don peppers death by tweet

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@DonPeppers

#SMiCS2011


Big data: 1 billion+ Google searches every day


Big Data: Amount of information doubles every two years. By 2015 it will be doubling every 72 hours


By 2015, game credits will make Facebook the


Generation Y already considers

email old-fashioned


In the U.S., 1 out of every 8 couples getting married

met each other online


AccelerateNatural Dietary Supplement

ENERGY BOOST

Impact Guaranteed

Technological progress is accelerating

No, it is not your imagination


driving faster and faster economic growth


growth started, at about 0.75% p.a.

By 1900, the rate of growth had climbed to 1.5% p.a.

By 1960, growth had increased again, to about 2.3% p.a.

For 100,000 years, the average human being lived on the equivalent of $400 to $600 p.a.

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Organizations compete to survive in

Over time, as in life, business models evolve into more complex

Business innovation takes an evolutionary path

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comes to those who

Apple Macintosh succeeded

But remember the Lisa?

iPhone is a big success

But an earlier phone failed

iPod succeeded magnificently

But who remembers Newton?

Like evolution, innovation proceeds by trial and


...so progress is collectively predictable but locally random

Strategy. Execution. Results.


Product CentricityMarket share

Customer Needs

Satisfied

Customers Reached

Share of customer

Cus

tom

er C

entri

city

Technology now gives business a new dimension for competition

Creating the most possible value from each customer

Creating the most possible value from each product




Customer Needs

Satisfied

Customers Reached

Share of customer

Cus

tom

er C

entri

city

CRM: Treating different customers differently

Technology now gives business a new dimension for competition


Customers remember you, whether you remember them or not

How you treat products today will have no effect on their price tomorrow

But how you treat customers today has everything to do with their value tomorrow



What does a relationship involve?Interaction occurs, both ways between two parties

Relationships are iterative by natureA context develops over time

Every relationship is different

Successful relationships generate trust


Customer ExperienceCustomer Insight

unique addressable individuals

behavior and needs

-efficiently and

effectively behavior, offerings, or communications

Identify Differentiate Interact Customize

Managing customer relationships



Two requirements for earning a

Good intentions

Competence



Good intentions require you to

would want to be treated if you

best indicator -

Firms that score considered the most for future

COPYRIGHT © 2011 ALL RIGHTS PROTECTED AND RESERVED.


Incompetence also destroys trust

Making the customer tell you personal details over and over

Customer calls the IVR, punches in his account number,

Giving customer reps no authority

Treating all customers the same


Gen

erat

ion

Gap

?96% of Gen Y consumers

belong to a social network

Average time spent per day: >1 hour


Or t

echn

olog

y ga

p?increases 1000 X every decade

will exchange 1000 X as much information with each other


William Gibson



Trust gains importance as interactions increase in speed and volume

1. Interaction generates transparency

3. Proliferation of messages leads everyone to screen information for its trustworthiness

2. Trust makes interactions more efficient



Extreme Trust

Proactive trustworthiness

TrustabilityA new, more demanding set of expectations:

Our standards for what constitutes trustworthy behavior are going up



Trustworthiness

Trustability compared to



TrustabilityMany previously acceptable marketing

x Profiting from customer errorx Benefiting from asymmetric information x Failing to notifyx All




Customer Needs

Satisfied

Customers Reached

Product centric business models are often inherently untrustable!



Linda Kaplan Thaler, CEO, Kaplan Thaler Group

Screw up today, and the

un-Google



Grant Robertson, blog post, May 1, 2007

Screw up today, and the



Box office receipts down 40% the day after release!



83% of consumers trust the recommendations of their friends

>50% trust online recommendations from complete strangers

Just 14% of consumers trust advertising

Welcome to The Age of Transparency



Radical idea: Everyone here should allow customers to review products and services

The technology is inevitable

Do you allow reviews on your site?



Sockpuppets beware!

Social media: Everyone

Internet chat: No one knows



Actual note, handed to a Qantas flight

attendant



Cnotxet alolws evreynoe to raed lgnehtystrigns of scarmlbed wrods prefcelty wlel

with others, giving strength to relationships

Human beings are creatures of context



You tailor your product, service, or elements associated with it

38

Customer tells you what he wants, or how he wants it

Save metime

The more effort the customer invests, the greatertheir stake in making the relationship work.

Now the customer finds it more convenient to remain loyal, rather than re-teach a competitor


Some of the guests initiate most discussion

Still others just listen

Social media is like a cocktail party

-9-

90%

9%

1%

still enjoy the party!



Social networks evolve, by

Preferential attachment can create a



Cascading is Unpredictable




Netscape had a million collaborating

members

postings were done by a single user




Netscape had a million collaborating

members

postings were done by a single user

900,000 registered users on Digg, but

one third of all home-page

postings come from just 30 users




900,000 registered users on Digg, but

one third of all home-page

postings come from just 30 users most

widely read user, Adam Fuhrer, had

millions of page views, including MS

Vista reviews




most widely read user,

Adam Fuhrer, had millions of page

views, including MS Vista reviews

Adam Fuhrer was

12 years old!




Adam Fuhrer is 12 years old!



Path dependent local randomness

NETWORKS

Collectively predictable emergent behavior


Just 15% of viral initiatives show positive results!

Therefore: Word of mouth is also inherently unpredictable


So be careful with

Despite its customer-friendly architecture, the press portrayed Speak Easy as sneaky and manipulative


Control is Not an Option

2010: Greenpeace campaigns on


They tried to get You Tube to take the video down because of trademark violations

They deleted critical comments on their Facebook fan page

They corrected the spelling errors in their

Control is Not an Option


Network analysis: To identify and quantify the influencers and the influenced

Sentiment analysis: To understand conversations, attitudes and dominant opinions in social media

Tools for making sense of social network communications

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DoubleClickidentified network influencers

1,000 influencers with certain traits

Quantitative survey of 6,000

Web users

Use the Web more than twice as much

Pay more attention to online ads, and want more relevance

But also more likely to clear their cookies regularly, as well as fast forwarding through video commercials

54COPYRIGHT © 2011. ALL RIGHTS PROTECTED AND RESERVED. 54

Build and maintain a

reputation for trustability

The only way to succeed in a

networked world

influencers and connectors are curious and inquisitive people.

Within Social N

etworks


Sentiment analysis: Making sense of written and spoken language

Analyzing attitudinal information requires

versus


Gross National Happiness Index

Heath Ledger diesMichael Jackson dies

57COPYRIGHT © 2011. ALL RIGHTS PROTECTED AND RESERVED.

Why the sudden surge of negative blog sentiment after rain-delayed game?

Stadium officials mistakenly told hundreds of fans the game had been canceled

But StubHub denied requests for refunds, because the game had actually been played

Sentiment analysis tool spotted trouble brewing online. Soon the company offered discounts and credits to affected fans


How to choose new products

Large consumer products company monitors product reviews, social media, and other unstructured data

Information is clustered to facilitate identification of problems, needs and new product opportunities

Consumer sentiment drives product development as well as providing real-time feedback on new products


Different social networks or search terms can generate highly different outcomes

will affect the feedback you detect

Tweeps are from Mars

And the commercial domain is different from the social domain

Fans are from Venus


2006: Introduced News Feed

2007: Launched Beacon shopping updates

Learning their lessons the hard way


Recruit high-influence customers to help design the Speak Easy program

But did Staples enjoy enough trustability?

What should Staples have done differently?

What could they have learned from


Office supply management guidance and tips

Incentivized customer reviews of competitive products in all categories

Discussion groups for small businesses, large enterprise office managers, government, non-profits

Office supply inventory management tools and other applications designed to reduce costs

Building trustability in advance


Was there a better policy for Nestle?

What would USAA or Amazon have done?

What Nestle could have done:1. Temporary moratorium on palm oil2. Reach out to the most involved customers 3. Solicit opinions and viewpoints, publicize

But again: Did Nestle have enough trustability?


Calorie and diet guidelines, objectively comparing Nestle products with other brands as well

Recipes, cooking guides, how-to pages, with customer contributions incentivized

Chocolate stories and videos, with contests for most creative or entertaining

Social responsibility discussion groups, emphasizing environmental issues in advance

Building trustability in advance


Recognize the inherent unpredictability of social networks and cascades of opinion

Avoid the impulse to try to control social media

Forgive mistakes and ask forgiveness

Avoiding death by tweet

WARNING:Build your TRUSTABILITY in advance!

66

Trustability works both ways

First Persian Gulf War (1991)

USAA sent unsolicited refunds for time spent abroad by members

2500+ members mailed their

refunds back!


Integrity is not elastic

If your company is designed for trustability with customers, then

Trustability is more likely to characterize other relationships as well

Workers trusting each other

Vendors, stakeholders, investors


profitable company,

It will make you a better company

Trustability


Peppers & Rogers Group

Management consultants in customer strategy issues

Magazines, newsletters,research white papers

Offices and clients around the world

@DonPeppers

[email protected]