Saturday, June 30, 2007

Oh, Just Wow!

In the midst (mist?) of iPhone coverage, one piece on VentureBeati caught my attention. CellSwapper allows people to trade what's left of their phone contract. People can use it to get out of their old plan and jump into a 2 year exclusive voice contract (yikes). The implications of this are really quite significant. Take services such as USwitch that enable you to compare service prices, and then switch. Well, if you have a contract with about two months to go, but a great introductory offer comes up elsewhere, your barriers to exiting the relationship have just been removed. I am sure their are legal and regulatory issues in they way of such free-flowing contractual commitments, but the market will find a way. The concept is excellent and reminds me why I read Sean over at The Park Paradigm, Sean loves markets. Read him to see how you can insure your business against the effects of the weather! For me, Cellswapper just reinforces the mantra that value delivery is a continuous process, and that free market forces will have their way.

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Thursday, June 28, 2007

Lose A Credit Card Customer For $12?

The Social Customer Manifesto reports on a customer scenario where a credit card company levied a late payment against a good customer who had paid their bill a day late due to various circumstances involving a holiday weekend, and the length of time it takes a payment to move through the banking system. Bottom line was that the customer trust and the customer relationship is now broken. For $12. I wonder if companies should call the customer and offer to wipe this late payment fee if the customer will accept a conversation with a customer service representative to investigate how they can better manage this relationship? If I am right, customers that are willing to speak to the customer service people are probably not long term credit risks. Customers that don't accept the invitation to conversation, are even worse credit risks than your system is currently telling you. Just a thought, given the lifetime value of a credit card customer.

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Wednesday, June 20, 2007

Where Do You Go To Research Your IT Decision?

It seems inevitable that Purchasing managers will look more and more to user generated content to get an idea of what the IT they buying is really likely to have in store for them (MarketingVox). Overall, vendor websites, followed by user-generated content and editorial websites and trade magazines, are the most referenced information sources for IT purchasing information. - Vendor websites are referenced often or very often by 61.5 percent of respondents. - User-generated content is referenced often or very often by 42.6 percent of respondents. - Editorial websites and trade magazines are referenced often or very often by 40.7 percent of respondents. - Paid analyst research, catalogs and buyer's guides are referenced often or very often by 24.75 percent of respondents. It would seem to me that there is a key challenge here of making your website connect better to user group communities including the overall blogsphere. For hosted services this is even more imperative. No doubt this will open up into a key market for companies like VoiceSage that can provide click-to-talk and interaction technologies.

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Monday, June 18, 2007

Mortgage Payment Defaulting

The Irish Independent reports that late payments and bad debt rates are rising in the sub prime mortgage lending sector in the US. The Mortgage Bankers' Association, in its quarterly snapshot of the mortgage market released yesterday, reported that the percentage of payments that were 30 or more days past due for "sub-prime" adjustable-rate home mortgages jumped to 15.75pc in the January-to-March quarter. The percentage of sub-prime adjustable-rate mortgages that started the foreclosure process in the first quarter of this year climbed to 3.23pc.That was up from 2.70pc in the final quarter of 2006 and was the highest on record. The first quarter's increase in foreclosures was mostly driven by problems in California, Florida, Nevada and Arizona, said Duncan. Wow. I'm guessing (sic) that some of those people that are 30 days late, are about 25% likely to default on their mortgage. Wow. Many of the people that are caught in this trap were mis-sold from the get go. They were given the go ahead to buy properties they could never afford and teaser introductory rates. Given that the Irish paper also reports a doubling in the number of 100% Mortgages in the UK in an effort to bring first time buyers into the net, the underlying issue of affordability of the stock comes to the fore. Should you sell these products if the customer can't afford them? Who is doing the sanity & credit check here? This is a systems problem: sales executives were incentivised to sell to anybody. They were bad sales, and the companies were addicted to "bad profits". Poor credit management had its roots in poor sales processes, and bad marketing. Lenders are going to have to evolve the relationship with the at-risk-customer, re-invent the offer, and help them get to financial stability. If they do not, then the prices of the property will fall, speculators will have stood back as rental incomes fell in tandom, and the lender will be forced to sell the property for less than it was bought for. Some would say cut and cauterize. Why not get in front of the at-risk customer, and make an offer to pro-actively manage the problem, before the customer is labelled a defaulter, and the bank has bad debt on its books. Given that some people can now trade their good credit rating, (see Virtual Economics) why can't family and friends share their good credit rating to help out the one member of their Tribe that is trouble. Even getting a dig out on payments for the period that it takes to sell the house without before the sales process is "distressed", would deliver value. Sounds like an opportunity to me.

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Tuesday, June 12, 2007

Referrals: Now 50% More Powerful !

Over the last number of posts, I have referred to the importance of customer reviews, and customer review sites (i.e. Bazzarvoice, Loudervoice,) They form an important part of the customers online search and evaluation strategy. Bazaarvoice claims that sales of a product go up from 16% to doubling just by adding customer reviews. The next stages are probably feature and price comparison and evaluation and customers are using tools for this as well, like Farecast. Going back to my old Marketing days, I'd say there is a great deal of brand-Halo effect going on, where we think we are getting good value, because the brand says so. With so much information, tools, and engines available, how on earth are we going to make decisions? It would seem to me that the overall Brand Reputation of a company will be paramount here, and Reputation will be driven by customer experience, the reporting of customer experience, and overall levels of customer advocacy. Customer advocacy is the result of customers getting exceptional service. has a nice little piece on a US brokerage firm that uses direct personal contact to drive this sense of exceptional service. They don't have an IVR, or a cenralised customer service center. Calls are driven right through to the local branch where they are handled by trained and informed individuals. Now I am sure their are lots of infrastructure bells and whistles in the background to ensure that questions can be answered and clients serviced properly, but they key to the companies success is "driving contact", not "withdrawing from contact". So why do they want to draw the customers in?
financial services customers who make referrals tend to be worth 50 percent more than a typical customer, and a new referred customer is worth almost as twice much as a customer coming from other channels. Also, "advocates become more valuable and more loyal simply by making a referral, because they put their reputation on the line,"
Now back to some very old chestnuts: - how many of your customers would actively refer you to a friend? - do you know what interaction points provide the opportunity for exceptional customer service? - do you know how to identify, interact with, and leverage the power of advocacy? The Guys at BazaarVoice have a good entry on getting to grips with some of this stuff.

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Monday, June 11, 2007

Dell To Storm Ahead?

It would seem that Dell are going to bring their mass customisation expertise a step forward. What am I talking about? Their ideastorm customer interaction space has thrown up two very "new to the company" ideas (1) open source operating system Ubuntu, and (2) environmentally friendly computers. Wait for this though: 100,000 people contributed to their Q&A on these decisions. Best quote for me in the article has to be Bob Pearson, VP-corporate group communications at Dell: "There's a big difference between pushing your story out vs. becoming relevant in customers' conversations." There is a lot in that quote. How do you create interaction opportunities that are relevant to your customer? Finally, if Dell could let people design how they wanted their MP3 player to interact with their Dell, they could launch a decent online alternative to iTunes. Crazy? Original Story on Advertising Age.

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Data Will Present Itself - What Would Your Heat Map Look Like?

Well, I have to say, I saw this one coming. Having seen a sickness tracking mashup, to track how colds, flues and other illness are geographically dispersed, I thought that it was only a matter of time before people started adding crime related statistics onto real estate maps. These guys could get a double impact by tying into a Trulia API. Then you could track the effect of crime rate on house and commercial property prices. These kinds of statistics will become presented as easy to read Heat Maps. What's this got to do with customer service, and marketing? It has to do with information asymmetry, and the roles that people play in a service exchange. Can you imagine if your car owners network began posting data about parts failures? But this is far from being bad news for the enterprise. How many times have you spoken with someone about a restaurant they were at only to have them tell you "oh, actually, it wasn't that great, I felt kinda ripped off because the meat wasn't good", and when you ask them what did the restaurant do when you told them, they say "Oh, I didn't tell them, I just didn't tip that well!". Surfacing the customer issues and dealing with them well is what this new data availability will enable you to do. Imagine if your marketing person left a message on this car parts network with all the name and number of their local dealer, telling them that they are within warranty etc., or better still, with a click to call option that lets that network contributer contact the marketing person to resolve this issue to everyones benefit? If all the data you currently hold in your customer care system was available on the web how would that change the way you think about what the purpose of your customer service?

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Thursday, June 07, 2007

No, You actually do have to care about customer service transparency....

Damien Mulley, a popular Irish blogger, had a bad customer service experience. It's the usual thing, somebody didn't treat his concerns with respect, and now he is angry, and evangelical. He blogged the entirety of his experience, the outcomes, and how he felt about the whole thing. Then he set up his own moaning site for customer service failures For any (remaining)company out there that does not get this, this is not just some "crazy guy" setting up a website. He has readers, collaborators, family, friends. Now they will share the experience, gripe about their own experiences, and probably cause some significant brand damage. Now imagine that Damien was on line right now with a customer service team and "broadcasting the experience" to his network, LIVE! It is not farfetched. Customer service is not a set of metrics, it is an experience at each individuals level. When Paul Greenberg gets bad service, he posts up the entire interaction process online. Tom Raftery does this to a gut wrenching extent, but has become a reliable recorder of experience as a result. When performing an online check of companies and their reputation for service, all your Adwords will not negate the effect of a well written, and highly evidenced customer experience. Just to prove it, I googled the search term customer review sites and restricted the results to Ireland. The Result Damien Mulley » Blog Archive » An Irish Customer Care Portal? Wow Its like a circular argument, isn't it?

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Loyalty Schemes and Mobile Phones

The Wise Marketer has a piece this month on the integration of the mobile phone and loyalty programmes. Quite simply your phone is always with you and your loyalty card isn't. I find it baffling that companies don't think about using the mobile phone as a method of sending out personal invitations to events, redeemable coupons, and related money back offers. The quoted report from the Impaq Group: there are four key mechanics of a loyalty programme, all of which are well suited to the mobile phones that are already in the hands of more than 80% of consumers: - earning points - tracking points - spending points and - receiving information Clearly, loyalty programmes need to differentiate more. So there is a growing need to differentiate loyalty programmes - to build both engagement and participation - with the main areas of concern being: - Clear rules - An acceptable currency - Simple redemption - Relevant/valuable rewards - Achievable results - Flexibility And mobile phones may hold the key "Could the mobile phone actually replace the traditional plastic loyalty card? In practical terms it would be a relatively simple matter for almost any modern handset to display the customer's ID bar code (or other machine readable image) on-screen, either as wallpaper or as a saved image or MMS message. Even in more manual systems, the mobile phone number itself can be used as a unique identifier (although this has some potential problems in countries where prepaid cards are the norm). The consumer then only needs to show their phone (or quote their phone number) at the check-out. And it certainly would encourage interactivity, leading to additional engagement in the programme. And they could be reminded by SMS before Happy Hour promotions and other loyalty programme-related events. They can have their points balance available at all times, encouraging them to redeem more regularly. Already, mobile promotions from brands such as Heineken have shown that mobile voucher redemption is dramatically different to paper-based promotions: Heineken achieved a redemption rate of over 80% in one campaign". At VoiceSage have delivered quite simple campaigns for loyalty programmes. Send out the voice call with a personal invitation to an event at the store, follow up with an SMS with the details. They work. That's why the stores keep using them. But how much more powerful they are when the SMS is personalised with a relevant offer and when it is sent at the right time. So much so, that the stores that have used it, are now no longer sending out those expensive letter drops.

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Wednesday, June 06, 2007

Social Networks: One Size Fits All?

An old Post by Caterina Fake nee Flickr Very interesting distinction between social networks in terms of how they accommodate different "friendship cultivation" styles (drawn from a Microsoft UK Study) Friendship Cultivators -- friends mean a lot to them and they spend a significant amount of their time nurturing friendships. They're always arranging get togethers and are in constant touch with friends online and on the phone Friendship Pruners -- make and drop friends quickly according to how useful they are. Friendship Pruners name drop a lot -- they like to be seen to be in social contact with the 'in crowd'. They hate 'dead wood' so frequently prune names from their diaries, online buddy lists and mobile phones Friendship Harvesters -- tend to have a very wide circle of friends that they get in touch with on a seasonal basis. They're happy to leave long periods without contact and typically dedicate a set period of time every few weeks or months to a flurry of contact to keep up to date with friends' news and gossip Friendship Gatherers -- are quick to make friends but the least proactive at maintaining friendships. They gather friends wherever they go but are socially lazy and once friendship has been established they rely on the other party to keep it going. They often seek out Friendship Cultivators so they can ride on the back of their frequent social contact and arrangements. Then, a commentator on her blog Don Ramsey says "I find that fascinating, but I'm particularly interested in how different web sites encourage different *kinds* of friendships. e.g. Facebook encourages you to keep in contact with people you already know, MySpace encourages you to add as many 'friends' as possible regardless of if you know (or want to know) them or not. Flickr is somewhere in the middle and encourages sharing with friends while making 'acquaintances' with similar interests. I don't think most sites even consider the kinds of relationships people form when using them - it's usually just a matter of "we need an 'add friend' function". In the end, there's a limit to the number of real friendships you can maintain before people start getting pi**ed off because you don't have time for them" Often the most powerful contacts in your network are those that have "break-out potential", those that span other networks. Given that some of your friends and business contacts will fall into the categories above, perhaps social networking, and how we manage and use them, requires different approaches. Just because someone bought a product from you three years ago does not mean that they want to get an sms update from you. But if you could push the message through a social network, perhaps the message will reach them in a way that is acceptable to them. Just a thought.

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