Category: Customer Relationships

The Upside of Killing off Marketing

Another day, another provocative title for a blog post that stirred the passions of marketers across the globe. The most recent button-pusher was Bill Lee, marketing consultant and author, who boldly declared in a Harvard Business Review blog post that “Marketing is Dead.” If you work in marketing, teach marketing, or otherwise have any connection to the profession, such a proclamation gets your attention. The title and accompanying article stimulated discussion ranging from Mr. Lee is correct to Mr. Lee is pathetic, and many opinions in between.

The heart of Mr. Lee’s position is that traditional marketing – advertising, public relations, branding, and corporate communications – is outdated in today’s social media environment. One-way communication has been overtaken by an emphasis on community building around a brand, its advocates, customers, and the general public. Groundswell from product users and fans has supplanted marketer-controlled messages as the driver of choice to build brand credibility.

Now back to the praise and bashing of Bill Lee – opinions about Mr. Lee’s position varied, but there is a benefit arising from his pronouncement that “marketing is dead,” even though I disagree with the statement taken literally. Marketers need the smelling salts of provocation that are delivered in a piece like the one written by Bill Lee. It is useful to be reminded that we operate in a very dynamic environment and that the role of traditional marketing certainly has changed. While advertising still plays a role in building a brand, it complements community-building efforts. The challenge for marketers is to find the balance in the respective roles played by traditional marketing and social media in nurturing customer relationships.

Marketing is far from dead, but it has undergone a radical makeover in recent years. Just as people experiment with different hairstyles, fashions, and hobbies to shape their identity, marketers must be open to redefining how brands and relationships are built. Social media is not a fad; specific platforms might come and go (e.g., MySpace) but user-driven communications are here to stay.

Plan for Failure

Murphy’s Law – you’ve heard of it, know it, and probably even lived it at one time or another. “If anything can go wrong, it will” is more than a lament; it is a call for managers to think about what can go wrong and how an organization will respond to adversity.

A reminder of the need to plan for a surprise visit by Murphy can be taken away from Southwest Airlines’ botched Facebook promotion last Friday. A 50% off fare sale intended to celebrate Southwest reaching 3,000,000 fans on Facebook blew up as a technology glitch caused some customers to be charged as many as 35 times for the same transaction. The company known by many as LUV was not feeling a lot of from irate customers.

What will be the response when Murphy sets up shop in your department or company? Most strategic planning focuses on how to achieve success – meet objectives, reach goals, and advance the business. Planning should include failure, too. The nature of the planning differs as it is not about how to achieve failure but rather how to mitigate it when it occurs. Examples of areas to address in failure planning include:

  1. Customer service response
  2. Public relations response
  3. Social media response
  4. Leadership response

It is impossible to plan specifically for failure as there are so many ways Murphy can invade your organization. But some essential considerations are:

  • How will a failure situation be handled – Within functional silos or by a cross-functional crisis management team?
  • Who are the key personnel that should be involved in resolving a failure situation?
  • What are acceptable benchmarks for delivering a response for each of the four areas (customer service, PR, social media, and leadership)?

Failure is inevitable, so is the need to plan for failure. How an organization responds when things go bad can either build trust with customers or destroy it. In Southwest’s case, it appears to be working diligently to refund all affected customers quickly. While relationships with some customers have likely been irreparably harmed, Southwest’s response will be a starting point for making amends with impacted customers.

Marketing Daily – “Southwest Facebook Promo Hits Turbulence”

Build Trust to Build a Following

I see many similarities in social media marketing of 2012 with Internet marketing circa 2000. At the heart of the similarities is a notion among many businesses that they need to have a presence because that is where their customers are. Another similarity I have observed is that many marketers do not have a clue what to do once they get there. “Let’s set up a Facebook page” may be a great idea, but why should anyone other than employees and relatives follow your business? To build a following, you must first build trust with people so that they believe your brand is worth following and justifies their implied endorsement.

A study conducted earlier this year by About.com found that consumers expect transparency from businesses on social media. People want access to user reviews and comments, including ones that do not reflect positively on the company or product. In terms of content, social media marketing should reduce emphasis on sales-oriented messaging. People are not interested in social networking sites becoming one more place where they are bombarded with “buy now” messages. “Like” trumps buy as the desired audience response.

Among findings in the About.com survey concerning liked content:

  • 33% said seeing a like or recommendation from a friend built their trust in a brand
  • 25% said the number of likes a piece of content received influenced brand trust

 Use social media content to build trust, and the sales will follow. The verbs of social media marketing are:

  • Listening
  • Sharing
  • Telling
  • Selling

Manage your social media sites as a place for customers and others to gather around your brand, not as an alternative to paid mass media for delivering sales messages. Do not ignore selling opportunities presented by social media, but those opportunities have to be earned by gaining the trust of your following.

eMarketer – “To Build Trust, Reviews are the Key”

Like Exceedingly, Love Strategically

Chalk up another new source for learning or reinforcing marketing lessons: HGTV. Yes, that HGTV, the cable TV network. On occasion, I will find myself watching HGTV shows with my wife. A recent chance encounter with an episode of Love It or List Itreinforced an important aspect about managing customer relationships. The format of the program is that a designer and realtor work with homeowners deciding whether to renovate a home or move to another. The end result is the homeowner will either love the renovation and stay or find a new home to be too irresistible and list their home for sale.
The homeowners featured in the episode I watched recently were weighing the stay or move dilemma, but both the designer and realtor knew they had their work cut out for them to please this couple. The tipoff? The home that the couple owned currently was chosen after looking at 255 houses. I don’t think I have been in 255 houses in my life, much less look at that many when deciding to buy one! After watching a few minutes of the program, it was understandable why they looked at so many houses – both the husband and wife had specific desires and demands for which there was no negotiation.
Yes, the program was for entertainment, but the behavior of the homeowners probably was not an act. They were hard to please, perhaps an extreme case of a difficult customer, but a drain on a business’s resources, nonetheless. One of the hardest lessons for me to learn in the earlier days of my professional career was that all customers are not equal. I wanted to like everyone, treating all customers the same. And, if there were customers that were not as profitable or took too much effort to serve, I was confident that I was the salesperson who could change the relationship and bring them along. Not all customers are equal, I came to understand. Some customers are more valuable and loyal; they deserve to be treated as a priority. Less valuable customers are not to be ignored, but they are serviced in a manner consistent with their value to the organization.
The take away from Love It or List It for marketers is to like exceedingly, love strategically. Having friends is great, and social media gives businesses a forum for making friends with customers and others regardless of their financial worth to the firm. But, realize that some customers are more important than others and should be treated accordingly. Tactics such as assigning dedicated customer service personnel, customized products, and rewards of merchandise or credit are examples of how valuable customers’ worth can be acknowledged. Determine which customers should receive the most love and show it to them. In other words, love strategically.

The Lost Art of Conversation

Some people say that customer service is not what it used to be. That point registered with me recently through an observation made by my 12-year-old son. We were shopping at a local department store, taking advantage of great deals on men’s clothing. As we checked out, the sales associate was very pleasant and talkative. She told us about other sale items and even about purse snatchings that had taken place at area stores.
We walked away and my son remarked “she sure was full of herself, wasn’t she!” When I asked what he meant, he said that she talked a lot. I paused momentarily and it hit me why he made that observation: That level of personal touch has become the exception rather than the rule in customer service. “That is how it is supposed to be” was my response. Traditionally, department stores have been known for delivering a personal touch. Sadly, that experience is delivered less frequently today. My professional career in marketing began in retail management for a department store. Our associates were required to write 10 thank-you notes to customers weekly. Timely approach of customers was expected. Sales associates were to be more than cashiers and serve as a resource to customers.
My son’s perceptions of what customer service is (and is not) have been shaped by mostly unremarkable interactions with service providers. Not necessarily bad service, but not the kind of experiences that you walk away from and go “wow – that was great.” A generation is being acclimated to “service” being driven by technologies such as self-checkout and online ordering. Measures of service quality are based more on the reliability of the technology than the personal attention given. 
It almost sounds funny to say that conversation can be a brand differentiator. But, my son’s take on what is extraordinary customer service suggests that a personal touch has the ability to stand out in an environment that is often more concerned with transaction efficiency. Embrace the art of conversation – show customers that you value their business and more importantly that you value them.

Who Are You Chasing?

I had the pleasure of attending the Nashville Business Journal Best in Business Awards luncheon yesterday. As a judge in two of five categories, it is rewarding to be in a room full of talented entrepreneurs and managers. In a video presentation featuring one of the winners, cj Advertising, I could not help but notice a sign taped to a wall in the agency’s office. It said “Chase your customers, not your competitors.” It resonated with me instantly. I cannot tell you any other image I saw in any video at that event yesterday, but I will be able to tell you about that sign years from now.

The statement is simple but powerful. If you chase your customers with a dogged focus on their needs and wants, competitors will be chasing you. Yet, we get bogged down analyzing what competition is doing and plans to do next. We worry that we might be undersold and pledge to match any competitor’s price. New products are introduced that mimic the best sellers of the competition. In other words, we spend too much time chasing competition.

Chase your customers, not your competitors is neither groundbreaking nor original. A quick search online found that others have written about the difference between the two. Doesn’t matter- it is a strong signal as to what a marketer’s priorities ought to be. Understand who you should be chasing, then align your priorities and activities in the pursuit of creating better customer experiences and healthier customer relationships.

Prediction as the Future of Customer Engagement

Engagement with customers is the Holy Grail pursued by marketers today. Awareness is not enough- quality interactions have gained favor over exposure and repetition as goals of marketing communications. Understanding this trend is easy; how to make customer engagement happen is much more elusive. How can people be persuaded to invest time and interest in your brand?

One solution to the engagement challenge is prediction. No, not marketers predicting buyer behavior using sophisticated modeling techniques. I mean consumers predicting future outcomes, doing it in the form of games. An example of the harnessing the power of prediction as an engagement tool can be found in a game being tested by The Tennessean, a Gannett newspaper. Nashville-based Consensus Point developed Football Futures, a stock market-style game in which players predict outcomes of future events and buy units (with points, not money) based on their level of confidence that the event will occur as predicted.

The goal of Football Futures is to amass points to maximize net worth with the potential to win prizes. Whether it is whether LSU or Alabama will win the BCS Championship Game, Norv Turner will be fired as head coach of the San Diego Chargers, or Tim Tebow will win more games as a starting QB than Cam Newton, Football Futures enables players to express their views and potentially parlay their opinions into prizes.

If there is one thing for which there is no shortage where sports are concerned, it is opinions about what should or will happen. Football Futures gives players an outlet to have a voice in the discussions that surround sporting events and stories. More importantly for The Tennessean, it draws people to its website and encourages them to spend time engaged with the site. The possibilities for using prediction-style games to engage consumers seem limitless. Politics, popular culture, and other sports are obvious prospects for themes for other games like Football Futures down the road.

Engagement does not occur because a marketer wishes it; people must be willing to commit to interaction. What better way to invite engagement than to ask the simple question “What do you think?” As we move toward the fresh start of a new year, it is a timely reminder that marketing relationships must be customer-centered. The voice of the customer must be heard, and it is up to marketers to provide platforms for making it possible.

The Question Netflix Got Wrong

An interesting email appeared in my inbox Monday morning. It was from Reed Hastings, founder and CEO of Netflix. The subject line, “An Explanation and Some Reflections” got my attention. Was he writing to say that Netflix made a mistake when it implemented separate pricing for its DVD by mail and online streaming services? When I read the first three words of his message I was convinced- “I messed up” suggested Hastings was about to tell us Netflix had a change of heart about its new pricing structure.

Not so fast- he goes on to say “I owe you an explanation.” Hastings proceeds to provide justification for the decision to change the pricing structure. On top of that, he broke the news of Netflix splitting into two businesses, Netflix for online streaming and Qwikster for DVD by mail. Hastings’ message was genuine and the tone was that of someone who realized he had erred in handling the implementation of Netflix’s new business model. But, in the end the message was more of an attempt to save face… and stem the tide of customer defections. Netflix has lost an estimated 1 million subscribers since the change. With more than 20 million customers remaining, we will not shed a tear for Netflix, but the extent of customer defections is significant.

The mistake that Netflix made was that it incorrectly answered a huge question: What would customers do? What would they do after learning that their associations with Netflix of “entertainment delivered as you want it” no longer applied? The changes benefited Netflix only, or at least that was the perception of many subscribers. And, when it comes to brands, perception is reality. I remind my students often that the true owners of a brand are its customers. While a business owns the physical and intellectual property of a brand, its meaning comes from the relationships people form with it. For many subscribers, their relationship with Netflix was shattered when their ability to get entertainment however they wished changed.

I do not fault Netflix for arriving at a decision that changes were needed in its business model to preserve the long-term profitability of the business. But, most everyone (including Netflix management) realizes they damaged brand relationships in the process. So, any change in strategy should be evaluated fully in terms of how customers will react to change? Human nature is to resist change. Marketers must be prepared for the resistance by being able to make a strong case for how change is good for the brand’s real owners.

Marketing Lessons from the Class of 2015

A major life event is taking place now and in the coming weeks for thousands of families across the country as the college Class of 2015 begins their freshmen year. College is more than higher education in an academic sense; it is a phase in one’s life when they are molded intellectually, emotionally, and socially. From a marketing standpoint it is important to understand the characteristics of this segment of the population. After all, they are future customers, employees, and leaders of business.

One firm that has made its work about gaining insight into Millennials is Mr Youth, a New York agency that describes what it does as “decoding the mystery of the new consumer.” Its recent report “5 Ways to Friend the Class of 2015” identifies influences on this group’s lives and how brands should approach marketing to them. They have seen the bad – terrorism has been a constant in their lives since 9/11 and saw (and in many cases felt) the economic meltdown of 2008 first-hand, and the good- tech toys like iPods and tools like Facebook that give unprecedented connectivity. This group is a paradox in that while many suggest that technology can contribute to laziness, they also believe that they can get ahead through hard work.

An important takeaway from the study is how the Class of 2015 differs from their 2010 counterparts. Instead of an interest on brands that convey status, this year’s freshman class is more concerned with brand authenticity and relevance. Brands whose values resonate with Millennials’ personal values are more important today. The challenge that marketers face is two-fold: 1) understanding where Millennials are in terms of their values and beliefs, and 2) connecting with them in a way that brand values can be communicated in a way that builds relationships. Social media is an enabler for reaching this audience, and Millennials expect to have access to your brand. But, the tone of conversation should have less to do with marketing products than it does acting like a trusted friend.

Good luck to the Class of 2015! I look forward to having some of you in my classes one day.

Leash and Muzzle: Social Media Program Tools?

One of the great characteristics of social media is that it gives a voice to brands. Interaction with customers and other people enables brands to shed their impersonal, aloof nature. Rather than talk at people using mass media channels, social media lets brands and people talk with each other. The unbridled communication exchanges bring transparency to business relationships. But, are there limits to how personal and frank brand representatives should be in social media?

This question has arisen again after a vice president with the New York Giants engaged in candid exchanges with fans upset with the team’s offseason personnel moves. Pat Hanlon did not pull punches in his replies to fans’ criticism of the Giants. Some of his tweets this week (@giantspathanlon) include:

“We don’t play on paper. You know what you can do w/ that paper?” His reply to a fan’s tweet: “on paper they ARE worse. no matter who signs your checks”

“This is great. We usually get to play two regular season games before people tell us we aren’t worth a shit.”

“Can you say we’re worse, knucklehead?” His reply to a fan’s tweet: ”can you say definitively the Giants are better than last year?”

Entertaining banter between Hanlon and Giants fans (and probably some Giants haters), but is this the best use of social media to engage people and build a brand? Can you imagine what would happen if this were the vice president of communications for Walmart getting into it with customers or special interest advocates criticizing the company? The executive would likely be reprimanded or even fired. No signs of either happening to Pat Hanlon.

Would it be better if Pat Hanlon bit his lip (or put his hands in his pockets) and refrain from responding to criticisms of his employer? Let the team’s performance on the field do the talking, with the ideal being Hanlon having the opportunity to gloat when the Giants have a great season. Social media provides a forum for listening to what people have to say about your brand- good, bad, and otherwise. But, listening can be difficult if social media is used as a platform for challenging people who are critical or oppose you.

When it comes to social media communication strategy, a figurative leash and muzzle can be valuable tools for resisting the urge to “discuss” issues in public. Listen and learn, but avoid the urge to lash out.