Mission Imbloggable is the title of our group presentation for BAMA 513. We chose this title because we wanted to show trade show visitors some ideas on how to get a blog going for a business topic that may not seem all that bloggable. Being that two of us for BCAA which has an insurance division, we decided to focus on home insurance. We researched the topic from a number of different angles and ended up focusing on 3 specific areas:
- demographics of bloggers (who's blogging and for what)
- best practices (top 10 tips, do's & don'ts, examples of best and worst)
- a live trial of putting these pieces together
To access the project directly, visit www.understandinsurace.wordpress.com.
Hopefully this project will inspire you and your company to get in on the conversation!
Monday, October 6, 2008
Friday, September 26, 2008
Groundswell Award: Listening
Forrester's 2008 Groundswell award submissions provide a number of very interesting ideas and best practices. While the criteria for the various categories are a little unclear, the categories themselves are quite appropriate given the topic. As an example, "listening" category seems to look for companies who listen to their customers about the type of content and of the online communities they actually want to form.
A cool example from this category is Omni Hotels . Instead of just gathering customer information for their own use, Omni uses the information provided by customers to add significant value to their travelling experience. The great thing about this site, is that it doesn't have a very corporate feel which likely encourages customers to contribtue to the conversation on a more frequent basis. The site relies heavily on community contribution to provide it's content so this also encourages participation. Overall, there are a lot of interesting lessons to be learned from The Local Scoop!
A cool example from this category is Omni Hotels . Instead of just gathering customer information for their own use, Omni uses the information provided by customers to add significant value to their travelling experience. The great thing about this site, is that it doesn't have a very corporate feel which likely encourages customers to contribtue to the conversation on a more frequent basis. The site relies heavily on community contribution to provide it's content so this also encourages participation. Overall, there are a lot of interesting lessons to be learned from The Local Scoop!
Thursday, September 25, 2008
Scary Times
The New York Times had an online article on Monday about the value that advertising firms can bring to the financial and insurance sector in the wake of the AIG bail out and the Lehman Brother’s bankruptcy announcement. The article points out that although Lehman’s isn’t a major advertiser, the ad agency community is definitely feeling the crunch. The article goes on to talk about how advertisers should take this opportunity to help their clients get their branding messages out quickly and really take a position letting consumers know about their financial strength.
Interestingly enough, there’s no mention of using the web to help get this message out. The article mentions that companies are working on their creative and branding message, but it seems as though this is all intended for offline media. I would think that the situation in the financial world is the perfect opportunity for one of the bigger players to step into the online space immediately advising of how customers can trust their company. Of course there’s a lot to be said for fully developing creative and taking time to develop messaging, but I’m really surprised that no one’s jumped at the opportunity provided with the web. These are definitely scary times but they could get a lot worse for those who delay in getting their message out.
Interestingly enough, there’s no mention of using the web to help get this message out. The article mentions that companies are working on their creative and branding message, but it seems as though this is all intended for offline media. I would think that the situation in the financial world is the perfect opportunity for one of the bigger players to step into the online space immediately advising of how customers can trust their company. Of course there’s a lot to be said for fully developing creative and taking time to develop messaging, but I’m really surprised that no one’s jumped at the opportunity provided with the web. These are definitely scary times but they could get a lot worse for those who delay in getting their message out.
Firewall woes
My best blogging intentions are being foiled by the fact that I spend 8 to 10 hours at the office each day. It's not that I don't have time to blog, it's that my company has a pretty restrictive firewall, so blogging is proving to be relatively difficult. Knowing how conservative many companies are, I suspect that there are many people in the same situation. Blogging is supposed to be an avenue to share your opinion and thoughts with a certain degree of spontenaity. This is practically impossible when you can't get onto your blog as the thoughts come into your mind. If companies want to get into having two way conversations with their customers, I think the first step is to allow your employees some freedom and flexibility in exploring what the web has to offer.
Monday, September 22, 2008
The Importance of Customer Loyalty in an Online World
Customer loyalty and growth
Customer loyalty is widely believed to be one of the more important factors in realizing long term growth and profitability. The traditional take on loyalty is that it’s important because it is less expensive to retain an existing customer than acquire a new one, thereby making existing customers more profitable. Loyal customers are also seen to be more likely to make subsequent purchases from a firm over time leading to greater revenue generation than a new customer. Another, perhaps less common, way of looking at loyalty is to see loyal customers as the gateway to other potential customers. One definition of loyalty that follows this line of thinking is “a willingness of someone to make an investment or personal sacrifice in order to strengthen a relationship.” In the same way that multiple purchases can be viewed as an “investment”, when a loyal customer puts their own reputation on the line by referring a friend to use a product or service, they are making a “personal sacrifice.” Therefore, loyal customers really are one of the keys to long term success.
Recognizing the importance of loyalty, many researchers have tried to come up with measurement tools to help harness the power of this metric. Retention rate and customer satisfaction, for example, are two of the most popular substitutes for loyalty. In the article The One Number You Need to Grow (Reichheld, 2003) the author aptly points out a number of pitfalls with the traditional measures of loyalty. These are:
1. Most measures of loyalty are overly complex.
2. Traditional measures are difficult to assimilate into every day operations.
3. Retention rates help measure profitability but not necessarily growth in that they track customer defections. Additionally, retention is not necessarily indicative of loyalty as customers may be held hostage by high switching costs or other barriers.
4. Customer satisfaction may indicate a customer’s feelings regarding their most recent experience but it does not necessarily predict future behaviour or growth.
As a result of these issues, Reichheld and his team undertook significant research to find the silver bullet of measuring loyalty. Through research of thousands of customers in multiple industries, they determined that the question “How likely is it that you would recommend [company X] to a friend or colleague?” ranked 1st or 2nd in terms of accurately predicting future purchases and or referrals. Given the impact of this one question, marketers should be looking for ways to capitalize on this long standing, and often inexpensive, way of advertising.
Word of Mouth Advertising
One way that marketers may begin to utilize word of mouth to their advantage is to look at web 2.0 functionality. Traditionally, word of mouth advertising involved trying to get customers to tell their friends about a product. This can be accomplished naturally, by having really great products or services, or companies can provide incentives to existing customers to recommend their product or service. With the capabilities provided by the internet, word of mouth now includes social networking, blogs, videos and other “user generated content”. The article Word of Mouth Marketing: Winning friends and influencing customers (Williamson, 2007) explores this exciting “new” driver of growth. With the power and reach of the internet, word of mouth advertising is becoming not only bigger, but more effective as well. The article points to research indicating that more consumers are relying on advice of all types in making their purchase decisions. As seen in the chart below, in 2007, 66 million adults shared advice on products and services; this number is expected to grow to 72 million by 2011. Put another way, 91% of US adults regularly or occasionally seek advice from other consumers.
Before delving deeper into the nuances of online word of mouth advertising, it’s important to understand the differences between offline and online word of mouth.
Offline word of mouth:
o involves spoken word
o usually takes place among acquaintances or family
o is more challenging to measure
Whereas online word of mouth:
o uses written words, video/audio
o more likely to take place between strangers or people who only know each other online
o is searchable and trackable
o can expand the impact of word of mouth exponentially
Note that the differences are really not that significant, however as the last two bullets point out, online word of mouth is often a more fruitful avenue than offline, because of the ability to track it as well as the scaleability of the medium.
The Online Opportunity
As mentioned earlier, there are many different types of online word of mouth advertising. The majority of internet users, employ customer reviews to garner their information. Blogs are also a growing influence on consumer decisions and in fact 17.5% of blog readers do so for recommendations. While viral videos and microsites are exciting and often humorous, consumer pass-along is still relatively low for these media. One of the reasons for the successfulness of online word of mouth is that consumers typically view traditional advertising as less trustworthy. People are more comfortable taking advice and opinions from someone online, even though they’ve likely never met. Adult internet users typically report that they can get to know and trust a regular online contact’s judgment and that familiarity is developed with regular online contact, even if this simply involves reading a few of their messages. Before you start thinking that traditional interaction is a thing of the past when it comes to word of mouth, it’s important to note that 70% of word of mouth activity happens face to face, while only 8% happens online. This means that the internet is a critical resource for educating consumers, however the actual act of sharing information still mostly happens the old fashioned way. Therefore, while word of mouth advertising may cost less than other media, it should not be a matter of all or nothing. Online word of mouth advertising is best used as one component of an integrated on and off line approach.
Marketing Takeaways
Given the importance of online word of mouth advertising marketers should put more focus on developing and encouraging online discussions about their products. Currently, only 25% of online stores use customer reviews because of the fear of losing control of the marketing message. While this may be a realistic fear, it’s more important to remember that consumers will talk about your product or service regardless of whether you provide them with the opportunity to do so directly on your site. By allowing this type of feedback and discussion directly on a company site, you will be in a much better position to hear what your customers are saying and actually do something about it.
References
Reichheld, F. (2003, December). The One Number You Need to Grow. Harvard Business Review, 46-54.
Williamson, D. (2007, June). Word of Mouth Marketing: Wining Friends and Influencing Customers. E-Marketer.
Customer loyalty is widely believed to be one of the more important factors in realizing long term growth and profitability. The traditional take on loyalty is that it’s important because it is less expensive to retain an existing customer than acquire a new one, thereby making existing customers more profitable. Loyal customers are also seen to be more likely to make subsequent purchases from a firm over time leading to greater revenue generation than a new customer. Another, perhaps less common, way of looking at loyalty is to see loyal customers as the gateway to other potential customers. One definition of loyalty that follows this line of thinking is “a willingness of someone to make an investment or personal sacrifice in order to strengthen a relationship.” In the same way that multiple purchases can be viewed as an “investment”, when a loyal customer puts their own reputation on the line by referring a friend to use a product or service, they are making a “personal sacrifice.” Therefore, loyal customers really are one of the keys to long term success.
Recognizing the importance of loyalty, many researchers have tried to come up with measurement tools to help harness the power of this metric. Retention rate and customer satisfaction, for example, are two of the most popular substitutes for loyalty. In the article The One Number You Need to Grow (Reichheld, 2003) the author aptly points out a number of pitfalls with the traditional measures of loyalty. These are:
1. Most measures of loyalty are overly complex.
2. Traditional measures are difficult to assimilate into every day operations.
3. Retention rates help measure profitability but not necessarily growth in that they track customer defections. Additionally, retention is not necessarily indicative of loyalty as customers may be held hostage by high switching costs or other barriers.
4. Customer satisfaction may indicate a customer’s feelings regarding their most recent experience but it does not necessarily predict future behaviour or growth.
As a result of these issues, Reichheld and his team undertook significant research to find the silver bullet of measuring loyalty. Through research of thousands of customers in multiple industries, they determined that the question “How likely is it that you would recommend [company X] to a friend or colleague?” ranked 1st or 2nd in terms of accurately predicting future purchases and or referrals. Given the impact of this one question, marketers should be looking for ways to capitalize on this long standing, and often inexpensive, way of advertising.
Word of Mouth Advertising
One way that marketers may begin to utilize word of mouth to their advantage is to look at web 2.0 functionality. Traditionally, word of mouth advertising involved trying to get customers to tell their friends about a product. This can be accomplished naturally, by having really great products or services, or companies can provide incentives to existing customers to recommend their product or service. With the capabilities provided by the internet, word of mouth now includes social networking, blogs, videos and other “user generated content”. The article Word of Mouth Marketing: Winning friends and influencing customers (Williamson, 2007) explores this exciting “new” driver of growth. With the power and reach of the internet, word of mouth advertising is becoming not only bigger, but more effective as well. The article points to research indicating that more consumers are relying on advice of all types in making their purchase decisions. As seen in the chart below, in 2007, 66 million adults shared advice on products and services; this number is expected to grow to 72 million by 2011. Put another way, 91% of US adults regularly or occasionally seek advice from other consumers.
Before delving deeper into the nuances of online word of mouth advertising, it’s important to understand the differences between offline and online word of mouth.
Offline word of mouth:
o involves spoken word
o usually takes place among acquaintances or family
o is more challenging to measure
Whereas online word of mouth:
o uses written words, video/audio
o more likely to take place between strangers or people who only know each other online
o is searchable and trackable
o can expand the impact of word of mouth exponentially
Note that the differences are really not that significant, however as the last two bullets point out, online word of mouth is often a more fruitful avenue than offline, because of the ability to track it as well as the scaleability of the medium.
The Online Opportunity
As mentioned earlier, there are many different types of online word of mouth advertising. The majority of internet users, employ customer reviews to garner their information. Blogs are also a growing influence on consumer decisions and in fact 17.5% of blog readers do so for recommendations. While viral videos and microsites are exciting and often humorous, consumer pass-along is still relatively low for these media. One of the reasons for the successfulness of online word of mouth is that consumers typically view traditional advertising as less trustworthy. People are more comfortable taking advice and opinions from someone online, even though they’ve likely never met. Adult internet users typically report that they can get to know and trust a regular online contact’s judgment and that familiarity is developed with regular online contact, even if this simply involves reading a few of their messages. Before you start thinking that traditional interaction is a thing of the past when it comes to word of mouth, it’s important to note that 70% of word of mouth activity happens face to face, while only 8% happens online. This means that the internet is a critical resource for educating consumers, however the actual act of sharing information still mostly happens the old fashioned way. Therefore, while word of mouth advertising may cost less than other media, it should not be a matter of all or nothing. Online word of mouth advertising is best used as one component of an integrated on and off line approach.
Marketing Takeaways
Given the importance of online word of mouth advertising marketers should put more focus on developing and encouraging online discussions about their products. Currently, only 25% of online stores use customer reviews because of the fear of losing control of the marketing message. While this may be a realistic fear, it’s more important to remember that consumers will talk about your product or service regardless of whether you provide them with the opportunity to do so directly on your site. By allowing this type of feedback and discussion directly on a company site, you will be in a much better position to hear what your customers are saying and actually do something about it.
References
Reichheld, F. (2003, December). The One Number You Need to Grow. Harvard Business Review, 46-54.
Williamson, D. (2007, June). Word of Mouth Marketing: Wining Friends and Influencing Customers. E-Marketer.
Sunday, September 21, 2008
A brief experience with Twitter
One of the reasons I'm taking the e-marketing class is because I've been feeling a little out of touch with all the new social media that's now available. While class has provided a lot of interesting ideas and resources, I've also been doing some of my own "research" on the side. Today I checked out twitter, a relatively new addition to the social media space. From the twitter (see I learned how to link!) home page I watched their brief tutorial explaining how the site works. Essentially, the premise seems to be an offshoot of Facebook's component that allows you to tell your friends what you're doing. Twitter is based on the proposition that you can learn more about your friends by knowing what they're doing at all times. Of course this is all dependent on you being vigilant enough to post your activities. I'm not sure I buy the argument that you'll become closer to your friends by being on Twitter, in fact I think that by using Twitter, you might even become more removed from them as you'll feel a false sense of familiarity with them and realize later that you haven't actually spoken to them in weeks! Also, I don't really think that people do enough interesting stuff in a day to warrant an entire webiste dedicated to tracking these activities. Twittering (is that what it's called?) is definitely not on my list of things to do.
Tuesday, September 16, 2008
Take Two
Even though I have an incentive to start blogging, I’m still feeling a little apprehensive about the whole thing. It’s not so much that I’m afraid someone is going to find my blog, it’s that I’m just not used to putting my thoughts down on paper (or screen). When I have something important or funny to say, my tendency is to call a friend or go visit a co-worker, not write it down. What’s more, I’ve never been one for diaries or even a lot of introspection. So this means that blogging is all quite foreign.
Last night, I was reading the book Naked Conversations, by Robert Scoble, the blogging guru. In the book, he suggests that first timers look at some of the well established blogs like Technocrati (http://technorati.com/). I must say, that I’m very impressed. There are tons of different subjects and opinions. In a matter of 3 minutes, I learned that John McCain helped create the BlackBerry (not true, it turns out, but you can read it at http://hosted.ap.org/dynamic/stories/M/MCCAIN_BLACKBERRY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT) and that city officials in an Israeli town are using DNA to catch rude dog owners that don’t pick up after the dog (true! Check it out at http://technorati.com/articles/399AeLpposxfc2GyXVC9pczlIzDv3%2BVkWjWJjc2MP2k%3D)
All in all, my first blog reading experience was very informative and entertaining, and my second blog writing experience turned out ok too!
PS I don't know how to hyperlink links to other blogs...hopefully I can figure that out by next time.
Last night, I was reading the book Naked Conversations, by Robert Scoble, the blogging guru. In the book, he suggests that first timers look at some of the well established blogs like Technocrati (http://technorati.com/). I must say, that I’m very impressed. There are tons of different subjects and opinions. In a matter of 3 minutes, I learned that John McCain helped create the BlackBerry (not true, it turns out, but you can read it at http://hosted.ap.org/dynamic/stories/M/MCCAIN_BLACKBERRY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT) and that city officials in an Israeli town are using DNA to catch rude dog owners that don’t pick up after the dog (true! Check it out at http://technorati.com/articles/399AeLpposxfc2GyXVC9pczlIzDv3%2BVkWjWJjc2MP2k%3D)
All in all, my first blog reading experience was very informative and entertaining, and my second blog writing experience turned out ok too!
PS I don't know how to hyperlink links to other blogs...hopefully I can figure that out by next time.
Tuesday, September 9, 2008
What's in a name?
Welcome to my blog! This is my first ever blogging experience and has been prompted by an e-marketing class that I'm taking in my MBA program. As the title indicates, I am 30 years old and have all of a sudden began to feel a little on the old side. I don't feel old physically or mentally, but technologically I might just be over the hill! Blogs, Facebook, Twitter, LinkedIn, Flickr, YouTube, the list goes on and on, are all relatively foreign to me. Sure, I have a Facebook page, but the whole social media thing has definitely not been a big part of my life. So, when I hear "younger people" talking about all these sites it makes me feel a bit over the hill. I hope that over the next little while I can explore each of these different types of media and figure out what the big deal is from both a personal and professional perspective. Stay tuned!
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