Learnable Services, CRM, and Social Business Design

March 29, 2010

“Presenting a consistent face to customers improves their comfort and satisfaction.”

R “Ray Wang” and Jeremiah Owyang Social CRM: The New Rules of Relationship Management

Marketing, especially social media marketing, and learning, including organizational learning, are both essential components of a dialogue strategy for customer experience design and management. A dialogue strategy builds on the assumption that companies learn more from customers when customers learn from them, and doing so benefits both. I increasingly think it provides a basic framework to think about, and consider as part of your experience design strategy, when relating to customers. Thought leaders increasingly refer to the challenge as social business design.

Given the maturity and diffusion of social media, a dialogue strategy provides a framework to discuss communication as an ecosystem, whether addressing collaboration, innovation, segmentation, sales, customer service, or brands. The key to the process is understanding customers, attracting them, engaging them with sales in mindempowering them to solve your product and service problems, and learning from them to improve products and services, thereby strengthening your brand. It is not simply segmenting them, targeting them, driving them through interactions, and transacting with them through sales.

Over time, people buy things they need from you rather than someone else because they want what you offer, and because they feel an empathic connection, i.e. that you understand them. From my reading, Wim Rampen’s contention that we need to use segmentation the customer’s way gets to the heart of the point. The challenge of learning how to make an empathic connection increases to the extent that CRM (customer relationship management) aims to align customer engagement directly with business transactions.

Those looking for a direct, sustained connection between customer engagement and sales from Social CRM are expecting too much in my opinion. The key question is whether you know that Jane Smith who called for support tonight also chatted with one of your people earlier, or posted (or tweeted) something positive or negative about you on her blog, or posted something about your product/service to a how-to community forum. Knowing any of those things about Jane’s activities and experiences with your brand increases the potential for empathic connection between your people and Jane, meaning your understanding of what Jane needs from your products/services increases.

It would be nice if a monitoring platform could listen for you and, just automatically, determine how influential Jane Smith really is in the scheme of things. It might be nice to have a social media management system that just took care of everything, gauged the influence of anyone commenting about you online, ranked their value relative to your brand, and prioritized the level of response needed. However, in the near term, regardless of how much we want that panacea, your employees, or outsource partners, are going to need to engage with your customers as though their problems are your own

Nestle’ can speak to that issue recently. It is important to note that the Nestle’ example is not the first time a company’s supply chain management, rather than a product or service per se, came under organized criticism. Nike and Shell, among others, found their own supply chain relationships under fire over the past decade. Indeed, Shell’s early experiment in 1998 with a blog called Tell Shell came under such negative commentary from the public that the company shut it down. Nike, on the other hand, engaged the debate and incorporated the criticisms into its business model, I’ll leave it to you to decide which brand strategy makes the most sense for customer relationships.

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Ethnography, Globalization, and Experience Design

December 2, 2009

Rosetta Stone

One of the most visited posts on this blog is titled, Empathic Research Methods and Design Strategy. Indeed, if you google or bing “empathic research”, the post pops to the top few links, or vey close, often even ahead of IDEO. My aim in that post was to add to points made by Adam Silver, a Strategist at Frog Design, noting that globalization and digitalization in the 1990s resulted in product and service interfaces with more culturally diverse and geographically distributed customers. The combination of these economic and social forces led designers to search for new methods to augment artistic intuition about form and function. Considerations of form and function also required attention to feel, emotions, features, and interactivity attuned to the needs, wants, and beliefs of users/customers. The power of ethnographic research to discern empathic insights by observing and interpreting people’s cultural activity is now widely recognized.

Recognizing the implications of globalization for design and marketing is certainly not new. The now classic book, The Design Dimension, by Christopher Lorenz, explained the crux of the point as early as 1986. Lorenz noted that,

…globalization does not mean the end of market segments, but their explosion to worldwide proportions. Far from declining, the number of market segments may actually increase…Though industrial designers frequently can – and do – substitute for the absence of marketing imagination. In most companies the most potent force for imaginative marketing and product strategy is a real partnership between marketing and design (pp. 146-147).

 The significance of Lorenz’ point came back to me recently while reading “How does our language shape the way we think?, by Lera Boroditsky, an Assistant Professor of Psychology, Neuroscience, and Symbolic Systems at Stanford University. Boroditsky’s research into language and thought complements a key point made in Malcolm Gladwell’s book Outliers, Gladwell informs us that one basic reason exists for the tendency of Chinese students to outperform others in math skills. Quite simply,

Take a look at the following list of numbers: 4,8,5,3,9,7,6. Read them out loud to yourself. Now look away, and spend twenty seconds memorizing that sequence before saying them out loud again.

If you speak English, you have about a 50 percent chance of remembering that sequence perfectly. If you’re Chinese, though, you’re almost certain to get it right every time. Why is that? Because as human beings we store digits for about two seconds at a time. We most easily memorize whatever we can say or read within that two second span. And Chinese speakers get that list of numbers—4,8,5,3,9,7,6—right almost every time because—unlike English speakers—since the Chinese language allows them to fit all those seven numbers into two seconds.

Whereas Gladwell’s interest is in the way language and culture affect our view of talent, Boroditsky is interested in whether, and how, language shapes the contours of thought itself, the kinds of questions people who speak a language are able to ask, and the kinds of significant symbols they recognize. Boroditsky’s research looks at an old question, and controversy, in anthropology and sociolinguistics — the Sapir-Whorf hypothesis.

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Social Networking with Roto-Rooter

October 22, 2009
toilet

Chilling Tales from the Porcelain Seat

You know social networking is going mainstream when service companies like Roto-Rooter start using it. My sewer line backed up yesterday and I called Roto-Rooter to clean it. The guy came out like always, did the job, and I paid him. As he handed me the receipt he also gave me a flyer that asked me to go to either Google, Yahoo, Citysearch, or superpages.com and write a review of the service. Once a week Roto-Rooter selects a name from the reviews submitted on any of these search engines and refunds the cost of the service. It doesn’t say whether the selection process is random or related to the sentiment of the review.

I was a little surprised that such an old-world service like plumbing would encourage customers to review their work. I guess that impression comes from a recent review I wrote on Yelp about another  plumbing company in St. Louis. My review was far from flattering. Anyway, I thought Roto-Rooter’s engagement of social networking interesting enough to check out their activity. Sure enough, they have a blog that Paul Abrams, the Public Relations Manager, updates regularly, and Roto-Rooter maintains a presence on a range of social network channels. From their blog,

Follow us at Twitter under @RotoRooter and here’s our main page on Facebook. You’ll even find a Roto-RooterTV channel on YouTube where you can see pet rescues, old commercials and instructional videos for DIYers. Then check out our photos on Flickr.

And, just in case you are wondering, the service was excellent though it isn’t one I like needing to buy.

Posted by Larry R. Irons

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Validating Customer Communities

October 13, 2009
group

Courtesy of mtsofan's photostream on flickr.

I’ve known Steve Finikiotis over at Touchpoints for some time, and especially appreciate his concept of the Validation Principle. I’ve seen the Validation Principle at work in my own experience managing online communities, as well as participating in many online communities. The key to any online experience is engagement, and engagement means relating empathically to other people in a way that they appreciate. Steve recently outlined the relevance of the Validation Principle to Twitter use, and other social media, in a succinct way.

If you use Twitter or any of the other social networking tools, you’re bound to notice how much people crave acceptance and appreciation…Its obvious that people like being shown appreciation, but there’s more to being appreciated than meets the eye…When we’re validated by others, we’re inclined to bond with them. I call this the Validation Principle, and it’s one of the keys to building durable customer relationships.

The bond Steve is alluding to is a key part of any successful customer community. It contributes significantly to a community’s duration. Developing such bonds though is not an easy process, requiring time as well as attention. It involves learning from customers, and it involves their learning from your actions in relating to them.  

Rule number one in managing customer communities is don’t fail to listen. Additionally, failing to recognize that customers know you are listening but feel like you just aren’t hearing them is equally damaging. Sometimes it is possible to listen effectively in an online community itself. Other times, you may need to actually do research to directly engage and validate passive members who mostly consume content (sometimes referred to as lurkers) to really understand the dynamics of an issue playing out in an online customer community.

What have you learned from engaging passive content consumers in customer communities?

Posted by Larry R. Irons

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Using Social Network Analysis in Social Business Design

September 23, 2009

radical

My last post discussed the Open/Closed culture fallacy in social business design. I made the point that leaders of large corporations are typically unable to answer the key strategic questions posed by David Armano of the Dachis Group in a recent important post, Re-designing Your Business Culture. Among other questions, David asked:

Do we want real connections established between employees, customers, partners?
How can we reward those in our ecosystem who actively contribute?
Do we actually want to engage those who want to engage us? Can we?

As this post’s subject indicates, my interest here is to explain how social network analysis, applied to the ecosystems of organizations, helps apply social business design in a manner that avoids the fallacy of open/closed business cultures. We can’t know how open or closed a business culture is until we research, analyze, and understand both its formal and informal networks.

As I noted previously,

To paraphrase Valdis Krebs, a social network analyst, more connections are not necessarily betterValdis Krebs, and other social network analysts engaged in ONA (Rob Cross and Steve Borgatti, for example) contend that the most efficient and effective adaptation to emergent challenges lies in “the pattern of direct and indirect links” in the ecosystem. You can read a straightforward overview of ONA by Valdis.

This post continues David’s line of thinking by considering a combination of two of his strategic questions in light of the open/closed culture fallacy. I also take a stab at noting how to answer his last question.

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Empathy and Collaboration in Social Business Design

August 27, 2009
dachis_eco

Source: David Armano "Social Business by Design"

My first corporate position carried the title Methods Analyst, working for a large billing center serving a telephone company. One of my main tasks in that role involved learning how other employees performed their work and documenting it. On each project I typically spent several hours observing people work (what some today call rapid ethnography or guerilla ethnography) and then did in-depth interviews of the people I observed. Usually, at the end of my observation, I took responsibility for doing the work for a brief time under their watchful eye. In some sense you could say my work required me to continuously cross train in other people’s work, analyze the process, and write it up in a technical document.  The main insight I took away from that experience was an appreciation for the importance played by empathy in effective collaboration.

First off, collaboration isn’t just about people sharing information to achieve common goals. Collaboration is about people working with other people to achieve common goals and create value. Advocates of Enterprise 2.0 sometimes make the fundamental mistake of arguing that collaboration is really only about achieving business goals, leaving the implication that incorporating social software into the work flow of organizations is sufficient. Even though goal-orientation is a big part of collaborating, collaboration requires more to achieve goals effectively. It requires shared experience. As Dev Patnaik and Evan Rosen recently noted, empathy and collaboration go hand in hand.

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CMR as a Precursor of VRM

May 28, 2009

Vendor Relationship Management (VRM) is a term used by Doc Searls and other members of ProjectVRM to distinguish market relationships between vendors and consumers where the latter gain increased control over that commercial relationship. Building on the VRM concept, Jeremiah Owyang recently noted that VRM offers a potential future for public relations agencies in which the future of PR is in representing communities rather than brands. As Doc recently declared,

We therefore resolve to avoid all relationships in which the privileges of loyalty are determined entirely by the seller, and to construct new terms and means of engagement that will work in mutually constructive ways for both customers and sellers, for the good of all.

 So, in the spirit of the Declaration of Customer Independence recently outlined by Doc, I offer the following turn of the century anecdote for thinking about Customer Managed Relationships (CMR).

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