Era of The Social Customer 2010.

Welcome to the Era of the Social Customer
21st Century Edition

The Social Customer

The Social Customer
This is a SOCIAL transformation that impacts all institutions – business among them – not exclusively

The Social Customer
Sea change in use of technology
Gen Y first generation to spend more time on the ‘Net than watching TV
96% on social network
Will outnumber baby boomers by 2010
Implications for marketing staggering
74% of all adults on the web are engaged with a social network/community

The Social Customer
The Social Customer – The Establishment
Social networks as active participants in effecting change (blogosphere, podcasting)
Collaboration between company & customers to provide useful value for each
Personal value chain subsumes enterprise value chain
The social customer is increasingly a mobile customer
Conversant with the tools – which are inexpensive

The Social Customer
Source: A Typology of Information & Communication Technology Users – Pew Internet & American Life Project

The Social Customer
Using Social Networks
Nielsen Online research “Global Faces on Networked Places” (March 2009):
Fastest growing sector for Internet use is communities and blog sites (5.4% in a year)
Member communities reach more Internet users (66.8%) than email (65.1%)

The Social Customer
Edelman Trust Barometer
2003 – “A Person Like Me” – 22%
Most trusted source moved from non-connected (to corporation) experts to “a person like me.”
Customers demand authenticity & transparency now

The Social Customer
Traditional ads – trusted by 14% (Marketing to the Social Web, Larry Weber)
Peers – trusted by 90% (Nielsen Global Online Consumer Survey, 2009)

The Social Customer
Conversation is controlled by the customer
Review sites
Yelp
Social networks/communities
Service complaint oriented – Planetfeedback
Get Satisfaction
LinkedIn
Facebook pages
Social Media Properties
User generated content – video, audio, blogs etc.
Blogs (200 million)
34% post brands & product opinions
Podcasts
Geek Brief TV

The Social Customer
Source: Brian Solis

The Social Customer
BUSINESSWEEK, DECEMBER 19, 2005
"Companies used to focus on making new, better, or cheaper products and services....Now the game is to create wonderful and emotional experiences for consumers around whatever is being sold. Its the experience that counts, not the product."
“People…want capabilities and options, not uniform products…business is there to provide the tools.”
“The Knowledge Economy is giving way to the Creative Economy...” (Knowledge has become a commodity so the solution is to) "focus on innovation and design as the new corporate core competencies."

Social CRM Definition

The Social Customer
From CRM to Social CRM
"CRM is no longer just a model for managing customers but one of customer engagement"

The Social Customer
Social CRM
“SocialCRM is a philosophy & a business strategy, supported by a technology platform, business rules, workflow, processes & social characteristics, designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted & transparent business environment. It’s the company’s response to the customer’s ownership of the conversation.”

The New Business Model

Concentrate on what your customers want, not on the dizzying array of places they converse.
Each customer wants a personalized experience…
Understand their relationship with you exists because they appreciate the experience
But how do you begin to “know” customers?
First, learn how they interact with you.
Ultimately, the tools for the customer to manage their own experience are paramount
Give them access to information that allows them to make informed, empowering choices which thus, provide value

The users and producers become partners/collaborators
Which means insight about your partner, rather than data on your customer becomes the mindset.
The business moves to be an aggregator of products, services, tools and experiences, rather than simply a producer of goods and services for sale
The user is an advocate of the experience and, directly and by extension, the company

New Business, Little Fella

Community retailing
Multiple brands
Established (Adidas, Vans)
Independent (The Kazbah)
Community of 800,000
Own clothing line (Sons of Liberty

Helps indie designers sell their wares
Promotes and advertises to the community
Recruit to the community and recruit from the community

Street Teams
Sign up, get unique code
Get friends to buy on the site using unique code
Discounts plus points for Street Team member
Street team member can upload photos, videos, earn points (community themes)
Return is cash & free clothes
1% of their network = 15% of their revenue
Over 8000 advocates on street teams

Transformative Social CRM Models

The New Sales Model
New approaches to lead generation (non-traditional social sources) (community participation)
Better handling of opportunities (Employee engagement) (Oracle Social CRM, Lotus Connections)
Need for competitive differentiation of a new kind but through organizational knowledge & sales intelligence (InsideView)
Reputation, influence, persuasion
Based on customer insight

The New Customer Service Model
What do you do – Customer Service Models
Agent based call centers (Ayava, Genesys, Siebel, Amdocs)
Process based CRM (Sword-Ciboodle)
Community driven customer service (Helpstream, RightNow)
Customer experience focused call customer service (Kana)
Web self service (RightNow)

The New Marketing Model
Authenticity and trust is what matters – more than even the “consistency” of the message

The New Marketing Model
Because the model is built on trust, the reputation of the company, not the message, becomes the brand
That means, both the perception but also the actual quantified assessment of the marketing practices as certified by third parties (TRUSTe, etc.)
The practical side would be an authenticated or accredited message that is validated by the ISP or whoever is transmitting it.
Marketing becomes the center point for engagement of the customer
Messages are not to be pushed at the customer about products and services;
Marketing uses the media tools that are available to engage the customer
But with authenticity (Walmart & Edelman screw-up)

Case Study: Proctor & Gamble
300 brands
23 of those brands $1 billion and up (e.g. Charmin, Crest, Folgers, Downy, Pringles, Tide)
2 billion consumers affected w/6 billion as goal
160 countries reached
One of 30 companies on the Dow Jones Industrial Average (DJIA)

“We have to create a great experience every time you touch the brand, and the design is a really big part of creating the experience and the emotion. We try to make a customer’s experience better, but better in her terms.”– A.G. Lafley, CEO Proctor & Gamble
“I think its value that rules the world. There’s an awful lot of evidence across an awful lot of categories that consumers will pay more for better design, better performance, better quality, better value and better experiences.”– A.G. Lafley, CEO, Proctor & Gamble

Focused around the co-creation of value and user communities
Sales/Marketing
Vocalpoint – 600,000 moms
Tremor – 225,000 teens
Research
Innovation Network – 80,000 scientists
Technology entrepreneur networks
Benefits?
In 2001 – 20% of ideas, products, technologies external
In 2004 – 35% of ideas, products, technologies external
In 200X – 50% of ideas, products, technologies external
Virtual design, 3D simulation

Perhaps the most innovative company in the U.S. when it comes to understanding of the benefits of customer ecosystem
They emphasize the “desired consumer experience” as their primary design focus
Taste, smell, feel of products – not just utility
Connect & Develop program
Moving technology and ideas between cross-functionally
Crest Whitestrips involved oral care unit (whitening teeth), corporate R & D (film technology), and fabric/home care (bleach experts)
Tie the effort to working with consumers too
50 technology entrepreneurs who scour for external resources including customers
Use of ethnographers to try to understand the activities of individuals in the context of social anthropology

Contemporary Marketing
Secret Sparkle body spray products launched Feb. 2005
Not campaign focused
Blog SparkleBodySpray.com launched May 2005
12,000 visitors per week
25 minutes per visitor per visit
Four teenage authors under identities of Vanilla, Tropical, Peach, Rose (4 body spray names)
Music, fashion, sports, dating, parties
Interactive activities e.g. building dream date (choice of males) that you can send to a friend

Case Study: Procter & Gamble
It went from this in 2005….
….to this in 2007

Case Study: Procter & Gamble
Results?
0.8% of the $10.4 billion antiperspirant/deodorant market by July 2005
Do the math - $83 million in five months

But They Didn’t Forget the New 12-13 Year Olds!

CaseStudy: Procter & Gamble
Say hi to BeingGirl.com

Getting Results: Creating Advocates

Advocacy
“Advocates are what you aim for optimally when you build your customer strategy. You settle for loyalty. Advocates are your partners, not just your clients. It works so much better that way.” -Paul Greenberg, CRM at the Speed of Light, 4th edition

Advocacy
Advocates are created through continuous:
Engagement (conversation)
Transparency (visibility)
Authenticity (honesty, straightforward behavior)

Advocacy
Approach to Advocacy - Strategy
Value Proposition
Creation of experiences and tools with products and services designed to appeal to a commonwealth of interest based on unique insights
Customer Strategy
Outreach to customers/potential advocates
Property development for customers – communities, tools, products, services available via company
Godin: Date your customers
Continuous Effort
Ongoing feedback, outreach, data tracking, program development
Constant desire for customer insight – not just data collection

The Metrics of Advocacy
Net Promoter Score
F. Reichheld: “The one question that you need to ask your customer is ‘Would you recommend my company to someone you know?”
Measured against the detractors to come up with score.
Has its own advocates and detractors
Referrals as metrics
Word of Mouth most influential 42.6% (BigResearch 2006)
David’s Bridal – 46% of all business WOM
PwC “hearing the whispers” – social metrics

The Metrics of Advocacy
V. Kumar
Customer Lifetime Value (CLV)
Customer Referral Value (CRV)
Customer Brand Value (CBV)
Measuring Social Customer Value
The Social Customer

KLM Club China

THANK YOU
Author: CRM at the Speed of Light (4th Edition, February 2009)
President: The 56 Group, LLC
Managing Partner/CCO: BPT Partners,
EVP: National CRM Assn.
Co-Chair: Rutgers CRM Research Center
Named #1 CRM Influencer (Non Vendor) by InsideCRM 2007
Named #1 CRM Blogger 2005, twice in 2007 by TechTarget and InsideCRM&InsideCRM 2008
CRM Magazine 2008 Top Influencer
PGreenblog: http://the56group.typepad.com
Email: paul-greenberg3@comcast.net
Twitter: http://www.twitter.com/pgreenbe
Facebook: http://www.facebook.com/pgreenbe
Cell phone: 703-338-0232

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Era of The Social Customer 2010.

by Paul Greenberg on Nov 16, 2009

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Era of The Social Customer 2010. — Webinar Transcript