Blog on Big Data and Analytics

Key to Social CRM success: Go Local!

October 13, 2011 by Harish Kotadia, Ph.D.

Marketing is never a zero sum game. Companies don’t have to lose for customers to win and customers don’t have to lose for companies to win. In fact, marketing is the art and science of finding a win-win approach to business transactions in which both the company and customers win.

Social Media can play a major role in finding this “win-win” equation between companies and customers, by helping companies better understand their customers’ needs (not wants or desires) and customers can better collaborate with companies using social media channels to design and co-create products or services that fulfill their needs. One key challenge facing all large and medium sized companies in this regard is how to engage tens of thousands of customers across the world on social media channels.

Well, solutions to this problem is to “Go Local”. Meaning, companies must engage their customers on social media channels at a “local” level. So if a company segments or classifies customers “geographically” or at a “store” level, they should engage their customers on social media channels at a store level. This means that companies need to have a Social CRM team for engaging customers at every local unit (like geography or store).

Unlike traditional CRM, which was all about centralization of information into a database for decision making at the top, Social CRM is all about engaging customers at a “local” level and empowering front-line managers for decision making where it matters the most – at the local level in a decentralized way. Because companies cannot collaborate with thousands of customers in a centralized way.

Here’s an example of this approach: Retail giant, Walmart recently announced that any one of Walmart’s facebook fans can get information from their “local” store by clicking on the Local Walmart tab on the Walmart’s Facebook page. “Liking” a local store will enable customers see local promotions for that particular store and a map of the store with exact location of advertised specials (for more, see this and this).

This strategy of “Going Local when it comes to Social CRM” is applicable to companies across all industries, be it retailers, restaurants or banks. Companies need to form Social CRM teams at a “local” level to engage customers and build win-win relationship with them.

What do you think? Do you agree that key to Social CRM success is Going Local?

Remembering Steve Jobs (1955-2011)

October 7, 2011 by Harish Kotadia, Ph.D.

Life of Steven Paul Jobs (popularly called Steve Jobs), the co-founder, former Chairman and CEO of Apple Computers, who died recently has been described in glorious terms. In the past few days, much has been written about his life and legacy, and I don’t think I can add anything new to what has already been said.

But I will definitely add this, Steve Jobs was more than an innovator and a visionary. He was not Thomas Edison of our times as many have said. I think he was an artist – a Michelangelo or a Leonardo da Vinci of our times. Technology was his canvas and iMac, iPod, iPhone and IPad his masterpieces. He approached technology with an artist’s “open” mindset rather than a technologist’s or scientist’s “Do’s and Don’ts” conditioned approach. As a result, what he achieved is truly breathtaking and his creations speak for themselves. I don’t think we are going to see any one similar to him in our life-time. It is often said that those whom the gods love die young. This surely seems to be true in case for Steve Jobs.

During Stanford University’s commencement speech in 2005, he said that “You can’t connect the dots looking forward; you can only connect them looking backward. So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.” So true. If only we can find a little bit of Steve Jobs within our heart and soul, our life will be so much richer and fulfilling!

Finally, to end this post I want to share this Bloomberg video on life and work of Steve Jobs. I am sure you will find it informative and inspiring. In case if you don’t see embedded video below, please click on this link for the video.

Rest in Peace Steve, you will be missed! You made it possible for me to video chat with my friends and family members on the other side of world at push of a button from a device that a 3 year old or a 85 year old person, and all age groups in between, find it not only easy to use, but also enjoy using it.

Social CRM Case Study: Netflix Vs. Blockbuster

October 3, 2011 by Harish Kotadia, Ph.D.

In one of my previous post titled Social Media: The New Front End of CRM System, I highlighted that Social Media has empowered customers like never before as they can discuss about brands/products on Social Media channels and companies have no control over what customers are saying about their brand. Moreover, as this discussion is “public” – visible to all, including other customers, potential customers and competitors, it is critical that companies engage their customers on social media, else their competitors will and damage to the brand will be immense.

Well, we have a great case study on this subject. Netflix, Inc., the provider of online video streaming and DVD by mail service seems to have misjudged the negative impact of price increase and other service changes they announced “unilaterally” this summer and as a result dissatisfied customers have leveraged social media tools to express their disapproval (for more, read this).

But instead of fighting fire with fire and using Social Media channels to engage customers for building trust and loyalty, Netflix has maintained a low profile on Social Media channels. Guess what? Blockbuster, a competitor of Netflix has seized the initiative by engaging Netflix’s customers using Social Media channels. Blockbuster not only offered a “30 day free trial geared at Netflix customer” on Twitter but also “started a new Twitter contest promising a free year of service for the four best Netflix breakup stories” (for more, read this).

Key takeaway from Netflix’s CRM crisis is that it pays to engage customers on Social Media channels because if you don’t, your competitor will. In that case, you will not only be sorry about not engaging your customers but as a double whammy, will also be sorry about your competitor leveraging the opportunity and walking away with your customers.

Life for companies that don’t care about their customers is tough indeed in Social Age. Don’t you think so?

Netflix’s self-made CRM crisis and how Social CRM can help

September 24, 2011 by Harish Kotadia, Ph.D.

Netflix, Inc., the provider of online video streaming and DVD by mail service, has fallen from customers’ grace hard and fast. Once a darling of its customers, Netflix management seems to have misjudged the negative impact of price increase and other service changes they announced “unilaterally” this summer and as a result have lost many customers.

Netflix’s CRM fiasco underscores the importance of not taking your customers for granted, especially in this day and age of Social Media. Dissatisfied customers can not only take their business elsewhere, but can also leverage Social Media tools to express their disapproval in a way that can have big impact on other customers and towards the brand. Just see the impact of Social Media firestorm generated by this CRM fiasco on Netflix stock for example (see this link).

Social media has empowered customers like never before to connect and communicate with other like minded individuals ‘publicly’ and the last thing any marketer should be doing in this Social Media age is to take important decisions impacting customers unilaterally and without explaining the rationale or motives behind such decisions. In other words, customers expect to be involved in such decision making or atleast expect a rationale explanation before any changes are made.

So what can Netflix do to recover from self-made CRM crisis. Answer is to fight fire with fire, that is use Social Media channels to engage customers and build (should I say regain) trust and loyalty (for more, see definition of Social CRM here).

For example, how about using Youtube to explain why these changes were made in the first place. How about using Facebook and blog postings to respond to customers’ criticism about price hike and services changes already announced. Key is taking customers’ into confidence in such a way that they feel that they have been involved in taking important decisions concerning the service they receive and pay for. Netflix doesn’t have to respond to comments from each and every customer, but if they respond to few customers in a fair and transparent way, other customers would appreciate and would be much more supportive of Netflix’s position.

Netflix can use this CRM crisis and turn it into a Social CRM success regaining its past glory (and stock price) if they can engage their customers on Social Media to (re)build Trust and Loyalty.

I want to end this post by sharing with you this excellent Bloomberg video on Netflix and profile of Reed Hastings, co-founder and chief executive officer of Netflix Inc. In case if you don’t see embedded video below, please click on this link for the video.

Social Media and the Rise of Consumer to Consumer (C2C) Marketing

September 11, 2011 by Harish Kotadia, Ph.D.

I have seen several examples of marketers in both, Business to Business (B2B) and Business to Consumer (B2C) segments, trying to use the same old B2B or B2C strategies when it comes to Social Media marketing. Marketers are failing to take advantage of unique characteristics of Social Networks by not modifying or re-engineering their business processes for Social Media and are merely “fitting” Social engine to their existing business processes instead and this is bound to fail. In fact, i wrote about this more than a year back in a post titled Social CRM: Thinking Outside the “Call Center” Box.

Companies must understand that Social Media channels empower customers to find & connect with other like minded individuals, interact with them in a “public” way and this is Consumer to Consumer interaction (C2C). Companies must leverage this C2C interaction for marketing rather than using B2B or B2C marketing techniques on consumers who are interacting with other consumers (C2C) on Social Media channels.

We need fresh outside the box thinking to take advantage of unique characteristics of Social Media and C2C interactions. For example, instead of trying to respond to each and every tweet or Facebook posting by customers, something not practical for a medium or large business, the emphasis should be on creating advocacy and building trust among consumers, keeping in mind the “Social Context” and C2C potential of the medium. No where this is more evident than in support communities, where brand advocates/loyal customers help other customers out by answering their questions or suggesting solution (C2C) rather than company Reps trying to answer all the question.

What do you think? Do you agree that marketers need to re-engineer their business processes to take advantage of Social Media’s C2C marketing potential or can they continue to use their “good old” B2B or B2C methods for Social media marketing?

Social CRM Market Size Undervalued?

September 7, 2011 by Harish Kotadia, Ph.D.

Gartner, Inc., the Stamford, Connecticut based IT research and advisory firm recently reiterated its guidance that “market for Social CRM is on Pace to Surpass $1 Billion in Revenue by Year-End 2012″ (for more, see this). I have seen similar estimates regarding size of Social CRM market from other research and analyst firms in recent past.

Such crystal gazing for estimating market potential for Social CRM software and services reminds me of the story of two shoe salesmen in Africa trying to assess size of the market for shoes. One salesman reported that there is no potential for selling shoes as no one wears them. Second salesman reported that there is tremendous potential for selling shoes as no one wears them. It’s all in the perspective!

In my opinion, the magic revenue number of $ 1 Billion for Social CRM is an under-estimate and true size of the market or potential for Social CRM software and services is much higher than ‘just’ a billion dollar. This is because Social CRM is an indispensable part of any CRM system due to the fact that Social Media has empowered customers like never before, they can discuss about brands/products on Social Media channels and companies have no control over what customers are saying about their brands/products. This discussion is visible to all including other customers, potential customers and competitors.

The best any marketer can do is to Listen and Learn from what customers are saying and Engage them in meaningful conversations. In other words, marketers have to treat Social Media channels as the front-end of CRM system, capture all relevant information from Social Media channels in the database and use Predictive Analytics and Knowledge Management tools to derive insights and help in decision making. As a result, CRM ain’t CRM if it isn’t Social!

And if CRM ain’t CRM if it isn’t Social, size of Social CRM market is equivalent to the size of CRM market in terms of number of installations (this includes large/enterprise class and SME/Small and Medium sized installations of CRM system). In terms of dollar amount, size of Social CRM market is equivalent to a substantial % of CRM market (atleast 25% of CRM market in my opinion). There is tremendous pent up demand for Social CRM software and services, not only among large enterprises but also small and medium ones. The only reason why it is not manifesting in terms of $$$ or revenue for Social CRM vendors is that software/services offered by existing vendors don’t address the pent up demand for Social CRM.

In other words, most Social CRM vendors don’t have a good product/service offering to address this demand. The moment any Social CRM software/services vendor offers a comprehensive solution for this pent up demand, marketers are going to lap it up the way customers lap up Apple’s iPad or iPhone for example. What I am trying to highlight here is that underlying demand for Social CRM software and services is very strong, but software vendors and service providers have not risen to the occasion to meet that demand and hence haven’t been able to tap into it. Hence to say that “market for Social CRM is on Pace to Surpass $1 Billion in Revenue by Year-End 2012″ does not truly reflect the size of Social CRM market. It is substantially more than $1 Billion in my opinion, in fact many times more than that.

What do you think? Do you agree with Gartner that “market for Social CRM is on Pace to Surpass $1 Billion in Revenue by Year-End 2012″ or you, like me think that it is substantially more than $1 Billion? Please take the following survey and share your opinion. (in case if survey question box is not visible below, you can Click here to take survey

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Why Social CRM? Because “The Consumer Isn’t a Moron; She is Your Wife”

July 12, 2011 by Harish Kotadia, Ph.D.

David Ogilvy, popularly referred to as the father of modern advertising, once said “The consumer isn’t a moron; she is your wife. You insult her intelligence if you assume that a mere slogan and a few vapid adjectives will persuade her to buy anything. She wants all the information you can give her“ (for more, see Confessions of an Advertising Man, p. 96, Ballantine Books: quoted here).

In these days of gender equality, we can rephrase this quote as “The consumer isn’t a moron; he/she is your spouse”, but the fact remains that a customer is the most important person for any business, more so in a competitive economy where customers have many choices. You may ask what that has got to do with Social CRM? Let me explain:

The sole reason any business, be a mom and pop store serving a small community or a multi-national corporation (MNC) having tens of thousands of employees across several countries with thousands of products and millions of customers, exists is to serve its customers. All business decisions and actions undertaken by every employee are aimed at satisfying needs and wants of customers, starting right from understanding customers’ needs/wants, designing a product, manufacturing the product, distributing and marketing the product and post sales support. Any action not aimed at making customers happy is fruitless or is counter-productive.

Heavy up-front investments are made (fixed costs incurred) in the process of creation and delivery of a product or a service with the assumption that the customer will like what is being offered and will purchase the product. Any active customer involvement in product design, manufacture and delivery process is ‘minimal’ at the best through market research. This results not only in costly product failures/increased risk for the business but also higher sales and support costs.

In ‘Social Age’, it is not only possible, but incredibly easy and inexpensive for business to collaborate with customers and work together irrespective of physical location and other barriers. Thanks to social networking technology, business has an opportunity to engage customer and prospects in ‘real-time’ at every stage of product design, manufacture and delivery process in order to minimize risks and maximize value delivered to customers.

Question is not how business can afford to engage customer on social media, it is how business cannot afford NOT to engage customers on Social Media channels. Social CRM, which has been defined as the business strategy of engaging customers through Social Media with goal of building trust and brand loyalty is the way to go for business (for more, see this).

To quote David Ogilvy again, “the consumer isn’t a moron; she is your wife”. Wouldn’t you want to engage your spouse or significant other (customers in this case) on an ongoing basis? And we all know the costs if we don’t engage significant people in our life, don’t we?

Wanna Save on Customer Support Costs? Outsource it to Your Customers!

July 9, 2011 by Harish Kotadia, Ph.D.

In these tough economic times, when companies often cut costs at the expense of product quality or customer service (or both!), what if I told you that there is a way marketers can reduce customer support costs AND improve customer satisfaction and loyalty at the same time. Better still, this can done quickly and in a cost effective manner. Sounds too good to be true. Isn’t it? Read on for how this can be done …

Here’s how – set up a branded and moderated customer community focusing not only on product usage but also underlying passions surrounding usage of your product(s) and let product enthusiasts and brand advocates help other customers out in resolving any issues. Community Moderators (company appointed representatives similar to customer support agents) need to step in only when required and provide necessary info or resolve an issue. For example, if you are marketing cameras, have a customer community on photography and travel (underlying passions) and not on cameras, where customers can share pics and tips, and help each other out on how to take great pics, which SLR lens to use or what should be the shutter timing/ISO setting etc. Who better to assist customers than other customers who use the product on a daily basis. Company representatives (moderators) can chip in where required.

This will not only reduce call volumes (and costs associated with it) to other support channels like phone and email, but will also empower customers share their expertise and experience and be recognized in their “community” of like minded individuals – something that is at the heart of Social Media revolution.

Besides setting up a branded and managed community, marketers should also integrate their CRM system to the community platform, so that activities of customers on the community can be monitored and individual customer can be recognized/rewarded on the basis of their contribution to the community.

Customer Support communities deliver ROI not only through reduction of call volume (and associated costs) to other support channels, but also can be a great source of new product or marketing ideas and drive customer loyalty through empowerment. You can’t go wrong with that one. Can you?

What do you think? Please do share your thoughts on the subject:

Move over Customer Support, it’s time for Customer Engagement

July 4, 2011 by Harish Kotadia, Ph.D.

Very few times in human history have we witnessed an inflection point in technology that fundamentally changes the way we live and work. Invention of electricity, telephone, TV & radio, computers and most recently, the internet are few examples of transformative powers of technology. Just imagine life without electricity, TV & Radio or internet. We can’t live without these technological wonders even for few hours, let alone few days! Such is their influence on how we live and work. Social Networking technology is one such inflection point in history of human evolution and we are in midst of a Social Media revolution that will fundamentally change how we live, work and play.

In this post, I want to discuss how Social Networking technology and Social Media tools are transforming customer support function. For many decades, marketers have been providing service to their customers over phone, and over email/chat after spread of internet. Both, phone and email/chat are private and one-to-one in nature. For any support, customers have to call a phone number (normally a 1-800 toll-free number here in the US) and wait for a Customer Support agent to answer the phone and resolve any issues or provide any necessary help. During the whole support process, marketers are in total control of the interaction to the extent that agents use “scripts” or pre-defined workflow during most customer support calls. This also highlights the fact that customer support personnel are just working as “agents” and are not really empowered to solve customers’ problem and have to adhere to their scripts during the call. How many times have we heard the phrase “sorry, my system won’t allow me to do that” in response to a request during a support call.

I am happy to note that thanks to rapid expansion of reach and effectiveness of Social Media channels, this is about to change. Social Media have empowered customers like never before as they can express their opinions/feelings about brands on Social Media channels, including commenting about poor customer service or wait times for some one to answer customer service calls. Marketers have no control over what customers are saying about their brands or poor service. Given this scenario, best strategy for a business is to engage customers on Social Media channels if customers prefer that option, especially when wait time for phone, email or web based support is too long for the customers.

As more and more customers air their grievances on social media channels, it is important for marketers to engage them and not wait for them to call customer support phone numbers. Social Networking technology provides great tools for “engaging” customers. Unlike traditional media channels, Social media communication is not only two-way, one-to-one, but customer is an active participant and “owns” the conversation.

Moreover, conversations over Social Media channels are public – visible to all. And customers and potential customers are discussing about products and brands on Social Media channels, including poor customer support whether the marketer is participating in the discussion or not. This is why it is utmost important for marketer to have a Social CRM strategy and invest in Social Media tools for effectively engaging customers and prospects. Gone are the days of “scripted” customer support calls.

Level of customer engagement will determine mind-share and market-share for a brand. Those marketers who effectively engage their customers and prospects will emerge as winners and those who are not good in customer engagement will lose market share.

What do you think? Is it time for Customer Support to move over and Customer Engagement to take its place? Please do share your thoughts on the implications for business.

Case Study: How Smartphone technology is changing Retailing

June 24, 2011 by Harish Kotadia, Ph.D.

Here’s an excellent case study of how Smart Phones are changing the way we shop. TESCO Home plus is a South Korean retail chain with 113 stores in South Korea. In order to reach out to their time-strapped customers, TESCO Home plus designed a “virtual store” to enable shoppers use their camera equipped smart phone and shop “virtually” by scanning QR codes of merchandise.

And what’s even more interesting is that the virtual store is located on platform of a subway train station so that customers can shop while they wait for their train. How convenient is that!

And don’t forget the ROI this can deliver because of not only savings in cost of operating stores (Real Estate, Utilities, Employee salary etc..), but also due to reduction in inventory costs as this is a virtual store.

You can’t beat that. Can you?

Watch the following video and see for yourself how it works: