As I'm waiting for my Kindle Fire to arrive in the mail, I got my first cross-sell email from Amazon. No, it's not for extended warranty. Amazon is offering music storage for $20/year in it's cloud service. Pretty attractive offer, considering benefits: I can download to Kindle, Android, PC or Mac. I am expecting more offers and bundled services from Amazon in the next 3-6 months. No, Kindle Fire is not just $199.
First Netflix, now RedBox is increasing the price of DVD rentals. One hypothesis would be that there are fewer customers for DVDs, requiring a price increase to keep the business going. If customers are not moving away from movies all together, but rather switching to alternative ways of getting entertainment on demand, then Netflix is on the right path.
Netflix's business model switch was too painful to watch - poor external communications, bold consumer reaction to pricing, inconsistent offerings...But they will survive this ordeal - because they are aligned with the future of TV and more broadly, entertainment. They are regarded as a value add to cable services. They give people reasons to enjoy their flat screens. And early adopters, especially among younger viewers, are streaming on demand. Those who focus on the number of customers leaving Netflix are acting on incomplete data. How profitable were those customers who complained and dropped off? Did they order one or 10 movies a week, paying the same subscription fee? If they were infrequent users, how easily would they switch to a streaming service?If they were hyper users, are they more likely to stream or wait for the DVD in the mail?These questions need answers, before we make final claims. The death of qwickster was a distraction. Netflix has some patching to do to mend its reputation. With the right content library and distribution strategy, it can survive.
The November issue of Info-Currents, my monthly social media newsletter is about to go out. Below is a snapshot from the previous issue. Each month, I delve into the implications of three emerging trends and provide readers with practical next steps. If you would like to subscribe to Info-Currents, please click here.
Info-Currents October 2011 Snapshot
Emerging trend: Consumer electronics buyers are as likely to consider online word of mouth as in-person conversations (29 percent, respectively), when making their purchasing decisions.*
Implication: As the new holiday shopping season nears, online reviews will play a significant role in smart phone and video camera purchases.
Action: Brands need to watch their star ratings and gear for search engine optimization now. They need to activate their fan base to share and rate their experiences.
*Source: S. Radoff Associates, Large Purchase Study
More than a year ago, a group of WOMMA members got together, curious to answer the question, “What is the interaction between online and offline word of mouth?” We knew about the Keller Fay research pointing to the dominance of offline word of mouth and we were living through the social media revolution—personally and professionally. Our hypothesis was that offline word of mouth trickled online and social media found its way to face-to-face conversations.
Our search quickly revealed that few marketers had explored this question. We felt that we would do a great service to the larger WOMMA community by pulling together a bibliography of key studies and publications that explored this topic. In this document, you will find a broad range of studies, including:
· Comparison of online and offline word of mouth (BzzAgent, Brains on Fire, Keller Fay, Peres and Shacha, S. Radoff)
· Offline activities’ impact on social media and search behavior (Cheema, iProspect , Lauren F. Sessions)
· Social media’s impact on offline consumer decisions (Chintagunta et al., Godes and Mayzlin)
In addition, we conducted a survey* among our members to see how they approached the topic and measured online/offline word of mouth. We found out that while they measure both types of conversations separately, a sub-set looks at the impact of online buzz on offline initiatives and vice versa. Among WOMMA members:
We hope that as the word of mouth marketing field matures, marketers find innovative ways to track results across online and offline platforms, and refer to the studies included in our bibliography as guideposts.
I would like to thank Dr. Walter Carl, Brad Fay, Bithika Mehta, Martin Oetting, Tarah Remington, Jasper Snyder, and Jeanie Son for all their contributions and their ongoing dedication to the project. As the online/offline word of mouth committee, we also appreciate WOMMA’s academic advisors’ input.
We present you with the online/offline word of mouth bibliography and invite you to join our conversation. We welcome your feedback and additions.
*Survey results are representative of WOMMA’s member base, and should be used directionally when talking about the broader marketer universe.
** This post has also been published on WOMMA's All Things WOM blog.
Facebook is giving small businesses advertising credit in hopes of getting this substantial audience to use the platform for customer acquisition. The mammoth social network is up against a tough challenge: Grand majority of small business owners do not see social media as a priority in their digital marketing list. IIn fact according to a Hiscox survey published by eMarketer, only 4 percent list it as a must-have. Many small business owners say they could live without it (43 percent). Some add that they don't get to it everyday (24 percent). There are still those who don't even know where to start (14 percent). Facebook may need to think of a more comprehensive plan than an ad push to secure time on small business owners' schedules.
I know the challenges of small business social media first hand. I am West Side Art Studios' self-appointed social media consultant. Greg Kessler, the artist behind the studio, is busy creating and teaching art day in, day out. He uses Facebook to stay connected with friends, but he rarely has time to devise a social media calendar, identify and engage his influencers. He does a good job of announcing milestone events and the rest of his time has to go to creating the product. Social media outreach requires time -- you need time to build a following and to engage in genuine conversations with them (vs. pushing messages at them). That's not a problem Facebook ad promotions will solve.
Standing with empty paper cups in hand, we looked for a recycling bin. Much to our dismay, the grand coffee chain did not separate its trash. “Unbelievable!” we thought and approached the counter. “Nope, we don’t recycle. Can you believe it?” said the employee, agreeing with our protest. My friend turned around and shoved the cups in mixed trash and said, “I’ll Tweet about it!”
That is one frustrated, social media savvy customer who knows she will get the attention of the brand and many others who’ve gone through similar experience, if she posts a mere 140 characters online. Her expectations are not only high because she wants the coffee chain to be green, but also because she wants a solution through immediate and open dialogue.
This is the changing face of customer care in the age of social media. Monitoring online conversations and responding in near real time has become an essential step in maintaining brand health. The complexity of setting up branded social media customer care lines may seem like added cost to an already robust system that handles queries through phone, email and mail. Companies need to have a perspective on the business impact of their social care channels, before determining their role in the customer service chain.
Social media customer service channels can reduce churn, increase satisfaction and bring in new customers:
· Reduced churn: Solving customer problems and preventing customers from discontinuing a service helps maintain a steady customer base.
· Repeat sales: High customer satisfaction yields loyalty as renewed purchases.
· Cross-sell, up-sell opportunities: The solution to a customer problem may be a product bundle or an alternative service. Social care specialists can serve additional products/services to customers depending on need and tone of conversation.
· New customers through positive word of mouth: Resolved cases and happy customer hash tags fortify brand reputation and convince readers that they would be equally well treated if they were to purchase from the company.
Besides expecting benefits, companies also need to ask some hard questions to build social care channels that make business sense for their target audience:
1- Who are the social media savvy customers, seeking a dialogue online?
a. What is their history with the brand?
b. Do they tap into offline channels as well?
c. Among online sources, which social media platforms do they prefer?
2- What questions/issues typically make customers turn to social media channels?
a. What are main topics?
b. What is the volume for each key topic?
c. In what problem stages are these questions? Will they need extensive follow up online and/or offline?
3- What is the cost of assisting a customer through social media, considering staff and technology systems?
a. What are key skills for social care specialists? What kind of training will they need?
b. How many staff members are needed to assist in social media conversations?
c. What is the process in which social care specialists will monitor online buzz and respond to customers?
The opportunity in social care is in addressing customer needs through efficient systems that deliver value fast, at reduced cost to the company.
This post has also been published on NM Incite's blog. Click here to read more on social media trends and business implications.
I got three critical emails in my personal inbox today: One from Seth Godin, asking me to buy an ebook, which would help buy malaria nets for children in need. One from TOMS Shoes, letting me know about their founder's book 'Start Something That Matters'. One from charity: water thanking all donors for what they have given to the cause over the past 5 years. Just this little example goes to show you how crowded the cause-marketing scene is. Everyone wants your attention for something worthwhile. You have limited dollars and time. What's a smart marketer to do to break through the clutter?
How about giving something back, instead of just asking? I got an email last night from charity: water saying they would be releasing the thank you videos online today. They would be thanking their donors starting at 9:30AM. I rmade a mental note to check out the site this morning. Of course, there they were: fun, genuine clips showing charity: water staff thanking all sorts of people who had ran campaigns, given up their birthdays and donated over the years. I thought it was cool, so I tweeted it. In less than an hour, charity water was following me back.
charity: water made a point to connect and treated me as a VIP with premium information. They emailed me a thank you note and they entertained me with a series of videos, while showing me how others have donated over the years (including a 3 year old!). They thanked me again for Tweeting. At the end of my fifth video view, I didn't mind the donate button. I was at this giant, virtual birthday party.
This was labor intensive on their part, but the back and forth was an example of what true (social media) relations should be like.
OK, one last point for staff members who were chugging Ouzo to thank Dimitri for his contributions to charity: water: Guys, you need to mix it with water and have some meze with it. You don't just gulp it down like that! But then, since you're hard core, I understand.
