Insightful thoughts from Morgan Stewart of Mediapost:

…marketers’ focus on acquisition makes perfect sense. Growth is the primary goal of any company — and new customers are required in order to grow. However, there is a point of diminishing returns where acquisition efforts are simply replacing customers that have already left — the classic leaking bucket.

This leaves two potential solutions. The first is to pour even more money into acquisition. This only perpetuates the cycle because things like product development and customer service get less funding. The second is to shift budgets toward retention — specifically customer service.

At this point, you may be asking, “Wait a minute, what does this have to do with Gen Y?”

Everything.

For years, companies have been able to play this shell game and get away with it. Burn one customer and there was another close behind to fill in.

But Gen Y drove the adoption of open communication technologies and that adoption has led to adoption among Gen X, Boomers, and even senior citizens. Burn one customer today and they can tell people — more people, faster than ever before — that you burned them. Remember Verizon math? Or Shamwow sucks?

Most customers won’t go to these extremes. Maybe they search for “[insert brand here] sucks” on Facebook and “like” it. Or maybe they can’t find one, create their own “sucks” page, and invite their friends to join. Maybe they just text a few friends while on hold for your “customer retention department.” Or maybe they do go to the extreme and make it their personal mission to embarrass your brand.

On the contrary, think of brands that symbolize great customer service: Nordstrom, Zappos, Starbucks. Their reliance on traditional marketing goes down over time because their customers do the advertising for them. They don’t rely on discounts to draw in customers, they charge a premium for great service and word spreads from one loyal customer to the next.

Per the CMO Council, only 19% of a CMO’s span of authority includes customer service. Yet, as one consumer told me in a recent focus group, “When I have an issue, I’ll call and then email, but if I don’t get the help I’m looking for, look out! They can’t ignore me when I put it on Facebook and Twitter.” Social media levels the playing field. Marketers can no longer hide poor service with slick branding and promotions. Instead, we need to embrace customer service as one of our most valuable marketing channels — for both retention and acquisition.

Progressive marketers will embrace this accountability instead of fearing it. Really progressive marketers will thank Gen Y for ushering in this new era that forces them to become better companies.

For the full article, click through the link!

Announcing what seems like a foregone conclusion, Harris Interactive and Placecast released findings that mobile-based coupons are becoming increasingly mainstream — particularly, among families with young children.

Coupled with widespread adoption of smart phones, driven by disruptive innovations in the delivery and presentation of content, mobile coupons (and, in a related vein, mobile-based customer service programs) are no longer relegated to the world of tech-savvy early adopters.

Of the study, Adage.com reported:

A study conducted by Harris Interactive found adults with children at home are more likely to be interested in text alerts about sales and promotions than those with no kids at home. Of people with kids younger than 6 in their household, 35% are at least somewhat interested in getting opt-in text alerts from favorite businesses, compared to 32% of households with older kids and 25% of homes with no children. (The study, conducted in May with 2,000 adults, does not distinguish between childless adults and empty-nesters.)

That’s a big shift from last year when the same study found mostly young males were interested in receiving marketing alerts on their phones, which coincided with the demographic most quickly adopting smartphones — young, affluent males. Mobile marketing firm Placecast funded the Harris studies both years.

The new data also show that parents of youngsters are also more likely to sign up and redeem coupons via e-mail, online or through services such as Groupon. While the difference is less dramatic, it’s the same group most likely to clip and redeem coupons from fliers, mailers or newspapers.

In the year between studies, the balance has tilted away from men, as adoption of smartphones such as the iPhone and various Android devices has become more popular. Most receptive to mobile offers are still young adults 18-34, and women’s interest has grown year over year.

To see the actual report, click through the link!

Examples of strong building relationships through social media, in  a blog post by Yael Davidowitz-Neu, a Sales Strategy Analyst at Google responsible for analyzing consumer behavior, search trends and market dynamics: 

Building Long Term Relationships

While it’s true that the web has made building individual relationships cheaper and easier than it used to be, this doesn’t mean that businesses can necessarily expect to build deep connections with their entire customer base; in many cases, this is neither feasible nor cost effective. However, if a firm focuses on building brand loyalty with a small subset of customers, they may find that it has an exponential impact.

Let’s look at a few examples of companies that have done this successfully:

Yelp’s Elite Squad: Yelp operates a social networking, user review, and local search website for members to post reviews and get user feedback on local businesses and restaurants. The Elite Program is a way for the Yelp to reward its most passionate users for making their site “funny, useful and cool” by providing them with exclusive offers and members only events. This allows Yelp to strengthen loyalty among Elite Squad members, offers an impetus for wanna-be-members to post additional reviews; and, makes the site content stronger – keeping the broader community active and engaged.

The Leukemia & Lymphoma Society’s Team In Training (TNT) Program: The Leukemia & Lymphoma Society is a charitable organization focused on fighting blood cancers. To raise funding, they developed a variety of programs to expand their outreach, including The Team in Training Program, which offers group training to those interesting in running a marathon to raise money for the cause. TNT encourages trainees to leverage the power of their personal networks, by providing participants with a personal, customizable microsite for reaching their fundraising goals by getting donations from friends and family. The microsite functions much like a Facebook Page – marathon participants can share their goals, visitors are able offer supportive messaging on the participant’s wall, and donations can happen directly on site.

Lion Brand’s Lion Brand Notebook: Lion Brand is a yarn company that has been in business for over a century. To build their online presence and appeal to passionate knitters, Lion Brand developed a bi-weekly podcast and corporate blog, They also helped to facilitate offline “knit-alongs” (shared knitting projects), by helping interested parties to find others in their local area looking to get involved. Lion Brand Yarn found that their customer outreach strategy drove impressive e-commerce results – those who visited the company’s blog were 41% more likely to buy at the Web site.

The rest of the article is also very good, in terms of strategic suggestions for building relationships through social media.
 

Despite meteoric and nearly ubiquitous popularity (click through for a sneak peak at the script of the upcoming movie The Social Network, based on Mark Zuckerberg’s ascent), Facebook leaves users only marginally more satisfied than their interactions with tax collectors. Talk about a negative customer experience.

From The Wall Street Journal:

Facebook plans to announce it has reached a milestone 500 million users this week — but that doesn’t mean the masses are happy customers.

The American Customer Satisfaction Index, developed by the University of Michigan’s Business School, included Facebook in its regular survey of consumer satisfaction with companies.

The result: Facebook came out with one of the lowest ranks of any company measured by the Index – a 64 out of 100. That puts Facebook in the bottom 5% of all private sector companies, and in the same range as the IRS tax e-filing system, airlines and cable companies.

Among social websites, Wikipedia led the survey with a 77, followed by YouTube at 73. Historically, performance in the Index has tracked fairly closely to a company’s earnings and stock returns relative to competitors.

If Facebook keeps growing, why do users score it so poorly?

For more, click through the link.

From MediaPost:

 One of my pet peeves with Foursquare has been that the special offers nearby tend to have very little creativity and are only available to mayors. For example, a typical offer will be that mayors of a restaurant may get a free drink when they buy a meal (unfortunately, Gemma does not have such an offer). While it is a good deal for mayors, it is inconsequential for most visitors to these establishments, since so few of them have a meaningful chance to win the mayorship. Most good mayorships require almost daily visitation to the business.

I’ve wondered why we don’t see more businesses offer value for just checking in. That, as I discovered at Whole Foods, is exactly what it is now doing with Foursquare.

Currently, the store gives a free bottle of water on a first check-in — a very welcome freebie during this heat wave. Last week, the offer was a free product on a 10^th check-in. This is really taking advantage of the Foursquare platform — a great way to use a location-based service to drive a lot of repeat store visitation with minimal investment. I can’t wait to see where Foursquare takes this a year from now as its user base grows, as the marketing elements of the platform become more robust, and as marketers and agencies get more familiar and creative with its capabilities.