One of the interesting challenges Marketers are charged with is to make their product or service stand out in minds of the potential customers. Those who are not blessed with analytical talents commonly slide into well bitten path to differentiate by specifications or price. These approaches do not really require any expense and/or curiosity to seek deep understanding of the customers, but they are ultimately led to erosion of profit margins and brand equity. If you, brand “owner,” don’t care about the customers, the customers don’t care about your brand. Advertising alone could carry the brands a great distance in the “good, old days” but in the age of Social Customer, an advertising message is expected to resonate with customer needs or it will cause more harm to the brand image and product sales than good. When it comes to a product reputation or brand equity, the notion that “Any publicity is good publicity” is not the best strategy.

None of it is new to most marketers and some companies are spending serious money to develop processes for discovery of consumer/customer insights. However, most are struggling to convert the findings into specific actions. Measuring financial impact of these actions seems to be an even more formidable challenge. I would like to explore these challenges and perhaps offer some ideas for dealing with them.

Many marketers today are too insulated from their customers to develop a true, genuine understanding and empathy of customer experience with the products or services they market. One of the reasons is the use of outdated market segmentation methodologies based on demographic data that was developed to help marketers to quantify and forecast, but do not provide much help in understanding the needs and discovering opportunities for differentiation. More evolved methodologies that attempt to develop customer “personas” are much more helpful in learning needs of the specific, pre-defined groups of customers. Scott Sehlhorst of Tyner Blain offered a wonderful explanation of how such methodology can be used.

Use of both abovementioned approaches together will likely to improve your product traction, but will fall short of true understanding you need to differentiate your product because everything you have learned so far is based on your own original assumptions. You start with a hypothesis of who your potential customers are, what functions and features they would like in your product, and how much they will pay for it. Then you proceed with a number of potential customers’ validation and advisory activities that confirmed or cancelled your assumptions with various degrees of certainty. However, you still don’t know if the group and personas (within the group) are your best potential customers since you cannot possibly validate that with every potential segment. Additionally, I don’t think it is possible to effectively differentiate – by design, packaging or message – without ultimate understanding how the customers experience the product. All the steps you have taken so far cannot give you this knowledge for 2 reasons:

• You have started at the “wrong” place – i.e., demographic segmentation of market is a wrong starting point. Much better starting question is – what products/services my future best customers are hiring today to do the job they need done. I use here terminology and concepts developed by Clayton Christensen. Check this video where he explains why the basic thinking taught in business schools and promulgated by consultants is killing innovation and the US economy if you are not familiar with his work.

•  Any knowledge of customer preference you have gained so far is company-biased because it was obtained by methods of inquiry and/or moderation. The one who forms a question or selects the subject of discussion ultimately influences any possible outcome. I do not believe that there is such a thing as an unbiased research, and I prefer customer’s bias to a company’s bias for the purpose of learning how a customer experiences a product or a service. This is my preference because regardless of our opinion, that is what they are going to use while selecting to purchase your product or a product of your competitor.

I am not dismissing the value of traditional methodologies off hand, but I am suggesting that substantially better results can be achieved by using triangulation of these with true insights of customer experience. There are plenty of customer-generated content available online for aggregation and analysis; however, even if you find difficult to find good data, we had very good results by asking customers wide open questions designed not for validation and easy tabulations, but to help them tell their stories:

What made you interested in a product XYZ?

• How and where do you use it?
• What was your experience so far?

Let them know that you asking because you want to learn how to make their experience better and promise that you will let them know the results of the study. Most people are motivated and willing to help. These types of questions are traditionally reserved for qualitative research that in the past was considered expensive, and the results are often dismissed as statistically not representative as they are normally reserved for a small number of customers. Those who try to find insights manually in large volumes of data are quickly get overwhelmed by “drinking from a fire hose.” However, advances in opinion mining technologies significantly reduced cost of high volume content analysis and can offer benefits of qualitative research and statistically representative numbers to back up the value of insights. In the words of Clay Shirky, “There is no information overflow-it is a filter failure.”

Good use of right technology can provide a marketer with a substantial and representative number of clues and hints to how customers think and feel about their experience with a given product or a group of products. However, no automation or outsourcing can replace your creative power of interpreting these clues into actionable insight. You can see examples regularly published on our Google+ feed.

The language customers who used to describe their experience will also provide the source of how to communicate with the market in the way the message will resonate and connect on the emotional level.

This morning, I had an interesting experience. Among many emails, tweets and webinar offerings, I managed to expose myself blindly to two that focused on one challenge I have to overcome the most – talking too much and listening too little. Interestingly enough, neither of the messages was specifically targeting individual or style shortcomings, and the subject line of these presentations was not about listening skills. If this is not a moment of serendipity, then I don’t know what is. BTW it also synch with my favorite definition of serendipity: “…is when you come to look for a needle in a stack of hay, and you end up finding a farmer’s daughter.”

The first piece of content is a video from http://www.entselling.com/ that talks about challenges of entrepreneurial selling and is not focused on the selling or listening style at all. It is very good and I strongly recommend it to any startup team, but the listening piece resonated with me the most. I’ve been trained on the importance of this skill for selling many years ago, and judging by my performance at the time, I have even learned to apply it. However, as it may be obvious to people who know me, it is not one of my natural qualities . The more I get excited about the subject of conversation, the less patient I get with listening to my conversation partners, particularly if I think I already figured out what they are trying to communicate.

I may be right about that, but it doesn’t create a great conversation experience, nor does it make them feel that they have been heard and that I actually do understand their concerns or problems I am proposing to address with my product or service. Apparently, it is a very common problem undermining many startup founders who are understandably excited about their creations to a detriment of their potential customers’ comfort, and subsequently a sales success. Maybe I should start looking for a startup founders “shut up and listen” support group. Please let me know if such a group exists.

The second piece is even more interesting and was presented by Rebel Brown at the Defy Gravity webinar sponsored by TreeHouseInteractive. Rebel is a very dynamic and passionate speaker, and she was talking about many marketers trying to use social media as traditional content broadcasting channel. The main lesson I took out of this presentation is about a challenge of institutionalized listening that needs to become a part of personalized conversation if a brand wants to be successful in social media. I suppose that no brand will be able to survive without social engagement with their customers, as the customers are creators of a brand.

“Advertising can help you sell good products, but only your customers can help you build a great Brand!”

The challenge is in learning what is important to your customers and communicating with them about this, as opposed to focusing on your product or your brand. I think the most difficult part is to not assume that we already know what it is, and not be afraid to learn from these communications.

Rebel also made a great point about the practice of counting followers and “likes” as a result of social media efforts. I will paraphrase it here as, “Do not confuse tactical metrics with actual meaningful results.” Let’s face it – these only exist because they are easy to count. Their relevance to business outcomes is very questionable, and the only thing they help to learn is how to manipulate or game the counting mechanisms.

I don’t think a “real” marketer can be helped by a mere support group or volunteer 12-step program. Perhaps there is an opportunity for a true “rehab.” All you need is a recovering marketing celebrity lending their name to this venture.

“You cannot manage what you cannot measure.” Those are well known and accepted words of wisdom that have been taught to thousands of MBA students for decades. There is a lesser popular truth though—that measuring wrong things can really hurt your business. Definition, selection and design of appropriate, balanced and concise metrics, as well as the processes for continuous delivery of these metrics, are the key management challenges for every organization.

1.      Focusing on the “wrong” metrics will create unintended results.

One of the more graphic examples of “wrong” metrics is a ratio of successful convictions, widely used to measure success or reputation of public prosecutors. This one causes US taxpayers to waste hundreds of millions of dollars in court costs, compensation for wrongful imprisonment and lost productivity every year. Essentially this metric is measuring a percentage of tried cases that result in conviction against the total number of cases tried by the prosecutor. The higher the percentage of convictions, the more “successful” the prosecutor is considered to be regardless of how well justice is served, how many lives are destroyed and how much financial damage is inflicted.

Another example is the evaluation of a Product Manager performance based on the attainment of product forecast goals. While I am familiar with a popular definition of a Product Manager’s role as a “Product CEO,” the organizational reality does not often support this definition, as product managers rarely have administrative authority to enforce their decisions and act mostly as influencers. It is intellectually dishonest to keep them accountable for a result of a sum of aggregated decisions made by a multitude of people, but most importantly it does not help to bring desired improvements in products performance.

2.      Focusing on unbalanced metrics will promote bad behavior.

Performance is often measured by a singular metric, yet people are rarely expected to behave one-dimensionally. Everyone knows that a lot of digressions will be forgiven to a salesman who consistently makes his quota, even though his lack of desire and/or skill to forecast costs your company serious hits to profit margin. Imagine it is the end of a quarter and you are deeply discounting your product in a desperate attempt to make your company revenue numbers, just to see your “best” performer bringing in a “bluebird” deal you had no visibility of. He just caused you to give away profits, and you did not need to sacrifice for “please sign today” deals. A secondary measurement attached to accuracy of forecast and associated with commission structure can dramatically improve a company’s profitability.

3.      Concise metrics promote action.

Conversely, the convoluted metrics are a waste of time, expense and opportunity. Many Customer Satisfaction measurements are falling into this category because they are often too general, and the best cause of action you may take is to do more studies. Most companies do not even consider competitive influences on their customer’s assessment of their satisfaction with their products or services. Unless feedback from customer analysis of every key component of customer experience is continuously conducted, and in relation to competitive options available to the customers, it is very difficult to figure out why overall Customer Satisfaction is moving higher or lower, who should take any action and what kind of action should be taken.

In conclusion, I would like to suggest that any performance metric has to be evaluated in a holistic model as it is very easy to come up with a clever way to improve one aspect of a specific performance at a detriment of the long-term well-being of the company as a whole.

Tablet’ Market Segment update

The last month was full of action if you follow the tablets market segment. HP first started the price discounting to “gain market share” and then dropped the “bomb” of discontinuing the TouchPad they introduced only 42 days before. The judgment is still out whether we witnessed results of really agile decision making or an example of exceptionally bad corporate self-distraction. The initial stock market reaction seems to support the latter hypothesis, and current history of HP boardroom soap opera episodes provides enough clues. The new CEO apparently wants the company out of consumer products businesses.

There is an update – It appears the decision produced a shark bait effect and caused a number of class action suites on behalf of shareholders.

In this installment of online market research update, I would like to explain the process we follow to generate these reports.

We start at the Product Reputation screen and enter name/model of a tablet and click the “Submit” button. When the metrics for the entered tablet show up on the right side of the screen, we click on the “Compare with other products” button to expose all tablets in our database.

At this date, we monitor customer generated content for 32 tablets and the Market Intelligence report will show their reputation which is calculated by processing the text of customer reviews with our opinion mining software. Keep in mind that no questions were asked about their experiences and no customer was ever contacted by us to solicit their opinions. Surveys are not our business!

We use the “Customize your report” button to select only the tablets that were updated (new customer reviews were published online) within the last 30 days and have greater than 25 customer reviews published. The total number of reviews analyzed is 9,003. The result of the customization is displayed below. Please note that the metrics are calculated on all aggregated reviews published by the customers from the time a tablet became available for purchase.

We export the CSV file and generate WoM (Word of Mouth) Share chart and Trend based on the exported data. Not surprisingly, Apple iPad earns the largest share of customer feedback at 17%, although the number is much smaller than its market share and substantially dropped from 35% only two months ago.

To discover what attributes of their customers’ experience are important, to measure how important these attributes are to the customers, and what the difference between their expectations and their experiences with each attribute is, we focus on five of the most reviewed tablets for a more detailed Customer Intelligence Analysis.

We use a two-point scale to visualize that difference.

0=unacceptable / 1=experience meets expectations / 2=delighted

Customers “say” that Usability (11.64%), Reliability (11.32%), Quality of Construction (9.5%) and Display (5.4%) are the most important attributes of their experience with the tablets. While all participants are providing Usability experience well above their customer’s expectations, HP TouchPad and Apple iPad 2 are the leaders in this category. Motorola and Toshiba are considered the most “reliable” tablets by their customers, while Samsung Tab continues to struggle.

Here is the access to the tablets’ online marketing research dashboard that allows to see actual customer’s feedback if you click on a specific bar.

The last chart I would like to offer depicts customer affinity for tablet’s operating system and despite all brouhaha about the TouchPad, WebOS still earns the highest score from its customers.

This online market research, administered by Amplified Analytics, is valid as of August 5, 2011 and is the result of the review of different tablet brands’ segment of the market. It is based on the analysis of customer feedback from 8,241 tablet users who expressed their sentiments on the product.

The chart above depicts the Word of Mouth (WOM) Share for ten of the top tablet brands in terms of customer satisfaction (CSI).

The chart above illustrates shows customer satisfaction with Operating System of their respective Tablet.

The scores were algorithmically produced by the use of Opinion Mining software that conducts an analysis of customer feedback that is published online by the customers themselves; no customer was personally contacted to provide their opinions.  The relative percentages were not based on customer’s answers to biased survey questions. It is not Amplified Analytics’ business to conduct surveys.

It is also important to note that the Apple iPad2 was excluded from the list of tablet brands analyzed because it significantly dominates the market, thus making the comparison of customer satisfaction meaningless. The Apple brand seems to have its own market that is incomparable to others.

The chart below shows a comparison of specific attributes (reliability, portability, display, etc) of leading tablets. These attributes came from the customers when they shared their experience using the brands. The green line athwart denotes the relative importance of each attribute to customers. Check the methodology used in this link: Opinion Mining. Attributes with less than 1% importance were not included in the graph.

From the graph, we can see that Reliability is the most important attribute, with 11.7% of total opinions.

Yet, customers of Samsung Galaxy continue to get disappointed for the second month of measuring it since it was first introduced. Its Customer Support, with an importance rating of 1.76%, exceeds customer expectations by 8% while the Display attribute, with a 7.42% score, is on top of the competition.

You can access this dynamic Customer Intelligence dashboard by clicking on this link and CustomerSay! Verbatim by clicking on a specific bar of this chart. “Attributes” and “Products” selection windows allow for focus on your area of interest.

Category Management Report Tablet’ Brands Word of Mouth Assessment (July 1, 2011)

This information is based on analysis of 6,413 customer reviews published online on or before July 1, 2011 on popular websites like Amazon, Best Buy and Cnet.com.

Only customer’s generated content (Customer Word of Mouth) is analyzed. Consumers’ opinions, without ownership reference, are not part of this online marketing research. The customer generated content was located, authenticated, de-duped and aggregated for the analysis.

There is significant difference in volume of customer feedback available for online marketing research of various brands as illustrated on the chart below.

Changes in Customer perceptions over time

HP TouchPad Tablet was introduced just a few days ago with an enthusiastic number of reviews and remarkably high Customer Satisfaction score. However it is not appearing on the Trending charts above because there is no sufficient history yet to plot.

Trend – It appears that the tablets with proprietary operating systems outperform Android counterparts, in terms of Customer Satisfaction, as they come to the market. See the chart below.

Please follow the links to HP Touchdown, RIM PlayBook, and Motorola Xoom,  verbatim if you want to read what the customers say about their experiences.

For more detailed analysis, please request Customer Intelligence Analysis for specific segment of this category.