Social Customer Experience Management (CEM) can be defined as the “Business strategy for intentionally using social media to engage with customers and deliver an experience that builds brand loyalty.” There is research to show that in doing so organisations drive up revenues and profits. A 2009 “engagement” study by Altimeter Group and Wetpaint found that “companies that are both deeply and widely engaged in social media surpass their peers in terms of both revenue and profit performance by a significant difference.” Now the data does not prove a causal relationship; merely that those brands that engage the most with customers also happen to be more financially successful, but you don’t need to be a rocket scientist to understand that when you are more engaged with customers they are likely to be more engaged with you.
Perhaps that is why a recent Forrester forecast (The State of Customer Experience 2011) predicts that spending on interactive marketing will reach $55 billion by 2014 .
Social Customer Experience Management (CEM) can be defined as the “Business strategy for intentionally using social media to engage with customers and deliver an experience that builds brand loyalty.”
This will be driven by spend on social and mobile marketing that will see compound annual growth rates of 34% and 27% respectively through 2014. However, the 2011 Forrester “State of Customer Experience” report also found that lack of strategy is the number one block to success.
There is no doubt that marketers are excited at the potential for reaching new audiences in new ways and positively influencing consumer word of mouth on the grand scale-the “Twitter effect.” However, the reality may not be as seductive as the hype. As Google guru Avinash Kaushik tweeted: “Social media is like teen sex. Everyone wants to do it. Nobody knows how. When finally done there is surprise it’s not better.” Well Google certainly seem to be learning how, its new social media product, Google + attracted 25 million subscribers in the first month since it launched in Beta form in July 2011.
So what are some lessons for those organisations wishing to get into digital marketing and Social CEM?
1. Being in the flow
Social media is happening whether you are there or not. A recent RightNow paper “Socialisation Of Customer Experiences” concluded that “brands are frequently left out of critical discussions, and when they don’t participate or respond, the discussion continues without them-for better or worse” First Direct, the telephonic and on-line bank, monitors social media commentary and reports what its customers are saying live on its “Talking Point” web page. Customers can view the topics and post their own contributions so that the bank is constantly in the flow of feedback.
The communication is all too frequently about you, not to you.
This is easier said than done however. Dipping into social media is like sipping from a fire hose- you may end up with more than you can handle! This means that you need good technology to help you sort the important from the irrelevant and, more importantly, help your people respond appropriately. The problem is that so many contact centres are designed to support traditional in-bound telephone calls whereas customers are now communicating about your brand over social channels. The communication is all too frequently about you, not to you.
Salesforce.com CEO Marc Benioff calls this “The Social Divide” and it represents a gulf that organisations must cross if they are to respond quickly to negative word of mouth Benioff suggests that organisations have to go through three stages to become a “Social Enterprise.” The first stage is having a social profile, being out there and in the flow and listening to your customers. The second is developing an employee social network so that your people are in the flow too, and finally creating a customer social network so that your customers become part of your product development process. The consequences of not becoming a “Social Enterprise” are alarming.
2. Dealing with detractors
The RightNow research found that nearly a quarter of British Adults have posted a negative comment about a company on a social networking site. Of these “detractors,” 65% want to inform others about their negative experience, 46% want to vent their frustration and 30% want to discourage others from buying from the company-and they frequently succeed. The study also found that a massive 39% percent of consumers decided not to buy from a company following something they read on the social web.
…39% percent of consumers decided not to buy from a company following something they read on the social web.
We used to say that a dissatisfied customer would tell 9-10 others. In today’s socially connected world that factor has multiplied several-fold. Convergys, the contact centre company, found that the average detractor would tell 45 friends via a social media site (Convergys 2010 Scorecard Series).
However, that figure hides a wide range of potential impact. There is the well-known example Dave Carroll, the United Airlines customer, who created a YouTube video of him and his band singing a song called “United breaks guitars.” His song relates the story of how, whilst travelling on United, his guitar was damaged and, despite all his efforts to claim for the damage, he was unable to get United to listen to him. Finally, in desperation he wrote a song about his experience and posted it on YouTube on July 6th 2009. United was quick to respond via Twitter and offered to compensate him but by then it was too late-the damage was done. By the end of July the video had been viewed 4.5 million times and, as of February 2011 over ten million people have viewed the video with thousands more posting comments about it. It is impossible to gauge the damage this has done to United’s reputation but imagine how much the average company might need to spend in order to create and air an advertisement that attracted ten million willing viewers.
The lesson we should take from the United story is that monitoring social media is one thing, using it to deal with customers effectively quite another. But when you do the benefits are amazing.
3. Turning fans into customers
In November 2009 Burberry launched a web site artofthetrench.com and invited customers to upload images of themselves wearing the brand’s iconic trench coats. Within the first week 400,000 people from 191 countries had done just that. Within nine months the site had been visited 9 million times. Delighted with these results the brand started a Facebook page and now has five million followers. The question though, is how do you convert social media fans into paying customers?
High fashion brands promote themselves primarily through annual shows in Milan, Paris, London and New York. The problem is that only a small carefully chosen audience is able to experience these and it is then months before the products are available via the stores. Burberry launched a concept called “Runway to Reality.” Its shows are now broadcast real-time in 3D to cities around the world to an audience of thousands. Simultaneously the shows are streamed live over the Burberry web site to a potential audience of a million who can view via their computer or iPad. Those viewers are then able to immediately click on the products they like and the products are delivered to the customer’s home a few weeks later; and if the product doesn’t fit or the customer doesn’t like it? No problem, return shipping is free as well. No wonder then, that Burberry has seen such a growth in its sales over the past year.
The RightNow study found that 46% of respondents become “brand fans” on social networking sites and 21% will seek an emotional connection with a brand and become members of the company owned community. Burberry and the mobile phone operator O2, both have brand communities. O2 calls it customers “fans” and has a “fan club” that provides privileged access to entertainment at the O2 Arena and sporting events.
In the process the brand has attracted more users that any other company in the market place and has the highest NPS rating (Net Promoter Score, a measure of advocacy) in the industry.
For organisations wishing to use e-commerce and Social CEM as part of their marketing mix and make it a fundamental element of their customer experience there are some important lessons to be bear in mind.
The need for a strategy
The “State of Customer Experience 2011” report by Forrester found that 86% of the 118 executives surveyed around the globe thought that the customer experience was the most important strategy for their companies and 76% were trying to differentiate by using it particularly through the on-line experience (76%) but they felt the biggest obstacle to success was a clear strategy for implementing it. We have found in our work with brands around the world that organisations take a very fragmented approach to implementing customer experience and we suspect that Social CEM will be the same. The tendency will be to rush into buying technology with no clear customer experience strategy in place.
…many organisations use technology to distance themselves from customers rather than to engage with them.
A client of mine recently hosted a dinner in London with a number of executives who were invited to talk about the trends they were seeing as well as some of the challenges. I had the good fortune to be asked to facilitate the event and was fascinated to hear the issues that these executives spoke of. One was the perception that many organisations use technology to distance themselves from customers rather than to engage with them. Self-help, automation, IVRs etc. are all seen as ways of reducing interactions and therefore costs rather than a means for providing choices that create value for customers. Another insight was that customer experience is actually the differentiator and technology the enabler and yet many organisations approach it the other way round.
We only need to look back a few years to see the consequences of believing technology is the answer in the absence of strategy. At the peak of CRM hype, expenditure on CRM systems was estimated to have increased from $20 billion in 2001 to $46 billion in 2004, yet one survey by Gartner estimated that 55% of CRM systems drove customers away and diluted earnings. We believe that unless organisations have a clear strategy for embracing social media and incorporate it as integrated component of the end-to-end customer experience it will fail to deliver the promised results.
There will be a time in years to come when we look upon the Internet and our iPad (or whatever version of iThing Apple has launched at that time) in the same way as we think about our telephone line or handset today. The web is, after all, just a communications channel, no different to any other except in its ability to broadcast our voice to a much larger audience. So it follows then, that we should not treat Social CEM as a silver bullet that is going to transform the fortunes of our organisation overnight. To do that we need a vision of how we wish to use it and how it can contribute to our overall customer experience strategy.
The tail wagging the dog doesn’t work in the canine world and it certainly doesn’t work in business. To ensure that technology enables the customer experience rather than driving it, learn more about my Customer Experience Management Model in Innovating customer experiences in a socially connected world.