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Digital Channel Hype versus Good Old Customer Value


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An honest look at how digital and social media can be used to create tangible value for companies, customers and consumers.

Magan Arthur & Rob Mallens

With inputs from:
Sumathi Venkitaraman,
Head, Marketing at CustomerXPs Software

Published in: Technology, Business
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Digital Channel Hype versus Good Old Customer Value

  1. 1. Are we missing the point? Digital channel hype versus good old customer valueAn honest look at how digital and social media can be used to create tangible value for companies, customers and consumers February 2012 A White Paper By Magan Arthur Rob MallensWith inputs from:Sumathi Venkitaraman, Head, Marketing at CustomerXPs Software Private LimitedThe Vice-President, Global Digital Services at a large life science companyGillis de Fouw, Front Office Manager, Ziggo BusinessJoost Augusteijn, Brand Strategist RabobankThe Senior Director of Marketing Operations at a large life science companyand thanks also to: Prof. David Meader, Director, Center for Socially Responsible Business atthe Mills College in California
  2. 2. INTRODUCTIONIn search of the digital media silver bullet we are losing the very thing we set out to improve:value. The three authors of this paper met on LinkedIn – with no prior connection – with the aimof taking an honest and realistic look what companies large and small could do to create tangiblevalue through digital and social means of engaging employees, peers, investors, customers, andconsumers. We would like to de-hype the social/digital channel discussion and focus on strategythrough listening, authentic and meaningful messages and well thought through engagementexperiences.Razorfish, arguably the leading digital agency, published a six month study, Liminal, which isfocused on customer engagement in this time of great transition. Here is a link to the research:http://liminal.razorfish.comFrom the Razorfish LinkedIn Post: “We took a ground up, customer centric approach tounderstand things like -- how do marketers make sense not only of divergent touch points, but thedisparate reasons why customers gravitate to them, and how this affects the continuing evolutionof how consumers choose to engage with a brand.Here are few things that came as a surprise tomany in the industry, specifically:> Though social platforms such as Facebook, Twitter and the geo-location social service (suchas Foursquare) are being quickly adopted, customers don’t always view them as an importantway to engage with brands.> When we asked consumers to prioritize what was important to them when engaging with abrand, they ranked the following priorities in exactly this order, no matter how we looked at thedata: feeling Valued, Trust, Efficiency, Consistency, Relevancy and Control (We call these sixengagement qualities the Engagement Elements.) In other words, in a world full of engagementtouch points, the most important things to everyone are to feel valued by the companies they dobusiness with, to get their need addressed quickly, and to feel the companies they engage withcan be trusted.> Even as “the consumer is in control” has become a mantra in the digital age, Control came indead last. Apparently, the consumer doesn’t need to be in as much control as we thought, seeingother things, as far more important.”What stands out in this is that the six engagement qualities would also apply to most employeesof any company, in terms of values we seek in our workplaces. We want to be valued and wewant to work in an environment of trust in which we can get things done efficiently andconsistently. In that sense digital channels and social networks can and should be viewed as toolsfor engagement in and outside the company. The goal has to be to strengthen the quality of anyengagement.
  3. 3. The authors, who come from very different backgrounds and live in three different continents,have found that despite these differences our experiences have led us to very similar conclusionsin how digital and social tools can help organizations improve engagement on all levels. We havegrouped the paper in three sections: • Strategy • Message • ExperienceSTRATEGY – Think and listen before you actWith the book Groundswell published in 2008 by Harvard Business Press we had a firstcomprehensive approach to strategic planning of digital and social approaches to engaging insideand outside of organizations with a goal of increasing the value of these engagements. Manylessons described in that book are still relevant but as the Razorfish study mentioned above showswe have learned a lot more about what works and does not work well in digital and socialengagement. The time of just experimenting should be over. Organizations large and small cannow approach digital and social channels with a clear strategy.It is important to highlight that such a strategy should not be merely a marketing activity but isshould be a business strategy. In general we can distinguish a few core areas that can be the focusof any such strategy. • Social and digital marketing and communication (inbound and outbound) For established products that can range from basic presence to participation to influencing For new products that can rage from product intro and trail sites to product research to product design • Internal social networks From communication to knowledge sharing and collaboration • Social and digital services From online support and account management to product communities and patient adherence programs • Social and digital commerce and products From traditional eCommerce to fully virtual products and services in media, travel, health, entertainment, b2b and more.Each of these strategies has very different goals and measures and each can be broken downfurther into sub categories that often require a different set of skills, tools and approaches. Anyorganization should be very clear on the strategic direction down to the sub category and haveestablished goals and measures based on the available best practices. Establishing a senior
  4. 4. executive led digital strategy board is a best practice and should be a first step. In almost all caseswill it be helpful for this board to work across internal lines and jointly established strategiesbetween sales, marketing and IT for external facing marketing strategies or between Support,R&D and IT for service related strategies etc. As the Vice-President, Global Digital Services at alarge life science and consumer goods company puts it: “We created a Global Digital Board, which brings together our brand, technology and operation teams to jointly discuss and decide on strategies related to our digital and social engagements. We seek to leverage our experiences, tools and processes globally. The shared services we can now offer our global marketing teams are providing a host of new capabilities at significantly reduced cost.”A second step is listening and understanding. There exists a wealth of information that can informthe direction and approaches of any strategy defined. The two mistakes to avoid are: 1) Dont forget all the information you already have from your support team, sales team, and research groups and from your initial digital projects or programs – your teams likely learned a lot. Some call this holistic analysis or holistic listening as opposed to just social listening. 2) Dont get into an overwhelm and information overload state – ask simple questions. Avoid analysis paralysis.Between the information you have and the breadth and depth of the virtual data sources out there,almost any questions could be analyzed. However most companies are not ready for the flood ofdata. Moving from basic social analysis to true business intelligence is a sign of high maturity butif overdone too early may cripple less mature organization.The Senior Director of marketing operations at a large life science company put it this way: ”We began too aggressively with tagging and tracking our messaging. Metadata and insights were buried in tons of data and not providing actionable measures to marketers. We should have started more simply with tagging and tracking the top five things we wanted to know from our messaging providing strong insights and actionable measures”Answering some simple questions that really impact the strategy can be a very effective start toany strategy. For example: • What are the three predominant statements about our product or service that influence the perception of our brand and identity in the social communities? • What is the overall sentiment about our product or service? • What are the three biggest complaints and what are the three biggest incentives to
  5. 5. work with us over our competitor? • Can we group our clients into a few simple digital persons that we can then serve better because we understand their preferences or sentiments regarding our product or service? • What messages we have sent in the past 3, 6, and 12 months have resonated the most and created the most virtual chatter? • How many of our customers have smart phones? Do they access them as a personal or business tool or both? • Where in our sales and service, production or quality teams could we make better use of Facebook and Twitter like tools to make collaboration and knowledge management easier and more fun?The above are just some examples of simple questions to get started. Advanced holistic listeningand social business intelligence can help with many aspects: 1. Understanding the consumer – profiling/targeting 2. Understanding of your own workforce – knowledge/idea sharing, collaboration 3. Understanding the need – new product and service design 4. Understanding the markets and trends – product and service road-maps 5. Understanding specific problems – internal and external peer communities – product support – open source and joint development (this paper is one example)It is simply not enough to just have a web site or “be where your clients are” and bombard thetwitter followers with basic marketing blur. We need to think about value of every engagement.How can we make it easier for a person we engage with a product, tool, information or anotherperson that could help him or her do whatever it is we now know they do?What has to be understood is that digital and social are not low cost quick tools. They oftenrepresent significant strategic opportunities and risk with high costs for building, monitoring,responding, reviewing and approving the new content. Also technology even in the cloud is notcheap and there will be cost for failures, as not all approaches will work out.Some companies may find that a simple presence through a web site will suffice but in all othercases digital and social should be taken up as an executive strategy exercise on par withestablishing a new product line or an M&A activity as the right digital strategy very well mayinclude both of these aspects.MESSAGE – Meaning and authenticityOne of the most interesting aspects of social and networked marketing is that we now deal withcommunities and interlinked humans not with masses, as in mass media. Masses have beenstudied and we know that humans in large groups tend to act in very simplistic or animalisticpatterns. However the new digital frontier has created a different phenomenon. Communities andnetworks are intelligent. Therefore the messages that we send into those channels have a verydifferent impact. It is the authenticity and the actual news worthiness of the message that makesthe difference. It is sure a “cool” factor to send it in a nice flash movie or via twitter or even think
  6. 6. of a multichannel approach but that effort drafts the need to actually have something to say.1Through holistic listening and evaluating the many data sources available today companies canget better answers to questions like: • Who are our customers? • What do they think of us and our products? • What kind of service do they expect?Instead of trying to adapt to all possible outcomes of the questions above, organizations have theopportunity to use these insights to become more aware of their own identity and start acting andcommunicating accordingly. Becoming aware of ones identity means providing answers toquestions like: • Who are we? Are we like that to our employees? • Who do we want to be for our customers, partners, employees and investors? • What role can social engagement play in that identity?The answers to the questions above give the ultimate frame of reference towards authenticcommunication in the digital channels. It also creates a clearer frame of the desired workingenvironment for employees and more recognizable products and services.Many companies have already engaged in a process to determine their identity and have beenable to translate that exercise to clear company values both internal and external. Many of themhave transformed those values to a branding strategy. Not many companies however have made atranslation towards the branded customer experience especially when it comes to social channels.Very few have made the brand experience part of the internal company culture. The positiveeffects of doing so can be dramatic as Gillis de Fouw, Front Office Manager, Ziggo Businessdescribes: "By defining a "Ziggo Business experience" we have become more aware of our identity. This guides us in our customer service and has a positive impact on our employees. Our absenteeism rates have dropped to the lowest in customer service branch"The engagement elements the Razorfish research points out are elements customers will belooking for with any company they do business with. It will be wise to take them seriously.However these engagement elements are generic. Following the Razorfish advice will deliverbetter, yet copyable customer experiences. The competitive advantage could be temporary forthose organizations that have made them part of their strategy before the followers will fall inline. The branded customer experience is unique and answers the question: How will a customerexperience a contact with us as a typical "our company" experience. It is so closely connected to1In a survey of more than 700 marketing and PR professionals, 50% of respondents said the single most importantaction a person or brand can take to increase their influence online is to create, post, or share compelling content;(Vocus/Brian Solis).
  7. 7. the organizations identity that it is by definition not copyable and efforts to do so will lead to notauthentic experiences.The two key questions now are:How can we make social and digital channels have the same “our company” experience?Will and should our identity change by leveraging social and digital channels? If so, can weinclude these changes into a new and improved branded experience?We would like to answer these questions with how one of the largest Dutch banks, TheRabobank, dealt with these two challenges. The Rabobank is a co-operative bank, which from itsstart in 1896 has had a strong local presence. Being nearby, in a literal and figurative sense, hastherefore always been a strong value, a part of the banks identity. However the modernization ofthis co-operative bank has reduced the number of co-operatives from 547 in 1996 to 139 in 2112(but still with over 800 offices and 3000 cash points throughout the country) At the same timecustomers want to do more and more business with their bank outside the bank office, by phone,mail or otherwise. So reinforcing the core value “nearby” merely by the physical presence ofemployees and offices has lost most of its effect as a distinguishing competitive factor.Rabobank has entered the arena of all Dutch banks that by utilization of a multichannel strategywant to meet the rapidly changing needs of customers. And like its competitors Rabobank is in aprocess to institutionalize the virtual service to customers into a virtual branch office.Interestingly it has chosen to set up decentralized virtual offices. This to at least be in line withthe "nearby" value: being as local as possible.This sounds paradoxical because one of the consequences of virtualization is that products andservices can be delivered from anywhere. But when the employees that deliver the products andservices through all virtual channels are from the same local environment of the specificbranches customers and are able to transfer this local flavor into every engagement, it might verywell prove out to be a very clever strategy.Right now a couple of branches are in the process of answering the question: What makes anengagement with us a typical Rabobank "local branch name" experience? The outcomes are notdefined yet, but it might very well be that elements like local dialect, awareness of local news anddevelopments will be a part of it. And that is hard to copy in a centralized, large virtualorganization.Therefore the answer to the questions, how can we make social and digital channels have thesame “our company” experience, is: by involving employees in the determination of the "ourcompany" experience and very important, by enabling employees to create experiencesaccordingly. This means a major rethinking of leadership, management and coaching paradigms.Almost all organizations that deal with large numbers of customer engagements, have tried tomanage this complexity by implementation of structures, processes, rules, strict diversion ofresponsibilities etc, etc.
  8. 8. Over the past 20 years we have been focusing on operational aspects of customer engagementsonly. This new way of thinking will require a more servant leadership style that can becharacterized by giving trust to employees, control more on direction than on output, in otherword loosen control. Only then will we see employees give the best of themselves to createbranded customer experiences, regardless of the channel that they will be delivered through.Rabobanks vision is founded on the ideas of Friedrich Wilhelm Raffeisen (1818-1888) whodeveloped the idea that poverty can best be conquered by helping people to help themselves. Thesolution: a co-operation. Therefore the vision of Rabobank, or its identity, is build four elementsthat have remained the same of the years: 1. Enabling a connection with the customer 2. Enabling a connection with society 3. Enabling a connection with the future 4. Enabling a connection with each otherRabobanks brand values: Nearby, Involved and Leading are nested in this identity. “We wants to be nearby our customers. Whatever the medium. With our offices as personal advice centers and our mobile apps as daily lifeline.” Joost Augusteijn, Brand Strategist RabobankThat Rabobank was the first Dutch bank to offer Internet Banking and the first mobile bank in theworld, and the fact that customers communicate via web, mail, social media and web care havenot changed the identity of the bank. Mobile banking brought the bank literally close to thecustomers heart (Nearby) Being the first to adapt these new technologies emphasized theinnovative character of the bank (Leading) As such the adaptation of social and digital channelsare logical consequences of the bank wanting to remain a stable, future proof bank (Connectionwith the future)Another good example of a company completely build around a strong shared value is Telfort,which was the third mobile operator in the Netherlands.Back then it was not easy to become a customer with a mobile operator. You had to fill in a lot ofpaper work, had to wait for a day to be activated, the pricing schemes were not transparent andthere were not too many places where you could buy a mobile phone. The core value of thisoperator, that was also directly translated into a promise to its customers, was: "We are going tomake mobile telephony EASY". This was translated in a large number of organizational aspects,like marketing and sales, customer service, service delivery processes etc. A few examples: • There was only one subscription form, with a fixed price per minute; • Customers didnt have to go to a telephone store to become a customer. They could buy a phone off the shelf in a super market or toy store;
  9. 9. • The handsets where packaged in milk cartons, which emphasized the fact that mobile telephony was available for everybody; • No paperwork to be filed in the activation prices. By opening the package the Terms and Conditions where accepted; • After unwrapping the package the first call that was made was redirected to the customer service center, where a realtime credit check took place. In stead of 24 hours it to less than three minutes to become a customer and make a first call. • A customer had in its life cycle only one moment at which he had to give his contact details, after that this information was never asked again;These are just a few examples of how customer experiences are designed to make mobiletelephony easier for customers. This became part of the corporate culture and it made thisoperator the most successful new entrant in the Dutch mobile market.It is important to understand that “making is easy” is the overriding identity and brandexperience. The choice of channel is secondary and in the example above digital and social mediawas not used much at all but it is easy to see how important it would be to ensure it fits in withthe larger message and is easy to use.Unfortunately there are a lot of bad examples where companies define digital and social identitiesthat are not inline with a positive brand experience or clearly defined identity. In the US AT&Tfor example has an elaborate web site that lets a customer choose anything from calling plan, dataplan, phones and services of all kind. However, it is everything but easy to figure out what Ireally need. The choices are confusing and in the end the store clerk was the best person to helpmy wife and me figure out what was best after much wasted time online. I wish AT&T couldhave simply put a chat, phone number or even twitter link on the website and be authentic abouttheir confusing mess. “You will never figure it out on your own, call us!”EXPERINCE DESIGN – A holistic approach to experience designOnce the strategic direction for digital and social engagements are set and the messages based onthe identity of the organization and its brands are understood it is time to design the actualexperiences.We like to speak of a holistic experience design because we want to highlight the interrelatednessof digital and social with brick and mortar, phone and traditional media. The brand and companyidentity has to be the same across all these channels.Digital and Social Channels are also not just one homogenous entity. We can distinguish at leastthree areas: 1) Representation of our brand or organization in digital form. 2) Listening and responding to comments and conversation in the virtual world 3) Actively influencing and initiating social conversations and viral campaignsWe will explore each area in a bit more detail below giving some examples.
  10. 10. 1) Digital RepresentationDigital representation includes the brand or company web or Facebook site but also includeslistings in Yelp, Wikipedia and other sources that clients and consumers leverage to findinformation about a company, product and service.It is obviously most important that our information can be found. In that regard search engineoptimization (SEO) and search engine marketing (SEM) are frequently used terms that followestablished standards. This paper does not try to elaborate on this topic. However, monitoring theway our identity is presented in a search engines search result, on the iPhone map, on Yelp andFacebook etc, is very much a concern we feel deserves to be highlighted.In one bad example we can think of a traditional food company that built a Facebook page for aspecific brand involving macaroni and cheese. The company and brand identity were based onattributes like old-style, trusted, comfort. So just the idea of Facebook was a slight clash to thatidentity. However the worst part was that the discussions on that site were mostly disgustingdescriptions by teenagers and college age youth about their experiences with days (and in somecases weeks) old servings of that brand’s product. Needless to say that this was neither positivebranding nor a positive experience for the average reader.It is surprising how many companies have abandoned hard learned lessons on branding andMarketing 101 when designing digital or social experiences. A company may have spent 100s ofhours to train in store sales personnel on dress code, and service oriented language that is in linewith the company’s identity and branding. The same effort has to be extended in digital andsocial engagements. An identity or brand should be presented in style, look and feel but also intone and language used in all conversations.2) Listen and RespondWe discussed the opportunities and risk of holistic listening earlier in the paper. As for experiencedesign we would highlight two key elementsA) Identify the conversationsThere is a conversation about your brand, product or service in progress at any given timesomewhere. At a minimum you should pay attention to what is said. In more advanced stages youcan start building intelligence of who is talking, where and when.Not listening can be futile. There are many ways to respond to virtual chatter. You can respond inthe same channel that was used by the originator but you don’t have to.The key is that you should respond to consumers whenever possible. Having a strategy for doingso in modern media channels like Facebook or twitter but also blogs and posts on message broadsis a good practice.Lets call this passive communication in response to brand impacting statements.
  11. 11. B) Respond@ symbols and # signs may just not gel well with a conservative and traditional bank forexample. While Virgin Atlantic can happily leverage these symbols of modern conversations andother shorthand without a negative impact on its modern brand.But even in Facebook or Twitter you can send very different messages depending on the identityyou want to portray. However it is not necessary to respond in all channels at all times.Lets say someone is asking about the closest location to purchase your product or where to find aspecific banks ATM. You can extend significant effort to intercept these conversations andrespond. But sending them a link to a web site where they can enter a zip code and then find thelocation is not a good user experience. If you do respond, why not send them a link that uses theirgeo location and provide a clear answer as in an iPhone or Google map with the locationshighlighted including store hours etc. If you cannot get their geo location you have to ask themwhere they are. However in most situations it will either not be feasible or necessary to respondreal time in all channels.If you have absorbed lesson 1 above you have made sure that your locations are clearly markedon iPhone and Google maps. Now all a consumer needs to do is enter your brand name into theGoogle or iPhone map and voila here it is store hours and all. It they twitter the question a fewmillion Twitter users will point them to your app or explain smart phone usage to them. Yousimply do not need to do that.2 Effort extended on making information easily found andpresented in helpful tools like maps and listings is much better use of your time.Naturally you can have a twitter address for your company or brand. But in that you simplyrespond to inquiries just as your customer service team did in the time of the telephone.It is more important to have the relevant information ready in digital form. If I have a technicalissue, dont send me the 150 page pdf user guide. Tell me the solution. If you twitter, text, emailor call me really does not make a difference to me. “Fix my damn router and if you cannot fix itsend me a new one.” If you do that I will tweet all my friends what a great company you are evenif I had to call a telephone number.Feeling valued, listened to and experience good service out wights the choice of channel for thatcommunication. Razorfish and other studies highlight this.3In fact extending too much effort on new social and digital means of communication can bedecremental if the traditional values of service and customer orientation suffer because attentionis taken off what really matters.2 A JC Williams Group consumer survey found that 91 percent of respondents ranked consumer generated content asthe number one aid to a buying decision. 74 percent of customers said they are influenced by the opinions of othersin their decision to buy a product. Marketing Sherpa found in a survey that 87 percent of respondents would trust afriend’s recommendation of a product or service over a review by a critic, while 84 percent said they would trust userreviews over a critic. Buzz Agent found that one word of mouth conversation has the impact of 200 TV ads.3 “Are internet users more likely to purchase from a brand after becoming a subscriber, fan or follower?” 37% ofTwitter users say yes, 31% are indifferent and 32% say unlikely. On Facebook, “only 17% agreed, 34% were on thefence, and a staggering 49% disagreed,” (ExactTarget via Brian Solis).
  12. 12. 3) Actively influencing and initiating social conversationsWhile this paper has taken a slightly critical view of over hyped new communication tools thereis some very obvious advantage to using social tools in marketing4 but also in company internalprojects and processes as well as in enabling better communication in the supply chain or partnernetwork.What should be understood is that monitoring 100s even 1000s of simultaneous virtualconversations is complex and expensive. Few brands and companies can invest in social mediacommand centers that come close to a live newsroom environment. There is much to be saidabout the merging of media and marketing. Adidas TV and social campaigns of many cool brandsare fascinating. For those interested the Super Bowl organizers (Americas biggest sports event)have come up with a great plan for such a social media control center.5 But for manyorganizations this is just too expensive and too risky to do.However, Salesforce Chatter, Yammer and other companies have introduced affordable tools forinternal social communication. Extending a traditional project portal with a news feed anddiscussion board is just a very good idea that does not need to cost much at all. It also will allowemployees and managers to experiment and learn about good and bad use of such tools in abusiness setting before unleashing them in broader consumer or client settings.CONCLUSIONIn conclusion we like to summarize that digital and social means of engagement are tools thatshould follow a well-established strategy in which the identity of brands and organizations shouldbe strengthened and through which each interaction should become more valuable to the partiesinvolved.In order for that to happen companies need to clearly identify their strategies acrossorganizational lines, allow their organization to reassess their identities and those of their brandsin light of the defined strategy and finally they need to design the actual internally or externallyfacing experiences in a way that will provide compelling, authentic and hands on helpfulmessages and tools.4 - 53% of active adult social networkers follow a brand - 70% of the active online adult social networkers shoponline, 12% more likely than the average adult Internet user - Among US social media users, 15% are more inclinedto buy brands advertised in social media sites;- Across a snapshot of the 10 major global markets, social networksand blogs reach over 75% of active internet users (Knowledge Networks).5 - Read more here:
  13. 13. Research and good articles:http://liminal.razorfish.com the authors:Magan ArthurAs author for Focal Press and contributor to industry publications such as the Journal of DAMand CMS Watch and through his work and speaking engagements at international conferencesMagan has become one of the thought leaders in the digital marketing space. Magan is focusedon building and leading teams thru the end-to-end execution of innovative digital, social andmobile programs that seek to cut operational cost and introduce Digital, Social and Mobilecapabilities that truly impact the ability to relate to customers, employees and partners in moremeaningful ways. Magan also supported the Information and Service Design Program at theSchool of Information at UC Berkeley and the Mills Collage MBA Program as a guest lecturerand mentor.magan@infoasis.comRob MallensRob Mallens has 20 years of management consultancy experience. In the past 15 years he hasbeen involved in customer management. Rob has had a number of speaking engagements atinternational conferences and frequently shares his ideas, via printed and digital media. Mainfocus areas: are defining corporate identity, branded customer experience design and leadershipstyles. Currently he is helping a number of organizations to define a desired customer experienceand his company assists in implementing the accompanying organizational changes. Thesechanges can be in leadership style, organization culture, coaching processes, in businessprocesses, management information systems 13