Recently I’ve been reading various articles on brand building strategies and it has been a good review of the basic principals of marketing. The usual discussions are typically about the importance of planning the best marketing strategy.
One of the hottest topics on the internet today is SMM (Social Media Marketing). Questions are being raised about the role of social media on the infamous 4P’s of marketing. I think we still have to address Product, Price, Place & Promotion; however, there’s a new sheriff in town and Reputation is his middle name. Consumers have participated in surveys for decades, but social media is now defining many product’s brand image.
Many companies are looking for ways to harness the power of social media in hopes of building a positive image for their products. It seems that lack of strategy has been a hindrance for most. We all know that customer reviews and feedback to our company’s website is a good source for ideas to improve our products. It’s no surprise successful companies like Pure Digital and Bose use them to monitor and measure their products’ reputation and improve processes based on these findings.
The majority of today’s major companies are now focusing on the importance of social media marketing trends. It seems that many product manufacturers are also experimenting with ways to exploit it for their own benefit. Are any of them finding ways to measure social media’s strategic impact on brand value? I actually wonder if any of them really understand what to do with any of it.
Does collecting bits of data from what all is being “said” without a plan to convert them into action make it worth the effort? The use of a well developed process to consistently measure your product’s reputation across the consumer market may perhaps prove to be invaluable.
Taking on the challenge with great success, we use raw data from customer reviews and feedback on various social mediums to measure the gap between customer expectations and their actual experiences with specific products. Reflecting on functionality, reliability and product support, these metrics provide crucial information that could allow you to increase profitability as well as develop lucrative niche markets.
Successful marketing involves everything that leads to increased sales. Realizing that social media is defining the reputation (i.e brand/product perception by it’s customer) for nearly every product on today’s market, you should definitely take advantage of this innovative marketing tool.
Product information, broadcasted via different methods and encountered by different means, is processed by potential buyers and creates certain expectations in our minds.
Functionality:
There are multiple “channels” by which an interest in buying a product creeps into our mind, but it is often a desire to experience functions and features of this product, and a promise of making our lives better, that makes us consider to part with our money. Hence if our expectations are not met by actual product experience, we often feel cheated and express dissatisfaction with the product. Sometimes it’s caused by actual and intentional misrepresentation of a product’s functionality, but more often it is misinterpretation of marketing messages associated with the product by a Customer.
Reliability:
No person decides to purchase a product expecting it to be “dead on arrival”, but it happens more often than you think. There is no way to know what is the expectation of every Customer for longevity of a product, but I can bet that at a minimum it is at least 1 day longer that the length of the product’s warranty. However, longevity is only one parameter of the Customer Reliability expectation. The other one is availability of the product for use or experience. Consider an example where a product breaks (i.e. is not available for use) during its reasonable life expectancy, and the Customer has to send it in for replacement or repair. Even more troubling are the instances when the loss of use is accompanied by associated damages or losses of perishable products, data, reputation or business opportunities, etc.
I consider Reliability reputation the single most important factor in my personal purchasing decisions as a failure to consider it very carefully can result in the most damage and unhappiness.
Support:
While there are ambiguities of Customer misinterpretations of Functionality messages, and a factor of Customer inexperience that may lead to negative Reliability experiences, there is no excuse for creating negative Support experiences. A Customer, rightfully, expects delivery at the stated time, respect for promised exchange and refund policies, and most importantly knowledgeable help from people who are genuinely interested in helping out. Unfortunately many companies treat Customer Support as the cost factor to be reduced, instead of an opportunity to learn and correct potential shortcomings in the product’s design and its messaging. This unwise strategy leads to commoditization of their markets, destruction of their brand value and profit margins as the Customer starts to look at their products as “disposable”.
Reputation is one of the most valuable assets of any company – It takes significant time and effort to build a good reputation. Great company reputation provides an opportunity for higher profit margins, as trust in your product improves, and allows less discounting and advertising expense compared to less reputable competition.
Higher sales becomes a result of Confidence in your product’s quality, reliability and support – as opposed to its price.
The only way to build Reputation is to provide your Customers with Experiences that consistently exceed their Expectations.
I’d love to get my hands on data for comparative analysis of the resources required to design remarkable products vs marketing ordinary ones.
Robert Stephens, the founder of Geek Squad that was acquired by Best Buy, reportedly said that “Advertising is the tax you pay for being unremarkable.” Given the choice, I would always select voluntary taxation such as consumption/sales taxes and/or lottery instead of mandatory, regressive income taxes, however, the governments have the luxury to extract both and don’t give us much room for choice. The reasons companies elect to pay an “advertising tax”, that often reaches 30% of retail price, is because we, the Customers, pay it.
I do realize that advertising is only a part of the marketing budget, and wonder what role the rest of the marketing organization play in maintaining competition based on the price per feature strategy. How much do marketers know what their Customers think about the product they purchased? Have they realized the value they were expecting? If not, what is the best way to close this gap?
Based on 64,601 Customer Reviews published before January 26, 2010
When you exceed Customer expectations, just unobtrusively help them to share their experience as much as possible. At this point all they really need is a really tall soapbox.
I took almost a month to recover from my CES2010 and now I can attempt to write something more or less cohesive. The experience was absolutely overwhelming. Bright images on gigantic screens and loud sounds continuously blasting away are to be expected at Consumer Electronics trade show, but my mind could not function very well in these conditions. I have not visited such large, noisy and heavily attended events for a few years and the assault on my senses was very difficult to bear, but I managed.
We are a new associate member of the Consumer Electronics Association and this was my very first visit to this event. CEA offers a terrific Mentoring program to its members and I came to Las Vegas to take advantage of it. It is amazing how much one can learn from truly knowledgeable and generous people even during a short personal meeting. I am very grateful to Bill Matthies of Coyote Insight for sharing his deep knowledge and understanding of the marketplace. I started this company with an idea of converting virgin data into actionable information, and we have almost succeeded – Bill made me realize that the link between our metrics and an action is very obvious to nobody but me, and advised to share that link with others using “stories” and “pictures” like this:
Robert Heiblim of BlueSalve and my CEA Mentor, helped me understand the inter-workings of the CE community better and to meet people in CE product marketing to learn more about how they go about conducting their business. I only wish I could get more of Robert’s guidance and advice.
Consider the actions a marketing product manager can take based on the data that their product ABC has a low satisfaction score. I can’t think of any other action than to learn more, i.e. to discover more data. Presumably information is created when our marketing product manager (or product marketing manager) compares ABC’s product satisfaction score with the one of a competing product, hence comparison of two points produce information, i.e. higher value.
Correlating the information produced by tracking these two data points over time with sales numbers can create knowledge – “product with an inferior reputation tends to undersell its competition by X%, when sold at competitive (i.e. similar) price”. Now, this is an actionable piece of knowledge as our MP/PM manager can attempt to discount the ABC product to stimulate sales or attempt to improve the customer’s opinion about it.
Can you suggest any scenarios where aggregated customer feedback about reliability of a product XYZ can lead to/suggest an action that protects and/or improves its profit margin? Your help will be deeply appreciated.
This time I played out a different scenario. It is quite common that customers of the products with high reputation for reliability, do not have much to say about support. It is understandable as they have no reason to experience Support Organizations. So I applied an unusual combination of filters to expose very popular and reliable products with negative customer experiences of Support.
This report helps to focus and to research root causes of problem by quickly exposing negative sentiment reviews about support.
I have used the following filters:
Product Reviews>50
CSI>1
PFS>1
PRS>1
PSS>1
This world has led to a new breed of consumers. They expect customization (make it mine), communities (let me be a part of it), multiple channels (let me call, click or visit), competitive value (give me more for my money) and choice (give me search and decision tools).
In this post I would like to focus on the combination of the first (customization) and the last (choice) and call it “personalization” for the purpose of this discussion.
As a consumer selecting a product to purchase, I rely on marketing collateral to form my expectations, and on the comments of my peers who already experienced the products I consider to buy. Any decision is made with a relative shortage of information required to make this decision. An unavoidable ambiguity of available information from marketing collateral and product scores from online retailers or advertisers, does not help the consumer to reduce uncertainty of their decision easily. I want to know how likely this product will satisfy me, because while I know that other customers, who described their experiences are my peers, their product scores do not help me to understand whether we share and value the same aspects of a product experience. The only way to figure that out is to read carefully the descriptions of their experience. That takes a lot of time and effort.
The higher number of customer reviews and more detailed their description of a product experience (more data), the more useful and accurate are the results of personalized information to support the purchasing decision.
The key element for me, as a consumer, is the reliability issues of the Garmin product when it is compared to very similar Magellan GPS. These reliability reputation issues are not “visible” looking at traditional 4.5 stars customers gave to Garmin. However for me reliability of GPS device represent the highest differentiator, and allows me to “personalize” my choice.
A very similar problem facing marketeers who want to understand specific, personal characteristics that affect the reputation of their products and brands, and how they influence their competitive position in their market segments. Their problem is multiplied by a number of products, brands and competitors they have to follow and lack of consistent methodology to produce effective output. The technologies are complex to implement and costs are staggering.
Through its maturation as a discipline over the past half century, marketing has emerged as a rigorous field. Tools such as conjoint analysis, economic and econometric modeling, behavioral economics, data mining, and techniques derived from mathematical psychology have raised the level of rigor and strengthened the insights that marketing can contribute to the enterprise. But many of the most rigorous tools were developed years ago. Today’s challenge is how to move from using old tools that are focused on solving problems of the past to developing new and rigorous tools that are relevant to the challenges of today and the future.
I would like to pose that “personalization” is the new “segmentation”, and certain aspects of personal Customer Experience provide a lot more guidance for marketers than demographics, ethnicity, etc. because they are much closer correlate to how your customers use and experience your products in their circumstances.
Marketing is divided between behavioral and quantitative approaches to marketing questions. Increasingly, the recruitment of faculty and doctoral students, and the design of workshops, are focused separately on behavioral and quantitative approaches. Ideally, the
two sides should come together. Markets can be seen through either a behavioral or quantitative lens, but as with binocular vision, we gain more depth when we look through both.
The positive effects of Word of Mouth references in customer acquisition (btw I hate that term) are very well documented. Often I see the term “peer to peer” marketing being used in the same context interchangeably, however not being a marketing professional I am not sure if there is a difference or if they are really synonymous. Wikipedia defines WoM Marketing as
Word-of-mouth marketing, which encompasses a variety of subcategories, including buzz, blog, viral, grassroots, cause influencers and social media marketing, as well as ambassador programs, work with consumer-generated media and more, can be highly valued by product marketers. Because of the personal nature of the communications between individuals, it is believed that product information communicated in this way has an added layer of credibility. Research points to individuals being more inclined to believe WOMM than more formal forms of promotion methods; the receiver of word-of-mouth referrals tends to believe that the communicator is speaking honestly and is unlikely to have an ulterior motive (i.e. they are not receiving an incentive for their referrals).[2]
Customer Reviews, describing personal experiences, opinions and recommendations of individual customers, are one of the best examples of WOMM. Amazon pioneered the approach and now there are many retailers like NewEgg, Best Buy and others, with technologies from BazaarVoice and PowerReviews that collect, manage and publish Customer Reviews. I have both contributed and used them as guidance for my purchases for many years, and even though I understand that the reviews sometimes tell more about the reviewer than the product reviewed, I still find them the best tool for reduction of purchasing decision uncertainty. I know some tech pros and gadget mavens, who’s advice is sought and respected by many, to use customer reviews as an important part of their product evaluation process.
Consumers have no squabbles over paying for independent advice and recommendation, often called unbiased which is incorrect as such a thing does not exist IMHO. The Consumer Report was a very successful example and provided great service to generations of shoppers who subscribed to their magazine and its online version, however their model has difficulties to cover an ever expanding breadth of the products offered, and it does not really deal with customer experiences. The point however is that their approach is not misleading – you, the customer, pay them to learn their opinion and recommendation and thus the only incentive is to provide you with good and honest information.
I want to make very clear that I am not attacking profit motives or the marketing profession. I love profits when they are honestly earned by providing quality customer experiences, and I love marketing that helps me find providers of such experiences. The problems arise when some people or companies decide to focus on deception instead. Many years ago, one of my good friends shared with me her great admiration for Amway products. I was very grateful for her zeal to “help” me find a good product, until I realized the concealed motivation. Needless to say, we are no longer good friends, just acquaintances and I would never buy anything associated with the Amway brand. That is not to say that Word Of Mouth Marketing cannot be incentivised, just that marketers have to understand that it could become a double-edged sword and can easily create unintended adverse consequences. It also creates a challenge for us, at Amplified Analytics, to develop an effective approach to weigh authenticity of reviews we analyze for producing Product Reputation metrics.
I used to have a sign in my office that said – “Happiness is expectation management” that could be interpreted as “It’s hard to be disappointed if you don’t expect much”. Apparently this wisdom does not resonate with a lot of consumers:
A recent Brandweek article titled “Retail Customer Service Stinks” reported that the service received by shoppers in over 1000 retail interactions in the study rated 48.2 out of a possible 100 points – a flunking grade. The study, conducted by the research firm The Salt and Pepper Group, examined retail interactions in 73 stores over a four-month period.
This quote, and the others to follow, came from an excellent article by @RetailProphet appropriately called How Consumers Killed Customer Service. In this article, the writer puts responsibility for deteriorating Customer Service on the shoulders of Consumers with our focus on low price.
We demanded the lowest airfare wherever we flew. We went to the buy-one-get-one sales. We made Walmart what it is today. We camped out for Black Friday. We built the dollar store channel. The bottom line is that we voted with our wallets and customer service lost. We killed customer service.
I’m glad this is finally articulated as I’ve felt this way for a long time. It is rare to see an advertising campaign that is focused on quality of experience, and the only differentiator seems to be the price. These unbalanced optimization attempts inevitably trigger a “law of unintended consequences”. Results range from retail stores, that both feel and smell like dumps, to rising costs of waste disposal caused by purchases of low quality products, that do not last and are priced too low to fix. Apparently most of us do not value the extra time, effort and energy wasted to deal with inferior products and services, to balance the economics of our decisions.
Examples of better balanced services (Apple Store, Nordstrom, etc) point to the fact that market segmentation works as intended and some of us, who expect more than just the lowest price, can still find better experiences.
For most of us it’s become a matter of making trades and concessions based on the type of product, the brand, or the store we choose to shop at. Just as we don’t expect the lowest price for a laptop at the Apple Store, we can’t in good conscience demand brilliant service at Sears, whose stores have become a virtual sea of sale banners. And if in fact we really can’t live with that trade-off, then I’m afraid we’ll need to rethink our definition of value as consumers and as a society.
I found an interesting post by Jeffrey Henning today. The article is touching on emotional attachment people have for different measurement scales used in Market Research. I can see how easily it come into play as we try to find one method to fit variety of research projects. Every method or tool has it’s limitations and therefore the challenge is to find the most appropriate one for the task at hand. Jeffrey quotes Brad Borther who provides an excellent advise:
Ten-point scale: “A five-point scale is totally inappropriate for customer satisfaction studies. Why? It lacks enough granularity and robs companies of a burning desire to take corrective action. It commonly leads executives to believe that ‘80% rate us four or five; that’s great, let’s move on,’ without realizing that it simply means that 80% are at least somewhat satisfied. Further, many people will never rate anything a ‘five,’ resulting in ‘four’ including those who are really very satisfied and those who are only somewhat satisfied. To avoid this topping effect, use at least a 10-point scale and count nine and 10 ratings as fully satisfied. This will also allow easier analysis of what bottom-line effects satisfaction has, since such tools as regressions work better with a more granular score.” – Brad Bortner, principal analyst with Forrester Research, “Best Practices: Why Customer Satisfaction Studies Fail“
Since our approach to measuring Product Reputation (delta between Customer Expectations and Customer Experience) is focused on competitive position of multiple products within their category, and our method does not require to ask people to measure it, I have decided to use “0″ to “2″ balanced scale with 2 decimal points for more granularity. It is interesting how infrequently people want to challenge a value of our methodology or accuracy of our analysis, compared to the selection of the measuring scale. By now I gave up any attempts to change their mind. We arrive to the scores using our algorithms to analyze Customer comments and reviews, not by asking them to measure according to any scale, therefore is much easier for us to recalculate Product Reputation scores to appear in a customer “favorite” scale. The integrity of the finding is not compromised by the conversion.
I wish all religious wars could be settled that easily.
There has been a lot written lately about the rising power of customer recommendation within the Marketing paradigm. Here is just one of many examples and a reference to an interesting study:
Advertisers are courting social-networking users because their opinions matter. More than 65 percent of 112,000 people surveyed said they were more likely to purchase products or services that they learned about in social-networking services, according to Powered Inc., an Austin-based company that helps Sony Corp. and Hewlett-Packard Co. with their social-media strategies.
Edelman Trust Report finds that trust in a recommendation, based on a personal experience of “a person like me”, has grown from 22% to 58% in just 6 years. AdAge reports that
So what is the meaning of “peer” or “a person like me” in an environment where most recommendations are anonymous, and the privacy of the recommenders is carefully protected? We all are too well aware of unscrupulous, and not too smart, marketers who tried to game the system with widely publicized failures. However that very publicity seems to give us even more confidence in our “peers”, as it makes us believe that the sheer number of reviews and recommendations of the authors, and the transparency of the Internet, will protect us from being manipulated.
Sometimes positive recommendations of people I know, will cause me not to buy the recommended product, as I am aware in our taste or skills difference. So how can we rely on the experiences of people we don’t know at all? I suppose there is a lesser of the two “evils” compared to the traditional advertising or “unbiased” review by paid experts.
As we have been working on mining Consumer Insight from unstructured and untagged data, I have been thinking of ways to algorithmically weight and/or score the “Authenticity” and “Authority” of authors in context of their product reviews and recommendations.
I believe that when someone (I hope that is me) manages to figure how to do it, it would bring even more value and meaning to the market. It would enable us to make more personalized choices.
Another thought, related to peer2peer marketing, came to me while I was exploring Cloud Expo grounds of the Dreamforce 2009. Not a single Dreamforce exhibitor with “Marketing” in their name, was demonstrating any functionality or service focused on learning and/or managing Customer Experience. I suppose to most people “Marketing” is still “Shouting”.
