The same day, the Library of Congress’ Copyright Office determined that “jailbreaking” the iPhone – a process that allows users to access apps not available in Apple’s App Store – does not violate copyright laws. Apple contends that jailbreaking can harm the phone’s user experience, and leave it vulnerable to viruses; the company voids warranties of jailbroken phones. The Copyright Office, however, said in its ruling that jailbreaking is “innocuous at worst and beneficial at best.”

Regardless of your opinion on the war in Afghanistan, the ethics of leaking sensitive information to the public, or the use of products in ways that weren’t intended, these examples serve to illustrate one principle of the changing information economy: You are not in control.

Media critic Jay Rosen encapsulates this perfectly in reacting to an editor’s note that accompanied the New York Times’ coverage of the Wikileaks documents:

From an editor’s note: “At the request of the White House, The Times also urged WikiLeaks to withhold any harmful material from its Web site.”

There’s the new balance of power, right there. In the revised picture we find the state, which holds the secrets but is powerless to prevent their release; the stateless news organization, deciding how to release them; and the national newspaper in the middle, negotiating the terms of legitimacy between these two actors.

Indeed. And that new balance of power applies just as much to corporate marketers as it does governments and militaries. Power has shifted to end users; they’ll take your messages and your products and do what they want with them, and there’s nothing you can do about it.

So while you can’t control, you can listen and learn. MLC counsels our members to optimize their social experiences to listening and sustained engagement, rather than a top-down, “we say, you do” atmosphere. But engendering this connection with your customers is tough – here’s what we suggest:

1) Focus on service. Organize your efforts in social media not to blast messages at your customers, but rather to be in service to them as they interact with each other and with you. Communication cannot be primarily about the brand – customers will almost certainly detect that and react negatively.

2) Embrace the power of the medium. If you’re treating social as yet another channel in an otherwise top-down marcomm mix, rather than an engine for creating and strengthening relationships, you’re not taking advantage of the unique opportunities that social media engagement provides brands. When done right – i.e., with a focus on service – engagement on social platforms can lead to better connections between brands and customers, as well as connections between customers with the brand as the focal point.

Taking advantage of those unique opportunities requires broad cross-functional alignment and silo-busting, and in our 2010 study on social media, MLC argues that active executive leadership is essential to produce results in the space.

3) Prepare for (but don’t expect) the worst. Social media has obvious upsides, but just-as-obvious downsides. If you’re active in the space, you should absolutely have policies in place to protect essential information (intellectual property, for example), establish guardrails that limit downside risk, and have contingency plans in place for when information gets out in a way that’s not intended.

But, by the same token, don’t expect bad behavior from your customers – they can smell a suspicious brand from a mile away.

MLC members, for examples of how your peers have created dynamic and collaborative social experiences for their users, please visit our Social Media Showcase.

Iconoculture recently reported on an unsettling trend in consumer travel—as airline innovation fails to keep pace with consumer demands, consumers are either rewarding smaller players like Suite Arrival (who delivers TSA-friendly personal items from popular brands directly to travelers’ hotel room) or inventing their own “DIY” approaches to make travel less frustrating.

The news isn’t all bad—Iconoculture spotted a few noteworthy exceptions as big brands made progress in the long march to improve travel.  Noteworthy innovators winning travelers’ endorsements include:

• Southwest Airlines “Bags Fly Free” Policy: takes one painful and expensive worry out of travel, and translates into clear, benefit-driven marketing messages.
• JetBlue’s Customer Bill of Rights: reimburses customers for the most aggravating travel missteps, including vouchers and refunds when flights are cancelled and delayed.
• Clear: the growing fly-through-security service enjoys over 75% favorability in online mentions.

For more winners—and a few losers—MLC members can check out Iconoculture’s full trend analysis.

Adversarial Leadership

Jeff opened by saying:“my job as CMO is to create tension,” and explained how he challenged the status quo and broke the rules to get action on social media at Kodak. He once asked Legal how many people he would have to annoy before he got fired. When they said a third of the company, he decided he still had plenty of leeway to push his plans through.  Similarly, when we asked how to deal with Legal’s approval processes for social media, he answered “You’re in marketing, be creative.”

He Who Dares…

One good example of Jeff putting his neck out, was the naming contest for Kodak’s waterproof camera (originally the “Zx3”). After reading an article criticizing Kodak’s unoriginal product names, Jeff decided to launch a contest for the best name and put the winners’ picture on the box. The problem was, they had just one week to choose the name. When slow Legal procedures threatened to thwart the contest, Jeff decided to ignore protocol and risk an unknown fine. The contest was tweeted just 26 hours after the article came out and generated more than 28,000 names in 4 days. “PlaySport” was chosen – an amalgamation of two entries. The contest saved Kodak $250,000 on nomenclature and created so much buzz that Marketing didn’t need to buy a single piece of advertising for 6 months. This is what Jeff calls “OPM”: Other People’s Money. And the fine from Legal? $300.

As well as sharing leadership techniques, Jeff also gave some useful color around Kodak’s social media team, processes, and strategy.

Kodak’s Social Media Team

Kodak has 14 full-time digital staff (who cover Web and SEO as well as social media), including a Chief Blogger and a Chief Listener.  In addition, it has a network of part-time bloggers and twitterers who come from all parts of the company, e.g., Sales in China, Finance in India, or HR in France.

Kodak’s Social Media Coordination

Kodak has five standardized “step and repeat” plans for coordinating social media activity around new content. The plans specify exactly what the Chief Blogger, Chief Listener, and Twitterers should do in different circumstances and vary in intensity (e.g., Plan A= one message in channel X; Plan E= multiple messages in channels X, Y, and Z.).

“The 4 Es of Social Media”

Four core principles drive Kodak’s social media strategy:

1. Engage: Reach people on a one-to-one basis. Kodak hired a Chief Listener to act as “air traffic control” and route comments to Sales/NPD/Customer Services for reply. She uses Radian6 and PeopleBrowsr to watch trends and identify comments that need a response.
2. Educate: Listen and learn. When customers said Kodak’s new camera needed a microphone jack, Kodak listened and passed the message onto NPD. The modified camera outsold its competitor 10 to 1.
3. Excite: Show customers that their input makes a difference.  Kodak’s contest to name the Zx3 drummed up a lot of excitement.
4. Evangelize: Excitement leads to advocacy. As Jeff explained, when you get people in the same direction, you don’t need control.

Finally, a few of my favorite soundbites:

On ROI

“When someone asks ‘What’s the ROI?’ ask back, ‘What’s the Return on Ignoring?’”

On risk:

“You never had control of the message. Customers always controlled the brand because they got (or didn’t get) the promise delivered. You have to give something up (control) to get something back.”

On Legal:

“Legal are there to advise, not make decisions. They don’t monitor every call or email, so why every social media interaction?”

On viral videos:

“Quit wasting your time – you can’t do it.”  Marketers tend to see viral videos as a home run, but social media is a game of building hearts and minds, not eyeballs and ears. Richer conversations have a bigger long-term pay-off.

On the future of Websites:

“They will become a hub.” Jeff uses a tool called Socialize Your Stuff to aggregate positive comments on his brands/products from across the Web on his site.

MLC members, learn more about the CMO’s role in social media at our 2010 meeting series, “Closing the CMO Leadership Deficit in Social Media.” Register here.  Or, attend the webinar on July 14 with your team, where we’ll share some of the highlights from the research.  Webinar registration here.

Video: You Can Do It, We Can (Still) Help

Slidedeck: You Can Do It, We Can (Still) Help

The Opportunity:

Home Depot found that previously overlooked “passionates” that sat outside the brand’s historic target audience were engaging with the Home Depot brand online.  The company would try to capitalize on this organic interest to use social media as a way to differentiate itself from competitors with the goal of recapturing a group of consumers they lost during the customer service slip.

The Plan:

(1)     Leverage Front-Line Staff:  Nick notes that social media provided Home Depot with a way to engage store associates in meaningful way.  By tapping into the collective knowledge of those store associates (ex: getting garden associate to blog about how he tends to plants; creating a video of craftsman giving tips on how to build a deck), Home Depot was able to provide different-in-kind value for potential customers.

(2)     Follow Your Audience:  Home Depot found that while homedepot.com is a destination, it’s not the only destination for home improvement information.  Rather than trying to boost homedepot.com higher in the rankings (it was typically consumers 4^th or 5^th stop), Home Depot could use video syndication to bring “how to” content to websites that customers were already frequenting like YouTube and howCast.

Case-in-Point:

One of Home Depot’s biggest opportunities was providing guidance and support during natural disasters, a time when home safety and repair was already top-of-mind for customers.  Home Depot hypothesized that Twitter could help them “reach further, faster” when it came to sharing advice on how to prepare for and recover from natural disasters.

MLC members, for more information on how you can leverage social to improve customer service, please visit our Social Media Topic Center and register for our July 15 webinar, Building a Socially Intelligent Enterprise: Closing the CEO Leadership Gap in Social Media.

(photo of a Home Depot store via Flickr user neubie)

What makes Twelpforce the right social media investment for Best Buy?

“First, it meets consumer needs. We sell stuff that can be hard to understand and consumers don’t want to do all the learning themselves. Second, competitors will struggle to replicate Twelpforce because it will take a long time to gain the experience we’ve collected over the years. When we say our employees are at the center of our strategy, we prove it in an initiative like this.  The more we demonstrate our savvy and offer this support service, the less consumers are willing to waste time working these things out themselves. That gives us an edge over the competition.”

How did you accelerate network growth (of both Twelpforce staff and consumers)?

“We used traditional media, such as TV ads and point-of-purchase notes, to accelerate consumer uptake. Internally, we tapped existing employee behavior and leveraged passionates.  It wasn’t a hard sell for staff who were already on Twitter.  We said, ‘You guys are already out there, would you like to help customers in this space while you’re working?’ That helped us get to critical mass quickly.”

Are there any incentives to encourage staff to participate in Twelpforce?

“Through heavy participation in Twelpforce, staff earn the right to help provide input to some of the strategic decisions made in the social space.  We’re also seeing more and more of our Twelpforce team members stepping into experimental “social” roles in-store that they are now more prepared for.”

What training do you offer Twelpforce staff?

“At the start, coaching took a lot of time and effort.  We had to keep reiterating that Twelpforce is about helping not selling.  Now though, the @twelpforce team is largely self-governing.  Those that have been with us for a while will mentor and coach those new to the effort.  While I lead the implementation of broad-reaching tools, the 1:1 coaching is a shared responsibility across the group.  If a new employee posts something suboptimal, someone will say ‘check out this FAQ on tone’. I make myself available for help at any time, but it’s rare that I step in and handle “issues”, as those are largely handled by the team.”

How do you help staff share knowledge?

“We have a tool – www.bbyfeed.com – that captures every interaction taking place on Twelforce (and will soon be expanding to capture interactions on a variety of platforms). It has simple search features that enable staff to pull up every conversation on a specific topic.  For a retail company, turnover is a fact of life, and knowledge sharing is essential.  Additionally, staff can post extra information without being bound to 140 characters. So, if one employee says, ‘I identified a new virus and found out how to box it in,’ another might add, ‘I found this cure for it…’ while a third could say, ‘and here’s how to prevent it.’”

How do you measure the returns on Twelpforce?

“We look at cost displacement (calls avoided) and quality and speed of service, as well as revenue influenced, and positive press generated. Although Twelpforce isn’t about Marketing or PR, we still measure its value in traditional Marketing/PR terms to demonstrate its full worth.”

What role did your CMO, Barry Judge, play in setting up Twelpforce?

“Without Barry, this stuff doesn’t happen. He put his capital on the line to pilot Twelpforce when it was an unknown idea. He is largely responsible for getting senior leaders on board and getting us involved in this space.”

Speaking more broadly, how do you see social media changing the way brands market to consumers?

“Social media is about relationship building, not marketing and not even relationship-based marketing. You could say that Twelpforce is marketing without marketing. It uses other parts of the enterprise to fulfill brand promises. There is a time and place for broadcast, but it isn’t here – here it’s about providing value and relevance. We give more than we take, but ultimately that will lead to more purchases.”

Check out the latest advice on Twelpforce here: http://twitter.com/TWELPFORCE

MLC members, learn how to identify your brand’s social media “sweet spot” using our Social Media Strategy Builder.

As you’ll read in the article, our research shows that “delighting” the customer—in other words, going above and beyond—yields only marginal additional loyalty from the customer.

We also found that customers are four times more likely to leave a service interaction disloyal as compared to loyal, and the primary thing companies can do to mitigate this disloyalty in the service channel is to focus on reducing the effort customers must put forth to get their issues resolved.

Put succinctly, loyalty in the service environment is a matter of reducing effort, not delighting the customer.

One thing this article pushed us to do was to think about the prescriptive advice we would give companies who want to pursue this low-effort journey. It’s not easy summing up more than four years of research around effort, what causes it and what leading companies are doing to eliminate it, but we managed to come up with the following list of five things that low-effort companies do (and are different, we have found, from what most companies do):

#1. Don’t just resolve the current issue - head off the next one. In the article, we share how Bell Canada and Fidelity successfully did this.

#2. Arm reps to address the emotional side of customer interactions. You’ll find three tactics in the article that will help your frontline reps address the emotional side of the service interaction and increase the odds that customers will agree with the resolution your reps propose.

#3. Minimize channel switching by boosting self-service channel “stickiness.” 57% of inbound calls come from customers who tried to resolve their issues online but couldn’t. In the piece, readers will learn how Cisco Consumer Products and Travelocity improved their self-service containment rate.

#4. Use feedback from disgruntled or struggling customers to reduce customer effort. The article shows how National Australia Group used feedback to increase its issue resolution rate by an impressive 31%.

#5. Empower the front line to deliver a low-effort experience. In the article, we talk about the incentives and metrics you can use to drive the right rep behavior.

Becoming a company that makes customer service “easy” seems straightforward, but as the above list suggests, it’s a tough road to follow for most organizations.

Our data is clear, however, on this point: If companies seek to maximize loyalty (and, in so doing, eliminate the disloyalty that service often drives amongst customers), they must focus their efforts on reducing effort, not on delighting their customers.

What’s your take on customer effort? How do you strive to be a low-effort service organization?

In advance of the book release, though, Hsieh released an excerpt to Inc. magazine, detailing how that vision created conflict between he and his investors – venture capitalists who sat on the Zappos board:

Some board members had always viewed our company culture as a pet project — “Tony’s social experiments,” they called it. I disagreed. I believe that getting the culture right is the most important thing a company can do. But the board took the conventional view — namely, that a business should focus on profitability first and then use the profits to do nice things for its employees. The board’s attitude was that my “social experiments” might make for good PR but that they didn’t move the overall business forward. The board wanted me, or whoever was CEO, to spend less time on worrying about employee happiness and more time selling shoes.

As Hsieh (correctly!) points out later in the excerpt, Zappos’ corporate culture is its biggest differentiator. When you order from Zappos, you know that you’re going to get exactly what you ordered, delivered directly to your door overnight, and if there are any problems with your order, an extremely friendly customer service rep has the power to unilaterally fix them. Hsieh intuitively knew something that MLC research has confirmed – emotional differentiation leads to much higher customer loyalty than functional differentiation.

Creating this culture isn’t easy. For one thing, it’s expensive, as Zappos investors found out. But in the online space, where trust reigns supreme, encouraging that culture turned out to be the right investment. Hsieh ultimately sold to Amazon, with explicit promises that they would preserve the Zappos culture.

What I thought was most telling, though, were the jaded reactions of the venture capitalists who questioned Hsieh’s “social experiments”. Surely these folks had read, at some point, a marketing guru talk about “authenticity”.  It’s a mantra that has pervaded marketing thought in the last few years, nearly to the point of meaninglessness. But here, directly in front of them, was true authenticity – a founder sacrificing short-term profits in exchange for implementing his vision and building an enduring brand – and the only value they could see was that it might make for a good PR stunt; a short segment at the end of the local evening news, maybe, or some cred in the marketing blogosphere.

I see Hsieh’s story as a leadership challenge. Authenticity isn’t something you can just implement – it starts with a vision, an idea for how an organization will change the world, and that vision has to be baked into every aspect of the business.  You have to be willing to take risks to preserve it, as Hsieh did when he defied his investors, and when he sold to Amazon. And, most emphatically, it’s not just a way to get some good press.

MLC Members, revisit our 2009 study, “Accelerating Loyalty“, for our insights on how authentic cultural and emotional differentiators can lead to increased customer loyalty.

(This is a guest post by Dan Clay of the Customer Contact Council, our sister program for call center executives.)

Needless to say (especially living in Washington, DC) it’s hard to find a conversation topic that elicits the same reaction from everyone.  But my experience working in customer service reveals one commonality across all ages, nationalities, races, and eye colors:  If you tell someone you work in customer service, they’ll tell you their latest call center catastrophe.

Your former classmate was transferred four times before he found out why his computer screen went blue.  Your aunt could have swept the floors of Madison Square Garden in the time it took her cable company to pick up the phone.  And all your friend’s husband wants to know is what it takes to talk to a human being.  Like it or not, these stories reflexively pour out whenever we answer the inevitable question, “What do you do?”

Our industry certainly receives a disproportionate share of public scorn.  But thankfully, some comedians channel this frustration into something funnier than the typical cocktail party venting session.  Which brings me to my question: What’s the funniest customer service scene you’ve seen?

Mine, without contest, comes during an Ellen Degeneres stand-up routine.  While questioning the necessity of instructions on shampoo bottles (is it really that complicated?), Ellen envisions the confused callers the shampoo 1-800 line must handle.

Ellen’s of course not the only comedian to crack us up at customer service’s expense.  Seinfeld seemed to have it out for telemarketers and rental car clerks.  Little Britain continues to get laughs every time the computer says no.  Turns out even Mad TV can be funny when it’s poking fun at customer service; the show provides a rare gem in the form of a short-fused fast-food employee seemingly inconvenienced by the mere presence of customers.  (Customer service finally got a moment of glory in Slumdog Millionaire – the hero at one point serves tea in a call center but goes on to become…well, I won’t ruin the ending for those who haven’t seen it already)

To bring this all back to an unfortunate reality: for many people, the funniest YouTube videos about customer service are not from comedians but from real-life company interactions—and the impact from social media negative word of mouth is anything but funny.

MLC members, visit our Customer Experience Topic Center for the latest on how to design the optimal customer experience, get the organization to consistently deliver on it, resolve customer problems, and measure impact in terms of customer loyalty and advocacy.

But back to the fun – will you join me on my break from the day-to-day rigors by answering, what’s your favorite customer service spoof?

• 78 percent said they use two or more channels to browse, research and make purchases; 30 percent said they use three channels or more
• 43 percent said they start their research online or through a mobile device, but then need to call a customer service or call center representative to complete the transaction because the necessary product or service information cannot be found online
• 39 percent said they browse via the online or mobile channel and then make purchases in the store because they prefer to touch and feel the product; 36 percent said they do this to compare several brands of the same product

Consumers are embracing the freedom the new multi-channel environment provides them in evaluating products and services to ensure that whatever purchase they make is the right one.  Retailers are starting to follow suit, but they face some significant barriers in doing so:

• Touchpoint Coordination—Many retail organizations manage in-store experience, e-commerce, customer service, and marketing communications in separate silos, making it hard to coordinate and synchronize efforts across touchpoints and leading to inconsistency and mixed messages to customers.
• Brand Differentiation—Gone are the days where a cool website will get you noticed.   As more retailers embrace emerging touchpoints—social media, mobile, apps, etc.—it will become increasingly difficult for any one retailer to differentiate in such a high-noise environment.  Retailers need to bulletproof the value propositions that drive all go-to-market activities, reinforcing the company’s key differentiators that best meet customer needs.
• Data Collection and Capture—New channels are both a blessing and a curse: while they can provide retailers with the chance to collect previously impossible amounts of customer data, rarely do they have the systems or people in place to use this data to build a single customer view.  This problem is often exacerbated by the same org structure issues that make touchpoint coordination difficult: if the groups don’t report into a single source, their data probably doesn’t get aggregated either.

While there is no quick fix for any of these issues, there are a couple of ways retailers can begin to close the gap to ensure success in the new multi-channel environment:

• Use a jobs/outcomes framework to organize customer understanding. Retailers should use the consumer data they collect to better understand the specific tasks customers are trying to complete when they interact with the company at specific touchpoints and how customers will measure the success of those interactions.  In organizations where individual touchpoints and data sources are owned by many different groups, cross-functional coordination will be necessary to build a holistic picture.  Framing customer understanding in this way can help identify the most critical customer touchpoints that retailers need to get right. MLC members, check out this tutorial for more information on jobs and outcomes.
• Ensure that key touchpoints demonstrate the brand’s unique strengths. Rather than try to improve performance across all channels, retailers should instead focus on ensuring that the critical few key touchpoints will shape customer opinion and engagement, accurately reflect the brand’s unique differentiating strengths.   Check out Pat’s post from a few weeks back for a framework for shaping the customer experience this way.
• Identify and fix misaligned touchpoints. Once the critical touchpoints have been optimized, it’s important to make sure that the others don’t detract from the experience with off-brand service delivery or inconsistent messaging.  Retailers need to identify these “brand busters” quickly and find simple solutions for bringing them in line with other touchpoints.   MLC members, if you’re interested in seeing a framework for ensuring touchpoint alignment, click here.

Taking this approach to customer experience will help retailers move from merely interacting with customers across multiple touchpoints to creating a seamless, truly multi-channel experience.

Well, which is it?  Of course, we’d all like to have an experience that is as good as can be, both functionally and emotionally.  However, we as marketers have limited time and financial resources.  We appreciate advice that steers us on how to prioritize. 

So, here is MLC’s take on how to make those tradeoffs. 

"Thank you, I will have one...it looks very functionally appealing"

Start by stealing a page from Lion-Nathan’s playbook.  Lion-Nathan is an Australian beer brewer, and has taken a clever approach to focusing the organization on the one or two most important pressure points to drive deeper consumer engagement.  High level, here’s how you would do this (there’s more detail in this case study for MLC members):

1. Gather attitudinal and behavioral data across your current and potential customer base.
2. Define the threshold attitudes AND behaviors that characterize different levels of engagement across a spectrum. 
3. Now, estimate the profit that those slices comprise, and spot one (or two, but not more) of the most leveraged audience slices to focus on. 
4. For those slices, study the differences in behavior and attitude that separate them from similar-looking audience slices at the next higher level of engagement.
5. Then, focus your marketing and experience efforts on those behavioral and/or attitudinal barriers, specifically.

Note: depending on your situation, you may find that either improving the functionality of the experience or creating a stronger emotional bond is higher return.  Regardless of which it is, with this approach, it will be easier to structure marketing and experience improvements because you’ll have an audience in mind with specific barriers to focus on.

Depending on where you land, I’ll recommend two important pieces of research and best practice:

• If it’s the functional part of the experience that you need to improve on, focus on reducing customer effort. MLC’s sister program, the Customer Contact Council, has done groundbreaking research here.
• If it’s the emotional connection you’re looking for, take a look at MLC’s  loyalty work focusing on shared values.  Read this short blog post and give the embedded podcast a listen.  Or, MLC members, you can access the full body of that work here.