Kate Carruthers provides advice on building trust with customers through social marketing techniques.
In the early days of my career we were told that marketing nirvana would be delivered to us by means of the all singing and all dancing customer relationship management system (CRM). It was described along these lines: "Customer relationship management is a company-wide business strategy designed to reduce costs and increase profitability by solidifying customer loyalty." (Source: Destination CRM.com, 2002)
Then in 2001 the Cluetrain Manifesto burst onto the scene with some revolutionary notions for business and marketing:
- Markets are conversations.
- Markets consist of human beings, not demographic sectors.
- Conversations among human beings sound human. They are conducted in a human voice.
Trust?
- 17% consider corporate or product advertising the least credible source of information.
- 19% consider social networks the least credible source of information.
- 75% of consumers don’t trust their peers (including social network 'friends') to provide good advice about a company.
(Source: 2010 Edelman Trust Barometer)
It is important to consider what customers really care about. For the most part customers don’t really:
- Care about your brand.
- Find your product fascinating.
- Love you because of your CRM or social media strategy.
It’s all about trust. But the real question is how can we build trust with our customers? There are three foundations of trust for consumers.
- Ability – this is based on the quality of our products or services and it is judged by demonstrable results from a consumer perspective. Our customer service also factors into this foundation. Bad customer service can undermine a good quality trust and destroy a customer’s belief in our ability to serve them.
- Integrity – this is based on our behaviour and it is driven by consistency and transparency in relation to our business and our people. The modern socially networked age means that lack of transparency is discovered very quickly and is often viewed unfavourably by the market. Also poor behaviour on the part of an organisation or its people can now be broadcast immediately via social networks. This is why consistency is an important part of this foundational element. Everyone can have an off day. It is what happens over the other 364 days of the year that counts. And when an off day happens then transparency kicks in and we need to acknowledge it, make it right and move on.
- Behaviour – this brings the other two foundations to life. It is important that our behaviour is congruent with implicit and explicit brand and business values; and also that we are responsive to customers in terms of those values. Incongruence between behaviour and espoused values irritates people and even if not obvious it niggles at people’s consciousness.
Zappos are a great example of this in action
Under the leadership of Tony Hsieh "Zappos has grown gross merchandise sales from US$1.6M in 2000 to over US$1 billion in 2008 by focusing relentlessly on customer service." (Source: Venture Beat Profiles)
This company was acquired by Amazon.com for US$880 million in 2010 (Source: TechCrunch). The value that was created in Zappos was through consistent application of these foundational principles list above.
As Tony noted in an interview: "The number one driver of our growth has been through repeat customers and word of mouth. We focus on having the best customer service, but ultimately, our#1 priority is company culture. Our belief is that if you get the culture right, then most of the other stuff, like great customer service and building a great brand, will happen naturally on its own." (Source: Retireat21)
Social networking offers advantages to small players
Social networks like Facebook and Twitter offer significant advantages to smaller players and it can even put them on a level where they appear bigger and stronger than they are.
The challenge for businesses who want to get started with social media is what to do, when to do it and how to execute effectively. There are many consultants around who offer to solve this problem but many are charlatans who rip-off unwary businesses. One tip – if they call themselves a ninja or a guru they might just be one of the charlatans. Good consultants will have a track record, demonstrable results and the ability to measure their efforts.
Another big challenge for business is choosing which social networks to become active in; and there are simple rules to adopt. There is no point trying to do it all! Pick the social networks where your customers hang out.
Just to give you an idea of how quickly the fashions in social networks can evolve:
Now we are building on the relationship capability of social networks and adding in location based elements. This means that we now see social shopping as a genuine opportunity for businesses.
But one thing to remember is that some of our old-fashioned marketing tools still have an important role to play. Do not discount the efficacy of websites and blogs, email newsletters, and direct mail newsletters and brochures. All of these support social marketing in important ways; and also ensure that customers who are not active online are not forgotten.
By combining traditional and social marketing techniques we can tailor our marketing messages to an audience of one. In doing this though we come full circle back to CRM because data collection and management are the keys to managing customer intimacy.
However, it is important to remember that tools are only as good as the people and processes that drive them. The ability to execute is what makes all of this come together enabling us to take ideas, plans and tools and execute to find the customer sweet spot.
Seven tips about technology and tools
Following are seven questions I always ask when considering adoption or acquisition of new technology for business. It is worth using these to find out if the technology will really be sustainable in your business.
1) What is it and what does it do?
With this question you can find out how much the person recommending it actually understands. If someone can’t explain what the proposed technology is and what it does in plain English be very suspicious. Seek alternative perspectives if they are unable to answer this question in a way that makes sense. I always say – "if you can’t explain it to someone’s grandmother so she can understand what it is and does then you don’t understand it properly yourself".
2) How does it work?
Don’t be afraid to openly ask "Can you explain to me how it works?" It is similar to the previous question but digs in more on the functions that it can perform and how it does so. Uncovering assumptions – such as that the proposed technology assumes access to high speed broadband – is critical. These assumptions generally add unanticipated cost to implementation of the solution.
This question also uncovers information about potential extra costs. For instance, if an application is hosted in the Cloud then it will need likely need an extremely reliable and robust internet connection.
3) How does it make or save money for me?
This is an important question. Often the person suggesting technology for your business does not correctly understand its profit model. The revenue model for your business in relation to the new technology needs to be clear, otherwise calculating the payback period is impossible.
4) How long is that payback period?
Strong and confident off-the-cuff answers to this question are invariably wrong. A sensible answer to this question will depend upon a number of variables, some of which are particular to your business, time and place. I have seen more dodgy payback assertions than I’ve had baked dinners. It’s worth digging into this question and doing a proper ROI analysis.
5) What are the indirect costs of this technology?
Often the focus is on the capital cost of the technology and little consideration is given to the total cost of ownership during the life of the asset. Indirect costs include:
- External costs: hardware and software maintenance (a good rule of thumb is 20% of original capital cost annually adjusted for CPI), additional support, ongoing minor enhancement requirements.
- Internal costs: this is usually the cost of time for staff to look after or use the technology; sometimes the technology adds new tasks that must be considered & often these tasks require some level of technical skill; also often overlooked is the possibility that you will need to take on new staff to run the technology.
6) How updateable is this technology?
This is a big question. If there are improvements in the technology will you have to buy a new model or can the existing model be upgraded? Given how fast technology innovation cycles move these days, being able to upgrade or expand the technology is critical to having a decent useful life for the asset.
7) Who else uses it & how do they use it?
If nobody else is using the technology yet then there needs to be compelling answers to all of the other questions. Further, if there are no other local users (i.e. in your country) then the support infrastructure might not be there ready to offer effective support. There is nothing worse than the support help phone line being in a timezone that is opposite to your own.
Kate Carruthers is a technologist, marketer and educator who blogs at www.katecarruthers.com/blog and can be found on Twitter @kcarruthers. Her extensive experience in senior executive roles for diverse organisations such as GE, AMP, Westfield and State Government informs her current practise in social business design. She has also lectured at Macquarie University and taught TAFE level courses in business and management.
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There is a big difference between trust for business customers and consumers. It was not clear to me what you really meant. For consumers Social media are a trusted source of information, the most trusted. The source (Edelman Trustbarometer) for the stated trust figure of 75% for 'peers', people do not trust that source of information, is based on the opinion of a very specific group of people. I read the Edelman Barometer and after that I understood what was meant.
Using those percentages should be in sync with the population you are mentioning.
Did I miss something?
Thanks (0)Hi Kate,
Great post... and also illustrates how social media has helped us move from an "inside-out" view (CRM traditionally being more about what we "do" to a customer) to incorporate the "outside-in" view of a customer.
Thanks (0)