Tuesday, November 17, 2015
The New 4.7% Rule; How to Increase the Efficiency of Your Social Media Efforts
8:07 pm est
It’s hard to read marketing trades without coming across an article reminding us of the importance
of content marketing. The message generally seems to be that the more content you throw out to your
current customers, the more they will pass along positive comments and recommendations to their friends, relatives, neighbors,
co-workers and strangers.
On Second Thought,
That's a Bad Idea! We’ve tested the theory and found that yes, sending interesting content to your customers, can
produce a lift in word of mouth. But we have also observed as with any other marketing tactic, there are costs and resources
involved. Consequently we suggest that one shouldn’t reach out to all of one’s customers; many of
them will consider your “valuable content” to be spam or irrelevant to them. As a result, they won’t
open it. They’ll delete it. They’ll unsubscribe. And, most won’t pass along the content
or their thoughts about it, so it’s an ineffective effort. And with some customers your unsought content may even
provoke negative word of mouth and ultimately ‘tarnish’ your image.
But we have never been able to
objectively measure the impact.
Now we have some help. Thanks to an article from AdAge
(September 2, 2015) we are told of a study from EngageSciences reporting that virtually all the earned media
and conversions a typical brand acquires through social media efforts originate from just 4.7% of the brand’s customers.
That's Positive Impact on Just 1 in 20 Customers! So, to wage a successful
social media campaign, simply capturing names and email addresses is therefore far from adequate. Instead, one needs
a process to identify that small percentage of ‘active customers’ who will pass along positive comments and recommendations.
Once a brand has successfully ‘mined’ for these customers, a more ambitious ‘seeding’ can take place.
Because the numbers are much smaller, one can afford to do more with/for these customers. With their identities known
and their influence proven, you can amp up your investment in them. So, knowing your content will have some impact,
you can expend greater effort on its creation. Or, alternatively, how about providing them samples? Inviting them
to special events? Letting them be among the first to try new products, and even delivering them conversation catalysts
so prospective consumers will have opportunities to ask for their opinions and advice.
But How to Identify Your 4.7%
There might be other
approaches but our process for identifying your best potential everyday advocates has three components:
- Behavioral Commitment: Search for those of your customers who are behaviorally committed to your brand; those who
buy the largest quantities; buy most frequently; or who have been your customers for the longest time.
- Emotional-affiliation: Use survey techniques to find which of the behaviorally loyal current
customers are also emotionally attached to your brand.
- The Communicator Gene: Beyond the behavioral and emotional 'screens', use further survey techniques to identify which
of your customers are most comfortable engaging others in brand-conversations.
Monday, October 26, 2015
Should We Abandon "Push” Marketing Research and Adopt "Pull” Marketing Research?
3:51 pm edt
The terms “push” and “pull” have been referenced in marketing discussions and
textbooks for some time. Technically the terms mean:
Push marketing: traditional marketing practices
in which content is directed towards consumers generally through the mass media (advertising; direct mail; collateral materials;
are all examples).
Pull marketing: a relatively new perspective in which consumers self-select and seek
out information about a product or brand.
Influence of the Internet
Arguably, the internet probably was the greatest
impetus for the evolution towards pull marketing. But, we shouldn’t disregard the fact that the typical consumer
has become far more sophisticated than his or her counterpart of 25 years ago. While the internet is a great facilitator,
consumers might have been ready to ‘take over’ the flow of information even without it. Accepting this radical
redirection, a recent article in the GreenBook Marketing Research Newsletter proposes that marketing researchers “understand
the paradigm shift in consumer behavior that continues to rapidly proliferate: people are increasingly ignoring push
marketing, and embracing inbound, or pull marketing.”
The inference? Adopt “pull
Hold On! Are
We Trying to Monitor Opinion or Please Respondents?
this conclusion unnerving. It suggest a lack of understanding the importance of random sampling; randomness being the
key to interpreting a survey’s results as representing any population. Instead, it seems pragmatically driven
to accept whatever form of information collection is easiest and will be most embraced by respondents. It can’t
be denied that:
Yes, this is the reality. But recognizing the practices exist shouldn't
compel us to modify our research methods. The acceptance of such practices shouldn't be extended to an endorsement of
Theory-based marketing researchers have striven to come to peace with this evolution
of practice. However, there is no real accommodation in scientific sampling theory to allow potential participants in
a survey to ‘self-select’ themselves. Doing so transforms a true scientific survey into a mere ‘straw
poll’ among a group who can’t be ascertained to be representative of any body of customers except themselves.
Some Constructive Suggestions to Cope with the Evolving Customer
An alternative strategy to cope with today’s far lower
cooperation rates with true marketing surveys is to substantially change our survey practices, by:
Shortening our information objectives
to two or three major learnings, thereby keeping surveys down to 3-5 minutes in length;
Impressing consumers with the responsiveness the research community gives survey results, thereby
encouraging future participation;
Creating survey questions that
are coherent, easily understood, and easily answered.
carefully before asking a question; is it truely critical (or just a 'nice to know' issue). Need we bother
respondents to answer or is the information available through observational sources?
Rewarding survey participants with something of value – not necessarily a monetary gift, but something
that will be appreciated. An inexpensive - though often overlooked - way to reward participants (in certain
types of studies) is to offer them a copy of the findings ('sanitized', of course).
Tuesday, October 13, 2015
Mistaken Assumptions About Net Promoter Scores
5:51 pm edt
How did the C-Suite
in your organization react to your latest NPS scores? Executives new to the process might react with disappointment
or uncertainty. After the formula for the NPS score is explained, reactions may soften but yet unrealistically high
goals may still be set for the future. "Let’s shoot for 75 someone might proclaim!" (Most of us
recognize that scores at that level are few and far between; reached only by standout organizations like the USAAs of the
Now suppose your NPS score is a 45 - and that’s a truly outstanding score for your category.
How would your senior executives interpret that? If they understand the NPS calculation (“Promoters” [those
customers awarding a 9 and 10] minus “Detractors” [those customers awarding only a 6 through a 0]) they might
quickly draw a mental picture of 45% of your current customers rushing out to enthusiastically recommend your brand to friends
and colleagues and to generate all sorts of positive word of mouth for your brand.
Unfortunately That's Probably Not a Very Realistic Assumption
For several reasons even the best
of brands doesn’t have 20%, 40% or certainly not 60% of its customers recommending the brand to friends and colleagues.
- Customers are actually answering a different question - Now that the NPS question has
become so familiar to most consumers, they interpret the “recommend” question as just a different way of
asking “how satisfied are you”? Or they subconsciously add the condition, “if you were asked
would you recommend the brand”? to the question.
- Only a minority of consumers generate all the recommendations and word of mouth -
Per the study from EngageSciences that we reported in our September 16 issue, virtually
all the earned media and conversions a typical brand obtains through all of its social media efforts originates
from just 4.7% of the brand’s customers. (That doesn't include activity in the private social media,
but it's still an incredibly small proportion.)
- Lack of brand knowledge - Most consumers just don’t know enough about a given brand or
don’t consider themselves equipped enough about a given category to actually make recommendations.
- Protecting the value of their
word - In reality the idea of making a recommendation to close friends and colleagues
can be inhibiting for many consumers unless they are absolutely sure a better option does not exist.
Then, What Does that NPS Score Really Mean?
To provide senior management with an objective and accurate understanding of what your NPS score means
you really need to be able to answer the following questions:
- What are your “Promoters” (those who scored your brand a 9 or 10 on
the likelihood to recommend question) actually writing and saying to their friends, relatives, neighbors, co-workers,
and even strangers? How are they describing their experience with your brand?
- How frequently are they “promoting” your brand? To how many people? Through
what medium? And are they waiting to be asked or are they volunteering their opinions?
- What are your “Detractors” (those who scored your brand a 0 - 6 on the likelihood to recommend
question) actually writing and saying to their friends, relatives, neighbors, co-workers, and even strangers?
How are they describing their experience with your brand?
- How frequently
are they talking to others about your brand? To how many people? Through which medium(s)? And are they
waiting to be asked or are they volunteering their opinions?
- What are
the positive themes that are common among both groups that should be leveraged in future sales and marketing, and
what are the negatives that must be overcome?
- How really different are the 'stories'
the two groups are telling about your brand? Does your brand possess a 'universal story'?
With answers to these questions, NPS scores can be used more effectively to: set priorities, drive future brand strategy,
and promote to greater success for your brand. Our Buzz Barometer™ service provides answers to
these questions and more.
Wednesday, September 30, 2015
The Five Most Powerful, Yet Least-Frequently Heard Words in CRM
4:09 pm edt
You don't have to look
far to find a story, a You Tube video or a Facebook post about how a company or organization failed to satisfy a customer.
Stories of dissatisfaction are just all too prevalent. When things go wrong, it’s appropriate for customers to
complain and today’s ‘enlightened’ management seems goaled to respond. But far less visible are stories
of satisfaction. Not because they occur less frequently. No doubt, most service encounters and customer interactions
end up with satisfactory if not delighted outcomes. But, when satisfaction is delivered, there’s less motivation
to act on it. Appropriately, customers shouldn’t feel the need to compliment a business for simply doing ‘the
right thing’. But sometimes, when a customer is unexpectedly delighted they are motivated to comment on their
delight. But this action, this comment imposes a whole new challenge to the business.
We write our
fair share of letters of complaint; but we also try to send letters of compliment in situations of extraordinary outcomes.
Our complaints are almost always acknowledged. But our compliments? Funny thing, they’re almost never
responded to! So ask yourself, have you ever told a customer these five powerful words, “Thank you
for your compliment”?
It's Not 'Rocket Science'!
Acknowledging compliments should be one of the most obvious practices a business can undertake. And
yet, few businesses do so. Why? Well, first off, a compliment bears no troubling threat (“I’ll tell
100 people”, etc.). Second of all, no one is in charge of compliments! Larger, forward thinking organizations
with Chief Customer Officers should probably institute “compliment departments”, but currently we know of none.
So why our concern? It’s all about building relationships with customers, and these days nobody
doesn’t want a relationship with their customers. So, put yourself in the role of an enthusiastic customer.
He or she takes the time to reach out to a company or brand to exclaim their extreme satisfaction. And then, what happens?
Nothing! And lo and behold the bond with this customers has been weakened - if not destroyed!
An Example: We're Acknowledged
We were reminded of this issue because a month
or so ago we wrote a note of compliment on a restaurant’s database counter card. We noted that our server was
extremely attentive, very knowledgeable and a real ‘host’ for the restaurant. About a week ago (a bit late,
but still exemplary) we received an email from the manager of the restaurant, thanking us for our compliment. Bingo!
The result? We felt: listened to, appreciated, and acknowledged. In short, we felt closer to this business; our
relationship was strengthened - we'll definitely return.
Ever since our first book, Aftermarketing, published in 1992, we’ve
recommended the following course of action for responding to compliments:
- Respond as quickly as possible and use a medium of communication with a priority
equal to or higher than that by which you received the compliment. (Don’t respond by USPS letter to
a compliment received by email.)
- Restate the exact
been given. This helps reinforce, in the customer’s mind, the praise offered you. If possible,
back up your restatement with some additional facts or evidence. This information will provide the customer
with 'content' to share with others.
- If you’re involved in a telephone
call or on-screen chat, try to elicit the compliment from the customer again (further reinforcing the compliment).
- Thank the customer for their business. (If you have affinity merchandise, send something along
to further bond with the customer. A paperweight or other item can serve as a ‘conversation starter’
allowing the customer easier entry to telling others about their delight with your company/brand.)
- Encourage advocacy. If you have a user community or other channels for ‘privileged information’ about your
company or brand offer the customer participation. If not include some "insider news" about your
company or brand - it'll give your customer something to mention to others (in the name of your brand).
Customers with compliments are everyday advocates asking to be reinforced in their
zeal and commitment towards your brand. Don’t let yourself down by failing to ‘close the loop’ with
Formulate your 'compliment handling process' today.
Tuesday, September 22, 2015
The Role of Customer Satisfaction in 'Won and Done' Categories
8:31 pm edt
is an expensive proposition. But marketers readily invest in attracting them because they know that over a customer's
extended lifetime they generate profits as a result of: 1) their stream of repurchases; and 2) the upsells they engage
in (purchases of related products and line-extensions). Both actions are dependent on their satisfaction with the original
product. These actions are the most generally acknowledged rationale for satisfying current customers. Unfortunately, only
secondarily are current customers’ recommendations, referrals, and positive word of mouth offered as an additional justification
for insuring their satisfaction. And, maybe that's a result of disparate purchase frequencies among product categories.
The Role for Satisfaction without Immediate Repurchase
In the world of fast moving consumer
goods and services (from soft drinks, to auto insurance, to running shoes) the repurchase/upsell model is commanding and the
need to satisfy customers is obvious. But what about categories of less frequent repurchase and non-existent cross-selling?
How is customer satisfaction to be promoted in categories in which the re-purchase cycle is extremely lengthy or when the
need to re-purchase doesn’t normally recur at all? For example, how many times will one buy a house, need a new
baby stroller, purchase a refrigerator, or get braces for one's kids? For that matter, the typical American car is now
being replaced only every 7+ years, and the interval between return trips to Disney World has extended as well. In these categories
there simply is no ongoing stream of purchases; no opportunity for upsells nor cross-sells to be impacted by customer satisfaction.
Yet marketers competing in these categories often nevertheless crusade for satisfied customers. What do they know or what
have they assumed?
Consider the 'Won and
in such won and done businesses resign themselves to the situation and accept it as just the reality
of their category. They make today’s sale, find gratification in their satisfied customers and move on to find their
next new customers. In their preoccupation with winning more new customers, they may do little to maintain active relationships
with their ‘past’ (done) customers. Furthermore, they may dismiss the potential of word of mouth, mistakenly
considering it an "unmanageable force". Faced with such impotency, they simply ‘hope for the best’.
We’re strong believers in word of mouth, as you no doubt know. And, interestingly, it’s these won and
done categories that make the best argument for harnessing the power of word of mouth.
You see, the only way
to directly benefit from satisfaction in a won and done category is to motivate satisfied customers to acknowledge to others
the good product, superb service and/or excellent care they’ve received!
Word of mouth gets that job
done. But it requires direction and management. That’s where approaches like our Identifying & Arming Advocates
comes in. You need to identify those customers most likely to communicate about a company (or its products) and then
provides them content, opportunity, and motivation to