Social Media

This section looks at blogs on Online Social Media

WOM still the most powerful tool for a marketer

Word of mouth, or recommendation, is the most powerful tool marketers have in their arsenal for attracting and retaining customers.  Despite this being the most powerful of the tools, it is one of the most overlooked, and hence I thought I would devote this blog to the importance of WOM.

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Customer satisfaction doesn’t cut it anymore

There is much talk about satisfying customers.  In fact nearly any marketing text you pick up, and the main definition of marketing is ‘satisfying’ customers.  Researchers, managers, experts in the past have said that satisfaction can lead to loyalty, profitability, customer retention, etc.  However, this is now changing.  I believe we need to do a major rethink on this topic.  Customers are no longer satisfied with being satisfied!!!

What is satisfaction?  Well satisfaction is essentially meeting the customers expectations.  If you promise to deliver a document by 1 pm, and you do it at 1pm, the customer will be satisfied.  If you’re late, then that results in the dissatisfaction.  However, if you are considerably early, then that results in a higher degree, which can also be called delight.

The problem with satisfaction is that competition has increased.  There are many companies out there offering similar products and services.  With the globalization of the economies, the number of new companies entering markets from countries like China or UAE are increasing.  Similarly western companies are expanding into these countries.  Hence, overall we have an increased level of competition.  Each company is trying to excel and beat competition.  Furthermore, the customers are much more aware of their surroundings today, than 10 years ago.  The internet, and more specifically Social Media, has really revolutionized the way how we communicate and how information flows.  Customers can find out about a sale, or promotion, or the latest features of a product even before any of these are launched.

Research now says that there is no guarantee that satisfied customers will become loyal (any level of loyalty).  So what does that mean for companies?  Companies now need to go beyond satisfying their customers if they want to get them to come back.  Hence strategic management needs to rethink their goals and objectives.  I think companies should now aim for delight, instead of satisfaction.  Companies that can make their corporate culture around this idea will be winners.  Delighted customers are ones that are most likely to not only come back to you, but also achieve higher levels of loyalty.  Moreover, these guys will be telling not tens, but hundreds or even thousands of their pals (through social media) about what a fantastic company you have.

In the short-term, it may mean an increase in costs.  However these are far out weighed by the benefits they bring in.  A number of companies that I’ve worked with that have adopted this philosophy have seen their revenues and profits increase over time.  Moreover, they have also seen their marketing budgets decrease, since word of mouth brings in more customers than any other form for them.  Interestingly this is true for both B2B as well as B2C companies.  Moreover, it works for all sizes of firms, from SMEs to Multinationals.

What do you think about this?  Do you see an problems or issues in implementing this strategy?  What other benefits could companies get by doing this?  I would love to hear your views.

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Exploiting the power of Online Social Media through Group Buying

While attending the IQPC Conference on Online Customer Experience, I realized that there was a great potential to bring back group buying web sites.  Just in case you don’t know what that is, I though I would paste portions of an article I did for a magazine on group buying…

What is group buying?

A while ago a few friends and I went out to purchase a particular brand of a digital camera.  We went to the vendor and asked him to reduce the price since there were five of us purchasing the same digital camera.  This beautiful concept, known as group buying, helped us get a good discount on the camera.  If any one of us had acted alone, we definitely would have had to pay the full retail price.  Interestingly enough the vendor was not at all displeased when selling the cameras at a discount.  In fact he was really happy to see a bulk quantity of his product being sold in one go.  One of my friends commented on how wonderful a concept this was, and unfortunately it did not apply to the internet.  Interestingly, just about any type of business model you can think of in the physical world does exist online.

The group buying model works on the concept of large groups of people purchasing products.  The larger the pool of buyers, the greater the amount of discount will be available to the consumers.  Group buying sites work slightly differently than the usual online shop.  First a customer visits a web site, and selects a product.  The consumer is then given a few choices for the price he/she wishes to pay for the produce.  For instance, with the camera, it would have its original price, a discounted price if 10 people were to purchase, and even a lower price if the number of people willing to purchase were 25.  If a consumer chooses the lowest price, then he/she will have to wait till 25 people sign up to purchase that particular brand of camera.

The obvious benefit is that the consumer gets a discounted price.  Perhaps the lowest price in the market will be offered at a group buying web site.  Moreover, the consumer doesn’t need to know 25 people to get a group buying discount.  People all across the globe can join the group buy.  The site selling these products also benefits from this model.  They are able to negotiate a discount from the manufacturer or the supplier.  The web site keeps a certain profit margin and passes the rest of the discount on to the consumer.  Therefore compared to the regular online shop, a group buying shop is far better, since the site is able to sell a larger quantity and make a bigger profit.  The manufacturer or the supplier also is happy with the deal.  They are happy because they sell in bulk quantity, and often times are able to dispose off excess inventory through these types of web sites.

The major downside to group buying is that the buyer has to wait till the required number of people signup.  This may take anywhere between an hour to weeks.  Therefore if a customer is looking to purchase a product and get it delivered immediately, a group buying site will not be the best place.  Moreover group buying sites come in two different variations.  Each variation has its own merits and demerits.

Why Now?

About 6-8 years ago, several group buying sites took off.  Unfortunately none of them became very successful, and most perished.  At that point in time the idea for group buying was, perhaps, ahead of its time.  However, right now may be the best time to get into this.  Why?  Well, now consumers have the power of the Social Media.  The average consumer is linked to over a 100 people!  For instance, I have over 600 in my various networks!!!  So getting the desired number of people to purchase a produce will be much easier and faster than it was 8 years ago.  Therefore I believe that it is the right time to start the group buying business model.  If you have an Online Social Community and are not sure where to take it, or how to get the most out of it, they is one thing which may be of use.

Who can use this?

Well really anyone can do this.  Group buying works for both B2C markets as well as B2B markets.  In a B2B market, SMEs can team up to buy raw materials or goods in bulk and get a cheaper rate, allowing them to compete with the bigger businesses.  In the B2C market, just about any business can start doing this.  Have extra stock, or would like to move things in bulk, or not sure if a product will sell.  Just create a group buying page for it.  This can be in addition to the usual goods you sell, and can be done on the same website as the one you currently have!  For example, if you’re CVS (US) or Boots (UK) and are not sure if a new brand of vitamins will sell.  Why not offer it as a group buy good.  If you get enough order, then you will know that there is more demand for this product.  Hence, avoiding the risk to pre-order stock!  This concept can even be used on a greater level.  I get to speak with managers from companies that are fed up with the dirt cheap prices of lower quality goods from China or India.  Well, how about a buyers forum where companies from the ‘smaller’ countries get together to obtain raw material, and hence reach economies of scale?

There are numerous applications of group buying.  I have done much work on this topic and published a number of articles as well as a couple of research papers.  If you’re interested to know more, get in touch.  If you would like for me to talk about a specific topic, please do let me know.

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Bring back groupbuying

Due to the busy schedule I haven’t been able to post a proper Blog, which I hope to accomplish tomorrow on an interesting topic related to Online Social Media.  While at Customer Experience Online event, Dean and I were chatting before our presentation, and an interesting concept hit me.  Group Buying sites in today’s world.  They failed in the past, but how about if we were to revive it.  Online Social Media would play a key role!  If you don’t know what I’m taking about, then please log in tomorrow for the full story, or follow me on Twitter to keep updated on the posts.

Here’s what I’ve been up to and some of my future commitments:

These past two weeks have been busy.  I presented on Best Practices in CEM at the CSTA/SOCAP event in Nottingham, as well as on Best Practices in CEM from an Online Perspective at the IQPC Exchange Customer Experience Online with Dean Van Leeuwen.  I must say, Dean is a great presenter, and it was fun working with him.  My future commitments include Presenting on Customer Loyalty (how to build & manage) in San Diego in October, at the IBAM conference.  I will also be presenting at the ICRM conference at Henley Business School, September, on a CEM model which can be used to build excellent experiences.  Furthermore, I am due to present a paper on Loyalty in the Tourism Sector in September.

From the CSTA/SOCAP event, I already got the feedback, and its pretty good.  Got excellent reviews.  I thought I would share some of them.  Overall I got a 7.8/10, which is not too bad.

  • Really engaging and fascinating model on customer experience
  • The model is something that I will definitely share with the team
  • Lovely style/Direct/lots to think about, good facts
  • Excellent speaker very informative
  • Interesting presentation & good examples used
  • Useful model
  • Quick pace, interesting topic - would like to know more.
  • Really informative
  • Information was helpful & gave a good overview of why businesses are successful.
  • Really interesting content – would love to see more

Please feel free to post comments to the blogs.  If you’re interested in me writing about a particular topic, then drop me a line at

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