Given the limited dollars available to both business and consumer decision makers in this prolonged tough economy, people have come to expect Customer Satisfaction. This is viewed as a minimum competency and no longer differentiates a company.
Per results of Voice of Customer research we have conducted over the past 12 months, decision makers now focus on proactive customer engagement and targeted / relevant communications. These factors are viewed as competitive differentiators. In fact, strength of Relationship and customer engagement has 12 times more influence on retention and repeat purchases than Satisfaction.
The Power of Social Networking to Engage Customers and Drive Sales
I keep reading about the power of social networking to engage customers in an in-depth relationship. But, I haven’t seen many case studies which show how to make money from this phenomenon.
Amie Street is a fast growing online music retailer which has a unique business model. All songs start free, and pricing is driven by the community, based on the popularity of the content, to a maximum of 98 cents.
In just a few years, Amie Street has grown its catalog to over one million songs and is experiencing rapid sales growth. Average spending by customers exceeds the average spend on iTunes.
The company was started in 2006 by three college buddies, Joshua Boltuch, Elliott Breece and Elias Roman (my son). Amazon.com led the company’s Series A financing round and Business Week named them among the “Top 25 Entrepreneurs Under 25.”
Amie Street represents a significant breakthrough in proactive customer engagement best practices which leverage the power of social networking to drive sales.
The following case study will show you how Amie Street used Voice of Customer Research to identify how to develop a deeper level of engagement with customers.
AmieStreet.com: Leveraging the Power of Social Networking
By Josh Boltuch, Co-Founder and CMO, AmieStreet.com
Challenges
As a start-up, everything from our brand image to the web site itself was in flux and being forged in real time. Due to our rapid desired growth rate, we had to answer some critical questions early in our lifecycle as a company.
Given their experience in improving the on-line customer experience for NBC and Microsoft, we asked Ernan Roman Direct Marketing to conduct their Voice of Customer Relationship Research process and develop strategies to address the following issues:
- How do our customers and prospects currently experience music online?
- What drives people to Amie Street?
- How does their experience on Amie Street compare with their expectations?
- What will motivate customers to buy more music and increase usage?
- How can the Amie Street site be significantly improved so it becomes a meaningful destination, customer experience and connection to Amie Street?
- What is the perception of Amie Street?
- What do people identify as Community building components?
- Which areas of content have the greatest potential for Personalization?
10 Tips for Marketers
TIP 2: Do not undersell your product. If you have unique features or a competitive advantage clearly communicate these in customer friendly language. Do not assume they understand these benefits. Watch out for internal jargon!
TIP 3: Focus your web site and experience to your specific customers. Even though we are trying to appeal to a broad audience of music customers, we still must communicate a unique brand. Per the VOC research, in our case playing it safe in terms of web site design and copy did more to turn off customers than if the site had been “out there.” So, focus the experience and design to your specific customers.
TIP 4: Social networking and commerce are still uncharted waters. Developing a product that is both a social discovery engine and a seamless e commerce solution is very difficult. Per the VOC research, our focus needed to be less on e-commerce and more on the member experience of community and interaction.
TIP 5: Members feel a true connection and this must constantly be reinforced. Members feel a special connection to Amie Street. Per the VOC findings, we needed to do more to acknowledge how much we valued these members. Customer appreciation was identified as a welcome and golden opportunity to build rock solid brand loyalty with these members.
TIP 6: Every customer is important and must be serviced within hours. Because we started as three guys in a house, we treated every customer as if they were the only customer, an attitude that has served us extremely well. Even though we now have hundreds of customer inquiries daily, every customer request receives an in-depth, personal response from a member of our team within 24 hours. Per the VOC research, this is seen as an important competitive differentiator compared with other “corporate” music sites.
TIP 7: Each section of the web site should only focus on the key messages customers want to see at that point. Per the VOC research, customers were confused or turned off by certain parts of the site because we were trying to jam too many things into certain pages or sections. Just because the internet offers infinite choice doesn’t mean your web site should. Figure out the one message and action you want to convey at each point in your site, to deliver the best customer experience!
TIP 8: Word of mouth is important, so give customers easy ways to promote you. Amie Street has grown almost entirely through word of mouth, yet per the VOC, we were not giving members easy and convenient ways to talk about Amie Street and the artists they discovered and love.
TIP 9: Price is not the most important factor! The VOC helped us understand that even though we usually offer the lowest prices compared to other music stores, this was often not a major concern to customers. They were more excited about discovering a song first and being able to tell friends than the fact that it was free or very inexpensive. Lesson: It’s all about the experience you create on your site regarding all aspects of doing business with you. The better this feels, the less important price is, even in a very competitive market.
TIP 10: People will opt-in and self-profile their interests and preferences. The VOC surprised us regarding how much information people were willing to share regarding their preferences in order to receive a more personalized on-site experience and relevant on-going communications. We will use opt-in self-profiling to drive much more targeted communications.
Results from Implementing the VOC Research Based Strategies
Within the first 60 days of implementing the VOC research based strategies, we have tracked the following improvements:
- New customer enrollment increased 16 percent
- Average repeat purchases increased 16 percent
- E-newsletter sales increased 75 percent
Results after 1 year of implementing the VOC-research driven strategies:
- 427 percent increase in new customers / month
- 412 percent increase in repeat purchases per month
- 258 percent increase in monthly sales
With results like these, Amie Street represents a significant breakthrough in proactive customer engagement best practices which leverage the power of social networking to drive sales. We hope the strategies outline above will help you implement high return Voice of Customer driven customer engagement and social networking strategies.
