Saturday, June 30, 2007

Opinion leaders and CGM

As a consumer's pre-purchase research finds more value and credibility in an informal source of information,rather than a company's advertising campaign or it's salespeople, CGM and opinion leaders are fast becoming forces to reckon with.

Opinion Leaders (Schiffman, Kanuk)have an informal influence over consumer behaviour and impact consumer acceptance of new products and services and Consumer Generated Media has provided a new source of communication for these opinion leaders.

The question is-
What drives an individual to be an opinion leader?

Desire for Self-Actualisation-
A feeling of superiority or status by demonstrating expertise by generating content and on being considered an authority on a subject.

Desire for Self-Projection-
Desire to build a credibility for himself. Research shows that individuals categorised as opinion leaders are four times more likely to be asked for advice/voice their opinion on any subject under discussion.

Need for Self-Confirmation-Try to reduce own post-purchase dissonance or self doubt regarding a purchase, by discussing the product features in a medium which will garner some comments, which if positive, will reassure the concerned individual regarding the appropriateness of his purchase.

Need for Social involvement-
Some people love sharing product related experiences and use these conversations as a means of being part of the community.

As the keen desire for knowledge and information drives an opinion leader to be an innovative consumer and share his experiences, his gregarious nature and access to the community coupled with the fertile opportunities provided by the collaborative web, can be utilised by organisations to generate favorable conversations about their products and services.

It is upto the consumer marketers to decide how to 'identify ' these opinion leaders or 'create ' 'CUSTOMER EVANGELISTS'

Thursday, June 28, 2007

The consumer was the king and we all seemed to know it.

According to the fifth annual PRWeek/Manning Selvage & Lee Marketing Management Survey, polling 279 U.S. chief marketing officers, VPs of marketing, and marketing directors and managers, and focussing on new media/CGM, integrated marketing and industry ethics, only about 12% respondents had CGM on their mind when considering marketing platforms.

Now why is this so?
CGM or consumer generated media is gaining imporatnce as the newly empowered consumers finds himself with a voice to express his opinions and post purchase emotions.

Organisations on one hand have a set of satisfied customers generating content about their positive experiences and influencing product adoptions by their friends and relatives, and on the other hand have to contend with unhappy customers sharing their woes with the threat of doing so in a technologically empowered digital environment capable of replicating the thoughts umpteen times, as people take to reading each others creations and linking to them.

As per the ADAGE article on the above subject, reasons for non-adoption of CGM as a promotion tool by several organisations stems from-

1. Fear of empowering a consumer to the point of no control.
2. No clear ROI on the subject yet.
However, the cost-effectiveness of this media over traditional media is bound to eventually let it get into vogue sooner or later.

Agreed that organisations are wary of embracing a medium where the echo of the consumer voice may be uncontrollable, but in an era where marketers are talking about
-Customer Relationship Management
-Customer Lifetime Values
-Increasing customer shares rather than market share
-Product Customisation
-Customer data warehousing and datamining and
-Using customers as brand evangelists,

will it not be contradictory to keep the consumer voice muffled?...After all, the consumer was the king...and we all seemed to know it.

Wednesday, June 27, 2007

Society concious corporates and the consumer

Coca-Cola recently entered into a tie-up with environmental group WWF. As part of a $ 20 m initiative, Coca-Cola is investing in 8 fresh water programmes overseen by WWF in regions where it has bottling operations.In return WWF will advise the drinks firm how to improve it's use of water , make it's bottling operations more efficient and reduce it's carbon footprint.As companies balance their objectives of profits, by focussing on the consumer, while also taking care of society's interests, the Societal Marketing approach to marketing is much in focus.

In an era of environmental problems, resource shortages, population growth, worldwide economic problems and neglected social services, there is a rising need of organisations which are sensitive to these issues to adopt the SOCIETAL MARKETING CONCEPT .

This concept of Marketing leads organisations to determine the needs and wants of target consumers and deliver desired levels of customer satisfaction more effectively and efficiently than competitors in a way that maintains or improves the consumer's and society's wellbeing.

Responding to nutritional concerns across the world, the $11 billion Kellog's company has decided to phase out advertisments targetting younger children for most if their products in case they do not meet nutritional guidelines.Mc Donalds has started churning out advertisments for adults. As consumer advocacy groups fight against anorexia across the world, Uniliver has announced a set of guidelines barring subsidiaries from using excessively thin models in a bid not to promote unhealthy 'slimness' in their advertisements.

Approaches like the above showcase the dedication of the organisations towards consumer welfare and positively influence their credibility. As more and more corporates embrace the concepts of Corporate Social Responsibility and consumer welfare, good corporate citizenship breeds not only consumer satisfaction, but also aids corporates in their efforts towards customer aquisition and retention.

Tuesday, June 26, 2007

Social networking and the collaborative environment

An interesting post by Eric Kintz, CMO, HP to take a look at Facebook's marketing potential.Early explorations for facebook's potential for marketing

How facebook's integrated collaboration environment could be a one-stop shopping avenue is described best in The Teenybopper Network by Andrew Mc Afee, Associate professor, Harvard Business School. His description of Facebook as collaborationware that spreads like wildfire and what exactly motivates people to get involved with this technology facilitated network building -"The desire to be popular and make friends" sums up the concept behind the ever increasing numbers on these social networks.
Facebook now open to enterprising developers talks about the innumerable applications being offered to developers to customise facebook to needs of the enterprise.

Another interesting post at the Gilbane Group Blog Facebook and enterprise 2.0 throws up kindof unexpected results. On a query on which collaboration technologies youngsters would use over the next 2 years in their jobs, email emerged at the top of the list. This was fairly acceptable considering that email is the primary source of interaction ad formal data communication in any enterprise today, but the tremendously low expected usage of blogs/wikis and a networking platform like facebook was a departure from the current picture emerging with the increased usage of these networking platforms.After all, appearances are deceptive!!

Wednesday, June 20, 2007

Measuring Customer Satisfaction

As the value of customer retention increases manifold and becomes as important as customer aquisition, measuring customer satisfaction has gained impetus 'coz the key to customer retention is customer satisfaction. A highly satisfied customer is likely not only to indulge in repeat purchases,recommend the company and it's products, have lesser problems with pricing fluctuations, gives feedback and may be easier to service.

Methodologies for Measuring customer satisfaction-

1.Complaint and suggestion systems.
2.Customer satisfaction surveys.
3.Ghost shopping.
4.Lost customer analysis.

As I studied a whitepaper on Customer satisfaction metrics from Netpromoter , the strategy corresponding to the second methodology of customer satisfaction survey was thoughtful. While collecting customer satisfaction data, it made sense to collect information corresponding to repurchase intentions and likelihood of a customer recommending the product and brand to another consumer.Analysing data for satisfied, dissatisfied customers and further taking a look at those dissatisfied customers who could pose as detractors and generate negative inputs about a company and it's products made thorough sense.

NPS-The Net Promoter Score
By simply querying consumers on
"How likely is it that you would recommend (Company X) to a friend or colleague? " the "Net Promoter Score" or NPS, can be calculated. The NPS is simply the percentage of customers whose answers identify them as promoters minus the percentage whose response indicates they are detractors.

Three Categories of Customers
NPS is based on the fundamental perspective that every company's customers can be divided into three categories. Customers can be categorized according to their answer to the above Question based on a 0-to-10 point rating scale with "0" representing the extreme negative and "10" representing the extreme positive end.

Promoters (those who answer 9 or 10) are loyal enthusiasts who keep buying from a company and urge their friends to do the same.
Passives (those who answer 7 or 8) are satisfied but unenthusiastic customers who can be easily wooed by the competition
Detractors (those who answer 0 through 6) are unhappy customers trapped in a bad relationship.

A proactive approach towards collecting and analysing this data appears mandatory in an age where customer complaints no longer are an index of a company's customer relationships. More than 96 percent of dissatisfied customers do not complain, most just stop purchasing from a company.

Understanding that a customer is not dependant on an organisation, but the organisation is dependant on him, appears to be the fundamental goal of any organisation.After all, Managing Customer Relationships towards more satisfied customers is the order of the day...

Monday, June 18, 2007

Case study from Brandingwire

Interesting new blog containing case studies and having a set of bloggers solve them independently. The first case study from
Branding wire is about a fictitious coffee company and the objective is to work out a strategy for growth and expansion. Ideas of contributors range from branding strategies to expansion plans, to extensive market research with the current consumers, to managing customer relationships, developing web strategies for publicity, capitalising local strengths, employee training to kiosks etc. An exhaustive list of ideas..

The one that stuck a chord was the idea on using Coffee outlets for Social Networking by The Branding Blog
In the era of social and Business networking, using these premises for the same, would definitely act as motivation for the social groups and adding an image angle to the offer, can make way for elite/premium social groups to get associated with the coffee chain. This will automatically take care of the word of mouth/buzz marketing as interested groups would like to be part of the clique.The relationship equity can be built upon so that customer's tend to stick to the brand beyond subjective or objective assessments, so much so that sticking to that brand of coffee becomes a habit.
Using social media further, adding access to internet based social networking at such a hangout can further set the revenue registers ringing.

Adding further to Drew Mc Lellan's idea of collecting data to gauge a customer's point of view, maybe some online communities can be established to have people share their coffee experiences...rather than interviewing customers, maybe an online site where they could briefly document their experiences before leaving, and hence be part of the 'Coffee' community....

As suggested by Brand Impact
" go after influential bloggers; find a large number of bloggers inside and outside the coffee blogging arena, and send a complimentary 1/2 pound bag. Ask for their input, either privately or publicly (on their blogs). Bloggers like coffee (by and large), and have an outsized influence"

Having satisfied customers create content about their experiences is bound to set off a positive chain which is much more beneficial than any other marketing or brand building tool....After all, satisfied communities not only indulge in repeat purchases, but also are great customer advocates....

Saturday, June 16, 2007

Can social media be used by corporates to manage customer satisfaction?

It is common place knowledge that
Customer Satisfaction=Customer Perception minus Customer Expectation.
If the client perception of the product delivered is lower than their exepectations, negative satisfaction is the result.
If however the client's perception of the product delivered exceeds their expectations a positive level of satisfaction is achieved.

Companies have by far understood that by effectively managing the three elements of this formula, they can ensure client satisfaction and hence garner competitive advantages.
The question here is...Can social media be used to manipulate the above equation to garner positive differential between perception and expectation.

1. Can companies use this media to reduce customer expectations?
I guess yes, by being conservative and talking about their products with realistic expectations.
Customer expectations are typically based on past buying experiences,the opinions of friends, and marketer and competitor information and promises. However, reducing customer expectations too much can satisfy those who buy, but may attract few customers and can create a risk of competitors enticing the prospective customers with better products. So, for starters, this may not be the right approach.

2. Can companies use this media to increase customer perception of value?Definitely .
Social media can be used efficiently in 2 ways to achieve the above.
a)Companies can set up corporate blogs which are sophisticated brand building and product positioning approaches.By managing the customer's subjective and intangible assessment of the brand, they can increase the brand equity, hence adding to the customer's perception of value.
b)Companies can ride the CGM wave,and by suitably incorporating the same in the marketing mix,identify some evangelists. It is clear that a few influencers can generate a great number of product mentions if they decide to feature a particular product or service in their blogs. By building relationships with these individuals, companies can not only have positive media generated about them, but also increase the value equity of it's products in terms of quality, price and convenience.

Both the above strategies(a&b) can aim at increasing customer perception of value for the company and it's products. Agreed that customer perception is a final function of the quality of the product delivered, but considering an optimum condition where the product is of standard quality, an increased customer perception of value for a company's brand definitely helps in increasing the level of customer satisfaction.

Thursday, June 14, 2007

The era of empowered consumers-why do consumers generate content?

At times, as customer expectations are met and desired level of customer satisfaction achieved, a company is left with a happy customer.
What is a happy customer most likely going to do?
He is going to-
1.Refer to the company's product happily whenever he engages in a conversation in that regard.
2.Influence other people to adopt the same product.
3.Indulge in a repeat purchase.
4.Create positive content about the company in case he is part of any web 2.0 social media components.
5.Provide Feedback and maybe product related ideas to the organisation.
point of view

So far so good.
An unhappy customer is most likely expected to work on opposite lines.

The question is-
Why does a consumer bother to create positive/negative content about a company based on the product that he has used?
The feeling of empowerment is unique. It gives a consumer an immense sense of satisfaction to know that they have a tool to get back to the company they have bought a product from.
2.Helps a consumer augment his self-concept-
The thought that content generated by him may later be read and analysed by the concerned company gives a consumer a feeling that he has the ability to contribute to the customer management and feedback analysis systems of the company and becomes a primary motivator to make him create content.
CGM has provided a medium to the common man to unload his thoughts and sentiments.
The ability to create a conversation tool to build a community of people using similar products and airing their views.People love to talk and share their experiences and when a tool is available, why not.
5.Project a public self image-Consumers also try to develop a personal brand through the content they generate.

As organisations strive to be more Consumer centric,it is the consumer who finds himself suddenly becoming powerful, with the ability to influence the reputations of organisations. Managing consumer relations and aiming at consumer satisfaction are no doubt important keywords for the success for any organisation.

Tuesday, June 12, 2007

The 4 C's of Marketing

Chris Brown on the Marketing and Branding Blog talks about the C's of marketing

In a customer-centric era where
1.organisations aim at gaining competitive advantage by creating and managing excellent customer relationships
2.The emphasis is as much on customer retention as customer aquisition,

marketing tools have also evolved from being product focussed and seller focussed to customer focussed.From a buyer's point of view, each marketing tool aims at delivering a customer benefit.

In the words of Philip Kotler, a parity can be established between how the 4 P's( of marketing deliver a customer benefit and can pave way for the 4 C's of marketing

Four P's vs Four C's
Product=Customer Solution
Price=Customer Cost

Success will arrive at a company's doorstep when it uses the correct combination of the 4 C's and by developing products as per customer needs, provides economically viable options conveniently to it's customers through the appropriate means of communication.