As consumers we all can recall the experiences that have left us feeling abused and mistreated by companies we have selected to give our money to. In some instances I promised to myself never to come back for more and kept my promise – I would rather go back to dial-up ISP than deal with Comcast.

According to the research of Bruce Temkin, former Forrester analyst and an authority on Customer Experience management,

In Forrester’s 2010 Customer Experience Ranking of 133 companies, Comcast came in 126th for it’s Internet business and 125th for its TV service. It also came in 105th/109th out of 114 companies in the 2008 rankings and 95th/101st out of 112 firms in the 2007 rankings.

The point of this writing is not to bash Comcast, even though it definitely deserves bashing, but to ask an important question: Does the Customer Experience (or Customer Satisfaction) really matter if in spite of its miserable scores a company like Comcast can produce healthy profits?

These financial statements show steady growth in revenues and profits over the same periods, and the numbers do not provide any evidence to support the belief that mistreatment of the customers is a good business practice.

I have posed this question to Bruce and his response

“@piplzchoice Good question. Cust exp is a long-term asset. Comcast (and others in the industry) are squandering it. It will catch up to them.”

This response is encouraging, but not entirely satisfying because it appeals to emotional belief (faith). I would prefer some empiric evidence of correlation between profitability and customer experience ratings or reputation.

I have heard about Claes Fornell of CFI Group who has done very interesting work in that field, but yet to learn more about that methodology.

To be fair, one example, particularly of a company that operates in rapidly growing market with very few competitors, does not offer any meaningful insight and I would love to find some other, more representative examples.

Woody Allen once said – “I would gladly accept existence of God if he would give me some evidence of his existence, like transferring $5M to my Swiss bank account”. Please let me know if you are aware of any definitive studies and/or methodologies that quantify and/or predict financial performance based on the Customer Experience – I am still faithful, but yearn for evidence.

As any business seeks to better understand customer needs and behaviors, it’s no secret that Social Media has opened more doors to CRM opportunities than ever before.  Last week while reading a recent marketing blog, I was amazed to observe that the writer failed to suggest the current trend of social networking as a frontline method for creating a relationship with customers.

Like never before, Social Media is providing a colossal platform allowing us to hear what our customers are saying.   It is quickly becoming one of the best ways to engage a customer and gain valuable insight into their experience with our products as well as those of our competition.  Are you listening?

This explosive technology could permit any business to identify competitive threats or opportunities through information that might not otherwise be detected without listening to thousands of customers.  Historically, formal focus groups were utilized as the most common means of collecting this data in-person from the end user.  Perhaps one could imply that today social media is quickly becoming the new “focus group”.

Consider for a moment that while traditional focus groups draw in customers to discuss their experiences, so are Social Networks providing the same information.  Is there really a significant difference?  The value of a focus group depends largely on quality of questions posed to the participants with all the biases that are incorporated into a question. The main disparity is that social media presents a very public review of a product or company’s benefits and even shortcomings.  However, we must not ignore the exponential numbers of consumers who are vocalizing this valuable data.  It is often more candid than any focus group could provide.

Getting connected with them is just part of the solution.  Connecting & engaging within these social mediums is relatively easy part.  Nevertheless, just like any other ‘marketing” effort, its success is not realized without measurement.  Therefore, the opportunity exists in figuring out what to do with the unstructured data.

Fortunately there is technology available to “interpret” this valuable data. Utilizing a multi-dimensional analysis, we convert various forms of feedback into an actionable plan then we take it one step further.  We are examining customer ratings across the market of nearly 20,000 products.  Many of the companies who have attempted their own translations had to invest very significant amounts of money into text mining implementation projects that allow handling feedback about only their own products.  With more than 2 million reviews, our database can deliver satisfaction scores from real world consumers about your products as well as that of your competition.

Self help author and motivational speaker, Robert Kiyosaki,  was quoted last year as saying ‘I am a bit old to focus on social media now but I spend an average of two hundred thousand dollars monthly through hired employees or consultants on social media, online reputation etc’.  While the use of social media as a marketing tool is still in its early stages, let’s not ignore this novel opportunity to act on customer feedback.

Clay Shirky once said in on of his presentations – “There is no information overload – it is filters failure”

Some people complain that the Internet has created overwhelming volumes of information.  Is there really too much information about objects of interest or is the perception of overwhelming volume actually misstated? Perhaps the issue is not quantity but level of quality. It is a matter of perception and focus; the ability to discriminate signal from background noise.  Both producers and consumers care about what is said about a product or service equates to dollars or pounds or yen because positive statements will usually translate into higher demand.  It is ironic how growing numbers of sophisticated product producers and consumers are tapping into the same information stream that has only recently come out of emerging social networks; a kind of digital crowdwisdom.

Whether consumers are overwhelmed by the amount of product information or just lazy, many consumers apparently prefer the conversation threads shared by digital “friends” in their social network over search engine result pages generated by a product’s keywords and metadata tags. There is a very human tendency to seek out the opinion or advice of a “social herd” of like-minded people with similar values, interests, and needs.  It is more than just a contemporary cynicism of Madison Avenue hype and infomercial verbiage. Following the “virtual herd” may at first sound like a derogatory statement but it is in fact fair and descriptive.  Herding is an adaptive trait that fosters very important social behaviors. Though it can, if carried to an extreme like lemmings jumping off a cliff appear pointless, following a “digital” herd saves time and minimizes personal risk. Whether inexperienced or as mentioned above, overwhelmed by too much information, “attending” to what the other member’s of one’s social circle say, do, or prefer is like a filtering device. Some people feel that the wider their circle and the greater the consensus toward a selection, the less risky their final choice. This filtering is especially cost-efficient. A consumer, after finding a common and comfortable social niche, has to neither spend additional time nor effort to select objects of value or need; they just follow the Word-of-Mouth recommendations of their trusted circle and their satisfaction is guaranteed.

Sophisticated product producers recognize that tapping into these social niches, if they can find them, provide free and truthful evaluations of what is right and wrong with their product line.  Crowdwisdom would appear to reflect unsolicited, and therefore one hopes, unbiased evaluations of many different facets of a product. If postings in some niche social network discuss a product, its reputation, and its brand over some reasonable time frame, a producer could conclude the data is accurate rather than misrepresented, for example, by a competitor’s planted remarks or their own staff trying to “market” company goods. They could conclude it is balanced rather than atypical and biased when, for example, a single irate customer monopolizes bandwidth with redundant rants.  Producers who cast their virtual nets over social networks to catch real-time comments must follow the best practices in statistical sampling and testing of experienced psychologists and trained sociologist. Crowdwisdom is not necessarily wise but it is, when collected carefully, extremely relevant. Especially in this digital age where many people struggle to find the signal in all the noise, it is cost-effective and an adaptive trait that minimizes personal risk. It doesn’t matter whether or not you trust or even like everyone in your social circle, if the group hangs out at a particular water hole, it must be safe to go there to drink.

The last night session on Social CRM left me very disappointed. The debate on whether SCRM is shiny, new dawn of new, social Enterprise or a infamous lipstick on the pig have been raging for a while. Until I’ve heard the comments and answers of the last night panel members (with honorable exclusion of Mint.com), I was very hopeful for the first. Not anymore.

CRM was certainly a very profitable business for a couple of decades now, and yet most people talk about it as a failure. I have written about the fact that CRM has never failed as a technology, but as a strategy, implementation, adoption, and as the result in delivering promised ROI.  At the heart of it CRM promised Customer Relationship Management, but delivered customer relationship Management – efficiencies and cost cutting without effective execution of better Customer Experience. We tried to manage Customers, not to manage our relationships with the Customers.

So, what have we learned here? Judging by the communications and attitudes of the last night panelists (again excluding the Mint) – not much. New and improved SCRM would help Enterprise to manage PR risks, to corral Customers into company controlled forums, capture more personal information and otherwise continue on the same path of exploitive relationship management.

The fine metaphor of the bridge between the Social and The Enterprise morphed into the image of the gated community without a lot of transparency or accountability.

@jowyang asked me afterwards if a company can make money engaging in more balanced, fair, respectful relations with their customers. In my opinion it is the only way to build a truly great, profitable company with a focus on long term ROI growth, look at Zappos.

Social CRM – Putting Customers First – what does it even mean?  Healthy relationship has to be equitable and “social” means that even in relatively free market society customers have a choice to have relationship with less abusive partners. The first law of Social is Authenticity and when a company starts to invest into quality of Customer Experience, with or without technology to support it, and then I’ll start buying into Social CRM. Please stop putting Customer first and concentrate instead on Customer Experience.

I understand brand as a collection of products, marketed under common name/trademark by a specified company.  While the brand is “owned” by a company, perhaps a symbolic image of a brand resides within the minds of consumers.  Formerly, when tenative threats were made to a brand, it could take months for it to be publicly identified.  Social media has altered the timeframe to mere minutes.

Recent blogs discussing the topic of real-time brand management were based on the March 13 Virgin America flight detained for more than 4 hours due to inclement weather.  I find the debate quite interesting.   The story suggests passengers and crew on this flight became quite restless and nerves were waning.  During this time, David Martin, the CEO of Kontain.com, utilized a social media app on his IPhone to “share” the unbelievable experience.

This effort initiated a phone call to Martin from a Virgin marketing officer with a $100 voucher proposal for his inconvenience.  His response was that all the passengers deserved more.  Subsequently, he was called by Virgin’s CEO, David Cush where Martin maintains he negotiated a full refund and a $100-per-person voucher for all passengers.

While you cannot amend the acts of Mother Nature, I am concerned that spontaneous reflexes such as this will begin to emerge when they are more likely very expensive patches for inadequate customer service processes or poor brand management.    A deeper analysis of root causes for poor customer experiences with a goal of the these causes systematic elimination constitutes a real “function” of brand management.

In response to the Virgin account John Sviokla suggested, “Every company must have “a brand radar system” to constantly monitor social media.”  He also states in a recent blog for the Harvard Business Review that businesses need to adjust to the new reality of being “on stage” at all times.   However, Real-time brand management is more than responding at the speed of a tweet.  Conceivably, we should strive for real-time identification, monitoring and analysis of customer feedback in an effort to develop a consistent set of rules that makes our brand stand out. 

These days a huge gap has formed between listening to our customers and actually understanding what they are saying.  It’s now evident to most companies that Social Media has opened new doors for listening to customers.  Although it seems they are drowning in volumes of voices, without good tools and/or methods to extract clear and actionable signals.  In a sense they can’t see the forest for the all the trees.

While CRM has become the hottest way to connect with customers, it is often mistaken as a form of technology used to disclose customer feedback throughout a company.  CRM is much more than technology; it’s an ongoing process to improve relationships with your customers resulting in better customer service, improved customer satisfaction, retention and loyalty.

So what is Social CRM?  Simply defined, this new advancement is a way to manage social relationships.  Its function is collecting data found in social networks and disseminating among the areas within the company that can respond to it. In the words of Paul Greenberg:

“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.”

Typically, it has taken a drastic measure such as decreased revenues, customer churn or product issues to compel us to reach out to our patrons. On average, this knee-jerk reaction is short-lived and dropped once the next crisis appears.

Customer satisfaction surveys are also utilized by many companies as a way to ‘connect’ with consumers. Although well intentioned, satisfaction surveys are often self serving and primarily give management the impression they are accomplishing something.

A good place to start connecting with your customers is by way of:
- Buyer behavior – adopt a ‘buyer orientation’ vs. the typical ‘seller orientation’
- Voice of the Customer (VOC) programs – go beyond satisfaction.  Bruce Temkin, a principal analyst at Forrester, defines VOC as “a systematic approach for incorporating the needs of customers into the design of customer experiences.”
Empowerment – make sure your organization is focused and able to make changes based on customer feedback.  Lack of this key element is often why customer satisfaction surveys are typically a flop.

Another interesting fact is the correlation of customer satisfaction with a company’s market performance.  A study published in the Journal of Marketing found that companies at the top 20% of the American Customer Satisfaction Index greatly outperformed in the stock market, generating a 40% return.

There is also a strong correlation between customer satisfaction and financial performance.  A study by JD Power and Associates discovered that organizations with the highest levels of customer satisfaction experienced profit margins at three times the growth rate than those with medium levels of customer satisfaction and more than 21 times that for low customer satisfaction ratings.

Often an organization may possess various methods of obtaining customer feedback but they are not able to comprehend it, creating action plans while many do not have the resources to try.  As a veritable strategy, perhaps we should be focusing more than ever on CRM (& Social CRM) development to bridge the enormous gap between listening and understanding our customers.

Bob Warfield of HelpStream is really up to something. There is a lot of talk about ROI on Social Media efforts, but very little to show that makes any sense.

Process barfs on Social because most Business Process isn’t integrated with Social.  E2.0’s biggest problem is it lacks Business Process for the most part.  Too often it does get thrown out as the silver bullet.  Process insists on considering all aspects.  If you’ve left something out (like your E2.0 software), the Process is not well formed.  If there are ways of doing things outside the Process, that’s a bad thing, at least from the Process viewpoint.

What we’re lacking is simply a harmonious marriage of these two.  Social should be integrated into specific business processes, perhaps many if not most specific business processes.
When it isn’t, what we have is ad hoc.  We lose the advantages of process in terms of measurability, repeatability, and consistency.  We lose the support of those who cannot see value in anything but process.  In the worst case, it sounds to them like we’re just arguing to hold hands and sing “Kumbaya”.

This is a matter of where we are in the evolution of Social Business Software.  The 1.0 E2.0 products are tools, in some cases they want to be dignified as platforms, but they lack that process component, so they really shouldn’t  be dignified as platforms because they are too incomplete.

We see this evolution over and over in Enterprise Software.  First we get the tools.  This is the Silver Bullet stage.  Everyone expects magic.  But the tools lack specific process.  They do not solve specific problems.  They are not solutions, in short.  As such, the results one sees from them vary wildly.  Nobody seems to be able to put their finger on why things work sometimes and not others.  The answer is that without Process, they haven’t factored people properly into the equation.  Ironic when this happens to software whose whole purpose is to be Social!

The formalization of “process” implies that there is a beginning, an end and most importantly – a purpose of repetitively doing something to achieve a specific result. The language of Social is extremely ambiguous, the current practitioners are still trying to figure out what exactly to expect, how realistic the expectations are and whether or not a  good experience can be consistently replicated.

“We are what we repeatedly do. Excellence, therefore, is not an act, but a habit.” — Aristotle

Just because some people are innately more social and enjoy “socializing” on-line, doesn’t mean that there is an ROI in it by default. Therefore it is critically important to ask and answer some of these simple questions:

1. What areas of my business could possibly benefit from a Social Media investment in time and/or money? Do you want to use SM for Marketing? To supplement Advertising campaigns? Do you expect to reduce your overall advertising budget as a result of these efforts? To learn about Customer Experiences with your product or service? Do you expect to decrease customer churning?
2. What existing processes and/or practices would be affected? Improved? Broken? Improved?
3. Would my Customers/Employees/Suppliers be affected by this investment?

I would suggest to drill into each one of them to evaluate any potential opportunities, size up potential investment and set very specific, and realistic expectations. The search for ROI too often starts well after the proverbial “horse is out of the barn”.

Customer Satisfaction is usually considered to fall into a domain of Market Research, to me however it is one of the most critical traits of CRM universe. After all Customer Relationship Management systems suppose to help you to know how your customers feel about your company, your service and your product at any given time. Therefore it is critically important to enable and optimize two ways communication channels for capturing and analyzing the resulting information flow.

“Unless the source of the statement (or comments) has extremely high qualifications, the statement will be more revealing of the author than the information intended by him. This applies, of course to matters of judgment. A book review, good or bad, can be far more descriptive of the reviewer than informational about the book itself. This (probabilistic) mechanism I also call Wittgenstein’s ruler: Unless you have confidence in the ruler’s reliability, if you use a ruler to measure a table you may also be using the table to measure the rule.”

The underscored words are mine.

“The information from an anonymous reader on Amazon.com is all about the person, while that of a qualified person, is going to be all about the book”

“Fooled by randomness – The hidden Role of Chance in Life and in the Markets” – Nassim Nicholas Taleb

While completely agree with Mr. Taleb, I would like to pose that this is mostly accurate statement about general sentiment of liking or not liking a book or a product. The reference to disagreement of accuracy of specific fact stated in the book and questioned by the commenter, assumes certain expertise and therefore is about the book and not about the writer of the comment. The reference to specifics of the customer experience with a product also provides more practical information than reflection of commenter’s personality or expertise, and if it is consistent with experience of other customers , warrants further analysis, and perhaps corrective action.

Based on Wittgenstein’s ruler approach I would suggest that CSI (Customer Satisfaction Index) is a relatively low value instrument which is like a thermometer, can point to the fact that your body is not well, but to none of potential reasons for that condition.

I just re-read an excellent post by Jeremiah Owyang, Partner, Customer Strategy, Altimeter Group. Jeremiah used to work for Forrester Research and just recently joined Altimeter.

There are a couple of quotes that got me going:

Beyond monitoring, insight from the social sphere is untapped. Social media monitoring is just the first baby step, most companies haven’t tapped into what the data actually means.

We all, more or less, know what monitoring is. Here is an example of a definition that come reasonably close to the marketing context once you replace the word “enemy” with something more appropriate, like “customer” or “consumer”, depending on the group one monitors.

The act of listening, carrying out surveillance on, and/or recording of enemy emissions for intelligence purposes.

So presumably obtaining “the insight” and/or “intelligence” is the purpose of the exercise. The most interesting question for me is – what are we going to do with this precious intelligence when we get it?

The second quote from this post, used here out of sequence, is

… marketers were used to ‘Bowling’, where marketers could easily throw a message down the aisle and hit the pins with great confidence. Now, he eloquently describes, it was more like ‘Pinball’ where a marketer could load the message up, shoot it out, but have no idea where it will end up.

It seems to me that despite all the talk by the “enlightened” marketers, by “listening” they still try to figure how to control the flow of messaging, rather than to “hear” and engage into conversation. “Listening” without a deep desire to “hear” cannot yield any insight or “Aha!” moments, and these are the ones that lead to meaningful and measurable actions. No wonder there is so much yearning for a magic ROI formula for Social Media investments. It is very difficult to figure a return on knowledge you didn’t bother to learn yet.

Learning is not compulsory. Neither is survival.

I have encountered some mixed emotions among some Market Research and Customer Experience Management practitioners about the usefulness of Customers Reviews as a source of real business intelligence, as opposed to their use as marketing gimmicks. I do not fancy myself as a true professional in these fields as I lack true hands-on, hard core operational experience; however, I doubt these mixed emotions and remain determined to develop technology that “listens” to the stories of customers to “learn” and measure how a product experience meets customer’s expectations.  I ran across this post today from ClearAction that clarifies some of these doubts:

What’s the difference between the way customers volunteer feedback versus the way they’re requested to give feedback? One revolves around outcomes in the customer’s world, whereas the other revolves around customer satisfaction enablers in the company’s world. True customer-centricity requires primary focus and decision motivations be centered on the customer’s world, rather than the company’s.

It is easy to imagine that politics, real or perceived loyalties and conflicts of interest can easily skew the results of customer satisfaction research. However biases, mistakes and algorithmic-imperfections can also result in low quality output. The method is less important than the intent.

customers “hire” a product or service to get something done for them. When we understand the circumstances motivating the customer to hire a product or service, then we gain insight into the customer’s jobs-to-be-done. A great way to identify customers’ desired outcomes throughout the customer experience is to scan customer-generated inputs on your brand category. Good sources of customer-generated inputs include contact center and sales call logs and social media.

Ethnography, or observation research, is also instrumental in understanding outcomes in the customer’s world. What value does your organization place on these customer outcomes sources relative to your formal research that is typically organized from a customer satisfaction enabler viewpoint? Why not consider revising formal research to focus on customer outcomes rather than enablers?By really understanding customers’ jobs-to-be done, constraints, work-arounds, hassles, and other elements of their world, new insights emerge for superior alignment with customers. Adopt the customers’ jargon — don’t make them adopt yours. Cater to the customers’ world — don’t make them cater to yours. Your jargon and world are customer satisfaction enablers, or a means-to-an-end toward customers’ desired outcomes. The outcomes are the direct link to re-purchase behavior and propensity to recommend a brand. In the end, it’s only the outcomes that matter.

The important point is that no single source of data, or method by which such data is acquired, produces viable knowledge. At this point I need to channel Chance, “The Gardener” from “Being There” by relying on my sailing experience – you cannot navigate by less than 3 points of reference; that is why the word “triangulation” was introduced. Our technological approach does not change this any more than the invention of GPS.