Richard Sedley podcast transcript
The following transcription is taken from an interview with Foviance’s CEO, Paul Blunden and Richard Sedley of cScape.
Speaker key
PB: Paul Blunden
RS: Richard Sedley
PB: Hi I’m Paul Blunden from Foviance, and welcome to our podcast on customer research, and in particular, in engagement. This podcast was recorded on February 26th, 2009, and today I’m joined by my guest, Richard Sedley, Director of the Customer Engagement Unit at cScape. Richard, I really appreciate you taking time to talk to me today.
RS: It’s my pleasure, thank you very much for inviting me.
PB: You’re welcome. Maybe the first thing as a bit of a scene-setter, we can do Richard, is just to ask you to tell a little bit about your background, and in particular, what you do at CScape and the work of the customer engagement unit?
RS: Okay, well, personal background, if you like, first. I actually studied painting in fine art; big, large canvases, mainly oil paintings, and then there was a convoluted route; I ended up owning a design agency, where our clients began to ask us for more and more work in the digital space, and this was probably around 94, 95, so fairly quickly we transformed ourselves into a digital agency, on the back of the design work that we were doing for clients. Then the long and short of it is that the current company that I work for, CScape, bought that design agency over ten years ago, and we set up the design department within CScape.
About three and a half, nearly four years ago, we set up a consultancy division called the Customer Engagement Unit, which was largely there to serve our existing clients, basically. It was becoming obvious that the technologies and the design that we were implementing for our clients, we were getting clients to part of the way there, but there’s a big whole area of digital, which means that you really need to be able to develop the customer relationship aspect of the work that you’re doing. And I think in many ways it was a case of, if we don’t do it, someone else is going to be doing it for our clients, so we stepped in and filled that bridge, if you like, and the sort of work we were doing at that time was very much looking at how customers are interacting with the site, being able to develop longer lifetime relationships between our clients and their customers, and so they could leverage that lifetime value. And that could take any number of different forms. In the recent year to 14 months, we’ve been working much more on a strategic level with our clients, helping them write strategic plans for the next two, three, even five years in some instances, around particular aspects of their activity, particularly around digital activity, but not exclusively actually, on that level.
We’ve just been working with a big Japanese multinational, the European division of a Japanese multinational, looking at strategically how they can move into an area which they consider to be digital by default, and that will also cover things like big trade shows, printed materials; how they can leverage the digital environment in order to be able to make the most around those areas.
PB:And when you say strategy there, you’re talking about digital and somewhat offline; that’s beyond just pure engagement then, that the CGU does, or specifically engagement?
RS: Well, right at the heart of it is the relationship with the customer, it’s how you’re about to engage the customer – that’s the most important part of it, and everything else flows from that. Strategically, that might mean looking at what new technologies they need to be able to implement, how they can perhaps move into areas that are becoming increasingly popular, like social media, without becoming too obviously just brand, brand, brand, and joining the conversation, as people like to say.
It’s taken the form, in certain instances, of looking at how we can set up ongoing competitor comparator analysis for clients, and a framework around that, which they can then take on and learn from an environment which, to be honest, is becoming increasingly important. The nature of the recessionary environment that we’re living in at the moment, means that the importance and stress on innovation is coming from every angle in order to be able to try and make sure that you get a better economic return on your money. So, the more people are emphasising innovation, the more it becomes important to be able to monitor the economic environment in the marketplace that you’re working in, in order to be able to learn very, very quickly from your competitors, should they steal a march on you in terms of innovation.
PB:Yes, it’s a fascinating area and one of the things I wanted to ask you about actually, you wrote the book, Winners and Losers, that came out about this time last year I think?
RS: It was, yes, I think it was just at the end of January 2008, but we started writing it in November 2007.
PB: Yes, and I know in the back end of 2007 there was a lot of conversation about, we’re going into a slowdown then, now, we’re facing a full blown recession. I’m interested to understand what, out of the findings from the book and some of the learnings, has come true, and what’s not come true; what’s your take on it?
RS: Well, I think we were perhaps over-cautious in terms of the way that we wrote the book, because at the time, a lot of the discussions were around, people were just being too doom and gloomy, and we were just, in fact, we were actively criticised by a number of people in the industry for writing a book like this, because they felt that we were encouraging the idea that people were going to cut back on their marketing budgets. Of course, the thing has come full circle now, and people are looking at it and thinking, well actually, when I look at it now, maybe we were perhaps not quite conservative enough in certain instances.
So, you can never be 100% right, but I think we did well in order to be able to foresee that something was happening, and to get something out into the marketplace, with insights, but also with tips on how you can act in this particular environment. So, there’s a page in it that looks at tips and ways that you can talk to your chief financial officer, your CFO, and try and encourage difference types of cuts; looking at ways that you can get projects funded, for example. And that list of tips was done on the basis of a number of interviews we did with both our clients and with other companies who had direct experience about having things cut in the past during recessions.
So, in terms of where we are at now with the recession, I think that the big problem that we face at the moment is that we don’t know where the bottom is, really, but in order to be able to carry on in business, we’re seeing, particularly in the larger corporates, people are doing what’s called cutting for the bottom; they’re already thinking it’s going to be incredibly bad, so therefore we will make redundancies, and we will cut our funding of marketing and other activities in preparation for the fact that it’s going to go right the way down to the bottom. And we’re all probably in a situation where we’re going to be suffering around that. Actually, that’s not entirely true, come to think about it; because there are instances of companies that are doing reasonably well at the moment, and I think a lot of that has to come down to an understanding of customer psychology, if you like. So, an example would be, I just saw something in the paper today, and I have it here in front of me so I can talk about it; that Cadbury has posted a 30% rise in annual profits, it’s up to almost 600 million. And you think about it, well, chocolate; you could say it’s all down to drumming gorillas and slightly psychotic children with wobbly eyebrows, but I obviously don’t say that. I think it’s much more to do with an understanding that customers, while they are probably in a bit of a doom-gloom situation, and the threat of job cuts and everything that’s taking place; also, you can’t live by that alone. And there’s a definite situation where people have a sense of escapism, a sense of playfulness about them, a sense of being able to treat themselves. And there’s an expression that we use, which is where people are able to trade up and trade down at the same time; so at the same time that they’re cutting on things that they don’t think are that important, they will carry on buying, or even trade up in brand, in terms of the things that they do think is important, and I can almost guarantee you that my wife thinks that chocolate is very, very important, so I would assume that most other individuals would think similarly. And I think that’s probably one of the things that’s behind the boom in Cadbury’s. There are other things, I think, as well, if you don’t mind me just going on about this that I think are interesting.
PB 
lease.
RS: There’s a very interesting company in the US that operates internationally, called Heritage, and they’re the largest specialist collecting auctioneers in the world. E-Bay exists, but then if you think of the real specialist collections, then Heritage is your mall. And they do things like film posters, comic books, coins; all of those kinds of things, and they’ve seen a 40% rise in profits in the last three months of last year, and the average lot value has gone up by over 8%. And you think, my goodness, why on earth is that going on? Because these things aren’t really all there for investments – coins aside; coins have always done very well in recessions. But I think, again, it comes back down to an understanding of psychology and customer psychology. The thing about recessionary periods and the downturns, is that the effect they have on individuals, and in particular our customers, is that they feel a lack of control, they feel out of control, they don’t know where their next reassurance is going to be able to come from, and people retreat back into domains over which they have a degree of control, and collecting is one of those domains. I might not be able to know where my next meal or ticket is coming from; that’s probably an exaggeration, but I might not be totally confident that I’m going to be employed next month, but I know I can add at least one, two, three, four, five things to my collection, which I have some kind of degree of control over in the domain. So, I think that there’s interesting things about the recession that have changed the way that our customers are reacting, and probably the thing that’s most important to recognise is that customers are not not spending; they are spending; they’re just spending differently. They’re spending with a more heightened focus on what they consider to be valuable to them.
PB:You mentioned Cadbury’s and the collecting area, which was no better emphasised than Yves St Laurent’s chair being sold, I think yesterday, wasn’t it?
RS: The most expensive chair ever, not even the Chippendales fetch that.
PB:Are there any other sectors that you feel are benefiting despite the recession, or areas within sectors, maybe?
RS: I think it’s easier to look at areas that you can say are definitely doing badly, but I think my hypothesis is that most areas could do okay, or at least not as badly as they are doing, if they take the right approach to things. So, an example, and I’ve seen some of this stuff is already beginning to kick into gear; it’s recognising what’s important to your customers, what they value, and the prisms with which they see that value. So, an example would be something like wide screen televisions. Wide screen televisions, marketed as the ultimate boy’s toys for a number of years, and we’re already beginning to see that these things have changed in the way that they’re being marketed, is much more around the idea of family values. Now, family is a traditional prism through which people understand downturns and recessions. It’s like, circle the wagons; let’s bring things together a little bit more. So, the value of the family, and the importance of the family becomes very, very important. So, being able to re-stress something like a technology, away from the kind of stuff that you might want to be able to lose, the boy toy aspect, more towards the idea of domestic bliss; we’re going to save a little bit of money going out – not that you actually do save any money. You can see that the same thing can be cut two different ways, and I think that one of the areas that has been acknowledged as doing reasonably well, is the high definition television stuff, and I think Sky have done quite well in the recent period. And I think that would absolutely fit with the idea of being able to stay at home. But the point I’m trying to stress here is that if you’re able to look at your product or your service or whatever it is that you’re offering, and find a way of being able to make it resonate with the customer’s recessionary mindset, then you still have potential. It’s not that some things will work and some things won’t work, in terms of just products in and of themselves.
PB: That’s very interesting, and I guess at the heart of customer engagement, how you’re going to go about interacting with them. One of the things I was interested to ask you is obviously Foviance see the world very much through customer experience eyes, and I’m interested in your view on how customer engagement fits in or is different, or the same as customer experience?
RS: Well, I think they’re all fairly fluid terms, and if you are successful in one, then you’re more likely to be successful in the other, but I do think there is a slight difference between the two, and if I was going to be pushed on this, I’d probably say that I think that experience is an important element of engagement, rather than perhaps the other way around. And I think you can have positive experiences, very, very positive experiences that don’t necessarily lead to engagement. Probably the classic example that’s rolled out again and again is the US automotive industry, the car industry, where satisfaction surveys indicate that somewhere between, I think it’s 85 and 93% of people who surveyed in the US auto industry, indicated that they’re satisfied or very satisfied with the US cars – but then they have a repurchase rate of 40 to 50%. So, satisfaction, and sometimes this can be experiences, is more an indication of past performance as opposed to future performance, and this is one of the key things with engagement, is that what engagement offers you, is probably it’s the best predictor of future business performance that you’re likely to get. Now, I think it’s probably worth me kicking in here and saying what I think is the definition of engagement, I think that would certainly help. We’ve come up with something which we put it like this: So, we say that this is the definition of customer engagement. It’s repeated interactions that strengthen the emotional, psychological, and physical investment that a customer has in a brand, a product, or company. And the key words here, really are, repeated and investment. So the investment element of it can be emotionally, psychologically or physically, and the fact that it’s an ongoing process, and I think that one of the major problems that you quite often see with marketing in general, is that it’s focused on the single conversion, it’s focused on reach, being able to get someone and to convert that one particular time. And it’s a kind of classic example, it’s that someone could walk into a car showroom and be bullied into a sale in its worst example, but you just know that they’re either going to take that car back or they’re never going to buy from that person again. So, engagement puts conversions into a more long term value laden relationship, and that’s a value laden relationship for both the customer and for the business, I think.
PB: That’s an interesting point, and perhaps a good time to bring in the role of the social media, which is very much seen as a long term influence, perhaps over brand, there’s some short term aspects to it, and in particular I know there’s a lot of challenges with measurement on social media, and whether long term, short term engagement is an issue. It’s an area I know you’ve got a lot of interest in and knowledge about. How do you think that is affecting how brands engage with customers and the way they’re measuring it in particular?
RS: Well, there’s examples of where some of this stuff is working well, and where it’s not worked well; the classic example of Dell having problems in the blogosphere a few years back, has actually enabled them to learn fairly quickly, and transform themselves, and you now have, they’ve even set up their own community called Ideas Storm, where they’re able to learn about their products and how people are using their products, and develop new products on the back of that. So they’re utilising social media and integrating social media into almost every aspect of what they do, from product development, product delivery, right the way through to support systems as well; there’s some very good examples in a book called Groundswell, by a couple of analysts from Forrester, so it’s worth having a look at that if you get the chance. It’s got a load of very good examples in there. I think that for me, the main difficulty with social media is that we’re still in largely untested territories, and I think that the recession that we’re in could have a major impact on this. So I know that myself and a number of clients of ours have started to use systems that are suddenly no longer there any longer, because the business model behind all of the social media just doesn’t exist. So I think you need to be very careful of when you’re taking some of these steps in there. Having said that, nobody ever learnt to swim without getting wet, and I think that equally what we’re seeing with some of our clients, and we’re trying to change this, is that they’re holding back too much. What social media can do, and this is why I’m a really, really big fan of Twitter at the moment, and I’ve been using it on and off for the last couple of years, but only really started to use it properly in the last year, and I think that’s part of the fact that it’s reached critical mass. What Twitter does for you, is it starts to help you to learn an effective language from a customer point of view. So, anyone as a company who starts a Twitter feed, and starts to be able to talk using Twitter, learns fairly quickly what is a good way of being able to talk and add value, in a way that you can’t do quite so easily when you’re blogging, because people don’t comment and come back to you and offer you comments. I was thinking about this the other day, and I was thinking about whether we could draw an analogy with the way that Darwin was looking at stuff, you know, it’s the anniversary of Darwin and everything; and that one of the reasons that Darwin and a number of his contemporaries who looked at fruit flies, is because they had very short life spans, so you see mutations and changes happening in a relatively short time period, because they would be born, they’d live, they’d die, and then another mutation would happen. And I think that that’s actually the beautiful thing about social media, and probably of all these things, it’s the beautiful thing about Twitter, is that you start, you try, and you can see change happening as you go, and so long as you’re observing, you’re able to learn through that process.
PB: What do you think about the E-Consultancy thing they did recently, putting it, I think it’s still there, putting a Twitter feed up on their home page?
RS: Well, it’s funny you should mention that actually, because I used it as an example yesterday at the speech I had at a Technology for Marketing and Advertising event at Earl’s Court. I think it’s a very smart idea actually, and not necessarily for the fact that people have picked up on it and thought, oh, that’s a kind of cool, gadgety-type technology thing. I think it’s more to do with the idea of social proof.
We’re living in an environment now where we’ve probably never lived in such a fast paced, attention demanding, attention sapping kind of world; no human being has ever lived in quite such a world, and as a result, what we do is, we continually rely on taking shortcuts when we make decisions about things. So, instead of sitting down and working through something logically as to whether this is a good idea or this isn’t a good idea, is this for me, isn’t this for me; what we do is, we look at the environment that says, what can I learn quickly to say whether it might be good or not. And the idea of social proof is one of those, what I would call cues, that we’re able to look at and take a lead from. And so, on the E-Consultancy home page, you can see all these people talking about E-Consultancy, and it’s rotating as it’s going around, and someone who is fresh to E-Consultancy stops, looks at this, and thinks, wow, loads of people are talking about E-Consultancy. How can that many people be wrong? There must be something interesting and vibrant about E-Consultancy. So what they’re doing is, they’re drawing on the idea that lots of people are talking about them, and being able to display that back in a very simple form, to their potential customers, to their potential readers, their subscribers, and say, look, how can this many people be wrong? Give it a go.
PB: It’s also extremely honest, of course, isn’t it, because you end up with the good and the bad all showing in one place?
RS: Yes, I think transparency is probably one of the things in social media, people spot fakes really, really quickly in social media, and I think that some of the discussions that brands have about creating fake people, which has raised its head again in the context of Twitter, I can’t believe it, it’s one of those things, it’s just going to get sniffed out very, very quickly. People are smart now. People have always been smart, but they’re super-smart in a super-fast way now.
PB: Yes, and there’s a lot of them of course, as well. It was one of the questions I had actually, around, as more brands get involved in things like Twitter, it is going from being a very techy toy to being something that as you said, has reached its critical mass, its mainstream. Have you got concerns about how brands start using this sort of thing, or not?
RS: Well, not my client’s brands, because we’ll be working with them, but I think people will continue to make mistakes, but I also think that the thing about Twitter is that people will just, kind of, un-follow you and you’ll get ignored. That’s the worst thing; you could end up by just talking to yourself if you’re not careful with that. So that’s where you need to be able to understand some of the value that you need to offer through something like Twitter – you can’t just talk about your brand, you can’t just talk about who you are, shout out who you are all the time; you need to be able to offer some real value to people, in order for people to be able to engage with you. And it doesn’t have to be over-complicated; it can be in a number of different ways. There’s been some recent research looking at the measurement around people re-tweeting, which is basically taking what someone else has said and sending it back out. And that’s a great idea, because what we’re looking at there again, is we’re looking at the idea of reciprocity; the idea of, if you do something for someone, you’re more likely to have someone do something back for you. And people building their brand around reciprocity, sharing, linking, re-tweeting, I think is a very sustainable model for brands depth, and extends brands in a way that they perhaps wouldn’t necessarily have planned to do. But it’s a nice, cheap, easy environment. There are other things. Personally I’ve had some very, very good experiences from people like the Car Phone Warehouse around this, and I have no idea whether they set it up intentionally to have someone there representing them as on Twitter, but I was looking at perhaps getting a new mobile, that’s why I sent in this guy a message, and he said, I’m not sure, but I’ll get back to you. Within probably about two hours I had someone from Car Phone Warehouse e-mailing me the details of the thing that I was interested in. Now, for me, that’s proper service; I didn’t have to leave my desk, and I felt like I’m going to be able to share stuff back with this guy from Car Phone Warehouse about things, and that’s the nature of the environment that social media can really foster.
PB:That’s an interesting example, and one of the areas I’d like to explore with you around cross-channel customer experience; because you look at that and say, okay, that’s a brand, Car Phone Warehouse, using a social media area, but it could be any area really, to help drive sales and conversion. As you say, people are just trying Twitter out at the moment, and the ROI stuff and the measurement’s really loose. How do you see that cross-channel measurement and social media measurement evolving over time, and particularly in a recession; do you have concerns for how organisations will continue to justify doing some of this stuff?
RS: Yes, I think that we’re not at a stage now where people are necessarily or consistently going to cut across things like social media. And I think that there’s probably quite a good reason for that, is that the reason why a lot of these brands got into social media in the first place was because certain individuals within their company started to take it up and do stuff. Or, alternatively, and this has happened with a number of our clients, is that fans of their products, or fans of their brand, have already started to be in that space, so it would be completely bizarre for the company to then say, we don’t want anything to do with you guys who are our potential evangelists. So, I think that it’s unlikely that people are going to pull back totally from social media space. I think that there’s an understanding that there’s a lot of potential in the social media space; the main problem is that people just don’t know how to interact with it. And at the moment, I’m not entirely convinced that being able to measure some of the interactions, at the moment, is going to give people the insights as to how to interact in that space. I think what’s happening and where it’s happening and how it’s happening, are very, very useful things to have, definitely, but why it’s happening, is I think, an equally important part to that. And I think that probably what we should be looking at, and I made a prediction two or three years ago that this stuff was going to take off, and it didn’t really, it only just potentially still may take off, is the idea of digital ethnography, where you’re doing the ethnographic research, but you’re doing it in the context of social media, and begin to look at how people are interacting, how they’re acting within social media. It crosses over with some of the buzz monitoring stuff, and the nature of the conversation, which I think is definitely important. But like I said, maybe it’s because I thought about it a while ago, but I prefer to think of it as digital ethnography. And I still think that’s going to take off, because there’s so many insights you can gain into customer behaviour through that kind of stuff. And that stuff does really inform how one can really make a difference within social media as well. So, we have a lot of clients talking to us about, should we be setting up a FaceBook group, for example. And I said, well, you know, there’s no harm in you setting up a FaceBook group if your customers and your fans haven’t already done that, but you need to understand what’s the motivation behind joining, for instance, a FaceBook group, and it’s not particularly marketed, it’s not necessarily even to be able to have discussions about the products. People join FaceBook groups to express an element of their identity. I joined the Tottenham Hotspur group because that’s part of my identity, not because I’m actually going to have discussions about what’s going to happen in the cup final or anything like that. People join in order to poke fun at themselves, so there’s a big sense of humour element about that. And there’s about three or four different reasons why people join FaceBook groups, but once you understand that, then you can begin to recognise the limited parameters through which you can market around, rather than simply thinking you need to be there and then we’re just going to send all our services down into that space.
PB: Right, social media is very much some of the new innovations that have happened over the last couple of years; I’m interested to understand what other areas of innovations you see in your area in particular, that would change the way organisations understand customer engagement and customer experience maybe.
RS: Well, if I pull you back to that definition of engagement, I think that the idea of repeated interactions is very, very important, and in many ways, what the beauty of social media allows you to do is have some of those repeated interactions within the customer’s space, in their domain, as opposed to on your domain, trying to drag them over to your website or wherever, constantly. And I think that the rise of location based services is going to become increasingly important, because then you’re not just doing it on their desktop, but you’re able to do it in context properly. And you’re already seeing stepping into that; I’m a big fan of the I-phone, there’s quite an interesting application on that called a ‘bright kite’, which allows you to mesh up location with messaging services and various other bits and pieces, and I think that we’re more likely to see that kind of location based stuff taking off. Now, from a multi-channel point of view, that means that it could be through just a single channel into your mobile, but the context in which it’s taking place might be in your bricks and mortar front, it might be in someone else’s living room, it might be in front of the television – there’s all sorts of other opportunities, and I think the beauty of mobile, because it’s such a personal device; I spend more time with my mobile than I do with my wife; because it’s such a personal device, it means that it allows you to mix channels rather than just simply thinking you have to talk down one channel at a time.
PB:Right, it’s interesting the I-phone, and in particular mobile, because I guess that we’ve been pre-empting the birth or the dawn of mobile for some time, and I guess we’re nearly there. And last year and the year before, there was a couple of conferences I was at where it was, 2008 will be the year of mobile, 2009 will be the year of mobile; we seem to be getting ever closer. Do you think we’re there yet?
RS: Yes and no, actually. I don’t think we’re anywhere close to where we’re going to be with mobile. We work with both small domestic clients, really pretty small companies in this country, but also very big, multinational corporates, and particularly on the multinational corporate side, we’re seeing the global internationalisation of their products is incredibly important. And in that context, I’d say that mobile has already made it. You’re already seeing that in other parts of the world outside of the UK, actually, mobile is a preferred channel for many individuals; often youngsters, but certainly a preferred channel for certain sections of society, and I think the ability for other developing countries to be able to leapfrog the process that we had to go through in terms of sitting down there, accessing your website through your PC, means that mobile is just as likely to take off quickly at other places in the world. So, yes, I think it’s already there, somewhere, put it that way. In the UK, less so, although I think things like the I-phone and the new Blackberry stuff is going to make a difference. It’ll be interesting to see what Google’s stuff that they, I can’t remember what it’s called now, G1 I think it is, does as well. So, in terms of us being able to properly deliver services to people, I think we’re still in an experimental phase, but I’d still encourage clients to do some stuff there. It’s only going to cost you between five and £10,000 to build an interesting I-phone app, that you can start to test the market on. And in the grand scheme of things, that’s not a massive amount to open up a new channel of communication.
PB: And certainly you’re seeing it in the mainstream and the location based services. On television last night they were showing an advert for finding restaurants on the I-phone, where you just shake it and it knows where you are, or you put your post code in and away you go.
RS: Yes, I think that that kind of stuff’s great, so in terms of the opportunities in terms of technology and those kinds of things, I would say those location based services, particularly via mobile, are key. On the flipside, I think that there’s a need for us to re-stress things like simplicity, in terms of new developments and innovations, and there’s some interesting work that’s been coming out of Stanford recently, Stanford in the States, which is looking at perceived simplicity. Obviously true simplicity exists, something is simple, but perhaps more important, particularly in the customer environment that we navigate, the perception of simplicity, and what is seen to be simple, is probably more important. So, for instance, Paul, I know how wealthy you are, but you’re really short of time, so what’s simple to you is going to be very different to me, who’s got no money at all, but actually, I’m kicking my heels all the time. It’s the classic businessman versus student environment, and it’s in those situations you can begin to understand that shaping our content, shaping our interfaces, shaping the whole way that we market, will be dependent upon, if you want to get something simple, we’re dependent upon understanding the sort of resources that an individual customer brings to our party. So, the way it’s broken down is that they’re really, I think six key resources that individuals come to, whenever they’re coming to any engaged relationship. We’ve already mentioned time and money; they will be the first two. The amount of physical effort someone is prepared to devote will be the third, the amount of brain cycles that someone can offer up, so both the capacity to be able to think, but also the effort that people are prepared to put into thinking about something. I think your fifth one would be around non-routine; the idea of, to what extent is someone prepared to break their routine. And I had a very interesting example of this; I was trying to get some money out of a cash point, and you don’t really think when you’re at a cash point, so I’m pressing all the buttons, and then suddenly this interstitial comes up in the process, that says, do you want some kind of insurance. And I’m looking at this and I just, I literally did not know what do, I was completely stumped, and it was showing me two buttons, yes, no; so the person who created that was thinking, it’s really, really simple, they’ll just be able to say, yes, I’m interested, or no, I’m not. But the point is, because it was breaking with my routine, it meant that it didn’t fall into the capacity of being simple for me, so non-routine would be your fifth. And then the final one would be social deviance, which is that there are certain social norms in society that some people find easier to break than others. So, for instance, actually, it would have been simpler for me not to get dressed this morning and to have you interview me with me in my underpants, but as you would have been quite difficult for me to, it certainly wouldn’t be simple for me to come in that kind of attire. In the same sort of way as for some people it’s very easy to be able to comment on blogs or to use social media, whereas, for other people, it’s not that easy for them to do that, because they don’t like sticking their head above the parapet etc. So, once you’ve got those six key resources, and you understand those six key resources that individual has when they come to any interaction with you, if you’re able to use a simplicity profiling technique, which say, okay, this person is rich in these three resources, and perhaps poor in these three resources, you’ve got some way of going to be able to inform your designers, your developers in terms of the functionality they’re making, and this applies in a non-online world as well. You’ve got a way of being able to explain to your designers how they need to create something that the customer will perceive as being simple, and therefore will engage with in a more obvious way.
PB: Are there any organisations putting this stuff into practice right now?
RS: To be perfectly honest, well, we are, but beyond that, I’m not sure, so we’ll see. It’s very new stuff that was only really published towards mid last year, and we’ve had some pretty good success, and people might be familiar with the likes of personas and profiling, and we started to build things like social technographic profiling, which again, is featured within that book I mentioned, The Groundswell, which looks at the different types of characteristics people have in order to be able to get the right kind of social media for them. We’ve included that stuff alongside things like simplicity profiling, to give an idea to designers and developers about the sorts of people that they’re engaging with, and the way that they understand what the functionality and the kind of marketing that they’re after.
PB: Fascinating stuff. One of the things I definitely wanted to ask you about before we close off, was the customer and engagement survey that you’ve been leading for the last three years. I know the last one, or the third one, came out just in December, and I was really interested, particularly over the last 18 months how you’ve seen customer engagement change as we’ve headed further and further into recession. Because I think the last survey was done after the banking crisis and we were very much heavily into it; have you seen that changing?
RS: Well, you’re right; it’s been three years now, and it’s a really great thing to be involved with actually, because you do get to talk to some very interesting people, and in addition to doing the survey, we send pre-results out to key industry commentators and get their take on some of that, which we then include in the subsequent report. I think the first one, people were saying engagement what? And it’s bizarre, but the idea of engagement was actually not a particularly prominent concept, and now it’s everywhere, there’s a kind of engage, engagement aura, which is good, which I think is a sign of the speed and sophistication of particularly our industry, and being able to embrace things that are important. So, I think that there was a tendency towards things like satisfaction, and people were muddling up engagement with satisfaction, and to a certain degree, people still do that; that’s back in 2007. The second one started to introduce the idea that social media was going to be very important, so it identified that people were going to start to look at social media quite seriously, which obviously then subsequently became true, and there was a reasonable kind of swell around the idea of social media. The last survey did have a distinct section on what was going to happen with the recession, what people were anticipating, and I think the thing that was interesting about that is that people were, and I think still probably are, caught up with the idea around cost and price. Cost and price is clearly an important thing, but it’s not necessarily the most important thing, and it’s certainly the thing that we’ve probably got the least control over in many ways, when it comes down to our products and our marketing. Certain things were quite prophetic, so what the survey highlighted was that people were going to get into Twitter in a big way. It was quite unexpected, I think 14% of the people that were surveyed said that they were going to devote a substantial amount of resources; that’s not necessarily money, it could be time; into using Twitter ; and then two months later we’re suddenly seeing that that stuff is actually beginning to come true. So, from that side, it was quite prophetic. I think that overall, in terms of how people are understanding engagement, I think there is definitely a deeper understanding that we need to be able to provide lasting value to people. There’s a company in the States called Adaptive Path that have come up with a really nice idea that I’ve used with some of our clients, which is that it’s no longer about just wowing your clients, it’s about creating a thing called the long wow. If you’re going to really impress someone over a period of time, you need to be able to deliver wows, not necessarily massive wows, but wows over a consistent period, in order to be able to engage with them properly. And it’s those slightly longer engagements, so that’s slightly longer relationships, that really begin to deepen engagement with people, and have that emotional resonance that most marketers would just love to have with their customers.
PB: Do you see much planning happening in this area; because one of the things we find, particularly in multi-channel and cross-channel environments, is that people are trying a lot, but there’s not necessarily an underlying strategy around how they want the brand experience or the brand engagement to behave. How do you see that?
RS: I think you’re entirely right, which is entirely understandable, to be honest, because it’s still fairly new for people, and in many ways, what we’re seeing is that the people that are engaging with social media within companies, certainly the companies that are slightly slower in this environment; people that are engaging with it are at the lower levels of the company, rather than it being a strategic decision and aim to be able to go in and maximise your impact in this stuff. So yes, I think that you’re right; there’s not that much planning going on, and we do some of this with our clients and have a social media framework which allows people to start to take decisions about where they should be, what they should look at, how they should go forward, and I could probably give you some of the key things that I think people need to think about. I think you need to be able to define your customers, which a classic example; there is no point in producing blogs which people aren’t going to read – there’s no point in creating the whole situation where you can upload and engage around video, if the audience you’ve got isn’t going to be that way inclined. So, defining your customers; and I think that would fit with what I was talking about before, the social technographic profiling of your customers and the simplicity profiling; both of those would fit into defining your customers. You need to be able to define your business requirements. If you’ve got an awareness problem, then actually, you’ll probably want to go for something that’s much more viral. If you’ve got problems in terms of being able to expose the content of your offering effectively, then maybe blogging would be a good example. Microsoft are excellent on this, in that what they did is, they turned their entire development, or what would appear to be a lot of their development team into bloggers, and therefore revealed the processes that they went through, and the nature of the products they were involved in. Previously, those kinds of things had been hidden. So, yes, defining your business requirements, I think, is very, very important. And then you get into a situation where you’re able to look at the tools and defining the tools that you want to go with. Once you know what it is you’re after, then maybe Twitter would be a great thing to go with; maybe FaceBook would be a good thing, maybe some kind of I-phone thing would be interesting. So, define your tools is the third part. Then you can learn through that, and define the language that you want to use, and so, often people start with their pre-defined language, which is the brand language that they have, but actually, I would say that’s probably the fourth element that you want to really look at. And then lastly, and this is not necessarily in order, this last one, is that you need to be able to define the management aspect of it, because social media done well can often take quite a bit of resource in terms of time, which means that it’s often very well suited to the lower levels of the organisation, but you have to have a degree of confidence in those lower levels of your organisation being able to offer up the right experience for your customers. In many ways, it’s access to that lower level of the organisation that’s most interesting to your customers anyway. One of the examples that I always use is that one of the most popular blog posts on the Guardian’s blogging system is about how they choose photographs for their newspaper; not about the content so much. So, things like that, they just give you a little bit of an insight into how the process is going on, and often it will come from the call centre, it could come from your staff canteen, it could come from your receptionist, as likely as, or probably more likely, to be honest, than coming from your senior management level.
PB: It’s fascinating that process already exists, and it reminds me of the age we were going through, ten, 15 years ago, when organisations used to talk about competing on their supply chain, and competing in different things. Do you think that organisations are starting to compete on customer experience, customer engagement? If you do, who do you think exemplifies that?
RS: When you say compete, do you mean in terms of there are two or three people out there in the environment that are competing against each other, or do you think that some people are, are you asking the question about, are people really using engagement and really using experience?
PB: Really about whether organisations feel they can differentiate using engagement, so take it as go to market model, so rather than looking at the supply chain as the way you differentiate and you are better; is customer engagement something that they’re now looking to?
RS: I’d say yes; I’m not entirely certain that it’s for the right reasons though, and that’s partly to do with the environment, in that the usual situation that you have when you’re in a recessionary period or an economic downturn, is that people say, okay, let’s concentrate on the existing customers, because it’s a hell of a lot harder to get new ones. And that’s actually not really the kind of basis on which you’re going to be able to foster really good engagement with your customers. So yes, people are looking in that kind of direction. Having said that, there are people that are doing it in a very interesting way; the usual examples that are always rolled out, people like Innocent Drinks, I think they’re doing some very interesting stuff. I think the idea of being able to open up their AGM to their customers via a Twitter feed – very, very interesting situation. And I think in many ways a lot of the charities are the places to look at the moment, for a number of reasons. I think charities have always been really, really good at testing. One of my colleagues that we recruited came from the charity background, and she was telling about how they would test just everything. They would test an image of a child, in order to be able to raise money on an envelope, and then they would test that same image with a donkey in the background; and funnily enough, the donkey raised uptake by about .5%, so they would put the donkey in the background. So they do all of that kind of testing, so charities have that kind of background. In addition, they have a volunteer workforce, which is naturally suited to things like Twitter and the social media front, so I think you can lots of interesting things there, but they have this extra dynamic, which is a horrible one, unfortunately, which has been dumped on them now, which is that the nature of the recession means that people are maybe likely to give less, so there’s a kind of need for innovation, there’s a need for doing things in a different way, and getting closer and more intimate with your donators, that charities have now. So, if I was going to recommend anything to the big businesses, it’s keep an eye on some of the core charities, the really cool charities, at the moment, because that’s where a lot of the innovation is likely to be happening.
PB: Fantastic. Richard, as usual, a fascinating conversation, thank you very much for giving the time. Are there any other thoughts you want to share before we wrap up?
RS: I’d just really like to re-stress this idea of, nobody learnt to swim without getting wet. So don’t over-think some things sometimes, and learning on the job has always been one of the best ways, so give it a go and get stuck in.
PB: Nice one; thank you very much Richard, really appreciate your time and advice and insight, and I’m sure our listeners will as well. Thank you all for listening, and please do come back to Foviance dot com shortly to download the next podcast in our expert series. Thanks very much.