Geeks and Shrinks

May 7, 2008

Are you listening?

Umair Haque wrote about the new economics of brands, describing how Google and Nike are “choosing to invest in consumers, instead of carpet-bombing them with advertising.” But what is the return on this investment? “The decision to invest in consumer is also a decision to listen to consumers – instead of talk at them.”

One of the most difficult aspects of being a shrink is obtaining the Voice of the Customer, particularly in an unbiased fashion. Part of the problem is that surveys and focus groups only manage to take a snapshot, even though there are some solutions that provide continuous information, and it’s difficult to anticipate the entire spectrum of responses when designing the survey.

If a company makes the decision to listen to customers, as Umair described, the full richness of consumer reaction comes through, as long as it is implemented at all levels. For instance, in email marketing, it is possible for an individual to reply to an email. Some companies (still) have addresses that they do not monitor (occasionally leading to embarrassing results), some send them to call center/customer service for disposition – but how many segment the replies appropriately and use them in the product development process?

The ability for a company to connect with a large number of customers in a unprecedented personal(ized) fashion is a feature of the new economy. Those that exercise that ability will be able to obtain crucial information for fulfilling customers’ needs and enhancing their brands, and those that choose to ignore seemingly minor customer communication can end up with censure in public view.

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May 6, 2008

Trust and information sharing

Filed under: Email list rental, Reputation — Tags: , , , , — rvenkate @ 12:09 pm

JP wrote about trust a short while ago, from the perspective of transmission of information, particularly when the ownership aspect isn’t clear. However, there’s another aspect of information ownership that wasn’t in scope for his post, which is that the trust relationship that he refers to also grants license to use that information only for specific purposes (which may or may not include transmission).

One example that comes to mind is the usage of email address information. Clearly, directly selling the contact information falls into the territory that JP referred to. However, what about the usage of that information without actually passing it on? For instance, many of our customers send advertisements to subscribers on behalf of third parties (aka “list rental”). They don’t pass the contact information on to those third parties; they just enable communications. It could go even further, combining all available information sources for more precise targeting.

The key is to remember that building a reputation is expensive in time, money, or both. Regardless of the legal contract (or absence thereof) under which the information is collected, the short-term gains of selling the information are usually small compared to the acquisition cost of new customers (or new employees, new suppliers, etc.) with a tarnished brand. Without considering both aspects, it’s not possible to determine the NPV of an initiative.

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