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Martha Rogers - Standing Up and Standing Out
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Martha Rogers - Standing Up and Standing Out

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What does social networking really mean for your company and your brand? If themessages your customers hear about you come mostly from you, then advertisingrules. But now that customers communicate …

What does social networking really mean for your company and your brand? If themessages your customers hear about you come mostly from you, then advertisingrules. But now that customers communicate with each other, more and more, it'sthe customer experience that counts. As transparency has become inevitable andcomplete, and all our customers can know essentially everything about all productofferings and pricing, how do we compete?

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  • Taking a big leap here, I will predict that trustabilitywill become the single most enduring measurement of a company’s ability to create value and sustainability. It will be the key driver of everything that truly matters to your customer Retention – new customer acquisition, cross sell and upsell and employee engagement.
  • 67% of shoppers spend more online after recommendations from online community of friends. (Internet Retailer, September 2009) Brands w/ highest "social media activity" (includes reviews) increased revenues by as much as 18%. (Media Post News, July 2009) 84% of marketers agree that building customer trust will become marketing's primary objective (1to1 Media survey of the 1to1 Xchange panel, April 2008) 11% of retailers reported a 20% or more overall increase in conversions as a result of adding reviews to their sites, 21% reported an 11% to 20% increase and 5% reported a 1% to 10% increase. (eTailing Group, June 2008) Rubbermaid found that, when they added reviews to their free-standing inserts (ads included in newspapers), conversion for the coupons increased by 10%. (Rubbermaid Case Study, April 2010.)
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    • 1. COPYRIGHT © 2012ALL RIGHTS PROTECTED AND RESERVED. 1
    • 2. Toyama no Kusuri-uri House-to-house medical supplies Consumers only charged for usage Detailed records kept in a database, called the “Daifuku cho” Circa 1750 2COPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 2
    • 3. In 1996, Barnes & Noble offered to buy amazon.com, --to protect them from B&N’s online launchCOPYRIGHT © 2012ALL RIGHTS PROTECTED AND RESERVED. 3
    • 4. In 1996, Barnes & Noble offered to buy amazon.com, --to protect them from B&N’s online launch Today: •Barnes & Noble has a market cap of $719 millionCOPYRIGHT © 2012ALL RIGHTS PROTECTED AND RESERVED. 4
    • 5. In 1996, Barnes & Noble offered to buy amazon.com, --to protect them from B&N’s online launch Today: •Barnes & Noble has a market cap of $719 million •Amazon.com has a market cap of $102 billionCOPYRIGHT © 2012ALL RIGHTS PROTECTED AND RESERVED. 5
    • 6. We all recognize this, right?6COPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 6
    • 7. And everyone knows what this is?COPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 7
    • 8. Well, how about this? Philip Stewarts Chemical Galaxy II periodic tableCOPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 8
    • 9. Taking a different point of view Customers just want their rock crushed to ideal granularity Orica’s business involves collecting detailed blast parameters from customers all over the world Now the company sells service contracts for crushed rock, taking on the risk of managing each blast itself What business are you in?COPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 9
    • 10. Strategy. Execution. Results.COPYRIGHT © 2012. ALL RIGHTS PROTECTED AND RESERVED. 10
    • 11. Can this work for smaller businesses? Zane’s Cycles faces both Wal- Mart and a sports superstore Chris Zane applies 1to1 marketing at the retail-detail level Lifetime bicycle warranties CRM-based customer profiles Doubled his business in two years to $3.5 million Now has 65% of the bike market in his areaCOPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 11
    • 12. Twin benefits of relationships… More satisfied customer More convenient product More appropriate offer Personalized service Lower costs Less ―wasted effort‖ Relationships and good experiences Lower inventory costs require trust Better asset utilization12 COPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 12
    • 13. Customer centricity’s objective Strategy. Execution. Results. Maximizing the valueCustomer created by each customer Needs Satisfied Customer Centricity Share of customer Maximizing the value created by each product Product Centricity Market share Customers ReachedCOPYRIGHT © 2012. ALL RIGHTS PROTECTED AND RESERVED. 13
    • 14. Customer centricity is building the value of the company by building the value of the customer base1COPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 14
    • 15. Welcome to the Age of Transparency 83% of consumers trust the recommendations of their friends More than half trust the online opinions of complete strangers But just 14% of consumers trust advertising! ―Transparency is a disinfectant for business. It will purify things and help start the healing, but it’s going to sting like hell.‖ Forrester ResearchCOPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 15
    • 16. Moore’s Law Every 20 years, computers get a thousand times faster and cheaperCOPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 16
    • 17. Zuckerberg’s Law Every 20 years, we share a thousand times as much information with othersCOPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 17
    • 18. Now suppose you were a food source for bees… Bright colors and a sweet fragrance can get any exploring bee to take a look But a bee will only do his dance to tell the other bees about you if he was satisfied with the nectar Moral: In the absence of communication among your customers, advertising rules Once your customers communicate with each other, it’s the customer experience that countsCOPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 18
    • 19. Strategy. Execution. Results.COPYRIGHT © 2012. ALL RIGHTS PROTECTED AND RESERVED. 19
    • 20. Going forward: Strategy. Execution. Results. 3 Requirements For Extreme Trust Intention Do the right thing Competence Do things right ProactivelyCOPYRIGHT © 2012. ALL RIGHTS PROTECTED AND RESERVED. 20
    • 21. Customers assert their new social power easily • HSBC forced to reverse course • Over the summer it had dropped its policy of free overdrafts for university students • By using Facebook, students connected with others to organize a protest of this new policy • Soon HSBC reinstated the free overdraft policy2COPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 21
    • 22. The components of 20th century “trust” Strategy. Execution. Results. Competence – doing things right Good intentions – doing the right thing Now Doing things right, and Doing the right thing, ProactivelyCOPYRIGHT © 2012. ALL RIGHTS PROTECTED AND RESERVED. 22
    • 23. Honeybees dance about everything!2COPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 23
    • 24. Screw up, and the “news” will be immediate, ubiquitous, and permanent You can’t un-Google yourself. - Linda Kaplan Thaler, CEO, Kaplan Thaler Group ―You cant take something bad off the Internet. Thats like trying to take pee out of a swimming pool.‖ - Grant Robertson, blog post, May 1, 2007COPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 24
    • 25. Trust Is Becoming More Important Because… 1. Trust makes interactions efficient 2. We screen information for its trustworthiness 3. Interaction generates transparencyCOPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 25
    • 26. Extreme Trust Proactive trustworthiness •No longer sufficient simply to refrain from cheating or deceiving customersCOPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 26
    • 27. Earning trust Strategy. Execution. Results. sometimes requires a deliberate balance of short- term gain and long-term equityCOPYRIGHT © 2012. ALL RIGHTS PROTECTED AND RESERVED. 27
    • 28. Earning trust Strategy. Execution. Results. sometimes requires a deliberate balance of short- term gain and long-term equityActing in thecustomer’s interestCOPYRIGHT © 2012. ALL RIGHTS PROTECTED AND RESERVED. 28
    • 29. Earning trust Strategy. Execution. Results. sometimes requires a deliberate balance of short- term gain and long-term equity If that seems impossible, ask whathappens when customerschoose between you anda company that can be trusted in the long runCOPYRIGHT © 2012. ALL RIGHTS PROTECTED AND RESERVED. 29
    • 30. Lots of people are asking: How can I use new social media to sell more to my customers?COPYRIGHT © 2012ALL RIGHTS PROTECTED AND RESERVED. 30
    • 31. Lots of people are asking: How can I use new social media to sell more to my customers? Wrong question!COPYRIGHT © 2012ALL RIGHTS PROTECTED AND RESERVED. 31
    • 32. Lots of people are asking: How can I use new social media to sell more to my customers? Wrong question! The question to ask now is: How can I use any tool to understand my customer better and build a more trustable relationship?COPYRIGHT © 2012ALL RIGHTS PROTECTED AND RESERVED. 32
    • 33. Very special (mis)handling? One bank routed calls from its most valuable customers to product and sales specialists, to try to sell something, before letting them do the routine transactions they wanted Ordinary customers were able to get right to the IVR and handle their transactions Why did those valuable customers leave? Source: The Best Service is No Service, Price and Jaffe, 200833 COPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 33
    • 34. Things aren’t always what they seem A BCOPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 34
    • 35. How good is your customer experience? 80% of corporate executives say their company delivers a superior customer experienceJust 8% of consumers report they received one Source: Bain and Company,COPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 35
    • 36. make Trustworthy is not good enough. an Your company must be trustable impact! Take this test…COPYRIGHT © 2012. ALL RIGHTS PRTECTED AND RESERVED. 36
    • 37. Strategy. Execution. Results. A trustworthy company: Carefully follows the rule of law, and trains people on its ethics policy to ensure compliance A trustable company: Follows the Golden Rule toward customers, and builds a corporate culture around that principle 37COPYRIGHT © 2012. ALL RIGHTS PROTECTED AND RESERVED. 37
    • 38. Strategy. Execution. Results. A trustworthy company: Does what’s best for the customer whenever possible, balanced against the company’s needs A trustable company: Designs its business to ensure what’s best for the customer is financially better for the firm, overall 38COPYRIGHT © 2012. ALL RIGHTS PROTECTED AND RESERVED. 38
    • 39. Strategy. Execution. Results. A trustworthy company: Fulfills all its promises to customers, and does what it says it will do, efficiently A trustable company: Follows through on the spirit of what it promises, by proactively looking out for customer interests 39COPYRIGHT © 2012. ALL RIGHTS PROTECTED AND RESERVED. 39
    • 40. Strategy. Execution. Results. A trustworthy company: Manages and coordinates all brand messaging, to ensure a compelling and consistent story A trustable company: Recognizes that what people say about the brand is far more important than what the company says 40COPYRIGHT © 2012. ALL RIGHTS PROTECTED AND RESERVED. 40
    • 41. Strategy. Execution. Results. A trustworthy company: Uses a loyalty program, churn reduction, and/or win-back initiative to retain customers longer A trustable company: Seeks to ensure that customers want to remain loyal because they trust the firm to act in their interest 41COPYRIGHT © 2012. ALL RIGHTS PROTECTED AND RESERVED. 41
    • 42. Strategy. Execution. Results. A trustworthy company: Focuses on quarterly profits as the most important, comprehensive and measurable KPI A trustable company: Uses customer analytics to balance current profits against changes in actual shareholder value 42COPYRIGHT © 2012. ALL RIGHTS PROTECTED AND RESERVED. 42
    • 43. Doing Business in the Age of Transparency Social networks evolve in a path-dependent way, and social sentiment cascades in an inherently unpredictable manner As a result, dealing effectively with rising levels of unpredictability is a vital skill-set for today’s managers Six strategies for dealing with unpredictabilityCOPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 43
    • 44. Doing Business in the Age of Transparency The social domain and the commercial domain operate on entirely different customs and mores Four ways to influence the influencers without using cash or commercial incentivesCOPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 44
    • 45. Doing Business in the Age of Transparency The e-social world facilitates convenient, cost-free sharing and collaboration among strangers: “social production” ―Free revealing…is at the very heart of social production—the free and unencumbered sharing of innovative ideas to generate some collective good.‖COPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 45
    • 46. Doing Business in the Age of Transparency The world is not perfect, so brands that maintain they are perfect are simply not trustable―Admitting one’s own vulnerability is the first step in earning someone else’s trust.‖ ―…the numbers show that a negative customer review actually converts to a sale more effectively than a positive customer review.‖COPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 46
    • 47. Doing Business in the Age of Transparency Dealing with a supernova of data will require skill with numbers, but human biases often triumph over objective analysis In the 1970s a man won the Spanish lottery with a ticket he’d specifically chosen for its ending number of 48. Very proud of his ―strategy‖ for winning, he explained: ―I dreamed of the number 7 for seven straight nights, and 7 times 7 is 48.‖ ―…90 percent of CMOs believe that customers trust their own company’s brand as much as or more than they trust competitors’ brands!‖COPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 47
    • 48. Things aren’t always what they seemCustomer’s view of trustability Your view of trustability Based on experience with other Based on changes you made trustable firms to your own prior policies COPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 48
    • 49. Rising Customer Expectations•Previously acceptable business practices are now“untrustable” X Profiting from consumer error X Failing to notify X All “caveat emptor” policies!COPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 49
    • 50. Strategy. Execution. Results. Earning trust all the time helps on a bad day Remember what happened to5COPYRIGHT © 2012. ALL RIGHTS PROTECTED AND RESERVED. 50
    • 51. Imagining the Future… •How would a trustable gift card work? •What about a trustable mobile phone company? •…a trustable health insurer? •…a trustable automotive manufacturer?COPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 51
    • 52. What social networks require of you: Build and maintain a reputation for trustability5COPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 52
    • 53. Trust is everything Prediction: Trustability will become the single most enduring measurement of a company’s ability to create and sustain value.COPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 53
    • 54. Trust sells 84% of marketers agree that building customer trust will become marketings primary objective Source: 1to1 Media surveyCOPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 54
    • 55. Customers can be tough: The three things they respond to: Figure out what’s best for each of them, and do it – well. And proactively.COPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 55
    • 56. If customers trust you… Strategy. Execution. Results.  …they believe you will understand their point of view What’s it like to be your customer? What should it be like?  Three elements of trustability: Goodwill Competence Proactivity5COPYRIGHT © 2012. ALL RIGHTS PROTECTED AND RESERVED. 2012ALL RIGHTS PROTECTED AND RESERVED. 56
    • 57. Customer trust is based on reciprocity… Strategy. Execution. Results. “Treat the customer the way you would want to be treated if you were the customer.” “Customer advocacy is…the best indicator of…cross-sell success” “Firms that score highest…are considered the most for future purchases”COPYRIGHT © 2012. ALL RIGHTS PROTECTED AND RESERVED. 57
    • 58. …and there’s no such thing as Strategy. Execution. Results. “one-way reciprocity” Empathy works both ways First Persian Gulf War (1991) USAA sent unsolicited refunds for time spent abroad by members 2500+ members mailed their refunds back!COPYRIGHT © 2012. ALL RIGHTS PROTECTED AND RESERVED. 58
    • 59. How would you compete against a company that customers trust so much they send back the refunds and stay for three generations and counting?COPYRIGHT © 2012ALL RIGHTS PROTECTED AND RESERVED. 59
    • 60. Strategy. Execution. Results. Trustability …can ―trustproof‖ a business, protecting it from random swings of social sentimentCOPYRIGHT © 2012. ALL RIGHTS PROTECTED AND RESERVED. 60
    • 61. A culture of customer trustdrives many leading firmsCOPYRIGHT © 2012ALL RIGHTS PROTECTED AND RESERVED. 61
    • 62. Strategy. Execution. Results. Creating a culture of customer trust These companies are not just selling something. They are building the value of the customer base.COPYRIGHT © 2012. ALL RIGHTS PROTECTED AND RESERVED. 2012ALL RIGHTS PROTECTED AND RESERVED. 62
    • 63. Rising levels of transparency will raise the Strategy. Execution. Results. standard for trustworthiness: No longer sufficient simply to refrain from cheating or deceiving customers • What happened to the wealth client Instead, a trustable company will work to protect customers’ interests proactively Proactive trustworthiness: TrustabilityCOPYRIGHT © 2012. ALL RIGHTS PROTECTED AND RESERVED. 63
    • 64. Simple truth Do the Do things right right thing ProactivelyCOPYRIGHT © 2012ALL RIGHTS PROTECTED AND RESERVED. 64
    • 65. A little inspiration from Harley Davidson?COPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 65
    • 66. Peppers & Rogers Group Management consultants in customer strategy issues Magazines, newsletters, research white papers Offices and clients around the world www.extremetrustbook.com Twitter @martha_rogersCOPYRIGHT © 2012 ALL RIGHTS PROTECTED AND RESERVED. 66
    • 67. Strategy. Execution. Results. &COPYRIGHT © 2012. ALL RIGHTS PROTECTED AND RESERVED. 67

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