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?

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.

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.

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?

Customer Experience Is Key In Ecommerce

Great video I found on the Internet about online shopper experience, while going through the paying process.

It is very true that the whole process is very complicated, and is a real turn off. It is therefore important to pay a close attention to this key part. It should be an e-commerce website know-how to make the payment process easy.

In traditionnal retailing, it is the arrival of automatic cashiers that allowed supermarkets, hypermarkets, and the whole modern retailing to spring up. Payment is a basic thing, but it does matter.

Thoughts About The Non Searchable Web

The Internet is changing. And it is changing fast. Social Media is modifying the way we consume and find information online. And you can see it shifting on a daily basis. Prior to the rise of social network, especially Facebook and Twitter, search engines was the path to reach information on the Internet. Therefore websites, either information one or ecommerce websites, needed to apply the rules of Google (Mainly), Yahoo and Microsoft, in order to generate leads. 

Search engines have by the way been a key factor of the exponential growth of the information, making it simple to navigate online.

But now, people spends more and more time on social network, and hence, they tend to access information not through search engines, but Facebook or Twitter. And it is a very important part that business must take care of. 

Indeed, the old rule of search engine optimization are not the only way to get visibility. This is the reason why marketing departments are spending more and more money on Social Media in order to get exposure.

It is very different to try to get the best ranking possible on Google, with specific coding rules, and to get a great exposure thanks to Facebook. Both tools don't work the same at all. 

I found this very interesting article, explaining the difference between search engine optimisation and social engine optimization.

Here are the rules it implies:

Step 1:

• Of course content needs to be planned for social media use.
• Content needs to be designed to “enable” social dynamics.
• In other words: the content must be created in a "socialisable" way from the start.

Step 2:

• It is no longer possible to rely exclusively on the analysis of user behaviour and motivation without also considering the social context.
• In designing social dynamics, user experience (UX) plays a very important role, so we should begin to place UX closer to [SEO] (Extension of SEO as Social Engine Optimization) than ever before. 

Social media is defenitely changing the web.

An Ode To Competition

I wanted to share with you some thoughts about several news which happened the past few months. All of them are linked with the competition concept.

 Competition is core to our capitalist society, and is supposed to stimulate low prices and innovation. Competition, as a matter of fact, is not something natural for companies. It is something that any corporation would try to avoid. Indeed, competition means that you can not master your business model. You have external factors, such as direct competitions (companies producing the same kind of products), indirect competition (companies which propose substitution products, or products which gets into the same budget for one client), customers, regulation, foreign companies getting into one market, and so on. To know more about these factors, you should look at the Porter matrix.

 Companies indeed try to escape from competition, it is the whole idea behind the Blue Ocean Strategy: Creating a space where you can not be compared, where your products/services are unique. Nevertheless, competition is something very important in business. Because competition is what drives innovation, and better prices for companies. Here is a video of Eric Schmidt, former CEO of Google, during Le Web 2011. He would like to see more competition in the Web 2.0 world outside of the Silicon Valley. He believes that it would stimulate the whole industry and therefore would benefit to innovation.


 There is also a very important part about competition: it forces companies to pay more attention to customers. This is when markets mature that you see companies developing customer relationship management strategy.

It also forces them to create new services. For example, when Pizza Hut proposes to deliver its pizzas in 30 minutes, then it forces the whole competition to follow the lead, and to propose the same.

 I take as an example what is going on in France, with the arrival of a new mobile network operator Free, which proposes new discounted fares. Prior to its arrival, there were three main competitors sharing the markets, with large margins, and therefore there was no real competition. But then, Free decided to enter the market, and to provide discounted prices, in order to cut the bills by half. After the arrival of this new competitor, other companies launched counter offers in order to align their fares. To sum up, we can say that competition, even though it is tough, is always a good thing, because it makes things going forward. What do you think about it?

Facebook And Profitability: Interesting Video And Some Thoughts About Potential IPO

Facebook keeps growing at a fast pace, and has matured as a strong marketing media, used by a large number of companies throughout the world.

I recently watched this video on Youtube, and wanted to share it with you.Unfortunately I am not able to upload it on my blog...

It is a CNN show where analysts discuss about the move of Godman Sachs to buy for $450 million of Facebook shares, evaluating it at $50 billions. It was on January 2011, a year ago.

At this time, Facebook was counting 600 million members, $2 billions in revenues. The analysts are discussing about the actual profitability Facebook may get. Indeed, it is very difficult, and it remains difficult now, to know exactly what kind of profitability Facebook is right now achieving. Also the fact that Facebook is not public, it does not need to give specific financial data, which could help us see how it works.

Facebook and social media company in overall is a brand new business modell. And as all new groundbreaking business modell, it is difficult to analyse the company's result and profitability in ten years from nom (which is what really matters).

Facebook has great ambition in 2012 to launch an IPO, and to enter stock exchange market. It will allow the company to raise massive money, and therefore give a lift to their effort of developping a leading advertizing hub, to attract advertizing budgets from companies and communication agencies.

 

This video has been published a year from now, and since then, very few information on the financial and business end of Facebook have been released. If Facebook actually really wants to enter the stock exchange market, they will have to publish some information about its profitability, and this is based on these information that the company will actually be rated.

The context is pretty tough for Facebook for a potential IPO:

• The world is experiencing a major economical downturn, and it impacts most of the Index, including Nasdaq
• The competition is getting tougher as Google is reaching more and more users with Google Plus.
• A lot of regulation complains have come up with Facebook, and new laws restricting Facebook's terms of condition may hurt its will to master users' data for commercial purposes.

2012 will be a crucial year for Facebook, because even though the IPO does not happen this year, Facebook will have to prepare for it, and we will probably have more information about Facebook's actual results.

Some Thoughts About Tablets And The End Of Computers

Tablets have been the biggest success in the high tech market in 2011. We have seen tablets blossoming and most of the computer manufacturers have launched their products. The two great leaders remain Apple with its Ipad, and Samsung with the Galaxy Tablet, empowered with the Android O.S.

I remember having read couple of Loic Lemeur's about Steve Jobs considering that computers were "trucks", and that ultimately they may disappear. But I am not really into that state of mind.

Here is a very interesting video I found on Youtube, where Bill Gates give his thoughts on the Ipad.

Obviously, as Bill Gates explain, his opinion is biased. But I must agree also with one of his point: there is a lack of ability to edit things with a tablet.

I personnaly own a tablet (an Ipad 1) and I truly love it. I use it all the time, read news, watching videos. It is a great device, which actually is in a lot of cases easier to use and better than PCs, even laptops.

However, a tablet is not enough, if you have to own only one computer device. Indeed, I find it very hard to write a blog post, or to use a worksheet, or edit a powerpoint presentation. A computer remain by far the easiest way to create or edit something.

So I do agree with Bill Gates when he says there is a lot of room for improvement for tablets.

The fact is that I don't believe we will have a sole "computer device" at our hand. The tablet is the perfect example of what is happening: We did not really need a tablet, but it just expands our connection with Internet.

And computers, the ones we use to edit and create which will exist at least for the next decade and beyond, will be a slight part of our interaction with computers and Internet.

Most of our "products", or "things" will be connected:

• We will have our smartphone, connected to the Internet, with enough computing power to play, to watch videos and so on.
• Our tablets, to relax and have access to Internet
• Our computers to work, to edit, for "inputs" as Bill Gates say
• Our car, where we get more and more options to access to social media, to GPS information (traffic, restaurant yellow pages, among other things).
• And all the things we are not aware of, but that will eventually come.

Sort of like in the Minority report film, we will have access to computers and Internet every where, and therefore, tablets will have its place, but I believe not the central place, and computer also will have an important place in it.

I believe that what will remain the core, will be the smartphones, as they are always on people, so the easiest way to get in contact with the Internet.

What do you think about it?

2011: A Year To Remember

In these times, it is a tradition to look back and go through all the main events which happened last year. 2011 has been a long year, full of important moments.

Here is a melting pot of the different events that marked the year:

• The Japanese Tsunami
• Fukushima's nuclear catastrophe
• Usama Bin Laden's death
• The rise of democratic protests in the arabic world
• The Greek crisis
• Then, the following Euro crisis
• The death of Steve Jobs
• The Dominique Strauss Kahn affair
• The Lybian war

I don't remember another year which could have been so full of important events. 

Some Facts About The Mobile Application Market

Mobile application has been a gold mine for a lot of people. And it is indeed a category still growing at a fast pace. I found this very good article which gives us some data about how mobile applications work.




It is a very interesting information. That shows you want should be your target depending on the platform in order to consider your application productive. You can see that there great gaps between the different services. That shows that a lot of the different services may disappear soon. For example, Blackberry has unfortunately failed at developping an interesting app plaftorm. Google has clearly become the leader in the market.

Freemium is becoming a more and more important part of the business model of mobile applications. The bigger the audience will be become, the larger the advertizing opportunities will be, and the easier it will be to propose free applications.

This is an interesting one, because supposely it explains that mobile advertizements are more efficient than Internet once. However, I would like to know what they consider as mobile campaigns. It is more and more difficult to identify mobile campaigns, as now they are closely linked to the Internet. The consumption of email and social media thanks to mobile devices constantly grow, and it is important to consider these new usage to propose an accurate way to deliver commercial messages through those devices.

I remain skeptical about the methodology of this chart, as I do not know the data itcomes from, but I believe there is something to digg there.

The mobile aplication market is for sure a marketing with a great future ahead:

• The penetration rate of smartphones, and other mobile devices allowing to download and use applications is growing at a very fast pace.
• The market is becoming mature, and users are increasing the number of applications they download.

Insights About Marketing On Facebook

I wanted to share with you a great article I found on a blog about the cost of marketing on Facebook. It has been a long time now that I have interested myself in social media marketing, and it is impressive how fast it grew. 

You can check the figures, they talk for themselves. But I just wanted to underline some facts about it, that I believe are interesting to understand and notice:

• It does cost money to communicate on social media. A common wisdom, especially at an early stage was that it was cheap and almost free to communicate on social media. Also, a lot of people thought it would be a great opportunity for small business to communicate, as it was a fast growing medium, and the freedom of speech would bother and limitate big corporations. However, it is the total opposite that happened, as the medium became pricy, and the efforts need to be high in order to bond with the community.
• There is no cost scaling possibilities.Whatever your number of followers/fans is, it will cost you per user about the same price. It is very diffferent from the other "direct marketing" tools, where the bigger the data base, the cheaper the costs are.
• There are big gaps for cost per clicks. Now it would be interesting to see the return on investment of the different categories. Indeed, cost per click is not really important. What does really matter is the conversion rate, and the way you may transform one lead into a customer.

Quand Google prend la plume

Je souhaitais réagir à l’édito du numéro de décembre 2011 de Marketing Direct Magazine. En effet, cet édito est consacré à Google, et notamment à la stratégie de recrutement du géant de l’Internet.

Le cœur du modèle économique de Google est le « référencement payant », avec les fameux « keywords ». Google, et ce depuis de nombreuses années, à recours à des campagnes de marketing direct pour démarcher les entreprises, petites ou grandes, en offrant des offres de tests avec des bons de xxx € d’achats.

La rédactrice, Dominique Fèvre, met l’accent sur le côté incongru de cette société vivant sur la révolution du marketing direct vers le numérique, qui utilise un support pour le moins traditionnel, qui plus est en crise (il suffit de voir l’état économique de la poste américaine).

Mais, comme elle le signale, ce n’est pas si abérrant : le média papier, et courrier reste un média très important dans la relation client. En effet, parce qu’il se rarifie, il en prend encore plus de valeurs. Le média papier est beaucoup plus personnel que le média Internet. Il conserve par ailleurs d’excellent taux de transformations.

J’ai toujours été partisant du mailing. Il est d’ailleurs, bien qu’ancien, l’un des médias qui permet le plus de laisser libre court à la créativité (choix du papier, des couleurs, de la découpe etc…).

Google a bien raison d’utiliser un média papier, et depuis le temps qu’il le fait, je suis sûr que c’est pour une raison.

Et vous, qu’en pensez vous ?

Where Is Heading Twitter ?

I have always been a big user of Twitter, which is actually my favorite social media. Nevertheless, and for quite a while, I have been wondering about their business model and their ability to generate long term revenues.

One figure comes up to my mind. Twitter has 100 million users. It is a pretty large base, and it makes it one of the most used social media in the market. But when you pay a close attention to this figure, Twitter is by far smaller than Facebook, and on an international scale, it remains small. Will it be enough to become an unquestionable media?

To me, the question is not solved yet. I have learned recently that Twitter is still raising funds in order to develop their advertising platform. It is for sure a very important step they are taking. They now focus all their efforts on developing this needed business model, and achieve profitability. But it has been several months that they are working on it, and still, it is unclear if they have really made any progress.

Twitter is a new medium. And most of the new medium, like television or radio, have started by providing great quality program before becoming profitable. Eventually it works. Twitter has no questioned change the way we consume information. Twitter it also changes the way we interact on the Internet. And it really brings added value to the user.

Twitter suits well for:

¨     Accessing information fast on a mobile device thanks to its short text messages

¨     Being informed to the most recent news.

¨     Interact with others who share the same interests.

But once again, Twitter really needs to find a way to monetize its service, otherwise its system may have no future.

I think they should have focused on this point right from the beginning, as it would have been easier afterwards to adapt the platform to advertisements.

How To Bring Value Thanks To Customer Experience

French newspaper "Le Nouvel Economiste" dedicated the headlines of its Leadership & Management section to customer experience. It is a vast topic which is very familliar of mine. Indeed, I am a true believer that top of the line customer experience can bring long term revenues to a company. You can take as an example Starbucks, Nespresso, or other popular ones.

But what is customer experience?

Customer experience encompasses all the emotions linked to a purchase, before and after it. Therefore we can consider two main components:

• The shopper experience: Before the good or service has been purchased.
• The customer experience: When the customer uses the good and after.

The goal is to propose more than a product, and being able to bring added value aside of the product's one. It becomes more and more difficult to bring "real" innovation through products as markets and technologies become more and more mature. Therefore, the best way to create something extra is to base it one something immaterial.

The key factor of success to create such an experience is to pay attention to all the different channels the customers use to get in contact with the brand. It goes from the packaging to the websites, and of course, there is a particular attention to pay to the point of sale. 

There is also one trap not to get into: To create a customer experience which does not take into account the company's profitability. Indeed, creating a great customer experiences implies a lot of costs in terms of branding, design, communication and so on. But it is also very important to size the increase of profitability it leads to. This is a very difficult task, because as an intangible concept, customer experience takes into account a lot of different costs, from stores furniture to the sales people uniforms, and linking the increase of sales or of marketshares generated from it is most of the time a difficult task.

You may monitor your customer experience efficiency through your after sales/ feedback management service, where you will be able to identify what goes wrong and misses into the experience you propose.

Customer experience also does not imply bringing a high quality experience, based on what you may find in the luxury market. If you look at Ikea's customer experience, it is great because it also implies low cost and an easier way to purchase furniture.

Nevertheless, customer experience is something vital for companies, and it is important to look after what you offer to customers in terms of experience, in order to understand better their expectation.

LeWeb 2011 Starts Tomorrow

As a lot of people may know, French event about the Internet and social media Leweb is starting tomorrow, December, 7th. Leweb has been created couple of years ago by French serial entrepreneur Loic Lemeur, who has been one of the trail blazers of blogging in the early 2000s. Since then, the conference did not stop growing at a fast pace, and has become now the leading event in Europe about the web economy.

I have never attended the event, because most of the time I was not available, and I must say the tickets are a bit pricy to me (even though it is very affordable for professionals, especially when compared with other events). Nevertheless, I always check what is going on on my Twitter account, and also, for some conferences, I watch the streaming videos (which are very helpful).

A lot of people has criticized the event, saying it got worse, but in my opinion, but I have two thoughts about that:

1. Social media events used to rock at the early stage, while every one was starting and enthousiast. The last couple of months we have seen a lot of services shutting down, due to the financial crisis of course, but also as a natural event, as markets and players starting to define their playground. This is the reason why it is less "spectacular".
2. It is still great to be able to access in Europe to such prestigious speakers, and simply for that, I want to warmly thank Loic.

I don't know if you will be there, but I hope you will enjoy Leweb this year.

Facing A Changing Business Model: How To React?

I wanted to write about a blog post I found on Seth Godin's.

Seth Godin discusses about how business model changes when a ground breaking innovation show up:

"When the form changes, so does the underlying business model, which of course changes the function as well.

Mail ---> email

Books ---> ebooks

DVD ---> YouTube/Netflix

1040 ---> Online taxes

Visa ---> Paypal

Open outcry ---> Electronic trading

Voice call centers ---> forums and online chat

Direct mail ---> permission marketing

In each case, the original players in the legacy industry decided that the new form could be bolted onto their existing business model. And in each case they were wrong. Speed and marginal cost and ubiquity and a dozen other elements of digitalness changed the interaction itself, and so the function changes too.

The question that gets asked about technology, the one that is almost always precisely the wrong question is, "How does this advance help our business?"

The correct question is, "how does this advance undermine our business model and require us/enable us to build a new one?"

There are projects that are possible with ebooks or Kickstarter or email that could never have worked in an analog universe. Most of the money made in the stock market today is via trading approaches that didn't even exist thirty years ago.

When a change in form comes to your industry, the first thing to discover is how it will change the function."

I wanted to go further in Seth's point. Indeed, Seth points out that when such an innovation comes up, most of the time, it is not the leader of its market which benefits from it, but a new company mastering and understanding what the innovation will bring. This is what the famous phrase is about: "This is not carriage makers which became car manufacturers".

Most of the time, the large companies dominating one mature markets can not really compete with smaller actors, because their expertise, their business model, and their operating costs structure are going in limbo, and are not organized how they should to adopt the innovation.

But what should the company do? Indeed, if it will not be able to compete with the new business model, the company must find a new way to grow, and to keep its revenues up.

Kodak failed to adapt to the appearance of digital cameras: Kodak ruled the market of personal cameras. Its business model was based on the sales of films. But its business model was not possible anymore once digital cameras appeared, and therefore sales plumetted.

As a matter of fact, it is very difficult to make deep changes in one company in order to change one business model. Some companies succeeded though, like IBM, which shifted from building computers, to becoming more of a consulting firm.

The question remains open. But maybe the easier way to abord dramatical changes due to an innovation is probably to leverage the blue ocean strategy, and to find a new market where the company's ability and skills.

What do you think about it? Do you have examples to share?

How Will The Financial Crisis Impact Customer behavior

Customer relationship management has rose in emerging market, as competition was getting tougher, and the aquisition of new customers more difficult and costly. The spring of CRM also marked the arrival of a new era, where customers where more alert, more sounded, and that they could take over the power companies used to have.

Now customers could switch easilly from one company to another, and they could actually realize that they really mattered for companies. 

Customer relationship management evolved throughout the time, as customers and companies changed. New ways to interract between each others appeared, especially thanks to the Internet: First emails, then forums and since couple of years now social media. Companies had to change the way they handled CRM, as more communication channels had to be managed, bringing complexity, and their use were less mechanical than simply through some questionnaires to fill.

We are facing very difficult times. Since 2008, two main financial crisis hit the world, and the road to recovery seems long and tough. Most of the time, it is during these difficult times that we see the biggest change in customers' behaviors. They need to adapt to a changing world. 

Most of households are hit by the crisis, which means there are strong chances their spendings will be cut down. And probably, the way they interract with companies will also changes. 

How will it impact CRM? We have already seen that social media has emerged as one of the most important place of conversation between companies and customers. But it will probably go further. The concept of loyalty, which has been challenged those past few years, with the multiplication of companies using somehow the same kind of tools to secure one customer, will probably once more evolved.

This more an open conversation than a real answer I am trying to give. Because I don't exactly know how customers will change. But a lot of customer behavior component will evolve within the next few months and years, and we must be prepared.

How Strikes May Impact Customer Relationship Management: Air France Case Study

Customer relationship management is a science which is at the crossroad of the different functions of one company. Of course, most of it is managed by the marketing staff, as it has a lot to do with researches, and communication with customers.

But it is also a focus which th whole company must take care of. This is the reason why a lot of the time we talk about "Customer centric companies", meaning that CRM takes a core part of how a company deal with its business. But most of the time, real 100% customer centric companies does not exist, and therefore it is sometimes hard to get all the pieces together.

Air France is one of the leading airline company in the world. It secured its position thanks to its image of a premium service company. This image has been built throughout the time, thanks to a lot of details, those small details which creates the big things... One of the very good example: A lot of my American friends know Air France because they serve Champagne on board.

Air France is taking customer relationship management seriously, and they have always been a trail blazer in terms of loyalty reward program. They also make their best to respond to customer complaints as fast as they can.

But sometimes, Air France's customer relationship management is experiencing damages, due to unusual circumstances.

For this November hollidays season, Air France personnel was on strike, protesting to job cuts speculations. Due to these protests, Air France's planes had to take off with 50% of their planes empty, due to lack of staff on board. 

Air France knows how to deal with those kind of issues:

First, because they have a very competent risk management department, which has been used to deal with different kinds of problems (the Icelandish volcano crisis this year, other strikes, political issues in some countries)...

Secondly, because strikes are quite frequent at Air France. I could quote French show "Les Guignols", which mention that strikes for November hollidays season at Air France are sort of a "tradition"...

And this is a real issue: You could be as good as you can be analyzing customer data, providing high quality communication material, being responsive in crisis time, sometimes, those social events can impact big time the image of one company.

So what can Air France do?

To be honest, Air France is far from being the worst of the airlines company to work for. But the way they deal with their employees (which are by the way the first ambassador one brand can have) is very important in order to maintain a  high customer service at all time.

In overall, strikes may be prevented by having strong relationship with unions, but sometimes, they are very difficult to avoid, especially in some specific industries. 

But human resources management, and social crisis inside a company can have a large impact on one company CRM Strategy.

Let Your Customers Speak Out

"Always Remember: If customer don't have effective way to voice complaint, they just quit doing biz w/ the co."
This sentence is a quote from @tedcoine I found out on Twitter. I believe it is a very interesting one in term of customer relationship management. Indeed, social media have changed the way companies interract with customers.


They can not anylonger avoid listening to angry customers, and they must now deal with it. This is the job of community managers, a new trade which is blossoming.


It is not a natural behavior for a company to let its customers to speak out its complaints and issues. A company sells products, and is seeking for efficiency, which implies standard processes in order to save time and costs.


But ultimately, customer satisfaction is the key factor which will bring success or not to one company.


A lot of companies have looked for ways to silence unhappy customers. They believed that by doing so, they will be able to keep the happy ones happy, and that eventually, unhappy ones would come back.


But it is no longer possible. And this is the reason why they must deal with it now.




This is the reason why it is important to have a strong feedback management system. A one which is able to deal with the large number of media one customer may use to get in contact with the company:

• A call center if it is via telephone.
• A customer service if it is by mail or email
• A community manager if it is by a social media
• A sales person if it is in a store
• An after sales service if it is because of a broken product.

Those media are expensive to manage, and to keep active. But they are vital, because it will minimize the lost of clientele in case of problems.


Also, something very important to think about is how to manage and leverage the large amount of information you may get from all those different sources.


The infromation will come from various ways, but it is important to have a tool which will allow the analyse of all the dysfunction customers may experience.