How To Build a Killer Community in Three Easy Steps

There is no magic to building communities.

You don’t have to sell your soul to have one, nor do you need to spend countless resources for it.  It is a simple 1-2-3 that will provide you with the most valuable information directly from your customers.  Want to try?

First, let’s define what we mean by communities.  A community is an aggregation of people with similar characteristics.  This could be an online forum, a social network page where you gather your fans, a set of followers in twitter, or any other place where you can have a conversation with a select group of people – whether they are fans or customers or something else (yes, even detractors – heard of keeping your enemies close?).

If you decide that building a community sounds good, this is the road to success in building it:

1. Purpose. Define a purpose for your community. You need to determine the theme or topic, the channel, the format, the rules, the potential users, the values and benefits.  This is not an ROI calculation – forget those for now.  This is where you decide whether investing into a community as an alternative channel to reach out to your customers is worth the time and effort.  You are not going to generate sales through these communities (then again, you may – but you cannot plan on it), this is a branding exercise.  Key Question To Ask: are you looking for a one-way or two-way communication? why?

2. Advertise. I used this analogy before for multiple things, but nothing in customer relationships was taken out of the movie Field of Dreams.  Just because you build it does not mean they will come.  Find the best way to get the word out: user groups, other communities, sales and customer support, direct advertising, email or mail campaigns, direct advertising – you know what works for your customers and how they react.  Key Question To Ask: what has proven successful to bring the people we want to action? how can we adapt it to this situation?

3. Laissez-faire. The french got it right this time.  Best way to grow a community once you created it and introduced it, let it be.  No monitoring or censorship, no “fake reviews” from inside to pump up the product or service, just plain out let it be.  If you think your product or service is good enough to build a community around, it should be able to stand on its own.  The most marvelous aspect of a community is the self-regulating part – where the users own it and find value and defend it from attacks and outsiders. Key Question To Ask: how can I increase the value to the community by contributing to it?

Are you building the right communities? Are you reaching your goals? Let me know…

Customer Centric? Where is the ROI on That?

All customers are created equal.  Yeah, right.  And the cow really did jump over the moon.

Customers come in all colors and sizes – and revenue and profit levels.

An essential component of managing customer relationships is customer-centricity.  I am almost as tired of saying it as you are of hearing it.  Yet, the part that is often left out of that discipline is segmentation.  As in, which customers should we focus on? Take a look a this picture.

customer-pyramid

This is a traditional distribution of customer segments.  Obviously, yours may be slightly different – have more layers or fewer, different percentages, etc (you do have one setup for your organization – right?) – but the concept remains the same.

Most of your revenues will come from your VIP customers.  There is a second, smaller, layer of “Hopefuls” – customers you can convert to VIP if you put some work into them, and then there is the whole mass of “Lost Cause” – customers that may be able to climb to Hopefuls or VIP, but most of them will remain customers that don’t spend lots of money.

Bottom line: if you want to get an ROI from your customer-centric initiatives you have to focus your efforts where there will be a return.

Are you basing your customer-centric strategies on your VIPs and Hopefuls? Why not?

Can Loyalty be Lost?

Loyalty.

One word with so many meanings – right?  I hear people talking about customer loyalty as if it were something that just happens.  I talk to clients who think that Loyalty is the only goal of business.  I even hear the term loyalty being thrown around as if it were the silver bullet that can solve any organization’s problems. Most often, I hear loyalty confused with customer service or customer experience.

Customer Loyalty is the slow buildup over time of  emotional, intellectual, and psychological ties with your customers.  It is not their undying dedication to your product – that is product admiration.  It is not loving your prices or value – that is price sensitivity.  Those are easily achieved or lost.

It is the long-term effect of being able to retain your customers because you took the time to listen, do, and work towards it.  Just as it takes a long time to build up, it takes time to deconstruct.  Loyalty cannot be lost.

Take Apple for example.  Hoards of loyal, almost fanatic in some cases, customers.  They took the time from the beginning to do two things right: cultivate their brand, and deliver what their customers wanted.  Through their hard times they could have easily done better by delivering to the mainstream.  Dumb down their interfaces, open their architecture, woo more developers.  However, they knew that their customer loyalty would help them through the thin times.  And they did.

Before the Genius bar and retail stores (genius move – no pun intended), they had bad technical support.  There were instances when people could not even get their products to work out of the box, and there was no help.  Those bad experiences would have cost any other company (say, Dell for example) a heavy market share and lots of customers.  Their loyal customers demanded and expected better support, and they got it.  Apple knew that if they delivered to their customers, they would get loyalty in return.

Loyalty is not lost, once you get it. Customers are lost.

Are you building loyal customers? Really?  Tell me more about it…

Don't Confuse Metrics and Measurement

When you read the title for this post you thought of the myriad reports your company produces and the metrics used to track performance, with traditional metrics being revenues, costs, profits, customer satisfaction and similar.  About 99% of my clients are in the same boat (at least when we start working together).  Most people will swear that measurement is just about tracking metrics .  Few people will know that measurement is not about tracking metrics – it is about selecting them and using them.

Even fewer understand why.

I have seen discussions in twitter and blogs lately about being stuck using the same old metrics.  You have a web site? Let’s track visits, page views, time on site, etc.  You have a call center? then we need to track number of calls, average handle time, average hold time, etc.  Marketing programs? sure, we can track number of emails out, number of reads, click-through, etc.  You have a hammer?  everything looks like a nail.

It is almost as if all the activities that organizations take on are already mapped out and metrics exist for them.  Best part about it? If you use the established metrics you can then benchmark  against others.

And, when you do that you get the same results as others.  You become just as mediocre and average as everyone else.  Sure, you don’t get fired — but you don’t grow your business, learn of new opportunities, or find out how to win over your competitors.  You actually remove competition – you become one more in the crowd.

The Measurement Confusion is what drives all this.

Most people intuitively know the metrics they would like to track for their business.  They know they are personalized to their specific situation.  However, they are confused as to how to get it done.  Thus, they settle for the average, mediocre set of metrics that everyone else follows.  Not the ones you need for your business, but the ones that are easy to get and to use.  This means you miss opportunities to improve your business, find new opportunities, and be successful.

Are you sure you want to run your business with someone else’s metrics? Would you rather succeed in tracking your own? What do you think?

Prevention beats Redemption in Customer Experience Management

I have been thinking about writing this for about 2-3 weeks now.  I even checked out the dictionary entries for prevention and redemption to make sure I got the right terms.

Most organizations focus their efforts for customer service and customer experience management on the side of redemption (the act of paying off on an obligation) instead of trying to prevent (effectual hindrance) the problem from occurring.  In other words, instead of trying to make sure customers are satisfied by designing better interactions or experiences before they get to customer service, they focus on how to redeem themselves once things go wrong.

In the old days most cell phone vendors knew that phone calls in their network would drop, the technology was in its early days and things like that were expected.  Thus, they had a money-back guarantee on dropped calls and some even created tools in their websites that would allow you to automatically claim the credit due on a dropped call.  That was redemption that was necessary due to lack of technical prowess.  Try to find that tool now.  Technologies improved, calling plans evolved, and you have to go through a very long cycle to get a credit on a dropped call with most cellular vendors.  Vendors used technology to prevent problems from occurring, almost eliminating the problem of redemption.

Your lesson? plan your Customer Experiences around prevention, not redemption, to save money.  Long time ago we used to talk about preventive customer service.  Use that to plan your experiences.  The creation and maintenance of that small application, not to mention the potential for fraud, led those vendors to realize that using better technology would save them money in the long run.

Are you planning your CEM initiatives for redemption or prevention? Why?

Why Customer Experience Management is Wrong

First post in my new home… let’s see how it goes.

I was reading through my morning barrage of blogs, tweets, and articles trying to get my handle on the world today when I came across a tweet from @DeanvanLeeuwen asking about favorite experiences that leave wanting to come back when it dawned on me that we are using the term CEM in the wrong context.  Here is why.

As I wrote before in my previous blog, Experiences are something that you design to attract people.  You want them to be immersed with all their sense into exploring their “experiences” to the point that it becomes their reality.  Disney is an excellent example of an experience designer, so if Four Seasons, Ritz Carlton and many other high-end brands.  Their experiences essentially become their product and their brand.  Everything you do, including customer service and all other interactions, are part of that experience.  Those people can use the term Experience Management and mean it.

Alas, the of the organizations shouldn’t use that term.  Someone like Walmart does not design an experience for their shoppers, they provide a valuable service – but not an experience.  If you ever found yourself in a Walmart on a Saturday after payday you know what I mean – that could not be designed to attract or keep customers.  Most definitely.  However, Walmart can design better interactions for their customer service interactions, adding value to their relationships with their customers.  This is not part of the experience – it is part of a good strategy to keep their customers satisfied.  Their bottom line is that Walmart customers don’t shop for experiences, shop for value.  They will welcome a good interaction for customer service – but they don’t expect it as part of the experience.

Should Walmart and other lower “experience designers” change their strategies to accommodate better interactions? Forget about building experiences? What do you think?

Customer First? or Customer Only?

Been reading a lot lately, trying to get caught up after spending so much time in the trenches doing some real work.  Almost everywhere I turn I read about “Customer First”.  Putting the customer first, or ahead of everything else you do.  Why, there is even an entity in the UK that is called Customer First to ensure UK organizations remain true to their customers.  Closer to home, Continental Airlines has been talking about the great results of their Customer First initiative, as well as Northwest Airlines (which merged with Delta recently, another Customer First organization) and even an organization as distinct as the City of San Antonio has gotten on board.

With all these people you’d think that customer first is all it takes to succeed – but I would like to bring up a more interesting point: it is not about putting the customer first, it is about making the customer the ONLY reason for your existence.  Putting the customer first means that there are other things to distract you from your commitment to your customer.  Making the customer the only thing means that their needs will supersede all others.  It may seem a trivial difference, and hair-splitting semantically speaking, but think about it for a second…

Do you want to commit all your resources to making your customers happy – or just the ones you can spare?

Do Unto Others, or The Golden Rule in Customer Service

There is one major problem with customer service setups today -each channel is treated differently, yet we expect customers to have seamless, similar experiences across all of them.  The flaw in this reasoning, it is nearly impossible with normal resources to manage any one channel properly – less along two, three, four or more.  You want to replicate, centralize, and leverage as much as you can to bring into action the economies of scale.

A client of mine who undertook the painful and lengthy process of mimicking in all channels what they were doing in their most successful one (telephone) was able to increase customer satisfaction by almost 30 points in a standard business cycle (one calendar quarter in their case) for most of their channels.  Even telephone, which had not changed, received higher scores.

Similarly, another client decided not to undertake the “huge burden” (their words) of centralizing channels or even replicatiing workflows and rules. As a result, they ended up spending almost 20%+ year after year for supporting separate channels.  This caused them to rethink their strategy of suppoorting separate channels and actually drop some of the channels they were supporting.  Yes, this is the opposite of what you want to do if you want to increase customer satisfaction.

Are you supporting all your channels as a single channel?