Customer Strategy and Tactics (Branding, Communications, and Relationships)
Management Overview
Building and sustaining a customer-centric culture is core to successful enterprise performance. However, once the basic architectural and engineering components are functional—or, in concert with their functionality—organizations must make certain that their strategy and tactics for optimizing customer experience, and downstream behavior, are both contemporary and effective. This includes elements of branding, messaging, and communication, and maintaining strong, value-based relationships.
Content as a Driver of Customer Behavior, and What This Means for Marketers
Increasingly, instead of accepting advertising and promotional material as honest and representative, consumers are relying on information they acquire through offline and online means for making brand and product decisions. Largely, this has been facilitated through informal Internet sources, but also available via mobile communication. One segment of content that has proven to be particularly valuable and effective is video, in part because it is easily available and very engrossing. Video is, as well, the fastest growing component of marketing content. Content, however, must be relevant, that is, built on an understanding of customer needs and wants; otherwise it has diminished utility.
Brand Influence Comes More from Offline than Online Content
Continuing with the theme of content influence, though online social media has seen significant growth and involvement among consumers, it continues to have only a fraction of the influence of informal offline word-of-mouth. Trust is a key issue; and, though use of, and involvement in, online social media as a decision influence is increasing, consumers rely on their ability to discern and distill what is available through online communication media.
Customer Experience Management Can Create Layered Loyalty Behavior, Somewhat Like Tree Rings
Consumer loyalty behavior often develops in layers over time, rather like rings of a tree. The outer rings represent the most recent experience or transactions. The middle layers are more strategic, and represent perceived value over time. The center, or heartwood, represents the core of supplier reputation and trust. Even though loyalty development may require some time to build, it’s possible to decrease it in a much shorter period of time.
Building Trust into the Relationship
Perceived sincerity and integrity in the customer and employee relationship with an enterprise is essential to optimizing experience and behavior. The traditional approaches to building trust, namely, product centricity, non-differentiated and commoditized elements of value, and passive insufficiency of value delivery will challenge organizations to succeed. Building a “bank account” of trust in relationships with stakeholders, through investment and effort, will pay off. Withdrawals to the trust account can also be made; and, it is difficult to recover when that occurs.
The Rewards of Bonding-Based Customer Relationships
Optimizing customer behavior has gone past traditional concepts like loyalty. The strongest expressions of performance are now advocacy and bonded relationships. Bonding is based on brand favorability and word-of-mouth, driven by personal experience with a product or service; and it is a significantly different, and more contemporary, approach for understanding what drives customer purchase. Degree of bonding is a function of trust levels coming from multidimensional exposure.
Branding the Customer Experience
As organizations, increasingly, endeavor to “humanize” themselves for stakeholders through culture, image, and reputation, one of the major customer-centricity trends is to brand the customer transactional and relationship experience, and make it memorable. Beyond such elements as service, process, channel availability, loyalty programs, and communication, the brand promise must be met and exceeded. Examples of customer experience-centric companies (Trader Joe’s, Southwest Airlines, Zappos, IKEA, and so forth) are provided, along with a set of five decision traits of organizations such as these.
Influences on Customer Relationships
Further underscoring the power of consumers to self-direct their relationships with suppliers and their decision making, a worldwide study assessed effectiveness of various communication channels. Organizations want to communicate effectively with their customers and prospects, and also leverage their behavior; but, to do that, consumers need to feel that any information they receive has personal value. Once again, trust was identified as a pivotal communication issue; and it impacted, as well, perceived security and safety of both transmitted and received information.
Dovetailing Advertising and Social Media
To be effective, advertising and promotion must align, that is, be consistent, with online and offline social media. Further, given growing consumer skepticism about company-sponsored messaging, it must be believable, differentiated, and engaging.
The Meteoric Rise of Content as a Driver of Buyer Behavior, Especially Rich Video: What Does It Mean for Marketers?+ (August 20, 2013)
As they are gathering information to help in day-to-day brand decision making, consumers want, crave, desire, seek, and value content from marketers—as long as it is reasonably altruistic, informative, and objective (i.e., tuned to an understanding of customer needs), and minimizes the “look of sponsorship” and the three most readily identifiable sales “Ps”: push, pitch, and puff. Estimates are that 9 out of 10 organizations are now utilizing content in their marketing programs, devoting one-quarter, or more, of their marketing budgets to this component of communication.
When we look at the tactics, or types, of content marketers are applying, studies are showing that social media has become the most popular, knocking articles out of the leadership position. Print magazines, still actively used, have remained about the same in terms of percentage of marketers including them in their content program. Research reports, presentation content through online sites such as LinkedIn-owned SlideShare (which gets close to 60 million visitors a month and has over 15 million registered users), and virtual conferences and webinars have seen significant increase in application. If the content available on this source lacks basic understanding of customer needs, it also has a high likelihood of failure (up to 80%, per some studies).
In addition, consumers themselves are contributing to the explosion in available content. There’s social media, of course, in the form of microblogs and blogs, but also community involvement, articles, and product and service ratings. One piece of evidence for how quickly consumers have become more active in generating content is the morphing of Jackie Huba and Ben McConnell’s “90/9/1 rule,” where 1% of consumers using the Internet were actively blogging and posting other types of content, 9% of consumers were commenting on the content, and 90% were just observing this activity, also known as “leering” or “lurking.” According to studies, it has now become the “70/20/10 rule,” where 10% of Internet users are posting, and 20% are commenting. The 70% who are just observing is declining all the time, as more people dive into the deep end of the consumer-generated content and comment pool.
The element of content getting the most attention—and the greatest year-to-year rate of increase—is video marketing, also known as rich video. Why and how? Cisco anticipates that video will represent 70% of consumer Internet traffic by 2017, up from 57% now. For example, YouTube is actively used as a source for consumer content. It’s the third most visited site in the world and the second largest search engine. That’s a lot of people getting information. YouTube is also set up to facilitate easy sharing. In addition to YouTube, videos are available in other venues on the Internet (Instagram and Vine), plus mobile and TV. Videos have been found to be four times more engaging than static content, and three-quarters of C-suite executives view industry videos online at least once a week. Note: Like other forms of content, video can also fail if not customer-focused.
Video creates consumer involvement, conveys rich information, and builds an emotional connection with a brand or company, often through advanced neuroscience approaches. And, video is an excellent, highly productive marketing tool. In one study, it was found that video embedded in an e-mail improved campaign effectiveness by 88%, click-through rates by 76%, and disposition to buy by 72%. In another study, embedding video on site landing pages increased conversion rates by 80%.
Beyond video, there’s documented proof of how all elements of content can effectively leverage customer behavior. The ongoing challenge for marketers is to not be tempted into overloading their content with overt sales or promotional propaganda, because that can quickly erode consumer trust.
Marketers Seem Smitten with Online Social Media’s Reach and Power, but Real Brand Influence Comes (Principally) from Offline Word-of-Mouth+ (August 12, 2013)
In this time of X Box, Wii, HD, PDAs, iPads, and sophisticated cell phones, the Internet is the acknowledged great, central enabler of social media. Nothing during our lifetime has so influenced the way people live their lives as the Internet.
Brand marketers, especially those representing food and drink products and consumer packaged goods, have dramatically increased their word-of-mouth marketing spending, especially online. They are actively creating new communities of product and service users, whose principal purpose is to spread the word and, hopefully, influence consumer behavior. Even so, word-of-mouth, through online social media, remains a fraction of the overall advertising and marketing budget.
A phalanx of consulting organizations has evaluated the role of the Internet in our day-to-day existence, and, at the same time, creating sea changes in traditional medial channels. One such study was conducted by Fleishman-Hillard, a major PR firm. Their study is particularly important in that it represented almost half of the global online population, with respondents in France, Germany, United Kingdom, United States of America, Canada, China, and Japan. Fleishman-Hillard evaluated influence; however, their definition of influence was not impact on purchase behavior, but the amount of time consumers spend on each communications medium and the degree of importance each medium has in their daily lives, particularly in their perceptions and attitudes.
Their study revealed several key insights:
Though digital communications dominate in terms of its use as a medium of conveying information (roughly twice that of television, and ten times that of print media), relatively little is spent in real marketing dollars. As consumers continue to shift their methods of communication, companies will need to rebalance their media mix so that it is more aligned with what customers are doing.
Asia is on the march as a digital power. Chinese use of the Internet has seen significant increase over the past few years. At 330 million users, they now represent an entity larger than the population of the United States of America. Combined with India, the Internet-using population is over 500 million (and is expected to grow by over 700 million by 2015, according to a McKinsey study). In addition to their numbers, Chinese Internet users are different as well, with much heavier researching, and expression of personal views through online social media.
Malaysia, however, won top prize for Internet use, especially where social media are concerned: though the country has only 15 million Internet users, this represents almost 60% of the population (and McKinsey forecasts that this will rise to 25 million, or 80% of the population by 2015). Malaysians are active users of social media sites and instant messaging, consuming 35% more digital media than Internet users in China and 150% more than those in India. India, with only 7% of the population having Internet access, is anticipated to grow to 28% penetration by 2015; and they are heavy users of e-mail and downloaded videos and music.
Digital communications impact decision making, especially its facility as a resource to compare options, and to identify expert and peer advice which creates greater confidence. Especially important here is the role of search engines, which often serve as information research launching points. This is where showrooming begins.
Online information-sharing is also coming to be seen as somewhat dangerous, or having the potential to be damaging due to security issues. As more and more people use online social media and generate content, over half of the respondents in Fleishman-Hillard’s study felt that people share too much personal information online, and over one-fifth felt that expressing personal opinions online could have a negative effect on their reputation, career, or financial well-being.
Trust is a critical social media issue. It’s one of the key reasons why mass advertising and promotional communication is something of the past. Consumers no longer trust information shoveled at them through a few large channels, and are far more interested in retrieving content from sources that they select and cross-checking for accuracy.
Though there is increased usage of online postings, as a starting point, to glean information on the experiences of others, there is also increasing skepticism. The Fleishman-Hillard study found that 39% believe it is safe to communicate with others online, but 19% felt it was unsafe to do so. We can conclude that, insofar as online dialogue is concerned, consumers are “cautiously trusting.”
Mobility in countries like India and Malaysia is a fact of life, and there is active use of mobile applications on PDAs and smart phones. In the United States of America, Canada, Germany, France, and the United Kingdom, however, actual adoption of these applications remains fairly low, with almost one-quarter of respondents admitting that they don’t use the full range of features available on their phones and mobile devices. Among the biggest gaps is the use of e-mails for communication and access to the Internet.
Fleishman-Hillard concluded that, in most countries, the Internet is just beginning to be an influential tool for peer-to-peer communication. Many consumers felt that the Internet would continue to increase in importance and influence, with Chinese Internet users giving the strongest endorsement to this perception.
Much of what transpires on online social media, the interchange between individuals, is what sociologists call “phatic” dialogue, which is content like “Where should we meet for lunch?,” “Do you like my new glasses?,” “How are you feeling today?,” “Did you see the Phillies game last night?,” “I’m going to the zoo next week with my grandkids,” and the like. Where there is online brand-related communication, it mostly revolves around customer experience and customer service.
A study of consumer use of social media by Nora Ganim Barnes, a Senior Fellow of the Society for New Communications Research, showed that, when customers are considering purchase of a product or service, about one-third said they went to social media sites to learn about the customer care offered, and about half of them take customer care, learned about online, into consideration. Online social media was among the less frequently used online sources, well behind search engines and online rating systems. Microblogging sites like Twitter and Oownce, YouTube, and social networking sites like Facebook were seen to have relatively little value as trusted sources of information leading to brand decision making.
The use of social media for at least contributing to consumer decision making, though, does seem to be increasing. Social media is, if nothing else, becoming a marketers’ tool for using two-way dialogue to deepen customer relationships. Though often defined as a set of tools and technologies—blogs, wikis, podcasts, and social networking sites—for people to have conversations with one another, advanced companies are using, or beginning to use, social media to engage customers and build enthusiasm for its products and services.
Informal communication monitoring organization Keller Fay reckons that there are 3.5 billion word-of-mouth conversations each day in the United States of America, and two-thirds of these involve product and service brands. Their studies, like those of consulting organizations such as McKinsey, show that word-of-mouth has the dominant influence on customer decision making. Their data, collected through online surveys of consumer panelists who are 13 through 69 (700 per week, 36,000 per year) and covering word-of mouth in all categories shows the following:
Word-of-mouth is mostly positive—63% of brand references are positive, compared to only 9% that are negative (but, it’s the negative that gets most attention).
Word-of-mouth has impact—About half see high credibility, are likely to pass information along to others, and are likely to purchase.
In addition, their studies repeatedly show that most of the brand-related informal word-of-mouth takes place offline. This may change in the future; but it’s a present reality. So, while online social media may stimulate and even facilitate customer decision making, offline word-of-mouth continues to dominate influence. This reality, among all demographic groups, must receive attention from all organizations which include informal communications as an element of their marketing program.
Just Like Dendrochronology: Creating Tree Rings Around Strategic CEM (June 6, 2013)
Science and nature, it turns out, both have a lot of application to CEM. Everyone who has ever taken a marketing course, or been exposed to marketing literature, is probably familiar with Abraham Maslow, a great social scientist. In the late 1960s, it was Maslow who developed a hierarchical, or layered, theory of human needs and values. Maslow focused on human potential, believing that people go through stages to reach their highest levels of individual capabilities (just as in nature and evolution).
For me, and likely for many customer experience strategists and marketing practitioners, there are parallels to Maslow’s ideas of moving through basic needs to the highest level and what we are endeavoring to achieve with customer loyalty behavior optimization. The metaphor is easy to see in dendrochronology, the rings and layered composition of a tree, which also has a lot to do with time (see Figure 5.1).
Figure 5.1. Like the rings of a tree, consumer loyalty develops in layers with the passage of time.
The Bark and Outer Rings—Most Recent Product or Service Experiences/Transactions
A supplier is the most exposed during the latest encounter or transaction with a customer, whether online, offline, or both. If customer–supplier involvement could be “viewed” the same way we look at a tree, it would be the Outer Rings or Bark, what is seen first when encountering the tree. Whether that transaction is a purchase, service experience, or communication isn’t particularly important. What is important is that the customer’s top-of-mind, tactical attitude about a supplier will certainly be affected by the most recent involvement.
As a result, the positive or negative impression left with a customer has both tactical and strategic implications. Tactical, because the attitude tends to be superficial and short term, and largely driven by what happened in the immediate past. Strategic, because if not either reinforced (positive transaction) or proactively and quickly addressed (negative transaction), the impression is likely to have deeper, longer-term engagement, belief, and behavioral implications for a supplier.
Without reinforcing a positive transaction, this can create a vacuum in the relationship; and the customer may be left to feel taken for granted, especially if an assertive competitor is working to create a relationship. If the negative transaction isn’t quickly and sensitively addressed, the customer may be looking for, or at least may be willing to consider, an alternative supplier.
Those of us in the customer experience evaluation and consultation industry, who measure the loyalty behavior effect of transactions and transactional components, find that we must look at them from both tactical and strategic perspectives: tactical, because our research can help groups like customer services or sales identify areas of process and relationship management “trigger points” or “moments of truth” which can be improved; strategic, because there may be direct linkage between these encounters and real loyalty. The strength of that linkage must be determined if a supplier is to optimize customer experience.
So, if endeavoring to understand the impact of the last, or most recent, transactions, both current and former customers should be debriefed.
Middle Layers—Building the Relationship/Creating Long-Term Perceived Value
Here, once the relationship has been established, we are concerned with the supplier’s ability to deliver and provide perceived customer value within specific products and services over time. We are also focused on understanding the strength and vitality of the relationship, and the opportunity to build on tactically created value.
When addressing measurement protocols in the middle layers, we’re principally interested in brand preferences and choices, plus performance over time. Consequently, we ask current customers about the following:
Perception of supplier (and key competitor) performance in key areas, and importance of those areas, also including elements of reputation and image
Likelihood to use the supplier’s products or services in the future
Level of favorability regarding the current supplier, and competitive suppliers
Evidence (and frequency) of having communicated to others, positively or negatively, about the value received, irrespective of medium
Likelihood to consider the supplier as the primary source for a product or service, or exclusive source
Likelihood to recommend the supplier
Evidence of performance change over time
Evidence of expressed and unexpressed complaints
The middle layers are where most customer loyalty researchers direct their efforts, principally because that’s what senior management, sales, marketing, service, and related functions want. However, as indicated above, there’s a great deal more to learn at this level than just degrees of satisfaction with the supplier and competitor, or likelihood to recommend. This is where bonding behavior begins to take shape.
In the middle layers, we can identify both improvement priorities and potential program initiatives for enhancing ties and perceived value with these customers.
Heartwood—Commitment and Advocacy Through Perceived Supplier Reputation/Trust Level
In looking deep into the core of supplier reputation and trust, all customer groups and stakeholders—including staff, investors, and the financial community—must be considered. To understand how the supplier is perceived at this level, in addition to finding out about top-of-mind awareness and salience, familiarity with/comprehension of various offerings of the supplier, and predisposition to purchase or recommend the supplier’s products or services (as would also be done at the middle layers), it’s vital to determine
how business practices, that is, ethics and basic values, are regarded;
how the supplier is seen as an “employer of choice” by staff, whether they would be recommended as an employer, or both;
the supplier’s image in such areas as community involvement, public issues, the environment, and so forth;
deep feelings and emotional attachment to the company of various stakeholders.
Many companies don’t delve into customer, employee, and community perception at the heartwood depth; but, deeply held emotional involvement has a great deal of loyalty-leveraging impact. One of our areas of research activity, for example, deals with the level of staff loyalty toward the company, commitment on behalf of the customer and the degree of alignment with the company’s customer loyalty objectives. We’ve found such a strong, causal correlation between customer loyalty and staff behavior through ambassadorship and productivity that such studies are often conducted in tandem to get the most complete picture of overall value creation effectiveness.
There’s one last thing to remember about the tree growth—customer loyalty behavior analogy, which applies equally to customer experience, and really to all areas of customer management; it typically takes a long time, and a lot of effort, for a tree to grow and mature, but it can be cut down very quickly or slowly decay without nourishment. Keeping the tree healthy and protected, from the bark to the heartwood, is in the best interest of every enterprise.
Building Trust: It’s a Matter of Fairness, Confidence, Authenticity, Openness, Sincerity...and Exceeding “Moments of Truth” Expectations (February 6, 2013)
Billy Joel is one of my all-time favorite musical performers. In 1986, he recorded “A Matter of Trust,” a great rock song in which the lyrics described what can go right, and go terribly wrong, in a relationship.1 A company’s relationship with, and desire to capture the hearts and minds of, two of its principal stakeholder groups—customers and employees—are almost entirely built around belief and value, that is, perceived personal benefit. Largely, the loyalty behavior companies get are a direct result of the trust and authenticity they create with these stakeholders.
The dictionary defines trust as “assured reliance on another’s integrity, credibility, objectivity, veracity, and justice.” Sincere, a related word, means “pure, real, honest, and free of hypocrisy.” In ancient Roman times, from its Latin roots, sincere meant “without wax,” a bargain between vendor and customer so open and transparent that it did not require the usual seal of wax to complete the transaction or maintain the relationship. The vendor’s reputation was sufficient to seal the deal.
Both sincerity and trust are at the heart of partnerships, contracts, relationships, and dealings between people and institutions; and these two words and concepts, along with authenticity and openness, are central to optimizing stakeholder experiences and behavior. As Billy Joel wisely observed in his song, trust is “a constant battle for the ultimate state of control,” which, too often, companies want to hold and not share. Then, customer trust becomes “a lie of the mind,” in which neither customer nor vendor feels fairly treated. And, seeing the glass as half empty, “After you’ve heard lie upon lie, there can hardly be a question of why” companies lose customer and employee support, favorability, and passion, leaving the door open for discontent, alienation, and even sabotage to occur.
Trust comes from deep within organizational rules and process execution, and it is built on the customer-related and employee-related vision, values, and mission regarding transactional experiences and marketplace behavior, through communication and purchasing or service. Trust, externally, is best understood as reputation and image.
There are basics associated with trust, such as privacy, consistent delivery of essential elements of tangible value, and building and sustaining a proactive, positive, customer-centric reputation within the marketplace. Building trust in a customer–supplier relationship begins with meeting these essential customer needs and requirements. Briefly, the customer needs one or more elements of a supplier’s product or service, resulting in that customer moving from prospective to engaged, “new customer” status when an initial purchase is made. Then, the relationship builds on emotional and rational/functional delivery of perceived value over time, comprising one or more components of the customer’s “trust equation.”
If any element of trust is received in a less-than-desired manner (including a non-authentic, deceptive, or otherwise negative experience), the relationship can be undermined, sometimes very quickly and sometimes with unattractive, long-term consequences.
Trust has become an essential, differentiating element in creating customer loyalty behavior. In fact, trust may well be the only truly sustainable competitive advantage for an organization. It is necessary, for example, if the supplier is to learn from customers through a free and open exchange of information, offline or online. It’s essential in positive customer word-of-mouth and referral, in having customers be resistant to competitive offers, and in having them be tolerant of occasional value delivery lapses. Without trust and authenticity, companies can quickly find themselves back to square one with their customers, where everything they offer—price, design, convenience, service, and so forth—can be easily replicated by competitors.
Many companies endeavor to attract customers and to build trust through a rather passive, commoditized, rational, and product-centric sales and marketing approach to the customer. Such companies often believe that high accuracy, delivery timing and completeness, and other tangible components of value will earn both differentiation and customer loyalty. As a result, they don’t adequately determine the customer’s real priorities and set of expectations, what the customer wants to hear (positioning), how the customer wants to hear it (preferred communication channel), or how they are going to say it (messaging). This is the traditional “push” approach to marketing, lacking authenticity and engagement; and it often doesn’t involve, or minimally involves, the customer in actual planning or dialogue. And, if the company fails to deliver expected value, that is, not doing what they say they will do and not meeting basic commitments and requirements, even using traditional one-way communication techniques, the relationship will inevitably fail.
When challenging economic times put pressure on customers, whether in B2B or B2C, optimizing relationships and perceived value becomes even more important. What is required is close experience management through setting, or resetting, service levels so that they do not degrade from the customer’s perception of value and, at the same time, not overinvest (with capital, people, time, or technology) in competency levels not important to the customer.
Trust building does indeed take investment and effort. Companies that rely largely on building a brand pedigree—what they think is product or service uniqueness, pricing, or corporate recognition—are likely to be challenged. Why? This is because these factors have been identified, again and again, to be the least influential in customer purchase decisions. Further, while customers are often willing to provide feedback, and do so, they also insist that companies take action on the input they provide. Increasingly, customers are insisting on a sense of partnership with their vendors or suppliers.
Thus, a “bank account” of trust and belief that the company is acting in the customer’s best interest can be built. However, just as bank deposits can be made, so can withdrawals in the form of expressed and unexpressed complaints, and customer defection—and quickly. Just ask Toyota, FedEx, British Petroleum, AIG, ExxonMobil, Bank of America, and other organizations that have taken hits to their corporate image (including dearly departed companies like Enron, Adelphia, and WorldCom). Once reputation is impaired, it is difficult to recover from the “long tail” of negativism.
A Gift for All Marketers: Cheerful Rewards of Bonded Customer Relationships+ (November 17, 2012)
Bonded relationships, the highest expressions of customer loyalty and advocacy behavior, will be the standard for successful brand and corporate performance going forward. Building and sustaining these relationships, through optimized experiences and employee ambassadorship, also reflect movement to a more customer-centric enterprise culture.
In many ways, bonded relationships, blending elements of advocacy and brand equity, are at the pinnacle of what every enterprise wants with customers. We have seen the benefits of adopting more customer-centric architecture, data flow systems, processes, and workforce. Over the past several decades, there has been a movement to build on traditional thinking about quality, satisfaction, and relationships. Now, we are at the peak, advocacy and bonding (see Figure 5.2).
Figure 5.2. Advocacy and bonding are at the peak of supplier–customer relationships.
True bonding occurs when customers select a single supplier from among all those they might consider, building the level of kinship and involvement, giving that supplier the highest share of spend possible, and informally (without any form of compensation) telling others about how positive the relationship is and how much value and benefit they derive from it. Bonding incorporates opinions formed from customers’ transactional and other contact experiences, but it is built on a foundation of strategic, positive purchase and communication behavior. This level of behavior results when the customer is favorable toward a supplier, and not only purchases consistently from that supplier over others, but also actively tells peers about the personal value and benefit received from the relationship.
How is bonding different from satisfaction or loyalty, which so many companies use as key measures of performance and effective customer management? Satisfaction, because it depends principally on attitudes and recent transactions, isn’t dependable because it doesn’t correlate very well with long-term relationships and bonds with suppliers or with key monetary measures like share of spend and willingness to try new products/services.
Loyalty, though it recognizes a longer-term relationship and more active purchasing from fewer suppliers, or a single supplier, doesn’t take into account the power and influence of peer-to-peer communication. Bonding considers not only the likelihood to have an exclusive purchasing relationship, but it also incorporates both strong emotional trust, kinship, and active, positive, and voluntary communication about the supplier.
By focusing on bonding (and mitigating or eliminating negativity), companies are able to both strategically, and positively, differentiate their value proposition while, simultaneously, create optimum levels of desired customer behavior. Oft-identified examples of companies which do this well are Harley-Davidson, which has been able to create a growing corps of enthusiastic owners through its million-member Harley Owners Group (with very little advertising), and IKEA, which has differentiated itself within the home furnishing retail category by offering unique products, services, and purchase experiences to a highly devoted customer base. These are both also strongly data-driven companies with highly customer-centric cultures.
Customer bonding, which identified the impact of brand favorability and informal communication on behalf of a brand or product—on others as well as the communicator—has been with us since there were organized societies. Before there was mass communication, principally in the form of print and electronic stories and advertising, seeking the advice and guidance of others, along with the customer’s own personal experience, was the way most product and service selection decisions were made. Simply, people trusted other people, and often aligned with their ideas and beliefs.
The challenge began in the 1930s through the 1980s, with the advent and growth of radio and television commercials, to go along with the newspaper and magazine advertising which had been around for a couple of hundred years before that. This marked the zenith of “push marketing,” with marketers determining what to offer, with little customer involvement. Before too long, consumers were being exposed to so many product-related messages—by some estimates over 2,000 per day—that absorbing fact from the clutter, and distinguishing it from puff, hype, and fiction became a daunting task for any prospective or active customer. Then came the Internet, handhelds, and smart phones, and with them arrived the exponential availability of product information—good and bad product ratings, positive and negative “‘buzz,” and so forth.
Perhaps the pivotal point in time when customer bonding, that is, more emotionally based customer relationships, began to re-emerge as a powerful marketing force came with Malcolm Gladwell’s 2000 book, The Tipping Point, followed by Keller and Berry’s 2003 book, The Influentials. In somewhat different ways, these books chronicled the ability of individuals, through favorable personal experience and social word-of-mouth, to influence the product and service purchase behavior of peers. These books were then followed by a flurry of others on the emergence of social networking, Web 2.0, consumer-generated media, and related major trends.
Much of customer bonding (and negativity) behavior depends on levels of trust and transparency between individuals, and also between individuals and organizations, and allied concepts such as objectivity, credibility, honesty, reliability, and originality in the online and offline communication methods that they themselves have created. A 2005 Yankelovich study found that 76% of consumers don’t believe that companies tell the truth in advertisements. This reflects a 30-year declining trend for believability of electronic and print editorial and advertising content around products and services. In short, 68% of adults trust other people “like themselves,” up from only 27% in 2003 (Edelman Trust Barometer).
GfK, a leading market research company, has been tracking consumer trust trends through the Roper Poll for several decades. In the 1970s, consumers already trusted and valued word-of-mouth more than print and electronic advertising and editorial content. By 2003, almost all (92%) consumers trusted word-of-mouth when making product or service decisions, while electronic and print content influence actually declined. Other studies, such as 2008 research conducted by OTX and DEI Worldwide, have generated similar findings and conclusions. The effectiveness gap between push messaging and trust creation, and customer engagement and inclusion, and focus on emotional elements of the customer relationship, has only widened in the past several years.
Customer bonding, the willingness to speak positively, actively narrow product and service brand consideration syets, and have strong favorability toward selected suppliers as a result of personal experiences with a specific brand or supplier, has been recorded principally in B2C sectors. However, if anything, bonding behavior is becoming even stronger in B2B industries, where so much of communication is offline and the pressures to make correct supplier decisions are even more acute.
In sum, for both B2B and B2C industries, there is well-documented proof that engaging (business and consumer) audiences in multidimensional experiences is directly linked to their propensity to act and advocate on behalf of preferred suppliers, products, and services. For companies that understand—or learn to understand, and apply—the benefits of bonding and brand relationship, this represents a gift that keeps on giving, throughout the year.
Creating and Building Relationships Throughout the Customer Journey: Branding the Experience (November 10, 2012)
Many B2B and B2C companies offer undistinguished, commoditized, vanilla experiences to customers. These are almost guaranteed not to be memorable, not to be talked about (unless neutrally or negatively), and they will not succeed at creating customer bonding behavior. Some, through customer-focused culture, discipline, purpose, and a powerful value proposition have succeeded in delivering consistent, positive experiences which are appealing to customers and which customers consider worthy of passing along through informal communication channels.
Beyond simply selling a product or service, these “experiential brands” connect with their customers. They understand that delivering on the tangible and functional elements of value are just table stakes, and that connecting, and having an emotionally based relationship with customers is the key to leveraging loyalty and advocacy behavior.
These companies are also invariably quite knowledgeable about what drives customer behavior. Every aspect of their offerings—customer service, advertising, packaging, billing, products, and so forth—is all thought out for consistency and effect. They market, and create experiences, within the branded vision. Every function involved in delivering a positive, reliable, and hopefully memorable experience is “closed-loop,” maintaining balance between customer expectations and what is actually executed.
Exemplars of branded customer experience also understand that there is a “journey” for customers in relationships with preferred companies. It begins with awareness, how the brand is introduced, that is, the promise. At that point, the suspect or prospect becomes a potential customer. Then, beginning with the first transaction, promise and created expectations must at least equal real-world touchpoint results (such as through service).
And, these expectations must be met or exceeded over time, with a minimum of disappointment. Finally, it requires that the brand’s image, its personality if you will, is sustained and reinforced. Advanced companies map the customer journey and plan this out, recognizing that experiences are actually a form of branding architecture, brought to life through excellent engineering (see Figure 5.3).
Figure 5.3. The journey for customers in relationships with preferred companies.
Some branded customer-experience-centric companies, like Zappos, IKEA, Disney, Target, REI, Nike, American Girl, Starbucks, Southwest Airlines, Trader Joe’s, Baptist Health Care, Whole Foods Markets, The Container Store, Wegmans, Apple Stores, and Harley-Davidson are well known. Others, such as Wawa, Umpqua Bank, and Zane’s Cycles deserve mention because they are customer-centric, original, and distinctive, and because they represent excellent examples of bringing employees, process, customers, and culture together in highly effective ways.
In her interestingly titled book, I Love You More Than My Dog (actually a metaphor for how closely consumers can bond with companies which create trust and authenticity), author and loyalty consultant Jeanne Bliss identifies several of these companies, as well as what makes them exceptional. In the book, she stated: When customers love you, they’ll turn to you first, regardless of the competition. They will tell your story, forming an army of cheerleaders and publicists urging friends, neighbors, colleagues, even strangers to experience your company. This is an almost perfect definition of the inside-out customer management which creates outside-in customer behavior.
As Jeanne describes, these companies exhibit five decision traits which separate them from the pack:
They decide to BELIEVE: They believe their employees and they believe their customers, that is, they trust them.
They decide with CLARITY OF PURPOSE: They are clear and straightforward about their value proposition.
They decide to BE REAL: They are transparent and “real,” making relationships between people, not between company and customer.
They decide to BE THERE: They are “in the moment” with customers, when and as needed.
They decide to SAY SORRY: They have humility and grace, and are willing to apologize when there are experience delivery shortfalls.
Today, we are witnessing customer-driven marketing through empowerment, self-management, and consumer-generated media; and many companies have found themselves in the backseat of the new-age vehicles used in customer–supplier relationships. Companies are being compelled to modify existing communication techniques, or create new ones, and rethink interactions between employees and customers, and how they hire and train employees, and the experience processes they utilize, so that they can be positioned to generate advocates among their customer bases.
In a customer-driven world, the reality is that frequency programs are not enough. Great product is not enough. Exceptional service and customer-sensitive staff, though incredibly important, are not enough. Use of new and innovative communication technologies and multiple channels is not enough. Tight, efficient operational processes, also necessary for consistent experiences, are not enough. Reputation, though also extremely important, is not enough. How companies use, or misuse, these experience-creating techniques, and how they assess the return-on-customer effectiveness, and level of monetization, of their communication and experience initiatives will change how well customer relationships are built by both small and large enterprises.
After Thousands of Years, Are We There Yet? The Effect of Trust, and Offline/Online Social Media Influence, on Relationships+ (August 25, 2012)
In Science and the Common Understanding, written in 1953, noted theoretical physicist and “father of the atomic bomb” J. Robert Oppenheimer (Figure 5.4) prophesized:
Figure 5.4. J. Robert Oppenheimer had predicted the emerging trends in the current market scenario.
The open society, the unrestricted access to knowledge, the unplanned and uninhibited association of men for its furtherance – these are what may make a vast, complex, ever growing, ever changing, ever more specialized and expert technological world, nevertheless a world of human community.
Oppenheimer anticipated, 60 years ago, pretty much what we—as humans, customers, and marketers—are experiencing today on a worldwide basis. There are many emerging trends which will influence the continuing growth and impact of social word-of-mouth, including mobile technology evolution, stronger focus on the emotional (as well as rational) elements of value, brand equity, and customer relationships (even in B2B, and perhaps at a higher level than B2C products and services), more active inclusion of customers in branding, marketing and development decisions (advisory boards, online customer communities, and so forth), and further movement away from heavy, almost exclusive use of traditional forms of advertising and promotion to those where consumers live and communicate (microblogging/Twitter, search engines, text messaging, social networking such as Facebook, LinkedIn, Plaxo, Digg, and so forth).
The amount of coverage online social media receives is tremendous. There is a strong and disproportionate amount of attention, as a medium for companies to influence consumers and as a medium for consumers to use to communicate with each other. There is so much material on how organizations can leverage social media to manage brand perception, dialogue with customers, and increase share of wallet and share of market that it could easily be taken as conventional wisdom that “online social media” is simply a surrogate term for all social media. It must be remembered, however, that offline word-of-mouth is still, by a wide margin, the most significant communication mode and driver of B2B and B2C customer decision making, even among young people for whom mobile communication appears to be a way of life; and the results of multiple studies reinforce that continued key finding.
Companies want to be where their customers are, offline or online. Online, customers have been sending increasingly strong signals that they will be using social applications, such as Twitter, Yelp, and YouTube, to communicate about vendor experiences. Customers want to be able to access whatever information they want, whenever they want, and wherever they want; and companies will need to harvest and analyze data for patterns and themes using computer-aided qualitative analysis software, such as text mining and cloud techniques.
So, paraphrasing Oppenheimer, in this expanding world of human community, where technology makes vast amounts of information available to anyone at any time, any company’s current and potential customers will be increasingly sensitive to the level of honesty, objectivity, and transparency represented in all content as they gather knowledge and make decisions. What we are all looking for is sincerity, or genuineness. The word sincerity, by the way, comes from the Latin root “sincerus,” or without the necessity of a wax seal on a transactional contract between supplier and customer. Sincerity is at the core of trust creation.
Stripping away the effects of technological advances as Oppenheimer saw them, nothing much has really changed in the building of trust and value between vendor and customer in thousands of years. “Humanness” endures. Personally, I find that very reassuring.
Hyperdrive Customer Influence: Artfully Dovetailing Advertising with Social Media+ (August 18, 2012)
At the end of the day, we support concepts articulated by Rory Sutherland of Ogilvy Group and word-of-mouth marketing consultant, Andy Sernovitz. Namely, advertising, as both a craft and a component of marketing, can’t afford to separate itself from the need to contribute to brand or product positive downstream customer behavior, nor to align itself with, and leverage, the growing power of online and offline social media.
If the advertising for a product or service is passive, intellectually unstimulating and boring, undifferentiated, or, even worse, focused on being interruptive and doesn’t contribute to generating customers and building advocacy behavior, then its value is indeed limited. If it’s energized and engaging, effectively cuts through the message clutter evident in both B2B and B2C advertising, and creates or reinforces a positive impression, then advertising can work effectively with, or dovetail into, the word-of-mouth desired from targeted customers.
What needs to be more openly and actively recognized, by all parties involved in sales, marketing, branding, customer experience, and advertising (Figure 5.5) is that online and offline social word-of-mouth is now, and will continue to be, a fact of life:
Figure 5.5. Online and offline consumer reviews are significantly more trusted.
Consumer reviews are significantly more trusted—nearly 12 times more—than descriptions that come from manufacturers (eMarketer, February, 2010).
The average consumer mentions specific brands over 90 times per week in conversations with friends, family, and co-workers (Keller Fay, WOMMA, 2010).
74% of online shoppers are influenced by the opinions of others in their decision to buy products or services (Manage Smarter, September, 2009).
90% of consumers trust opinions from people they know; 70% trust opinions of unknown users (Econsultancy, July 2009).
Social networks are growing in importance as a source of decision-making input. In a study by My Yearbook, 81% of respondents said they’d received advice from friends and followers relating to a product or service purchase through a social site, and close to three-quarters of those who received such advice found it to be influential in their decisions (ClickZ, January, 2010).
This is, indeed, irrefutably strong evidence of the new realities for advertising.
Section Summary and Perspective
For companies seeking to build trust and optimize customer experience delivery, they should not only follow a customer-centric culture, but also the strategy and tactics for building an emotionally based, inclusive relationship. Ideally, multiple elements of branding, communications, and connection will come together to make this happen:
Content—particularly video, which has grown in effectiveness and pervasiveness—which is relevant, informative, and objective and available via multiple channels. Customers need to feel, and believe, that any information they are provided, and through whatever self-directed source, has personal benefit.
Messaging produced by the organization must be consistent with content, seamlessly aligning with online and offline informal communication; and it should be recognized that decision making is (a) controlled by the customer and (b) likely to be influenced by both offline and online content and messaging.
Building trust takes time and effort; and organizations need to recognize that the “bank account” of empathy, image, and reputation so carefully grown with customers can be wiped away virtually overnight. Creating long-term customer loyalty and outstanding, memorable customer experience means thinking about the consumer in strategic relationship, rather than transactional, terms. This means that emotional drivers, sincerity, objectivity, and integrity, must come from inside the enterprise, including employee behavior. To build bonding behavior, many organizations have created branded elements of the experience into their product/service value delivery; and, combined with the benefits of an endearing, customer-centric culture, they have gained the financial rewards of true customer loyalty.