Three steps for building a business that can generate the conversations that generate sales.
Building on prior columns about social business and social customer relationship management (CRM), this week we'll cover implementation. The specific actions and steps to put design into practice ultimately drive business success.
How do you deliver service that separates great brands from the rest? Be clear about why your business exists. Whether you're a manager or an executive officer, a small business or Fortune 500, selling to businesses or running a services organization, you and the people around you have the ability to decide what you stand for and why you come to work each day.
If you haven't done this as an organization, take a page from Roy Spence's "It's Not What You Sell, It's What You Stand For" and do this. Today. Clarity of purpose is the cornerstone of running a strong business.
Jeanne Bliss's opens her great new book, "I Love You More Than My Dog," with a simple thought: "Show your customers you deserve their business by deciding how you will run yours." Adding further oomph is Colleen Barrett's foreword. Barrett, having risen through the ranks at Southwest Airlines, now serves as president emeritus. Powered in part by Roy Spence and the team at GSD&M, Southwest is an organization that knows a thing or two about purpose (the freedom to fly) and creating delighted, loyal customers.
Having a purpose and delivering on it are two different things. This is where the next key insight comes, in the form of management and business process design.
Purpose provides a central rallying point. Your business derives strength based on the clarity of communication internally and the degree to which each person understands their responsibility within the organization.
When a firm decides to organize around employees and customers to deliver exceptional experiences, the results get talked about favorably. Bliss put it this way: "Beloved companies are clear about their purpose in supporting customers' lives. They use this clarity when they make decisions to make sure that they align to this purpose."
This drives favorable customer experiences and creates the kinds of conversations you want to hear on the social Web. Intuit knows this, and conducts itself accordingly: 81 percent of its sales are attributable to word of mouth. Those are sales that didn't need to be driven by advertising, saving Intuit money that can be used to support collaboration between employees and its customers and to innovate, driving the larger cycle. Intuit owns its marketplace as a direct result.
Companies that enjoy these types of benefits take care in their own management practices. Ted Shelton, CEO of The Conversation Group, published a whitepaper on "open management," a management model with the objective of transforming policies, philosophies, and the organizational model to support and encourage creativity and collaboration from every employee.
In practice, the combination of what Bliss, Shelton, and people like David Armano are talking about becomes evident as a competitive advantage that exists across the entire business cycle. Shelton takes it to the practical level, citing Google as an example.
Google CEO Eric Schmidt noted in an interview for Management Lab, that "smart people want to work with smart people and they want to be informed." Challenge is, the free flow of information poses a threat to traditional hierarchical organizations. How do you get past this?
Take a look at how successful companies win in the marketplace. Consider Best Buy and Circuit City. Prior to Circuit City's 2008 bankruptcy, these were the two leading retailers of consumer electronics. Among the factors cited in the divergent fates of these firms was Circuit City's decision to reduce expenses by sacking experienced (a.k.a. "expensive") employees versus Best Buy's near-opposite approach: Investing in and celebrating the knowledge of its most experienced people.
Best Buy celebrated employee knowledge not with awards and plaques, but with the de facto standard of personal recognition: A reputation-based expert system implemented within the organization to collect and convey deep-seated knowledge to all employees. Beginning with "Blue Shirt Nation," Best Buy has integrated a suite of social and knowledge management technologies. Blue Shirt Nation itself is now an engine for innovation within Best Buy.
Better access to information results in experiences like mine recently at Best Buy. I was buying a router and asked an associate a specific product-related question. Without hesitation he turned and queried Best Buy's knowledge system. I got the right answer, and by the smile on that associate's face, I knew that he felt good about it.
What technologies can be used internally to reach these objectives? The Conversation Group's whitepaper lists them all, but here are some that have potential internal use:
Deployed internally, these technologies can drive empowered employees to new levels. Wegmans Food Markets is a privately held grocery store chain with 37,000 employees and an estimated $4.5 billion in revenue (2007). At the core of Wegmans' success are its employees: With control over their own decisions they can deliver what CEO Danny Wegman calls "telepathic levels of service."
The benefits don't stop at the sale register, either: The cost of employee turnover is a concern for any business, especially so for grocers and retailers. Again from Bliss's book: "Wegmans' annual employee turnover is 6%, against the grocery store average of 19%." That is a direct, measurable competitive advantage.
Getting It Done
Here are three steps for building a business that can generate the conversations that generate sales:
Social business, collaborative business design, and social CRM are three important evolutions of "social media marketing" that are (or soon will be) essential for marketplace success. Start exploring, take a good look at your business, and grab your "champion's hat."
There's a promotion waiting for someone. It might as well be you.
Dave is the VP of social strategy at Lithium. Based in Austin, Dave is also the author of best-selling "Social Media Marketing: An Hour a Day," as well as "Social Media Marketing: The Next Generation of Business Engagement." Dave is a regular columnist for ClickZ, a frequent keynoter, and leads social technology and measurement workshops with the American Marketing Association as well as Social Media Executive Seminars, a C-level business training provider.
Dave has worked in social technology consulting and development around the world: with India's Publicis|2020media and its clients including the Bengaluru International Airport, Intel, Dell, United Brands, and Pepsico and with Austin's FG SQUARED and GSD&M| IdeaCity and clients including PGi, Southwest Airlines, AARP, Wal-Mart, and the PGA TOUR. Dave serves on the advisory boards for social technology startups including Palo Alto-based Friend2Friend and Mountain View-based Netbase and iGoals.
Prior, Dave was a co-founder of social customer care technology provider Social Dynamx, a product manager with Progressive Insurance, and a systems analyst with NASA| Jet Propulsion Labs. Dave co-founded Digital Voodoo, a web technology consultancy, in 1994. Dave holds a BS in physics and mathematics from the State University of New York/ Brockport and has served on the Advisory Board for ad:tech and the Measurement and Metrics Council with WOMMA.
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