Social CEM

Moving Beyond Customer Loyalty to Customer Advocacy

Authors:
Dr. Gary Edwards
Dr. Natalie L. Petouhoff
Lisa M. Schwartz

www.empathica.com
 Social CEM: Moving Beyond Customer Loyalty to Customer Advocacy

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 Social CEM: Moving Beyond Customer Loyalty to Customer Advocacy

Table of Contents

Overview: Using Social CEM to Transform Your Business 4

The Current State of Customer Experience Management (CEM) 5

The Transformation of the Customer Experience 6

Leveraging Global Trends to Engage Today’s Consumers 8

Targeting the Millennial Generation 9

Five Challenges & Implications for Brands in a Socially Connected World 10

Understanding the Customer Experience Lifecycle 10

Managing Customer Experiences throughout the Customer Lifecycle 12

Deciding When (and When Not) to Take Action on Customer Feedback 13

Consistently Delivering Customer Experiences That Positively Affect Your Brand 15

Going beyond the Loyalty Stage to Drive Active Advocacy 16

Recommendations for Managing the Social Customer Experience 18

Get a Deeper Understanding of What Drives Advocacy 18

Drive Focused Actions in Your Locations 20

Get Credit for Delivering Great Experiences 21

Ensure Your Whole Organization is Committed 22

Social CEM Readiness Checklist 24

Conclusion 25

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 Social CEM: Moving Beyond Customer Loyalty to Customer Advocacy

Overview: Using Social CEM to Transform Your Business

With the advent of social media and the rise of mobile smartphone technology,
consumers are in the driver’s seat, posting their customer experiences in permanent,
online forums and providing instant customer feedback that is increasingly visible
to the public. To get in front of these trends, traditional, relatively passive Voice of
Customer programs have the opportunity to evolve into highly actionable Social
Customer Experience Management (Social CEM) solutions. The most advanced and
commercially advantageous Social CEM includes not only the process of gathering
one way customer experience feedback, but also the ability to provide true two-
way dialogue that drives local and immediate improvement efforts, drive positive
online and offline customer advocacy, increase same store sales and increase
Customer Lifetime Value (CLTV). Social CEM is about moving beyond “interrogating”
customers about their experience with brands and creating an ongoing dialogue
where customers become “co-creators” of the brand by becoming active, engaged
advocates. This paper is about how brands are transforming their businesses by
using Social CEM.

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 Social CEM: Moving Beyond Customer Loyalty to Customer Advocacy

The Current State of Customer Experience Management (CEM)

What’s made customer
Measuring customer experiences is really about understanding the sum of a series experience management
of touch points, the gestalt of one or several moments of truth that drive an overall a vital, bottom-line
perception of the individuals involved and the product purchased or consumed,
business initiative in
juxtaposed against the channel engaged and the expectations of the brand.
today’s world is that
Customer Experience Management (CEM) is how a company manages those
digitally connected
interactions with customers. CEM has emerged as a “space” or methodology in
retail parlance, as it provides a means to manage and create loyalty, and higher
consumers are far
customer lifetime values (CLTV) – where customers buy more goods and services more vocal about their
over longer periods of time, positively affecting revenue, profits and margins. By customer experiences
contrast, not managing CEM can lead to increased operational costs as well as and have a more far-
negative word of mouth and customer attrition. Social CEM acknowledges that reaching impact than
with social media the impact of either positive or negative customer experiences are ever before.
more immediate, tangible and amplified and as a result, must be integrated in the
customer experience management program.

It is an old adage in business that “you can’t manage what you don’t measure”. Many
companies do not effectively measure, communicate and hold their front line agents
accountable to continuously improve their customer experiences. They may collect
customer experience data, but the time and distance from feedback to a customer
evidencing any tangible improvement is so long that most consumers who provide
feedback do not believe any good comes of it. This is evidenced by Consumer
Insights research done by Empathica showing that only 46% of respondents
believe that feedback is used to improve the customer experience. This can only
be the result of two factors: 1) a lack of transparency and communication from the
brand outwards on what the score is and what’s being done about it, and 2) a poor
understanding and execution of the improvements needed at the local unit (i.e.,
store, restaurant, branch, dealership, etc.) level. As a result, the revenue boost and/
or cost cutting goals of CLTV have often not been met and customer experience
improvements remain an elusive goal in many companies.

Whether taken seriously or not by the executive suite, customer experience metrics
have always been important indicators for the success of a company1. What’s
changed and made customer experience management a vital, bottom-line business
initiative in today’s world is that digitally connected consumers are far more vocal
about their customer experiences and have a more far-reaching impact than ever
before. With studies showing 78% of consumers trust recommendations versus only
14% who trust advertisers’ messages, managing on/offline customer experience
has never been more important2.

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 Social CEM: Moving Beyond Customer Loyalty to Customer Advocacy

When today’s consumers post information about their customer experience online, Social Media Statistics:
they can reach thousands of people in mere seconds. And those posts remain
online as a permanent record of customers’ experiences. If, as is often the case,
the customer experience is “off”, the company is in danger of not only losing the
future revenue of the customers who posted, but also the revenue from hundreds
if not thousands of other customers who read about how the brand’s products or
services didn’t meet customer expectations and subsequently choose not to buy
from the brand. In addition, the lack of improvement in the business can result in
increased operational costs dealing with customer complaints, the source of which
could have been rectified if recognized and corrected based on ongoing customer » Smartphone owners now spend
feedback. as much time using social
networking apps such as Twitter
The rapid adoption of social media and mobility has left most companies and Facebook as they do playing
organizationally challenged to adopt new approaches in how they design and games
improve customer experiences and drive customer loyalty and advocacy. Utilizing
» Users log an average of 77
a systematic approach to Social CEM can provide real-time feedback for the
minutes per day using apps on
corrections and adjustments required by the business as well as to build an ongoing,
their smartphone
online customer advocacy program. Companies can use Social CEM to drive
high quality interactions and provide end-to-end customer experiences across all » 40% of Twitter users regularly
communication channels (online and mobile) as well as in face-to-face (F2F) brick- search for products via Twitter
and-mortar locations such as in retail stores, restaurants, hotels, bank branches » 12% of consumers have
and auto dealerships. However, making these changes requires not only a change purchased a product online
in how leadership views customer experiences, but also the empowerment of the because of info they found on
various functional departments who are being measured by customers to actually Twitter
make the changes required to deliver exceptional customer experiences.
» 60% are willing to post about
products/services on Facebook if
The Transformation of the Customer Experience
they get a deal or discount

In the last decade, consumers have rapidly adopted disruptive, online technologies. Source: http://thesocialskinny.com/99-new-
social-media-stats-for-2012/
Customers went from being limited to visits to a brick-and-mortar location to
researching and comparing a company’s products and services via Internet
searches and review websites followed by in many cases making the purchase
online. A shift from brick-and-mortar shopping to ecommerce signalled a new way
to communicate with customers, SMS text messaging over mobile phones is not
just a way to interact with friends; it is increasingly a means for companies to interact
with consumers.

The advent of handheld devices like the smartphone and iPad, have forced an
evolution in how consumers and businesses communicate. Today, handheld digital
tablet technology makes mobile communications available and useful at every age.
Unlike generations before now, even kindergarten students are indoctrinated into
this new paradigm. These future customers grasp for their parents’ smartphone or
tablet computer as if it was a link to life itself. Along with handheld devices, social
networking sites continue to proliferate. Facebook, Twitter and Pinterest along with
dozens of new, well funded entrants into the field allow consumers a direct line