Digitalinfant's blog is now on Posterous!

Hi there!

If you've noticed very few posts on this blog over the past couple of months, it's because I've moved my primary blog over to posterous. To access it, go to http://digitalinfant.posterous.com/

Thanks,

Is social media the answer? First know your goal and what you are solving for

Recently I got hold of 360i’s social media playbook (http://www.360i.com/pdf/360i-Social-Marketing-Playbook.pdf) via Len kendall (@LenKendall). It’s an exhaustive look at what social media is and how brands should think about engaging their customers with it. It’s a good report and most likely an attempt by 360i at legitimizing their “social media expertise”. For me though, it’s the start of a trend I’ve been seeing around rules, frameworks and legitimacy.

Everyone’s got an opinion (and an answer)

Many people are referring to themselves as social media strategists and offering “top ten rules” or a “three pillar strategy”. Agencies are blasting out POV’s and clients are even putting together their own rules on how employees should use social media on behalf of their company (Intel’s newly created social media rules). Putting a framework around your social media opinion is a good idea. It makes it visually pleasing, easier to understand and go viral a ton quicker.

Ask the simple question

For me though, in the end it ladders back to a much simpler question: What’s your goal for your brand or what are you trying to solve for? The solution may be social media, but it also may not. My uneasiness comes from those who are already pre-supposing a social media solution without even looking at what your goal is or problem that you are trying to solve for.

With that, here are my favorite bits from 360i’s playbook.

· The value of social media is best measured by the frequency or depth of engagement with consumers

· Remember that people have different levels of investment in social media (Forrester ladder) and your platform use and scale is affected by this

· Always establish your goal at the beginning. What do you want the outcome to be for your brand when using social media

· Just because a social platform grows rapidly, does not mean marketers must develop a strategy for their brand on that platform

· Traditional marketing tactics don’t always apply – having a single big idea is far from a requirement for achieving success in social marketing

· If you are going to participate, make sure you have an authentic voice.

· Plan, get involved, experiment, learn and evolve

Thanks to Len Kendall for the tweet containing 360i’s playbook and 360i for making the thing public.

-Johnathan (@digitalinfant)

Who do customers still defect with an 80% sat score?

Why do customers still defect with an 80% sat score?

Because the experience you have during every interaction with a company matters more.

In the early 90’s, Xerox did some pioneering work on customer satisfaction. Around the same time, the Michigan Ross School of Business developed what is now seen as the leading indicator of customer satisfaction: The American Customer Satisfaction Index. The latter sparked a massive growth in businesses and people offering their opinion on how you could use and measure this customer satisfaction through books (roughly 300 on Amazon) and tools (ForeSee, etc), and what this meant in terms of dollars and cents: “satisfied customers spend more”, “satisfied customers are more loyal”.

My discussion of the ACSI and the increase in companies offering ways to use it ends there. What I’m more interested in, and I think has more important implications for your business (anyone currently using customer satisfaction scores to improve loyalty or their customers experience) is the work done by Xerox. You see, when Xerox did this pioneering work in the early 90’s, they came across a very interesting finding: If satisfaction is ranked on a 1-5 scale, from completely satisfied to completely dissatisfied, the 4’s, though satisfied, are six times more likely to defect than 5’s.

Framing the problem

The Xerox finding turned many assumptions about customer satisfaction scores on their head. Thinking around this time, and what I think is a problem today with many marketers using satisfaction as a panacea measure for loyalty or customer experience, is that the correlation between satisfaction and loyalty is a normal, linear relationship. If you improve satisfaction, your customer loyalty corresponds accordingly. But, as Xerox showed, this actually wasn’t the case. In tends to have a slow build up then skyrockets around the perfect score of “complete satisfaction”. I find this even more interesting from a problem standpoint when you think about those who use sat scores to monitor individual components of their customers digital experience and really aren’t entirely sure what a 70 or 80 sat score means in the grand scheme of things

What can you do? Informed ramblings on a solution

For me, what I’d like to see is more people in marketing begin to question their satisfaction scores, and if they are in a highly competitive industry (as most industries are today) realize the bar is set to perfection. Be careful of building out even more predictive models from satisfaction scores and realize that it is not a panacea. In diversifying your risk from merely relying on customer satisfaction scores, I’ve seen a few other areas of measurement that I agree with. In Thomas Jones and Earl Sasser’s 1995 HBR article “Why Satisfied Customers Defect” they state that the ultimate measure of loyalty is share of purchase in the category. Other measures that can be used to determine this: intent to repurchase, primary behaviors i.e. recency, frequency, and secondary behaviors i.e. customer referrals, endorsements (free of forced prizes encouraging this behavior though).

But the measure that I have always found the most compelling and that I believe leads to the best experience and most loyal customers is in what Thomas Stewart concluded with in his 1997 Fortune article “A Satisfied Customer Isn’t Enough…”. A customer’s decision to be loyal or defect is instead the lump sum of many small encounters with your company. Thomas’s thoughts were echoed again 10 years later by David Armano in his Micro-Interactions In a 2.0 World presentation, “Each encounter, no matter how brief is a micro-interaction which makes a deposit or withdrawal from our rational and emotional subconscious. The sum of these interactions and encounters adds up to how we feel about a particular product or service.”

My thanks to those whose worked I’ve cited and used in this presentation:

- David Armano’s micro-interactions presentation

- Thomas Stewart’s 1997 Fortune Article “A Satisfied Customer Isn’t Enough…”

- Thomas Jones and Earl Sasser’s 1995 HBR article “Why Satisfied Customers Defect”

And the person who first planted the seeds of improving upon a customer experience and customer loyalty way back in my early 20’s:

- Dr. Gordon McDougal

Exploring a new business model for online newspapers

My tweet above was a verbal expression of an interesting problem that I had been thinking about for a little while. It's no secret that newspapers are in a heap of trouble. Just today I read that average industry revenues fell 7.9% in 2007, 16.6% in 2008 and 30% projected for 2009. But the reaction that followed was astonishing and incredibly exciting. Immediately I had people respond saying they wanted to join in on the conversation - @davegray was my first responder, followed by @nickheise, @elledog, @annaobrien and @christopherberry. I had a flurry of links sent to me, and conversations immediately started happening on what people thought the core challenges were for this industry. Our passion is there. Many people who aren't even remotely involved with this industry want to solve this problem.

But why do so many people care to solve this problem that doesn't directly impact them? This isn't global warming and it isn't the future of health care. I think people want to solve this problem for the same reason I do - because we don't want to see newspapers die, and we know they can have a role and exist profitability in an increasingly digital world.

The point of this post is to begin a series of whiteboard ideas on how we (the dispersed group of individuals passionate about the same issue) can solve the broken business model of online newspapers. I have started to house links that people are sending me in my delicious account http://delicious.com/Digitalinfant tagged under "newsmodel" and for instant communication of ideas, I am tagging most conversations with #journchat or #newsmodel on twitter.

I'm off to a rabble event in Toronto tomorrow to discuss "what's wrong with our newspapers". I won't be live tweeting but I will be following up with a blog post.

Looking forward to the journey.

Interesting reads and a question to be answered for next week

Saturday's Globe and Mail was immensely boring again, but today's Sunday NY Times made up for the lull with a few interesting articles.

• "States are slashing social programs for the vulnerable". An interesting look at what states are having to do in order to reduce their budget deficits and meet the increased demand on social programs. They highlight Arizona as having one of the highest deficits and the result is an increased number of elderly without proper assistance. This isn't the first time I've heard about John McCain's state being one of the worst offenders of social programs. How did this aristocrat get so far in the presidential race? http://tinyurl.com/d5efbb
  

• "Life of crime and time behind bars inspire a drug dealer to turn author". A former drug dealer who ran a lucrative cocaine business, served 20 years in jail and has now become an author. Apparently his novels, which use fictional characters and plots to express the life the author had before he went to jail, are incredibly interesting reads. http://tinyurl.com/c2tved

• "Tech recruiting clashes with immigration rules". This is part of an ongoing series the NY times has had on immigration. To be honest, the whole series has been very well written and tends to look at both sides of the theme being discussed. It was interesting to learn that 60% of engineers with PHD's in the U.S are foreign born - I think this referred to the valley though. http://tinyurl.com/czj5w

I'm also currently working on a blog post for this week which will dive into the question, "What is more important, the message (brand) or the platforms we use to engage the audience with it?".

Johnathan

Don't just sit there, adapt!

I've been reading Leonard Fuld's book on conducting competitive assessments called, "The secret language of competitive intelligence". I'm not the biggest fan of the title, but the book is interesting and applies to what I'm doing right now to say the least. I started to think about an example he brought up on research houses, about how the internet drastically changed their industry. This leads to my curious thought/statement/whatever you want to call it: when you see other forces that begin to change your traditional model, that changes the way consumers interact with your services, don't fight it, learn it and see how you can work with it.

Learning how to adapt. I think of Fuld's quote, "gone were the days when online information pioneers, such as SDC ORBIT and Dialog, information aggregators, could act as critical (and sometimes sole-source) distribution centers...the dialogs of the world lost influence since publishers could sell their wares directly to consumers". How we adapt and how fast we adapt to these changes are incredibly important in determining the survival of your company.

How not to adapt to industry change. Don't think it will go away. Many of the worlds CD and DVD retailers such as HMV thought digital music transfers would, while Apple jumped on the opportunity to offer the digital HMV's of the world. Don't pay it lip service and then not act. In response to Sony's introduction of the first digital camera in 1984, Kodak amassed more than a 1000 digital patents. They even announced a 1.4 megapixel CCD chip in 1986, but failed to bring not only this announcement to the market, but failed to capitalize on any of their patents.

What you should consider when things change. Learn everything you can about it, gauge customer reaction to it, even go so far as prototyping the idea. Begin to think about what it could become. Going back to Fuld's book, and thinking about the online information pioneers, things didn't die, they evolved. Those research houses that adapted - that began to realize mass access to information didn't result in quality information, that people didn't have the time to search for everything and required information on their speciality, i.e. Forrester - not only survived, but began to gain greater market share.

It's interesting where a tangent can take you, and if you want to read a good book on conducting a competitive audit and analysis, I recommend Fuld's book.

When the product experience overshadows the web

"I remember why I never take this thing". These were my last few words before I ended my conversation with my friend. I was near the end of my journey on the TTC. A journey that I normally avoid due to its long commute times, grimy seats, and share of odd balls. I have been thinking about this journey, and its timeliness to a conversation I was lucky to have with a user experience designer. This designer had just finished telling me about the "launch" of the new TTC website, http://www3.ttc.ca/, and there involvement with it. It was a cool conversation because of the amount of usability testing they were doing, but that's a side bar.

The more important part: the site sounded awesome, since checking it out, I would say they moved from the 1920's to the 1980's. I'm not jumping for joy, but it's a step up. For me, nothing really touches the London transport site: http://www.tfl.gov.uk/

But this isn't the point here. What was important, was that I realized that no matter how well the redesign was, even with its fix to the trip planner, the bad experiences I have on the TTC overshadow the improving web site. The experience on the TTC matters more to me than its presence online. My bus was crowded, it was late, and I didn't get a seat. Compare this with GO Transit's website: it is arguably now less advanced or "cool" than the TTC's, but the GO is mostly on time, it doesn't smell, I can get reading done. The "Go product" is an enjoyable experience and makes up for the sub-par site.

I thought this was an interesting problem. It made me think about its application to clients agencies choose. If the product is just a really bad experience for users, does your ability to provide them with a completely different look online matter. Aren't you just trying to provide a bandaged solution at this point. On the other side, if you can find clients that understand this symbiotic relationship. That the product experience + communication experience (here I refer to online) are both important tools in an experience formula, that they are willing to improve the product, than you have yourself a good client to work with.

It was an interesting experience aboard the TTC and it made me think about the relationship between products and what we do online.

And no, I won't be taking the TTC again unless it's a Sunday afternoon.

-Johnathan