COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED.   1
Don’s social media poem:

           A Facebook fan tweeted his friend

           That he liked a good show now and then,...
Scary thought:
                                                        Gen Y consumers now
                    Generation ...
Or Technology Gap?
                                                       96% of Gen Y consumers
                         ...
“The future is already
                                                                     here. It’s just not evenly
   ...
Strategy. Execution. Results.




                                     84% of consumers trust the
                        ...
Death by word of mouth…
                                                                              Strategy. Execution....
Screw up today, and the                 Strategy. Execution. Results.




                                                ...
Strategy. Execution. Results.




           “You can't take something bad off the Internet. That's
             like tryi...
Click Here to See all the Presentations
                                                                                  ...
works because customers Strategy. Execution. Results.




                                                              ar...
Strategy. Execution. Results.




     Customers go online to talk about brands and
     their experiences with them

    ...
Social media is like a cocktail party


    In social media: Apply the “1-9-90 Rule”

   Some of the guests initiate most ...
Social Media “Engagement Pyramid”
                                                                    Strategy. Execution....
How to engage social consumers                                     Strategy. Execution. Results.




Curators: Public reco...
17
     Distribution of social media participants
                                                                        ...
Tools for making sense of social networks
                    and peer-to-peer communications




Network analysis: To ide...
Click Here to See all the Presentations
                                                       From Alterian’s Engaging Ti...
Strategy. Execution. Results.




Cascading is inherently
unpredictable



                                               ...
Strategy. Execution. Results.


                                          Netscape has a
                                 ...
Strategy. Execution. Results.


                                          Netscape has a
                                 ...
Strategy. Execution. Results.




                                                                     900,000 registered
...
Strategy. Execution. Results.




                                                                Reddit’s most
          ...
Therefore: Word of mouth is also
                                                         inherently unpredictable


     ...
Be careful with
                                                 “WOM marketing”


Despite its customer-friendly architect...
Taking the customer’s perspective…
     …is the most critical step when it comes to
     customer engagement
     You have...
Can you speak the customer’s language?




COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED.   28
Speaking the customer’s language…

   …means engaging the customer as a fellow
    member of the human race

   And every ...
And what about your brand advocates?
              What are they actually worth?

          One research study of customer...
A telecom company
                                            CSV vs. CRV - Telecom Company

           $2,500

          ...
Network
                                                            influence
          DoubleClick
                      ...
Within Social Networks
                                                            The only way to
                       ...
Alterian’s
“Social Engagement
              Index”
                                   100 = Average


Super Bowl 2010


  ...
Calculating the Alterian
   “Social Engagement Index”

   Social Engagement Index (SEI) incorporates:
   1. Number of soci...
SEI changed over time

      Pre-Game                                              Game Day




                          ...
SEI changed over time

                                                       Post Game




                Some brands sh...
Sentiment analysis: Making sense
                                                of written and spoken language


        ...
Michael Jackson dies
     Heath Ledger dies




                                                       Gross National Happ...
Sentiment analysis:
“Voice of the customer” in real time

                                          Used online searches o...
Why the sudden surge of negative blog
                                                       sentiment after a rain-delaye...
Alterian’s
                   Social
               Sentiment
            Engagement
                    Index
           ...
Calculating the Alterian
“Social Sentiment Engagement Index”
     SSEI incorporates:
     1. Number of social media mentio...
Sentiment helps explain persistence




                                                       Click Here to See all the P...
Monitoring social media mentions



  Listen for mentions of your brand (and your
  competitors’ brands!)
            Who ...
Monitoring social media mentions


  Also, pay attention to individual customers
           What pain points are being hig...
Handling individual problems
“Don’t bother wasting money on social media until
your organization can competently handle a
...
Handling individual problems
                                                       Monitors Twitter, blogs, and online
  ...
Twitter is WAY more than just “Twitter”
                                             Why customers turn to Twitter
       ...
How Carphone Warehouse uses Twitter
         Customer
         posts on
         her blog                         My Carph...
How Carphone Warehouse uses Twitter
         Customer
         posts on
         her blog                         My Carph...
Assign a 20-something to monitor your
            brand mentions on social media sites

            Analyze what your cust...
Do you allow reviews on your site?



         Radical idea: Everyone here should allow
         customers to review produ...
And don’t forget:
    People are just like big honeybees!




                                                       Click...
@DonPeppers

     Peppers & Rogers Group
     Management consultants in
     customer strategy issues
     Magazines, news...
 Death by Word-of-Mouth: Socialize Your Brand NOW
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Death by Word-of-Mouth: Socialize Your Brand NOW

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Presented by Don Peppers, Co-Founder, Peppers & Rogers Group

The social media revolution may be even more disruptive to business models than the Internet itself has been, requiring nothing short of a complete re-wiring of many corporate processes, particularly marketing, sales, and service. Want to know the future of marketing and customer service? Look at how Gen Y and Gen Z consumers are employing social media to navigate their lives. Most prefer to interact via Facebook and MySpace rather than email.

Learn how to:

* How customers are using social media and the implications for businesses

* “Social network analysis” and “sentiment analysis” – two tools for understanding what’s going on in social media networks today


* Best practices for “socializing” your brand to build deeper customer relationships

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Death by Word-of-Mouth: Socialize Your Brand NOW

  1. 1. COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 1
  2. 2. Don’s social media poem: A Facebook fan tweeted his friend That he liked a good show now and then, And to his surprise His good friend advised: Alterian 2010! Click Here to See all the Presentations From Alterian’s Engaging Times Summit COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 2
  3. 3. Scary thought: Gen Y consumers now Generation Gap? outnumber Baby Boomers COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 3
  4. 4. Or Technology Gap? 96% of Gen Y consumers belong to a social network COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 4
  5. 5. “The future is already here. It’s just not evenly distributed yet.” William Gibson Click Here to See all the Presentations From Alterian’s Engaging Times Summit COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 5
  6. 6. Strategy. Execution. Results. 84% of consumers trust the recommendations of their friends >70% trust online recommendations from complete strangers Only 5% of consumers trust advertising Source: “Your Brand: At Risk? Or Ready for Growth?” Alterian White Paper, 2010 COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 6
  7. 7. Death by word of mouth… Strategy. Execution. Results. Box office receipts down 40% the day after release! COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 7
  8. 8. Screw up today, and the Strategy. Execution. Results. “news” will be permanent “You can’t un-Google Yourself” Linda Kaplan Thaler, CEO, Kaplan Thaler Group Click Here to See all the Presentations From Alterian’s Engaging Times Summit COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 8
  9. 9. Strategy. Execution. Results. “You can't take something bad off the Internet. That's like trying to take pee out of a swimming pool.” Grant Robertson, blog post, May 1, 2007 Click Here to See all the Presentations From Alterian’s Engaging Times Summit COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 9
  10. 10. Click Here to See all the Presentations Strategy. Execution. Results. From Alterian’s Engaging Times Summit Lack of trust slows transactions down and imposes frictional costs When more trust is required, business thrives, as obstacles are reduced The Need for More Trust Has Boosted Business COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 10
  11. 11. works because customers Strategy. Execution. Results. are social animals Bees and ants communicate new discoveries to benefit the group COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 11
  12. 12. Strategy. Execution. Results. In the absence of communication among your customers, advertising rules But when customers talk to each other, it’s the customer experience that counts Now suppose you were a food source for bees… COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 12
  13. 13. Strategy. Execution. Results. Customers go online to talk about brands and their experiences with them Do you host the conversation your customers are having? Or does someone else? Where is your brand’s “community?” COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 13
  14. 14. Social media is like a cocktail party In social media: Apply the “1-9-90 Rule” Some of the guests initiate most discussion 1% Others “hang on” and like to contribute 9% Still90% others just listen Most people don’t talk much but they still enjoy the party! COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 14
  15. 15. Social Media “Engagement Pyramid” Strategy. Execution. Results. Curating Producing Commenting Sharing Watching Source: Altimeter Group (Li and Owyang) COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 15
  16. 16. How to engage social consumers Strategy. Execution. Results. Curators: Public recognition, rating trusted advisors Producers: Platform for VOC, recognition and ratings Commenters: Open, friendly community, no trolls Sharers: Tools, recognition Watchers: Relevance, monitored content Source: Altimeter Group (Li and Owyang) COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 16
  17. 17. 17 Distribution of social media participants Strategy. Execution. Results. United United States South Korea Kingdom Curating <1% <1% <1% Producing 24.2% 52.8% 18.6% Commenting 36.2% 74.3% 31.9% Sharing 61.2% 62.9% 57.6% Watching 79.8% 91.1% 77.1% Source: Global Wave Index Wave 1, Trendstream.net, July 2009 COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 17
  18. 18. Tools for making sense of social networks and peer-to-peer communications Network analysis: To identify and quantify the influencers and the influenced Sentiment analysis: To understand conversations, attitudes and dominant opinions in social media Click Here to See all the Presentations From Alterian’s Engaging Times Summit COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 18
  19. 19. Click Here to See all the Presentations From Alterian’s Engaging Times Summit Strategy. Execution. Results. Social networks evolve by “preferential attachment” Preferential attachment can create a “cascading” effect COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 19
  20. 20. Strategy. Execution. Results. Cascading is inherently unpredictable Click Here to See all the Presentations From Alterian’s Engaging Times Summit COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 20
  21. 21. Strategy. Execution. Results. Netscape has a million collaborating members But 13% of Netscape’s “most popular” postings were done by a single user Cascading is inherently unpredictable Click Here to See all the Presentations From Alterian’s Engaging Times Summit COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 21
  22. 22. Strategy. Execution. Results. Netscape has a million collaborating members 900,000 registered But 13% of Netscape’s “most popular” users on Digg, but postings were done one third of all by a single user home-page postings come from just 30 users Cascading is inherently unpredictable Click Here to See all the Presentations From Alterian’s Engaging Times Summit COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 22
  23. 23. Strategy. Execution. Results. 900,000 registered users on Digg, but one third of all home-page postings come from Reddit’s most just 30 users widely read user, Cascading is inherently Adam Fuhrer, has millions of page unpredictable views, including MS Vista reviews Click Here to See all the Presentations From Alterian’s Engaging Times Summit COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 23
  24. 24. Strategy. Execution. Results. Reddit’s most widely read user, Cascading is inherently Adam Fuhrer, has millions of page unpredictable views, including MS Vista reviews Adam Fuhrer is 12 years old! COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 24
  25. 25. Therefore: Word of mouth is also inherently unpredictable Just 15% of WOM programs show positive results! Click Here to See all the Presentations From Alterian’s Engaging Times Summit COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 25
  26. 26. Be careful with “WOM marketing” Despite its customer-friendly architecture, the press portrayed Speak Easy as sneaky and manipulative You can’t manufacture “authentic” word of mouth If it isn’t spontaneous, then it isn’t authentic! Click Here to See all the Presentations From Alterian’s Engaging Times Summit COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 26
  27. 27. Taking the customer’s perspective… …is the most critical step when it comes to customer engagement You have to see the world through the customer’s eyes The customer is not interested in your stores or your products or your people The customer simply wants his need met So don’t just speak your brand’s language Engage by speaking your customer’s language COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 27
  28. 28. Can you speak the customer’s language? COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 28
  29. 29. Speaking the customer’s language… …means engaging the customer as a fellow member of the human race And every human being is completely unique! COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 29
  30. 30. And what about your brand advocates? What are they actually worth? One research study of customers separated “spending” value and “referral” value LTV = CSV + CRV (i.e., spending plus referrals) Surprise: Best references aren’t always the highest spenders! Source: “How Valuable is Word of Mouth?” Harvard Business Review, October 2007 COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 30
  31. 31. A telecom company CSV vs. CRV - Telecom Company $2,500 $2,000 $1,500 Most valuable referrers Value CSV $1,000 CRV $500 $- 1 2 3 4 5 6 7 8 9 10 Most valuable spenders Customer Decile Source: “How Valuable is Word of Mouth?” Harvard Business Review, October 2007 COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 31
  32. 32. Network influence DoubleClick varies by analyzed 6,000 Web users individual 1,000 influencers with certain traits Use the Web more than twice as much “People often ask my Pay more attention to online ads, and advice about…” want more relevance “I am an expert in But also more likely to clear their cookies certain areas…” regularly, as well as to fast-forward through video commercials COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 32
  33. 33. Within Social Networks The only way to succeed in a networked world Build and influencers maintain a and reputation for connectors are curious trustability and inquisitive people. COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 33
  34. 34. Alterian’s “Social Engagement Index” 100 = Average Super Bowl 2010 Google reached ~103.5M Top 10 account for 50% 34 (of 46) below average COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 34 34
  35. 35. Calculating the Alterian “Social Engagement Index” Social Engagement Index (SEI) incorporates: 1. Number of social media mentions, and 2. Influence of author ∑ (N x I) i SEIi = x 100 Average COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 35 35
  36. 36. SEI changed over time Pre-Game Game Day Click Here to See all the Presentations From Alterian’s Engaging Times Summit COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 36 36
  37. 37. SEI changed over time Post Game Some brands showed better persistence Click Here to See all the Presentations From Alterian’s Engaging Times Summit COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 37 37
  38. 38. Sentiment analysis: Making sense of written and spoken language Analyzing attitudinal information requires evaluating the “valence” of words versus COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 38
  39. 39. Michael Jackson dies Heath Ledger dies Gross National Happiness Index COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 39
  40. 40. Sentiment analysis: “Voice of the customer” in real time Used online searches of consumer comments in launching Windows 7 Tapped customer search requests, along with comments in blogs, YouTube, and Twitter, to advertise its Lotus business software Uses feedback from TripAdvisor, Twitter, and Facebook to position its casino brands COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 40 40
  41. 41. Why the sudden surge of negative blog sentiment after a rain-delayed game? Stadium officials mistakenly told hundreds of fans the game had been canceled But StubHub denied requests for refunds, because the game had actually been played Sentiment analysis tool spotted trouble brewing online So company offered discounts and credits to affected fans COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 41
  42. 42. Alterian’s Social Sentiment Engagement Index (SSEI) Super Bowl 2010 COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 42 42
  43. 43. Calculating the Alterian “Social Sentiment Engagement Index” SSEI incorporates: 1. Number of social media mentions, 2. Influence of author, and 3. Valence of sentiment (either +1 or -1) ∑ (N x I x V)i SSEIi = x 100 Average COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 43 43
  44. 44. Sentiment helps explain persistence Click Here to See all the Presentations From Alterian’s Engaging Times Summit COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 44 44
  45. 45. Monitoring social media mentions Listen for mentions of your brand (and your competitors’ brands!) Who is talking about the brand? What are people saying about the brand? Where are they talking about the brand? COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 45
  46. 46. Monitoring social media mentions Also, pay attention to individual customers What pain points are being highlighted? Directed to company at large, or a particular situation? What is the emotion or sentiment being shared, either negative or positive? What information is being shared about the various customer experience touchpoints? COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 46
  47. 47. Handling individual problems “Don’t bother wasting money on social media until your organization can competently handle a customer phone call or email.” – John Burton, SAP Labs To fix a service problem:  Acknowledge  Apologize  Act Click Here to See all the Presentations From Alterian’s Engaging Times Summit COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 47
  48. 48. Handling individual problems Monitors Twitter, blogs, and online review sites for negative mentions 2400 stores in nine countries Click Here to See all the Presentations From Alterian’s Engaging Times Summit COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 48
  49. 49. Twitter is WAY more than just “Twitter” Why customers turn to Twitter They can avoid the call center altogether Complaints via traditional channels get lost or just fall through the cracks They’re not being heard or taken seriously Twitter agents can be more objective and empathetic Immediate resolution to cross-departmental issues The crowd can participate in solving customer’s issues, providing better answers COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 49
  50. 50. How Carphone Warehouse uses Twitter Customer posts on her blog My Carphone Warehouse horror story! Little did I know when I bought my phone from CPW that I would enter a week-long nightmare… Customer then Read about my Carphone Warehouse horror story “tweets” here: www.customerblog.co.uk the blog Mon, 8 Mar, 15:55 Sorry to hear about your CPW problem. Maybe I can CPW help. Send me a direct message @CPWcares responds to tweet Mon, 8 Mar, 17:34 Click Here to See all the Presentations From Alterian’s Engaging Times Summit COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 50
  51. 51. How Carphone Warehouse uses Twitter Customer posts on her blog My Carphone Warehouse horror story! Little did I know when I bought my phone from CPW that I would enter a week-long nightmare… Customer now writes Update: CPW comes through for me! a positive First, I want to thank CPW for responding to my problem blog post! so quickly and professionally. I’m very impressed that they are taking customer service so seriously… Click Here to See all the Presentations From Alterian’s Engaging Times Summit COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 51
  52. 52. Assign a 20-something to monitor your brand mentions on social media sites Analyze what your customers are saying, and how they influence other customers Start intercepting customer complaints before they become complaints! Some things you can do now Click Here to See all the Presentations From Alterian’s Engaging Times Summit COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 52
  53. 53. Do you allow reviews on your site? Radical idea: Everyone here should allow customers to review products and services The technology is inevitable COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 53
  54. 54. And don’t forget: People are just like big honeybees! Click Here to See all the Presentations From Alterian’s Engaging Times Summit COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 54
  55. 55. @DonPeppers Peppers & Rogers Group Management consultants in customer strategy issues Magazines, newsletters, research white papers Offices and clients around the world To subscribe to the “1to1 Weekly” email newsletter: dpeppers@1to1.com Click Here to See all the Presentations From Alterian’s Engaging Times Summit COPYRIGHT © 2010. ALL RIGHTS PROTECTED AND RESERVED. 55

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