Thursday, March 29, 2012

Sandro Castaldo Trust Model

I discovered thanks to a post of Henri Kaufman the work of Sandro Castaldo on customer loyalty building process.Sandro Castaldo is an Italian professor who has worked to identify which are the components of customers trust in one brand. 

Trust is a very complex concept, and in terms of customer relationship with a company, there are many different components which can impact this trust:
  • The salespersons
  • The assortment
  • Sales promotion
  • Communication
Sandro Castaldo found out a way to analyse the interaction between those different factors in order to determine which of them has the most impact on trust.
Here is how it works:
  1. It defines the elements which may influence one customer trust.
  2. He also defines which of those elements impact either the perceived value, the store patronage, satisfaction, the behavioral loyalty intentions and the trust.
  3. He then conducts a survey on customers using the quota method
  4. He then is able, upon the survey, can set the priorities of each element
To understand better how it works, I invite you to visit this link.There is a very interesting paper about how private lable can impact store trust. The whole technique is detailed in this paper.

It would be very interesting to conduct such a survey for your company, in order to understand better the role of each of your customer relationship management components, and being able to monitor them. Sandro Castaldo wrote a book about it: Trust in Market Relationships.

What do you think about it?

Tuesday, March 27, 2012

As I have been running this blog for quite a while now, I have encountered a lot of great articles, which I have discussed here. But more that those great articles (and there are a lot), there are some quotes, which I always keep in mind, as they are food for thoughts. I wanted to share them with you, and I will update as often as I find something interesting here.

Hope you will enjoy it, and feel free to give me some more.

We always make our decision based on what we know and believe. Seth Godin

You can't turn the wind, so turn the sail.Kofi Annan, to President Bashar Assad about Syrian crisis.

Monday, March 26, 2012

We always make our decision based on what we know and believe.

I wanted to share with you a blog post I found on the always interesting blog of Seth Godin.For those of you whom may not know who Seth Godin is, he is a marketing guru, which was at the center of the permission marketing concept.

"We've decided to hire someone with totally different skills than yours..." and then they hire someone just like you, but more expensive and not as good.
"We're not going to buy a car this month, my husband wants to wait..." and then you see them driving a new car from that other dealer, the one with the lousy reputation.
"I'm just not interested..." and then you see the new RFP, one you could have helped them write to get a more profitable and productive outcome.
People lie to salesmen all the time. We do it because salespeople have trained us to, and because we're afraid.
Prospects (people like us) lie in many situations, because when we announce that we''ve made the decision to hire someone else, or when we tell the pitching entrepreneur we don't like her business model, or when we clearly articulate why we're not going to do business, the salesperson responds by questioning the judgment of the prospect.
In exchange for telling the truth, the prospect is disrespected.
Of course we don't tell the truth--if we do, we're often bullied or berated or made to feel dumb.
Is it any surprise that it's easier to just avoid the conflict altogether? Of course, there's an alternative, but it requires confidence and patience on the part of the seller and marketer.
Someone who chooses not to buy from you isn't stupid. They're not unable to process ideas logically, nor are they unethical or manipulated by others. No, it's simpler than that:
Given what they know and what they believe, the prospect is making exactly the right decision.
We always make our decision based on what we know and believe. That's a tautology, based on the definition... a decision is the path you take based on what you know and believe, right?
The challenge, then, it seems to me, is to realize that perhaps the prospect knows something you don't, or, just as likely, doesn't believe what you believe. Your job as a marketer is to figure out what your prospect's biases and worldview and fears and beliefs are, and as a salesperson, your job is to help them know what you know.

I wanted to comment the bold sentence: We always make our decision based on what we know and believe. That reminds me of my customer behavior classes in the United States: One customer decision making process is a complex process, which implies several phases and factors which will impact it.And I think it is very interesting that we should not blame one customer not to have picked our product or service, but we should focus on what triggered this decision, and especially, what we have not done to influence it toward our company.

The difficult part out of it is to be able to get this information, because as Seth is explaining, most of the time, the customer will keep this information for him, not to be judged.I also believe that in some ways, the customer may not be sure that he took the right decision. He would like to have but as nowadays we have always the choice with a large range of products whatever we buy, the decision making process is becoming more difficult.This is the reason why customers are seeking for customer reviews to make sure and to comfort their choices.

As long as there is a competition, there will always be customers not buying your products, but it is important to know what information they did not have, and what they believed, in order to get as few people as possible shoppers leaving your store with empty hands.

What do you think about it.

Friday, March 23, 2012

Backplane: Should Companies Create Private Virtual Communities?

It has been years now that Facebook interests companies in order to bond with their customers/communities. Marketers have understood how powerful social media could be to create brand awareness and to reach their customers in a unique way.

But Facebook almost monopoly on social communities bring some questions: Is it a good thing that companies rely on a private company's tool to connect with its customers? Indeed, it is a normal behavior for a company to want to master and control what it is doing. Indeed, Facebook can whenever it wants change its policy which could have great impact on people's community.You should see what is going on with Google's decision to charge company using Google Maps: People are moving away from Google's tool, which can have many consequences.

Also another important question is: Is Facebook really the best way to connect with my customers? Facebook has a specific way to create Facebook pages, and it is not as easy to customize the page.The main strength of Facebook is that it has already a large number of users, and it is therefore easier to grow a community quickly. But afterwards comes the will to animate this community, and maybe there are better tools than a Facebook page.

This is the reason why, a lot of companies are willing to create their own social media, outside of Facebook. And this is where comes Backplane. Backplane is a company which has built Lady Gaga's virtual community.The famous pop star is known for having a large community following her both on Facebook and Twitter. The Backplane's ambition is to leverage the know how brought by the Lady Gaga's experience to other companies willing to create a similar link with their communities.

"Backplane is exploring the possibilities for mainstream brands, from Nike to ExxonMobil, to create virtual communities that foster deeper relationships with customers. (In the case of ExxonMobil, the likeliest passion for the firm to tap is not for petroleum itself, but for the different brands of car it powers.) The trick is to find those key influencers and amplify their voices. Mr Carter says that experience with Lady Gaga has taught him that what a super fan says can sometimes have a bigger impact on fellow fans than a word from the Lady herself. "

It reminds me sort of of Tripnity, a company which has developped a long time ago now (at least 5 years) a community for Air France's passengers to connect with people taking the same flight at the same time (bluenity). The community is still on, but I am not really sure about the success.

The question is, should companies try to create their community outside of Facebook, and use the service of a company like Backplane?

I am not sure about the answer: I think it is risky to rely on Facebook, because Facebook could decide soon (as they will become more eager to generate profits as they will be in the stock exchange market) to charge professional use. We all know that, at the spike of the social commerce hype Facebook asked for huge commissions in order to use Facebook for selling purposes.

Now Facebook knows how to create powerful communities, as they have a long experience on it.Also, you have now a lot of people with the expertise of communities on Facebook (advertizing agencies, companies...) because they took part of several of them. It is therefore easier to leverage this expertise.

But I believe that the main strength of Facebook is that people are already registered in Facebook ,and entering a community is much easier for a user than to register on another service.I believe that the registering process is a real threshold, and Facebook has the chance to have people already on it.

Nevertheless, I think the question should be asked depending on the budgets and the ambitions of the brand.

What do you think about it?