Think Customers: The 1to1 Blog

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Saman
Social Media Marketing

I just read one of the latest 1to1 e-newsletters and feel I have to chime in.

Three issues in the newsletter caught my eye: "What's the Secret to Web Site Bliss?" By Mila D'Antonio; "Customer Experience Trumps Product Innovation," By Larry Dobrow; the "-- Companies Change Youth Strategy" -- by Kevin Zimmerman; and the letters pertaining to "Firing the Customer." To one major extent they all truly talk to and about 1-to-1 marketing.

The first article, about "The Knot" Web site, is, if proven, an exception to the rule of how so many organizations actually perform 1-to-1 marketing. Here I can feel a synergy at work: the management works with the Web master, and the customers to create and maintain an environment conducive to customer loyalty and growth. Whether done on purpose or not, management is obviously viewing its own employees as customers, which helps to make for that synergy.

As said, this is an exception wherein too many organization say, "We care about the customer and we want a valid and a good dialogue," when, in truth they wish to use a tool to convince customers to stay or for customers to no longer pay attention to what the organization is doing or will do to the customer which will benefit the organization but possibly harm the customer in some way; or, they are only giving "lip service" to be considered in a manner other than how they are. The other major article, the short one, and the letter attest to
the usual.

The idea of "Firing the Customer" and Coca Cola's stance on caring about the youth are classic examples. Each stating how much each cares about the customer and such, but, then stating that whatever they are selling is and has always been okay anyway. This is just "window dressing." After all, if the product has been so good, why even try to show that you are doing something to make is a good thing now; and, then keep it the same way? All that is needed is to simply state what the facts are about a product, but only if the product is challenged. Doing as Coca Cola did leads me to become suspect of them, their motives, and even their product (even though I know their product is not harmful for most of us -- unless we are allergic to one of the ingredients, or sensitive to some aspect of it).

This is why I have asked in past "Letters to the Editor" whether anyone has followed up on any of the stories written about the good of an organization adopting a 1-to-1 approach. I know too well, from my own experience, how often that so-called change of approach is just to capture a greater market share; and, once obtained, the same organization disregards that same customer by treating him or her as a piece of property to do as the organization wishes. The banking industry repeatedly does this, as an example.

As said, this is based on my understanding and experience. After all, the whole idea of 1-to-1 Marketing, or CRM, is still an extension of the accounting feature called, "Good will," but developed into a methodology to be able to be taught, learned, practiced, and improved. Perhaps some of the organizations which state they practice 1-to-1 Marketing, or CRM, would benefit from reviewing what the accounting term, "Good will," is all about?

I know it sounds too good to be true, but the Knot's word-of-mouth "campaign" definitely works for that site. I am getting married in October and I only knew about The Knot from the dozens of friends who got married before me.

In my interview with Carly Roney, she said that before The Knot, wedding advice was given by gray-haired women who who had been with wedding magazines for 30 years. The Knot created a fun and personal site that soon-to-be brides build an affinity to. It truly has filled a void in the wedding planning space, in which case women want to share it with all their friends.

Also, to extend the loyalty beyond the nuptials, The Knot launched newlywed site The Nest and The Nest Baby.

Zappos is another example of a company whose primary source of growth has been through repeat customers and word-of-mouth. The company believes that investing resources and money in improving the customer experience is more beneficial than investing in marketing.

With $597 million in merchandise sales in 2006, and a projection of $800 million in 2007, and The Knot's 70 percent increase in revenue last year to $70 million, I'd say word-of-mouth is working for these companies.

When I got married two years ago, I used the Knot almost every day. I heard about it from some friends, and have since told many people about it. I also frequent the message boards on The Nest to see what other newlyweds are talking about. (I don't mind the name, and there are a few brave men who use the site as well).

I think that for a Web-based property in the right kind of market, word-of-mouth can exist right from the start. The Knot seems to have hit on something. Carley Rony goes into some more detail in the podcast about how the company shoots for a "five-year" loyalty plan -- from proposal to pregnancy. It's more of a relationship-building tool than a product, which helps spur word-of-mouth.

Tim, you're of course right that word of mouth will not produce "loyalty" in the wedding market, because weddings are, if not one-time events, certainly not frequent for most people.

However, I think one of the great strengths of a good word-of-mouth reputation is that especially when purchases are infrequent, a good reputation for service means that one-time customers tell OTHER would-be customers.

In thinking through the benefits of great service, this is a data point that should never be ignored, and it is indispensable when selling a very infrequently purchased product or service.

I'm having just a little trouble with this. If you look at something and it's too good to be true, usually you can bet your life that's right.

So I fell at this hurdle: "The Knot is a word-of-mouth marketing phenomenon. We attribute our growth from day one to brides' almost instant obsession with and loyalty to the brand. It's not without an effort on our part. A lot of it came from the fact that we were willing to take a risk in the market of weddings. It was so staid and tired. We came out with a brand that was so offbeat -- calling it The Knot. People have a strong affinity to the brand. They feel like they belong there. " reads to me like puff without substance.

There is no such thing as a pure word of mouth business. Something has to spur that first purchase, something has to drive the customer to begin the process of liking a brand and being loyal. So what was that thing? Surely it didn't just exist one day and trade because of word of mouth?

And then I looked hard at brand loyalty. If the target market is weddings, how often do we get married? How does the loyalty extend beyond the current impending nuptials? Where is the repurchase cycle? "Oh yes, i always go back to The Knot each time I get married" does not sound like a probable line!

So what are they doing really?

I can't comment on PPC webvertising because I'm outside their catchment area. Do they webvertise in the USA? If so that is not word of mouth, that's traditional business promotion.

"The Nest" is a different brand. I can see loyalty there. It has interesting sexual stereotypes, though. Are US women happy to be categorised as nest builders? I doubt it.

I like the fun philosophy, the full Ben and Jerry part. I just don't swallow the "word of mouth phenomenon" elements. I'd love it to be the whole story. If it is I am so jealous!