Sunday, November 29, 2009

Rewarding Vs Prospecting

It is challenging to set a customer relationship programs which will drive prospect in and reward the best customers. The whole idea behind customer relationship management is that every customer is different, and that they have a different value for the company. Hence, some customers might cost you money because they requires a lot of after sales service for very few sales.

A bunch of companies are mistaking by thinking they should focus on believing that good customers should not be rewarded into CRM programs. The belief is that since they are good customers and that they are happy anyway about the service, there is little more to expect from those customers. But actually they are the ambassador of your brand, and you could leverage them to improve your products and customer service.

Also, one of the main challenge is to get an agressive sales strategy. As competition is getting tough, it is difficult to get a new customer, and hence, companies are willing to pay lot of money to get them.

That is what is going on with cell phones companies, where you'd better change your service if you want to change your phone, as companies are giving better discounts to prospects than actual customer. But this is a dangerous game to play too.

Focus On One Problematic
You can't at the same time reward loyal customers while getting new ones. Of course, owning a great loyalty reward program will turn some new customers in, but that shouldn't be the main goal.

Get A Large Portfolio Of Reward
I believe that the reason should be in providing different kind of customer advantage upon you are targeting loyal customers or prospects. Probably loyal customers would imply more after sales support or intangible assets (invitations to special events, or others), while a prospect is just seeking for the best deal right away.

Anyways, it is always difficult to size the reward, but it is important first to keep your best customers rewarded, because they give you more than sales, but also potential new leads, and secondly, to keep some rewards for prospects that are hard to measure compare to your other customers.

Thursday, November 26, 2009

Orange Facing Legislation To Cross Data Mining

Orange is one of the world leading provider of Internet and cell phone networks. The company owns by instance the biggest French marketshare.

Orange aims to leverage its customer data base in the DSL Internet market to prospect new customers, and hence to make cross selling strategies.

Thanks to data mining, Orange will be able to segment its existing customer data base to provide the right message at the right persons. The challenge of the industry is the conversion of Internet and mobile devices, which requires companies to propose comprehensive bids including, phoning, Internet and TV access.

So far French government has not allowed Orange to do so. Probably because Orange had a strong customer data base due to the former monopoly it had couple of years ago, prior to the privatization of the industry. Hence, they have a great number of customers that have been given to them at this moment, and that have never decided to switch.

I believe there is indeed a great opportunity for Orange to get leverage from this asset. However, so far it doesn't seem to be possible.

Wednesday, November 25, 2009

Smartphones Sales Still Boosting Cell Phones Figures

The number of smartphones users is constantly growing and is the main source of growth for the cell phone market.

According to Gartner if cell phones sales has been steady, increasing by 0.1 %, with 309 million devices sold, smartphones counts for 12% of these purchases. I believe this trend will go on with the christmas period, and will see more and more people equiped with multimedia gears like Iphones, Blackberries or Android devices.

Tuesday, November 24, 2009

LinkedIn Brings A Twitter Feature

It has been a while I am waiting for such a feature. Same thing that the list feature on Twitter, Those two main social media are getting new synergies. LinkedIn is a great service that enables first to create an online profile, or extended resume to promote online, and secondly, to connect with your business network. But one of the weakness of LinkedIn was that it was static, meaning there was nothing on your profile that would evoluate in such a manner that it would drive users to go on their account on a daily basis. For example, the Facebook power, and the reason why it is so attractive for brands and advertisers, is that users owns a feed of actions and events which convinces people to check often what is going on. The same thing for Twitter. This is the Instant Web.

Now LinkedIn already had great other features that have been added over the time. For example the question and answers feature was pretty nice, but still limited I believe. Now that you can post your Twitter feed on LinkedIn, it makes your resume/profile interractive, and shows out what you are at the moment.

Now there is still some other features that I miss on LinkedIn. Especially, all the features that are dealing with groups. At some point, I was developping the alumni association of my master at Dauphine. But compared to Viadeo's hub feature, where you can add up job proposition, creates forum or even have a calendar of event, LinkedIn has limited options.

Hence, I believe that LinkedIn should boost this part of their business to enable people to create great private business groups. But I believe it will be on soon...

Sunday, November 22, 2009

Video Counts For 27% Of Internet Use

I believe we are done with the web 2.0 trend. Web 2.0 enabled people to get in contact with each other, share, but also creates online. It has been some kind of revolution, and now the use of social media is going mainstream, which changes the way companies and brands interact with customers.

This revolution has been supported by websites like Youtube or dailymotion, which allowed people to broadcast their own content in a very unique and innovative way. Thanks to the bandwidth capacity that rocketed up, video has become one of the most consumed media on the Internet. According to a recent study, video watching counts for 27% of the Internet use.

I have attended not so long ago the Parisian Videocamp 3, which was focused on the use of video on the Internet. There is still room for innovation in this business.

But something that is very interesting about this study, is to see that Youtube has revolutionized the way to consume video. Hence, in the web 1.0 era, video was mostly downloaded from peer to peer platforms, whereas now it is consumed instantly by streaming. This is now I believe the "web 3.0", or the evolution of social media: the Instant Web. It will be the theme of Leweb Paris conference. Consumer want everything now, and so do they for video. They don't want to wait for downloading content.

While the overall video numbers are up, Sandvine reports that P2P usage is down to 20 percent of total Internet traffic, from 32 percent in 2008. Sandvine said that the amount of P2P usage is growing on an absolute basis, but VOD applications are growing faster. Sandvine looked at the bits per second, per protocol, along with how many active hosts per protocol on the network.

This dip in P2P echoes other recent reports from Cisco and Arbor Networks that show use of peer-to-peer file-sharing as a percentage of broadband usage is on the decline. In June of last year, Sandvine said that P2P traffic was hogging up bandwidth, generating 43.5 percent of Internet traffic, but that study was just of several, unnamed “leading” service providers, which could explain the discrepancy from the 32 percent number released today.

I believe that the Internet is going to pursue its revolution on how we consume videos. The very same way it changes the way we consume Newspapers, or more widely written news, and radio, with customizable content and podcasting, the revolution of video consumption is on.

Friday, November 20, 2009

Social Media Users' Profile Around The World

Want to have some statistics about social media users? High tech company Forrester has published the results of one of their studies, which establishes an outlook of the use of social media in different countries.

Forrester sets 6 profiles of social media users, depending on their level of use of the media:
  • Consumers
  • Creators
  • Critics
  • Collectors
  • Joiners
  • Spectators
  • Inactives

Thursday, November 19, 2009

Brand Equity Worth Much More Than Anything

Brand equity might be something intangible and hence not really the specialty of CRM experts, but this is something so strong you can't deny. I was at the Disneyland park the other night and as I was leaving the movie theater, I have noticed that even though the park was closed, the magical music of Disney was still playing, all lights out. This might seem totally unecessary for most of you, but this is those kinds of little details that build strong brands, and that set those company apart.

The Example of Coca Cola

Some companies have based their value on their brand. I believe Coca Cola is the best example. Coca Cola has existed since more than a century and based its success on the very same product. In the whole history of Coca Cola, most of their product sales is the classic Coke. No major innovation has brought in, neither in terms of products (the failure of the New Coke is actually one of the most outstanding marketing case study), nor in terms of packaging/distribution, nor in terms of sales promotion.

But Coca Cola has been able to invent a myth, and foremost to keep this myth alive and well being, that it sets it apart.

Of course Coke is a great product and it helps, but the branding effort has been tremendous. Same thing for Disney, that has been able to pursue its greatness thanks to marketing superiority.
A brand must live
What is important is that the company embraces the brand value, and that this brand lives in their every day actions.

There are a lot of tools and ratios that helps chief of marketing to measure their brand return on investment, and I like to discuss about branding score, which is a wide concept to be thought.

But once more branding is also another important part of your customer relationship management strategy, because the brand is the face of the company, and it is the personnality the customer is in contact with when it uses the product or simply when it is in contact with an ad.

Tuesday, November 17, 2009

Zappos Aiming To More Personalization, one of the hottest internet retailer, which masters the web 2.0 technology, has recently hired choicestream to empower their website with more personalization features. The goal is to enhance customer experience and ultimately raise the average sales per customer.

What is funny, is that Zappos has been recently bought buy Amazon, which is the leading retailers in terms of personal recommendations. As the merge hasn't been finalized, Zappos staff declared they were still operating individually and hence, could decide what they wanted on an operational stand point. But still, in terms of convergence, it doesn't really make sense, as Amazon is clearly the leader in the industry on this aspect. It is funny to compare with what Carrefour did not so long ago, establishing a contract with Publicis for its communication, forcing all its business units to switch for Publicis.

Anyways, what really matters is to see that Zappos is still pursuing customer service greatness, and as the company matures, it is getting equiped with the finest technologies to provide great customer relationship.

Monday, November 16, 2009

France: 60% des internautes adeptent du CtoC

le CtoC (customer to customer) est en train de devenir un axe majeur de la distribution en France. Ainsi, 60% des internautes ont soient achetés, soient vendus à un autre particulier. Cette statistique est fondamentale.

Nous sommes ainsi en train de passer d'une société de propriétaire, où les utilisateurs possèdent leurs biens, à une société d'utilisateur, où ce qui est important est l'utilisation du produit. On voit aussi un autre courant très important qui est le prêt d'objet ou la location via l'Internet.

A l'heure de la crise, où il est important de faire des choix pour conserver un pouvoir d'achat fort, les français raisonnent plus en terme d'utilisation que de propriété. Ainsi, pourquoi acheter une perceuse, alors qu'on ne l'utilisera en moyenne que deux fois dans sa vie?

Le CtoC, et les autres courants alternatifs de distribution vont modifier rapidement les pratiques des distributeurs.

On n'est qu'au début de cette révolution qui risque de devenir un axe déterminant de diversification et de consommation pour les distributeurs.

ix internautes français sur dix (60%) ont acheté ou vendu au moins un objet entre particuliers sur le web au cours des douze derniers mois, un moyen de recycler, payer moins cher, trouver des articles épuisés ou arrondir leurs fins de mois, selon un sondage publié lundi.
En 2008, ils étaient 56%. Si on prend également en compte les vide-greniers, 77% des personnes interrogées ont échangé des objets entre particuliers, selon le baromètre "C to C" (commerce entre particuliers) PriceMinister/La Poste réalisé par l'institut OpinionWay.
A l'achat, la part du commerce entre particuliers sur internet a passé un cap symbolique, se hissant à 51% contre 49% en 2008.
Un internaute sur cinq (21%) a acheté des livres sur la Toile, 14% y ont acquis des vêtements, et 13% des jeux vidéo. Le livre arrive également en tête des déclarations de vente sur internet (12%), suivi des DVD et VHS (8%) et des vêtements (8% également).
La principale raison évoquée pour vendre ou acheter sur le web, avant même le prix, est que "cela réduit le gaspillage, cela évite de jeter, c'est comme du recyclage": cet argument est avancé par 49% des personnes interrogées.
Ensuite, 41% relèvent que cela "revient moins cher à l'achat", 36% que c'est un moyen de dénicher des articles rares ou épuisés. Près d'un tiers (30%) y voient la possibilité d'augmenter leurs revenus. "La préoccupation budgétaire reste forte en ces temps de crise économique", commente l'étude.
Parmi les principaux freins à la vente sur la Toile figurent la peur de ne pas être payé (71%) et de devoir régler des frais de mise en vente (59%) ou une commission aux sites internet (55%). Un quart des personnes interrogées estiment que "c'est compliqué de faire un colis et de l'expédier", et 11% mettent en cause la qualité de l'acheminement, contre 17% un an plus tôt.

Friday, November 13, 2009

Statistics Is Not Everything

CRM strategies get a lot of attentions of CEOs due to its capabilities to measure campaigns efficiency. Thanks to new customer relationship management tools, you are able to get clear pictures of the efficiency of your marketing programs, and what your customers' value is.

But this system is biased as multi channel distribution has become common nowadays. Business has become more and more complex. Now online retailers are opening stores like Dell, and also brick and mortar companies like Wall Mart are setting up online stores. Moreover, brands are also getting more and more online as Apple or Nike do with their concept stores.

Also, social communities have enable customers to speak about brands and their customer experience, which is valuable information that still need to be explore.

I have read not so long ago that customer to customer (CtoC) business is also growing, and we are going from an ownership society, where people owns things they use, to a user society, where the use primes to the ownership, and where renting and borrowing becomes more attractive than buying. 60% of French Internet users have at least bought or sold something online to another person.

Hence, it multiplies the number of information sources, which makes it complex to get clear stats about customers.

The utopia of knowing everything about your customer has probably gone away. Macy's has declared that it generated $50 billion thanks to its Online activities, either it is shopping online or getting traffic out of their websites, but was not able to explain exactly how they have figured it out.

Statistics is not everything
I wanted to correlate this fact with an article I found about basketball. Basketball is a sport about stats, where you can have a clear picture of the individual performance thanks to the number of points, rebounds, assists, blocks, or shot percentage a player had. There is also an indicator, called the PER (Player Efficiency Rating), that mixes all this factor to rank the best players in the game. Here is a table showing up the performance of the bests.

N#NomPER1Lebron James31.762Dwyane Wade30.463Chris Paul30.044Dwight Howard25.445Tim Duncan24.516Kobe Bryant24.467Brandon Roy24.348Tony Parker23.479Dirk Nowitzki23.2010Al Jefferson23.16

If you know a little about the NBA, you must know that Kobe Bryant is considered as one of the best player to have ever played, and one of the best right now. According to this table, Kobe would not even be in the top 3, but only the 6th player. Actually Kobe in his whole career would have never reached the score of 28, and never been part of the top 3, even when he's been named the MVP of the league last year.

The conclusion is that statistic is not the whole picture. Kobe Bryant's greatness go beyond his stats, but his capability to be a leader in the money time. Statistics can't measure the number of games he won by making the last shot, by cheering up his teammates, or by defending hard.

That is actually the reason why the Most Valuable Player (MVP) trophy doesn't reward the best player of the league, but the most valuable, the one that contributes the most to the team's success.

Customer relationship management should not be seen as a way to measure efficiency or to get accurate stats about its clients. It should be seen as a whole idea and will of a company to get superior customer service. A lot of companies doesn't own a loyalty reward program but provides superior customer service which leads to high revenues.

Hence, customer relationship management must be considered not only on an information system point of view, but also in terms of customer experience, which is the ultimate goal of such a strategy.

Thursday, November 12, 2009

Rupert Murdoch to Remove His Sites From Google

In my opinion this video is about to revolutionize both the news industry and the Internet consumption of information. This video is an interview of media tycoon Rupert Murdoch discussing about his business on the Internet, and in particular, the close relationship the different news websites has with search engine.

We all know that the news industry is experiencing a great crisis since the arrival of blogs and the boom of Internet. Now information has become fast, complete and free, and hence it is difficult for newspapers company, Murdoch's core business, to explain why someone should pay for information.

Now, Murdoch explains 3 very important points:
  1. No one owns a profitable news business on the Internet. Some influent bloggers or websites break even, or make little money, but no one makes actually profits. Murdoch admits that in overall, his constellation of newspapers website doesn't make a profit of their activities.
  2. There is not enough advertisers in the world to set up a business modell that would create profits out of a news website. Advertisers are not milk cows, and a lot of web 2.O companies have forgotten that point. You might generate millions of visits, it doesn't mean you'll have advertiPublish Postsers that could pay you enough to generate a profitable activity.
  3. Google brings you traffic, but it is not loyal readers that use Google to land on your pages. This is interesting on a customer relationship management point of view. Because they are occasional readers, there is little to expect in term of revenue generations, and hence, it is in Murdoch's mind impossible to create a business plan out of those occasional people. Actually, the newspaper industry thrived on people getting subscriptions. This customer base was securing the breaking even point of the companies. And now with the Internet it is difficult to forecast such a thing.
Hence, according to all this idea, Murdoch might decide to take his newspapers website out of the Google search engine results.

The main question is about monetization, and business model on the Internet. At the moment, it is hard to see where the news industry is heading to.

Old Fashion
Now Murdoch is also old school. I mean, the news industry has changed and you need to face it. Of course, google is a huge part of the change, but there is also the Instant web coming up with Twitter.

Now, I must admit that Murdoch is right at some point, it is important for people to realize the value of information, and that it costs money to bring content and editorial quality. I was at the Paris Video camp last month and monetizing content was one of the main issue. Because blogging, googling or Twitting lives out of this content that professional journalist gets.

I still believe that there is still some room for new business model for the news industry.

Here are some other interesting stats about news industry and Google:
  • On a weekly basis Google and Google news are the top traffic providers for account for over 25% of’s traffic.
  • Over 44% of visitors coming from Google are “new” users who haven’t visited the domain in the last 30 days.
  • Twitter and Facebook sent 4% of US visits to News and Media sites in October 2009. (via @Hitwise_US)
  • The percentage of upstream traffic from Facebook and Twitter to News and Media sites is up 490% year-over-year.

Wednesday, November 11, 2009

First Moment Of Truth: In-store Marketing Beats Traditionnal Advertising

This post is linked to the one I have already written about the
First Moment Of Truth. This topic is very important to me as I am working the retail industry. A new US study shows that "nearly a third (32 percent) third of the 999 shoppers polled online in March said in-store marketing is very effective. Only 27 percent said the same about ads living outside of the store."

The survey, which is part three of the "Gone in 2.3 Seconds: Capturing Shoppers with Effective In-Store Triggers Series," found that the shopping experience is crucial for marketers. Sixty-nine percent of those polled called the in-store experience a “make or break” scenario. While 65 percent of shoppers are making lists, brand decisions are still being made at the store according to 60 percent of respondents. End-aisle displays are the most engaging according to 70 percent of those polled followed by merchandising displays (62 percent) and department signage (58 percent). Ceiling banners and overhead mobiles have the least impact. Shelf strips (55 percent) and shelf blades (50 percent) have become more important especially among the Gen X and Gen Y crowds who feel the more information the better, per the report. Overall, women and Gen Y were most influenced by in-store marketing efforts. "Understanding high potential shopper strike zones has become increasingly critical given the intensified battle for consumer loyalty and share of mind in-store," said D’Anna Hawthorne, strategy director at Miller Zell, a retail consultancy. The report was conducted by the National Research Network on Miller Zell's behalf.

In-retail marketing is mostly underrated, but in the grocery retail industry it is one of the most powerful tool you could use. Of course, out of the store advertising is very important to generate leads and traffic in store, but growth of revenues comes from in store customers' decision making process. And new technologies could have a great impact in helping customers to make their decision.