Do Your Community Members Deserve a Badge?

Social media badges are not a brand-new phenomenon. I have an impressively interactive badge on the right sidebar from the Pickens Plan community. I downloaded it because I like the community and I like the message of the badge, not because it does me any particular good. I was interested to see a new application by the Huffington Post over the weekend.

In doing research, however, I came across careless use of the term. There are quite a few writers and sites that use “badge” to identify the “this site is a member of Facebook” app like this one that you can get from many social networks. The purpose of these apps is to link you through to your page on the social network. That makes them a chiclet (note proper spelling!), not a badge as HuffPost, the Pickens Plan and others are using the term.

According to my friends at Overdrive Interactive, who have an excellent white paper on the use of chiclets, “Chiclets enable a user to quickly share web content by automatically posting articles, photos, video, and other content to their blog (WordPress, Blogger, TypePad), public bookmark page (Digg, Delicious), or social profile (Facebook, Twitter).” You can download the white paper from the Overdrive home page.

Badges have a different, and perhaps a more personal, use. CNET likens them to the efforts many of us made in Boy or Girl Scouts to collect merit badges for various accomplishments.

According to CNET, the current craze for badges started with Foresquare and the competition of its users to earn status in the community. The HuffPost application rewards its most engaged users by making their comments more visible. There are various levels of activity, which they outline on a FAQs page. For example, a member can become “Moderator” by flagging objectionable commentary on the site. As Bryan Person pointed out last week, sites are either overlooking or falling behind in the important activity of moderation. Encouraging help from their members is an excellent approach. Rewarding them in a visible way for their help seems equally desirable.
Not incidentally, the application for a badge results in the applicant linking their Facebook or Twitter account to HuffPost. The publication is cagey about how they will or won’t use that info, but the FAQs do point out that “the shift in privacy is very minimal.” Not sure exactly what that means, but it worries me about as much as people who complain that their privacy has been violated on other social networks. Social networks aren’t a place for those who zealously guard their privacy!

HuffPost is clear that its current effort is intended to increase member engagement with the site. Why can’t the concept be extended in a way that rewards members for desired behavior. That makes it like a CRM loyalty program. Why is that not a good idea? The Tesco Clubcard is the classic example of a vibrant online loyalty program, but I don’t know any firm that’s using a “proud member of” type badge as a tie-in with its loyalty program.

Maybe we’re thinking too much about social media as an acquisition tool and not enough about its potential value as a CRM tool. What are your thoughts?

A piece of advice to CEOs (and everyone else interested): The Social Media is not the silver bullet

The response of businesses to the Social Media as marketing tools is overwhelming. It is getting hard to find any company home pages that do not display proudly Twitter, Facebook, YouTube, RSS and other social links. To many managers the Social Media hype has triggered euphoric expectations and the illusion that jumping on the Web 2.0 bandwagon will magically solve all their problems and give them “competitive advantage”.

The countless Social Media aficionados and self-proclaimed “gurus”, “experts”, “evangelists”, “specialists”, and “prophets” I wrote about earlier are also contributing to the confusion; a very similar picture to the dot.com frenzy that some of us still remember but obviously many of us have already forgotten.

One of the big management fallacies (shared and distributed by most of the ignorant “experts”) is that the logos of the trendy apps on the web site will make customers believe that things have suddenly changed: our products got better, the customer service works, we listen to the customer. Some serious research is of course necessary here to see whether these management perceptions have anything to do with reality and whether the introduction of Social Media is really by itself leading to any improvements.

Until such evidence is available I would rather advice some cautiousness: the Social Media is not the silver bullet. I consistently explain to those who follow my lectures on the subject that the Social Media is only part of the solution. Other parts are the Customer Advocacy and the of course the Marketing strategy on different levels. I explain them that you should not start investing (or rather throwing) money in social Media strategies if you do not first address the issues in the (E)-Marketing Strategy Pyramid.

Borrowed from the well-known Hierarchy of Needs Maslow model my pyramid simply says that in order to be able to apply any Web 2.0 / Social Media strategies you should consistently address ALL lower levels of the model. In simple words you can not have Social Media ambitions with lousy products and customer service, a marketing organization in a permanent state of winter sleep and a dysfunctional web site that was last updated in the previous century.
Anecdotal evidence indicates that indeed such situations are not the exception. I recently read the post of Tom Davenport and the post of Umair Haque in the HBR blog that discuss the problem from different angles.
For those who want to address effectively some of the issues arising I have a few simple advices. Before you start talking about Social Media Marketing:

- Place yourself in the place of your customer
- Try to listen (and hear) the real customer voice
- If you have outsourced your customer service to a Call Center break today the contract with them (if possible). If you do not do this you can never apply the first two advices
- Look to your organization carefully and without bias (or maybe let someone else to look to it).
- Have you ever heard the terms CRM (not the software packages that are called so) and Customer Advocacy? If not go to Google (or maybe in an old fashion library) and try to find out something about them.

Starbucks Listens--and Acts!

Earlier in the week Michael Estrin had a good advice in iMediaConnection for those who want to have a good blog, either personal or corporate. The graphic from Starbucks caught my eye. It perfectly captures the concept of a community being involved in idea generation for a brand.

I always wonder whether companies follow up on good ideas so I checked it out. Here’s what I found.
















The My Starbucks Idea site seems to be the home page of the enterprise. It’s where you can sign up to be part of the idea generation process. It’s on a SalesForce.com platform, so clearly it’s intended for CRM. Do the numbers in the Categories section represent posts and comments—5,483 for Tea & Other Drinks, for example. Probably. I checked some of them and there are active postings, comments and discussions.

The Idea page links to the Ideas in Action blog where Starbucks employees give feedback. I captured a post that’s reporting on the number of ideas launched in a given week. Posts are frequent.

What’s really interesting is that there tend to be 2 or 3 comments on those employee blog posts—agree, disagree, whatever—there are a few comments on each post. Comments on the Idea site tend to be more active, and assuming that a point for a post represents a vote, the voting is very active. My point is that there seems to be more action on the site that’s mostly UGC than on the blog where employees, chosen for their expertise according to the site, blog about what they have actually done. Worth thinking about! Does it mean that brand enthusiasts enjoy talking with one another even more than they enjoy talking directly to the brand?

All in all, it’s a site—and a concept—worth exploring. Starbucks has created a community around something everyone loves to do—telling you how they think you should run their business. They’ve found a way to involve and engage, and they are following up in a disciplined fashion.

I’m not saying any of this is particularly easy, especially the follow-up. I am saying that it’s worth seeing what you can learn from Starbucks about engaging customers in your own brand.

Harrah's Adopts Surface Computing

I’ve written about Microsoft’s surface computer before. It offers lots of opportunities for entertainment and interaction but it’s still pricey at $10,000 per unit. Also, I’ve long been fascinated by Harrah’s and their incredibly comprehensive and successful loyalty card program.

When I saw the article in CNET about Harrah’s installation of six surface computers in a bar in one of its Las Vegas casinos I read it with interest. The computers offer bar patrons a variety of applications—they can develop their own mixed drinks and send them to other patrons, watch YouTube videos, play games, and use an app called Flirt. You can see the uses on this seriously lame promotional video from Microsoft. I’m having trouble deciding whether the women or the men are most insulted by the content, but it does show the tables in action. View the video here.

The implications are broader than just empty-headed beautiful people flirting in a bar. Harrah’s has long been famous for its Total Rewards program and the way they use the resulting database to market their individual casino locations. If you know this story, your first thought is, “Data; I wonder what use they are going to make of it?” A lot of their marketing is based on knowing what individual customers do in specific casinos and marketing to their interests and needs. The surface computers are meant to fit into their databased marketing program in some way. I can’t see anything very profound from the features they currently offer, but it may be only a first step.

If you don’t know the Harrah’s story, it’s an excellent example of disciplined database marketing. If you have access to the Harvard Business Review there have been several articles by and interviews with CEO Gary Loveman since he took over in January 2003. There is a recent interview on The CEO Show with Robert Reiss. The 18-minute audio interview focuses on customer service but the importance of data about customers and how they use it at Harrah’s is frequently emphasized in the discussion. To listen, follow this link and scroll down to the March 9, 2008 interview. It’s worth it.

The Total Rewards program is deservedly famous. Take a look at its tiered strategy, which has emerged from segmentation analyses over the years. Harrah’s SVP of Relationship Marketing, David Norton, says it’s more than just a rewards program. Another way of saying that is that Harrah’s captures, mines and develops and executes marketing programs based on the customer data they capture from the program. That applies to individual customers and individual casino locations. In 2005 Norton said that 50% of Harrah’s revenue was driven by [targeted] marketing. That’s a major achievement, especially in an industry where glamorous properties, big-name entertainment and marquee chefs are the essence of strategy.

It’s about both data that drives programs and people who execute them. Gary Loveman has understood that from the beginning. It doesn’t happen overnight, but once a company puts a disciplined databased marketing program into place, it just gets better over time.

The Internet is now a chief source of data about our customers. How many of us capture and use transaction and activity data well? How many develop customer-effective programs that provide more of the kind of data we need to serve those customers better and win their undying loyalty? Very few!

Are Social Media Metrics the Future?

I’ve long been an admirer of Tesco’s Clubcard CRM program. A student recently brought to my attention an article in British publication Marketing Week that makes a larger and more important point; thanks Alisa.

If you’re not familiar with the story the Tesco Clubcard started well over a decade ago. Under the guidance of the Dunnhumby agency Tesco has expanded its offerings from simple conveniences like paying your utility bills at the store (and later on the website) to a wide product portfolio with heavy emphasis on financial services. In 2006 the Financial Times said Clubcard had over 13 million members in over a dozen countries around the globe. Some have been members for many years—consider the wealth of data Tesco has about them! It uses the data to personalize communications and offers for a huge number of subsegments. The original focus was on their quarterly Clubcard mailing; their website is now an important focus of marketing activities. Much of the information about the early days of the Tesco/Dunnhumbycollaboration has now disappeared off the web into a book, which is well worth reading, even if the Marketing Week article suggests that this is the past of customer data; other approaches are the future.

According to author Alan Mitchell:

Take Google as one example. With Google, individuals volunteer information about what they are interested in buying, and when they are interested in buying it. This provides data that Clubcard can never capture: before-the-event information about what somebody is planning to buy rather than after-the-event information about what they have bought. In marketing terms, that's nirvana - and Google is just the start.
Facebook and MySpace are other examples: individuals building profiles about themselves - personal databases - on a mass scale, to reveal information about their attitudes, preferences, circumstances, lifestyles and interests. No traditional market research or transaction-based database could ever match these personal databases once they reach maturity.

That’s not an entirely new revelation, but he says it better than most. And it’s pretty scary when you stop to consider it. Tesco’s Clubcard is best practices marketing because few, if any, other marketers have been able to emulate the scope of the data they collect or the marketing finesse with which they use it.

If the customer intent data that can be mined from social media is the future of metrics—and there’s a strong argument that it is—then most marketers are far behind the curve in terms of customer data capture and use.

It also suggests an interesting strategic question. If a marketer is behind the CRM data curve, should he try to leapfrog into the area of social media, skipping traditional CRM altogether? I don’t think so. Each is a different kind of data; each has its own uses, even though intent data may eventually turn out to be more powerful. What do you think?
Sphere: Related Content

Call Centers: A curse in disguise?

In the 90s they were praised as the new frontier of marketing, the foundation of CRM (Customer Relationship Management), the key for creating loyal customers and as the ultimate customer service solution. I refer of course to the infamous call centers: with very few exceptions confirming the rule, call centers are widely seen as nothing more than customer nuisance, source of resentment and as far as I know one of the main reasons of customer irritation that goes as far as switching brands or service providers. I still have to find someone who talks positively about them; I really can not imagine how it is possible that marketers have not yet understood what kind of damage these centers do to their brands and firm reputation.
Call centers offer two main categories of services: Outbound (bothering people with unsolicited calls at any time of the day, trying to sell from cheap electricity to dubious financial products) and Inbound i.e. under the pretext of “Customer Service” or “Help Line” doing their best to go through scripts that persuade you that the whole problem is inside your head and deny you any access to the firm responsible for the piece of crap you bought and can’t get working. Next to depriving the term Customer Service from any meaning and actually hurting most companies using them by creating a barrier between them and their customer, call centers do not seem to have many positive things worth talking about. Some skeptics will argue that they have helped increasing the welfare in the developing world by creating new employment opportunities in India, Pakistan, China and other low-cost countries. I would say that perusing low-costs is one of the main sources of the problem i.e. the unacceptable low quality of services provided and the actual denial of service since the people sitting at the other side of the world have no real power or authorization to actually solve any problem.
I have many personal experiences of the inability of call centers to help the customers, the nicest one is from last year when I was attempted to make a hotel reservation through the hotel help line since the online booking system was refusing my reservation without any obvious reason and any explanation. A very polite yet stubborn voice with a very nice exotic accent informed that booking through the site was the only way to make my reservation. In my repeated questions why the site booking system was not accepting my reservation the voice kept repeating "I am sorry sir, the only way to make the reservation is through our web site". After repeating this to me 4 to 5 times I hung up and booked in another hotel.

The real long term advantages of call centers on low cost countries is also a point worth some though. In that respect I recomend the film Outsourced The Movie to everyone. In the web site of the movie you can also enjoy a very entertaining spoof about call centers and outsourcing solutions. However it would not surprise me if someone would tell me that this video is not a parody but actual footage. The reality is not much different.