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Customer Engagement (Part 1)

by on Tuesday, May 3rd, 2011

Richard Meyer has a typically thought-provoking post about customer engagement on his New Media and Marketing Blog. In the post he tees off on a research report that uses ‘likes” on Facebook as the sole metric of customer engagement. Richard has a big problem with this: “Who the hell cares who ‘likes’ your posts?”

Richard goes on to say that engagement “doesn’t mean a damn thing”. I completely agree that clicking the “like” or “follow” button doesn’t mean that customers are engaged, but I think there is such a thing as engagement. I also think that marketers can and should take steps to encourage engagement, but that ultimately they can’t control it. I also think that we are a long way from effective engagement metrics.

Scuderia Ferrari

(Helena.40proof via Flickr)

I would define an engaged customer as one who acts as if he/she has a stake in the marketer’s business that extends beyond the specific transaction. These are the customers who can provide valuable insights and information both to the marketer and to other consumers. Under this definition, “liking” or “following” is about the weakest possible form of engagement imaginable.

Even in the absence of marketer involvement engaged customers can have a significant impact on sales. Because they may know more than the typical consumer and be more willing to share, they can be effective advocates for the marketer’s brand and products. Even if they point out product flaws or own up to having made a mistake in purchasing the marketer’s product (although Richard disagrees, Yelp and Trip Advisor contain plenty of reviews in which customers take at least some of the responsibility for their negative experience).

If the marketer does involve itself with its cadre of engaged customers it can do more than increase short-term sales. It can increase long-term sales by optimizing its business in areas such as product features, merchandise mix and customer service. By bringing them inside the tent the marketer may make these customers even more engaged and even more vigorous advocates for the brand and its products.

Customers don’t have to become unpaid product testers or spokespeople to be engaged. Engagement can include attending marketer-sponsored events or participating in marketer-endorsed charitable activities. By concretely affiliating oneself with the marketer and — critically — by sharing about it, engaged customers can drive the marketer’s message and build the marketer’s brand. Whether these activities result directly in sales depends in part on how they are structured and how the sales cycle normally works (cars and colas aren’t purchased the same way).

How vital is the marketer’s involvement to customer engagement? The short, if obvious, answer is that it can’t hurt. Perhaps surprisingly, however, some marketers with highly engaged customers have little if any involvement with them. One example, admittedly atypical in terms of both product and customers, is Ferrari. The Italian sports car maker has a passionately engaged base that includes not just current owners but past owners, hope-to-be owners and probably-never-will-be owners. This high level of engagement takes place with virtually no involvement from Ferrari, which pays attention only to the very top tier of its customer base (even for Ferrari, all customers are not created equal).

In the absence of marketer involvement, the Ferrari faithful have turned to enthusiast sites such as Ferrari Chat as well as marque clubs such as the Ferrari Club of America and Ferrari Owners Club (which hear from the marketer mainly when it believes its trademarks are being infringed). They have returned Ferrari’s lack of involvement by creating their own communities, whose benefit to the marketer goes unrecognized and unrewarded, but probably not unnoticed.

If it’s clear that marketers shouldn’t use likes and follows to measure engagement, what are some appropriate metrics? That will be the subject of Part 2 of this post.

The Zavee takeaway:

  • Customer engagement exists, but “likes” and “follows” are its most trivial form.
  • Engaged customers can help marketers improve their business, and not just by purchasing more.
  • Marketers can ignore, monitor or facilitate customer engagement, but it isn’t always clear which strategy will have the highest ROI.

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Building Loyalty with Customer Reviews

by on Wednesday, February 23rd, 2011

Kevin Stirtz of Amazing Service Guy has an outstanding post in The Social Customer called, “10 Ways to Turn Online Reviews into More Loyal Customers”. Kevin’s advice is not just smart, it’s easy for any merchant to adopt. Things like, respond to every review; when you’re wrong, apologize; stay positive and consistent. Simple points, but they get at what makes a review platform like Zavee so powerful for local merchants.

I have only a few thoughts to add to Kevin’s. First, I absolutely agree with responding to every review, at least with a thank you. Depending on the platform, merchants can respond publicly (on the platform), privately (via direct message or email), or both. For example, I’ve seen public responses to reviews on TripAdvisor but not on Yelp. I’ve received private responses to reviews on Yelp. Zavee supports both public and private responses. Having access to both domains gives merchants a lot of flexibility but requires thought about how to use them. For example, a general statement of apology probably should always be public, but a promise of specific compensation might best be communicated privately.

Kevin doesn’t make the point explicitly, but underlying his comments is the notion that reviews can be shared socially. An inappropriate response can easily make the social rounds and do more damage than the review that the merchant was responding to. A gracious and informative response can be shared as well, but with the opposite effect. In other words, responses to reviews are marketing communications, and should be crafted as carefully as a news release or an ad.

Shout!

shout! (via Sandra Nahdi - Creative Commons)

Kevin rightly advises against writing fake positive reviews, calling them a distraction from the real work of improving the business. I agree that they are a distraction but I think another reason to avoid them is that they jeopardize the credibility of the review platform as a whole. Think of it as “Gresham’s Law” applied to content.

However, merchants frequently tell us they are more concerned about fake negative reviews, e.g., from a competitor or extremely dissatisfied customer. Merchants can never completely prevent malicious reviews but there are two things they can do to limit their impact: First, merchants should be extra vigilant about not rising to the bait and engaging in an online shouting match with the reviewer. Kevin makes this point about all negative reviews but it the more negative the review, the more important the merchant’s self-restraint. Second, merchants should trust their customers. They are pretty good about spotting outlier reviews, recognizing them for what they are and discounting their impact accordingly.

A more annoying problem for merchants is reviews that are stale. Restaurants that have changed chefs, hotels that have repainted their rooms, and stores that have changed suppliers have all been victimized by dated reviews. No one knows why anyone would wait months to describe a shopping, dining or travel experience they probably barely remember, but it is a common occurrence. Our attempt to limit the impact of both dated and false reviews is to permit shoppers to post a review only after making a purchase and within 30 days of that purchase.

The Zavee takeaway:

  • Respond to every review, if only to say “Thank you” or “I’m sorry”.
  • Treat every review as a marketing opportunity, to both new and existing customers.
  • Treat every response a marketing communication, one that may be shared well beyond merchant and customer.

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Is A “Deal of the Day” Right for You?

by on Tuesday, December 7th, 2010

Every year some online concept seems to catch on with users, commentators and venture capitalists alike. This year’s hot concept is the “deal of the day” pioneered by Groupon. The daily deal is a deeply discounted product promotion available for one day only. Groupon features the deal on its web site and blasts emails to users who have opted in. It can provide substantial exposure to a marketer or product, although it doesn’t necessarily pay for itself. Is Groupon (or one of its many imitators) right for your business and its products? As usual, it depends.

The marketing psychology behind Groupon’s deals is simple: an ultra-low price to stimulate interest plus very brief availability to stimulate action. You’ve seen the same thing on direct response infomercials on late night TV. But those infomercials work. And so, at least to some extent, do Groupon’s deals.

The New York Times business blog “You’re The Boss” recently analyzed the math behind a typical Groupon deal. Separately, a team at Rice University studied how satisfied merchants were with their Groupon experience, and how likely they would be to use a Groupon deal again.

via Sofianos Rezk (Creative Commons)

In the Times article the bottom line was whether it cost more to acquire net new customers via the Groupon promotion or through conventional channels. That like a perfectly reasonable metric, although perhaps not the only relevant one. In the Times’ example the hypothetical business spent about the same to acquire net new customers through the promotion as through other channels, which made the promotion a wash, but the author pointed out that even small changes to the many variables could alter the result significantly.

That’s important because the Times example described more than a dozen different variables, from the the percentage of coupons redeemed to the percentage of redeeming customers who were not previously customers of the merchant. Depending on these variables a Groupon program could be anything between a home run and a disaster.

But running the numbers is not the only way to decide whether a deal of the day makes sense. The Rice University study led by Professor Utpal M. Dholakia (full pdf available here) reported a wide range of views from merchants concerning their satisfaction with the Groupon promotion and the likelihood of their using Groupon again. The three key predictors of repeating a Groupon promotion were

  1. Effectiveness in reaching new customers
  2. Percentage of Groupon users buying more than its value during the visit
  3. Employee satisfaction with the Groupon promotion

In other words, the promotion would be considered less than successful if it promoted trial but did not produce net new repeat business; did not result in substantial on-premises upsell of Groupon users; and did not satisfactorily account for reductions in commissions and tips. Merchants reported that unless these factors were present they would not be inclined to repeat a Groupon promotion even if their promotion had been profitable:

There is widespread recognition among many business owners that social promotion users are not the relational customers that they had hoped for or the ones that are necessary for their business’ long-term success. Instead, there is disillusionment with the extreme price sensitive nature and transactional orientation of these consumers among many study respondents.

Is Groupon too much of a good thing? The suggestion in the Rice study that Groupon shoppers are qualitatively different from ordinary shoppers would be troubling if true. This would suggest that consumers who are highly motivated by the brief availability of an extreme price reduction are not willing or able to see beyond the deal and are not particularly open to learning about the merchant or her (non-discounted) products.

Are there any benefits to a tool that brings traffic but maybe not genuine trial? It depends on the business. A retailer that does better when the store is full (e.g., because of a social element to the brand) may be able to leverage the traffic Groupon can bring. A restaurant that cannot adequately service a Groupon-driven wave of first-time customers (who may not be the best tippers) is likely to have an unsatisfactory experience regardless of the numbers. The key is to understand the process, understand the numbers and have realistic expectations.

The Zavee takeaway:

  • Groupon isn’t as much about promoting trial of your product as it is generating buzz about your brand.
  • For the right business, Groupon can result in incremental sales to one-time customers and an acceptable level of new customers, all without upsetting and under-compensating your staff. But it doesn’t seem to happen very often.
  • Brands aren’t built with magic bullets. Surprise and delight your customers, reward their continued loyalty, and make it easy for them to share their experiences.

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A Look at the Future of Location-Based Marketing

by on Friday, November 19th, 2010

Bill Hanifin of Loyalty Truth (and a friend of Zavee) was kind enough to point me toward the Location-Based Marketing Summit held recently in New York. Bill thought it would be worth my while and, as usual, he was right.

Although the conference organizers were interested in what comes next for location-based marketing, most of the speakers were oriented toward the here and now. I came away from the conference with a far greater understanding of the uses and limitations of the current technologies and platforms while getting a grasp on some of what lies just over the horizon in the location-based space.

The Wise Marketer, a leading UK-based site for forward-thinking marketers, asked Bill to provide a write-up on the conference. Bill’s report, with which I assisted, was first published in The Wise Marketer for this week and is reprinted below:

The conference blended strategic and tactical insights about location-based marketing techniques, and most of the speakers observed that this branch of mobile marketing is still in its infancy. The principal strategic focus of the conference, however, was on consumer engagement and how to increase it.

Several speakers referred to Forrester’s recent finding that regular use of the ‘check in’ model was still in single-digit percentages, and that consumer awareness of these services wasn’t much higher – a report that has however been disputed at least once.

Either way, with estimates of more than 12 million people playing what consumers will initially consider “the location game”, smartphone penetration reaching 9% of the handset market, and SMS usage covering 95% of all wireless customers, it is clear that almost all consumers can be reached with marketing messages via a mobile handset.

Ian Schafer, CEO for Deep Focus, discussed ways in which marketers could use the technique for more effective marketing, suggesting that it can grow customer loyalty, increase relevance, and provide useful data and insights. He considers the smartphone to be “the next generation loyalty card”, with targeted deals and discounts being available upon check-in (or perhaps even without a digital check-in). By way of example, he highlighted ShopKick, which has a hardware platform that pushes reward currency to the consumer as soon as they enter the merchant’s store (without the consumer even having to check-in or make a purchase).

Android Phone

Android Phone (by Johan Larsson - Creative Commons)

Most of the speakers, including Schafer, took it as read that delivering more relevant marketing messages increases their effectiveness. And, in a highly fragmented communications environment, the relationship between relevance and effectiveness is even more essential.

Overall, it was agreed that location-based applications can at least provide:

  • People – other users who might have something in common with the user;
  • Content – messages or offers based on what the user likes that is at/near her location;
  • Time and Place – targeted, timely messages or offers based on where the user is right now;
  • Context – communications based on prior behaviour, as tracked by the location-based device.

The potential of location-based data is that it can drive better business decisions by adding additional dimensions (i.e. time and place, captured over time in real-time) to what is otherwise known about each consumer’s behaviour. One great example cited was the Microsoft Bing ‘Home Turf Finder’ for the World Cup, which identified certain bars in New York City as “home turf” for fans of a particular team. The determinations were based in part on editorial sources such as Thrillist, but were mostly derived from ‘heat maps’ of consumers who had checked in or tweeted their support as well as their location.

Several speakers also noted Google‘s recent announcement that 30% of mobile searches and 20% of all internet searches have local intent, and said that all of the major players (e.g. Facebook, Google, and even wireless carriers) were already focusing on local information.

There was also considerable discussion of ‘Groupon’, although some panellists expressed doubts that the “deep discount, deal of the day” model provides sustainable customer growth. Speakers agreed, however, that geo-targeting adds value by increasing both relevance and personalisation. And, in order to thrive, it was agreed that location-based applications must provide the consumer with something of value, preferably in terms of relevant and personalised content.

Overall, panellists agreed that there is great demand for marketers to engage with consumers at “the right place and the right time, all the time”. Mobile couponing, despite being a fragmented space, seems to have taken hold. As a result, one area in which technological developments are anticipated is indoor navigation, where GPS signals are sometimes degraded and are not designed to be accurate enough for navigation within a store.

Finally, the issue of consumer privacy arose in almost every session. John Nicholson of law firm Pillsbury Winthrop Shaw Pittman concluded that “the more value a marketer delivers, the more information a consumer is likely to share”, and that an application that seems to exist only for marketing purposes is unlikely to gain the consumer’s trust.

(Article copyright 2010 The Wise Marketer)

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Social Media for Small Business: Glass Half Full or Half Empty?

by on Thursday, November 4th, 2010

Are you using social media for your business yet? The most recent semi-annual small business study by Network Solutions, as reported by the Grow Smart Business blog, has a mixed answer to that question. On the one hand, only 24% of the 500 businesses surveyed said that they had a social media presence. On the other hand, that’s double the number from a year ago. Significantly, businesses reported using social media in effective ways: to identify and attract new customers, to increase awareness of their brand and to engage with current customers. On the other other hand, only 16% of businesses claiming a social media presence said that they used social media as a customer service channel – a strategy that other companies have employed successfully. Does it work? A study reported by eMarketer found that small businesses “with 100 to 500 followers generated 146% more median monthly leads than those with 21 to 100 followers” although there was no incremental gain above 500 followers.

The Poetry Store

The Poetry Store (Creative Commons)

The Network Solutions study also asked what problems social media users encountered. By far the most common problem was that social media took more time than expected, reported by 43% of social media users (vs. 50% in 2009). How much time social media takes depends on its importance to the business, including how many of the company’s strategies it affects (Customer acquisition? Brand awareness? Customer service?). Our suggestion is to start small, especially if you will be handling social media yourself. Limit the scope of your social media presence and concentrate on using it effectively on only a few things. In other words, depth over breadth. Another suggestion is to set aside two periods per day, one in the morning and one in the afternoon, to tweet, blog, update Facebook or do whatever else has to be done. A different approach is to fit social media into the gaps and downtime that seems to be part of everyone’s day. We think that scheduling social media time would be more productive and less stressful than the ad hoc approach, but either could work. The point is, time is no excuse for avoiding social media.


The Zavee takeaway:

  • Your competitors are using social media. Don’t get left behind.
  • Social media works. Use it the right way (and there is a learning curve) and it will move the needle.
  • It doesn’t take a lot of time to get it right. Start small, and make managing your social media presence part of your daily schedule.

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When Things Go Wrong, There’s No Substitute For The Human Touch

by on Wednesday, October 20th, 2010

Social shopping sites (like Zavee), as well as many merchants’ own web sites, provide tools that let shoppers “self serve” information they want to make an informed purchase decision. Some large merchants are also asking customers to self-serve customer service issues, too. Is this a good idea?

For product-related issues, it’s a great idea. Many manufacturers, such as Apple, now host libraries of information to help consumers use and, when necessary, troubleshoot their product. This system filters out customers with easy to solve (or at least common) problems and frees the customer service representative (CSR) to deal with more difficult (or less common) issues.

Not another customer service complaint! (via Star5112 - Creative Commons)

Some companies have an intermediate stage between self-service and a conversation with a CSR: live chat. Live chat uses an IM-like interface for online interaction with a CSR in real time. Why would a merchant use live chat rather than a live conversation? Most live chat software lets CSRs conduct several live chat interactions at once, while they can handle only one phone call at a time. This can result in shorter wait times compared to phone queues, which may make the more impersonal quality of live chat a fair exchange.

Are consumers equally wiling to self-serve when the issue relates to the company’s service? Recent research supports the unsurprising conclusion that when things go wrong consumers want to interact with a human, either in person or on the phone. But not just any human will do. Consumers want someone who listens, responds appropriately (rather than from a script) and is empowered to address the problem.

Speaking of Apple, I recently had a wonderful customer service experience at the local Apple Store. They made an avoidable mistake that delayed the servicing of my laptop. When I called and pointed out the mistake, the service manager immediately took steps to make it right. He didn’t even consult the store manager; he just made the decision on the spot. I’ve always been a “Mac guy” but now I’m more likely not only to buy Apple products but to recommend them as well. Great customer service will do that.

Best Buy explicitly treats customer service as a sales channel. Its twelpforce program puts sales associates on Twitter where they respond to customer inquiries, which range from questions about what to buy to troubleshooting assistance to service complaints. Why Twitter and not either live chat or a phone call? First, from a look at the Best Buy feed the interactions clearly are unscripted and one-on-one. Live chat isn’t as spontaneous or personal. Second, Best Buy doesn’t offer twelpforce as an alternative to telephone interaction with a CSR – it’s positioned as tech advice for the consumer (even though they handle service issues). Twitter also scales better than the telephone. Associates can switch between helping customers in the store and on Twitter; a voice solution would would take associates off the floor. Finally (and I’m speculating here), I think it matters that twelpforce consists of sales associates rather than CSRs. Associates’ only mission is to grow the business, which includes providing a customer experience that makes buying – and returning – more likely. CSRs also are (or should be) tasked with providing a quality experience, but they encounter customers when they want to complain, not buy. So it’s easy to understand why CSRs might be less customer-centric than associates.

Smaller companies can’t (and probably wouldn’t want to) duplicate an enterprise level customer service structure, but there are lessons that small companies can learn from big ones. First, asking customers to self-serve on product issues can make sense and save money. It’s one of the smartest things you can do with your web site. Second, make sure that every customer-facing employee is trained to listen to customer concerns, respond appropriately and take prompt action (even if that action is to pass the customer to a more senior employee). Third, use customer service as a sales channel. Any action you take that goes beyond customer expectations – especially if you venture into “surprise and delight” territory – can increase that customer’s loyalty and create an advocate whose recommendations bring you new customers and more sales.

The Zavee takeaway:

  • Understand the differences between customer service issues that relate to the products you sell and the service you provide. Customers are more willing to self-serve product issues than service issues.
  • When things go wrong there is no substitute for personal interaction, the more personal the better. Especially (but not only) in smaller companies, everyone is a CSR.
  • Customers share their experiences, both good and bad, so every interaction can be amplified. Great customer service creates brand advocates who recommend you to others. Poor customer service has the opposite effect.

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Big Brands Embrace Social Commerce. Are They Alone?

by on Tuesday, October 12th, 2010

Zavee CEO Alan Pleskow and I attended the inaugural Rise of Social Commerce conference last week in Palo Alto. Big brands (usually) adopt new technologies and strategies earlier than small to medium sized businesses, so the conference provided a fascinating peek at how some of the largest companies are planning for and deploying Social Commerce today.

Social Commerce was defined by the conference organizers as “the use of social technologies to connect, listen, understand, and engage to improve the shopping experience.” For most conference attendees, the goal was removing the the technological, economic and operational obstacles that add “friction” to the online commerce experience.

(via x-ray delta one - Creative Commons)

Does that mean that Social Commerce is only for brands that sell online? And only for enterprise level companies? Not at all. Much of the learning around how consumers interact with brands and each other applies equally to brands whose customers make shopping decisions online but actually buy in-store. And much of the same learning applies equally to SMBs, even if some of their challenges are unique. For example, while SMBs are more likely to ask “How can I find the time?” than “Which department owns this?” using technology to become more customer-centric is something every business can do.

The organizers developed a conceptual framework for Social Commerce that has four phases:

  1. Let’s Be Social
  2. Enlightened Engagement
  3. Store of the Community
  4. Frictionless Commerce

The first phase is where many SMBs are today: working out the basics of consumer engagement on social platforms. Very few business we meet through Zavee still believe that social media is irrelevant to their business. Their most common issues are the time commitment required and the loss of control over their business’ message. Depending on the size of the business the time issue can be a real concern, but small businesses can start small, and increase their investment in social media as they begin to see results. As for the control issue, a few minutes on Twitter should open the eyes of any business owner about how much control they really have.

The second phase should be the destination for most SMBs, and they should get there as quickly as possible. This phase involves adding social content to the shopping experience: reviews from consumers, information and suggestions from the business, even content sourced from third parties. Regardless of whether the actual transaction takes place in the online or offline domain, enriching the consumer’s shopping experience through social content can have a significant impact on businesses of any size. Consumers respond to timely, relevant, personalized content by trying new businesses, becoming loyal customers and sharing their experiences with the community.

The third and fourth phases are over the horizon for many enterprises, let alone SMBs. The third phase involves bringing consumers into the process by which businesses create, buy, stock and price products, and the fourth involves completely re-imagining the retail experience. Some of the examples from the conference, such as Kaboodle and ModCloth, are very impressive. Many of the companies at the conference are looking to leverage Facebook’s enhanced commerce capabilities to bring the online store to the consumer rather than force the consumer to leave Facebook for an e-commerce site. SMBs may not be able to do everything these companies have done, but the underlying insight – that consumers respond to being included in decisions that are made upstream of the purchase – is something SMBs should consider making part of their strategy.

With so much emphasis on the enterprise, why did Alan and I attend this conference? It’s because we believe that the definition quoted above also describes what Zavee does for our merchants and shoppers. Our platform helps merchants use social media to listen, understand and engage with consumers. More importantly, Zavee is a community that supports the shopper-to-shopper and merchant-to-shopper interactions that lead to an enhanced shopping experience and a stronger brand. Adopting a Social Commerce strategy can seem daunting for SMBs, but with Zavee they don’t have to do it alone.

The Zavee takeaway:

  • SMBs can learn a lot from what enterprises think and do, even if these learnings can’t be applied directly.
  • The insight that consumers respond favorably to content that is timely, relevant, personalized can be leveraged by businesses of any size.
  • SMBs need to get into the Social Commerce space, but Zavee can ensure that they don’t take the journey alone.

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4 Things I Just Learned About Location-Based Marketing

by on Tuesday, October 5th, 2010

As someone who enjoys – but doesn’t completely get – Foursquare and other “check-in” services on the Web, I was looking forward to the Location-Based Marketing Summit I attended last week in New York. I learned a great deal about this rapidly-growing field, and I had the chance to hear and speak with some of the people who are responsible for the latest thinking and most interesting developments in location-based services (LBS) and their application to marketing. Here are some of the things I learned at the conference:

via jorgempf (Creative Commons)

Check-in is only the beginning. Services such as Foursquare and Gowalla have received so much publicity lately that it’s easy to equate LBS with check-in. But LBS also includes maps and other query-based services (imagine wandering through a museum and using your mobile device to learn about the painting you’re standing in front of) and a variety of shopping platforms (mostly deals and discounts but also several loyalty platforms) as well as socially oriented services like Foursquare. What can LBS do for marketers? At least three things:

  • Grow loyalty. Some marketers, such as Tasti-D-Lite, are using LBS as a loyalty platform, where a purchase results in an automatic “check in” and a message to friends as well as an award of loyalty points. A new service called TopGuest drives enrollment in hotel loyalty programs by offering bonus points when a guest checks in (in the LBS sense).
  • Increase relevance. Adding time and place to any information increases its relevance. And almost any kind of information can be made more valuable by adding relevance. Location data can tell marketers about what people like to do and to buy, and when and where they like to do it. It can place consumer behavior in context: Is going to Starbucks after the gym the same as going there on the way to work? Is going to Starbucks because it’s convenient the same as going there because you like it? With more detailed and relevant information about the consumer, marketers can create messages and offers that are much more relevant to the consumer – and more likely to be acted on.
  • Provide data. Marketers also can use aggregated location data to make better decisions. Comcast, which uses Twitter as a customer service channel, has been mapping tweets as a way to learn where service resources are needed most and communicate with customers in those areas. Location data can also be used to map patterns of customer behavior, from which bars attract fans of what teams to which doctors are prescribing what medications.

Engagement is everything. The hype about check-in services has obscured the wide variety of location-based services that are already available. The common denominator among them is engagement. How can LBS create engagement? One way is to deliver relevant information delivered in real time. Or, as one speaker called it, earning attention by being in “the right place, right time, all the time.” Another source of engagement is providing an enjoyable experience, such as by including game mechanics. On a superficial level this is how the check-in services work. But the real value of these services is relevance: for avid users, where their friends are and what they are doing right now matters. Another way to create engagement is financial: location-based shopping services that provide deals and discounts certainly have an audience.

Local is next. It’s easy to think of LBS as the province of large marketers, and it’s true that large marketers are better able than small ones to take the risk of jumping into LBS early. However, many of the speakers (and attendees) at the conference were talking about local applications. Why? One reason may be that, according to Google, one-third of mobile searches and 20% of all searches have local intent. That’s a big audience to overlook, and with the cost of technology decreasing, local marketers have a chance to engage with them using a location-based platform. Although local use of LBS is still in its early stages – for one thing, awareness of and interest in LBS is thought to be low among local marketers – look for substantial growth in this sector. And look for Zavee to be right in the middle of things.

Privacy is a transaction. This was one of the most eye-opening insights of the entire conference. No speaker disagreed that consumer privacy concerns were a legitimate issue for LBS and the marketers who use them. Several speakers, for example, were critical of Facebook for being insufficiently sensitive to users’ privacy concerns. But every speaker who discussed privacy at any length made the same point: While a service that exists only to push marketing messages will always have a privacy problem with consumers, a service that delivers a genuine benefit will find consumers more likely to share private information. The greater the benefit, the greater the sharing. This only works, of course, if consumers know what they are being asked to share – a potential issue with some advertising programs. All of the speakers at this conference, however, emphasized the need for LBS to be transparently opt-in with an easy way to opt back out. It will be very interesting to see, over the next several years, whether this transactional notion of privacy reflects consumer behavior or whether there are certain bright lines that no LBS can safely cross.

This has been a busy few weeks but our conference-going isn’t over: Zavee CEO Alan Pleskow and I are off to California for the Rise of Social Commerce Conference in Palo Alto – expect a post about it next week.

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What Is Your Attention Worth?

by on Wednesday, September 22nd, 2010

Permission marketing requires marketers to obtain the consumer’s consent before delivering a marketing message (one that is relevant and timely, of course). It is the opposite of traditional interruption marketing, which is delivered whether whether the consumer likes it or not. Permission marketing was an answer to an increasingly cluttered messaging environment in which marketers competed with each other to communicate with consumers.

(via Zoutedrop - Creative Commons)

A new way of looking at the question of who gets to reach the consumer focuses on a different dimension: not clutter, but time. Marketers are competing with consumers for the right to communicate. Consumers can, as Joe Marchese of Social Vibe puts it, “‘outbid’ marketers for their own attention.” In other words, if their time is worth more than marketers are willing to pay for their attention, consumers may be willing to pay not not to be interrupted by marketing messages.

So, what is a consumer’s attention worth? Most consumers behave as if their time and attention in short supply – something that increases with income. This makes attention an increasingly scarce, and therefore pricey, commodity. A marketer’s ability to communicate a message to a consumer comes down to what that consumer thinks their time is worth. In one of his posts, Marchese uses the example of a marketer who effectively values attention to a 30-second pre-roll (the ads before a web site opens) at one cent per impression. Marchese suggests that since almost everyone values their time at more than $1.20/hour, most would pay the penny rather than sit through the ad.

We can see this with smartphone apps, which often are released in both “lite” and “full” versions. The lite version has most of the web application’s features, carries ads and is free. The full version contains the full feature set but no ads and is not free. It would be interesting to know how much of the purchase price consumers who buy the full version are mentally allocating to the added features and how much to the freedom from ads. Still, marketers are drawn to this business model because downloads of the “lite” versions are said to drive sales of the paid app.

Smaller marketers aren’t competing for consumers’ attention with TV spots and web site pre-roll. Frequently, they are using inherently cluttered media such as newspapers and directories. But regardless of the marketing channels they use, small marketers need to understand how difficult it is to capture and sustain consumers’ attention. With limited time, consumers’ will pick and choose from the messages that are out there, or may simply decide that it’s worth some money to enjoy content free of any messages.

How can smaller marketers compete for consumers’ attention? If there is a market for consumer attention, presumably the price fluctuates. Smaller marketers need to be nimble enough to take advantage of these price changes and bid for consumer attention only when the price goes down. When does that happen? Perhaps when the message can be linked with something with which the consumer has a positive association. The most obvious example is the Super Bowl, in which the interruption of the game is not only accepted but welcomed. When else might the price go down? Perhaps when the consumer is engaged in an activity that makes them feel good, or feel good about themselves. Smaller marketers that associate themselves with a charitable cause may be able to communicate marketing messages as part of the communications that relate to the cause. And perhaps when the “marketer” is actually a fellow consumer. This is one of the insights underling social shopping: that consumers will more readily accept, trust and act on messages from peers than from marketers.

The Zavee takeaway:

  • Time is the commodity in short supply, so the competition for consumer attention is less with other marketers than with the consumer.
  • Consumers may outbid you for their own attention, even if they have to pay to make you go away.
  • The price of consumer attention constantly changes. Figure out when the price goes down and be nimble enough to seize the opportunity.

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4 Things to Consider About Negative Reviews

by on Wednesday, September 15th, 2010

Now that a New York court has dismissed claims against Yelp by a New York dentist based on a (very) negative review and on Yelp’s alleged removal of positive reviews, this might be a good time to think about what makes a review “negative” and what negative reviews mean to – and for – your business. You may think that negative reviews are just angry people taking shots at you. Here are four other ways to look at it:

via Marten Bjork (Creative Commons)

Readers recognize – and discount – outliers. Positive or negative, excessive emotions in a review diminish their credibility. It’s great to get an exceptional review for exceptional service. But if the glowing adjectives are out of proportion to a typical customer experience, readers are likely to apply the old saying: If something sounds too good to be true, it probably is.

Same thing with negative reviews. The surest way to lose credibility IS TO WRITE IN ALL CAPITAL LETTERS WITH LOTS OF PUNCTUATION!!! These are actually the best negative reviews you can get, because even if they are accurate, who will believe them? It’s true that some people write reviews to blow off steam, but readers know that, and respond accordingly.

Mixed reviews are not necessarily negative. Have you ever used Rotten Tomatoes to decide whether to see a movie? The site’s “Tomatometer” rating is based on whether published reviews were positive or negative. However, a review can only be either “fresh” (i.e., positive) or “rotten” (i.e., negative), no matter how mixed or qualified the review might be. For “Going the Distance” (51% rating), the fresh reviews include “solid but totally forgettable” and “hilarious in many individual scenes [but] less than the sum of its parts”. Rotten reviews included “funny but forgettable” and “The laughs kept me involved … but after I left the theater, it occurred to me that this slight comedy hadn’t gone very far at all.” Hmm. Many reviews – of anything – are mixed enough that it would be hard to give them either a thumbs up or thumbs down rating. So don’t consider every mixed review a thumbs down.

A mixed review is often more thoughtful, detailed and nuanced than an outright rave or pan. A customer who writes a review that contains some negative feedback isn’t venting, she’s helping. These are the reviews your customers will take seriously – and you should do the same. When you respond to reviews like these (easy to do on Zavee) you can use the review as the basis for an ongoing relationship. If you want a second chance at the customer and a more positive review the second time around, being proactive is the only way to get results.

Yes, competitors can try to hurt your business with fake reviews, but there are reasons you don’t hear about it happening very often. If you are running a good business deceitful reviews are unlikely to harm you, especially if you are actively communicating with your customers. Why? First, as discussed above readers will tend to discount rants whether or not they are malicious. Second, users of social shopping sites tend to be very skeptical of reviews that differ greatly from what most (real) customers experience. The unusual experience is another kind of outlier. On the other hand, negative reviews that go into detail about the experience and/or are written by a reviewer who has demonstrated credibility based on other reviews may well be taken seriously, but how many of your competitors are willing to invest that much effort just to undermine your business? If you are actively communicating with your customers you should be able to deflect even the most sophisticated malicious review. Finally, social shopping sites are trying to safeguard against malicious and fraudulent reviews. At Zavee, our system will reject a review unless the author has had a transaction at that merchant within 30 days of the review. Could a competitor jump through all those hoops just to hurt your business? Probably, but how many would bother?

A negative review is a positive experience. On the most basic level, a thoughtful review that recounts a negative experience provides valuable information for your business. You can’t be everywhere, and if a waiter or a sales associate didn’t behave appropriately, or if a product or service fell short of expectations, wouldn’t you want to know? Of course you would prefer to hear it privately, but in our increasingly social world these conversations are being held in the open. That isn’t necessarily a bad thing. A negative review can be a positive experience because your handling of the situation – again, in public – gives you the chance to move the conversation forward: increasing customer engagement and loyalty, building your reputation and your brand, and even persuading non-customers to give you a try.

The Zavee takeaway:

  • Readers are smart, and they are good at recognizing which reviews to take seriously.
  • Negative reviews can hurt your business only if you ignore them or react passively. Especially on Zavee, where we make it so easy for merchants to interact with customers, make sure you respond to every review.
  • Always follow through on anything you promise – and don’t forget to talk about it.

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