Word of Mouth (via Mo - Creative Commons 2.0)

Smaller merchants do have one significant advantage over larger competitors: because they are close to their customers they should be better able to deliver the kind of customer experience that results in credible, actionable, recommendations. Because they know that word of mouth is so important, and because they are more likely to be competing on service than on price, smaller local merchants are uniquely positioned to provide the Wow! factor that launches word of mouth recommendations.

Smaller merchants also have a related advantage, one they should leverage more fully. Unlike much larger competitors, most small company employees are customer-facing at least part of the time. These employees should be hired, trained and required to promote significant, relevant brand equities at every customer interaction. They also should be encouraged (and empowered) to provide the same Wow! factor as the sales associate or the owner/manager herself.

But just as word of mouth is no longer restricted to face-to-face interactions, the role of employees in promoting the brand can also extend beyond individual encounters. In particular, merchants should require – or at least encourage – all employees to actively promote the company’s brand equities through social media.

As companies consider how to implement a social media program, the role of employees should be an integral element of the strategy rather than an afterthought. What role might employees play in a social media program? Here are some suggestions:

• Create a group blog for employees. It’s easy to do, you can link from your web site and blog posts are indexed by search engines. Some content could be expressly about the company (e.g., as a workplace, if that is a key equity) but most of the content could be about what interests the bloggers. Here the message is more subtle but potentially very effective: You should shop here because this company hires people like us. Amazon now has numerous blogs with this subtext – even a car blog – something they may have learned from having acquired Zappos, which pioneered the concept.
• Let your employees run your Facebook page. Facebook is now so flexible that a company’s fan page easily can accommodate both “official” content from the company and less structured content from employees. Employees can leverage their own social graph to expand the company’s reach. One objective should be to pierce the wall between the company and its customers. Here’s a simple example: instead of the company simply announcing its “Employee of the Month,” why not post nominations (perhaps including video clips of the employees in action) on Facebook and let the community vote?
• Get your employees Tweeting. There are many ways in which employees can use Twitter to benefit their company. One is simply to tweet actively about topics that relate to the company’s business. This does not necessarily mean promoting specific products or deals, although (with disclosure) there is nothing wrong with that. But the employees of, say, a fashion boutique should be on Twitter constantly providing value-added content about fashion, art, music or anything else the clientele would find interesting (and bringing useful information back to the company). Employees also can be the “canary in the coal mine” for their company. By setting up keyword and hashtag searches on Twitter they can see and respond to mentions of the company, its products, suppliers, etc. and respond appropriately. The scope of this task will vary by company and it needs to be handled carefully, but any established company that isn’t using Twitter in this way simply has its hands over its ears.

One final note about empowering employees to use social media on behalf of the company. It’s in everyone’s interest to clearly specify what employees must, can and may not do. Transparency and disclosure are vital to every social media plan, and it’s important to have someone in charge of ensuring compliance. Mistakes are inevitable but they need to be addressed promptly, lest your lawyers come in and advise you to prohibit employees from using social media altogether (note: pdf download req’d).

The Zavee takeaway:

• Your employees can help provide the kind of experience that produces word of mouth recommendations.
• They also can help you increase the reach and impact of your word of mouth marketing if you integrate them into your social media strategy.
• There are countless ways to leverage employee involvement in social media – be creative!

Our commitment to getting reviews right stemmed from our insight that reviews were another form of Social Media and, as such, were going to be a vital component of the Zavee experience and value proposition. We also learned, based on research with merchants, that many business owners who expressed concern about potential harm from fraudulent, malicious or even accurate negative reviews also intuitively understood the benefit of hearing about issues directly from the customer affected.

As marketers are learning, people will say whatever they want to whomever they want, and merchants don’t have the power to control their customers’ conversations. They can, however, do two important things.

First, they can listen, learn and respond. Thanks to Social Media, including reviews, merchants can make necessary adjustments to their business almost in real time. This is something that every business should be doing, all the time, through every available channel. Twitter and Facebook are great listening posts, but reviews are a channel that exists solely to provide feedback about the customer experience.

Second, merchants can participate in the conversation. By actively engaging with their customers merchants can address problems quickly and publicly; they can provide perspective that helps customers evaluate reviews; and they can favorably shape perceptions about the business.

• Responding quickly is important because unresolved issues tend to fester. Responding publicly is important because it gives the merchant the chance to address at one time a concern that may be shared by many customers.
• Actively participating is the only sure way to get the merchant’s perspective into the conversation. Both the manner and the substance of the merchant’s response can help customers determine how much weight to give a negative review, while the absence of a response does nothing but add credence to the reviewer’s complaints. A measured, factual response may not erase the impact of a negative review, but at a minimum the merchant will have extended the relationship with the customer and demonstrated both interest and respect.
• Simply committing the time and effort to engage customers in conversation sends a positive message to all customers and can go a long way toward shaping perceptions of the customer experience. This can reinforce the positive experiences of current customers and build loyalty, but it also can lead non-customers to have a favorable impression of what it would be like to be a customer. In other words, an impressive response to a negative review can actually bring in new business.

Reviews (via fengergold)

In benchmarking Zavee against other sites that feature reviews we observed a wide disparity in the treatment of key issues. Some sites filter reviews while others list them all chronologically. At least one site that uses filtering algorithms has had to defend itself against allegations that it improperly manipulated the placement of reviews. We decided not to filter or change the placement of reviews, because we believed that the less we intervened in the substance of reviews, the more confidence shoppers would have in them and, ultimately, in the Zavee brand.

We also observed that some sites permitted reviews (both positive and negative) that described experiences that had occurred long before the review was written. We thought reviews that were dated were so likely to be inaccurate that it would be unfair to both merchants and shoppers to have them on our site. We also were concerned, as many merchants seemed to be, that on some review sites there there were insufficient safeguards against fake reviews or even fake merchants.

We addressed these problems by requiring that any shopper who wanted to review a merchant had to have made a purchase from that merchant within the previous 30 days and by permitting only one review per purchase. Zavee solicits a review after every transaction, and the shopper’s My Zavee page lists recent transactions and the time remaining to submit a review. Zavee automatically rejects reviews that do not meet these rules.

We also were concerned about reviews that, while perhaps not fraudulent, seemed hostile or malicious. We initially considered moderating reviews, the way we moderate comments on Zavee Thinking, but we decided not to. There is nothing wrong with having editorial standards for reviews – we are, after all, responsible for the content on our site – but we thought the better way to deal with potential problems was to let shoppers and merchants have their say but remove reviews that violated our Terms of Use.

Because we passionately believe that reviews should be a dialogue, we also made it easy for merchants to post responses to shopper reviews. Merchants are automatically notified whenever they are reviewed and have 7 days to post a response. Responses appear with the original reviews and always show up together in a search. Shoppers can respond the the merchant’s response, and the entire conversation is threaded so it can be seen by everyone who sees the original review.

The Zavee takeaway:

• You can’t control what your customers say, but you can listen, learn and respond to concerns – almost in real time.
• Use negative reviews as a conversation-starter, not a relationship-ender.
• How you handle unfavorable reviews can shape perceptions about your business, for future as well as current customers. Treat reviews as an opportunity to be impressive – you may be surprised by the results.

Update (4/14/10): MediaPost’s Marketing Daily reports that S.C. Johnson has been receiving substantial negative feedback, including reviews, about a new pet care product – and tells Marketing Daily that it is bringing the feedback to its product development team for consideration.

A recent survey found that women increasingly are shopping for clothing online. How does that news help local merchants? A whopping 84 percent of those who reported taking their business away from bricks and mortar stores did so because of poor customer service. And customer service is where local merchants have an advantage over larger competitors. Owners and managers of local businesses usually are closer to the customer, and are often the first to hear about issues or concerns. They have the ability to react to customer needs and even break (or change) the rules if circumstance dictate.

Chanel Boutique on Wicklow Street (via chacrebleu)

One thing local merchants can do to exploit their natural advantages is to adopt a “boutique” mentality. One big difference between boutiques and other stores is their focus on providing a unique, personalized experience, not just selling a product. Customers often respond favorably to that experience, not just by paying extra for it once, but by becoming loyal customers and by sharing their experiences with their social circle. The combination of premium pricing, repeat business and word of mouth is exactly what local businesses want to achieve.
The boutique mentality isn’t limited to retail. There are boutique hotels, boutique wineries, even boutique auto mechanics – a really good one services my race car. Most boutiques are small, but they are defined by service, not size. A small retailer that doesn’t provide a unique experience to every customer isn’t a boutique; it’s just small.

Part of the boutique experience is the sense that the relationship with the customer doesn’t end with the sale. Whether it’s as simple as a follow-up phone call or as elaborate as a series of surprise gifts, boutiques understand that continuing to engage after the sale helps create customers who are not just loyal, but vocal.

The best boutiques thrive on data. Knowing and catering to customer preferences is the hallmark of the successful boutique, especially boutique hotels. But hotels aren’t the only boutiques that have access to data about their customers. With tools like Zavee, almost any business can learn who their best customers are, how much they spend and how frequently.

It may take some effort to fit the boutique mentality into a business that doesn’t already have it. It certainly takes commitment to make it work, because it requires a focus on the customer that isn’t second nature for every merchant. And it sometimes requires some investment, especially for businesses that are new to managing customer data. But it may be just what a merchant needs to compete in difficult times.

The Zavee takeaway:

• A business that wants to charge more, generate repeat business and earn referrals from vocally loyal customers should think and act like a boutique.
• Boutiques are customer-focused before, during and after the sale, and rely on data to understand customer preferences.
• The boutique mentality can be applied to businesses in virtually every category; it just takes commitment and creativity.

Our most important news is that Zavee is almost ready to go live. We are finalizing the launch release of our software and expect to begin processing transactions by mid-January. We began our merchant sales efforts in November and already have signed up scores of local businesses in our South Florida launch market. Our consumer acquisition program will begin in January and ramp up over the next several months.

Shopping, Socially

One of the most gratifying – and, frankly, amazing – things about the process of creating Zavee is the extent to which people who know what they’re talking about are saying the same things we are about Zavee’s core concepts. In short, Zavee is in the right place at the right time.

When we describe Zavee as a “social shopping” platform we recognize that this is a new concept for most consumers and businesses. Social media marketers, however, say that social shopping is poised for growth:

“Social shopping is really still in its infancy,” said Andy Lloyd, CEO at Fluid, an e-commerce technology company. This means retailers and solution providers are still thinking about how people connect with other people around buying decisions in an online environment and how they can facilitate those gatherings. “The challenge is people don’t know what social shopping is or what it does,” Lloyd continued, which is why the adoption rate isn’t very high yet.

Search professionals have been quick to see the advantages of social shopping for merchants, including advantages we discuss with merchants constantly: the ability to connect with customers, enhance credibility and leverage word-of-mouth.

From a consumer perspective, social shopping taps into basic principles of human behavior. Marketers increasingly recognize the potential of social shopping and are aligned with Zavee’s perspective on integrating social networking functionality with search and review capabilities:

In social shopping, you see recommendations and reviews that your friends have shared. You see items that your friends have purchased or brands that your friends have shopped with. This matters a lot when you’re shopping for a digital camera and are stuck deciding between three different models. Of course, the last 10 years’ worth of people’s purchasing histories and written reviews on Amazon may help you narrow your choice – if you can filter out the noise. But those reviewers are entirely anonymous to you, even though they may use a real name and have a rating history with the site.

We believe that 2010 will be the year in which social shopping comes of age. This clearly is good news for Zavee. We believe that our social shopping platform, which also integrates a cash-back rewards program and a mechanism for raising funds for local civic and charitable organizations, offers a compelling value proposition for merchants, consumers and causes. We can’t wait to prove it.

From all of us @Zavee, a happy, healthy and prosperous New Year to all!

The obvious place to start is at the point of sale, where the merchant has the most direct ability to influence customer satisfaction. Here we are talking primarily about intensity and latency: how strongly an emotion is felt and how long the feeling lasts. One clear way to increase the intensity and latency of customer satisfaction is to provide an over-the-top, mind-blowing, truly unforgettable experience at the point of sale (can we call it an OTTMBTUE?). That will certainly keep things top of mind! Unfortunately, the OTTMBTUE has a few drawbacks. First, not all categories and not all interactions are equally suited to blowing the customer away. Second, the typical means of providing an OTTMBTUE involves some form of payment to the customer, such as an upgrade or a free item. While merchants often have to make such a payment to an unhappy customer to right a wrong, applying that strategy in the hope of making a happy customer ecstatic can get very expensive – especially when the customer determines that she should be treated that way at every visit.

On the other hand, it is possible for creative merchants to create extremely high levels of customer satisfaction without giving away too much margin. One of my favorite examples is Tesco, the UK grocery chain. Stuck between a premium chain and a discounter, Tesco repositioned itself as a service-oriented brand. From 1995-2004 the company produced a campaign starring Prunella Scales and Jane Horrocks that used the tagline “Every Little Helps” (we would say, “Every Little Bit Helps”) to demonstrate Tesco’s commitment to the customer. If you’ve never seen this spot you’re missing a treat.

Another way to increase the latency, and perhaps the intensity, of customer satisfaction is to communicate with the satisfied customer early and often. Car dealers and some hotels, among others, get this half right: they email surveys to customers almost immediately but rarely follow up. If a customer gets a phone call after submitting a survey, it is more likely that the customer had reported a good experience or a bad one? Of course it’s important that merchants address issues raised by customers – but surveys may not be the best way to keep a delighted customer both happy and talkative. If a merchant can identify a very satisfied customer at the point of sale, a phone call several days later – just to chat, not to sell – can reinforce the feeling of satisfaction that the customer took away from the store. (Having conversations on social media is also a good idea.) The customer feels special because in fact she is being treated special. The merchant can’t treat everyone this way, and it may require an investment to learn which customers should be treated this way, but reinforcing customer satisfaction can increase the length of time the positive emotions remain top of mind and may even add to them.

Latency and intensity are both about time: the longer the customer’s intention to recommend the merchant remains top of mind the greater the likelihood that the customer will encounter someone who will act on the recommendation. Another factor is confidence. In order to act on a recommendation, the potential customer must have confidence in the recommending customer both generally and within the specific domain. If a customer is not someone who inspires confidence generally there is not much the merchant can do about it, but the merchant should know better than to treat that customer as a source of potential WOM.

via iproclaim.com

However, the merchant can help a customer become more knowledgeable about the merchant’s domain and thereby increase the likelihood that a customer’s recommendations will be taken seriously and acted upon. Domains where the inherent level of difficulty is high are natural categories for this, and, indeed, internet legend Gary Vaynerchuck (almost 850,000 followers on Twitter) got his viral start posting how-to videos about wine on YouTube. Imagine a customer who leaves Gary’s store not just having received solicitous attention and paid a fair price for good wine but who has received an education, too. That customer not only is more credible as a recommender in the wine domain but probably has wine (and Gary’s store) top of mind for a longer period of time than otherwise.

The final point at which WOM is fragile also involves time: the person who receives the recommendation must be at or near the point of intention if he is going to act on it. Even if everything else lines up – a delighted customer leaves the store and immediately meets a friend who trusts her judgment generally and her knowledge of the domain specifically – the recommendation will not be acted upon if the friend has no intention of making an imminent purchase in that domain. Is there anything the merchant can do in this situation? It depends. If the friend has no interest in the merchant’s domain there is really no point to the recommendation. If this is not the case, however, the merchant can try to capture the friend’s contact information and leverage the recommendation as a reason to communicate with the friend (if the friend opts in). If the friend is disposed to trust the customer’s recommendation the merchant may be able to convert the friend to a customer the next time the friend is near the point of intention based on the prior, unsuccessful recommendation. Finally, by continually communicating with the satisfied customer, and indeed by repeatedly providing a positive experience, the merchant increases the likelihood that the customer will again encounter the friend (or perhaps a different one) closer to the point of intention.

http://hearmehearmenot.wordpress.com/

The next step is much more problematic. The customer leaves with every intention of recommending the merchant. But like most emotional drives, it will remain top of mind for only so long. At some point the intention to recommend the business will dissipate, or be crowded out by other things, so it’s vital that the customer encounter a potential recipient of the recommendation before this point is reached. Some customers will reach out to specific acquaintances to make a recommendation while others will wait until they encounter an acquaintance serendipitiously or are solicited for a recommendation.

Then there is the issue of the person who receives the recommendation. Obviously, it must be someone with whom the customer is acquainted. But personal acquaintance isn’t enough. For the recommendation to have the desired impact the recipient of the recommendation must:

• Have confidence in the customer generally as someone whose recommendations would be reliable – no one would act on the recommendations of someone they think is a flake
• Have confidence in the customer specifically as someone who is knowledgeable and experienced in the relevant domain – if the customer knows about wine but not shoes her recommendation of a wine shop will be more powerful than her recommendation of a shoe store
• Be able to understand the reason for the recommendation – this isn’t always an issue, and the intensity of the recommendation can count for a lot, but it certainly helps if the customer can effectively convey the merchant’s selling proposition
• Be at the point of intention – the recommendation will be more powerful if the recipient of the recommendation is ready, willing and able to buy than if she has to remember the recommendation later on, when the emotional drive that she has “borrowed” from the customer has dissipated or been crowded out

As much as anything else, it’s timing that makes WOM fragile. If our hypothetical customer is solicited for a recommendation within the scope of her expertise by an acquaintance who is at the point of intention, the recommendation should be very powerful – unless the customer no longer remembers her experience so intensely or so favorably. If she reaches out to an acquaintance to recommend a merchant while her experience is still top of mind, that recommendation should be powerful, too – unless the acquaintance has just made a purchase from a different merchant or otherwise is not at the point of intention.

In a future post, we’ll discuss some things that merchants can do to make the WOM cycle stronger, and we’ll also describe how Zavee can help. In the meantime, let us know what you do to make WOM work for you.