Welcome to the Era of the Social Customer

21st Century Edition

The Social Customer

The Social Customer

The Social Customer

This is a SOCIAL transformation that impacts all institutions – business

among them – not exclusively

The Social Customer

Sea change in use of technology◦ Gen Y first generation to

spend more time on the ‘Net than watching TV 96% on social network Will outnumber baby

boomers by 2010

◦ Implications for marketing staggering 74% of all adults on the web

are engaged with a social network/community

The Social Customer

• The Social Customer – The Establishment◦ Social networks as active participants in effecting change

(blogosphere, podcasting)◦ Collaboration between company & customers to provide useful

value for each◦ Personal value chain subsumes enterprise value chain◦ The social customer is increasingly a mobile customer◦ Conversant with the tools – which are inexpensive

The Social Customer

Group Name Adult Pop. % Age Group

Elite Tech Users 31% 20s - early 40s

Middle-of-the-Road Tech Users 20% 30s – late 40s

Few Tech Assets 49% 50s – 60s+Source: A Typology of Information & Communication Technology Users – Pew Internet & American Life Project

The Social Customer

• Using Social Networks• Nielsen Online research “Global Faces on Networked

Places” (March 2009):• Fastest growing sector for Internet use is communities

and blog sites (5.4% in a year)• Member communities reach more Internet users

(66.8%) than email (65.1%)

The Social Customer

Edelman Trust Barometer◦ 2003 – “A Person Like Me” – 22%◦ 2004 – “A Person Like Me” – 51%◦ 2005 – “A Person Like Me” – 56%◦ 2009 – “A Person Like Me” – 58%◦ Most trusted source moved from non-connected

(to corporation) experts to “a person like me.”◦ Customers demand authenticity & transparency

now

The Social Customer

Traditional ads – trusted by 14% (Marketing to the Social Web, Larry Weber)

Peers – trusted by 90% (Nielsen Global Online Consumer Survey, 2009)

The Social Customer

Conversation is controlled by the customer◦ Review sites

Yelp◦ Social networks/communities

Service complaint oriented – Planetfeedback

Get Satisfaction LinkedIn Facebook pages

◦ Social Media Properties User generated content – video, audio,

blogs etc.◦ Blogs (200 million)

34% post brands & product opinions◦ Podcasts

Geek Brief TV

The Social Customer

Source: Brian Solis

The Social Customer

"Companies used to focus on making new, better, or cheaper products and services....Now the game is to create wonderful and emotional experiences for consumers around whatever is being sold. Its the experience that counts, not the product."

“People…want capabilities and options, not uniform products…business is there to provide the tools.”

“The Knowledge Economy is giving way to the Creative Economy...” (Knowledge has become a commodity so the solution is to) "focus on innovation and design as the new corporate core competencies."

BUSINESSWEEK, DECEMBER 19, 2005

The Social Customer

Social CRM Definition

"CRM is no longer just a model for managing customers but one of

customer engagement"

From CRM to Social CRM

The Social Customer

“Social CRM is a philosophy & a business strategy, supported by a technology platform, business rules, workflow, processes & social characteristics, designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted & transparent business environment. It’s the company’s response to the customer’s ownership of the conversation.”

Social CRM

The Social Customer

The New Business Model

• Concentrate on what your customers want, not on the dizzying array of places they converse. • Each customer wants a personalized experience…

• Understand their relationship with you exists because they appreciate the experience

• But how do you begin to “know” customers?◦ First, learn how they interact with you.◦ Ultimately, the tools for the customer to manage their

own experience are paramount Give them access to information that allows them to

make informed, empowering choices which thus, provide value

The New Business Model

◦ The users and producers become partners/collaborators Which means insight about your partner, rather than data on

your customer becomes the mindset.

◦ The business moves to be an aggregator of products, services, tools and experiences, rather than simply a producer of goods and services for sale

◦ The user is an advocate of the experience and, directly and by extension, the company

The New Business Model

New Business, Little Fella

Community retailing Multiple brands

◦ Established (Adidas, Vans)◦ Independent (The Kazbah)

Community of 800,000 Own clothing line (Sons of

Liberty

Helps indie designers sell their wares

Promotes and advertises to the community

Recruit to the community and recruit from the community

Street Teams1. Sign up, get unique

code2. Get friends to buy on

the site using unique code

3. Discounts plus points for Street Team member

4. Street team member can upload photos, videos, earn points (community themes)

5. Return is cash & free clothes

1% of their network = 15% of their revenue

Over 8000 advocates on street teams

Transformative Social CRM Models

New approaches to lead generation (non-traditional social sources) (community participation)

Better handling of opportunities (Employee engagement) (Oracle Social CRM, Lotus Connections)

Need for competitive differentiation of a new kind but through organizational knowledge & sales intelligence (InsideView)

Reputation, influence, persuasion◦ Based on customer insight

The New Sales Model

What do you do – Customer Service Models◦ Agent based call centers (Ayava, Genesys, Siebel, Amdocs)◦ Process based CRM (Sword-Ciboodle)◦ Community driven customer service (Helpstream, RightNow)◦ Customer experience focused call customer service (Kana)◦ Web self service (RightNow)

The New Customer Service Model

The New Marketing Model

Authenticity and trust is what matters – more than even the “consistency” of the

message

Because the model is built on trust, the reputation of the company, not the message, becomes the brand◦ That means, both the perception but also the actual

quantified assessment of the marketing practices as certified by third parties (TRUSTe, etc.)

◦ The practical side would be an authenticated or accredited message that is validated by the ISP or whoever is transmitting it.

Marketing becomes the center point for engagement of the customer ◦ Messages are not to be pushed at the customer about

products and services;◦ Marketing uses the media tools that are available to engage

the customer◦ But with authenticity (Walmart & Edelman screw-up)

The New Marketing Model

300 brands◦ 23 of those brands $1 billion and up (e.g. Charmin, Crest,

Folgers, Downy, Pringles, Tide) 2 billion consumers affected w/6 billion as goal 160 countries reached One of 30 companies on the Dow Jones Industrial

Average (DJIA)

Case Study: Proctor & Gamble

“We have to create a great experience every time you touch the brand, and the design is a really big part of creating the experience and the emotion. We try to make a customer’s experience better, but better in her terms.” – A.G. Lafley, CEO Proctor & Gamble

Case Study: Proctor & Gamble

“I think its value that rules the world. There’s an awful lot of evidence across an awful lot of categories that consumers will pay more for better design, better performance, better quality, better value and better experiences.” – A.G. Lafley, CEO, Proctor & Gamble

Focused around the co-creation of value and user communities◦ Sales/Marketing

Vocalpoint – 600,000 moms Tremor – 225,000 teens

◦ Research Innovation Network – 80,000 scientists Technology entrepreneur networks Benefits?

In 2001 – 20% of ideas, products, technologies external In 2004 – 35% of ideas, products, technologies external In 200X – 50% of ideas, products, technologies external

Virtual design, 3D simulation

Case Study: Proctor & Gamble

Perhaps the most innovative company in the U.S. when it comes to understanding of the benefits of customer ecosystem◦ They emphasize the “desired consumer experience” as their

primary design focus Taste, smell, feel of products – not just utility

◦ Connect & Develop program Moving technology and ideas between cross-functionally

Crest Whitestrips involved oral care unit (whitening teeth), corporate R & D (film technology), and fabric/home care (bleach experts)

Tie the effort to working with consumers too 50 technology entrepreneurs who scour for external

resources including customers◦ Use of ethnographers to try to understand the activities of

individuals in the context of social anthropology

Case Study: Proctor & Gamble

Contemporary Marketing◦ Secret Sparkle body spray products launched Feb. 2005

Not campaign focused Blog SparkleBodySpray.com launched May 2005

12,000 visitors per week 25 minutes per visitor per visit Four teenage authors under identities of Vanilla,

Tropical, Peach, Rose (4 body spray names) Music, fashion, sports, dating, parties Interactive activities e.g. building dream date (choice of

males) that you can send to a friend

Case Study: Proctor & Gamble

Case Study: Procter & Gamble

It went from this in 2005…. ….to this in 2007

Results? 0.8% of the $10.4 billion

antiperspirant/deodorant market by July 2005

Do the math - $83 million in five months

Case Study: Procter & Gamble

But They Didn’t Forget the New 12-13 Year Olds!

Case Study: Procter & Gamble

Say hi to BeingGirl.com

Getting Results: Creating Advocates

Advocacy

“Advocates are what you aim for optimally when you build your customer strategy. You settle for loyalty. Advocates are your partners, not just your clients. It works so much better that way.” -Paul Greenberg, CRM at the Speed of Light, 4th edition

Advocates are created through continuous:◦ Engagement (conversation)◦ Transparency (visibility)◦ Authenticity (honesty, straightforward behavior)

Advocacy

Approach to Advocacy - Strategy◦ Value Proposition

Creation of experiences and tools with products and services designed to appeal to a commonwealth of interest based on unique insights

◦ Customer Strategy Outreach to customers/potential advocates Property development for customers – communities, tools,

products, services available via company Godin: Date your customers

◦ Continuous Effort Ongoing feedback, outreach, data tracking, program

development Constant desire for customer insight – not just data collection

Advocacy

Net Promoter Score◦ F. Reichheld: “The one question that you need to ask your customer is

‘Would you recommend my company to someone you know?” Measured against the detractors to come up with

score. Has its own advocates and detractors

Referrals as metrics Word of Mouth most influential 42.6% (BigResearch

2006) David’s Bridal – 46% of all business WOM

◦ PwC “hearing the whispers” – social metrics

The Metrics of Advocacy

The Metrics of Advocacy

Measuring Social Customer ValueThe Social Customer

V. Kumar◦ Customer Lifetime Value

(CLV)◦ Customer Referral Value

(CRV)◦ Customer Brand Value

(CBV)

KLM Club China

Author: CRM at the Speed of Light (4th Edition, February 2009)President: The 56 Group, LLCManaging Partner/CCO: BPT Partners,EVP: National CRM Assn.Co-Chair: Rutgers CRM Research CenterNamed #1 CRM Influencer (Non Vendor) by InsideCRM 2007Named #1 CRM Blogger 2005, twice in 2007 by TechTarget and InsideCRM&InsideCRM 2008CRM Magazine 2008 Top InfluencerPGreenblog: http://the56group.typepad.comEmail: paul-greenberg3@comcast.netTwitter: http://www.twitter.com/pgreenbeFacebook: http://www.facebook.com/pgreenbeCell phone: 703-338-0232

THANK YOU