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?

Pump up the jams

This is post #300 on {grow} so I thought this would be a good opportunity to pause and just say THANKS!

If you ever want a case study for somebody who has fell in love with his blog community, it would be me. The true friendships, new connections and opportunities that have come through {grow} have been one of the highlights of my career. You take me to school every day.  And if we haven’t connected personally yet, I would love to hear from you by phone, email or maybe even a live visit some time.

We’ve come a long way. Monthly page views have already doubled in 2010 and as you may know, {grow} was nominated for blog of the year in an industry competition.   For me, the true highlight was that we were nominated by a man I admire so much and one of our great community members, Danny Brown (who won the award last year).   In addition to Danny, the other award nominees are Jason Falls, Todd Defren and Gini Dietrich. Are you kidding me? They are all TREMENDOUS!  So if you would like to vote for {grow} or one of these folks, you can do it HERE.

By the way, a sort of extemporaneous “get out the vote” for {grow} campaign broke out on Twitter today.   Thanks for this sentiment and your passionate enthusiasm!   Compared to some of the other communities, we’re still small but hey, we’re mighty!

Thank you for spending your time here so faithfully and for letting me be your “chief conversation starter.”  I never take you for granted and can’t wait to pump up the jams with you on the next 300 posts!

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