Marketers Aren't Listening to the Voice of the Customer?*!

I find this data from today’s Center for Media Research newsletter so stunning that I’ll just quote it verbatim:

A new study by MarketTools revealed that 94% of companies do not yet use social media channels such as Facebook and Twitter to gather customer feedback, despite consumers' growing engagement with these mediums. The study found that the most common ways companies gather customer feedback are email/online surveys (51%), formal phone surveys (28%), and informal phone calls (28%).

As someone (and I doubt that I’m unique) who just refused to answer the email survey from the car manufacturer because I had already answered the one from the dealer and who uses ANI to select the phone calls I answer, I’m pretty sure these 94% of companies are missing the mark. While I’m engaging in self-revelation, I’ll also add that I don’t usually respond to emails for reviews of products I’ve just purchased. I do occasionally, and I would have done so for the car, had they asked me because it has one noticeable improvement over the model I previously owned. The car companies really have overdone the satisfaction surveys—especially since the sales and service people have been trained to ask customers not to say anything bad about them!!!—see #3 below and ponder. The rest of the data from the newsletter is also quoted verbatim:

1. 39% of executives surveyed said that their companies increased focus on customer satisfaction in 2010 versus 2009, with 21% stating that they invested more in customer satisfaction-related products and services in 2010 versus 2009
2. Despite the importance given to customer satisfaction, 14% of executives surveyed said their companies don't solicit customer feedback at all
3. 46% of the executives surveyed rate their company's performance on customer satisfaction in the top 10% when compared to their peer companies, and 93% rate themselves in the top 50% of peer companies.
4. Still, 56% of all respondents said their companies do not have, or are not sure if their companies have, a formal voice of the customer (VOC) program
5. Nearly one out of every four executives said that they seldom or never use customer feedback to change a business process.

I also have a personal perspective on #5. I made an online Christmas order for 9 items, none of which showed being out of stock. However, only 5 were shipped and the invoice listed 4 as out of stock (inventory failure). I was, however, billed for the total amount of the order (billing failure). I tried the call center several times to always find a lengthy wait. So I tried email—every day for one week plus some miscellaneous. I got 2 autoresponses for each email (marketing automation failure), but never a real response. My credit card took my word for it and refunded the difference. I wrote the above in considerably more detail to the operations VP. In the meantime, the company started refunding my money, one item at a time (another marketing automation failure)! The VP simply passed my email onto the call center manager, who has no responsibility for any of these things except possibly the wait time, although that’s probably a budget issue. But the VP got it off his desk, apparently happily ignoring the fact that it was business processes at fault, not customer service.

The opposite end of the spectrum is the social media mission control centers recently established by Pepsi’s Gatorade (video here) and by Dell. This 3-minute video is from the opening of Dell’s center with commentary by several industry experts.

Smaller companies/brands should not let the size of these “mission control” operations put them off. It’s a matter of scale and the listening issue of small brands is not the listening issue of Dell. Smaller brands, smaller companies need to think about their own processes, which I’ll lump under the Voice of the Customer rubric.

My recent personal experience says:

1. I would have done a customer review on the car because there was something (in this case favorable, though that’s not the issue) I’d like to point out to potential purchasers. I don’t care to waste my time checking Excellent on a mind-numbing set of Likert scales.
2. Even a VP can take a few seconds to acknowledge a customer email—even better to show that the real nature of the customer problem is recognized. This company is out about $25 in an undeserved refund—more important it permanently lost this customer!

How can you scale Dell’s and Gatorade’s listening activities to your brand? That’s the real issue and it can—and should be—dealt with! While they’re at it, corporate executives should come out of their protected cocoons and actually listen to the voice of the customer!!

Listening for Customer Understanding

I’ve expended a lot of energy trying to get marketers to really grasp the difference between marketing research and the analysis of behavioral data as avenues to customer insight. Sometimes I despair. We academics are partly at fault. Most marketing courses, especially the introductory ones, teach marketing research as the way (read that the only way) to learn about customers. We forget that there is behavioral data of many types, from many sources, that should be mined before enterprises spend time and money on marketing research.

Senior marketers have the same hang-up. Marketing research is what they were taught. They may feel comfortable with how it is done and the results it produces (or they don’t use it at all). But I thought an Ad Age headline (subscription required) earlier in the month captured the essence of the problem. When I used this slide in class last night, I got a lot of puzzled (disbelieving?) frowns. Let me see if I can restate the issue in terms of why companies need to listen as their first step in understanding customers in a way that leads to viable marketing and business strategies.

The ARF held another conference on listening yesterday and I looked this morning to see if any material had yet been posted. Not yet; I’ll keep looking but I did find a great quote in a blog post from ARF president Joel Rubinson. He says:

Listening is about hearing what people [say] rather than the marketer wants to talk about, (emphasis mine) and hearing it in people’s own words. It’s a window in the mind, heart and emotions of people, one you need to have your nose pressed up against continuously. Because things change…really fast…giving agile marketers great opportunities leaving traditional marketers wearing the WTF happened look on their faces.

As I looked, I found something else really good. I don’t know whether the ARF is happy having this report, clearly marked ‘confidential’ posted on the web, but for now at least, it’s there, so I’ll link to it. As all good researchers do, they start with an operational definition of listening:

“The study of naturally occurring conversations, behaviors, and signals, that may or may not be guided, that brings the voice of people’s lives in to the brand” (p 11)

They parse the definition in a useful fashion and go on to say a lot of important things about developing a listening strategy. You should read it for yourself. It’s long, but the main concepts take up only about 20 pages, followed by an incredible number of good short case studies, and ended with a discussion of technology and platforms. Let me leave it with the brand-related objectives that can be realized, in full or in part, by a well-crafted listening strategy. Their list is:

• Discover New Customers
• New Product Development and Innovation
• Improve Existing Products
• Maintain Sales Momentum
• Drive Brand Growth
• Re-brand or Re-position
• Tackle Public Policy Issues
• Manage Reputation
• Manage Brand Health
• Customer Care
• Increase Loyalty and Customer Value (pp 13-14)

I don’t think any of us can disagree with the desirability of any one of these objectives. That still begs the question of how to produce the best data to meet the selected objective(s). Try this conceptualization.



We have to listen to conversations that relate to our brand. That’s one kind of qualitative data. Behavioral data from everything to site visits to transactions is one type of quantitative data. Each of those types of data quickly becomes gigantic. Together they are mega-gigantic. For a brand of any size or reach, they have to be thoughtfully mined to come up with actionable insights.

Then the question is whether there is anything missing. In researchers’ terms, not just something interesting that we’d like to know, but data from which we can draw actionable insights. If the answer is ‘yes,’ we may need to do marketing research. It could be anything from a poll (or a series of them) on our website to a custom marketing research project. If it’s really important to a full picture of the customer, then do the marketing research. All the while behavioral and conversational data floods in. Also, the world moves on, which is another problem with pausing to do conventional marketing research.

That’s the nature of the challenge and it’s formidable. In the process of this investigation I’ve learned more about useful platforms that can help meet the challenge. More about that next week!

Is It Now Web Squared?

The O’Reilly Web 2.0 Sumit is coming up later this month. Tim O’Reilly and John Battelle have been talking about their vision of Web Squared—Web Meets World—as they solicited suggestions for conference content at midsummer. The conference program seems to be set and it’s likely to have its usual major impact on thinking about the web and what it means in our life.

Their live webcast is posted on YouTube. It’s almost an hour long but both of them are always worth listening to. This slideshow hits the major points and is well worth paging through.

Web Squared

View more presentations from oreillymedia.

When you do, you’ll probably also want to download their white paper (note the number of channels they are using in a totally integrated fashion). They point out that Web 2.0 has always been about the Internet as common platform and using it to harnessing collective intelligence. We need to go beyond that to develop new applications, new systems that become better as they are used. That implies a lot of data; they use the term mobile sensors and give some interesting examples, the iPhone You R Here app is one. Their point is that there’s more to this “data cloud” than every item having its own separate identifying chip. There are all sorts of information flows (information shadows) produced by various kinds of machine-to-machine activity and, taken together, it provides a powerful data set. If that frightens you from a privacy standpoint that’s another, but important, topic.

In their overview, they talk about “stuff that matters” and this is their conclusion:

If we are going to solve the world’s most pressing problems, we must put the power of the Web to work – its technologies, its business models, and perhaps most importantly, its philosophies of openness, collective intelligence, and transparency. And to do that, we must take the Web to another level. We can’t afford incremental evolution anymore.

It’s time for the Web to engage the real world. Web meets World – that’s Web Squared.

No quick overview can do justice to the thinking of O’Reilly and Battelle and their collaborators. You should read and mull over some of this material for yourself. It may well be the roadmap to the future of the Internet!

Are Behavioral Segmentation and Self-Segmentation the Same?

Last week an Ad Age article with the headline “The Death of Consumer Segmentation?” caught my eye. I consider segmentation a fundamental tenant of marketing, just as catchy headlines are a tenant of journalism. Anway, I read with interest. I’ve been part of some of those really big segmentation studies he talks about as well as many smaller ones. All produced value in an earlier era. In my opinion, their day has past.

Michael Fassnacht’s three key points were:

1. Static consumer segments have little value in a rapidly-changing environment
2. Consumers are never part of just one segment
3. By controlling the communications they receive, consumers have control over marketing activities.

The key take-away: big segmentation studies are out; consumer self-segmentation is in. He also uses an interesting term, “enabled self-segmentation;” I’m unclear whether he meant that to be synonymous with “self-identification,” which he refers to in the preceding paragraph. He ends with a section on how marketers can enable consumer self-segmentation, which is reasonable but I didn’t think went far enough.

I looked at Fassnacht’s own blog and found a couple of interesting posts. I’d recommend his reflections on the election (Binary Thinking, November 9, 2008) in which he rightly states that human beings are not one or the other in a given situation, they are highly nuanced. I looked further and found a recent post describing "micro analytics," which I though was important. The key steps, developed by Huayin Wang, are:

1. Treat UGC as the raw gold of data information. Find the right methodology to score the individual UGC pieces by relevance and relationship to each other. This kind of quantitative exercise will enable one to decipher patterns within the large universe of UGC, either on Flickr, YouTube, on blogs, etc.
2. Identify the right UGC content clusters to understand marketing opportunities. This will enable one to isolate potential opinion leaders within a certain content grouping as well as unveil unleveraged perception spaces for a particular brand.
3. Build a persuasion platform that uses the different attributes of each UGC element for an interactive program, all based on the principles of behavioral targeting.
4. Analyze the modified UGC landscape after a sufficient period of time to understand if the interactive marketing program has created any positive impact for the brand.

Wonder how many companies are doing something like that--not many I'll bet! It makes wonderful sense, and it's also based on the analysis approach used in the really big old marketing segmentation studies. It just uses behavioral data, not survey data--a huge step forward.

The situation is, as I see it, that the marketer can use this approach--self-segmentation uncovered by micro analytics--for analysis of content data collected from across the web, provided by unidentified subjects, similar to anonymous visitors on a website. Yes, you could link a Facebook behavior to a member (a person becomes a fan of a brand page, for example), but would it be worth the effort? I sincerely doubt it!

But there's an even simpler solution that few companies (except publisher sites with an array of newsletters) seem to be practicing. ASK THEM! In other situations, I've called that expanded permissioning. Ask registrants what they really want to get from you and how often. That would let them self-identify, at least to the extent you offer options/segments that are relevant to them.

Then take the next step. You might not be offering exactly what they want--chances are good that you are not. How do you ask them or analyze their activity on your site to find out what else they are looking for? The answer is--you set up ways to Listen--in ways I've talked about before!

That sets up a virtuous cycle in which the marketer first asks then uses analytics for deeper understanding. Time-consuming expensive traditional marketing research need not apply!

Customers Rate Experiences

Forrester has released its 2008 customer experience index report, based on consumer ratings of their experiences at firms covered in the study. Bruce Tempkin has posted some data on his blog and has a link there to the full report.

Forrester has 3 basic experience criteria—usefulness, ease of use, and enjoyability. The report gives a brief overview of their methodology. There are interesting comments on the blog and in response to one, he has given a little more detail on the methodology.
















The results are interesting. Retailers and hotels rank highest of the industries studied. Health insurance and TV service providers are at the bottom. The large range of experience ratings given to ISPs is interesting.

In some ways, I’d say the top-performing firms are the usual suspects. Have you ever sat down in a comfy chair and browsed through some books at Barnes and Noble? The one I go to doesn’t have its own coffee shop; that would add even more to the experience. USAA is always near the top on satisfaction studies; one assumes that their superb customer service is a huge factor in the overall experience rating. When you look at other high-performing firms, they’ve worked hard on customer service, so it seems reasonable to me that the basic blocking and tackling matters. Then if you add a coffee shop or a pizza parlor on top, you can offer great customer experience. But you can’t buy great customer experience with only coffee or pizza, no matter how good they are! If customer service stinks, nothing else really matters.

It’s good to choose one or more of the high-performing firms to study and observe. For instance, there’s not a Cosco near me; I don’t shop there and was surprised by a student analysis of just how good their customer service was a few semesters ago. It also helps to follow one or more firms outside your own industry; that may open up new ideas.

Customer experience is the focus at the moment—on the web and off. It’s worth developing a vision and a strategy and devoting time and effort to offering great customer experience. It pays off, perhaps in sustainable competitive advantage.

Lee Jeans Enters the Social Media Space

It’s always interesting to hear a marketer talk about integrating social media into marketing efforts. When it’s a respected brand with a long history, it’s even more so. Yesterday’s AdAge video interview with Liz Cahill, VP Marketing for Lee Jeans gives insights into the process they used to begin social marketing.
Watch the video here.

One of the things Lee did was to conduct a social media audit in order to understand what was being said about them in Internet space. Some agencies (iCrossingUK, Serengeti Communications) have social media audit products and have posted information about them. This is one way of listening to the customer without (marketing) intervention into the conversation. As the interview suggests, it may be a very good first step to joining the conversation. Remember the bore at the cocktail party who plows right into the discussion without first understanding what’s really going on? Not the way your brand wants to be seen!

There are other approaches to consider as you enter the space. Firms like Networked Insights and KickApps will either allow you to create your own community or mine community data that is already out there or both.

Your PR people should be deeply involved in reputation management, whether you choose to market in the social network space or not.

Listening to the voice of the customer is different in the age of social media. Liz Cahill also points out that the velocity of customer communication is high in the social media world. What are you missing if you are not listening—if you are not part of the ongoing dialog? A lot!

Personalization--Part 2 - The Back End

Read Part 1 here
Personalization of customer communications is can be a powerful marketing technique. It is best exemplified by carefully-chosen content that is relevant to the customer’s activities and interests, not simply by addressing customers by name. On the front end it can be used to attract attention and encourage action. On the back end it places great demands on data and systems. Relevant behavioral data must be captured and maintained in a form that makes it accessible to personalized marketing communications programs. Systems must be in place to ensure data quality and security, maintain it in actionable form, and deliver it when required. Marketing and IT are the two major players in these activities, but they require the informed cooperation of personnel throughout the organization. That requires the backing of top management. Put together, as they are in this graphic from Marketing Charts it’s a very tall order.
The CMO personalization survey confirms observation and anecdote that indicates few firms are handling the data and systems issues well. Their findings include:

•Nearly 50 percent of marketers report having fair to poor or little knowledge of customers, and almost 47 percent rate their company’s data integration capabilities as being deficient or needing improvement.
•[Only about] 10 percent of respondents rate the accuracy and reliability of their customer data as extremely good.
•Many marketers currently spend less than 10 percent of their budgets on personalized
communications; looking ahead, 55 percent say they will spend more than 10 percent.
•Purchasing history/activity – as well as size, profitability and location of customer – are key data points for designing personalized communications campaigns.
•Multi-channel integration is still lagging in personalized communications as almost 50 percent of marketers report a low degree of integration.
•Marketers appear fearful and intimidated by the investments required for personalized communications as there has been limited testing across all areas.

The effectiveness of personalized communications has been long established, as I suggested yesterday. Likewise the challenges of shared organizational ownership of data that leads to poor data capture and management are not new to those who have practiced database marketing since the 70s. These problems do not seem to be getting better. In fact the sheer volume of data available on the Internet seems to have exacerbated them. The CMO report includes expert commentary on the results. Bernard Gracy,VP, Strategy and Business Development forPitney Bowes Document Messaging Technologies hit the nail squarely on the head. He lists the top three challenges as being:

• Inadequate systems, data, resources and budgets. Personalization requires an effective investment to improve our available solutions – something many marketers are hesitant to make.
• The disconnect and lack of communication between chief marketing executives, who serve as the primary directors of personalized marketing initiatives and sales and customer relationship management groups, which most frequently maintain control of data used in these campaigns.
• An ineffective tracking system for a customer’s purchase history and activity, as well as size,profitability and location of customer. These are, by far, the most important key data points for designing personalized communications.

He adds that, “Tapping into “The Power of Personalization” requires marketing, IT, and operations divisions to work in concert – to link disparate databases across the enterprise to create a single view of the customer,create insight from that view, and have that insight.”

At best, that’s a hard job. Without top management understanding (this is not all going to happen overnight) and support (it’s going to take some front-end investment; ROI will come later), the job will not get done. The CMO study provides useful guidelines. It also suggests that CMOs will have to champion the personalization initiative within the organization. That takes marketing strategy skills, some rudimentary knowledge of what the technology can and cannot do, and the ability to bring disparate groups within the organization together around a common theme.

Let’s hope we have lots of CMOs with the combination of marketing and organizational skills necessary to pull it together on the back end. With the back end in place, the front end will be able to field compelling personalized communications.

Without it, companies will languish in the back waters of untargeted mass communications. That cancels out major capabilities of channels like email and websites themselves. That’s unfortunate, and in the end, it’s a waste of resources. Better to invest in the data that will enable meaningful use of the technology.
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