April 1, 2009
By Paul Greenberg, founder and managing principal, The 56 Group

Social Customers Want to Engage

It’s been five years since I started talking about the social customer—someone not only engaged with the institutions he’s doing business with but also willing to engage his peers.

I had good reason: In 2003, the most-trusted source among respondents in the Edelman Trust Barometer was the subject-matter expert; only 23 percent cited “someone like me.” Just a year later, that figure became 51 percent, and now peers are the number-one most-trusted source.

Today, that trust includes the ability to reach out via the Web to people you don’t know personally and yet trust implicitly. Think of that time you picked a cafe based on the content from Yelp or some other review site—you didn’t personally know the reviewer, did you? That freedom of communication works both ways: People can galvanize peers into action for or against a company—that’s the true power of the social customer. The conversations are also an amazing repository of knowledge—in fact, harnessing the customer relationship for service may be more powerful than utilizing it to drive sales.

You’re likely on Facebook (175 million members) and LinkedIn (35 million). You also may know of specialized social networks, such as Innocentive—125,000 scientists and engineers who solve problems as a community. But it’s no surprise if you’ve never heard of PlanetFeedback, one of a whole class of independent communities that exist to handle customer complaints on behalf of the customer. Each month, roughly 125,000 visitors share complaints with a community that has no connection to the offending company. With the consumer’s assent, however, the site’s operators can also take action, providing a way to show loyalty and positive commitment. PlanetFeedback communities discuss the various issues, compare and rank the stories, and elevate the feedback to actionable status based on the community’s say-so.

In short, the conversation about your company is taking place outside your control. With customer service—easily the most emotionally charged company-customer interaction—this lack of control can be dangerous to you. A single incident can be a catalyst for the creation of multiple enemies. But there is opportunity in that danger because, if handled well, an enemy can become a loyal advocate.

But how? Through the creation of customer communities, given access not only to the company’s best practices and corporate knowledge base, but many of its senior executives as well. Even more germane, customers have access to other customers. The community forums can raise—and solve!—issues that might stump the knowledge base or even a customer service representative.

Customer service application vendor Helpstream, for example, did a study of the communities serving its hundreds of thousands of customers. The breakdown in how the problems were solved tells volumes about the way customers attempt to solve problems: 47 percent resolved by CSR; 37 percent resolved by knowledge base; and 17 percent resolved by the community itself. [See this month's Rising Stars for more on Helpstream.]

That smallest number is the most important. Not only are the traditional approaches to customer service being used, but customers can now solve each other’s issues—increasing their loyalty to the company that provides the tool for that resolution (i.e., the community itself).

Sage, for example, has built a large, organized community of users for its Act! by Sage contact management software. Sure, some sage Sage personnel participate, but the network’s strength has been the ability of members to help each other. When one Act! user, for instance, had a database problem, it was another user who knew what to do. A resolution achieved! But there’s more: The original user documented the fix, enabling it to be added to Sage’s customer service knowledge base.

This leads to tangible results. In its first year, the Act! by Sage Community had more than 8.9 million page views and 266,000 searches. More important, the sense of community served as a catalyst for product testing, increasing some participation by over 300 percent, and helped generate a 15-point increase in the Act! brand’s Net Promoter score. Transforming potential enemies into advocates—a pretty good trade, no? If you’re not sure, ask your peers.

[See Insight for more on vendor-sponsored communities and Net Promoter score (here and here).]

Paul Greenberg is president of The 56 Group (the56group.typepad.com), a strategic CRM consulting services firm, and a cofounder of CRM training company BPT Partners. The fourth edition of his best-selling book, CRM at the Speed of Light (McGraw-Hill), will be out later this year.

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For the rest of the April 2009 issue of CRM magazine, please click here.