A panel of independent experts then examined business performance of the same 21 companies against sales growth, profitability and asset growth. These experts were not made aware of the organisations CMAT score. Analysis clearly showed that those with higher CMAT score achieved higher business performance. Payne, A (2009) Achieving Excellence in Customer Relationship Management

(3) http://mashable.com/2010/12/20/data-predictions/

Tags: CRM, CRM Data, CRM Strategy, CRM technology, CRM Technology Failures, Data, LBi CRM, Mashable, Paul Greenberg, Social CRM, Traditional CRM, Value, What is CRM

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Being the Hostess or Host with the Mostess

Posted by Deborah Womack July 9th, 2010

The Importance of Social Community Management: 

The responsibility of organising and managing shared experiences within an online community falls to the host(ess) or Community Manager. While Community Management is a relatively new profession, its principles are rooted firmly in a 1950’s Good Housekeeping Guide to Good Entertaining. Why? Because community management is not about broadcast marketing. It’s about building relationships, sustaining involvement, nurturing conversations and resolving problems; encouraging engagement and providing support. Think Fanny Craddock or Betty Draper (Mad Men) as gracious hostesses meeting and greeting martini-starved guests to their respective homes each week and you understand the importance the role plays in keeping the community alive. What these women knew (fictional or not) was that a gathering of likeminded people is deemed a success when there is palpable energy, buzz and memorial shared experiences – handled with a little bit of grace and a big smile.

At the IAB Social Media Party, Amy Cutbill, Communities and Social Media Manager for BT Tradespace  and I outlined four key elements for successful Community Management:

-  Etiquette and Tone (The Social Butterfly)

-  Listening and Receiving (The Good Listener)

-  Involvement and Empowerment (The Wallflower)

-  Support and Affinity (The Staff)

While Etiquette and Tone might be found in your brand guidelines, the other three are intrinsic to relationship building are sometimes unclear within an organisation or – worse yet – overlooked. If you are looking for them, look in your CRM strategy. They’re there.

As Amy pointed out, “Organisations and brands should focus their attention on the members (The Guests) and think about what members want from the platform. For example news sites can push messages and stories out without concerning themselves greatly about encouraging a dialog amongst users because that’s not what readers expect. However within other platforms it’s essential to sit back and take note, listen, get involved, ask questions and be fully engaged instead of broadcasting facts about you and your brand – you wouldn’t walk into a party and start by shouting out your achievements.”

By incorporating these four elements into your strategy you will elicit the support of your most active users and they will, in turn, help to build your brand and become your biggest advocates. There’s no need to shout to be heard.

Sally Ormond of Briar Copywriting is an active BT Tradespace  member:

 “With the ever increasing use of the internet it’s never been more important to engage with your readers online. And that doesn’t mean just to sell. Today, prospects aren’t looking to be sold to. In fact, if people feel they are being sold to they’ll head for the hills. Today’s online marketing is all about giving great information and advice, building relationships and entering conversations.

Selling has changed; people want more, they want real value and that can only be achieved by engaging with your readership.

Social media sites such as BT Tradespace encourage businesses to embrace this form of ‘selling’. Although businesses can set up their own microsite, the community forums offer a valuable opportunity to find out what their market needs. By becoming involved in discussions, businesses can learn what their customers really want. Giving free advice may seem a strange way of doing business, but in doing so you are elevating yourself to expert status within your field. People will get to know you and are more likely to do business with you when the time comes. Showing your personality is key as the old adage ‘people buy from people’ is even truer today than it’s ever been.

BT uses its communities to draw small businesses together. By actively encouraging their members to use the forums, they are ‘teaching’ business to become web savvy – something that is vital in today’s online world.  Their use of Twitter multiplies this effect innumerably. It engages a wider audience creating a real community spirit amongst users. Certainly since I’ve been on BT Tradespace I’ve gained a lot by using the communities.

Whether it’s finding new suppliers, clients or information, the contact with other businesses has been vital for me to grow my own business. I’ve been able to share tips on how to utilise blogging and article marketing to boost your SEO efforts along with providing simple copywriting tips that help the effectiveness of your marketing.

Growing your business today is all about boosting your online presence.

Getting a website is just the start. If you want to be successful online social media marketing is a must. From utilising the power of sites such as BT Tradespace, to using Twitter and Blogging – the real power of the internet comes from engaging with your readers.

Tradespace http://briarcopywriting.bttradespace.com/

Now back to our IAB Social Media Party. Amy and the entire LBi CRM team  handed out cake balls and cake pops  courtesy of CakeBalls.co.uk  to all the guests because we know the fifth key element to a successful gathering is cake. Who doesn’t love cake?

Tags: Community Management, CRM, eCRM, Social CRM, Social Media, Tradespace

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CRM gets social

Posted by Hannah Drury August 11th, 2009

So not content with being in this week’s OK Magazine (yes, really), the CRM team have been busy sharing their thoughts on segmentation and the like with NMA in last week’s Customer Relationship Management special.

It’s an interesting article that looks at the (relatively) long established discipline of CRM with a fresh pair of eyes and asks “what’s more important to customer relationships: triggers or Twitter?” It discusses a view shared by the CRM team here – that traditional CRM needs to evolve and make use of new, social communication methods, media and technologies.

“Social CRM” is about engaging with consumers on their own terms – joining their conversation. It means talking and listening to your customers at times and in places and in a way that they are comfortable with. From this perspective, the underlying principles of CRM remain true; ensuring relevant and meaningful conversations and interactions (”the right ‘message’ at the right time in the right place”). The proliferation of channels and media just make this a tad more complex!

This new approach to CRM is not just about ‘adding in a few more channels’ – its fundamentally challenging traditional CRM practices (i.e. segmentation and communication strategy) and technologies (i.e. multi-channel campaign management and marketing automation) – requiring them to evolve to accommodate the need to respond to real-time experiences and conversation that consumers expect through interactive channels.

There’s no doubt social media and technologies present real opportunities to better connect and build relationships with customers. Whilst a lot of attention is being paid to the marketing part of CRM, perhaps the greatest potential for improving and advancing relationships is through the service channel. For example, sites like getsatisfaction.com are turning customer service on its head: with customer support evolving into a community conversation between users and the brand.

Read more “Expert Views” on innovations shaping CRM, including my two-penneth! Enjoy!

Pipa Unsworth, CRM Practice Director, LBi

Tags: CRM, eCRM, Social CRM, Social Media

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