Burn It Down, Start From Scratch And Build a Social Media Strategy That Works

There are times you simply need to destroy what exists in order to replace it with something better. Such is the case for social media. The past seven years have been so full of mistaken beliefs, poor assumptions and outright misinformation that the time has come to reassess completely what social media is, how it works, how consumers use it and what it means for brands.

The fact is that much of the social media dogma we take as gospel has been wrong from the start. As a result, brands are wasting good money to chase irrelevant or even damaging social media outcomes, and the required improvements are not minor adjustments. In many cases, the wrong departments have hired the wrong people to do the wrong things evaluated with the wrong measures.

Together we will burn social media to the ground and rebuild it from scratch. We will do this with data. Data will provide the spark and accelerant that destroys today’s social media strategies, and data will also be the bricks and mortar to build a credible and accurate understanding of consumers’ social behaviors and the legitimate opportunities available to business.

DESTROYING SOCIAL MEDIA MARKETING MYTHS WITH DATA

Every social media marketer and pundit knows case studies that tease the promise of organic content success. They share and reference the same ones time and again, building false hope that marketers’ next social campaign will be Oreo Dunk, #LikeAGirl or Real Beauty. But tear yourself away from the rare and apocryphal stories of success and focus instead on broad, unbiased data, and a different picture emerges.

“Organic social media stopped working.” Those words are from the latest Forrester report, “It’s Time to Separate the ‘Social’ From the ‘Media.'” This is the same Forrester that in the 1990s counseled IT leaders to pay attention to “Social Computing” and whose 2008 book, Groundswell, introduced many business executives to the ways social media was changing consumers and the marketplace. Today, Forrester is again ahead of the curve, making the case that brand organic opportunities have disappeared and social media marketing has become entirely a paid game. As a result, the research firm recommends that marketing leaders assign their social budgets not to the social team but the media team because, as Forrester notes, “Social ads aren’t social; they’re just ads.”

The report states a simple fact that too many content marketers ignore in 2015: “If you can’t get a message to your audience, you can’t very well market to them” Facebook reach for top brands’ posts was just 2% of their fans in 2014, and that number will only decrease further this year.

Evidence of social media’s remarkably poor reach is all around, and many social media marketers are simply ignoring it (or hoping their bosses do). For all of its brand strength, Coca-Cola’s Facebook page this past weekend had a People Talking About This figure–which includes every page like, post like, comment, check-in, share and mention the brand earned in seven days–of just 37,700 people. The world’s largest consumer brand (which sells 1.8 billion drinks a day) on the world’s largest social network (with 1.5 billion monthly active users) engages fewer people in a week than can fit in one MLB stadium–and not even Dodger Stadium but Kansas City’s modest Kauffman Stadium.

Not only is reach falling but social has never succeeded in delivering reliable marketing scale, no matter how many case studies suggest otherwise. Social does not deliver purchasers (accounting for 1% of e-commerce sales, compared to 16% for email and 17% for CPC). Social delivers poor conversions (with a conversion rate of 1.17% compared to 2.04% for search and 2.18% for email). Social fails to deliver trust (with B2B buyers rating social media posts among the least important for establishing credibility and just 15% of consumers trusting social posts by companies or brands.) Nor is Social media a major factor in search engine rankings (placing dead last among the nine major factors affecting SEO according to MoZ’s 2015 Search Engine Ranking Factors report.)

Rather than hit the brakes, social media marketers are trying to keep their shaky strategies together with wishes and duct tape. For example, marketers are desperately trying to overcome declining organic reach by posting more frequently, but that is not a long-term solution (nor much of a short-term one, either). Another tactic is to chase consumers from one social network to the next for brief windows of organic opportunity. Instagram is the latest social network hyped for delivering higher engagement, but the social platform is busy adding and growing its advertising programs, which means organic reach will rapidly decline on Instagram as it has elsewhere.

Social media marketing has become a house of cards, teetering with lies stacked high since the dawn of the social media era. Entire corporate social media strategies are crafted on baseless assumptions that presume brands can reach prospects and customers in social networks, consumers want and trust brand content, all engagement matters, likes are marketing KPIs and fans and followers are advocates. The best thing social media professionals can do now is to burn down that tower of cards and start from scratch by studying the data, creating new and realistic proof points and producing more effective social media strategies.

BUILDING SOCIAL MEDIA STRATEGIES WITH DATA

Starting from square one, please allow me to introduce you to social media and the opportunities available to your company, one fact at a time:

FACT: People take social media seriously, and so should business. 
The numbers are impressive–1.5 billion people use Facebook, 316 million use Twitter, 300 million Instagram and 200 million are on Snapchat. And social media behavior is still growing, with the average usage time rising from 1.66 hours per day in 2013 to 1.72 hours last year. Despite some spurious headlines suggesting Facebook’s demise, that social network continues to dominate, with 59% of users accessing the social network two or more times a day (which is two-thirds more than Snapchat or Twitter and 1000% more than Pinterest). What these data points tell us is that social media is important to consumers, and brands should find ways to meet consumers’ needs and expectations in the channel. While numbers like these typically tempt marketers into believing social media is a fertile content marketing opportunity, this is not the case because…

FACT: Consumers work hard to block and ignore brand messaging.
Use of adblocking software is on the rise in 2015, having gone up by 41% since last year. Of people who view time-shifted TV, 37% do so because it permits them to skip ads, and 56% skip every commercial when viewing from a DVR. Of those who have seen online pre-roll ads, 94% have skipped them. And 57% of consumers are actively taking steps to avoid brands that bombard them with irrelevant communications, with 69% having unfollowed brands on social channels, closed accounts and cancelled subscriptions. The reason people do this is that…

FACT: Consumers do not trust brand content.
In the latest Edelman Trust Barometer Study, the majority of countries now sit below 50% with regard to trust in business, and this past year trust in business dropped in 16 out of 27 countries. In the US, consumers do not trust text messages, social media posts or ads from brands. Millennials are an especially tough crowd, with only 1 in 100 saying that a compelling advertisement would make them trust a brand more and they place sales and advertising at the bottom of their trust rankings. So, if organic reach is continually declining toward zero and consumers do not welcome or trust brand messaging, should brands abandon their social profiles? Of course not, because…

FACT: Consumers count on brands to be present in social media, particularly on Facebook.
Consumers indicate they expect brands to be available in an average of 3.5 social media channels, and around 80% of consumers expect brands to be present on Facebook. But if we have established consumers do not want or trust brand messaging in social media (or pretty much any other channel), why do consumers want brands on social networks? It isn’t for brands to fill their news feeds with a stream of promotional messaging but…

FACT: Consumers expect brands to engage on consumers’ terms.
62% of Millennials say that if a brand engages with them on social networks, they are more likely to become a loyal customer. It is not as if brands have no opportunity to listen and engage with consumers one-to-one, considering nearly 50% of people have used social media to praise or complain about a brand in the past month. On the B2B side, 75% of B2B buyers want brands to furnish content of “substance,” that helps them to research business ideas, but 93% of brands focus their content on “marketing” their own products and services. Of course, while too many marketers believe broadcasting messages is a way to engage consumers, people do not consider marketing content to be “engagement.” Instead, they want brands to treat them individually, listen and respond. For example…

FACT: Consumers want fast, responsive customer care in social media. 
63% expect companies to offer customer service on social media, and one in three social media users prefer to reach out to a brand on social media for customer service. 75% of consumers using social media for customer service expect to hear back in an hour or less; half want a response in real time. But despite the demand for customer care in social media, brands fail to meet expectations; one study found that 33% of consumers who reach out to brands for customer service get no response, while another recent study found four out of five inquiries go unanswered on social media. The stakes are high for brands to get this right. Econsultancy asked consumers how brands performed to resolve recent issues, and of those who said the brand was very ineffective, 46% are still customers (compared to 71% for very effective brands) and 13% shop at the same level (compared to 46% for very effective brands).

FACT: Consumers want to collaborate with brands to develop better products.
42% of Millennials say they are interested in helping companies develop future products and services, and studies have shown, not surprisingly, that customers are more likely to buy products they helped to create. The secret isn’t merely to offer a database into which people can dump their product ideas; once again, people want true bilateral engagement with brands. A recent study of ten co-creation projects found that the largest percentage of participants (28 percent) was driven by curiosity and a desire to learn, and another 26% had an interest in building skills.

FACT: Consumers want brands to stand for something, not simply push products and generate profit.
People want more from brands. Consumers do not see a conflict between businesses being profitable and being good for the world–81% agree that a company can take actions that both increase profits and improve the economic and social conditions in the community where it operates. Edelman’s 2015 Trust Barometer study also found that half of respondents attribute increased trust in business to the fact that a business enabled them to be a more productive member of society. Edelman found the biggest gap between business importance and business performance on 16 trust attributes was not products and services or even purpose–it was integrity and engagement. The Nielsen Global Survey on Corporate Social Responsibility found much the same, with 55% of global online consumers across 60 countries saying they are willing to pay more for products and services provided by companies that are committed to positive social and environmental impact. Millennials have even higher expectations–three-quarters say that it is either fairly or very important that a company gives back to society instead of just making a profit.

FACT: Brands win when they get people talking to each other, not about the brand’s content but about the actual Customer Experience. In the US, 70% of consumers trust brand and product recommendations from friends and family, which is almost 400% greater than the trust they have in brand posts in social media. Millennials do not trust traditional media and advertising, so they look for the opinions of their friends (37%) and parents (36%) before making purchases. However, marketers continue to struggle with Word of Mouth (WOM)–64% of marketing executives indicated that they believe WOM is the most effective form of marketing but only 6% claim to have mastered it.

DOING SOCIAL MEDIA RIGHT

Most companies are doing social wrong and have done it wrong from the beginning. The key to success is to stop most of what today passes for social media strategy and rebuild social plans from the ground up:

  • First, create and measure a new definition of WOM. An individual who recommends your brand based on their actual customer experience is gold; a customer who clicks the “heart” button on a pretty photo posted by your brand isn’t even tin (and a like that is bought is a stain on the soul of your brand). Now is the time to recognize that not all consumer interactions are equal and to succeed, brands must generate the WOM that matters–not the activities that are easy to manipulate and tabulate but the ones that are difficult and meaningful. Discard the fake WOM strategies created with brand-to-consumer content broadcasted in social channels and focus on the real WOM forged peer-to-peer with customer stories, recommendations and advocacy. Fake WOM gets people to click “like” on something the brand posted; real WOM gets people to tell others why they should trust, try and buy your product or service.
       
  • Toss out your social media scorecard immediately. The first step to refocus social activities on what matters is to change what is measured. Stop rewarding employees or agencies for generating engagement that fails to deliver business benefit and start measuring what matters–changes in customer loyalty or consideration, positive and authentic Word of Mouth, inbound traffic that converts, quality lead acquisition and customer satisfaction.
     
  • Reconsider what department should lead your social media efforts. Once you have reconsidered the metrics that matter, the next question is who within the organization is best equipped and staffed to deliver on those metrics. If organic social media is not proving an effective marketing channel, should your marketing team be responsible for content creation and managing social media calendars? If one-to-one engagement and responsiveness are the new goals, which department is best staffed to provide what the brand needs and consumers expect in social media? These are vital questions, because whichever department funds and manages social media will expect the outcomes and use the metrics about which they most care. A recent report from Econsultancy makes the case: Among Financial Service firms, just 38% see social media as a channel for retention; the majority sees it geared for acquisition and cross-sell. That means most of these firms are using social media to chase marketing strategies to drive sales (an approach we now know will fail) while the minority have social media strategies designed to improve customer satisfaction, reputation, loyalty and retention–goals generally not associated with Marketing but with Public Relations and Customer Care departments.
          
  • Objectively assess the return your brand generates with content marketing in social channels, and stop what is not working. If you are not today validating positive return on marketing content posted to social channels, you certainly will not do so in the future as organic reach crumbles to nothing. Marketers continue to act as if content marketing is destined to work and they have simply failed yet to find the right content marketing strategy. Data tells us otherwise; customers and prospects inundated with marketing messages, distrustful of brand content and protected behind social paywalls and adblocking software are not interested in or available to your content marketing output. Content is essential and has a place in Marketing strategies, but now is the time to rebalance the investment the brand is making to match the return it receives and can expect.
       
  • Stop talking at consumers and telling them what you want them to hear. Start listening to customers and responding with what they want and need. Your brand’s intent is more evident than your content, and actions speak louder than words. If the best thing your company can think to do with this wonderful one-to-one relationship channel is to talk about itself, you have no right to be disappointed when consumers perceive and punish your company for its self-interest. Brands that win in the social era will not be better at storytelling but in using social media to hear, help, educate, encourage, empower, connect and respond to their customers and prospects as individuals.
      
  • Get social customer care right. There is no excuse for failing to staff a customer care team properly, secure the right social media management platform, listen for customer needs in every appropriate social channel, manage inbound messages, answer every question, address every complaint and help every prospect or customer in a timely manner. Self-service and peer-to-peer support are valuable tools, but they are no substitute for getting responsive one-to-one customer care right in a growing (and very public) channel of preference for many of your customers.
      
  • Get people talking to each other. Your brand is disappearing from consumers’ news feeds (if it has not already), but friends will always see content from the people they know, care and trust. Stop trying to spark engagement using funny, clever, hip, edgy or inspirational content, and stop acting as if authentic peer-to-peer engagement can be bought by paying influencers to tweet about your brand. Find ways to get people talking to each other about their real experiences with your company and its offerings. Engage your happy customers and help them to share their experiences; intercept customers at moments of truth to encourage sharing; build P2P ratings and assistance into every mobile and web experience; connect people to each other in meaningful ways; and more than anything, provide the sorts of product and service experiences people will want to talk about and their friends will find worthy of attention and consideration.

Here is a place to start as you rebuild your company’s social media strategies: If your brand never posted another piece of marketing content to Facebook, Twitter or Instagram, how would you demonstrate your firm’s values in social channels? If the ability to post promotional messages were taken away, what social media strategies would your company execute to create awareness, attention, consideration, trial and loyalty? If you could no longer rely on your brand journalists, paid influencers, social designers and marketing agencies to create content for social channels, what one-to-one, peer-to-peer, responsive, collaborative, integrated, authentic and meaningful strategies would your brand execute? (Why isn’t it doing those things effectively today?)

The question is no longer if the tired, failed strategies of the past seven years will miraculously yield success; it is if your social media leaders are willing to admit the mistakes of the past, throw out what is not working and chart a new course. The data to build practical and potent social media strategies is not hard to find, but it easy to ignore.

The true secret sauce of social media has never been and will never be to get people to share your brand’s latest viral video or inspirational quote on Instagram. The future belongs to brands that follow the lead of companies like Uber, Nest, Square, Apple, JetBlue, Costco, Trader Joe’s and USAA–brands that get people talking to each other about their differentiated products, customer experience, values, innovation or community commitment rather than about their clever social media posts.

Grab the fire extinguisher, build a social media bonfire and start from scratch. Do this now, and 2016 can finally be the year your brand meaningfully succeeds in social media.

Seven New Social Media Studies You Probably Won’t Hear About at SXSW

This week is the annual SXSW Interactive conference, where social media elite descend on Austin to party on Sixth Street, post selfies with people who have higher Klout scores and pick up the mad schwag liberally distributed by startups. A few may even wander into conference halls to see some presentations, although that is far from certain.

This will be my third year staying home, and while I will miss the chats and parties, I will not miss the general sense that SXSW is a missed opportunity for the social media industry. All the best and most experienced minds in the business gather in one spot, but few find themselves in sane, sober and expansive conversations because it is hard to focus on serious topics when one is screaming over an indie band or dashing from the Convention Center to South Commerce to West 6th for events.

Although SXSW Interactive has tended to feature more hype than criticism, perhaps 2015 will be the year when reality sets in. At last fall’s Social Shake-Up, I was pleasantly surprised at the candor at which people were discussing declining reach, difficult social metrics and social media marketing obstacles. It will be interesting to see whether the predominant buzz from this year’s SXSW is about social media marketing difficulties or the more typical chatter about the next hot new app.

If SXSW Interactive gets serious about substance over hype, here are seven recent studies that should be mentioned from stages in Austin. All challenge assumptions about the value of social media marketing and offer the sorts of data that should guide tough decisions about investments and strategies in the social channel this year:

  • Bounce Exchange find poor organic social acquisition and conversion:  In 2014, Bounce Exchange analyzed more than $1 billion of e-commerce revenue. Their research found that organic traffic from these companies’ social media channels accounted for only 1.2% of clients’ overall revenue. Moreover, conversion was 1.3%, less than half of their clients’ overall average. (Source)
      
  • The Center for Marketing Research at the University of Massachusetts Dartmouth finds fewer companies optimistic about tracking sales through social media: In interviews with executives at Inc. 500 firms, the UMASS study found a drop in companies tracking sales through social media, from 36% in 2013 to 32% in 2014. Even more telling, at a time when marketers are spending more on social media and should be improving their metrics, the number of executives who do not know if social is driving sales increased seven points, from 11% to 18% (and another 44% believe it accounts for less than one percent of sales).

    Finally, the UMASS study found that Inc. 500 executives are losing faith that social has the potential to increase sales in the next year–the percentage of executives who indicate social is the tactic with the most potential to drive sales dropped from 16% in 2013 to 13% in 2014. That puts social media well below online advertising, less than business directory listings and equal to traditional print/broadcast media. (Source)
      
  • Custora finds social drives small fraction of sales compared to organic search, PPC and email: Custora tracked 100 million anonymized shoppers, $40B in e-commerce revenue, and 100+ online retailers in January 2015. It found that social media delivers just 2% of ecommerce sales. This figure is 91% less than organic search, 88% less than CPC and 87% less than email. Custora’s data was no different over the holiday period. In its E-Commerce Pulse 2014 Recap, the company notes, “Similar to the trends last holiday season, and throughout 2014, social media (including Facebook, Twitter, Instagram, and Pinterest) is still not driving a substantial share of e-commerce transactions. Through the holiday season (November – December 2014), social media drove only 1.9% of all e-commerce orders – a similar share to holiday 2013, when it drove 2.3%.” (Source and source)
     
  • Webmarketing123 finds that, when it comes to social media investment decisions, marketers are using assumptions rather than hard metrics:  A November 2014 study by Webmarketing123 found that that “many marketers still relied on ‘gut instinct’ when determining which channels to use for marketing campaigns, as the most-used weren’t always the most-measured.” The report called social media “one of the biggest pain points for respondents.” While 87% of B2B marketers used social media, just 17% were able to prove its ROI—that is the lowest percentage among channels used. As for B2C marketers, social is now the most commonly used channel, with 87% of B2Cs using social, but only 27% could calculate ROI. (Source)
      
  • MaritzCX finds that social media is not an influential information source for car buyers: MartizCX surveyed 60,000 people and found that social networks (Facebook, Google+ and Linked) were the 19th most influential information source when customers under the age of 35 research a new vehicle. While “Family/friend/word of mouth” ranked second at 18.8%, online social channels were much less significant, with “Chat rooms/blogs/forums” at 1.5%, online videos at 1.3%, social networks at 0.4% and Twitter (dead last) at 0.2%. Beating digital social channels at influencing car purchases are very traditional channels such as salespeople at dealerships (the top influencer at 21.5%), newspaper/magazine reviews (4.7%), TV ads (3.6%) and manufacturer’s brochures (2.8%). (Source)
      
  • The CMO Survey finds that marketers continue to use the least powerful social media metrics: It is amazing that the two most common social media metrics used by marketers this far into the social era are still Hits/Visits/Page Views and Number of Followers or Friends. We are well past thinking that top-of-the funnel metrics are a good way to measure any digital marketing tactic, much less social media. Less than a third of marketers evaluate social media based on conversion rates, and fewer than one in seven use customer acquisition cost.

    Even more concerning, there has been a decrease since 2010 in the number of marketers using bottom-of-funnel social media metrics such as Sales Levels, Revenue per Customer and Profits per Customer. Marketers are ignoring the most powerful metrics in order to focus on the ones that are easiest to collect (and to manipulate). (Source)
      
  • Marin Software finds social advertising significantly lags search and display: The Marin Software Performance Marketer’s Benchmark Report is expansive, covering over $6 billion worth of ad spend from advertisers and agencies with budgets in excess of $1 million annually on paid-search, display, social, and mobile. First the good news for social media: The clickthrough rate for social ads is better than for display ads–social CTR was double that of banners on desktop and 50% greater on smartphones. However, while social ad clickthrough may beat display, it still pales in comparison to search, which has a 425% better CTR on desktop and 383% greater on smartphones.

    Once the folks who click on those ads arrive on your site, social conversion rates are downright dismal. Compared to social ads, display advertising’s conversion rates are 255% greater on mobile and 900% more on smartphones. Social advertising conversions fare even worse against search ads; search ads deliver conversion rates 818% higher on desktops and 2100% greater on smartphones versus social ads.

    While social advertising offers the lowest cost per click (CPC), advertisers (at least those whose goal is conversion) are over-paying for social ads. Desktop social ads offer a CPC 82% less than desktop search ads but return a conversion rate 89% less than desktop search, making social advertising’s cost per conversion around 65% greater on desktop. On mobile, social advertising has a cost per click that is 80% less than search ads but experience conversion rates 95% less than search, resulting in a cost per conversion that is more than four times greater in social than search. (source)

Will data like this get attention, discussion and consideration at SXSW, or will this year’s conference continue its history of celebrating consumer adoption and the rare but unrepeatable successful case study? If SXSW attendees buzz about the growth of “dark social” and Audi’s Super Bowl Snapchat success rather than explore what we have learned from our experience on the social networks that have been around for eight years, then we will simply see brands repeat the same mistakes on Snapchat, LINE and WhatsApp that they made on Facebook and Twitter.

For those attending SXSW Interactive, my wish is that you have more challenging, sober and enlightening discussions than you do drinks and that you leave Austin with more hard data than promo items. 

The CX Pyramid: Why Most Customer Experience Efforts Fail

It is no secret among Customer Experience (CX) professionals that most CX efforts fall flat. Forrester found that only 25% of CX professionals say their companies’ CX programs actually improve customer experience, and Avaya recently published a study indicating that 81% of organizations have seen their Customer Experience Management (CXM) initiatives fail in the last three years.

The problem is that most companies view Customer Experience as a program and not a purpose–something to be assigned to a couple of employees while the rest of the company goes about its business improving efficiency, acquisition and margins.

When one considers the hierarchy of experiences brands can furnish customers to satisfy their needs–“The CX Pyramid”–it is easy to understand why so many CX efforts fall short. Most of today’s CX initiatives focus on incremental change in existing processes, which limits those programs to solving the least important needs at the bottom of the pyramid. Finding CX gaps and fixing them with more content on websites, new training for customer service representatives or greater self-service options certainly offers benefits, but nowadays these actions are table stakes rather than ones that allow brands to differentiate themselves from the competition.

Today’s innovative companies begin their Customer Experience design in a different place–not with customer perception of existing products and services but with an understanding of consumers’ evolving needs and expectations. As we will see, the most powerful companies today simply rewrite the Customer Experience from the top of the pyramid down, leapfrogging established competitors by delivering experiences that are more integrated, robust and powerful.

Introduction To The Customer Experience Pyramid 

Before exploring examples of brands that succeed at the upper reaches of the CX Pyramid, let’s first briefly explore the pyramid from bottom to top. Each step represents a greater level of customer need that brands can solve with product and service experiences:

  • Furnish information I can use: The lowest form of CX is to give customers information so they can solve their own problems. If I suffer a flat tire, a brand may offer instructions on how to swap it for the spare. Or if I have my identity stolen, a company may provide the twenty steps I can take to recover. This sort of information is good to know, but it is a weak customer experience that does little to satisfy customers or create differentiation for brands.
     
  • Solve your problem when I ask: Let’s face it, most customer care nowadays is designed not to satisfy my needs but to solve the company’s issue–namely to get me off the phone or stop me from complaining on Twitter as quickly as possible. Even worse, companies like Comcast are turning their customer care employees into sales representatives, holding them responsible for quotas of new revenue-generating services and for retaining customers who simply wish to cancel. This sort of experience tells customers their needs are less important than the company’s.
     
  • Resolve my needs when I ask: There is a difference between handling a customer’s immediate issue and resolving their needs. If a repair service replaces my flat tire with a spare but I still have to get the damaged tire repaired, my needs have not been fully resolved. Or if my bank puts a hold on my checking account after my identity has been stolen but I still have to call the credit card company to cancel my card, the bank has not resolved all my needs. To fully satisfy customers’ needs and not just process their requests takes time and care, but it furnishes a more powerful brand experience.
      
  • Provide what I need without me asking: Not every company or service can do this, but providing what a customer needs before they ask is a powerful way to demonstrate customer commitment and win loyalty. When your credit card company catches fraud before you do, alerts you and has a replacement card in the mail before you even ask, that is a memorable experience. Or consider our tire example–would some be willing to pay more for a service that removes all worries by monitoring their tires, knowing when a flat is about to occur and replacing it overnight in the customers’ driveway? Providing experiences that protect customers from harm or help them to exploit opportunities before they ask furnishes brands with strong, trusting and emotional customer bonds.
      
  • Provide what I need without me knowing: As we near the top of the CX Pyramid, we arrive at levels of experience that can only be provided when brands rethink products in the age of big data, mobile connectivity, social media and the Internet of Things. Nest thermostats offer an Auto-Away feature that raises and lowers my home’s temperature, saving me money without me even knowing it is acting on my behalf. OnStar Automatic Crash Response can estimate the severity of a car accident and alert authorities, even if I cannot. Google Now monitors my activity and furnishes updates I may need but did not request, such as the delivery status of a package (automatically derived from an email confirmation I received) or the directions to a business (for which I recently searched). The future of CX isn’t merely reactive and responsive but proactive and serendipitous, which means the brands that will win our trust, loyalty and advocacy will solve problems or harness opportunities we do not even know we have.
      
  • Make me better, safer, more powerful: Much like Maslow’s hierarchy, this self-actualizing (or brand-actualizing) level is more aspiration than reality in most verticals, but there are plenty of examples to be found among the world’s most powerful brands. Apple achieved this with the iPhone and iPad, giving consumers devices that allowed them greater access and control of information and communication in a more intuitive fashion than was previously imaginable. Facebook, Twitter, Snapchat and others have given people incredible power to broadcast information, build reputation and enhance relationships. And the rapid growth and adoption of collaborative economy companies such as Uber, Airbnb, LendingClub, Kickstarter and others is due to the way these innovative startups furnish consumers with more power–over assets, expenses, income and experiences–than traditional providers and business models can match. 

What’s Wrong With Customer Experience Management Today

The CX Pyramid furnishes a lens through which to view the problem with many of today’s CXM initiatives. Too many tend to be:

  • Backwards-looking: Many CX programs strive to identify and patch problems in the existing product and service environment rather than seeking ways to significantly change that environment.
      
  • Reactive: CX initiatives often implement ways to improve the experience for customers who hold up their hands and ask for help rather than seeking ways to furnish experiences that proactively prevent issues or furnish solutions.
     
  • Tactical: Many CX programs have the ability to change tactics rather than being empowered to rethink the organization’s strategic approach to meeting customers’ most important and ever-changing needs.
     
  • Narrow: While there’s nothing wrong with housing the CX team within the Marketing or Customer Care departments (which four in ten organizations do), the impact is reduced when these programs only influence change within those silos rather than encouraging (or requiring) collaboration across departments.
     
  • Self-interested: Companies that put the customer first and evaluate CX in terms of customer perception will have stronger outcomes than those that seek to change CX only in ways that improve corporate financial outcomes. 

Companies that make profound leaps forward in Customer Experience are the opposite. Brands like Amazon, Apple, Nest, Uber, Zappos, USAA, Square and Costco have CX efforts that are forward-looking, proactive, strategic, broad and customer-centric. Their results are realized not in incremental improvements to customer care or existing products but with profoundly different experiences that satisfy a higher order of customer needs.

How Amazon and Uber Rewrite Customer Experience From the Top Down

Compare the CX approaches taken by Amazon and Borders. Whereas Borders’ CXM process sought to make the existing bookstore experience more pleasant with cafes, Amazon’s approach to CX was to start fresh and focus at the top of the CX pyramid. While Borders was achieving the top-rated CX in the country, Amazon was re-imagining the Customer Experience of shopping in a digital world. And when Borders went bankrupt, Amazon was still rising, collecting more customers and building stronger relationships.

How could the company with the top-rated CX in the country fail, beaten by the upstart Amazon? The differences in Amazon’s and Borders’ outcomes can be seen when comparing how their CX improvements fit into the pyramid.

While Borders offered shelves of its employees’ favorite books (“Furnish information I can use,” the bottom rung of the CX Pyramid), Amazon offered a recommendation engine to provide personalized selections for its customers (“Provide what I need without me asking,”) While Borders offered cafes (a move that had more to do with solving its own problem of increasing share of wallet than with satisfying consumers’ demand for still more coffee shops in the world), Amazon was launching the Kindle, a device that gave consumers the power of instant access to literature and information with greater mobility.

Borders optimized the customer experience for bookstores in today’s business model, while Amazon envisioned new products and services to provide the customer experience of the future. As today’s business models withered against digital solutions that furnished experiences higher in the CX pyramid, Borders was left with the best customer experience that no one wanted.

The same can be said for Uber versus the taxi industry. Uber did not start with the existing taxi system, study consumer complaints and launch a new livery company with cleaner cabs or friendlier drivers; instead, Uber rewrote the CX of urban transportation. Compare this to the “innovations” offered by taxi companies in the past two decades, such as card readers that allowed consumers to swipe their credit card (while earning a glare or outright hostility from the driver) and video screens that did little for riders but helped the taxi companies earn revenue from advertisers.

While taxi companies were largely ignoring their CX problems or providing solutions at the very bottom of the CX pyramid, Uber went from unknown startup to $40B company by starting at the top of the pyramid. Uber’s mobile application, with its real-time driver location data, ratings system and integrated payment platform all provided solutions that fit into the upper portion of the pyramid. But the real killer attribute of Uber is found all the way at the top of the CX Pyramid–the ability to immediately call a taxi to my current location. Giving that power to consumers has made standing in the gutter waving at passing yellow cabs seem as hopelessly outdated as the horse and buggy. Uber’s on-demand service is an example of how the Customer Experiences that really matter are ones that “Make me better, safer, more powerful.”

Whether one compares the top-rated and bottom-rated companies in Customer Experience, or the brands that are most rapidly lifting their brand equity versus those that are not, or the most trusted versus the most distrusted companies, it is easy to see how the brands that succeed do so by providing experiences that solve higher orders of consumer needs. The future belongs to companies that understand that CX is the most powerful force for building brands in the era of splintering media, diminishing consumer trust, empowered consumers and powerful WOM.

In the future, brands will not succeed because they have CX programs. They will succeed when CX is driven from the top, is integral to company culture, guides the behavior and actions of all employees, spans silos, and ensures that products and services satisfy consumers’ most important needs. Tomorrow’s success stories are today focusing at the top of the pyramid, while the future Kodaks, Borders and Radio Shacks of the world are all anchored to the bottom.

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