Connecting with Customers

The new way in which the customer interacts with media.

Today we are at the beginning of a new renaissance, exploring the ways in which customers are behaving in the new world of Web2.0. In the context of this media revolution, life will not be the same for you, or your customers again.

Eric Schmidt, Google’s CEO said, “ The Internet is the first thing that humanity has built that humanity doesn’t understand, the largest experiment in anarchy that we have ever had.”

This “experiment” as Schmidt referred to, is fundamentally about democratising information. Simply put, it moves the focus of communication from the media to you, the individual. It is not a one-way process anymore. It is an environment in which a dialogue takes place between the brand owner and the customer and between the customers themselves.

This will shift your marketing strategy and implementation in significant ways.

The one-way process

One of the most important objectives of marketing is how to gain the attention of relevant customers and where. These touch points traditionally have been through mainstream media such as television, radio, press, poster, and also through direct marketing. Behind this was a Push/ Pull Strategy, pushing a message onto the target audience, in the hope that they would like the message and Pull (buy) the product.

customer strategy

(Chart 1) This strategy created a process of decision taking that encompassed: awareness, familiarity, consideration, purchase, and loyalty.

The problem with this is that it is a one-way process. It is not a dialogue.

Creating a dialogue.

Mark Pedowitz, President, ABC Studios said, “Digital Media has levelled the playing field, opening doors to anyone to have immediate and unlimited access to an audience. But content must evolve with the platform”.

With the advent of technology and the use of the Internet, not only has a new media been created but also so has a new process of interaction with the customer.

We now have a dialogue that is both immediate and relevant. The content must be engaging and in many instances subtler than the previous broadcast media approach of pushing the message. As Ezra Pound the poet once said to an aspiring writer, “ Don’t describe the thing, describe the halo of the thing.” Pound knew that by describing the quality of something rather than its features, will engender greater intrigue and involvement. Describing “the thing” closes down the conversation, describing the “halo” opens it up.

This approach underpins sales and finds support in recent research by McKinsey. This study has revealed a new process of engagement and decision-making by the customer.

Source: McKinsey

(Chart 2) It is a circular process with four primary phases: initial consideration; active evaluation, which is the process of researching potential purchases; closure, when customers buy brands; and post purchase, when customers experience them.

customer strategies
At the post purchase point customers are increasingly likely to
discuss their satisfaction or dissatisfaction online. This dialogue will trigger other customers’ future purchasing decisions. What is essential is to have a pro-active online reputation management system in place. We will discuss that in more detail and its effect on how the customer moves from initial interest to after sales satisfaction, or otherwise, later in this whitepaper.

Dialogue along the customer journey

Marketing professionals need to adjust to this new customer journey. It is a journey that is more complex. It is a journey where the marketer can win friends and just as easily lose friends. In many cases the marketing effort must change: from less focus on brand advertising at the initial consideration phase to developing internet properties that help customers gain a better understanding of the brand when they actively evaluate it.

This may mean that a process change is necessary from pushing a brand message onto customers, to providing information, support, and experience of the brand (even if just a virtual one) that engages the customer in a dialogue so that they can make their own decisions.

The importance of the Web 2.0

The Internet is crucial in this new process of dialogue. To exploit Web 2 .0’s benefits requires an open mindset on the part of the marketer, one that moves from media buying to developing properties that attract customers: this shift in mindset encompasses websites that discuss products and services; programmes that encourage customer engagement; and systems that tailor advertising by understanding the customer as an individual with unique tastes, rather than as a statistical grouping.

(Chart 3 ) It isn’t just the customer you need to engage in dialogue. There is a hierarchy of people who engage with the Web.
At the bottom of the involvement pyramid we have Watchers and Sharers. These are the people who are the most active in their involvement of watching on line, reading blogs, and downloading material.

Picture 10

Next are the Commentators who rate products and services, comment on a blog post as well as write in a discussion forum.
An example of this is the advent of Trip Advisor for the traveller, which has underpinned the power of customer opinion.

The Producers write blogs and upload videos while the Curators are special to the company in that they are the guardians of the experience, moderate forums and edit Wikis to ensure their accuracy.

The people at the bottom of the pyramid, the Watchers and Sharers are the most active by volume and the Commentators have a great influence on opinion and influencing purchase.

So why do people share? Well, recent research from Share This Survey concluded that 81% of people share online to help someone who will benefit. 42% said to give back something, such as photographs, jokes, information, and third was to inform others about products or services.

When I first came into advertising and marketing, the giant share of marketing spend was on television. It was megaphone marketing.

Our target audience for brands was not segmented by social groups or income or even psychographics. We had no engagement pyramid. The audience was defined as universe. In other words, everyone, because everyone watched television. In short, the old marketing had Van Gogh’s ear for dialogue.

Integrating the customer into the process.

The available media drove this crude perception of people and their potential motivations. It was pushing a brand statement.

It worked through expensive repetition of a message like rote learning in uninspired educational establishments. It was not inclusive because there was no opportunity to question or engage in feedback.

As Confucius said: I hear and I forget. I see and I remember. I do and I understand.

With the democratisation of media we are able to create a dialogue, shifting the emphasis of seeing the customer as a target to viewing the customer as a partner and collaborator in the marketing process. This is a necessary pre-requisite for sales success.

Take for example, Fiat. When they launched the new Fiat 500 they created a website that that allowed potential customers to gather around their common interest, cars.

In the initial stages of the brand creation, Fiat embarked on creating applications and functions on the website that enabled the potential customer to create their own car, allowing them to customise different elements.

In addition, the potential customers were invited to join a creative laboratory where they could enter their own design contributions as well as create their own jingle for the website.

Mothers and Mothers-to-be were also invited to make their own contributions and were encouraged to share photographs of their family and newborn babies as well as enter a lottery to win one of the new cars.

By building a sense of involvement and personalisation into the website and the whole creative process, Fiat strengthened the potential customer’s sense of co-authorship among both males and females.

This underpinned making the Fiat 500 the customer’s brand.

Things are evolving…

Five years from now all media will either be completely digital or well on its way to becoming intangible.

Steve Rubel Ad Age December 2008

The Internets success is not just down to the immediacy of its information but also the relevance of that information.

Marketers need to help the customer with relevant information.

Take Comcast for example. If you have a cable problem in the US, Comcast use Twitter to ask customers “Can I help”. When customers respond, Comcast send out their Field Support Teams to solve the problem.

Through this process of finding customers to help, Comcast develops an image of pro-activity in customer support, reinforced through relevant interaction with customers.

The Comcast example demonstrates the effectiveness of pro-active engagement by seeking out the customer and ensuring that the brand blends into the context of the website or social media forum. It provides relevance and integrity.

A further example is Hyatt Hotels’ mobile reservation and check-in. Microsoft’s Bing powers Verizon Wireless mobile search. When consumers search for Hyatt and click on the result, they get redirected to Hyatt’s mobile website.

Through Verizon, Hyatt can reach 86 million subscribers and by taking advantage of this subscriber base, Hyatt can get customers to book rooms, check in and out, get travel tips, and access general information whilst on the go using Verizon’s Mobile Web service.

The synergy between search and mobile display resulted in a 350% increase in ad recall and 125% increase in brand recall through the inclusion of mobile search ads.

In this new engagement world, brands need to be mobilised to provide and deliver greater customer involvement through greater immediacy, anticipation of customer needs, quality of product and service, relevance, context, and value.

We are social.

People are social creatures. We, as individuals enjoy discussion, sharing information. We love to share our experiences and not just about the brands we buy or the car we drive or the Hotel we stay at. We also enjoy publishing our thoughts as can be experienced through Facebook, Twitter, and lots more social media sites. Those private thoughts made public can then be seen around the world not just on the social media website but through the long tail of media recognition of what you have to say.

So, Social Media is fast becoming a significant part of the fabric of society. The way to make it work for your brand is to have something meaningful to say and something relevant to offer. People go to a website for a reason not by accident. It is an envelope with an address on it. This can be a great advantage to the marketer. It can also be a nightmare if you fail to create a dialogue with your target audience and are unable to convince your customer and prospect through poor attitude, inadequate product, and poor service.

social media

Social Media Chart Source: Intelligent Positioning Ltd
An example of pro-activity in this are is RS Hotel in New York. The Roger Smith Hotel may be the most media savvy hotel in New York, if not the world: there’s a blog; a Facebook fan page; a You Tube Channel; over 3,000 Twitter followers; a Flickr photostream.

The two young guys behind this family run independent hotel have turned it into a digital force to be reckoned with. They have made sure that the staff are tuned in to new media opportunities that can provide a dialogue with current guests and prospects with the objective of providing a great environment and service.

One example of their pro-activity was when they saw a blog on the Internet from an out of town blogger and responded to his question: “Where do people stay in New York?”

Because the hotel staff was active in the blogosphere they were rewarded with a sale. This connectedness rewarded the Hotel in not just the sale of the hotel room but with further blogs that recounted the experience and promoted the pro-active nature of RS Hotel’s mindset and prompt service.

Social Media Maintenance

Picture 13Source: Marketing Professionals

(Chart 4) To keep your social media activity current and relevant, like the RS Hotel, you need to have a thorough maintenance programme. If we look at the chart we see how such a programme encompasses monitoring and renewing content across the relevant social media. Done competently, this will help to keep you ahead of your competition.

Whatever your brand is, whether it is a Hotel, a cable service provider, or a car, it is wise to remember that the brand is not yours. It is your customer’s.

A good social media maintenance programme linked to good online reputation management will help to strengthen that bond between the customer and the brand. Online reputation management combines marketing, public relations, and search.
The first objective is to gain visibility for your brand. Research shows that rarely do customers go beyond page two on the search engine rankings. The second objective is to create a positive interactive experience that will lead to sustainable engagement and sales.

To be effective, reputation management should not be passive to the discussions online but to be involved, constantly fuelling positive engagement. Good reputation management seeks to analyse, monitor, and influence your brand’s online presence, always seeking to be a relevant and stimulating part of your customers’ decision-making journey. As a marketer if you don’t like what is happening to your brand online, do something about it. And do it without delay. It is not enough to have proactive reputation management and a well maintained, attractive, website where there is a relevant dialogue and where the key evaluation element of the new decision making process takes place. The challenge is to be seen.

So what are the tools that will enable you to get your site onto page one, as well as tell you where your competitors are on the search engine hierarchy? It is highly likely that your prospects are using search and social media to evaluate potential vendors. The key question that you have to ask yourselves is, “Are we doing enough in those channels to demonstrate our expertise?”

How to generate clicks on your site.

Artificial Intelligence is increasingly a significant element in search by expertly examining customers’ online patterns to predict their tastes, desires, and future needs.

Broadly there are two types of search: Organic and Pay Per Click.

Simply put, PPC is bought traffic based on key word auctions: the concept is that marketers bid for their ads to appear on certain keywords, the higher the bid and more relevant your content, the better the chance of getting the top position. This can be expensive.

Whereas, Organic Search is a tool, if expertly used, that will help you to get your site onto page one and keep you there, through site analysis, key word relevance, and content refreshment. Traffic, unlike PPC is free.

(Chart 5) Two types of search: Organic and Pay Per Click.

There is a definite preference exhibited by users for organic results over PPC. Of the two types of listing it is organic listings that currently generate the most traffic as you can see from Google’s Golden Triangle (Chart 6) but that does not mean that PPC has no place in a well rounded search engine marketing strategy.

PPC can provide a tactical boost to the more strategic organic search. The two are very effective if used together.

It is also worth mentioning that Organic has the additional benefit of producing a better return on investment.

How to measure social media effect.

“The tools we use to create digital content are increasingly powerful but decreasingly expensive. And we can show our work to a potential global audience. There is no analogue in human history for this development.” This is a quote from Dan Gillmor’s book, We the Media.

It points to the cost effectiveness of Web2.0 and the social media model. But the return on investment is only high if the tools and the message are executed correctly.

Measuring and managing Customer Lifetime Value is the key to sustaining a competitive advantage in the market place.

First you must determine what to measure:

There are three basic elements to measure:

1. Output objectives:

How many people read your blog?

How many people comment?

How many people download your whitepaper?

What is the quality of your discussion?

2. Out-take objectives:

How does the social mediasphere position your brand and people?

What is the perception of your organization?

3. Outcome objectives:

Financial. Traffic. Relationships.
These will lead you to a lifetime value calculation of your customers.

To effect this, it is necessary to invest in software to enable customer data gathering. This data will provide you with the information that will assist you in managing and growing customer value.

Source: Marketing Professionals

(Chart 7) Lifetime Valuation of your customer can be defined simply as : transactional value plus network value. That gives customer value less customer acquisition and retention costs. These values form the basis of the Customer Lifetime Value Equation.

Picture 14

The benefit of retaining and growing customer value over their lifetime is one of the most efficient ways of growing your business.
Remember that happy customers tell others about products and services that they like. Then your company’s potential for greater profit from Lifetime Customer Value is brought into play.

Conclusion.

In conclusion, we are moving towards an age of media democratisation. We have no history of this to help us. The Web’s history is in the future. But what we do know is that we as marketers need to understand the new rules of engagement:
involve the customer as an individual and as a partner in the process of brand development and sustainability.

This will generate greater profit and customer loyalty for your company.

I will leave you with three thoughts from Albert Einstein:

1. Out of clutter, find simplicity.

2. From discord, find harmony.

3. In the middle of difficulty lies opportunity.

For further information about maximizing your customer contact email Garry Titterton on: garry@creative-mindset.com or click onto www.ip-seo.com or www.creative-mindset.com