26th Mar 2010
Marketing guru and author Seth Godin talks with Dan Martin about CRM, social networks and how to set up and lead your own customer tribe.
When Seth Godin speaks, people listen. He has been one of the most celebrated speakers of the past two decades. His best-selling books have inspired thought and debate on business concepts ranging from customer tribes (Tribe) to storytelling (All Marketers Are Liars). And his blog is ranked number one marketing blog in the AdAge Power 150.
So when he announced that "CRM is dead" in a 2006 post, the industry could be forgiven for having a few uncomfortable moments. But four years later, CRM is still around – so it would appear that on this occasion the mighty mind of Seth Godin made a mistake. Or did it…
"I believe what I wrote is that the idea of ‘managing’ customers is dead – not the acronym is dead. The acronym is going to be around for a long time because companies still WANT to manage their customers. But when I wrote it four-and-a-half years ago, I was right! You don’t get to manage your customers, your customers now manage you."
In fact, his 2006 blog post highlighted that Disney Destinations Marketing had created a new department entitled Customer Management Relationships, suggesting that this was more than semantics, this was something significant. Forward four years and the recent Gartner CRM Summit pushed the same message – "Individuals are in control. Individuals are making the choices," Gartner VP Steve Prentice told the audience, "It is no longer about customer relationship management, it is much more about customer managed relationships."
Godin was right on the money. But he still sees the ‘customer management’ philosophy alive in many of today’s businesses.
"The mindset that says that somehow you can get to manipulate what people are doing – which is what made all those hundreds of millions of dollars for the CRM people – is clearly bogus. That’s not what really happens. And if you take that mindset, you are going to react all the time instead of respond. But what ‘tribes’ is about is leading customers, not insisting or managing customers. And the difference between management and leadership is that managers know what they’re going to get and try to get it cheaper; leaders aren’t sure what they’re going to get but they have a goal, and they try to get there. And the companies that have a goal and move forward always outperform the companies that are trying to manage people to get it a little cheaper."
This idea of customer tribes is one of Godin’s most celebrated concepts. In a nutshell it suggests that by connecting likeminded people and creating a platform for their interaction, people and organisations are able to create their own tribe – and ultimately lead it. It’s an inspiring idea, and one that has gained legs thanks to the growing ineffectiveness of traditional customer engagement efforts via marketing.
"Organisations that want to do marketing, used to do marketing by interrupting people. They used to do it by yelling at people who didn’t want to hear from them about things they didn’t want to hear about, and they figured that if they just yelled at people often enough they’d make enough money to earn it back.
"Well the world has changed pretty dramatically. We have discovered that people don’t pay attention to ads, they don’t respond to the ads and they don’t remember the ads. But what the internet is doing is making it easier to follow people you want to follow, to connect to people you want to connect to. So the future of marketing, as it turns out, is leadership. If you do something that people want to follow, if you connect people they want to be connected to, they all join a tribe – a group of people interesting in accomplishing something. And if you can lead a tribe, then the marketing will take care of itself."
When it comes to setting up a tribe – and making a success of it – Godin has the following pieces of advice:
- Be 'human' – "People don’t want to follow a committee. They want to follow a person. The most important thing to do is to be a person, to make a product that someone should buy because they want to not because you pushed it on them. To tell the truth. To be authentic. To be a human being and connect with people."
- You don’t have to have a big tribe to be successful – "Tribes don’t have to be very big to be effective. If you have 1,000 true fans, 1,000 people who will drive across the country to see you perform, 1,000 people who will tell their friends, that is enough to make an impact."
- Understand that not everyone wants to be in your tribe, and not everyone should be in your tribe – "One of the most difficult things to do as a small business person is to say ‘you’re not in’ and ‘you can’t do this’ because we want everyone to be our customer. But tribes, all of them, succeed because there are outsiders. You can’t have insiders if you don’t have outsiders."
This concept also offers the possibility of a more level playing field for businesses, irrespective of their size. "There’s a coffee bar in London called Prufrock, one of the things that he does is that instead of having a frequent buyer card, where if you buy eight cups of coffee you get a free one, he gives you one where if you buy eight cups of coffee from his competitors, and he lists them all, he’ll give you a free one. Why would you do that? You do that because you’re speaking to a very specific sort of person, a cosmopolitan urbane person that gets that you’re winking, understands that they’re part of the coffee ‘tribe’, that acknowledges the fact that you care enough about coffee and coffee drinkers that you would send people to your competition. That act by a small company changes the landscape. Starbucks can’t beat them at that game."
The proliferation of social media platforms has not surprisingly had big implications for this area. Social media sites such as Twitter and Facebook have continued their rapid penetration, while new platforms such as Google’s Buzz have emerged in the meantime. Godin believes that the spectacular rise of social media has had both positive and negative effects.
"The bad news is that most marketers are using social networks as a new way to spam people. Using social media as a new channel to yell about what they do. On the other hand there’s a whole breed of companies coming along that’s realising that if you can build a social network on Ning or something like that, or if you can just build an email relationship with people or that you can move people through this electronic medium so that they can connect with each other, then you’re half way to building a tribe."
Godin himself is very selective with his social media use. He famously (infamously?) shuns Twitter, for instance, although there is a Twitter feed of his blogs. The reason for this, he insists, is simply a matter of time. There are so many social networks out there that it is difficult to use them all – and he advises that people specialise.
"You have to pick. You can’t do all of them. The reason I’m not on Twitter is that I already picked. I have a blog, I need to take care of it, I need to focus on it, I answer hundreds of emails every day. If I added Twitter to the mix I would be bad at the other two things. So you need to focus. There are companies that use Twitter quite effectively, and if you can be one of them, in the way you tell your story, and the kind of people you interact with, then go do that. But don’t do it just because everybody else is doing it - that’s a silly reason."
For some organisations, this lack of ‘focus’ probably manifests itself out of an enthusiasm to be in the thick of the social action. Businesses are being told they need to be part of the conversation – but that is easier said than done, and so some efforts go awry. Even with Godin’s advice on building a tribe, there are firms that feel their trade doesn’t lend itself easily to social media. Most social strategies are based around the idea of followers and users talking about your brand and promoting you on networks. So where does that leave the likes of wholesalers who sell non-branded items or any number of unsexy B2B-style sectors that users are unlikely to talk about on the likes of Facebook?
Godin is adamant that it can work for any organisation – they just need to approach it with the right attitude and the right strategy.
"If you insist on being a price-driven, commodity supplier to businesses that don’t want to talk about you, well then don’t expect to grow. That’s all there is to it!" he explains. "What we know is that if you can change that equation, you can grow. How can you get people to talk about you? Well for example, let’s say you are a plumbing supply house in a small suburb or rural area or even a city, why not invite all of the plumbers – the ones who never get to talk to eachother over a beer – together once a month, to a party. Just to talk to other plumbers. You don’t have to say talk about my widgets or talk about my faucets - just talk.
"Now if all the plumbers come together once a month to meet eachother and trade stories and hang out, don’t you think they’re going to want you to be part of that conversation? Don’t you think you become irreplaceable in the extent that you are the host of all these plumbers? Instead of saying 'I have the cheapest faucets' what you need to say is 'I have the coolest plumbers, come here you get invited to meet your peers'. So there are all these opportunities to unlock conversations. But no-one is going to talk about your boring products for boring people. However, if that’s what you insist on, then be prepared to be invisible."
Listening to him talk about creating and leading a tribe, about making these all-important connections, it all seems so straightforward. Perhaps it is this ability to conjure eureka moments with such ease that is the reason for his own leadership status. Or perhaps it is the fact that he makes business seem less of a science or art, and more of a lesson in human relationships. As long as organisations understand they can't manage those relationships, of course!
"The real question I would ask everyone is if you went out of business who would miss you? And if the answer is only the people who've got to walk three more stores to get to a dry cleaner, that’s not a good answer," he concludes. "The idea of being missed, of being an important part of someone’s day or someone’s business or someone’s life isn’t easy to accomplish. You’re not going to accomplish it by making what the big companies make but for just a few pence cheaper. You’re going to accomplish it because you touch people, because you’re generous, because you make change, because there’s something about what you do and how you do it that people viscerally connect with. And if you can’t do that then you’re going to be struggling for years. And if you can do it, then you’re going to discover there’s a line out your door. There’s a line of people who want to be touched by you, who want to be connected, because that’s a basic human need."