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Richard's and Laura's Blog

3 Posts tagged with the social tag
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Headline from the WSJ: GM pulls advertising budget from Facebook! Days before the IPO, that’s just plain mean spirited. If I was banking on a $100bn valuation, I might be a tad concerned about this development. With a budget of over $3bn to spend on ads, GM is the third largest spender in the US (P&G is #1). Perhaps they were miffed that they only have a $33bn market cap after all these years, and quite a few motor cars sold. Either way, the implication is that targeting Facebook members as advertising opportunities is the principle value from the site is missing the point. Facebook is a treasure trove for companies.

 

I am of course, looking to the social voice of the customer. I’ve made the gross generalization in the past that advertising spend is simply a tax you pay because your customers are not advertising your product for you. That’s extreme for effect. But it is true that companies with higher NPS don’t need to spend as much money on ads as those who have lower, to get the same result. It’s a logical conclusion from the word of mouth economics studies we have done around NPS.

 

But for many companies, the first instinct when a new medium comes along is to rush to buy advertising space. And if people don’t respond to the ads, what interest do they have in that medium. Respectfully, let me suggest they start by listening, not talking. Facebook, like much of social media, is a gift for companies around viral word of mouth. Spend a fraction of that advertising budget on understanding what customers are telling you on Facebook, understanding who your promoters and detractors are in social media, figuring out your Sparkscore; companies may discover that the real financial return comes from the positive word of mouth they can create rather than the ads they serve. It’s what Net Promoter 2.0 is all about.

 

See you in London!

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" …'Ere, he says he’s not dead. Well, he will be soon, he’s very ill. … I’m getting better! No you’re not, you’ll be stone dead in a moment. …I think I’ll go for a walk You’re not fooling anyone, you know"

 

Monty Python and the Holy Grail 

 

Surveys are the worst possible solution to the data collection problem, until you consider the alternatives, the joke goes. The punchline is that there are no alternatives. It’s fast becoming time to reconsider. 

 

Fact is, surveys are on a steady, but inevitable, fall from grace. I will illustrate my case through example. Google "Nielson Box" and choose images. Take a look at the pictures, it’s like looking at stills from one of those fashionable TV series set in the 50’s (which presumably Nielsen measures) when a computer could conveniently fit into a small living room (if you had the air conditioning, which you didn’t). It’s not the future, but it was the only available tech at the time. Advertisers showed you commercials, you watched (yes son, we watched TV commercials back then!) and advertisers had to figure out if they got value for money (good luck with that). Then came click through ads and you didn’t have to guess as much. Next, coupons attached to your facebook page that will not only enable the promoter to track your exact purchase, and that of your friends, but also probably whoever you stood in the line next to at Starbucks this morning. OK, I made that bit about Starbucks up, it’s not shipping yet. 

 

My point is this: the means to understand the effectiveness of promotions is shifting from the universe of analog, imprecise, measured by guesswork technology, into a world of “big data”: precision, measurability, real time. It’s not a surprise, it’s telegraphed. 

 

Surveying is reaching a zenith. Gone are the antique days of the clipboard, today we have … the digital clipboard! Low cost equals ubiquity. Fancy a beer tonight? Let’s survey the gang. We are getting saturated. 

 

In the short term, there will be a flight to quality. No, you can’t survey me and ask me if I did travel on the flight after all, or did I buy your product, you need to figure that out in advance. I won’t spend 30 minutes filling in your crazy complex questionnaire, especially if I suspect you won’t do anything with it anyway. Come to think of it, you didn’t do anything with it last time I sent it in. Please don’t make it look visually cheap: it’s a form of your market communication after all, what does it say about your firm? Oh, the ad at the bottom of the page is a nice touch, very professional. BTW, your colleagues in another department just surveyed me the other day to ask about the best color palette for the new microsite design, so I’m tapped out for the year.  

 

The bar is getting raised, and the companies that can’t leap it will find that nobody shows up for the party, or worse, only the folk who want free beer.  But that’s all today. In the long run we can see that surveys will be less important. Because your customers have already told you what they think.  

 

On the phone with your contact center. In email to your sales team. And above all, in the social web, to their actual friends, Facebook friends, LinkedIn friends-I-want-a-job-from, etc. Worse for you, unlike many survey responses, someone might actually be watching these comments. 

 

Now, our technology relies on survey data to work. And we are not seeing any sudden let up in demand for surveys. But, just because your uncle Frankie told you that Blockbuster stock was a buy in 1990 didn’t mean he was wrong at the time, just that you should keep an eye on the future while getting what you need to get done today. We will need surveys for the foreseeable future, but we need to start building our expertise around a future of social media, massive unstructured and unprompted data streams and, above all, customers who talk to each other at a time and place of their choosing, not ours. 

 

See you at the Net Promoter Conference in London in June, for Net Promoter 2.0

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I recently saw a presentation from ad:tech San Francisco in which the following phrase was used:   "Recommendation is the new advertising."

 

The substantiation for this claim was that 90% of online consumers trust recommendations from people they know more than any other source. This of course starts one to wonder whether advertisers have entered the world of recommendation, in which they can try to influence that recommendation to achieve business benefit.  In considering this trend, I've also noticed that the window from Buy to Advocate in most of the advertising models shows this cycle as very short – meaning once someone makes the decision to buy, they immediately become an advocate.  This may make for an interesting model, but we all know what happens in between buy and advocate: the customer experiences a company’s brand, product, services, support, etc.  And along the way, perceptions are created that either serve to counter that initial buy decision or enhance it.

 

True recommendation comes from a positive feeling created through a multitude of experiences – it is a natural extension of these experiences, not a manipulation. Understanding these experiences – both online and offline – is still vital to any long-term customer strategy. As we know from word-of-mouth analysis, the value of a Promoter is both their lifetime purchase behavior in combination with their positive referral behavior. The combination of the two yields a total customer's worth. And we also know that the value of that referral behavior has exponentially changed through social engagement. Promoters are referring at greater rates across industries. Undeniably, social influence is growing.

 

Social media is opening new, unexplored avenues for influence, and permitting promoters to reach a broader audience than ever before. The social web is a critical channel for understanding the experiences that delight promoters (and mobilize them), gaining strategic insight about core issues being voiced by the market, understanding the influence of both active promoters as well as detractors, and prioritizing action accordingly.  So as you look at your social media strategy, recognize that the total customer experience is a cumulative activity which manifests itself in positive and negative sentiment about your brand, product quality, and value. This sentiment not so surprisingly can translate to a form of social web "promoters" and social web "detractors" which forms the basis for something we call Social NPS. How Social NPS aligns or calibrates to your structured NPS will be the topic of upcoming thought leadership and technology innovation for us. I look forward to your thoughts, comments, and questions.