Posts Tagged ‘Twitter’

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Can Social Media Clean Up BP’s Image?

by on Tuesday, June 8th, 2010

Imagine that something having to do with your business goes catastrophically wrong, in public, and you don’t look like the blameless victim. That, and worse, is the situation BP finds itself in following its disastrous oil spill in the Gulf of Mexico. And, perhaps even more than the Toyota recall, social media is affecting perceptions of the disaster and those involved in it.

via Noah Scalin

BP itself is providing a real-time video feed from a dozen cameras of the oil spewing out of the wellhead. This feed is becoming the defining imagery of the disaster, the constant flow representing for many the helplessness of the “experts” on the surface a mile above. BP also maintains a YouTube channel. BP has supplied its wellhead video feed to the web site of the House Select Committee on Energy Independence and Global Warming, which has maintained a steady flow of press releases focusing on BP. In addition to video, BP’s own site contains maps, claims forms (in English, Spanish and Vietnamese) and, of course, press releases.

BP is also trying to participate in the conversation on Social Media, but does not appear to be having much success in overcoming anti-BP sentiment. The “Boycott BP” page on Facebook is liked by more than 450,000 users, although it is unclear whether this movement will be able to affect BP’s business. On Twitter, an anti-BP impostor has amassed almost 140,000 followers while BP’s own Twitter feed is hovering at about 12,000 followers.

Much like Toyota several months ago, BP cannot expect to be portrayed other than as the villain. All BP can do is communicate openly and actively, and if its mea culpas come off as somewhat self-serving, at least the company isn’t stonewalling. The difference between the recall and the oil spill is, of course, scale. Toyota fixed the problems with its cars relatively quickly and was able to begin to rebuild its reputation. BP faces a much greater challenge, because the spill has not been contained quickly, the environmental impact may be enormous, and as an oil company BP did not start out with the kind of reputation Toyota had among the public.

So far, BP has demonstrated a certain sophistication in not trying to shut down the parody Twitter feed or the flow of satirical treatments of the company’s logo. In March, the environmental activist group Greenpeace provoked Nestle into overreacting to critical videos and Facebook postings that included modified versions of the Nestle logo. BP hasn’t fallen into that trap. Nor has it attempted to co-opt the fake Twitter account. This is a wise choice, since if trying to shut down the account would be bullying, trying to fold it into the company’s own communication strategy would seem, um, slimy.

The Zavee takeaway:

  • In a bad situation, openness and honesty really are the best policies.
  • The better you do at solving the problem, the easier it will be to rebuild your reputation.
  • Frustrated people need to express their frustration. Don’t try to stop them.

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Rebates: The Loyalty Monster?

by on Tuesday, May 18th, 2010

The Palm Beach Post recently ran a story about rebates and how frustrating it can be to redeem them. The article reprints the famous strip in which Dilbert confronts the three-headed Rebaterus monster and finally gives up trying to get his money.

Rebates aren’t something most small business have to concern themselves with, and they certainly aren’t part of Zavee‘s model. Nevertheless, they are an interesting touch point between marketer and customer. How large companies handle the complex questions about rebate redemptions may have implications for how smaller businesses deal with analogous situations in which the cost of making a customer happy may be to lose her altogether.

Consider what happens with a rebate: On the one hand, the marketer is willing to pass along an amount of money that may be significant both in absolute terms and as a percentage of the purchase price. This should create a positive interaction, especially for rebates that result in, say, a mobile phone costing the customer zero out of pocket. On the other hand, a redemption process that the consumer views as overly complicated or simply unfair can leave an unpleasant aftertaste and potentially threaten a relationship that may just be beginning.

Marketers have a legitimate reason for making the redemption process at least somewhat complex: preventing fraud. Fake bar codes and forged receipts are only two of the ways companies could be preyed upon if redemption were too easy. Moreover, some non-redemptions, or “breakage”, is attributable to consumers’ own inability to follow directions, such as mailing in the rebate by the deadline. Unfortunately, it is difficult for the consumer to differentiate between redemption strategies that are designed to protect the company (and, ultimately, consumers), from strategies that are expressly intended to increase breakage. And consumers do not seem inclined to give rebate marketers the benefit of the doubt.

We haven’t seen a great deal of discussion about the potential impact on customer loyalty of rebate redemption strategies, and we think there a great many unanswered questions. Here are a few that we hope loyalty professionals will consider and talk about:

  • If a consumer comes away from the rebate redemption process convinced that the marketer was attempting to (or did in fact) prevent her from redeeming her rebate, how long does that ill feeling remain? What are the variables that determine whether the consumer chalks it up to lessons learned or is lost to the marketer forever? Assuming that a given rebate redemption strategy will result in some loss of customer business, how do marketers calculate those losses in determining the ROI of a rebate program? Does the breakage always pay for the lost customers?
  • Do marketers take into account the propensity for frustrated consumers to share their experiences with their social graph, e.g., on Facebook and Twitter? What steps are marketers taking to participate in the conversation with consumers, e.g., to explain how the marketer’s redemption strategy reduces fraud and keeps rebate programs alive?
  • What are the fulfillment industry’s goals in structuring rebate redemptions? More specifically, is maximizing breakage an overt goal or merely an inevitable byproduct of loss prevention strategies? Is it reasonable for consumers to expect that marketers are capable of balancing their desire to prevent fraud with the customer’s desire to receive the rebate without undue difficulty or delay? Some companies have taken steps to make the redemption process easier, without changing the underlying eligibility rules, by walking consumers through the process on their Web sites. Is this the wave of the future, or do these marketers have unique reasons for making redemption easier?

At Zavee we don’t have answers to any of these questions but we hope the loyalty industry recognizes their importance and gives them the consideration they deserve.

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Checking Out Checking In

by on Tuesday, May 4th, 2010

Have you checked in yet?

Foursquare @SXSW

Foursquare @SXSW

Location-based social networks such as Foursquare and Gowalla make use of the GPS capabilities of smartphones to let users communicate in real time not just what they are doing, as with Twitter, but where they are. They are growing rapidly, and for businesses they are well worth checking out.

Both networks are about two years old but have entered the mainstream only recently. Users of Foursquare “check in” at different locations to tell their friends where they are and what they are doing. Foursquare also has an element of game play that lets users collect “badges” for certain activities, such as earning a “barista” badge for checking into five Starbucks. Foursquare has a large user base that skews young and lives in cities, and has attracted a certain amount of backlash (note: strong language at link), although it has its defenders. Gowalla doesn’t depend quite as much on its game mechanics, but supports media files, such as photos, and claims to be looking for a broader (and perhaps older) demographic.

Businesses seem to have less of a “wait and see” attitude toward location-based social networks than they did toward Facebook and Twitter. It may be that, having been through this before with other Social Media outlets they simply need less persuading when it comes to location-based networks. It may also be that the business case for location-based networks is more obvious than with, say, Twitter. Another possibility is that the networks themselves have become business-friendly faster. Foursquare already has the ability to serve merchant offers based on location, although it is still refining its analytics dashboard. In any event, marketers are not sitting on the sidelines. Recently, Pepsico announced a “geo-based loyalty program” in partnership with Foursquare that will reward consumers who check in via iPhone at businesses that serve Pepsi products. The History Channel also is using Foursquare to promote its show, “America, The Story of Us.”

Do networks like Foursquare and Gowalla have relevance for small businesses? We think they do. Even basic data on who has visited a business, how frequently, etc. adds to the merchant’s knowledge of the customer base. Serving offers and other content to those customers has obvious benefits, although it still isn’t clear how the merchant can get a full picture of the return on investment from that content (merchants will know how many people used (and, presumably, saw) the offer, but won’t necessarily know how many of those transactions were made by customers who would have purchased anyway). Checking in to a business from a location-based network also can provide extended word of mouth for the merchant. It’s going to take time to figure out how to use these services for business, but that was true with Facebook and Twitter. And, as with Facebook and Twitter, there is a lot of potential and no real downside for businesses that experiment.

At Zavee we are currently exploring the fit with location-based networks, but we fully anticipate using this technology to add value to the Zavee experience for both merchants and shoppers. With both cash back offers by merchants and reviews by shoppers, Zavee provides a great deal of content whose value can only be enhanced by becoming location-aware.

The Zavee takeaway:

  • You heard it about Facebook, you heard it about Twitter. Well, location-based social networks aren’t fads either.
  • Businesses have wised up and caught up, and are right on the heels of consumers in discovering how to make these services useful, relevant and rewarding.
  • If you were sitting on the sidelines while Facebook and Twitter were becoming huge, don’t let it happen again!

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Twitter for Local Businesses

by on Tuesday, April 27th, 2010

When I speak with local merchants about Social Media, I find that they have surprisingly similar levels of awareness, interest and understanding: Almost everyone is familiar with Facebook and YouTube, although they don’t always see the business opportunities, and very few seem to have even heard of LinkedIn. In between is Twitter, which many merchants seem to have heard of but not that many seem to be interested in. The comment I’ve gotten from more than one local merchant is, “I don’t have time for everything and I have to draw the line somewhere.”

The Greater Delray Beach (FL) Chamber of Commerce has been kind enough to ask me to speak about how businesses can use Twitter – and why they should. My presentation, which is part of a “Tech Talk and Coffee” about Social Media for Business, is scheduled for Tuesday, May 18 at 7:30am. Other speakers will cover Facebook, YouTube and LinkedIn. The session is open to the public as well as to Chamber members and every local business should find it useful, even businesses that haven’t considered adding Social Media to their marketing mix.

By now most people have heard of Twitter. Oprah uses it. So does the White House. It’s a free micro-blogging service that lets users publish short notes (called “tweets”) of up to 140 characters in real time. There are smartphone applications for Twitter, so it is a fully mobile service. Users can “follow” other users and see their tweets in their Twitter stream. Following and being followed is how users build a community on Twitter. Users also can search by keywords or topics to find relevant tweets. Users can reply to tweets, forward (“retweet”) them, and include links to web sites or other media. Engaging in these conversations is a good way to attract followers.

Broadly speaking, there are at least four ways businesses can use Twitter.

Listening Post. Twitter’s most significant benefit to business is its immediacy. When US Airways Flight 1549 landed in the Hudson River in January 2009 there were posts, including photos, on Twitter within minutes. If you want to know what your customers, competitors, vendors, etc. are thinking right now, Twitter is a great way to find out. Listening on Twitter is also a great source of ideas and information. Using Twitter’s search functions can widen any business’ horizons.

Brand Builder. Tweeting regularly with timely, relevant information creates interest in you and your brand. This works best when most of the tweets are on a subject that relates to your business but does not overtly promote the business itself. For example, if your restaurant wants to be known for its fresh produce, you could tweet about sustainable farming, its local purveyors, and even the weather. You will attract followers on Twitter who might become customers themselves or retweet your posts to others. Media outlets have become big Twitter users and you could find your restaurant covered in the newspaper just by using Twitter adeptly.

Lead Generator. Twitter lets users form, and join, communities. Twitter’s search functions make it easy to identify other users with similar interests or in similar businesses. Mutual following puts a business’ tweets in its followers’ streams and vice versa. You can get leads from Twitter communities built on common interests both by reading relevant tweets and simply by asking for help.

Help Desk. Twitter is an outstanding platform for providing customer service. Responding in near real time to a tweet that asks for assistance – or jumping in to solve a problem you see on a tweet from a customer even if it isn’t directed to you – not only helps your customer, it helps cement (or improve) your reputation as a business that cares about its customers. One of the earliest business adopters of Twitter was Comcast, a company not known for the quality of its customer service. Comcast now has a full-time staff that monitors Twitter for customer complaints and responds almost immediately. When you ask your customers to follow you on Twitter you are not just gaining access to them, you are providing access to yourself. Since all of your followers will see these interactions the potential benefits of using Twitter to help your customers quickly are huge.

At Zavee we try to use Twitter for all of these functions, and we continue to learn as we go. Here are a few suggestions for getting started with Twitter:

  • If you don’t feel comfortable putting your business name out there right away, start with a personal Twitter account.
  • Listen first, then start asking questions, make suggestions, and in no time you will be part of the action.
  • Pass along stuff, including links and retweets, that’s timely, relevant and interesting, but don’t overdo it. Original material is more useful and will result in more followers.
  • Most important of all, be yourself.

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Using Social Media for Marketing Research

by on Tuesday, April 20th, 2010

Bill Hanifin always poses the interesting questions every marketer should be asking – but might not be. In a recent post, Bill asks, “How do we gain insight into the customer preferences that drive purchase decisions?”

That’s almost a rhetorical question, because there many marketing research techniques available; Bill skewers discusses them in his post. Bill’s really fascinating question is, “How can we re-engineer our methods of collecting attitudinal data from consumers?” Bill proposes some ways in which Social Media can be part of the answer, and I’d like to suggest some others.

Lifestyle Boards/Moodboards/Market Research via designandtechnologystudentSome very quick background: Researchers use both quantitative and qualitative measures to figure out what consumers want and what makes them buy. Quantitative tools, such as telephone surveys, use statistical principles to draw inferences about a large group from the responses of a random sample of that group. However, they are subject to all sorts of bias (usually unintentional) that can affect the validity of the data. Online surveys are particularly tricky, since their self-selected sampling can never be truly random, which means they aren’t as quantitative as they might appear.

Qualitative tools, such as focus groups, don’t provide the comfort of statistics, but instead are intended to produce insights by probing more deeply into the motivations of consumers. This can get marketers to think in new and different directions. Although our experience with focus groups and other qualitative tools was very successful, they can be compromised by the small number of participants, the group leader’s personality, bias and skill, and by personalities within the group. Whether quantitative or qualitative, however, the data never “speaks for itself.” It’s always subject to interpretation, and sometimes to wishful thinking and oversimplification.

Social Media opens up a world of possibilities for marketing researchers, agencies and marketers. Several characteristics of Social Media tools make them ideal for provoking creative thinking and producing insight:

  1. Penetration. Although it is not equally dispersed across age, education and income cohorts, access to Social Media is extensive and growing, even among older consumers.
  2. Speed. Social Media can be used quickly – almost in real time on mobile devices.
  3. Opt-in. Social Media is inherently permission-based. This may not make it easier to find a random sample for an online survey, but it does make it easier to find consumers who will share their opinions, insights and experiences because they want to rather than because – as in the case of focus groups – they are being paid and fed.
  4. Location-based. Social Media is increasingly being integrated with location-based applications. Location is a variable that does not exist for most focus groups, which usually take place in dedicated facilities.
  5. Interactivity. Social Media is … social. The interactions among participants in a focus group frequently are the most valuable part of the group. Social Media facilitates similar interactions on a vast scale.

How could researchers leverage these attributes? Here are a couple of ideas, all of which are qualitative in nature:

  • Discussions on Facebook pages. Marketers could start conversations on issues that range from very concrete questions, such as opinions on new packaging ideas, to strategic issues such as potential line extensions. Consumers also would be able to launch their own discussions, which the company could either moderate or simply monitor.
  • Scheduled conversations on Twitter. Marketers could use Twitter as an extension of the conventional focus group. Many more voices could be heard over the same period of time than with a typical group.
  • Location-based feedback. Suppose a large restaurant chain wanted a snapshot of server performance during the lunch rush, or a retailer wanted to evaluate restocking at every mall-based store. Consumers could check in at each location and provide real time feedback, including photos and video. This would provide data from a much larger, more varied and possibly more knowledgeable group than mystery shoppers, at a fraction of the cost.
  • Consumer-generated video. Focus groups rarely depart from a conversational model. But it might be very useful for consumers to shoot videos in response to specific solicitations by the marketer. “Make your own commercial” campaigns are a start in this direction, although to be valuable the campaign should encourage consumers not to be constrained by the company’s current marketing.
  • Meetups/Tweetups. Marketers could use Social Media as the nexus for live meetings with consumers. Moderators could ask questions of the group, which could be responded to with live Tweets.

I am sure that others can come up with further – and doubtless better – ideas. These techniques are likely to be low in cost, but they definitely have some kinks or at least raise some issues. For one thing, all research involving Social Media takes place in the open. This is not always a problem but if keeping the subject of the research away from competitors is a priority, the research is not a good candidate for Social Media. Second, there is no way to control – or even verify – the composition of the participants. A marketer who wants specific cohorts represented in a focus group will not be satisfied with Twitter-based groups. However, this lack of control doesn’t have to be a bad thing, if it’s dealt with creatively. For example, a marketer of adult diapers might be tempted to decide against using a Twitter-based focus group because Twitter users are too young; but men in their 20s may have valuable insights into a product that is marketed to women over 60. They have grandparents, after all, and their perspective on their grandparents’ experience with the product might be very valuable.

The discussion above involves using Social Media qualitatively. However, it may be possible to use Social Media for quantitative purposes. According to the Los Angeles Times, a team of researchers at HP Labs has developed a computational model that uses the volume of tweets about a movie and their overall sentiment about the film to predict its box office performance over its first two weeks of release better than any other standard measure. The rationale for this result is completely beyond me, but if the methodology stands up, and the results can be replicated in other areas, we may have to rethink what we mean when we say we are looking for statistically significant results.

The Zavee takeaway:

  • Marketing research is both art and science, and it influences decisions that affect all of us.
  • Social Media is expanding the range of marketing research techniques, usually while reducing costs.
  • If you think marketing research might be right for your business but the expense has kept you away, try to find a research firm that uses Social Media. You might have to make some compromises on methodology, but you may learn a lot more than you expect.

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The Positive Side of Negative Reviews

by on Tuesday, April 13th, 2010

Actor, author, shortstop or chef, no one likes a negative review. But when we were developing the Zavee business model we decided early on that we would have to include negative as well as positive reviews. The goal we set for ourselves was to create a framework for reviews that were accurate, timely and fair – and that meant including negative reviews.

Our commitment to getting reviews right stemmed from our insight that reviews were another form of Social Media and, as such, were going to be a vital component of the Zavee experience and value proposition. We also learned, based on research with merchants, that many business owners who expressed concern about potential harm from fraudulent, malicious or even accurate negative reviews also intuitively understood the benefit of hearing about issues directly from the customer affected.

As marketers are learning, people will say whatever they want to whomever they want, and merchants don’t have the power to control their customers’ conversations. They can, however, do two important things.

First, they can listen, learn and respond. Thanks to Social Media, including reviews, merchants can make necessary adjustments to their business almost in real time. This is something that every business should be doing, all the time, through every available channel. Twitter and Facebook are great listening posts, but reviews are a channel that exists solely to provide feedback about the customer experience.

Second, merchants can participate in the conversation. By actively engaging with their customers merchants can address problems quickly and publicly; they can provide perspective that helps customers evaluate reviews; and they can favorably shape perceptions about the business.

  • Responding quickly is important because unresolved issues tend to fester. Responding publicly is important because it gives the merchant the chance to address at one time a concern that may be shared by many customers.
  • Actively participating is the only sure way to get the merchant’s perspective into the conversation. Both the manner and the substance of the merchant’s response can help customers determine how much weight to give a negative review, while the absence of a response does nothing but add credence to the reviewer’s complaints. A measured, factual response may not erase the impact of a negative review, but at a minimum the merchant will have extended the relationship with the customer and demonstrated both interest and respect.
  • Simply committing the time and effort to engage customers in conversation sends a positive message to all customers and can go a long way toward shaping perceptions of the customer experience. This can reinforce the positive experiences of current customers and build loyalty, but it also can lead non-customers to have a favorable impression of what it would be like to be a customer. In other words, an impressive response to a negative review can actually bring in new business.
Creative Commons 2.0

Reviews (via fengergold)

In benchmarking Zavee against other sites that feature reviews we observed a wide disparity in the treatment of key issues. Some sites filter reviews while others list them all chronologically. At least one site that uses filtering algorithms has had to defend itself against allegations that it improperly manipulated the placement of reviews. We decided not to filter or change the placement of reviews, because we believed that the less we intervened in the substance of reviews, the more confidence shoppers would have in them and, ultimately, in the Zavee brand.

We also observed that some sites permitted reviews (both positive and negative) that described experiences that had occurred long before the review was written. We thought reviews that were dated were so likely to be inaccurate that it would be unfair to both merchants and shoppers to have them on our site. We also were concerned, as many merchants seemed to be, that on some review sites there there were insufficient safeguards against fake reviews or even fake merchants.

We addressed these problems by requiring that any shopper who wanted to review a merchant had to have made a purchase from that merchant within the previous 30 days and by permitting only one review per purchase. Zavee solicits a review after every transaction, and the shopper’s My Zavee page lists recent transactions and the time remaining to submit a review. Zavee automatically rejects reviews that do not meet these rules.

We also were concerned about reviews that, while perhaps not fraudulent, seemed hostile or malicious. We initially considered moderating reviews, the way we moderate comments on Zavee Thinking, but we decided not to. There is nothing wrong with having editorial standards for reviews – we are, after all, responsible for the content on our site – but we thought the better way to deal with potential problems was to let shoppers and merchants have their say but remove reviews that violated our Terms of Use.

Because we passionately believe that reviews should be a dialogue, we also made it easy for merchants to post responses to shopper reviews. Merchants are automatically notified whenever they are reviewed and have 7 days to post a response. Responses appear with the original reviews and always show up together in a search. Shoppers can respond the the merchant’s response, and the entire conversation is threaded so it can be seen by everyone who sees the original review.

The Zavee takeaway:

  • You can’t control what your customers say, but you can listen, learn and respond to concerns – almost in real time.
  • Use negative reviews as a conversation-starter, not a relationship-ender.
  • How you handle unfavorable reviews can shape perceptions about your business, for future as well as current customers. Treat reviews as an opportunity to be impressive – you may be surprised by the results.

Update (4/14/10): MediaPost’s Marketing Daily reports that S.C. Johnson has been receiving substantial negative feedback, including reviews, about a new pet care product – and tells Marketing Daily that it is bringing the feedback to its product development team for consideration.

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Social Media Marketing Goes Mainstream

by on Tuesday, March 30th, 2010

Still think that Facebook, Twitter and the rest of the Social Media universe are just for geeks and kids? Think again. None other than The Washington Post ran a feature story yesterday about how marketers and their agencies are using Social Media tools for both word-of-mouth marketing and reputation management. Although the news hook for the story was a local (i.e., D.C.) restaurant joining one of the class action lawsuits against Yelp, the focus of the article was about how major marketers such as Chrysler, Sony and Domino’s are sponsoring tweets and giving samples to bloggers, as well as monitoring the Web for negative comments and reviews.

Entrance to The Washington Post

The Washington Post (via Dion Hinchcliffe)

The article cites Nielsen data that 70% of Internet users trust online recommendations and reviews (we cited the same study here), and quotes a Boston University professor as to why: “[C]onnecting with other consumers is more helpful [than traditional ad messages]. It’s more fun. Consumers love to interact.” The article also reports that digital word-of-mouth marketing is expected to top $3 billion a year by 2013.
The article describes at some length how marketers and agencies are using Social Media tools to influence customer perceptions, including by sponsoring posts and tweets. This is a controversial subject that has been discussed extensively online, including by us. Sponsorship raises issues about the nature of Social Media, including whether media such as Twitter will eventually become less effective if sponsored tweets become more prevalent.

Sponsorship also inevitably raises the issue of disclosure: when and how prominently to disclose, and whether even full disclosure can prevent consumers from losing trust in the communication and, by extension, in the marketer itself. All of the agencies mentioned in the story claim that they fully disclose any sponsorship, either with a hashtag such as “#ad” or some other signifier such as “(sponsored)”.

Interestingly, however, the Post reporter seems openly skeptical about whether the average user understands that these communications are sponsored. A writer for Time voices similar concerns. This is a perspective that we all would do well to keep in mind. Much of the online commentary about sponsored tweets and posts seems to focus on issues other than whether the consumer comprehends the disclosure. If it’s true that casual users might actually be misled (as opposed to merely annoyed) by sponsored tweets and posts, marketers should be extra cautious before launching a Social Media campaign that involves sponsored communications.

The Zavee takeaway:

  • It’s official: Social Media Marketing has arrived.
  • Users trust online recommendations and reviews. Let’s keep it that way.
  • Sponsored tweets and posts raise a lot of issues. If the risk of misleading consumers is one of them, it’s time to think twice about the tactic.

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Customer Service – For the Recession and Beyond

by on Tuesday, February 16th, 2010

Here at Zavee we spend a lot of time thinking about what smaller businesses can learn from larger ones. We also think a lot about customer service. The current recession seems to us an excellent time for businesses to focus on customer service. Commentators seem to agree. Their reasons may be obvious, but they make sense nevertheless:

  • Retaining existing customers costs far less than acquiring new ones
  • When competing for customers, businesses often have to choose between offering more value (e.g., by improving service) or cutting prices
  • A good customer experience makes future purchases more likely, while a bad experience does the opposite

These posts focused mainly on larger companies, many of which have downsized their customer service staffs. There are anecdotal indications, if nothing else, that customer service has suffered as a result.

City Light customer account operators, 1945

City Light customer account operators, 1945

On the other hand, some larger companies are maintaining or even improving customer service. We think that these companies will be well positioned after the economy recovers because they will have generated loyalty and improved the value of their brand at a time when some of their competitors were cutting service or hiding from customers. Some are using technology: Comcast and Best Buy are by now well known as pioneers in the use of Twitter to learn about and respond to customer care issues. Other companies, such as Southwest Airlines, maintain high levels of customer satisfaction by making service part of the organization’s DNA (although no one is perfect). And I have had at least one potentially negative experience with a rental car company turn positive simply because a well-trained senior manager was on the scene and jumped in with the right approach and a fair solution.

Smaller companies have both a harder and an easier time maintaining customer service in a recession. Harder, because increasing expenses during a time of weak revenues may be difficult to swallow. Easier, because the cost-benefit analysis is much clearer. Some large companies may believe they can afford to exchange so much in sales for so much in customer service expense, but most small companies don’t think that way. Although there certainly are exceptions, most small companies realize that they can’t afford to give up sales to save money. They also realize that good service builds repeat business and long-term loyalty. Finally, they should also realize that customers talk – which means that good customer service can generate referrals: the least expensive but most reliable way to acquire new customers. The good news for small companies is that maintaining and improving customer service doesn’t have to be expensive. Here are some low-cost approaches to customer service that businesses can start now and keep in place even after the economy improves:

  • Listen to your customers. There are many ways to listen: you can use applications like Facebook and Twitter; you can send surveys to customers by email; you can call them on the phone; and you can chat with them at the point of sale. As long as you are sincere and open you will learn a lot about what you are doing right and how you might improve.
  • Empower your associates. Your customer-facing employees should be encouraged to engage with customers at every point of contact and empowered to offer solutions to at least some concerns or complaints. Anything that can’t be handled at their level should be referred to the appropriate person and dealt with promptly.
  • Use technology wisely. At Zavee, we use a third-party application called Zendesk to help us manage customer service. Clicking on a “Help” link from anywhere on the Zavee site opens our Member Services page, from which anyone (even non-members) can read our content, engage with others in a forum or contact us with a question, comment or complaint. This system creates a numbered “ticket” for every interaction, which is automatically flagged for followup by Zavee but also gives the user a way to follow up with us. It turns everyone in our organization into a customer service agent, because we never know in advance who will be the best person to handle the next ticket that comes in.
  • Don’t go it alone. In addition to blogs and other online resources, local chambers of commerce are a great source of information from businesses like yours in your own market. If you are located in South Florida, we invite you to join Zavee. Our marketing tools help merchants understand their customers better and our networking tools improve their ability to communicate with and learn from customers.

The Zavee takeaway:

  • If you think the recession is time to double down on customer service, you’re right. If you think it’s time to cut back, think again.
  • It may be easier for you to provide excellent service than a larger competitor, because you are closer to the customer. That’s a key point of differentiation – make the most of it.
  • Customers talk. Make sure they have only good things to say about you.
  • Don’t stop once the economy improves.

Update (2/18/10): “Poor Customer Service Costs Companies $83 Billion Annually” provides a useful summary of an impressive global research report (pdf) on the high cost of poor customer service.

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