Is Social Networking The Gap in eBay’s Armor?

Is the lack of an integrated social network and reputation management system the Achilles heel of the eBay juggernaut? seems to think so. On Friday, launched a new auction site code-named “Ocean” that is “powered by social networking” and is aimed squarely at eBay.

“We sought a way to integrate the trust inherent in these networks into e-commerce. To achieve this, we have integrated into our auction tab a system that allows for social and business networking unlike any that has ever connected businesses and consumers on-line. It may evolve into a massive, intelligent marketing organism, or into a system of personal introductions, or in some direction we have not foreseen. One thing we do anticipate, however, is that these “reputation networks” will work particularly well for on-line auctions, where buyers, sellers, enthusiasts and experts are traditionally anonymous — and opinions are often biased (as evident in the declining value of ratings and the increasing tendency for retaliatory and spiteful ratings). – Patrick Byrne, President,

A quick perusal of the system yielded a number of pros and cons. Overstock’s president seems to strongly feel that there is significant value in providing this “friendly” (their word) connection between users of the network. And anything that brings rational, personal interaction between buyers and sellers is a good thing in my book. That’s where real relationships come from.

Byrne also clearly recognizes that trust and “reputation networks” are important in building a business and a community. He also is willing to take a risk in this ‘ready, fire, aim” approach…he seems to know that there is *something* there in providing these connections, even if the hard benefits of community-building are not clearly defined. On the other hand, getting “into” the network is a bit of a hassle. Multiple registrations are required (one for Overstock, and then a separate one for the auction and social network).

In aggregate, I view this with guarded skepticism. First off is the increasing issue of “social network spam,” where individuals with even the weakest ties to a person are innundated with “requests to join my network.” Additionally, while the fundamental idea is sound, it will likely be difficult for Byrne to build critical mass in this network for the casual buyer/seller. That being said, those individuals who are very deep into a community, however (such as memorabilia collectors), may embrace this to find other individuals who have similar interests and passions.

Of course, the biggest confusion will be the question of “why?” For the average buyer and seller, what will be the benefits to them of investing the time needed to create, grow and nurture their network?

How To Drive Your Customers Away, The AT&T Wireless Way

Having myself been stung by the AT&T Wireless process and service nightware, I read with great interest the story of their downfall and presumed sale next month. The toll: a significant number of the company’s 31,000+ employees will likely lose their jobs, and the remaining customers will have to migrate. One take on the root cause:

“Years of substandard customer care, spotty coverage and dropped calls had taken their toll.

‘The line from the company was that we lost those people out of bad luck,’ said a regional sales manager. ‘But they walked away flipping us the bird. They aggressively walked away from us. They couldn’t wait to get away from us.'”

Ok, it’s not rocket science, folks. Do these things:

  • Listen to your customers
  • Make sound business decisions based on that input
  • Do what you promise, when you promise to do it
  • When your customers are defecting in droves, don’t spend millions of dollars upgrading the “company’s Falcon 50 jet to a bigger Gulfstream jet for commuting — then put millions of dollars more into a new interior for it.”

(shakes head…)

I Don’t Trust You. Yet.

The concept of “I can’t trust you, until I get to know you better,” is at the core of a great posting by Christopher Allen in the Life With Alacrity blog. Christopher’s thoughts are a great window into how real relationships are built with customers. When two people are “building rapport” with each other, they are going through this process:

This is how I typically explain progressive trust when I meet someone in-person at a conference:

You are now spending your most precious resource, that most unrenewable commodity — time, in order to listen and understand what I have to say.

Why do you do so? Because by the act of us being here in this common space, at this conference, you have found a very simple credential from me–that I’m willing to spend time here in a place that you are interested in as well. In turn, I’m willing to spend more time chatting with you for the same reason.

Why do we continue to chat, and not move on to other people to discuss with? Because as we chat we are exchanging a number of credentials — people we know in common, common interests, meaningful ideas, etc. We may also present credentials typically issued by others, like our business cards, or explain our relationship to the host…As our collaboration grows, we will find ourselves seeking more and more credentials, endorsements, etc., but they will not be enough. The next level of trust can only be established by experience of commitment — for instance do we call back when we said we would? These tests typically start with small things, and then grow to larger things. At some point this may ultimately grow to form simple verbal contracts; over time richer, deeper social contracts are agreed upon that might not be written down.

Ultimately we may bring in third parties to witness, and thus possibly enforce our mutual obligations…

Some great thoughts there, along with a followup by Clay.

Progressive trust is required to create real relationships with customers. How do you do it?

Taking Outsourcing One Step Further

Ok, this is pretty cool. In what appears to be a successful effort to both improve customer service and reduce costs, a fast-food restaurant in Brainerd, Minnesota (yes, the same Brainerd of FARGO fame) has outsourced its drive-through to Colorado. According to reports:

As she leaned out the window of her Chevy Blazer to place her order through a speaker box, Feld was greeted by the friendly voice of an order taker she thought was working inside…Four states away in a Colorado Springs, Colo., call center, “Linda” recorded Feld’s order and flashed it onto a computer screen inside the kitchen of the Brainerd McDonald’s. Less than two minutes later, Feld drove away, a smile on her face and a burger in hand.

From a business point of view, management claims that fewer mistakes are being made on orders and turnaround time has improved by an average of 20 seconds per order.


Killing Marketing As We Know It

I love how SUN’s President & COO, Jonathan Schwartz, dispenses with the boring, uber-sterile traditional glossy marketing approach and just tells customers what’s going on.

For example, the organization has recently begun selling their systems directly on eBay. Instead of overdone PR, he states what they are doing, why they are doing it, and how it affects their strategy, customers, and partners (and, not incidently, this move also gives them perfect information on the true market price of their systems). Schwartz also uses it as a bully pulpit to raise doubts about SUN’s competitors. He also dimisses a minor confidentiality leak that took place when the marching orders he gave ended up on a t-shirt wearing dog.

What SUN has done goes beyond simply giving their fromage grand a microphone, however. They actually have set up an environment that is is accessible to any Sun employee to write about anything. Sports. Music. One of their bloggers, “Mary,” even states “I use this blog to explicitly and without apology market to you.”

SUN is in the process of killing Marketing as we know it and, in the process, is getting closer to their customers

(thanks to Rick Klau for the lead)

Real Life Example: Using Social Software To Reach Customers

How did this happen? While most commercial businesses are still trying to figure out the basics, a state government agency in Utah has put up a great example of how to use social software (in this case, a blog) to better connect with customers.

This eGovernment site goes into the details about how they are using their weblogs as a customer relationship management tool:

“…we have a group blog that is accessible by PIOs and others from multiple state agencies to generate the news for our State business portal. We have other multi-party blogging ideas in the works.

We may even use blogging as an inexpensive, easier and more effective way to do customer relationship management / contact management for an internal service fund. For example, each customer agency becomes a category in the (internal facing) blog. People post to the blog category any time they have contact with that agency. Managers and CRMs can subscribe in their aggregator to those agencies (categories) that they have an interest in. Add a search engine to the blog for additional power. You have an effective solution in hours or days rather than months.”

Nicely done! Since our friends in Utah are doing so well in this regard, I would suggest setting up an enterprise social networking conference here as soon as a possible.

Biz Blogging Takes Off

A lot of thoughts today on blogging as a way to bring an enterprise and its customers closer together. Building on the internal/external model of blogs, I think that blogs (and all social software) can bridge the gap in four different ways.

1) Enterprise to customers
2) Representative with customers
3) Enterprise with customers
4) Customers with customers, sponsored by the Enterprise

(“to” implies a one-way information flow, “with” implies a conversation)

However, to round out the internal/external way of looking at things, we might want to think about the “external” interactions through the more traditional viewpoints of sales, marketing, and service. Some examples:

Potential Marketing blogs, in addtion to “branding”
– Product direction
– Uses of existing products

– Case studies of existing customers
– Calendar of events

Potential Sales blogs
– 1:1 blogs between representatives and customers/prospects
(question: would you be more likely to interact with a sales rep if he/she had a blog?)

Potential Service (or Support) blogs

– User groups (discussions among users)
– Problem resolution
– Publication of new features / updates

Any others anyone can think of?

From the “timely!” department…as this post was being put together, also saw that there is a new set of thoughts on Creating Customer Evangelists that may merit a deeper look.

(from Fredrik Wackå, via Ross); and,

(from Church of the Customer, via Nova)

Enterprise Social Networking, Blogging Key Customer-Facing Growth Areas

A new report entitled Online Communities in Business contains some great information on how the use of collaboration technologies in business is predicted to evolve over the next 1-to-5 years. Many-2-Many points out that one of the biggest challenges, however, is (still!) measuring ROI; would love comments from anyone who has a novel and/or effective way to do this.

According to the report (pdf here)

“In terms of growth, in the one-year timeframe, teamrooms, weblogs, and social networking show the biggest expected gains”

for customer-oriented and customer-facing collaboration, which covers Customer Care, Marketing and Sales, as well as New Media/Publishing.

UPDATE on the Microsoft CRM debacle: Lead story on CRM Buyer today indicates that Microsoft is starting to contact their CRM customers directly to try and manage the situation.