Many Social Media proponents, activists and analysts express strong believe that its advance creates revolutionary changes to role and importance of consumer voice in market dynamics.

So far it gave birth to hordes of consultants and marketing services that promote ideas of influencer chasing and reputation management monitoring technologies, however the “scream” of offerings seem to counteract the idea of increasing the volume of the voice of customer.

One example is a number of websites, offering depository of customer reviews about products and/or services, outnumber the customers who are willing and capable to contribute to these depositories. The end result seems to be counterproductive as consumers who look for such information are hassled to sites that have no content to offer.

Some companies spend substantial energy to explore and pursue some form of activity involving Social Media and there are very few, but loudly celebrated examples of those. However that doesn’t seem to change overall reputation of these companies. One of my favorite whipping “boys” – Comcast is still rated dismally for the delivery of their customers experience, despite heroic efforts of their Social Media team on Twitter and Facebook.  Here is another example, a darling of the Social Media mavens – LinkedIn. Based on Customer Service Scoreboard scores

LinkedIn is ranked #253 out of the 273 companies that have a CustomerServiceScoreboard.com rating with an overall score of 19.35 out of a possible 200. This score rates LinkedIn customer service and customer support as Terrible.

There 56 negative comments vs 1 positive one and most of them by paying subscribers, who cannot get their issues resolved. Ironically the 19.35 score is below the LinkedIn lowest monthly subscription fee of $24.95.

I know that 56 complains is a very small number considering millions of people who use the network, but I wonder what is a percentage of them who actually use it actively enough to care, and even more interesting is how many actually pay for it. I personally am one of them and my experience is one of neglect. I have an issue outstanding for almost two years without resolution. The issue resurface from time to time and causes me a lot of aggravation and waste of time. I finally decided to use LinkedIn Inmail to escalate the problem to the founder of the company, Reid Hoffman.

On 7/2/10 12:18 PM, Gregory Yankelovich wrote:
——————–
I am expending a valuable Inmail credit and hope that you will read it.

This is the 3rd time I am erroneously locked out of my ability to ask for Introduction. I am paying customer, but I cannot get resolution for almost 2 years. The 1st time I have experienced this problem, I reported it 10/27/2008 and I am having problems with it once again and it negatively impacts my efforts to bring my product to the market.

I rely heavily on my network to reach out to potential customers and partners. However every time I encounter this problem I have to wait for 2-3 days for your Customer Support to reset the system’s counters. 2-3 days are a long time to waste in the life of a startup. I understand the power of reputation more than most people and don’t want to scream #fail all over Twitter. Please help.

To Reid’s credit he responded

Gregory,
I am reading it; I’ll put your issue into the executive escalations. Since I don’t know what you’re doing that hits problems, I don’t know if we support what you’re doing or not. (For example, not saying that this is what you’re doing, but we have very clear messaging limits to prevent spam.)
Hope it all works out. (And, btw, you can write what you feel is right on twitter: I apologize for where we step when we’re wrong or slow.)
all the best,
Reid

However his response was the only one, I am still waiting for any contact from the Customer Support. I eventually did express my frustration on Twitter:

Wasted yet another day waiting for help from #LinkedIn technical support – still no love.

What is a reasonable response time for #customersupport? Does anyone else has #LinkedIn Introduction Withdrawal or is it just me?

and here the reaction I have received

@piplzchoice Do you have a free linkedin account? If so, be thankful you get to use linkedin at all. Just sayin.

I did not write this to whine about my “misfortunes”, but to explore what, if anything, is actually changing with advent of Social Media in respect to the treatment of the customers. Advertisers keep complaining how difficult it is to gain share of consumer attention, yet when a company like LinkedIn or Facebook, does manage to do it, and end up raising enormous amounts of capital based on that fact, our attention doesn’t seem to be that valuable anymore. Let’s face it, Social Media is nothing more than another communication channel, like a next generation of telephone, radio, TV and email. All of these improved our life experiences at some cost to our privacy or quality of life, but how we use these channels is the only thing that may influence how Market delivers our Customer Experiences.

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.

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.

Create a Customer Experience that delights them.

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?

Standard Deviation of Average Headphone Reputation.

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.

In MITSloan Management Review Article “A Plan to Invent the Marketing We Need Today”, Yoram Wind wrote

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.

Professor Wind continues

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.

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 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.