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Social CEM: Moving Beyond Customer Loyalty to Customer Advocacy | Empathica Whitepaper


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Social CEM: Moving Beyond Customer Loyalty to Customer Advocacy | Empathica Whitepaper

  1. 1. Social CEMMoving Beyond Customer Loyalty to Customer AdvocacyAuthors:Dr. Gary EdwardsDr. Natalie L. PetouhoffLisa M.
  2. 2. Social CEM: Moving Beyond Customer Loyalty to Customer Advocacy2
  3. 3. Social CEM: Moving Beyond Customer Loyalty to Customer AdvocacyTable of ContentsOverview: Using Social CEM to Transform Your Business 4The Current State of Customer Experience Management (CEM) 5 The Transformation of the Customer Experience 6 Leveraging Global Trends to Engage Today’s Consumers 8 Targeting the Millennial Generation 9Five Challenges & Implications for Brands in a Socially Connected World 10 Understanding the Customer Experience Lifecycle 10 Managing Customer Experiences throughout the Customer Lifecycle 12 Deciding When (and When Not) to Take Action on Customer Feedback 13 Consistently Delivering Customer Experiences That Positively Affect Your Brand 15 Going beyond the Loyalty Stage to Drive Active Advocacy 16Recommendations for Managing the Social Customer Experience 18 Get a Deeper Understanding of What Drives Advocacy 18 Drive Focused Actions in Your Locations 20 Get Credit for Delivering Great Experiences 21 Ensure Your Whole Organization is Committed 22 Social CEM Readiness Checklist 24 Conclusion 25 3
  4. 4. Social CEM: Moving Beyond Customer Loyalty to Customer Advocacy Overview: Using Social CEM to Transform Your Business With the advent of social media and the rise of mobile smartphone technology, consumers are in the driver’s seat, posting their customer experiences in permanent, online forums and providing instant customer feedback that is increasingly visible to the public. To get in front of these trends, traditional, relatively passive Voice of Customer programs have the opportunity to evolve into highly actionable Social Customer Experience Management (Social CEM) solutions. The most advanced and commercially advantageous Social CEM includes not only the process of gathering one way customer experience feedback, but also the ability to provide true two- way dialogue that drives local and immediate improvement efforts, drive positive online and offline customer advocacy, increase same store sales and increase Customer Lifetime Value (CLTV). Social CEM is about moving beyond “interrogating” customers about their experience with brands and creating an ongoing dialogue where customers become “co-creators” of the brand by becoming active, engaged advocates. This paper is about how brands are transforming their businesses by using Social CEM.4
  5. 5. Social CEM: Moving Beyond Customer Loyalty to Customer AdvocacyThe Current State of Customer Experience Management (CEM) What’s made customerMeasuring customer experiences is really about understanding the sum of a series experience managementof touch points, the gestalt of one or several moments of truth that drive an overall a vital, bottom-lineperception of the individuals involved and the product purchased or consumed, business initiative injuxtaposed against the channel engaged and the expectations of the brand. today’s world is thatCustomer Experience Management (CEM) is how a company manages those digitally connectedinteractions with customers. CEM has emerged as a “space” or methodology inretail parlance, as it provides a means to manage and create loyalty, and higher consumers are farcustomer lifetime values (CLTV) – where customers buy more goods and services more vocal about theirover longer periods of time, positively affecting revenue, profits and margins. By customer experiencescontrast, not managing CEM can lead to increased operational costs as well as and have a more far-negative word of mouth and customer attrition. Social CEM acknowledges that reaching impact thanwith social media the impact of either positive or negative customer experiences are ever before.more immediate, tangible and amplified and as a result, must be integrated in thecustomer experience management program.It is an old adage in business that “you can’t manage what you don’t measure”. Manycompanies do not effectively measure, communicate and hold their front line agentsaccountable to continuously improve their customer experiences. They may collectcustomer experience data, but the time and distance from feedback to a customerevidencing any tangible improvement is so long that most consumers who providefeedback do not believe any good comes of it. This is evidenced by ConsumerInsights research done by Empathica showing that only 46% of respondentsbelieve that feedback is used to improve the customer experience. This can onlybe the result of two factors: 1) a lack of transparency and communication from thebrand outwards on what the score is and what’s being done about it, and 2) a poorunderstanding and execution of the improvements needed at the local unit (i.e.,store, restaurant, branch, dealership, etc.) level. As a result, the revenue boost and/or cost cutting goals of CLTV have often not been met and customer experienceimprovements remain an elusive goal in many companies.Whether taken seriously or not by the executive suite, customer experience metricshave always been important indicators for the success of a company1. What’schanged and made customer experience management a vital, bottom-line businessinitiative in today’s world is that digitally connected consumers are far more vocalabout their customer experiences and have a more far-reaching impact than everbefore. With studies showing 78% of consumers trust recommendations versus only14% who trust advertisers’ messages, managing on/offline customer experiencehas never been more important2. 5
  6. 6. Social CEM: Moving Beyond Customer Loyalty to Customer Advocacy When today’s consumers post information about their customer experience online, Social Media Statistics: they can reach thousands of people in mere seconds. And those posts remain online as a permanent record of customers’ experiences. If, as is often the case, the customer experience is “off”, the company is in danger of not only losing the future revenue of the customers who posted, but also the revenue from hundreds if not thousands of other customers who read about how the brand’s products or services didn’t meet customer expectations and subsequently choose not to buy from the brand. In addition, the lack of improvement in the business can result in increased operational costs dealing with customer complaints, the source of which could have been rectified if recognized and corrected based on ongoing customer » Smartphone owners now spend feedback. as much time using social networking apps such as Twitter The rapid adoption of social media and mobility has left most companies and Facebook as they do playing organizationally challenged to adopt new approaches in how they design and games improve customer experiences and drive customer loyalty and advocacy. Utilizing » Users log an average of 77 a systematic approach to Social CEM can provide real-time feedback for the minutes per day using apps on corrections and adjustments required by the business as well as to build an ongoing, their smartphone online customer advocacy program. Companies can use Social CEM to drive high quality interactions and provide end-to-end customer experiences across all » 40% of Twitter users regularly communication channels (online and mobile) as well as in face-to-face (F2F) brick- search for products via Twitter and-mortar locations such as in retail stores, restaurants, hotels, bank branches » 12% of consumers have and auto dealerships. However, making these changes requires not only a change purchased a product online in how leadership views customer experiences, but also the empowerment of the because of info they found on various functional departments who are being measured by customers to actually Twitter make the changes required to deliver exceptional customer experiences. » 60% are willing to post about products/services on Facebook if The Transformation of the Customer Experience they get a deal or discount In the last decade, consumers have rapidly adopted disruptive, online technologies. Source: social-media-stats-for-2012/ Customers went from being limited to visits to a brick-and-mortar location to researching and comparing a company’s products and services via Internet searches and review websites followed by in many cases making the purchase online. A shift from brick-and-mortar shopping to ecommerce signalled a new way to communicate with customers, SMS text messaging over mobile phones is not just a way to interact with friends; it is increasingly a means for companies to interact with consumers. The advent of handheld devices like the smartphone and iPad, have forced an evolution in how consumers and businesses communicate. Today, handheld digital tablet technology makes mobile communications available and useful at every age. Unlike generations before now, even kindergarten students are indoctrinated into this new paradigm. These future customers grasp for their parents’ smartphone or tablet computer as if it was a link to life itself. Along with handheld devices, social networking sites continue to proliferate. Facebook, Twitter and Pinterest along with dozens of new, well funded entrants into the field allow consumers a direct line6