For those of you keeping score, my first four posts focused on the kinds of relationships businesses can have with their clients online. These relationships in my mind went from the as shallow as possible to as deep as possible. We started with the concept of findability and the fact that the Internet is a purely on demandRoyal Russian Navy training pool medium and then went on to recommendation which is arguably one of the more important methods of marketing online (given the right tools). Transparency, which encourages businesses to talk to customers with a human voice was the next concept and collaboration finished out the series of posts as being the deepest type of relationship a company can have with its customers. My goal when working with clients is to get them to the transparency at the very least.

Collaboration is dependent upon the business model. Yesterday I read a great post by Avinash Kaushik about breaking out conversions on a macro (acquisition) and micro (accessing other elements of the site) level. (This also reinforces the concept of the atomization of the internet but we aren’t going to focus on that now.) I think the only thing that Avinash missed was talking about all of a business’s contact/interaction (corporate social graph) points throughout the Internet and not just the company’s site. His point is that if we track users in a more global manner, instead of just at the point of conversion, we will have a better understanding of their online persona’s and what we can do to increase the likelihood of acquisitions in the future. One of the commenters also goes on to identify micro conversions and the “E” word. As in engagement. The goal of becoming the trusted resource.

This made me rethink of my original premise of deeper relationships, on a relatively linear path. I didn’t talk at all about conversion. I’ve also been thinking about the quantum leap between being found and someone making a recommendation. I’ve taken the conversion for granted and I define it as the step between findability and recommendation. (This may sound naive and yet, what is a conversion given some of the newer business models. Watching a video? Uploading your photos? Seeing a pre-roll?) I would say that conversion is a commitment to the product/service and recommendation is a commitment to the brand. (I do recommend brands that I have not tried and yet I do let whomever know that I have no direct experience.)

Way back in October there was an article in the Harvard Business Review by V. Kumar, J. Andrew Petersen and Robert P. Leone that asked the question of How Valuable is Word of Mouth? The authors break down potential customers into 4 categories:

  1. Champions – People who purchased the product/service on a regular basis and are good marketers
  2. Affluents – People who purchase the product/service regularly but are not good marketers
  3. Advocates -People who don’t buy very often but are responsible for numerous referrals
  4. Misers – People who are good at neither

They go on to say that a customer’s referral value (CRV) is higher than a customer’s life time value (CLV), therefore making Champions and Advocates the most valuable customer types. This makes sense when you think about how people make buying decisions. It’s an interesting method of defining a company’s customer base. If we use this model to reconcile what Avinash has posted and what I have posted, we come to some interesting conclusions.

The first conclusion is that any marketing material that can be forwarded on to others, as a referral, needs to be engaging and customizable. This referral needs to have the potential to be personalized other than just the from line. Maybe allow the user to interject something to speak to exactly what they like about the product/service. (This is starting to get to a topic I will post about very soon; the tools of the corporate social graph.)

The next thing I thought of was how to weigh certain aspects of your online presence. If someone is hitting the support section more and other sections that may speak to an issue. If they are hitting the “marketing” slice that lives on YouTube then that should be weighed more heavily. Now, it is important to also weigh the type of the experience. If someone is watching a YouTube video (passive) then it has the impact that it has. If someone is talking via LiveChat (active) with an employee then that interaction can be far more powerful in regards to creating an online experience. (If you wanted to increase the impact of the YouTube video you would have an employee answering questions and addressing comments as an employee of the company.)

With respect to what I’ve posted, collaboration may be another form of Champion. Collaborators not only buy the product/service, they also create it. Champions are more marketers and collaborators are more engineers. With this distinction in mind, Karmaloop has the best of both worlds. They have enabled customers to easily become sales people and product creators which generate 15% of their overall revenue. If the Harvard Business Review article is correct it would also be wise to track how often a user selects the forward to a friend option (CRV > CLV) to help identify them as a Champion/Advocate. These users, the Champions/Advocates, need to be given tools that they can personalize, which could also be thought of as collaboration with, to allow them to make specific recommendations.

Also, transparency (manifested for example by how much time clients spend on a business’s blog/forum or talking with customer support) should be weighed more than an average page. This type of interaction creates loyal customers and can feed recommendation. (It also, has the ability to piss a lot of people, but again; we’re not going to focus on that right now.)

To wrap it up (because this post is lllooonnnggg). Marketers need to measure all areas of a company’s corporate graph, define and then develop deep relationships with their customers on the customer’s terms. Not every “customer” can be acquired. The customer dictates what kind of relationship you as a business can have with them and it is up to business leaders to make that relationship as deep as possible.

By Michael Myers