The Social Media Pay-off of Engaged Customers

JT in Berkeley Thumbnail  by John I. Todor, Ph.D. (

 It is no revelation that customers are spending less! What might surprise you is that, even in this economic crisis,

Most customers scrimp to splurge!

They scrimp by cutting back or bargain hunt to conserve money on commodities, items that don’t lead to emotionally meaningful outcomes. Scrimping on these types of products lets them splurge on items they do find emotionally meaningful and still balance the budget.

 Scrimping and splurging are two different mindsets that are adopted by the same customer. Whether your customers scrimp or splurge will have a dramatic impact on your bottom line.

 The difference between scrimping and splurging is the level of emotional engagement. If an individual does not perceive any difference between product A and product B, in terms of the emotional outcome, they can mindlessly treat them both as undifferentiated commodities. Think about your customers. If they focus on price and convenience, they are signally that they don’t want to spend much money, time or mental effort on your offering or listening to your persuasion. On the other hand, if they act like the committed Starbucks customer who drives by other coffee houses to stand in line to pay full price and even a premium for their favorite espresso beverage, they are engaged and getting emotional gratification.

 This doesn’t just apply to pleasures like a "latte." It happens with shoes (Zappos), cellular phones (iPhone) food (Whole Foods), clothing (Patagonia) and … (you add to the list).

Okay, what does this have to do with Social Media and a pay-off?

Over 70% of people now participate in social media and a very high percentage get engaged in order to make purchase decisions. People engage online to make decisions about cars, travel and even groceries and utilities. But here is the rub. They do so mainly through various forms of customer-to-customer conversations. Why? People trust peers, people like themselves, much more than they trust businesses. Also, peers talk about outcomes not things.

This creates both a challenge and an opportunity!

The challenge is that most participants in business sponsored social media initiatives are relatively passive. The opportunity is to dramatically increasing the level of customer engagement—to get more customers to scrimp elsewhere so they can splurge with your company.

There are three primary hurdles to making this shift:

  • Earning sufficient trust to get customers tentatively engaged. You have to attract them to a hopeful proposition, hopeful in two ways: (1) that the outcome will be meaningful to them; and, (2) that your role in fostering the outcomes is genuinely helpful.
  • Eliminating triggers or signals that put the customer into a closed minded "Scrimping" mindset. Fifty percent off signs will do this, but so will many other more subtle actions. But it is not just a matter of eliminating signals. When people are anxious or stressed they become closed minded and less trusting. Since stress and anxiety tend to last, the can carry over from one situation to another. This means that a customer might bring emotional baggage into their interactions with your company. You need to know how to defuse these negative emotions before getting down to business.
  • Tentative engagement is not enough to build high levels of trust, desire and demand. This type of relationship takes a deliberate and systematic process based on customer psycho-economics.

If you would like to learn more about customer psycho-economics, I invited you to download our paper Customer Psycho-economics in a Down Economy.

If you are interested in a case study approach to seeing how this psycho-economic framework applies to social media, you might want to check out my upcoming Social Media Academy online course, Building Customer Relationships and Advocacy with Social Media.

Social Media, Customer Relationships and the Recession

JT in Berkeley Thumbnail By John I. Todor, author of Get with it! The Hands-on Guide to Using Web 2.0 in Your Business.


When I invited Lauree Vallery of Experience Renewal Solutions to contribute to the publication, The Importance of the Customer Experience in a Down Economy, She agreed to write about how business planned to deal with the recession. She also made the point that this was very different from what customers expected from their vendors. Businesses were mainly planning on hunkering down and conserving resources. Customers were expecting vendors to understand their plight and to offer help, guidance and understanding. Customers want to buy from companies that help them deal with their challenges.


This desire for help from vendors is not unique to a recession, it is just exacerbated. Last year large enterprises decided to use social media and online communities to help their small business customers. Visa, Inc. launched the Visa Business Network on Facebook last year and has more than 20,000 small businesses participating. Similarly, American Express launched the OPEN Forum for small businesses. It now attracts more than 600,000 unique visitors a month. Why do small business leaders participate? To connect with each other and to share strategies for success. Visa and American Express are enabling their customers to thrive and, of course, building meaningful relationship value.

The Social Media Academy: Education on the Business Potential of Social Media

JT in Berkeley Thumbnail By John I. Todor, Ph.D., author of Get with it! The Hands-on Guide to Using Web 2.0 in Your Business. (


Over 300 million consumers actively participate in social media but at this time, most of the conversations are people-to-people. While the conversations cover a wide range of topics one thing is for sure, people’s buying decisions are influenced by what they learn via social media. To date, the number of businesses participating in the conversation is relatively small and there is a lot of experimentation going on. This needs to change. Businesses need to become more engaged to regain influence and learn from customers. Customers need to converse with companies so they can deliver the products and experiences customer desire. Social media provides the vehicles.


However, to become engaged and accepted by customers on the social web, businesses need to learn new strategies, new forms of connecting with customers and new ways to mobilize their organizations. This is a formidable challenge. Recently, the


( was launched to meet this challenge. Founder, Axel Schultze is assembling the best faculty possible so they can share their diverse and collective insights, expertise and real-world experience with business people who participate in the Academy courses. Each course will be co-taught by a number of faculty.


I am very pleased to announce that I will involved in setting the direction of the Academy as an Advisory Board member as well as teaching course sessions on social media business strategy.


The Academy is not about technology, it is about how businesses can use the technology to achieve their business goals. If you would like to learn more about the


sign up for our next free webinar on January 21st (

We are in a Recession – so why are Customers Spending More at Starbucks?

JT in Berkeley Thumbnail
 By John
I. Todor, Ph.D., author of Get with it! The Hands-on Guide to Using Web 2.0 in
Your Business


is up, the stock market is down, and people are worried about their financial
future. It seems there are daily reports about just how far sales have dropped
compared to last year. Over the Thanksgiving sale-a-thon, retailers report that
people bought but they primarily bought items that were highly discounted,
eroding their profit margins.


Geezeo released their latest Main Street Spending Index. Here’s what caught my
eye. Starbucks customers are spending 36% more than they were a year ago.
What’s more, if you look at the month to month trends, there was no systematic
decline associated with the deepening recession.


customers now average 3.7 visits per month compared to 2.9 visits in November
of 2007. Customers are also spending more per visit—an average of $5.92 per
visit in 2007 has risen to $6.36 in 2008.


We are in
a recession, if you follow the often heard logic; customers are expected to cut
back on non-essentials and switch to lower priced brands. Well, Starbucks
doesn’t qualify in either case and they are not having big “Sales.”


What is
going on? The simple answer is that customers scrimp on items that don’t deliver an emotionally gratifying
experience to be able to splurge on
ones that do. This is not new. Before the recession there were thriving
Starbucks stores in low-income neighborhoods. But why the increase?


We are
human and a critical part of our being is managing our emotional welfare. The
recession has raised the levels of anxiety, stress, confusion and uncertainty
in most people and no one likes being in any of these states. Starbucks is not
$6.32 worth of coffee; it is a small personal indulgence that leads to
temporary but worthwhile emotional lift. The experience is positive and under
our control.


Bully for
Starbucks you say, but what about companies like mine that sell consumer
electronics, groceries, cars etc? Well, your customers are human and have
emotional needs that are exacerbated by the recession. Help them deal with
these emotional needs, help them gain a sense of control and give them a
relationship that supports them.


I realize
that these are high-level and abstract statements that some will find hard to
apply to their business or industry. There is help. One source that deals
directly with the recession is The
Importance of the Customer Experience in a Down Economy
. This is an 84 page
report published and made available free by Ogilvy’s Customer Futures Group. In
the report, 18 internationally known thought leaders provide sage insights and
advice on the topic. As the editor, I highly recommend this publication.


A second source of strategic and tactical help
is my book Addicted Customers: How to Get
Them Hooked on Your Company
. This book was written before the recession but
what it provides is actionable insights into the psychological principles that
lead to emotionally compelling customer experiences. It also discusses business
practices that put these principles into action. Of course, I think it is a great
book but moreover, the concepts and ideas are extremely relevant to
buyer-seller relationships is tough economic times

The Importance of the Customer Experience in a Down Economy

by John I. Todor, Ph.D., author of Get with it! The Hands-on Guide to Using Web 2.0 in Your Business

Here is an excerpt from Ogilvy's Customer Futures Group new report on The Importance of the Customer Experience in a Down Economy.

Eighteen international contributors were asked to independently address a critical issue facing business today: The Importance of the Customer Experience in a Down Economy. Each contribution offers unique expert insights, observations and advice yet, when looked at as a whole reveal five seiminal themes that will help business leaders succeed in these difficult times:

  • What customers are experiencing, why it matters and what to do about it.
  • Leadership and strategy in troubled times.
  • Economics that justify a customer-focused strategy.
  • Delivering more with less.
  • Employees: Stressed but so essential.

We are involved in a worldwide economic crisis and a prolonged recession looms in our future. Business as usual is not a viable option; companies must take action. But action to what end? Coping? or Thriving?

The Chinese term wei gee expresses the dual nature of a crisis. One aspect is danger, the other is opportunity. Businesses can either react to the danger or seize the opportunity. The reactive approach of hunkering down to ride out the storm, has a focus on efficiency and conservation of resources. Yet, as Jan Hofmeyr states, Businesses are under pressure in recessions because their customers are under pressure.

To receive a full copy of this report, click here.

Customer Experience and the Down Economy

By John I. Todor, Ph.D., author of Get with it! The Hands-on Guide to Using Web 2.0 in Your Business.


Here is the shocking news from just completed research:


“There is an alarming lack of alignment between customer emotional expectations and corporate action plans that can only result in frustration and growing distrust by customers.”


The research is very recent and taps into the attitudes, emotions and plans engendered in Canadian customers and Canadian business leaders by the economic climate. I strongly advise that you consider the implications of this research regardless of what country you live and do business in.


Historical evidence indicates that there are winners and loser in recessionary periods. This report points to one major source of opportunity to thrive. In essence the report says that customers will initially become conservative in their spending but then renew buying, perhaps at a slightly lower level. When they do resume, they will prefer to buy from companies that will help them make sense out of turmoil and will help them gain the most experiential value. If these types of companies are not available, customers will act as predators seeking out the lowest prices.


When asked about their plan, the majority of business leader said they were hunkering down, conserving resource and hoping to ride out the storm. WHAT A DISCONNECT!


Now, suppose your company decides to deliver what customers are looking for—this sure sound like a formula for thriving to me!


This research, conducted by Lauree Vallery of Experience Renewal Solutions is reported in a report to be published by Ogilvy’s Customer Futures Group on December 2nd. In this 83 page report, The Importance of the Customer Experience in a Down Economy, 18 internationally known contributors provide insights and advice on how to thrive in a recession.



Customer Futures is making this report available at no cost. Register now to receive your copy.

Keywords and Customer-centricity

JT in Berkeley very small By John I. Todor, Ph.D., author of Get with it! Practical Ways to Use Web 2.0 in Your Business.

Alvin Toffler, the futurist, coined the term ignorage to define something that was once true but, due to change, is no longer so. The problem comes when people suffering from ignorage continue to make decision based on the old logic.

Here is a good example. A company in the environmental technology space decided to build their brand around the phrase “clean technology” and upper management explicitly directed marketing not to use the word “green”. Consistency is a fundamental principle in the building of brand recognition.

Marketing hired an AdWords consultant to run a campaign for them. They set a daily budget and told the consultant to go forth and generate leads. If you are not familiar with Google AdWords, here the gist. You select the keywords that you think will attract customers (people doing web searches) and put them in your adwords advertisement. These ads are the results that show up on the right hand side of search pages. Google places your ad on the page if the searcher uses the keywords you have selected. When you set up your AdWords campaign you bid on the keywords. The higher your bid and the higher the ad’s relevance to the customer’s search, the higher your ad’s position on the page. Every time someone clicks on the ad, Google charges you the price of the bid. When you have spent your daily budget, Google stops placing your ads.

In this case, one of the keywords the consultant bid on was “green technology”. He also put the phrase “green technology” in the ad. This attracted customers and their clicks quickly used up the daily budget and, of course, generated leads. When management discovered that the word “green” was used in the ads, they strongly objected and told the consultant to take it out or lose their business.

Without “green” in the ads the number of clicks by customers searching declined so dramatically that they never spent the daily budget and the number of leads generated dropped to one-half of what it was when “green” was included. The consultant had to double the bid so the ad would be placed higher on the page in order for the daily budget to be maxed out. But, this still generated half the number of leads.

Here is where ignorage comes into play. People search for the phrase “green technology” nearly twice as often as they do “clean technology” when looking for environmentally friendly products. This means that the keywords you choose need to be the ones potential customers use, not the ones your company decides will represent you brand. Customers dictate what works in online marketing and one way they do so is through the words they use (think keywords).

The terms potential customers use and look for in ads reflects what is relevant or meaningful to them. The company-centric thinking that tries to define the terms that reflect their brand in today’s marketplace is wrong-headed and expensive. Customer-centric thinking requires an outside-in perspective. They should be asking “what are customers thinking about, what terms do they use?”

How can you get an answer to this question? Here are two free online tools: and Both will let you compare the frequency that terms (keywords) are used. A comparison of “clean” and “green” clearly shows that “green” is the term of preference—nearly two to one.


Customers Buying Process Trumps Companies Sales Efforts


By John I. Todor, Ph.D., author of Get with it!. The Hands-on Guide to Using Web 2.0 in Your Business (

Customers are increasingly resistant to sales efforts or, they expect greater price concessions. Consequently, more aggressive sales tactics produce diminishing returns. Even when they do buy, many companies are finding customers do not remain loyal.

How do people buy? Increasingly, people start with an online search and their search process vets products, companies and people—before they do business. As customers we want the experience to be meaningful to us. "What meaningful outcome can I expect?" "How will the experience deliver value to me?" "What will it be like doing business with this company or this person?"

With the explosive growth of social media we are more likely to seek answers to these questions online. If there is no insightful information about you, your product, or company on the web you are increasingly likely to be excluded from the buying process. Why? Customers have already been influenced by what they find online and are less receptive to sales efforts.

Think this doesn’t apply to you? Well, here are a few statistics that should rock your complacency:

  • Research by Edelman indicates that more than two-thirds of us feel that we are bombarded by too much advertizing, believe that marketing is hype, and rank it in the bottom third of trust scales. Word-of-mouth is a more trusted source of insights and information and increasingly this is coming from online sources. We trust people like ourselves, even if we don’t personally know them, more than companies.

  • Morgan Stanley and Cisco Systems estimate that Internet traffic attributable to consumers now exceeds business traffic and the gap is increasing. While some of this is people sharing vacation photos on Facebook or Flickr, peer-to-peer conversations are exploding and are influencing purchase decisions. The train has left the station.

To reach this growing base of internet savvy customers companies need a social media presence that is visible, credible and relevant. A website is not enough.

A Recession? Practical Ways to Thrive With Web 2.0

Jt_in_berkeleymed_2 By John I. Todor, Ph.D., author of Get With it! The Hands-on Guide to Using Web 2.0 in Your Business.

Worried about a recession, looking for growth opportunities, consider these statistics:

Only 28% of small businesses had registered with one social networking site (Warrilow & Co.). There most interesting statistic—the fast-growth companies, defined as having 20% or greater increase annual revenues, are more likely to be participants in social networking.

Over 50% of American adults (customers) use social media and the number is rising constantly (Universal McCann). Many are voicing their opinions through blogs (there are now over 112 million blogs) and various other forms of consumer-generated content such as peer-reviews.

Over 90% of American adults regularly or occasionally seek online advice about products or services (BIG Research).

90% of shoppers in the United Kingdom wish they could communicate directly with businesses using live chat, forums or other forms of online interactivity. (1&1, October 2007).

For every $1 in online sales, the Internet influenced $3.45 of store sales (eMarketer, 2007).

What’s the point?

Regardless of whether you sell online or offline, a visible and credible social media presence is critical if you want to thrive. The fact that less than one-third of small businesses are even registered on one social networking site is noteworthy especially when you consider that those who are, experience greater growth. This spells OPPORTUNITY.

Posting you contact information on a social media site is a start, but don’t expect it to attract high-value customers. Increasingly, potential customers want to vet products, companies and people, before they do business with them. To pass muster, you, your products and company must have a visible and credible social media presence. The good news is that there are free Web 2.0 tools and techniques that can help. To learn how to harness these tools and techniques, I invited you to participate in my upcoming Webinar (free) "Practical Ways to Use Web 2.0 in Your Business." My next webinar is scheduled for August 13th.

The Customer Experience is About Mindshare, not Market Share


By John I. Todor, Ph.D., author of Get with it! The Hands-on Guide to Using Web 2.0 in Your Business (

Starbucks is closing about 600 hundreds of its American stores. This has lead many pundits to say Starbucks had over saturated the marketplace with coffee houses.

However, at the same time Biggby’s Coffee Shops announced the opening of their 100th store in the mid-west. Technomic’s, a Chicago-based research firm ranked Biggby’s number 39 on Restaurant Business magazine’s Fast 50 list of the fastest growing chains.

If the coffee house marketplace is over saturated, how can Biggby’s be growing so fast?

If you ask Biggby’s CEO, Bob Fish, he will tell you it is their focus on customer engagement. As he puts it, "The Biggby way is a way of looking at customers as people, and that kind of engagement we have at our stores makes it a personal experience. People love our coffee, but the reason they come to our stores is it makes them feel good."

Isn’t Starbucks about the customer experience? Sure, but at least two things have happened at Starbucks. One, several years ago the Starbucks bean counters decide it would be more efficient if the beans were sealed in bags rather than being in bins, no more coffee aroma. Along with this efficiency move, they started using automated espresso machines. Now the barista’s just push a button. In the past they made the coffee for you and made much more eye contact. It was more personal and friendly. Sure these things make the stores more cost-efficient but… You get the picture.

The other challenge facing Starbucks is they have become, well, routine. One of the realities of our psychological system is that the emotional impact of routine things diminishes. Like all businesses that want to win mindshare, Starbuck needs to revitalize their customer experience.

Baby Boomer Turned-off by Financial Jargo-What an Opportunity for Financial Services, but…

Jt_in_berkeleymed By John I. Todor, Ph.D., author of Get with it! The Hands-on Guide to Using Web 2.0 in Your Business. (

My sources within the financial services industry say they are very interested in doing business with baby boomers and they think customer relationships are very important.

Here’s the perception of the other side (source AARP magazine, Jul/Aug 2008):

  • 60% of 50+ Americans say they don’t read financial literature because it is too hard to understand.
  • 41% of 50+ Americans are turned-off by financial jargon.
  • 54% of 50+ Americans think an Internal Revenue Service tax form is easier to understand than a mutual fund prospectus.

Why do financial-service professionals and companies use complicated jargon instead of plain English? Here’s what 50+ Americans think:

  • 63% say it is to make a product or service seem more impressive.
  • 50% say it is to distract people from focusing on the fees they will be paying.
  • 50% say it is to make consumers feel less confident about handling their own finances.

One group wants customers with money. The other group has money and they want help. Where is the problem?

I did a very informal survey of some financial advisors about the situation and the most common response was, "we are not responsible for the jargon, the companies are."

Once again, what an opportunity! Financial advisors should advise. But people don’t like taking advice from people they don’t trust. A first step in building trust is helping clients understand what they don’t understand.

Word-of-Mouth and the Economy

Jt_in_berkeleymed By John I. Todor, author of Get with it! The Hands-on Guide to Using Web 2.0 in Your Business.

Barcelona to New York to San Francisco—the schedule time, 16 hours. Actual time 27 hours. Now that was a customer experience.

What’s that got to do with word-of-mouth and the economy? Here’s a little story that illustrates.

My American Airlines flight from Barcelona to New York was a little late getting away from the gate, not to worry. Then we sit on the tarmac for several hours. A frustrated pilot comes on the PA and announces that we must return to the gate due to a foul-up in paper work. He proceeds to tell us that since American Airlines only has one flight per day in and out of Barcelona, they put the management of the station out to bid. He adds, that in these days of cost-cutting, the lowest bid wins, and you get poorly trained staff. Apparently some of the cargo was not poorly declared as to weight and location in the plane. USA regulations require the pilot to have this information.

The initial idea was for the tower to relay the information to the pilot while the plane was on the runway. Some how this didn’t happen in a satisfactory way and it was back to the gate and another 2 hours sitting in the plane. Nearly everyone with a connecting flight in New York missed it.

Like any business, American Airlines has a right and obligation to keep costs inline. However, they need to do so in away that protects the customer experience and the employee experience. As a frequent American customer I don’t want to have to wonder whether they are really servicing a route, I want to count on them, trust them. Now I am not so sure. As to the employee experience, well the pilot’s frustration and explanation speaks volumes. Apparently, he was experiencing the consequences of cost-cutting as well.

If the economy keeps slipping it won’t just be airlines that look to cost-cutting to maintain profits. The challenge will be to find ways to do so without doing serious damage to customer and employee relationships and commitment.

The Word-of-Mouth About Customer Experiences

Jt_in_berkeleymed By John I. Todor, Ph.D., author of Get with it! The Hands-on Guide to Using Web 2.0 in Your Business.

Consumer-reviews and Top Rated Products listings are hot and profitable!

Check it out:

Online shoppers who look at TripAdvisor reviews book double the number of trips that online shoppers who don’t look at reviews.

Bass Pro Shops reports that products that make the "Top Rated Products" category based on consumer-reviews, convert at a 59% higher rate than the site average., like Bass Pro Shop, gets markedly higher conversion rates for "top-rated products" but also finds these buyer spend 63% per order.

Don’t let the term "Top Rated Products" mislead you into believing that we can go back to our "product-centric" ways. It is still about the customer and the customer experience. In this case, the experiences of the reviewers help future customers make meaningful decisions.

Consider this:

Conversion rates are higher on products with less than perfect reviews than those without reviews at all.

90% of those surveyed say they have a better overall shopping experience when they research products online before shopping in-store.

Products with 50+ reviews have a return rate that is half of those with fewer than five reviews.

The source of my data –

Here’s my take. Rating are good but the comments of customers are great. Reviews are especially meaningful if they come from someone like us. We discount the star rating when someone point out a feature or experience that we value. We make judgment calls based on the narrative.

My personal experience. I booked a 2.5 star hotel in Washington because two reviewer brought out what matters to me. Both commented that the hotel was thread-worn but clean. Both mentioned it was walking distance to  the coffee houses and restaurant in the Dupont Circle area. Hooked.

Customer Trends that Can’t Be Ignored

Jt_in_berkeleymed By John I. Todor, Ph.D., author of Get with it! The Hands-on Guide to Using Web 2.0 in Your Business.

If you are wondering what’s happening in the world of your customers, consider these statistics and there implications.

If you are not wondering, start…

  • Consumer IP traffic surpassed Business IP traffic in 2008 and the gap is predicted to widen.
  • Consumer Information Technology is advancing faster than Enterprise technology.
  • Social Networking dominates Global Internet traffic. In 2008, all of the top 10 sites are in some way involved in Social Networking. These six were in the top 10 in 2005 but no longer are: ebay, Amazon, Microsoft, aol, and
  • Fifteen to twenty-four year olds are 2 time more likely to connect via social networks than email. In contrast, adults 44+ years of age are 1.5 time more likely to use email than social networks.

The source:

These people are your customers and they are involved in a massive conversation. What are they saying about you, your company and offerings? What if they are not saying anything? What are you saying? Is it visible? Is it credible?

Three Ways Web 2.0 Can Make You a More Successful Businesperson

Jt_in_berkeleymed By John I. Todor, Ph.D., author of Addicted Customers (

1. Turning Information Overload into Insights and Opportunities

Today’s fast changing and complex world confronts both businesses and customers with too much information and confusion that comes with change and innovation. The time pressure of a 24/7 world exacerbates the problem.

Web 2.0 tools and filters can harness information overload and turn it into insights and opportunities. These filters can help businesses deal with their own challenges. Most importantly, executives gain insights on ways to help customers make sense out innovation and see how it can help them and therefore creating desire and demand.

2. Building a Networked Brain Trust

Trust in relationships can simplify things in a fast-paced and complex world. While online networks improve the efficiency with which businesspeople can accumulate and manage connections, they don’t necessarily foster trusting relationships. The reality is that time-pressures and other societal factors have reduced the number of close relationships for most people.   

Online social networking sites and tools can be used proactively to build a robust base of people who can provide the knowledge, know-how and advocacy to thrive in a changing business climate—a Networked Brain Trust. The key is turning online connections into trusting relationships with real-world consequences.

3. Regaining the Ability to Influence Customers

Customers in just about every marketplace are online and they are vetting products, companies and people before they do business with them. All three must have a visible and credible social media presence. If they don’t, they lose out. A Web 1.0 website is not enough. Today customers not only want to know about products and where to buy them, they want to know about the experience they can expect when they consume them. And, they want to know if the people and companies behind the products will help them get the greatest possible experiential value with the least possible frustration.

The rules and tools of a Web 2.0 world are dramatically different from traditional marketing, advertising and brand building. To be successful efforts to build a credible social media presence requires an understanding of how today’s customers make decisions and what they value. It requires an understanding of the principles underlying the viral network effect of social media as well as how Web 2.0 tools can be systematically used to make it happen.

The new rules and tools of Web 2.0 are a source of disruptive change to the business world. Therefore, it is essential that any businessperson who wants to adapt and thrive must know how to play the game. You can outsource the tasks but you can’t outsource how your business knowledge and know-how addresses the challenges your customers face.

For the past year I have been helping clients deal with these issues. The insight, strategies and tactics are now available in two forms. One, an interactive eBook, Get with it! The Hands-on Guide to Using Web 2.0 in Your Business. The second is a series of 12 short and digestible, online seminars. To learn more, I invite you to go to the Get with it! Site.

Hazardous: Selling Technology not Building Relationships

Jt_in_berkeleymed By John I. Todor, Ph.D., Author of Addicted Customers: How to Get Them Hooked on Your Company (

It turns out that customers are not the only ones that hate the service they get from companies. Companies hate the limitations in service that their service technology enables them to deliver.

Research by Forrester found service oriented technology adopted by their clients seldom fully live up to the service they want to provide their customers. In many instances over 50% of what a company wants to deliver in a service channel is not possible. This leads to what they see as serious gaps in customer service.

What a missed opportunity for win-win-win. If the technology companies worked at shifting the focus of the relationship from selling to building relationships this wouldn’t happen. Unfortunately, the pattern and resource allocation favors sales. Obviously from the statistics, open, co-operative and collaborative relationships are not the norm.

What an opportunity. Imagine the outcome of an open and co-adapting business ecosystem involving technology providers, their clients and the client’s customers. It would overcome enormous inertia and waste and enable the right things to be implemented at a much lower cost.

Sounds like a fit for the ‘social’ element of Social Networking.

Influence and Advocacy are Earned, They are Not Market Segment

By John I. Todor, Ph.D., author of Addicted Customers: How to Get Them Hooked on Your Company (

“As more companies adopt social media, they struggle to find effective metrics for deciding who are the most influential players.”
That was the conclusion of a study presented at the recent Society for New Communications Research Symposium in Boston.

I must say that I find the search for influentials and the concept of new media or social media to be at odds. I don’t deny that some bloggers and some social media sites attract more eyeballs than others. But, where does the influence come into the picture. Is it that by identifying online contributors with the greatest reach, they can purchase product ads on their sites? Or, are they thinking about purchasing their influence? How Web 1.0.

I do think the greatest potential of social media does lie in influence, but influence that arises from the social element, not the implied endorsement. The social element being the willingness of people to share, contribute and participate in conversations about their experiences. Others are influenced by this consumer generated content because talks about the potential experiences they might have in buying and especially using the same product. The experience of others helps put purchase decisions in a context from which someone can make relevant judgments. Think of context as the interrelated conditions or situation in which something exists; the circumstances that define meaning or value. They stories conveyed by others seta context and if that context has relevance or meaning to a reader, they will be influenced. This quite difference from how mass marketing attempts to influence customers.

A while back I was looking for a hotel room in Washington, DC. My first strategy was to look for the best trade-off between location, price and the expedia rating. This allowed be to narrow choice to a four star hotel that was above my budget and two hotel within my budget but only garnering 2.5 stars from expedia. One had two customer reviews. Both said the hotel was a little worn but clean and comfortable. One raved about being walking distance to the restaurants near Dupont Circle. The other mentioned great coffee houses. Those statements put things into a context that was meaningful to me. That’s influence.

Would I have been influenced if mega-blogger like Robert Scoble had mentioned the hotel in one of his posts? Only if he had communicated meaningful information about the experience and did so in a credible and non-commercial manner. Without this it would have been akin to a celebrity endorsement. These days trust studies rank celebrity endorsement in the lower half the scale. In contrast, peer-reviews rank near the top.

Literally Branding Customers is Baffling

By John I. Todor, Ph.D., author of Addicted Customers: How to Get Them Hooked on Your Company (

At an aftermarket tradeshow Dunlop tires offered people a free set of tires. The caveat, you needed to let them tattoo the Dunlop logo on your body. Apparently there was an appeal, 50 people quickly took up the offer and hundreds more are on a waiting list.

There are a few things I don’t get about this gimmick.

First, even though tattoo are becoming more common place I can’t imagine getting “branded with a logo” for a set of tires. Then again, I don’t have any tattoos and don’t plan to get any. But, would I wear a temporary tattoo for a free set of tires? Maybe.

Second, the original blog where I saw this item (Mastaler) claimed the first 50 were Dunlop enthusiasts. Huh! They might have been tattoo enthusiasts who wanted a free set of tires. Will they buy Dunlop in the future? The best you can say is “maybe, maybe not.”

Third, it likely generated publicity and now there are 50 people walking around with a Dunlop logo on their body. There is nothing authentic about this type of endorsement. It is like the celebrity endorsements that now rank near the bottom of trust scale. Who will this attract? Most likely, people who want something for nothing or want some personal attention. Least likely, people who are trying to buy the best tires for their car or people who buy because they expect a differentiated customer experience.

The latter can be expected to have a much high lifetime value. So, why did Dunlop do it? And, why does MarketingProfs think this is a “shot of marketing inspiration?”

Help me out, what am I missing.

Avid Technologies Weary of ‘Shouting’ at Customers’

Jt_in_berkeleymed_2 By John I. Todor, Ph.D., author of Addicted Customers: How to Get Them Hooked on Your Company (www.

Hardware giant Avid Technologies announced that it won’t exhibit at the spring convention of theNational Association of Broadcasters.

The first reaction of many customers and industry experts is, "are you nuts." The conventional thinking is that NAB is the industry event and everyone who is anyone needs to be there.

General Manager, Graham Sharp, says, "Our marketing dollars are going up, but we’re going to spend them on much more personal engagements (with customers)." At large trade shows "the booth is very loud, and you’re competing with demonstrations from other vendors. You get to meet a key customer and shout at him for half an hour, and then he moves on."

Avid is in a fortunate position; they know who their customers and prospects are and how to contact them so the lack of trade show visibility won’t hurt them. On the other hand, more personal and engaging interactions can dramatically improve customer relationships.

Kudos to Avid for having the courage to abandon conventional tradeshows in favor of directly engaging customers. I will be keenly interested learn specifically what they do to actually get customers engaged.

Information Overload in 2008

Jt_in_berkeleymed By John I. Todor, Ph.D., author of Addicted Customers: How to Get Them Hooked on Your Company (

Basex, Inc. chief analyst, Jonathan Spira, has forecasted that information overload will be the problem for 2008. (San Francisco Chronicle, December 27, 2007).

Spira estimates that the disruption and disorientation of too much information cost the U.S. economy $650 billion in 2006 due to loss of worker productivity.

In my book, Addicted Customers, I make the case that the impact is at least as great on customer buying behavior. Information overload is stressful and stress leads to customers who are increasingly indifferent and closed-minded. As a consequence, they are predisposed to make purchase decisions based on price and convenience rather than value and loyalty. Not a good thing for businesses.

The antidote is turn indifferent customers into emotionally engaged with the product and especially in the experience.