Tag Archives: loyalty management

Turning a product “miss” into a CRM “hit” – The iPhone 4 and the Kin

This week, Microsoft and Apple both announced what many would refer to as “misses” in their mobile device product lines.

misses-200x111Microsoft cancelled their Kin social media telephone product line (less than six weeks after launching it). Apple admitted to flaws in its signal meter of its iPhone 4 (and all other prior iPhones). However, it has countered industry and consumer reports regarding problems with its newly redesigned antenna—one that many customers are purchasing of a USD $30 case (or bumper in the UK) to mitigate.

Both of these situations have led to stories in both the tradition and social media that raise a common points: consumers feel as if they have been let down by a established company they trusted enough to invest money in a newly-released product. This is a classic customer relationship management (CRM) miss that reduces customer loyalty. However it is one that both companies can easily repair in a way that restores long-term trust.

What I would do if I were at Microsoft

Microsoft is investing heavily in a revamp of its new Windows Mobile line. (This is the very reason they gave for ending the Kin). Take advantage of this by sending all customers who bought a Kin a coupon that lets them obtain a free new Windows Mobile smart phone if they pick from a list of specified (partner) providers and continue their contract through completion.

This would let Microsoft provide a high cash-equivalent (i.e., retail price of the phones) offer for a fraction of the price (the true external cost of the phone after removal of partner revenue sharing). It would transform legitimately disgruntled customers into potential evangelists of their new strategic products. It would also restore trust: customers would see very clearly that buying a new Microsoft mobile product is a safe thing to do.

What I would do if I were at Apple

The Apple situation is complicated by a two contradictions: 1) Apple’s testing indicates that signal meter problems exists but the antenna problem does not, while 2) many of their customers firmly believe there is an antenna problem. Apple does not win by trying to tell customers their belief is wrong (or offering them their money back if they return their new phones within 30 days of purchase). However, there is a simple fix…

Email everyone who bought the iPhone 4 a coupon (an experience well-known at the Apple store) that provides a link to download a the new signal meter fix and provides a USD $30 gift certificate for any product or accessory at the Apple and iTunes stores to compensate them for the signal meter inconvenience. Customers now have the choice to use this to 1) “buy” (for free) the case to “fix” their “antennae problem,” 2) do nothing or 3) use the certificate to buy another product (potentially one more expensive that the gift certificate). By providing customers the power to choose, they can very quickly show good service without engaging in a “perception vs. reality” debate.

The cost and time-sensitivity of restoring customer loyalty

The cost of these actions is low—especially when one considers their true cost (vs. their retail value) and compares this to the overall profit across a smart phone purchase and two-year access plan. The benefits are enormous: good reputation, facilitated upgrade of the book revenue per customer, and conversion of a customer from someone who is likely to turn to a competitor to one who is likely to return. However, achieve this, both of these companies must move quickly, in the next 10 days: before negative experiences become permanent brand opinions.

Social Networks for Business Tip #10: Connect All The Dots

I have found ten common tips that apply irrespective of what your enterprise does, your market is or what technology platform you are using. This is my last tip in this series of 10 posts; each with a particular theme. These intended to be read in the order presented, as they will build upon each other…

Tip10

Don’t Leave Your Community Detached

red_net_fAs I stated on the first post in this series, you business community is one of many channels within which you will interact with your customers, employees, partners and other stakeholders. If you do not recognize this fact and simply create a standalone community, you will only create a place where your stakeholders socialize. While this is nice, it will not create a large return on your investment (more often than not, it will not provide any return).

If you want to maximize the return on investment in your business community, you need to embed it into the your entire enterprise.

Start With Your Core

I am a big fan of modular architecture. This model advocates that you can achieve the better results, in a more flexible manner, by picking the best technology for each problem on hand instead of trying to find one perfect system that does everything.

I recommend starting with the following core of three modules to build a “best of breed” architecture ideally positioned to exploit value from your business community:

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Module 1 is Your Business Community. Its purpose is to serve as channel to attract customer interest and drive engagement. It is essentially a virtual storefront to capture the ideas, preferences and experiences of your customers in a measurable, data-driven format.

Module 2 is Your Data Warehouse. The Data Warehouse extracts the wealth of interaction and engagement from your business community and merges it with all of your other business data (e.g., customer lists, sales, supply chain data, etc.) in a format ideal for business analysis. This enables you to detect patterns and make discoveries from your community that you can use to create value.

Module 3 is Your Primary Back Office Management System. Depending on you business this could be an enterprise resource planning (ERP), customer relationship management (CRM), sales force automation (SFA), billing and merchandising (B&M) or even content management systems (CMS). This is where you automate your data warehouse discoveries in the format of rules for advertising, promotions, offers, sales, customer care, shipping, billing and credit.

Note: For more information, you can click here to listen to my online Webinar on Social CRM (link no longer active) for more information as to about why this modular architecture model is better than trying do everything from a single, all-in-one platform.

Then Build Out to the Rest of Your Enterprise

Now that you have your business community integrated into your core, you easily add on every other part of your enterprise to leverage even more value from the discoveries you are making by engaging with your community members. In many cases, the much of your enterprise is already integrated with your primary back office system and data warehouse, making this extension far less daunting than it initially appears.

Here is how it works:

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  1. You put a Fan Page up on Facebook and a User Name up on Twitter to attract customers
  2. Through these mainstream consumer networks, you redirect customers to your business community
  3. Customers can view what you have to offer here freely, maximizing the number of Spectators you have
  4. When Spectators want to add to the community, they can easily become Joiners (and log in) by re-using their Facebook or Twitter IDs. All of their actions as Critics and Creators of content are automatically attributed to these accounts (which already have established contact and profile information)
  5. All of this (Critic and Creator) interaction is pulled into your data warehouse and joined with the rest of your enterprise data
  6. Your Marketing and Business Analysts mine this data and find new opportunities to present better offers, package better products or simply explain what you do (and its benefit) in clearer terms
  7. They work with your Business System teams to publish these findings in the forms of rules and workflows in your ERP, CRM, SFA , B&M and CM systems
  8. These new rules and workflows automatically drive changes in your Static Web Site, Business Community, Direct Response Campaigns, Contact Centers and Sales force
  9. You can capture customer feedback through all of these channels and combined it in you data warehouse with results from the your ERP, CRM, SFA and B&M systems to measure the value you have created

This creates an entire system that facilitates continuous improvement, generating over time growing understanding of your customers, employees and partners and using this to create growing value and ROI.

Smart Enterprises Have Already Shown How This Creates Enormous Returns

Tying all this together is not some imaginary view of success. Many smart enterprises have already down this. Three are highlighted below:

Dell’s IdeaStorm

Dell tied a set of open communities to their every aspect of their operation. This has generating ideas for new products and product configurations, improved customer satisfaction and increased online sales.

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Men’s Health

Rodale  has fully embedded their Belly Off Community into their online content and print magazine. This has boosted online advertising revenue, increased customer loyalty and boosted magazine sales.

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American Express OPEN Forum

American Express has tied their new OPEN Forum community into core entire enterprise and advertising network (even including affiliate marketing programs such as their join Shine-A-Light campaign with NBC Universal). This has created a clear value proposition for their customers leading to everything from increased card transactions to added OPEN card applications.

amex_eco

You Can Do This Too

This entire blog series lays out the steps to do this. If you follow it, you too can create effective communities that drive business value.