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Do you know the problem with the customer experience? It doesn’t have a media sales rep.

So no one is taking you out to a nice lunch, plying you with semi-fine wine while slowly separating you from your budget and increasing your media spend on it.

However, that doesn’t mean that the customer experience doesn’t generate media for you. We live in a digital age where you must assume that every customer is also a publisher. So, if you invest in your customers, you can gain significant positive media exposure. Fail to invest? You can get significant exposure as well…it just won’t be as brand-friendly as those TV spots you just bought.

So, while businesses are expected to spend $214.3 billion on advertising in 2011(according to SNL Kagan), what return will they get for their investment? In recent research by Satmetrix, only four percent of Americans said they trust advertising the most as an information source when choosing products or services. The top choice? Independent sources (83 percent), especially those with whom they have personal relationships.

While recent research from Experian (warning: there is a squeeze page) disagrees on the exact number, it reaffirms the importance of winning over your customers. It states, “Despite consumer reliance on digital devices and Internet-provided information, the most influential element driving purchase decisions today is still word-of-mouth.”

Experian found that 54 percent of consumers chose word-of-mouth as highly influential to their purchase decisions. Of course, this shouldn’t be news to you. You probably learned about word-of-mouth in Marketing 101.

But, a lot has changed since then. As stated above, every customer you have is now likely a publisher as well. So now there is even word-of-mouth advertising from people your consumers have never even met. According to the Pew Internet & American Life Project, “nearly six-in-ten adults (58%) have done research online about the products and services they buy, and about a quarter (24%) have posted comments or reviews online about the things they buy.”

So, how do you optimize the customer experience to get the most from word-of-mouth advertising today?

There is no one right answer, of course. I asked around a little in this vast, resourceful marketing community of ours. Read on for a few tips, and I’d love to hear your thoughts as well…

Your customers can see right through your marketing so you might as well let them

“When a company is humble enough to admit a weakness, they immediately distinguish themselves from the competition. It opens the door for a trust relationship.

The consumer is all too aware of the fact that we are not perfect. To pretend otherwise only serves to raise their suspicion. Tell them what you can’t do, and they’ll believe you when you tell then what you can do.”

– Dr. Flint McGlaughlin, Managing Director (CEO), MECLABS

Transparent marketing is essential. According to the Satmetrix study, 20 percentof those who defected a company did so because of unfair fees or charges.

“Companies still need to advertise to create market awareness, but market trends such as the increased use of social media networks and consumer reviews online are all increasing transparency about the actual experiences that companies deliver, and what customers think of them,” John Abraham, general manager of Net Promoter programs at Satmetrix, said. “You just can’t hide any longer behind bad quality. Advertising and marketing messages need to line up with customers’ real experiences. So, first and foremost, you have to get the experience right.”

We’ll talk about getting that experience right in just a minute. But first, how do you ensure that your advertising and marketing messages are transparent and truly reflect what your customer is experiencing? You don’t want to be the Comical Ali of your company, claiming victory while the facts on the ground so clearly conflict with your messages. And while he may have literally had a gun to his head, forcing him to make ridiculous claims…you don’t. You have a choice.

As I’ve said before in these (Web) pages, I think Transparent Marketing: How to earn the trust of a skeptical consumer is an excellent guide, but, in full transparency, it is written by the man who signs my paychecks – Dr. Flint McGlaughlin.

So, I also wanted to get a perspective from someone outside of MECLABS and provide a very granular example that you could apply to your marketing efforts today. I asked Ryan Deutsch, VP of Strategic Services, StrongMail, about transparency in email marketing. He said that “welcome programs offer the best opportunity for transparency” and offered these specific tips:

• Provide examples of the types of messages the subscriber will be receiving
• Provide an overview of the frequency of communication and give the consumer the opportunity to set preferences around cadence
• Provide an explanation of how data is captured within the email program and how that is used to create more targeted and relevant messages
• Explain the privacy policy of the brand
• Explain the opt-out and unsubscribe options

Don’t dictate, discover

“It is the customer who determines what a business is. For it is the customer, and he alone, who through being willing to pay for a good or for a service, converts economic resources into wealth, things into goods. What the business thinks it produces is not of first importance – especially not to the future of the business and to its success. What the customer thinks he is buying, what he considers “value,” is decisive – it determines what a business is, what it produces and whether it will prosper.”

– Peter Drucker, The Practice of Management

In Peter Drucker’s day, it was far more difficult to determine what the customer considered valuable. Today, you have almost instant access to that information in many different ways:

• Test your value proposition – You can test and measure your value proposition in real-time under real-world conditions with your actual customers using PPC ads
• Actually ask your customers – Use automated exit surveys, ensure your sales and customer service teams track customer interactions in a CRM system, engage in one-on-one conversations in user forums, or use technology in some other creative way to pick your customers’ brains.
• Listen to what they say – Social media monitoring has become a very powerful tool to learning from your customers. Of course, don’t stop at listening to customers and discovering what they want, use social media to respond as well. For example…

I asked Joe Chernov, VP of Content Marketing, Eloqua how he uses social media to discover what customers want and nurture word-of-mouth advertising. As co-chair of the Word of Mouth Marketing Association’s Ethics Panel, he knows a thing or two about the topic. Here’s what he had to say…

“All customers are not created equal. Those who engage with you on social channels are far more likely to be your brand advocates. In fact, at Eloqua, a client who engages with us on any social network is 450 percent more likely to be a brand promoter than our baseline client. This self-selecting group is a collection of ambassadors-in-waiting.  The key to unlocking their word-of-mouth is as simple as connecting with them on a personal level on their social channel of choice. That’s really all it takes.”

Truly serve your customers

“We learn whatever skills we need to service the customer. We build whatever technology we need to service the customer.”

– Jeff Bezos, CEO, Amazon

Think about Amazon for a moment. They mostly sell books and other stuff (lots of stuff) through an e-commerce store. Yet, out of seemingly nowhere, they launched their own hardware device – the Kindle. We take it for granted now, but for an e-commerce store to launch a hardware device in a segment that barely existed before it entered the market is quite revolutionary.

Why take that leap of faith? To truly serve the customer.

How can you truly serve your customers? After all, you’re likely not Jeff Bezos. You likely only have control over a small patch of territory in your overall company.

And yet, that patch is likely the tip of the spear in terms of customer interaction. You are in the unique position to discover and then shine a light on issues that really matter to your customers, to ensure that there is true value in your marketing propositions.

I asked Dave Ewart, Senior Director of Marketing, Satmetrix how marketers can achieve this. Satmetrix, the company behind the study referenced above, makes a management tool that can be used to gauge the loyalty of a firm’s customer relationships. Ewart said that successful customer-centric marketers:

1. Continuously collect and analyze data about customer interactions and customer satisfaction, and they use automated customer listening and feedback systems;
2. Track and measure word-of-mouth online, and identify and support customer advocates;
3. Share data from customer interactions across organizational departments; this helps them strengthen relationships with customers and sometimes even uncovers untapped markets; and
4. Lead a company-wide commitment to addressing and resolving customer issues and problems.

Don’t consider anything that impacts the customer “not my problem.” It’s you who made the promise upfront with your impressive marketing campaigns. So, it better be you who ensures that your company delivers on that promise with an exceptional customer experience.

If not, your customers hold the trump card. Advertising even more successful than yours. Word-of-mouth.

Related Resources

Hoax Marketing: Your brand comes first, humor second, even on April Fool’s Day

Social Media Marketing: Turning social media engagement into action at Threadless

The Last Blog Post: How to succeed in an era of transparent marketing

Inbound Marketing newsletter – Free Case Studies and How To Articles from MarketingSherpa’s reporters

Social Marketing ROAD Map Handbook

Every advertising agency, SEO specialist, and PR firm likes to be seen as a partner, not a vendor. And that may well define your relationship. But, go down to accounting and explain that relationship, and they’ll laugh in your face.

And for good reason. While, hopefully, you do have that close knit partner relationship, at the end of the day, this is a financial arrangement and you must maximize the value of that arrangement.

On the face of it, performanced-based pricing seems like a no-brainer. You get a guaranteed result, or you don’t pay.

Is this a great country, or what?

Like many things, the devil is in the details. First of all, you have to keep in mind that the vendor knows the metrics far better than most prospective clients do. That means, in many cases, the vendor is selling the illusion of risk.  Second, and more importantly, you have to be sure the result you are paying for is the result you really want.

Let me show you what I mean. I’ll use a teleprospecting vendor as an example, and highlight the lesson you can get out of each example for the type of vendors you work with every day.

What intermediate metrics truly contribute to your success?

In B2B lead generation, a common result is defined as an appointment for sales people. The cost per appointment generally runs from about $400 to $800, depending typically on volume, your brand and the target.  If you can provide the vendor with the people your sales team absolutely, positively wants appointments with, you’re in business.

In my case, I would gladly take appointments with CMOs of B2B companies with $500 million or more in revenue. At least, that would probably be my immediate response. Of course, there might be a few CMOs in that target that oversee pure e-commerce plays, or highly commoditized, low-end products that do not require lead generation, my area of expertise (or, so I would like to think). Therefore, I might pay for some appointments that I don’t really want. So, the real cost for a qualified appointment might be a bit higher than I originally agreed to.

Then there is the hidden cost: sales productivity. The purpose of such services is to increase sales productivity. For these kinds of top executive-level appointments, the representative might very well expect to meet face-to-face with the CMO. So, you have to add to the equation the cost of the commuting time and meeting time. Loaded field sales costs for complex solutions often start at about $100 an hour and can be $500 an hour or more, for elite, high-end key account sales people.

Very quickly, a $500 appointment can become an $800 or even $1,500 appointment, especially if any serious commuting takes place. If the conversion-to-deal is high or the revenue-per-deal is high, then who cares? In many cases, however, buyers find out that 20 to 30 percent of the appointments are not a fit. Now the cost of the qualified appointment goes way up, and the soft cost of sales expense goes to the moon, not to mention the hit on sales productivity.

Unless you are absolutely certain that your sales team wants appointments with a particular set of individuals, then you really need to focus more on qualified leads, not just appointments.

LESSON LEARNED: Make sure you pick the correct intermediate metrics when paying for performance.

Are you helping  your vendors be successful?

OK, now you have learned your lesson, the hard way. You won’t do that again, right? So you negotiate a cost per lead fee structure. Before you do, you wisely work with sales to define BANT (Budget, Authority, Need and Timeline) lead criteria and structure the deal accordingly. Again, the devil is in the details. What if sales discovered, after further review, that what they really wanted was to get in to larger accounts before the prospect had finalized a budget? In those cases, maybe the deal takes longer but the win rate is higher and the deal size is higher. Happens all the time. Now you have to try to change the deal. At least for some accounts.

With leads, there is also often subjective information, open to interpretation. Is the prospect really acting with authority? Do they really have a budget? Even seasoned sales people can be mistaken about such things. In short, lead qualification is almost always nuanced, complex and evolving, as the teleprospecting operation figures out how to qualify leads precisely and the sales organization figures out what it really wants and needs. This reality often creates conflict with the vendor initially, because the fee structure negotiated is not really the right fee structure and so one side or the other loses.

Finally, if the vendor is taking all the risk, many people understandably put vendor support on the back burner. It’s human nature. In reality, teleprospecting operations fail, including those that are in-house, without proper support from marketing and sales. For example, from marketing, this operation needs lists, assets and tools, and an appropriate supply of reasonably qualified responders. From sales, the team needs training and mentoring on qualification and precise, rapid feedback on leads..

After all, the fee is fixed and the operation should run on auto-pilot. You also might not bother investing in effective demand generation that feeds the vendor or even list development, instead allowing the vendor to get by on cold-calling decaying lists.

Your program then becomes the dumping ground for new hires. The vendor might also park underperformers there before giving them their walking papers. In other words, both you and the vendor try to extract some value out of the effort. But, some of what matters isn’t getting measured, like the cost in the market place to your brand because of the quality of the calling.

LESSON LEARNED: A business relationship is a two-way street. Your vendor can’t help you be successful, if you don’t help it be successful. As Jerry Maguire said, “Help me help you!”

Is there transparency in your relationship?

So, what’s the right approach? It really depends on what you need and how clear you are about your needs. If you have a reasonably well-oiled, well-documented process and approach to teleprospecting, then asking the vendor to share in the risk and the upside can serve your mutual long-term interests.

If things are not going so well and you need to figure out the right approach, then pay-for-performance is going to create unnecessary conflict. You might be better served in that case to put your focus on determining the right model or strategy for teleprospecting and the parameters of a pilot. Insist on a level of transparency during the pilot and then use the pilot to optimize the approach. Then, after the production level has begun to plateau, start working on a shared risk model.

The right shared risk fee structures ensure that both the vendor and the client win if the program is working and lose if the program is failing. To arrive at such an arrangement, there must be clarity on both sides about mutual obligations and the consquences for non-compliance. Mutual trust and respect are also necessary, including a win-win approach to the fee structure.

To those who might argue that every dollar of profit a vendor makes is a dollar of margin that is lost to its clients, I would point to the free enterprise system. Everywhere in free markets, the quest for profits drives higher levels of efficiency (and losing money drives companies out of markets and out of business). If the vendor makes above average profits for driving above average efficiency, then its clients are the beneficiaries. And the profits that the vendor makes must always be tempered by what its competitors offer or what its clients believe they can achieve in-house.

LESSON LEARNED: A rising tide lifts all boats…as long as everyone is clear on how “tide” and “boat” are defined in the process. So, before you dive in, dip your toe in and start with a pilot that has flexibility to evolve over time. Once the proper success metrics have been discovered, and a working relationship is established, you can create a more successful payment model that truly shares risk and reward.

But don’t stop there. Look at this as an evolving fee model. Continue to optimize as you learn more about what creates a mutually successful relationship.

Related Resources

B2B Marketing: The 7 most important stages in the teleprospecting funnel

B2B Lead Generation: Why teleprospecting is a bridge between sales and marketing

B2B Marketing: The FUEL methodology outlined

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When working in social media, many marketers stick to a few areas, such as Facebook, Twitter and blogging. Justin Greis, Owner, Panna Dolce, chose a broader approach.

The Chicago-based French maracron, cookie and brownie bakery relaunched in December 2009 after perfecting their macron recipe for five years. Now, they have a blog and also work in Facebook, Twitter, Vimeo, Flickr, YouTube and other networks.

“We don’t discriminate,” says Greis. “We found there are different types of people who connect through different types of networks, and the more we’re connected and linked up through a central hub, which ends up being our blog and our ecommerce site, the better.”

Amazingly, Panna Dolce’s three-member team is able to keep content fresh in all these networks while maintaining their business. They do so, in part, by connecting as many accounts as possible, so a blog post becomes a tweet, a video becomes a Facebook update, and so on.

“We haven’t seen a lot of interaction on our blogs. But when you link your blog to Facebook, when you like it to Twitter, when you link it to YouTube and Vimeo, you connect with people the way they want to be connected to — and that is absolutely essential.”

The team also generates content by partnering with and writing about relevant sites, as well as covering their own:
o Charity work
o New flavor launches
o Events attended
o Press mentions

The team’s website, powered by Volusion, enables shoppers to share links to their product pages, further increasing their content on the  networks.

All this work is paying off. The team estimates 35% of ecommerce sales come from referral traffic from social networks. That number jumped to about 50% during Valentine’s Day. Also, the team’s work is earning them valuable business contacts.

“We’ve had several offers from big retail department stores that are tasting our products right now to see if they want to pick them up. We’ve had a lot of interest from bigger boutique grocery stores…All of those contacts were made through [online social networks].”

Personal travel arrangements often require coordination with other parties, whether it’s your spouse, friends or other family members. That’s why travel activity retailer Viator’s sharable wish lists are such a great idea.

Many ecommerce sites offer wish lists to visitors. They’re especially useful during the holiday season when families are figuring out what to buy one another. The impression I’ve gleaned from marketers is wish lists are useful, but they’re not a strong ongoing performance driver.

Online travel, on the other hand, has a more practical application for wishing. Friends and family members going on trips often coordinate what to do and send each other ideas. Viator’s wish lists make it easy for travelers to share ideas, and the team places “Add to my wish list” links prominently on their product pages.

I noticed these lists during a conversation with Kelly Gillease, Marketing Director, Viator. Visitors can view items on their wish lists directly on the homepage. From the homepage, with one click, they can view a form to send the list to up to three people with a personalized message.

“We do get a fair number of people creating wish lists, emailing them and sharing them,” Gillease says. “We’ve found it really does help boost our conversion rates.”

Gillease’s team plans to build on this success by creating account pages where site visitors can view all their lists, among other features.

Are there other effective applications for wish lists that you’re seeing? Are they helping lift your conversion rates? Let us know in the comments, and thank you.

When shoppers visit supermarkets and large retailers, they’re bound to see branded in-store displays. The stores add revenue while helping brands stand out. Why not apply this idea to ecommerce?

That’s just what Doug Miller, Global VP, Media Solutions, Expedia Inc., and his team have done with several Expedia Inc. properties including Expedia.com, Hotels.com and Hotewire.com.

The team started leveraging their reach into the consumer travel market when Miller joined about five years ago. Miller says about 61% of visits to travel websites are to Expedia properties.

“They are very few places, probably nowhere else, where you’re going to be able to reach an online travel audience in such a concentrated way.”

This qualified high-volume travel audience presents a great opportunity to sell media. Expedia’s world-wide media business, a which encompasses more than Miller’s team’s work, accounts for about 10% of their total business and growing fast, Miller says.

Take a look at these four media options. They might give you ideas for leveraging your own audience:

StorePoint Ads

The team’s first program offered display ads that reached several Expedia Inc. sites. The banners are shown:
o Adjacent to search results
o On the homepage
o On browsing pages
o On content pages for various destinations

“This is where Hawaii or Mexico or American Airlines will call out to you and say they have a special opportunity for you at the point of sale,” Miller says.

Expandable StorePoint Ads

The team later updated the StorePoint technology to offer marketers the option to integrate interactive rich-media ads. The Flash-based ads expand over site content when clicked, and retract to their normal size when visitors move away.

Once expanded, the ads can offer a range of functionality, including:
o Audio and video
o Data capture fields
o Interactive animation
o Send to a friend

TravelAds

The team offers marketers a bid-for-placement, sponsored listings program specifically designed for hotels. The ads are featured at the top of search results pages on Expedia.com and Hotels.com for location-based searches bid on by marketers. These marketers can bid on specific locations and time periods, and set a maximum budget to control their spending.

PassportAds

This year, the team launched a behaviorally-targeted ad format that reaches Web surfers after they’ve left an Expedia site. For example, an Expedia.com visitor might search for and browse for hotels in Venice, leave the site, and later see ads elsewhere for Italian vacations.

The team works with several ad networks and sister companies to make the program work across a wide range websites, some in the comScore top 100, Miller says.

About a month ago I had the pleasure of interviewing Tamara Adlin about best practices in improving users’ ecommerce experiences.

She was speaking at Etail West 2009 in Phoenix and I wanted get her insight since she’s been in the field for the past 18 years. She created the Customer Experience services team at Amazon.com.

Here were her Top 3 Tips for Enhancing Users’ Ecommerce Experiences:

Tip #1. Display differentiators and value propositions on the homepage

Adlin says 99% of the sites she sees fail to apply this simple rule. It’s as easy as constructing a simple statement, or bullet points, or a general voice that relays: Welcome. Here’s who we are. Here’s what we sell. Here’s how we’re different. Here’s why you should care. Here’s what you should do.

Tip #2. Look at the site from end-to-end

Companies should get into the habit of clicking through their site every day. Go to the site, click on the sale or promotion creative. Where does it take you? How can you make that process make more sense for the user? How can you give them exactly what they want?

Tip #3. Customer service is the key

Don’t slack on customer service efficiencies. If a customer says the product doesn’t work, invest in a proactive customer service department that offers to expedite a new product immediately. The positive word-of-mouth garnered from that simple gesture is worth thousands of marketing dollars.

Third-party shopping comparison sites such as Shopping.com and Shopzilla can get products to consumers who aren’t visiting brands’ sites directly. However, these sites pose challenges: they have different audiences, data requirements, bidding requirements, and capabilities.

Mercent, a Seattle-based company founded by former Amazon execs, has built a platform to help marketers sell across a range of third-party sites. I chatted last week with Mercent CEO Eric Best and several marketers from specialty retailer Brookstone.

Read more…

Of course, marketers have known forever how a celebrity can impact sales for their companies. My earliest recollection of this idea was of Joe Dimaggio and Mr. Coffee TV spots from the early 1980s.

Well, I happened to call Zappos.com the other day to talk about sending back some shoes I had bought, as they were a half-size too small. Who was I greeted by? None other than CEO Tony Hsieh at first. A CEO making an automated appearance? Big freaking deal, right? I agree. Read more…

For the last few months, MarketingExperiments has been testing which times of the morning work best for their webinar announcements. The results — in terms of number of signups — have been surprising. Read more…

Retail email item: On August 27, Bed Bath & Beyond sent out a campaign that included a dedicated link for people who opened the message on their mobile phones. As part of my job of keeping an eye on as much of the email universe as possible, I signed up for a few BB&B segments – but not every single one of them – while registering at the site a number of months ago.

Read more…