Community Service:Social Interactions and Service in the 21 Century

Prof. Barak Libai 1

Prof. Barak Libai

Arison School of Business, IDC, Israel

Institute of Service Excellence (ISES)

Singapore Management University

July 2014

A moment of history

In the 1990’s we learned about customer relationship management and customer centricity

And began to manage by individual customer value, looking at retention and satisfaction, and building loyalty programs

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We increasingly understand now that we need to manage “communities” of

connected customers, not only individuals

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Communities created by someone’s close social network

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Communities created by social media recommendation sites

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Communities that exist at large video and sharing sites

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Managing in a world of connected customers

Hard to predict Hard to control Non-linear

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The “future of service” is social

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We must talk the “social language” !

The “black box” of customer social interactions begins to open

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Data

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Duncan J. Watts, a Columbia University sociologist now on

leave and heading a research unit at Yahoo!, marvels at the

change. "When I started network research 12 years ago, we

had virtually no data," he says. Now he and his team can study

the network behavior of 295 million e-mailers and legions of the

200 million Facebook users. For social scientists, Watts says,

this flood of data could be as transformative as Galileo's

telescope was for the physical sciences: "It gives us a new

understanding of our world and ourselves ".

BusinessWeek May 09

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Tools

Associations

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Understanding community based customer relationships will be an essential part of service

management in the coming years

The “books” are still being written They demand understating of social interactions in general

They change with technology And the advice cannot typically be unequivocal

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Some things that we learned in recent years on social interaction, consumers

and profitability

Relevant to services, hospitality, and markets in general

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1 )Social effects from others have an essential effect on everything we do

Clearly on consumers decision making

Prof. Barak Libai 20Nielsen Global 2011

And stronger for services than for goods

Probably related to the risk and uncertainty associated with services

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2 )Social media increasingly becomes the place where customer service interactions happen

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Eileen Brown ZDNet 2014 Survey "Customer Engagement and Today’s Consumer"

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3 )Online review are of noticeable effect on customers

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Yet the answer of how they affect is still unclear, and possibly depends on the category

Prof. Barak Libai 25Blal and Struman 2014

The impact of Volume and Valance of online reviews on hotel RevPar

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4) Social media is the battleground of a new power struggle

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Customers enjoy to see the power goes back to them

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In this new environment individuals realize their disproportional power

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http://www.davecarrollmusic.com/

July 2014 www.hotelied.com

Some individuals are more powerful than others

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Forrester Research, Empowered

We may need to update customer relationship management systems

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Customer lifetime valueCustomer social value

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5 )Some optimism about negativity

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Most of the word of mouth, offline and online, is positive, not negative.

This is strongly consistent across studies, by academics and practitioners !!!

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Our job is to create positive word of mouth, more than to mitigate the

negative!

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6 (The “community” of social media can complement and replace existing business functions

From Groundswell

38CRM- Prof. Barak Libai

How things are different with social media

Now you can pursue this objective

You already have this business function

Ongoing monitoring of your customers’ conversations with each other, instead of occasional surveys and focus groups

Listening Research

Participating in and stimulating two-way conversations your customers have with each other, not just outbound communications to your customers

Talking Marketing

Making it possible for your enthusiastic customers to help sell each other

Energizing Sales

Enabling your customers to support each other

Supporting Support

Helping your customers work with each other to come up with ideas to improve your products and services

Embracing Development

The rules of “community service” are still being written

We should study them carefully !

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Thank you!!!

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