Era of The Social Customer 2010.

Welcome to the Era of the Social Customer21st Century Edition

The Social CustomerThis is a SOCIAL transformation that impacts all institutions – business among them – not exclusively

The Social CustomerSea change in use of technologyGen Y first generation to spend more time on the ‘Net than watching TV96% on social networkWill outnumber baby boomers by 2010Implications for marketing staggering74% of all adults on the web are engaged with a social network/community

The Social CustomerThe Social Customer – The EstablishmentSocial networks as active participants in effecting change (blogosphere, podcasting)Collaboration between company & customers to provide useful value for eachPersonal value chain subsumes enterprise value chainThe social customer is increasingly a mobile customerConversant with the tools – which are inexpensive

The Social CustomerSource: A Typology of Information & Communication Technology Users – Pew Internet & American Life Project

The Social CustomerUsing Social Networks

Nielsen Online research “Global Faces on Networked Places” (March 2009):

Fastest growing sector for Internet use is communities and blog sites (5.4% in a year)

Member communities reach more Internet users (66.8%) than email (65.1%)The Social CustomerEdelman Trust Barometer2003 – “A Person Like Me” – 22%2004 – “A Person Like Me” – 51%2005 – “A Person Like Me” – 56%2009 – “A Person Like Me” – 58%Most trusted source moved from non-connected (to corporation) experts to “a person like me.”Customers demand authenticity & transparency now

The Social CustomerTraditional ads – trusted by 14% (Marketing to the Social Web, Larry Weber)Peers – trusted by 90% (Nielsen Global Online Consumer Survey, 2009)

The Social CustomerConversation is controlled by the customerReview sitesYelpSocial networks/communitiesService complaint oriented – PlanetfeedbackGet SatisfactionLinkedInFacebook pagesSocial Media PropertiesUser generated content – video, audio, blogs etc.Blogs (200 million)34% post brands & product opinionsPodcastsGeek Brief TV

The Social CustomerSource: Brian Solis

The Social CustomerBUSINESSWEEK, DECEMBER 19, 2005"Companies used to focus on making new, better, or cheaper products and services....Now the game is to create wonderful and emotional experiences for consumers around whatever is being sold. Its the experience that counts, not the product."“People…want capabilities and options, not uniform products…business is there to provide the tools.”“The Knowledge Economy is giving way to the Creative Economy...” (Knowledge has become a commodity so the solution is to) "focus on innovation and design as the new corporate core competencies."

The Social CustomerFrom CRM to Social CRM"CRM is no longer just a model for managing customers but one of customer engagement"

The Social CustomerSocial CRM“SocialCRM is a philosophy & a business strategy, supported by a technology platform, business rules, workflow, processes & social characteristics, designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted & transparent business environment. It’s the company’s response to the customer’s ownership of the conversation.”

The New Business ModelConcentrate on what your customers want, not on the dizzying array of places they converse.

Each customer wants a personalized experience…

Understand their relationship with you exists because they appreciate the experience

But how do you begin to “know” customers?First, learn how they interact with you.Ultimately, the tools for the customer to manage their own experience are paramountGive them access to information that allows them to make informed, empowering choices which thus, provide value

The New Business ModelThe users and producers become partners/collaboratorsWhich means insight about your partner, rather than data on your customer becomes the mindset. The business moves to be an aggregator of products, services, tools and experiences, rather than simply a producer of goods and services for saleThe user is an advocate of the experience and, directly and by extension, the company

Community retailingMultiple brandsEstablished (Adidas, Vans)Independent (The Kazbah)Community of 800,000Own clothing line (Sons of Liberty

Helps indie designers sell their waresPromotes and advertises to the communityRecruit to the community and recruit from the community

Street TeamsSign up, get unique codeGet friends to buy on the site using unique codeDiscounts plus points for Street Team memberStreet team member can upload photos, videos, earn points (community themes)Return is cash & free clothes1% of their network = 15% of their revenueOver 8000 advocates on street teams

Transformative Social CRM Models

The New Sales ModelNew approaches to lead generation (non-traditional social sources) (community participation)Better handling of opportunities (Employee engagement) (Oracle Social CRM, Lotus Connections)Need for competitive differentiation of a new kind but through organizational knowledge & sales intelligence (InsideView)Reputation, influence, persuasionBased on customer insight

The New Customer Service ModelWhat do you do – Customer Service ModelsAgent based call centers (Ayava, Genesys, Siebel, Amdocs)Process based CRM (Sword-Ciboodle)Community driven customer service (Helpstream, RightNow)Customer experience focused call customer service (Kana)Web self service (RightNow)

The New Marketing ModelAuthenticity and trust is what matters – more than even the “consistency” of the message

The New Marketing ModelBecause the model is built on trust, the reputation of the company, not the message, becomes the brandThat means, both the perception but also the actual quantified assessment of the marketing practices as certified by third parties (TRUSTe, etc.)The practical side would be an authenticated or accredited message that is validated by the ISP or whoever is transmitting it.Marketing becomes the center point for engagement of the customerMessages are not to be pushed at the customer about products and services;Marketing uses the media tools that are available to engage the customerBut with authenticity (Walmart & Edelman screw-up)

Case Study: Proctor & Gamble300 brands23 of those brands $1 billion and up (e.g. Charmin, Crest, Folgers, Downy, Pringles, Tide)2 billion consumers affected w/6 billion as goal160 countries reachedOne of 30 companies on the Dow Jones Industrial Average (DJIA)

Case Study: Proctor & Gamble“We have to create a great experience every time you touch the brand, and the design is a really big part of creating the experience and the emotion. We try to make a customer’s experience better, but better in her terms.”– A.G. Lafley, CEO Proctor & Gamble“I think its value that rules the world. There’s an awful lot of evidence across an awful lot of categories that consumers will pay more for better design, better performance, better quality, better value and better experiences.”– A.G. Lafley, CEO, Proctor & Gamble

Case Study: Proctor & GambleFocused around the co-creation of value and user communitiesSales/MarketingVocalpoint – 600,000 momsTremor – 225,000 teensResearchInnovation Network – 80,000 scientistsTechnology entrepreneur networksBenefits?In 2001 – 20% of ideas, products, technologies externalIn 2004 – 35% of ideas, products, technologies externalIn 200X – 50% of ideas, products, technologies externalVirtual design, 3D simulation

Case Study: Proctor & GamblePerhaps the most innovative company in the U.S. when it comes to understanding of the benefits of customer ecosystemThey emphasize the “desired consumer experience” as their primary design focusTaste, smell, feel of products – not just utilityConnect & Develop programMoving technology and ideas between cross-functionallyCrest Whitestrips involved oral care unit (whitening teeth), corporate R & D (film technology), and fabric/home care (bleach experts)Tie the effort to working with consumers too50 technology entrepreneurs who scour for external resources including customersUse of ethnographers to try to understand the activities of individuals in the context of social anthropology

Case Study: Proctor & GambleContemporary MarketingSecret Sparkle body spray products launched Feb. 2005Not campaign focusedBlog SparkleBodySpray.com launched May 200512,000 visitors per week25 minutes per visitor per visitFour teenage authors under identities of Vanilla, Tropical, Peach, Rose (4 body spray names)Music, fashion, sports, dating, partiesInteractive activities e.g. building dream date (choice of males) that you can send to a friend

Case Study: Procter & GambleIt went from this in 2005….….to this in 2007

Case Study: Procter & GambleResults?0.8% of the $10.4 billion antiperspirant/deodorant market by July 2005Do the math - $83 million in five months

But They Didn’t Forget the New 12-13 Year Olds!

CaseStudy: Procter & GambleSay hi to BeingGirl.com

Getting Results: Creating Advocates

Advocacy“Advocates are what you aim for optimally when you build your customer strategy. You settle for loyalty. Advocates are your partners, not just your clients. It works so much better that way.” -Paul Greenberg, CRM at the Speed of Light, 4th edition

AdvocacyAdvocates are created through continuous:Engagement (conversation)Transparency (visibility)Authenticity (honesty, straightforward behavior)

Era of The Social Customer 2010.

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Era of The Social Customer 2010.