Archive for June, 2010


Can the social web play a role in customer retention?

The recession has culled the weak from the pack but it’s likely that your competition is still fierce.  Is there a way to attract and retain B2B customers without lowering your price? And is there a way to leverage the social web to keep your customers … even in the extreme case of a commodity market?

Holding onto customers in a buyer’s market is one of the most extraordinary challenges in business, especially if you’re selling a commodity (Commodity = purchasers view suppliers as identical on all factors but price, i.e. common coal, steel, or chemicals).

There is usually only one winner in a commodity market — the lowest cost supplier — except in periods of high demand when supply falls short.  But there are ways to lock-in customers even in ugly downturns.  One strategy I used throughout my career was to create a systematic plan to raise switching costs. By this I mean create obstacles — through valuable benefits — to prevent a customer from leaving you for the competition.

A process to retain customers

This process starts with getting out to your most valued customers and listening. And I mean REALLY listening. We would sometimes have half-day sessions to explore un-met and under-served customer needs that would …

  • Improve their competitive position
  • Enhance profitability or productivity
  • Eliminate waste
  • Lower risk
  • Increase speed to market

One strategy that uncovered potential points of differentiation was to ask customers what they hated about their job. This always seemed to get people to open up about an idea we could implement to make their life easier!   Some other potential approaches to this challenge:

  • Solve a customer problem (reporting, data-gathering, analysis/testing) that might add slightly to your cost, but establishes enough value to create a hurdle to switching
  • Create a specialized service that would be difficult for competitors to match (we did a specialized truck-return recycling program, for example)
  • Work actively with customers to influence specifications and terms that could advantage my company or disadvantage a competitor
  • Focus retention efforts on most profitable customer locations
  • Look at eCommerce integration options to enhance retention

Notice that all of these ideas go beyond the basics of price, quality and service. Those aren’t strategic initiatives. Those are competitive tablestakes these days.

When customers don’t play nice

This process of listening, reacting and renewal must be continual and integrated through an effective CRM system. But it doesn’t always work.

In the middle of all this great creative marketing work I just suggested is another dynamic. Purchasing may not want you to implement your ideas – even if there is an advantage – because it reduces their flexibility with suppliers.  They may even force you to hand over your innovations to competitors. I witnessed this in the automotive market in the 1990s.  This ended up hurting customers because when there is no reward for innovation, innovation ends.

Now what about the social web?

Is it possible to develop some distinct value through social media that could create a switching cost? My answer – probably not. The social web might be a tool to listen and tune-in to possible innovations and market needs but I don’t see how social networks can create sustainable switching costs in this part of the sales cycle. It’s free to everyone and easily duplicated by competitors.

However, I do think you can create PRIVATE information networks and communities that create distinct value. For example, one idea that worked really well was a private, unique market information hub for customers who remained in our top tier in revenue.

What are you doing to hold onto your best customers in tough economic conditions?  Can you think of any way to leverage the social web for DISTINCT value in a commodity market?

Why it’s ridiculous to argue about ghost blogging

It seems like “ghost blogging” — the practice of penning posts for others —  is always under attack.

Jon Buscall wrote a fine piece about it recently as did Mitch Joel.

Philosophically I agree with them.  In a pure and perfect world executives should write their own copy.

But practically speaking I don’t agree.

Here’s why.

  • It’s not a pure and perfect world. Ghost writing is going to happen and it always has.  Wishing and pontificating will not make it different.  So why not at least do it well?
  • Most executives don’t have the time or ability to blog consistently and effectively. So if they don’t get help, it just won’t happen. Isn’t it a good idea to help bring their ideas to life?
  • Personal connection and “community” is probably less important to somebody at the “rockstar” level of chairman.  I know this will get hollers from the crowd that community is “everybody’s business” — and to some extent that is true, but again, I’m being practical. Most CEO’s are not being compensated to build community through a blog.
  • The chairman does not pen his own speech, yet nobody questions that they own it. They don’t write the shareholder’s letter in the annual report, yet this is deemed as authentic. Do you think Former GE Chairman Jack Welch sat there and pecked out his own book? And yet it is seen as his.

So why do so many people seem to want to put blogs in a different class of writing?  In the world of corporate communications it could be argued that blogs are even less important and critical than a major speech or a document being submitted to the SEC.   Why are people on a quixotic mission to fight against reality?

Here’s a better solution. Establish guidelines to have an effective ghost blog in an effective and ethical way.  A few months ago there was a debate on this topic on {grow} that resulted in some guidelines for ghost blogging:

  • The host executive should provide general ideas for a ghosted blog post and a few bullet points expressing key thoughts for the writer to work from. Obviously the writer needs to spend as much time as possible with the host to get a feel for their language and opinions.
  • The executive should approve every blog post before publishing under their name.
  • Content aimed at a personalized connection – such as responses in a blog comment section – ideally should be authored by the executive, not the ghost writer.
  • Be sure there is an approval process in place that can handle the need for flexibility, responsiveness and the opportunistic tendencies of the social web.
  • Guidelines of the corporate blog process and a list of blog contributors could be contained in an “about” section.

Do these make sense?

Want to “go viral?” Think again!

Seems like everybody wants to produce content that goes viral.  Speaking from experience, you should be careful about what you wish for!

Last week I followed with tradition and posted something light and entertaining on a Friday. In fact I thought it was funny — skewering Guy Kawasaki for his voluminous and sometimes bizarre tweets.

To my surprise and delight, Guy actually found the post and had a great sense of humor about it.  And it must have created some traction for him — his team tweeted it out five times over 24 hours. This is a fellow with nearly 300,000 followers.

The post didn’t set a record for an individual day on my blog, but over three days, it was pretty huge — about 5X the normal rate of page views for a weekend. By some definitions, I guess you could say it went viral.

And then the problems started.

When you go viral, you reach a lot of new people outside the comfortable “normal” audience you’ve built over time.  In fact about 95% of the readers last weekend had never been to the blog before.  This was also a new population who didn’t realize I was trying to be funny. People who don’t even know what funny IS.  So I started getting nasty-grams from folks who thought I was being profane: “Who are you to call somebody a devil? You need to look in the mirror, pick up a Bible and ask this man for forgiveness.”  How do you respond to that?

Next came the imposter. Somebody logged into the comment section with a Guy Kawasaki email address and hijacked the blog. Then the “real” Guy showed up to defend himself … or was it a representative? … or another imposter? … and for awhile I didn’t know which end was up. It took me about an hour to sort through the mess, delete the imposter’s comments, and “stand watch” over new comments coming in.  Up until that day I had only deleted one comment in the history of the blog.

Since I made the choice to not have ads on this site, I don’t receive any financial benefit from thousands of new readers coming to the blog.  What about new RSS subscriptions? As best as I can tell, it was about ZERO.  They were all blog tourists I suppose.

I’m really grateful that Guy took my post in good humor and liked it enough to tweet it out.  From the imposter incident, I have a new appreciation that being a celebrity comes with a target on your back. In the end, I’ll settle for my good ol’ {grow} homeys any day!

I really appreciate the consistent friendship and support from the {grow} community, whether I suck or whether I knock it out of the park.  I don’t need viral. I just need you. Thanks!

Related Posts Plugin for WordPress, Blogger...