When Should You Favor Customer Experience Over Profits? Never!

Harley Manning

Last month, I was in Europe with a group of customer experience professionals from various divisions of the same large company. Although their expertise was at varying levels, no one was clueless, and everyone seemed highly motivated. About halfway through the all-day session, one of the attendees asked me a question that I’m going to paraphrase here.

After some preamble about the pressures the company was under to increase revenue and profits, he asked, “Given that, when should we put aside the need for profits and fund customer experience projects instead?”

His question surprised me. And I clearly surprised him when I responded, “Never.” I let that hang in the air for a moment so that it could sink in. Then I added, “You should never put aside the need for profits when you fund customer experience projects.”

I could see that people were a little confused, so I went on. “You should only fund customer experience projects that will produce profits. That’s why you do those projects in the first place. And if you have other kinds of projects that will produce better business results, do them instead. But if you take the time to create the business models for your CX projects, you’ll probably find that they’ll produce better ROI than most of the initiatives they’re competing against.”

To be clear, the guy who had asked the question seemed very bright and had a lot of expertise in his area (metrics and measurement). But he had fallen into the same trap that so many customer experience advocates fall into. He wasn’t thinking of improving customer experience as a path to achieving business results. Instead, he was thinking of it just as a generally good thing to do for customers (which it is, but that’s not why you should do it).

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The Data Digest: Using Internet-connected Devices While Watching TV

Reineke Reitsma

On Sunday, February 24, TVs around the world were tuned to the 85th annual Academy Awards show (aka The Oscars). While the very first Academy Awards ceremony took place in 1929 — with guest tickets costing only $5 and fewer than 300 people attending the event in the Hollywood Roosevelt Hotel’s dining room — today the event is broadcast live to millions of fans across 200 countries. But The Oscars’ impressive growth in viewership is not the only thing that signifies the changing times; the technological advances that the awards program has embraced position the event as a leader in the modern-day media consumption landscape.

In 2011, Oscar.com’s supplementary footage offered an overwhelmingly popular second-screen viewing experience; it won an Emmy Award for Outstanding Creative Achievement in Interactive Media. Several weeks ago, the Academy launched a second version of the official Oscars app that engages consumers all year round but provides exclusive real-time updates during the dazzling event itself.

The Academy’s mobile development, which allows consumers to connect with supplemental real-time content for an enhanced entertainment experience, is a timely one: Forrester’s North American Technographics® Online Benchmark Survey (Part 2), Q3 2012 (US) shows that 69% of US online adults use Internet-connected devices while watching TV today. Not surprisingly, younger consumers are most likely to turn their devices into TV companions: 61% of 18- to 24-year-old multitaskers use a mobile phone to interact with programming-specific content.

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Penny Arcade's Influence On Tech Products Versus Forrester Research

Zachary Reiss-Davis

Your perpetually-connected customers are seeking information from a much broader range of sources than ever before. If you just work with the same traditional influencers you have for years — industry analysts and mainstream media — your message risks getting lost in a sea of noise.  Instead, leading marketers are identifying key online influencers for their products and marketing to them specifically.  These influencers are highly specific, and are not the same for any two products or solutions, or even two different audiences of a single product. 

The value of reaching out to a non-traditional list of influencers was illustrated this week by Microsoft’s marketing campaign for the new Surface Pro. 

Mike “Gabe” Krahulik is the author of the long-running Penny Arcade, a popular webcomic about video game culture.  He said on Twitter he was “interested in the Surface Pro,” and due to the target audience and popularity of his comic, Microsoft sent him a demo unit.  Gabe’s not a technology journalist; he’s not an industry analyst; he’s just someone with a passionate and tech-savvy following — a following which includes perpetually-connected customers who influence technology purchasing.

What happened next? Gabe wrote a full-length, relatively positive, review of the Surface Pro and its applications for media professionals that was not only read by his audience, but became a top link on TechMeme, a tech news aggregator.

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Smart Move: Facebook buys Atlas

Nate Elliott

Facebook just announced that it's buying marketer-side adserver Atlas from Microsoft. I think it's a great move.

It's always been clear that for Facebook to realize its potential, the company would have to start powering advertising beyond its own site. Facebook has collected an incredible amount of data about people's affinities and preferences, but it lacks the brand ad units to help marketers effectively leverage that data. Although the statement announcing the deal focused on Atlas' measurement tools rather than its ad targeting technology, we expect that Atlas will soon be using Facebook's data to target sponsorships, in-stream ads, and other rich ad formats across the entire Web — and that's big news. The question now is how quickly and successfully Facebook can integrate its data with Atlas' tools, and whether they can avoid a privacy backlash as they do so. History suggests they'll struggle on both counts.

If you want to hear more about how Facebook can turn its affinity data into something that's useful for marketers, stop by my SXSW session, Affinity, Intent & The War For Marketing Dollars, at 5 p.m. on March 10 at the Four Seasons.

Rough But Open Road Ahead Of Barnes & Noble

James McQuivey

Today, Barnes & Noble revealed the details behind the company's prior warnings that things in the holiday quarter didn't go well. Specific weak spots are appearing everywhere for the company, in its retail business, in its college store business, and in its Nook device business. Even the growth in sales of media for Nook devices, at nearly 7% over the same quarter in the prior year, was not growth enough to inspire confidence. Especially given that future sales of electronic content depends on robust sales of the hardware itself. 

The company's dilemma will one day be a classic case study of the effect of unrelenting digital disruption, both how a traditional company can innovate under digital pressure as well as how hard it is to steer such a traditional ship in a digital direction. At this point, no single recommendation, no matter how digitally disruptive, will fix the company's problems. But once the company gets through the widely discussed option of splitting the company into two units -- the retail arm (with website) that company chairman Riggio wants to buy and the Nook unit (with college business) that Microsoft and academic publisher Pearson are already invested in -- there will be a chance on both sides to practice a fundamental tenet of digital disruption: openness.

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Brand As Publisher Or Brand As Newsroom? My POV: Brand As Storyteller.

Tracy Stokes

Oreo’s recent quick-thinking “Dunk In the Dark” response to the power outage at this year’s Super Bowl put the spotlight on real-time branded content and reinvigorated the discussion about how brands need to become not just publishers but newsrooms. What’s driving this need? Today’s perpetually-connected consumers — 42% of US online adults and 37% in Europe — can engage brands at any place, any time, and at any velocity. Because of this, the sheer volume of creative content that brands must now churn out is forcing marketers and agencies to reexamine how they think about — and how they resource for — content. This challenge is not to be underestimated. But before you think about scale and real-time response, think about the story you want to tell to create brand advantage. To do this well, you need to first be true to yourself, second know your audience, and then engage your customers with a good story:

  • Know who you are. There’s a lot of content out there you can develop or share. So where do you start? Start with your brand. Guide your content development by your brand’s North Star, and make sure there is a logical connection between the content and your brand. 
  • Know your consumers. Figure out what your consumers need. What do they care about? What are they passionate about? Scott Monty, global head of digital for Ford, recently commented that Oreo succeeded at the Super Bowl: “Because they related to us, not because they forced us to relate to them.” 
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Brand as publisher or brand as newsroom? My POV: Brand As Storyteller.

Tracy Stokes

Oreo’s recent quick-thinking “Dunk In the Dark” response to the power outage at this year’s Super Bowl put the spotlight on real-time branded content and reinvigorated the discussion about how brands need to become not just publishers but newsrooms. What’s driving this need? Today’s perpetually-connected consumers — 42% of US online adults and 37% in Europe — can engage brands at any place, any time, and at any velocity. Because of this, the sheer volume of creative content that brands must now churn out is forcing marketers and agencies to reexamine how they think about — and how they resource for — content. This challenge is not to be underestimated. But before you think about scale and real-time response, think about the story you want to tell to create brand advantage. To do this well, you need to first be true to yourself, second know your audience, and then engage your customers with a good story:

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Back From Yet Another Pilgrimage To Mobile's Mecca

Thomas Husson

 

After experiencing some of the most exhausting days in the life of a “mobile” analyst, I am back from Barcelona. I shared some thoughts before the event started (see here), but here are my key takeaways from the 2013 event. I saw:

  • Fewer high-end smartphones. Gone are the days when handset makers announced their flagship devices in Barcelona. In a communication ripped from Apple’s playbook, Samsung announced a press conference for the likely launch of the Galaxy S4 on March 14. Among the most interesting devices from a price/technology standpoint were the Huawei Ascend P2 and some of the LG handsets. 
  • More and more “phablets” and tablets. In the “phablet” category — I prefer to call them supersized smartphones — a special mention goes to the LG Optimus Pro. Numerous tablets were announced, including the Sony XPeria Tablet Z for $499, three Android Lenovo tablets, and the HP Slate 7 — an Android tablet for business users at only $169. These types of announcements are new for MWC, highlighting the evolution of personal computing and the growing importance of the screen size.
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Music Industry Stops Losing Money, Finally

James McQuivey

Yesterday The New York Times picked up the hopeful news from the global music business that the revenue free-fall from $38 billion a year more than a decade ago appears to have stopped at $16.5 billion, leaving the industry at less than half its pre-digital size. This bottoming out of the revenues will come as some relief to industry executives who have wished and prayed for this day because, until it actually arrived, nobody knew for sure what type of revenues to expect in the future. That can make running a business pretty tough.

The music industry is everybody's favorite example of digital disruption done wrong -- including mine, since I covered music for Forrester several times. I have some classic stories I could tell to illustrate the point about executives who believed that suing customers was the path to profitability and so on, but I'll spare you those. However, as the author of a book called Digital Disruption, I actually owe it to the music industry for teaching me a few key principles of how to manage digital disruption:

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As Smartphones Attain Critical Mass, The Next Billion Users Will Be Less Sophisticated

Susan Huynh

With just over a billion people around the world having a smartphone in 2012, and the next billion smartphone adopters joining in within the next five years, smartphones have reached a tipping point. Malcolm Gladwell defines the tipping point as “the moment of critical mass, the threshold, the boiling point” within a sociological ecosystem. A technology hits critical mass when one-fifth of the population adopts it. For smartphones, developed economies witnessed this phenomenon in 2011.

North America and Europe top the global smartphone penetration rates, at 47% and 35%, respectively. However, they are outpaced in terms of the sheer number of users by the Asia Pacific region. In fact, China alone already has more smartphone users than any other country in the world. And our forecast shows that Asia Pacific is also the fastest-growing region for smartphone adoption, projected to increase by approximately 20% per year.

In the Forrester Research World Smartphone Forecast 2012 To 2017 (Global), we investigate the size, speed, operating system (OS) dominance, and user demographics of the competitors in the world’s smartphone showdown. Younger and wealthier adults are the early adopters of smartphones, but there will be a gradual progression toward adoption by lower-income and older adults as smartphones become cheaper and the offerings of basic phones become more limited.  

 

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