Companies, organisations and governments are paying serious attention to developments in online communities because of hard demographic facts:
According to the Pew Research Center in the US, 87 per cent of US teens are now regular internet users and more than 50 per cent are daily users.
Over 81 per cent play games online and almost half make purchases.
With a combined purchasing power of around US$139 billion a year (according to American market research firm Harris Interactive) and even greater influence over others' purchasing decisions, they're not just playing Pac- Man anymore!
This kind of technology usage is clearly not a passing fad. It is also no longer a small enough niche to ignore. In fact, it's large and powerful enough to warrant serious attention and to be utilised as an extremely powerful new forum for building relationships and brands. But it doesn't have to be massively serious relationships, nor does the usage of technology have to be bleeding edge.What I am talking about is using the lessons from how high tech can be high touch, and having the courage to apply them to your world.
A car service centre could use it (and some do) very effectively.When a customer's car is due for a service they can send a gentle reminder and enable the customer to book any available time slot via SMS, and after the service work is done they can send another SMS to let the customer know the car is ready. This is such a simple, unobtrusive and useful application of very cheap technology. It simultaneously enhances the customer experience and streamlines the company's operations, making them more profitable.
Or look at other usage of technology to streamline a highly personalised life. The LG internet refrigerator is designed so it can order your groceries through an online grocery gateway. It is also a music player and PDA. The DIVA (among other) air conditioners can be activated via an 'I'm on my way home' SMS.
First Direct, the online banking subsidiary of HSBC in the UK, send an SMS to their customers when they are approaching their credit limits to save them embarrassment when they try to make a purchase they can't afford, and also to spare them unwanted overdraft fees. In early 2007 the bank estimated that the SMS program had saved customers around £32 million in overdraft fees.5 The program has proven so popular that other banks in the UK, such as Nationwide, have begun to follow suit.
Or you could get slightly more sophisticated in your use of technology in building relationships in the way Amazon.com does. It remembers not only what you have purchased, but what other people who have bought things that you have purchased have purchased, and then makes recommendations, which are often very useful, about other things you may find interesting. There is no human involved, yet you feel valued and as though the site understands you. At the end of the day, so long as people feel it is relevant and personal, they are happy to listen to your message. This is what Seth Godin discussed in Permission Marketing, and also may help explain why a survey of 500 mobile phone users by London PR firm Rainier PR found that 74 per cent of users were happy to receive short-range, location-specific promotional information via technologies such as Bluetooth.
The list of companies that have employed technology in really cool ways to stay in close relationship is getting longer every day, but is still nowhere near as long as it should be. Wireless technology is now allowing personalisation based on where you are and what you are doing like never before.
Companies also are now employing high-tech means to empower traditional relationship-building exercises. That is, rather than completely change their marketing to adopt hightech measures, they are using some new technology in conjunction with their old campaigns. For instance, McDonald's has introduced web access to some of its larger urban restaurants where some clientele (often travellers) want to eat and check their email. Their restaurants and advertising message remain unchanged, but the technology is placed on top. Procter & Gamble tied an extensive print and broadcast campaign for Dove soap to an interactive campaign in Times Square where people could vote in real time for the images they found most attractive.
An Australian example of using technology to connect with the market is United International Pictures partnering with a number of interactive mar-keting and technology companies to launch Mission Impossible 3. Nearly 10,000 people registered online to use their mobile phones to participate in a huge, city-wide puzzle game with clues delivered by SMS and 'hypertag' technology embedded in bus shelters and signs. This was a far better way than thirty-second television ads to attract a large number of committed fans who would swell opening weekend ticket sales for MI3 and create an all-important buzz about the movie.6
As these examples show, relatively simple interactivity can massively increase customer participation and hence the feeling of a reciprocated relationship with your brand. The current failure of organisations to deliver anything near the kind of customer service people expect today is all the more shortsighted when you consider how simple and cost-effective it can be to interact with customers through new technology. Reconnect with one of the governing flips of this book. 'Think AND, not OR', and recognise that high tech can indeed be high touch.
And for Pete's sake (pardon the pun), start engaging in a dialogue with your marketplace,whether through technologyenabled means or not, instead of talking at them all the time. Monologues are soooooo yesterday!
Finally, if you think social networking is just for people with too much time on their hands, consider that IBM has named a vice-president for social software. On 24 January 2007, the holder of that new position, Jeff Schick, announced the pending release of Lotus Connections, which will use SMS, blogging, personal profiles, and so on to empower employees to establish virtual worlds for mutual brainstorming. This new software – exactly the same thing as teenagers, college students and others use on MySpace, Facebook and Second Life – will be used within IBM and sold to other companies. IBM's prototype for Lotus Connections contains 450,000 profiles. As Schick put it, IBM believes Lotus Connections will 'unlock the latent expertise in an organisation'. It will do so by making that expertise relational.7
I'll have more to say about business uses of social networking software in chapter 6, 'To Get Control, Give It Up.'
In closing this section on high tech is high touch, let me say emphatically that it is not about the technology. It is about connecting with the customers. Despite what you read about younger consumers, it is not really about the technology for them, either. They, and increasingly the broader market, just use technology as their means to connect. Don't make technology your obsession, make connecting with your customers and staff your obsession. If technology helps you do this, and it can, then use it.
THE REBIRTH OF THE MIDDLEMAN
This chapter's tour of the new relationship technologies would not be complete without a brief look at one of the most interesting business developments in recent years, the rebirth of the middleman.Way back in the late 1990s – doesn't that seem like a long time ago already – many people were predicting that the internet spelled the end of the middleman.No longer would consumers need any intermediaries between them and product or service providers, the argument went. The internet would provide direct connections for everything from A to Z.
And so it did. But in multiplying the connections between customers and a whole world of suppliers, it also reestablished the value of intermediaries that could sift through all the offerings and sort them in a variety of ways. I say 'tha?' advisedly, rather than 'who', because the new middleman may just as well be a technology as a person or a firm.
The most successful sites in the world are in fact middlemen.With the exception perhaps of Amazon.com, the most visited sites are those that connect the supplier to the customer, such as eBay, or people to people in the case of MySpace, or people to content as in the case of Wikipedia and YouTube. Google is no different. As the old saying goes: 'When everyone is panning for gold, sell pans.'
It is not just about the internet though. It is about services – be they personal or technological
ly driven – that help us to sift through the clutter. The phenomenal growth of mortgage brokers around the world is a very good example of what I am talking about.
The home loan market is becoming increasingly competitive with consumers spoiled for choice, at least ostensibly. However, the variety of sources of home loans, the complexity of comparing them and also the fact that it has to happen on your time have led to a reintroduction of the importance of the middleman. Mortgage brokers are as a result becoming increasingly popular. In the United States, for instance, mortgage brokers handle more than 80 per cent of home loans. Australia is catching up, with 40 per cent of home loans currently mediated by mortgage brokers.
In fact, the more these places distance themselves from the people who are providing the loans, the more popular they become. In Australia, the biggest mortgage broker is Mortgage Choice, who in the last financial year boasted a record aftertax profit of A$14.8 million and generated A$10.6 billion in housing loan approvals.
Key to the Mortgage Choice brand story is that they have no stake in which lender provides the mortgage to the home buyer. Their brokers receive the same commission no matter which mortgage you choose, so that effectively they work for you, not the banks. The customer appeal of this brand story is manifest in the steep positive growth of Mortgage Choice's revenues and bottom-line profit.
Companies like Mortgage Choice and eBay demonstrate that there is a business model in just owning the relationship and not actually selling anything. In the example of Skype in 'Fast, Good, Cheap – Pick 3', I talked about eBay buying Skype for $2.6 billion.Might I be so bold as to suggest that what made Skype so valuable was in fact their relationships, not their business model, which could easily be duplicated. Although Skype did not yet have profits, it did have a large and growing base of loyal users, and as I mentioned in chapter 2, 'Fast, Good, Cheap – Pick 3', eBay was making significant progress in monetising the value of that customer base within a year after buying the company.
Product review sites are another increasingly popular form of middleman. Sites such as zdnet.com and cnet.com in information technology and consumer electronics – there are similar sites in other product and service categories – have become trusted partners in customers' purchasing. In the same space there are pure price shopping assistants such as bizrate.com, pricegrabber.com, nextag.com, and Google's Froogle. Once you have found exactly which product you want to buy with the help of a review site, you can instantly find out who has it cheapest. Not only that, you can also often see whether a vendor has been found reliable by other shoppers. These sites continue to grow in popularity as people look for advice from people they feel they can trust, rather than people they think are simply trying to sell them something. Again, people want to do business with and take advice from people they know, like and trust.
As the knowledge and information age evolves into the relationship era, the ultimate middlemen become those who connect us to valuable information and people. The internet is full of so much garbage, the middleman has become essential. This is why some of the most valuable property on the net is Google.With a market capitalisation of US$155.9 billion (as of June 2007) and with 380 million unique users every month, Google is the middleman to end all middlemen. The market has become so oversupplied that being a 'trusted adviser', even if it is only in the form of an algorithm, is a very powerful proposition.
Although I have used behemoth brands such as Google to make the point, there is nothing to disqualify local businesses from servicing their markets better than global ones can. In countries like South Korea, local search engines have been more popular than Google because customers consider the results to be more relevant. Relevance is key in a world where time and mental energy are scarce resources.
The point here is simple: from the customer's perspective, increasing complexity and the proliferation of choice (partially fuelled by companies mistaking 'choice' for 'customer service'), in an environment suffering rapid compression of time, have made middlemen attractive again. From the corporate perspective, this could be an excellent opportunity to see if your services can be construed as making you a 'middleman'. Do you solve complex problems? Do you get people the information or service they need? Are you saving them time, or costing them time?
Reframing questions about the services and products you provide in this way can help you clarify your position and role, and also may give you great ideas for changes you could make.
TALENT WANT TO BE 'PERSONALLY' CONNECTED TO THE COMPANIES THEY WORK FOR AND THE PEOPLE THEY WORK WITH
You need great people if you want your business to be truly competitive, not just in terms of building relationships with clients but in terms of being the most innovative, telling the best stories and having the courage to take the most action. In the talent-dry environment that we are operating in, this requires a well thought out and coordinated campaign to promote your employment brand to attract the best talent. Although building the employer brand is not a topic for this book (see www.petersheahan.com for more specific resources on how to do this), I am interested more broadly in what makes a workplace attractive to great talent and how it develops and retains the talent it already employs.
I believe there are two key things that both attract and retain great talent:
1. the work you do
2. the relationships you build with your people.
This may seem a little simplified, but it is not. I deliberately leave out things like money and benefits because, as with 'Fast, Good, Cheap – Pick 3', these are the price of entry. At the end of the day, all other things being equal, people stay at jobs because they like doing quality work and because they like the people they work with.
The quality of the work includes several things. It is about whether people find the work interesting, but it is also about whether the work challenges them and forces them to grow. My attention is obviously going to be on number two, further making my point that business is personal. But before I go on, let me just say that if your organisation was a flipstar business, the work would rock. How could it not?
To the point: your ability to acquire, develop and retain the best talent is directly proportionate to the quality of the relationship you build with that talent.
Every client I have tells me, 'Our people are our greatest asset.' They mean it, but most of the time they don't know how to show it in practice. All of my work in companies to date on generational change and workforce trends suggests that this will be one of the most important strategic issues for companies over the coming years.
RELATIONSHIPS ARE SIMPLE, BUT NOT EASY
To finish the chapter here are five keys to building great relationships so you can profit from a world where people think business is very personal.
SHIFT YOUR MINDSET
Relationships can only work if you think they can work and if you think they are worth investing in, because only then will you put in the appropriate effort to ensure they are a success. In other words, relationships are a self-fulfilling prophecy.
Perhaps the most important key is truly to believe that building great relationships will get you the best results. Too many times I see companies behave in ways that suggest they would rather not hear from their customers. Or I see stressed and busy managers focusing only on their operational responsibilities, when careful investment in the relationships they have with their staff may allow them to delegate more effectively, and perhaps reduce that stress and busy-ness that is taking over their lives.Make building relationships part of your day-to-day life. Schedule into your diary time to nurture existing relationships and start new ones. Believe it will be a good investment of your time and energy, and inevitably it will.
ENSURE COMPETENCE
Once you have the right mindset, competence is fundamental to striking up a quality relationship. Simply put, if you are no good at what you do, no one will want to be your friend. To understand what is required to meet basic expectations of competence, think back to
chapter 2, 'Fast, Good, Cheap – Pick 3'.
DELIVER ON WHAT YOU PROMISE
Once you are comfortable with what you offer, make sure you don't overstretch on what you promise. The only thing worse than a bad job is a bad job which you thought was going to be fantastic. If you can't meet an expectation, level with the customer. Don't be like the hire-a-hubby who came to our house and gave my wife a quote to fix our stairs, then told us when he would be back to do the work but never showed up.
BUILD TRUST
In many ways, building trust in a relationship is contingent on the above three steps (having the right mindset, doing a good job and delivering on what you promise), but trust is also established independently of the above. Medical researcher Wendy Levinson found that doctors with good patient relationships were less likely to be sued, even when they did things wrong.8 That is because patients who trusted their doctors believed they had their best interests at heart. The way patients judged whether their doctors had their best interests at heart were very simple things like:
did they 'sound' interested
how 'long' they spent in consultation
how intently they 'listene?'
their 'tone' of voice.
I would like to make the point here that not getting sued and getting return business are different prospects altogether. I may not sue a doctor who misdiagnosed me, but there is a good chance I will never go back. So again, competence is still a huge part of this equation.
HAVE GOOD MANNERS
People might think this sounds simple. If that's the case, why is it that websites like crmlowdown.com are filled with examples of straight-out rude customer service? And why is it that I can issue you an air-tight, money-back guarantee that every single person reading this book can give an example of a time when they have been treated appallingly by a company? Ensuring people on your front line (and yes, this includes you) treat customers with respect and courtesy (and actually go the extra mile in helping them solve their problems) might seem obvious, but I will talk about it until it actually starts happening!
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