A Spanish saying declares “A bad wound may be healed, bad repute kills.”  Yet another proverb found in the Holy Bible reveals “Good reputation is more valuable than wealth.”

Reputation is the perception of your product (or company) based on your customer’s personal views or prejudices.  Jeff Bezos, founder and CEO of Amazon, defines reputation as: “What people say about you when you have left the room.” A few dissatisfied customers along the way may create negative reviews, but we all know you can’t please everyone, all the time.  It’s the majority that counts most, however it is critical to monitor and analyze what caused the negative Customer Experience, so we can learn and improve.

Corporate marketing plans often include strategies to enhance their reputation, but are they considering customer feedback as a device for measuring reputation?  Should these views yield influence on the way you produce and deliver your products?

Lately, social media has emerged as a handy tool for gaining insight into consumer’s expectations.  Customers are talking in their own language about the products they are using, voicing opinions and sharing their experiences and disappointments.  They are discussing product/brand features in relation to cost and reputation.  Perhaps ‘Social Research,’ if you will, is being prepared right before our eyes as social networks display consumer findings of our products.

While many shoppers are using social media to make informed decisions about their purchases, you can take advantage of the same information to modify your marketing plan, find a fix or correct customer support delivery, if necessary.  Building and maintaining a good reputation are keys to business success.  If positive PR is missing from your product’s character, you need to know about it quickly so you can find a solution to repair the injury.

Turning a deaf ear to the small voices of your Customers can easily turn them into a roar like the one Toyota is experiencing today and Dell experienced 5 years ago with XPS overheating. Being proactive early in the game can prevent tarnish on your reputation and enormous cost of its repair. In reputation management, an ounce of prevention is definitely worth a ton of cure.

We have developed a methodology to consistently measure product reputation. Raw, Customer generated data is used to measure the difference between consumer expectations and their actual experience with a specific product. These metrics, and detailed “Deep Dive” reports, provide effective road maps for product management and delivery.

<DA Report_MP3 Summary

Reputation beats everything else.  But as Rome was not built in a day, reputation cannot be built in a day either.  However, one blunder and you could hit the wall, knocking it all down.  Learn to listen to what your customers are saying; your reputation is at stake.

DA Report MP3 3…

You have probably seen examples of data produced from our database using our PRMIR v1.1 in the previous posts of this blog. Well, now you can take it for a free 5-day test drive. There are a few more examples of the use cases at this site.

We are currently monitoring the reputations of over 14,000 Consumer Electronics and Computer products in about 300 categories. Our database is growing at the rate of 25% per month, however there is a lot of work left to do in improving our algorithms to achieve a more accurate distribution of products into proper categories, and enable our data acquisition to harvest information at a higher performance rate. The accuracy of the scores is already pretty accurate and the consistency of interpretation allows for meaningful analysis of market segments.

Please let me now how this service can be improved from your perspective.

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.

Meaning: from  the many, one. The following illustrates how many voices can come together via social networking and the internet to help us spend our money more wisely.

Craig Newmark, founder of Craigslist says in this interview:

“Posting information about products and experiences as everyday as hotel stays (”Generally all my reports are shower-related,” he said) helps other people make more educated purchases, he said during a panel session Tuesday, and can ultimately lead to better customer service when large numbers of people weigh in on social-media forums. Participating in these sites is an act of compassion, in some sense patriotism.”

Think back to your last “pig in a poke” purchase or “Hotel from Hell” experience. What would you give to have had someone spare you that? We all tell our friends our good and bad experiences in the marketplace. Now with social networking our “friends” can be like friends squared, we have the ability to reach the full six degrees of separation (just about anyone who has an internet connection) and share information. I agree with him that the numbers have to be large for it to really work and your idea of a great laptop and mine may vary due to what we want or require from it. Each reviewer contributes a piece of the puzzle to give shoppers a better picture of the product or service.

While it is often our own current economic woes that are making us choose more carefully where we spend our dollars, it is also the “green” thing to do. There is a lot of waste in the process of returns, and many products, particularly electronics, are not disposed of in an environmentally friendly manner. In the end, the manufacturers and retailers include that cost of returns into the purchase price of their products. If we were able to choose more wisely, resulting in fewer returns, perhaps prices would reflect that. While my skepticism prevents me from holding my breath for that, (it could happen) I totally agree with Craig that it is a public service we can provide for one another and benefit from ourselves.

It seems words like “hope”, “change”, “renewal” help us to detach our actions from their inevitable consequences, at least in our own minds. At the turn of the New Year  we habitually make ourselves (and others) insincere promises to change, to start working out, to start learning languages or skills, to lose or gain weight, etc. We also like to make predictions nobody takes very seriously or calls us on.

Here is an example predicting the Death of Marketing

Gone are the days when marketers could carefully craft messaging and then broadcast that message in a few channels to huge portions of their audiences.  Oh, you can still spend money that way if you want to but in our transparent world, no marketing budget can possibly overcome the actual experience consumers have (and share with friends, followers and Google) with the product, service, or organization.  It no longer matters what you say;  in 2010, your brand will be more defined by what you do and who you are!

I wish Augie Ray, the author of this prediction and a new Forrester analyst, was right, but we both know that he is not. I am hoping that we will see consumers re-gain their power of choice and intelligent, rational selection and I believe that it has already started happening as reported by many observers. Here is an example from the Gerson Lehman Group quoting a McKinsey report:

“Two-thirds of the touch points during the active-evaluation phase involve consumer-driven activities such as Internet reviews and word-of-mouth recommendations from friends and family” .

I just don’t believe that “it” will happen in 2010, primarily because the fundamental change is not an event, it is a process. A process that takes time and a lot of education as too many consumers have willfully relegated their power of choice and are more comfortable to see themselves as victims. Here is an example of a discussion “Does your Company’s Reputation Really Matter?” that illustrates my point:

Perhaps things will change if capitalism develops into a more socially equable system, or a new form of leadership evolves for the 21st century. In the meantime, what do you think? Is reputation still something to be valued and maintained? Does it really count for anything? And how do we ensure that our voices — customers, citizens, taxpayers — are heard amid the deafening noise of spin?

It is interesting to see a victim-hood mentality spilling over from Harvard Business Review by a “Leadership Coach”. I suppose if you don’t believe you have the power – you do not have it.

All the moaning, blaming everything in sight and somehow hoping for a better outcome, meanwhile continuing our patronage of those who don’t deserve it, is not going to bring any change for the better.

I rather do without many things I deem to be necessary – many are not. I stopped buying products that do not deserve high regard from customers who experienced them. I’d rather be without or pay more for quality if it is available. I have enough headaches, thank you very much. I stopped flying anywhere I can drive within a reasonable time, and I do a lot of my long distance meetings using technologies ranging from Skype to Cisco.

For the same reason you cannot change your weight without changing your diet, you cannot get the quality you deserve without demanding it — consistently. Change before you have to.

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.

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.