Social Shopping = Groupon? Nope – this is only the beginning

by tz4rgp | Dec 3, 2012 | Blog |

Some time ago my wife Nicole posted a small series of blogs about the topic of Loyalty on ciber.com. In these readable blogs she identified and summarised three main strategies of acquiring loyal customers, which are Every day low price Classic loyalty programs that base upon cash-back options or that are points based Hybrid models To gain and retain loyal customers it is necessary for Retailers (or brands, or …) to get into a mutual engagement with the customers. In order to achieve this it needs something like a WOW!-factor. An important way to get this factor for Retailers is the usage of social media (or social CRM when being more advanced). Every day low price of course means plain ole price competition. No WOW!-factor whatsoever involved here. On top of that there can be only one competitor that actually has the lowest price. All the others go in from second place onwards. Given that, competition only on price is the surefire way to a Retailer’s death if the Retailer is not the one with the lowest price. Price competition kills margin, service levels, shopping experience, ability to gather and analyze more data on customers, as it needs an investment, which needs to be paid out of lowering margins. Every day low price works well for highly commoditized products and services, else it is dangerous. Customers will not see the real price of a good or service anymore but ask/search for a discount. It is extremely difficult to change this behavior once it shows up – and we consumers are already educated about the fact that the same product...

Social Shopping – A Retail Future

by tz4rgp | Dec 3, 2012 | Blog |

A while ago I blogged about threats and solutions in the retail industry that have their origin in rise of social media; with this post I would like to continue on this topic, focusing on possible solutions for retail companies. This blog also ties in to a recent article by Mark Tamis on Social CRM in Retail. In his article Mark describes an interesting and elaborate scenario that showcases a technology enabled, consumer and network driven decision process, using the example of buying a party dress. This example is interesting because, although the process is entirely consumer driven, the involved companies use the technology to add value to the customer, thus achieving a win-win situation. What the involved companies (a retailer and a hairdresser) are doing is establishing customer loyalty by [unordered_list style=”green-dot”] Engaging the customer Providing a superior shopping experience, combining online and offline aspects Enabling the customer to get immediate feedback from their network [/unordered_list] With this the two involved companies manage to align their interests with the customer’s interests. In other words, they are distinguishing themselves through service, instead of price. Trying to achieve loyalty through the offer of “least price” is a surefire way to death. To quote the 1986 Highlander movie: There can be only one. Although the scenario described by Mark sounds very advanced it isn’t. The enabling technologies exist and “just” need to be tied together. We are not talking Star Trek here. I really like this scenario as it depicts what could be. Still, integration is a hard business. Because of this I would like to come forward with another scenario...

Some Klout Score Musings

by tz4rgp | Dec 3, 2012 | Blog |

Today I’d like to present some musings about the klout score. Now, mine is not particularly high – actually it is pretty low – as you can see below; but the curve is interesting, if set into a context. So far I only followed my klout score pretty idly, till I started to do some minor experiments on 16.02.2011. You see some immediate effect on the day after. This is mainly due to me posting a blog entry and communicating this via Twitter and LinkedIn. There also should be a communication via CIBER’s Twitter account. This usually leads to a few clicks and one or two followers on Twitter. However, the real point I’d like to draw your attention to is the 22.02.2011. This is the day the 6.3 earthquake struck in Christchurch downtown and caused severe devastation. As you may know, I normally blog about CRM and social CRM on the CIBER site, so that event is clearly outside my usual activity. Now the catch is: I do live in Christchurch and quite some of my network friends do know this. So I did some simple things by updating my status in the few networks that I actively use: [unordered_list style=”green-dot”] LinkedIn with direct update to Twitter Facebook XING [/unordered_list] As you can imagine this still caused some reactions of my friends – quite some of which are real life friends. Of course there are still one or two CRM related posts of mine in there, plus an opinion on a political matter in Germany, but the majority of all conversations deals with the Christchurch quake, and the...

Social CRM for Retail – Threats and Solutions

by tz4rgp | Dec 3, 2012 | Blog |

Brick-and-mortar retail businesses face a combination of ever-increasing customer expectations, customers being “educated” to expect and receive promotions, and of course an ever increasing competition in the market place for their customers’ share of mind and share of wallet. On top of all this they need to realize that they do not control the communication to their customers anymore, let alone being capable of controlling the communication in between their customers. As many bloggers, including myself, and analysts already stated, the advent of extremely user friendly and ubiquitous mobile devices and web applications essentially decoupled retailers from communications between their customers and even led to their marketing messages becoming part of the “background noise” for lots of consumers – just something one filters out when it comes to getting serious information. Of course there are exceptions, especially considering that retail businesses reacted to this threat. For retailers it is about being where the customers are. This started with setting up transactional web sites (web shops) to drive additional sales, using more and different ways to address customers, e.g. setting up and participating in communities, building fan pages on Facebook, Twitter streams, keeping in touch with exciting new services like Groupon, building capabilities to monitor and participate in discussions in forums, creating loyalty programs, and so on. Quite some of the challenges facing retailers have the potential of being disruptive to their business models. Take Groupon as an example: Groupon is the successful implementation of a scheme that shifts the power balance drastically to the buyer (consumer) side; the scheme is similar to the earlier development of retailer purchase organizations...

A Company like Me

by tz4rgp | Dec 3, 2012 | Blog |

We trust those sources most, who are like us. “A company like me”, as Paul Greenberg dubbed it in an article for destinationCRM, is a vision that depicts a trustworthy, almost human, company; maybe this vision is not an achievable one, but it still is a very good one since easily related to and understood. It clearly shows the path to the ultimate goal of each company: To add value to customers by being trustworthy. Adding value to customers increases their loyalty and having more loyal customers directly translates into an improved bottom line since loyal customers have a higher value than irregular customers. They spend more and more often. Loyal customers furthermore often act as ambassadors for “their” companies and brands thus providing a free-of-charge marketing- and sales force which results in a better top line. As a matter of fact and as stated in several blogs before, people – customers – are more connected than ever. They get information they trust on products and services anytime and anywhere via their personal networks and can easily confirm or prove wrong all information that is pushed out by companies. They achieve this via usage of services like Epinions, Tripadvisor, Facebook, Priceme, and so on. Customers use these sites from their home computers and via their smart phones, so that they even take ad-hoc decisions informed. As a result the push approach does not work anymore. Companies are no more in control of the information that is available about them and their brands. Successful companies embrace this. As an example (and sorry to all the not mentioned ones, …) we...

A Survey on the adoption of Social CRM

by tz4rgp | Dec 3, 2012 | Blog |

We recently conducted a small survey on the adoption and priorities of Social CRM in corporations. The results, of course, cannot be treated as absolute, as the sample size is too small. However, they correlate to research done by Jeremiah Owyang and the Altimeter Group. This especially relates to the modest available budgets and somewhat to the way ahead. The Altimeter group research can be found here. Btw: Jeremiah’s blog is a worthwhile reading for anyone who deals with social CRM. Back to my main topic, our survey results. The top findings are that [unordered_list style=”green-dot”] only 12 per cent of our answers indicate that companies are not using social media at all, and are not planning to do so. There is a quarter of the answers saying that social media usage is part of normal business processes. more than fifty per cent of the respondents say that they are using social media for marketing, but not via formal campaigns about 90 per cent of the respondents claim that they are working with a budget for social media that exceeds 10,000 dollar a vast majority of 80 per cent of the respondents think that the importance of social media will increase for their company in the next year. Companies are using a plethora of unintegrated tools to manage their social media efforts a staggering 40 per cent of the respondents see it as unlikely that they connect their CRM system with their social media efforts. [/unordered_list] Now the last one puzzles me, especially following the statement that the usage of social media is important, especially in the marketing. This...

Social CRM needs a CRM system, doesn't it?

by tz4rgp | Dec 3, 2012 | Blog |

Some days ago Bob Thompson interviewed Graham Hill about his take on Social CRM. The interview covered a lot of topics, most notably the future of Social CRM about which Graham has a particular view and led Bob to ask the question whether it is necessary to have a CRM system to have Social CRM. On a first glimpse this question sounds simple, but it really isn’t. From a business perspective it only matters that CRM is executed upon, if CRM is a topic. This is totally independent of systems, as are the possible paths into the future of Social CRM that Graham sees, which is a deviation from this post that I likely will look into in a later post. My answer to Bobs question is a clear No – but Yes! Sounds odd, doesn’t it? So let me explain. CRM is a business strategy; so is Social CRM. In an earlier blog titled CRM vs. Social CRM – what is the difference? I discussed differences as I do saw them at that time. My view has slightly evolved since, but this is another side track. Let’s have a look at good definitions of CRM and Social CRM. Wikipedia defines CRM as “a widely-implemented strategy for managing a company’s interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the...

Traditional CRM vs. Social CRM – What is the difference?

by tz4rgp | Dec 3, 2012 | Blog |

Just by looking at the terms Customer Relationship Management and Social Customer Relationship Management one can see that they are sharing the same roots; Social CRM is either a limitation to or an enhancement of (traditional) CRM – or is it something entirely different? Let me take a brief view at what CRM and Social CRM are and are not and then come to a conclusion. CRM – Customer Relationship Management – is a business strategy. If you do a brief research on the web you will find many definitions with their own tweaks. What most of them have in common is that they all say that the strategy is about the customer and about how to engage a customer so that the company applying the strategy [unordered_list style=”green-dot”] gets most knowledge about the customer (groups) and is able to action upon this knowledge to maximize the own results (be it market share, revenue, margin, win, …) [/unordered_list] As such a CRM strategy covers all relevant actions to market the right products to customers, sell the products and potentially provide service afterwards. CRM by no means is a technology, although sometimes this is still peoples’ thinking. A CRM application/system or suite enables and supports the business in pursuing its CRM strategy. The software does this by providing the tools to perform the necessary tasks and by providing the data that is necessary to control processes and to take necessary action. Something that is not explicitly said is that one fundamental underlying premise of pursuing a (traditional) CRM strategy is that the business owns and/or governs the communication with the...

What is Key to the Success of (Social) CRM?

by tz4rgp | Sep 27, 2012 | Blog |

Inspired by a blog post by Dr. Harish Kotadia I started to rethink about what the real key success factors for a social CRM strategy are. Harish used Walmart as an example, based upon their introduction of the “local” Walmart on Facebook. Walmart, being a retailer with more than 3,500 stores is surely a company for which the concept of (physical) proximity is important. From the outset I contradicted him (how dare I 😉 ). My point was, and is, that companies like Amazon, Dell, even Apple, arguably have a social CRM strategy but are not exactly local (there is not even a single Apple Retail Store in NZ …). They all manage without being physically local. Some brick and mortar retailers are even able and willing to bring their store to their customers by various technical means (e.g. Tesco but also others). So, I argue that proximity is more defined by ease of access, availability, interaction, rather than physical distance. This, in turn, means that physical proximity is not necessarily a key concept. This is especially true as being close, physically or otherwise, but irrelevant doesn’t bring a company anywhere, except into bankruptcy. So, relevance seems to be key. What is relevance? Relevance is the ability and willingness of companies to create value together with their customers. This goes beyond the mere transaction – giving money in exchange for a product or a service. Value for the company is not created by a single transaction, nor does the product itself create value for a customer. Value for the company is created by sustainable business. Sustainable business is not...

Customer Service – The Great, the Bad, and the Ugly

by tz4rgp | Sep 27, 2012 | Blog |

We recently read Peter Shankman’s raving experience report about Morton’s Steak Houses where essentially the management of the restaurant chain went out of their way to provide a loyal, valuable (and influential on the web) customer with a surprise meal after he jokingly tweeted that he is hungry and would really enjoy a porterhouse steak on the airport. Morton’s made this happen and excited a customer who created a buzz on the web in terms of tweets and re-tweets, an intensely discussed blog post, numerous mentions in other blogs (including this one here). The consequences of this not so simple action are obvious: [unordered_list style=”green-dot”] An influential and already loyal and happy customer turns (even more) into an advocate. He talks about his amazing experience – and justifiably so A customer originated marketing message is sent that promotes the brand Morton’s brand perception increased even more (I didn’t even know of them before, but then I am a German who lives in New Zealand…) [/unordered_list] I really would not be surprised if the incremental revenue that is directly attributable to this smart move of a company that is consequently and consistently active on the social web outweighs its cost by orders of magnitude. This episode clearly shows the potential for businesses that lies in actively using the social web. Unluckily it is still an outlier. Reality looks different. Let me bring three examples of very different businesses in Germany that could use Morton’s as a guiding light. The businesses are A major railway operator A leading mobile carrier An online bank Three very different businesses – yet they share...