Tag Archives: Marketing

Financial Ratios for Social Media

Much has been written about the benefits of Digital Media to business, not the least of which is that it is highly measurable. We can see how many hits we have on a website, how many clicks through on an advertisement, how many members in a community, how many employees are blogging, but are these actually numbers which indicate Return on investment of time, resources and money? Not necessarily. They are merely potential precursors of transactions. In other words they are indicators that there may be additional transaction and revenue. So if we can see the numbers, how do we determine what value these measurement’s have and how to use them to forecast future success, or analyse past opportunities?

If we are to truly unlock the business value of the web, we need to develop a series of indicators of digital success, similar to the financial ratios developed by DuPont for investors and management accountants.

Naturally these indicators are determined by the business objectives and different ratios are more appropriate for different scenarios. It is also critically important to understand that we need to define the ratios correctly by defining a causal link between what we measure and what is actually an indicator of success. Using the wrong ratios to manage the digital side of the business could have dire unintended consequences and be incredibly detrimental.

Here are some proposed digital ratios for a social media business;

  • Social Leverage Ratios

Social leverage ratios are similar to the financial concept of beta, because they relate to the amount of commercial leverage in a social network. The “network effect”, when it come s to social media relates to the fact that a network (of people, telephones, social media sites etc.) becomes more valuable to each member, the more users that are part of the network. One Social Leverage Ratio is the Viral Coefficient.

In his book, The Viral Effect (2009), Adam Penenberg talks about the viral coefficient which needs to have a value greater than one for the network to grow in value. The viral coefficient basically means that each individual member must invite more than one person i.e. replace himself in the membership of the network and add at least one more member. If each individual only invites one person and that individual invites one person, then the growth of the network will be linear. But say for example, each individual invites two people, and each of those individual’s invite two people, then the membership and hence the value to the members grows exponentially.

This has huge implications for the design of social media businesses and marketing campaigns. Although the focus is to get people to register and start using the services, an equal effort must be expended getting them to share and invite other people to join the network. This is called viral loop marketing, and is measured by calculating and comparing the viral coefficient of each social network activity.

Facebook’s new function, which suggests friends for you based on the number of friends you have in common, is an example of a social network activity which is aimed at increasing the number of people you link to and increasing the value of your personal network, to keep you on Facebook. The more active members who are Facebooking, the more Facebook can monetise their platform through advertising, and the more value to the Facebookers the more they will encourage non-Facebookers to join.

  • Collaboration Coefficients

There are similar ratios that can be used to calibrate Intranets, such as the collaboration coefficient which explores the depth and usefulness of employees as nodes in a network. High collaboration coefficients suggest that the business is deriving value from the way that employees are working together.

  • RODSI

Web sales ratios include the conversion ratio or the RODSI which is a measure of the Return On Direct Sales Investment, and is calculated by subtracting the sales and marketing costs directly related to a campaign from the revenue that the campaign attracts, and calculating it as a percentage. Businesses can then experiment with different techniques and tools to increase their RODSI, such as Leads Management, SEO, different advertising media etc.

Each of these ratios can be used as a measure of success and the future success of digital strategies, it is incumbent on us to work out what the best measures are, and if necessary to develop ratios that are particular to the project.

These Social Media Ratios start off by being experimental, but over time they should stabilise as we ratify the causal link between what we are measuring and the business objectives which are predicated on them. Once we have validated the ratios, they can be used to benchmark and compare the success of one social media activity over another.

About Digital Bridges

Digital Bridges creates high performance organisations by unlocking the business value of the web. We create digital strategies, user requirement and functional specifications for Intranets, websites and web applications. We also develop and implement social media strategies and create powerful digital brands using eMarketing and Communication and manage brand conversations with consumers.

Digital Bridges approaches the web from a management consulting position and relies heavily on rigorous academic thinking as well as business experience. It is headed up by Kate Elphick who has a Law degree and an MBA from GIBS. Kate has spent the last fifteen years of her career on the business side of the IT industry with companies such as Datatec, Didata, Business ConneXion and Primedia.

Digital Bridges has a broad range of experience working with significant, successful clients in the Financial, Gaming, Tourism, Pharmaceutical, ICT, Legal, Airline, Professional Services, Media and Public Sectors.

To find out more about Digital Bridges, please visit www.digitalbridges.co.za or contact Kate Elphick on katee@digitalbridges.co.za

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Filed under Business, Digital Communities, eMarketing, Enterprise 2.0, HR Intranet, Interactive Intranets, Web 2.0

The power of viral expansion loops when building robust social networks

When we build social networks we are gathering groups of like-minded people together for a reason. That reason may be that we want to monetise that social network by advertising to them, or to sell them widgets, applets or products on line. Another reason that we build social networks is to manage relationships with people around a common interest, this may be brand building for a motor vehicle brand, or employee relationship management for a large bank. Whatever the purpose, a social network will be most successful when we have the highest penetration of suitable members possible, active within the social network.

The concept of the “network effect” relates to the fact that the more members there are in a network, the more value that network has for the individual member. The quintessential example is the phone. If only two people have a phone, the phone has less value to you than if thousands of people have phones, because you can contact so many more people.

Online social networks are subject to the network effect, if there are too few people in the network it will not have any value to the individual member and they will abandon the network pretty quickly. Therefore when we build social networks, we want to populate them as rapidly as possible, so that people can derive value by networking, sharing, communicating, collaborating or conducting business.

Viral expansion is when the members of a community actively recruit new members and is an extremely effective and cost efficient way to build powerful social networks.

A “viral expansion loop” occurs when virality is incorporated into the function of the product, in other words a company grows because each user begets new users, just by using a product they spread it. This concept is explored in detail in a fantastic book by Adam Penenberg (2009), called “Viral Loop The power of pass it on”. In the book Penenberg says “What’s the sense of being on Facebook if nobody uses it?”. The value of the community is inherently incorporated in its size.

Tupperware was one of the first viral businesses. When one housewife hosted a Tupperware party for six of her friends, they were each given the opportunity to host a Tupperware party for another six friends and so on. This viral distribution network proved more effective and created more sales for Tupperware than any organised retail chain.

One of the ways to build robust social networks is to focus on the “viral coefficient”. The viral coefficient is the ratio with which community members attract new community members. In other words, on average, how many additional members does each network member recruit?

If the social network’s viral coefficient is less than one, it will be self contained and very soon will stop growing. For example if the viral coefficient is 0.5 and there are 20 people in the network, then they will invite an additional 10 people who themselves will invite another 5 people who themselves will invite 2 people who invite 1 person. We can see with a vital coefficient of less than one that the network plateaus very rapidly at 38 people.

If the viral coefficient equals one the, 20 people invite 20 people who invite 20 people and we see a linear growth pattern from 20 to 40 to 60 to 80 in total in round four.

The real secret to growing social networks is to cultivate a viral coefficient of greater than one. Let’s assume that the viral coefficient is two then 20 people invite 40 people who themselves invite 80 people who invite 160 and so forth. By the fourth round, we have 300 people on board. We see exponential growth in viral networks with viral coefficients higher than one, and the higher the coefficient the exponentially higher the growth. Just by doubling the viral coefficient from 2 to 4 we see that the social network grows by 80 to 320 to 1280 and in the fourth iteration we have 1700 members. In other words having a the viral coefficient is the equivalent of compound interest in the world of social networking.

So how do we increase our viral coefficient? Well there are basically three ways;

  • Make is useful for members to spread the message;
  • Make it easy for them to spread the message; and
  • Make them look good for spreading the message.

Making it useful for members to bring more members on board

Offline examples of this include multi-level marketing such as Amway, online you could create products where members actively encourage their friends to come on board in order for them to sell more. An example could be a charity whose members actively recruit more people to donate money to a good cause, or a political party raising funding for a campaign.

Making it easy for members to bring more members on board

There are a number of ways to do this, clearly an “invite friends” button which automatically eMails friends the link to the social network is easier than expecting the person to type in the URL.

At Digital Bridges we have a saying “The more virtual you are, the more real you need to be”. The same holds true for social networking. People still network socially in the real world, you could use a real world networking tool, such as a business card, to bring people into digital communities.

There is tool called a poken which does exactly that. It is a sort of electronic business card which looks like a memory stick with a receiver and transmitter built into it. When two pokens are touched together they exchange information which has been pre-populated onto the poken. This information includes the standard name address and contact details, but it also contains data pertaining to the social or business networks that people participate in. When the poken is plugged into a computer it automatically populates all contact details and links people within the various networks that they are members of.

Making the member look good for spreading the message

This should be the easiest part if you have bespoke special interest social networks. You need to create content and encourage your users to create content which appeals to like-minded people within the network and let them share it with their friends, peers and colleagues. So for a scientist social network you might post some provocative comments about the Hadron Collider which they can respond to and share with their friends. On a joke website they could forward the latest joke to potential members.

A word of caution

It is important to remember that particularly in South Africa, we don’t have sufficiently large, digitally literate communities to become self sustaining and that although we need to focus on maximising the digital coefficient in order to approximate saturation, we also need to have dedicated resources managing these social media networks to reduce churn at the same time as raising the viral coefficient.

About Digital Bridges

Digital Bridges creates high performance organisations by unlocking the business value of the web. We create digital strategies, user requirement and functional specifications for Intranets, websites and web applications. We also develop and implement social media strategies and create powerful digital brands using eMarketing and Communication.

Digital Bridges approaches the web from a management consulting position and relies heavily on rigorous academic thinking as well as business experience. It is headed up by Kate Elphick who has a Law degree and an MBA from GIBS. Kate has spent the last fifteen years of her career on the business side of the IT industry with companies such as Datatec, Didata, Business ConneXion and Primedia.

Digital Bridges has a broad range of experience working with significant, successful clients in the Financial, Gaming, Tourism, Pharmaceutical, ICT, Legal, Airline, Professional Services, Media and Public Sectors.

To find out more about Digital Bridges, please visit www.digitalbridges.co.za or contact Kate Elphick on katee@digitalbridges.co.za.

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Filed under Business, Digital Communities, eMarketing, Enterprise 2.0, Interactive Intranets, Web 2.0, Web Marketing

Web 2.0 and the Brand

Marketing is evolving toward a new thought-framework where the intangible experiences, transactional processes and relationships are becoming central to the brand and the customer has become a ‘co-creator’ of the brand rather than simply just a ‘user’.

The logic of branding is shifting from the conceptualisation of brand as the collection of attributes determined by the organisation, to the brand as collaborative, value creation between all stakeholders including organisations, employees and customers. This shift in logic is important when considering the Internet as a brand-building medium because its modern interactivity or web 2.0 places the user as a co-creator of the content and therefore the brand.

A strong brand provides a series of benefits to both buyers and sellers, simplifying the buyers’ search process and simplifying some of the sellers’ tasks, and enabling competitive advantage through preferential pricing.

Branding is defined as the process of creating value through the provision of a compelling and consistent offer and customer experience that will satisfy customers and keep them coming back1 . Companies are beginning to realise that brands are among their most valuable assets.

The Internet has had a transformational impact on business shifting the balance of power from companies towards customers  adding further complexity and dynamism to branding strategy. These days brands are socially constructed by consumers who are actively involved in brand creation.

Consumers respond to brands within communities, where the members of the community have a sense of shared consciousness, personal stories, morals and traditions that are all associated with a branded good or service. A great example of this is the new mums community on the Pamper’s community platform. Their brand conversations are not limited to nappies and creams, they are part of building the Medical Aid brands as they share experiences and provide advice on which Medical Aid to choose.

Brand communities have the ability to influence members’ perceptions and actions and can lead to a socially embedded and entrenched loyalty. Although negative implications involving brand communities exist, such as the ability for negative rumours to pervade the community, competitors gaining information through the community’s internal communication and normative community pressure, brand communities offer an effective method for building brands. Companies are able to advance customer engagement with the brand, foster the creation of stronger brand relationships and in so doing mitigate customer exit barriers resulting in increased competitive advantage.

The development of a strong brand community significantly influences brand loyalty and as a result positively impacts on a company’s financial performance and competitive advantage. Online community members potentially have stronger commitment to the brand and are more likely to buy the brand repeatedly, spread more positive word-of-mouth information and provide useful information to the company.

Web 2.0 simplifies the development of an online brand because it facilitates the creation of user-generated content by the community and the interactions of its members around this content.

1 Aaker, D. (1991) Managing Brand Equity: Capitalizing on the Value of a Brand Name. New York: Free Press

About Digital Bridges

Digital Bridges creates high performance organisations by unlocking the business value of the web. We create digital strategies, user requirement and functional specifications for Intranets, websites and web applications. We also develop and implement social media strategies and create powerful digital brands using eMarketing and Communication.

Digital Bridges approaches the web from a management consulting position and relies heavily on rigorous academic thinking as well as business experience. It is headed up by Kate Elphick who has a Law degree and an MBA from GIBS. Kate has spent the last fifteen years of her career on the business side of the IT industry with companies such as Datatec, Didata, Business ConneXion and Primedia.

Digital Bridges has a broad range of experience working with significant, successful clients in the Financial, Gaming, Tourism, Pharmaceutical, ICT, Legal, Airline, Professional Services, Media and Public Sectors.

To find out more about Digital Bridges, please visit www.digitalbridges.co.za or contact Kate Elphick on katee@digitalbridges.co.za.

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Filed under Business, Digital Communities, eMarketing, Enterprise 2.0, Semantics, Web 2.0, Web Marketing

Marketing and Innovation in Managing Skills

Many companies like to boast that employees are their greatest source of competitive advantage, yet the reality is somewhat different. it has become imperative for us to focus not only on how we attract and retain talented people, but also on how we engage them to deliver to our bottom line, to the best of their abilities.

Gone are the days of company loyalty. Talented employees see themselves as mobile and in control of the future of their careers. As the workforce becomes more mobile, gains control of negotiations with employers, the costs of managing and retaining talent intensify because we need to take a strategic approach to attracting talent and managing our competitive advantage.

So where do marketing and innovation fit into the picture?

In their book Marketing Management, Kotler and Keller (2006) say that “Marketing deals with identifying and meeting human and social needs”. The American Marketing Association (2004) defines marketing as “an organisational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organisation and its stakeholders”. The social definition of the role of marketing in society is “a societal process by which individuals and groups obtain what they need and want through creating, offering and freely exchanging (products and) services of value with others.”

Substitute the word “customer” with “employee” and we see a remarkable similarity in the processes for attracting and retaining talent.

To escape the economically challenged business models that have their roots in a time when talent was plentiful, companies will need to adopt a strategic approach to the HR processes for attracting, retaining and engaging talent through innovation (Hamel 2007). Elements of this approach can be adopted from marketing best practice.

So how could we use innovation and marketing to mitigate the skills shortages?

There are several steps in creating, communicating and delivering value to employees and for managing relationships in ways that benefit the organisation and its stakeholders

Creating value through innovating employee processes

Many organisations have removed themselves from their employees and adopted processes to automate their management and standardise their delivery. This was entirely relevant in a manufacturing world such as we saw in the last century, where the unit we applied to make money was labour. Today, it is intellectual capital that provides competitive advantage. The rules have changed, we are no longer standardising delivery, but amplifying it.

Take a good look at your business. Are you creating sustainable competitive advantage through your most important assets? Have you evaluated and innovated the principles, processes and practices that are based on outdated economic and business environments? Wealth creation will come from ensuring that you get a superior return on your employee investment. This is the product of attracting, retaining and engaging superior skills that are committed to acting in the best interests of your organisation.

Delivering value to your employees

We find ourselves in a very interesting time; just as we see the rise of the power of the knowledge worker as a revenue generating resource, along comes a new technology in the form of web 2.0 which enables us to change the way we manage to get the best return from employees.

The Gartner Group describes web 2.0 as “a transformative force that’s propelling companies across all industries towards a new way of doing business characterised by harnessing collective intelligence, openness and network effects.” We derive value from our employees by engaging with them, delivering the value to them as knowledge workers and motivating them to act in the best interests of the organisation.

The future of how an organisation will derive value from its employees is gathering pace on the web. The Internet is the most adaptable, innovative and engaging thing that human beings have ever created (Hamel, 2007).

The modern role of employee management is to magnify human effort, this is now possible using web 2.0 to get more out of individuals by harnessing their initiative, creativity and passion and then equip them with the tools, incentives and working conditions to compound those efforts in ways that allow human beings to achieve together what they could not do individually.

Grow your employer brand

Critically evaluate your brand from the point of view of potential and existing employees. You may know that you work for a first-rate organisation, but does prospective talent know this and how much credibility does your employer brand have in the market? How can they recognise you as a superior employer above other companies?

In marketing there are three primary ways to communicate your value; advertise it, use compelling public relations and rely on word of mouth. When communicating to your employees and future employees, the best way, is to let them experience it and tell others about it. What better way than to harness the power of 2.0 as a strategic business tool in your organisation?

About Digital Bridges

Digital Bridges creates high performance organisations by unlocking the business value of the web. We create digital strategies, user requirement and functional specifications for Intranets, websites and web applications. We also develop and implement social media strategies and create powerful digital brands using eMarketing and Communication.

Digital Bridges is technology agnostic and partners with great technology companies in order to ensure that our solutions are fit for purpose and deliver on organisational strategy.

Digital Bridges approaches the web from a management consulting position and relies heavily on rigorous academic thinking as well as business experience. It is headed up by Kate Elphick who has a Law degree and an MBA from GIBS. Kate has spent the last fifteen years of her career on the business side of the IT industry with companies such as Datatec, Didata, Business ConneXion and Primedia. Her skills include innovation and growth through marketing, communication, collaboration, knowledge management, human capital, performance management, process engineering and BI.

Digital Bridges has a broad range of experience working with significant, successful clients in the Financial, Gaming, Tourism, Pharmaceutical, ICT, Legal, Airline, Professional Services, Media and Public Sectors.

To find out more about Digital Bridges, please visit www.digitalbridges.co.za or contact Kate Elphick on katee@digitalbridges.co.za.

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Filed under Enterprise 2.0, HR Intranet, Interactive Intranets, Semantics, Web 2.0

Word-of-Mouth and eMarketing

The Internet has brought many unique benefits to marketing, one of which being lower costs and greater ability to engage with a global audience. The interactive nature of eMarketing, both in terms of providing instant response and eliciting responses, is a unique quality of the medium. eMarketing refers to digital media such as the Internet, e-mail, wireless media, the management of digital customer data and electronic customer relationship management systems.
It also refers to the placement of media along different stages of the customer engagement cycle through search engine marketing (SEM), search engine optimisation (SEO), banner ads on specific websites, e-mail marketing and Web 2.0 strategies.
Word-of-mouth (WOM) principles play an important role in eMarketing. People no longer need to wait to meet someone in person to discuss a book they’ve read or an event they attended. Today they simply generate content in their social networks letting everyone know their views. For live events, people broadcast themselves via Twitter for real-time content generation not to mention the interaction as others tweet, retweet, comment, like, or post reactions.
The traditional push communication techniques are becoming less effective while still costly. We have transitioned into a media environment meant to be about conversations where the media and its message represent the starting point for the generation of meaning in social media. Digital media has relinquished the control to audience.
If you’re actively using eMarketing, you have a higher chance of being heard, connected and engaged when you’re part of the WOM network. eMarketing should be used to manage reputation and generate awareness. Brands should care about what people are saying and how they are saying it. They must actively listen and participate in order to humanise the relationship through interactions and manage their reputations.
Whether you’re a blogger, a marketer, or an entrepreneur your opinion counts and can be contagious. It’s now possible and easy to circulate your message via the new digital channels like Facebook, LinkedIn, Twitter or YouTube. The key is to facilitate effective word-of-mouth campaign through these communities.
Each time you’re able to influence experts, opinion leaders, or people with authority you’ll instantaneously gain a little more credibility and access to their fan base. Then the collective minds with shared visions will continue to spread your message forming the viral wave pushing all the way.
If you want to attract relevant audience to your branded social network, you must do more than just spam visitors with self-promoting ads. You need to offer compelling value that keeps your audience engaged as well as perpetuating the interaction. The more interactivity a social network platform allows their users to have, the more engaged users will be which often leads to a greater chance of influencing the network effectively. This is why blogs are still amongst the most influential social media because they encourage bloggers to interact with their audience in a simple and easy fashion.
Although eMarketing is complex, it is critical to the future of any organisation

About Digital Bridges

Digital Bridges creates high performance organisations by unlocking the business value of the web. We create digital strategies, user requirement and functional specifications for Intranets, websites and web applications. We also develop and implement social media strategies and create powerful digital brands using eMarketing and Communication.

Digital Bridges is technology agnostic and partners with great technology companies in order to ensure that our solutions are fit for purpose and deliver on organisational strategy.

Digital Bridges approaches the web from a management consulting position and relies heavily on rigorous academic thinking as well as business experience. It is headed up by Kate Elphick who has a Law degree and an MBA from GIBS. Kate has spent the last fifteen years of her career on the business side of the IT industry with companies such as Datatec, Didata, Business ConneXion and Primedia. Her skills include innovation and growth through marketing, communication, collaboration, knowledge management, human capital, performance management, process engineering and BI.

Digital Bridges has a broad range of experience working with significant, successful clients in the Financial, Gaming, Tourism, Pharmaceutical, ICT, Legal, Airline, Professional Services, Media and Public Sectors.

To find out more about Digital Bridges, please visit www.digitalbridges.co.za or contact Kate Elphick on katee@digitalbridges.co.za.

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Filed under Digital Communities, eMarketing, Enterprise 2.0, Web 2.0, Web Marketing

The EQ of CRM

Web 2.0 provides us with an opportunity to improve our relationships with our clients by focussing on the interactions that are important them and on the way our employees interact with clients.
Mature companies with many points of contact with their strategic clients — banks, investment houses, IT companies, telecom providers — devote a great deal of money and effort to retaining their current customers because the costs of doing so tend to be much lower than those of acquiring new ones. The success of this strategy depends on expanding the breadth and depth of client relationships and on translating the resultant loyalty into higher sales, as well as a healthier bottom line.
However, although companies are investing in traditional loyalty programmes, CRM technology and service-quality improvements, most of these initiatives do not return the expected investment. What’s missing is the sparkle between customers and employees that transforms people into strong and committed brand followers. No where is this more apparent than during interactions when clients invest a high amount of emotional energy in the outcome (for example, a lost order or a cancelled flight).
Companies struggle to transform the way employees respond to its clients. Some assume that the quality of emotional responses — what Daniel Goleman calls an employee’s “EQ or emotional intelligence”1 — is impossible to influence. Others script what “spontaneous” conversations, removing authenticity from the clients’ experience. Still more underestimate the importance of employing employees who are mature enough to understand the clients’ world and the impact of poor service on it. This makes it difficult to foster appropriate behaviour and enhance the intrinsic emotional intelligence of employees, across the whole customer facing employee network.
There are a number of practical ways to overcome these challenges. In any industry that offers a service, there are moments when the long-term relationship between a business and its clients can change significantly. By supporting and developing the emotional intelligence of its employees, it can ensure that those moments have a positive outcome.
High emotion, high performance
What is the link between emotionally charged interactions and the purchase decisions of customers? McKinsey research has identified the existence of “critical moments” for customers as well as the companies that respond appropriately to them.2 These moments occur when the customer has a problem or receives advice, either good or bad. By contrast, routine transactions (such as collecting a credit card) don’t offer the same opportunity to create an emotional bond with the customer. Many companies make the mistake of over-investing in routine transactions but fail to differentiate themselves in the customer experiences that really matter.
McKinsey’s research demonstrated clearly the impact of emotional intelligence on the bottom line. After a positive experience, more than 85% of customers increased their value to the bank by purchasing more products or investing more of their assets; more than 70% reduced their commitment when things turned sour. More worrying, this isn’t necessarily immediate or visible, it takes the form of shifting part of a client’s business to another institution, or a willingness to talk to the competitor.
Given the clear link between positive interactions and share of wallet, every customer-facing business should identify the points of interaction that are relevant to its industry. In insurance, for example, there are many of these potential service interactions, from shopping for quotes, to claims procedures and claims handling. All offer the potential for something to go so badly wrong that a customer defects. Only a few can provide positive moments — opportunities to intensify the customer’s loyalty to a carrier.
Then, having identified the “critical moments” for their industry, they need to build a support mechanism into the employees’ environment for them to acquire the EQ and behave in a way that is relevant to the clients’ needs.
Why behaviour is the key
Standard responses to eliminate human error (IT systems, mechanistic CRM approaches and complex protocols) may smooth simple customer interactions. But pure technological solutions can never strengthen the emotional connection between employee and client.
Technology falls short when it is designed to standardise processes rather that support the employees through collective sharing, for example by taking into consideration the three elements that largely govern human behaviour: thoughts and feelings, values and beliefs and personal emotional needs. These are not acquired through a standardised process, but through collaboration and communication.

Web 2.0 technologies facilitate a two way communication between the employee and the organisation and employees and each other. This was recently demonstrated in the Awareness Report, released in late 2007. They noted some incredible results in terms of the positive external impacts of the application of web 2.0 customer relationship applications such as customer engagement was increased by 68%, brand awareness & loyalty improved by 64% and additional revenue that was generated went up by 39%.
Employees can succeed with the right skills and competencies and while most companies understand the importance of building capabilities (through training etc.), many ignore the mind-sets of their client facing employees.
If employees believe that they are the guardians of the client’s well-being, they feel confident in what they sell and in their ability to communicate. This mind-set makes it easy to have successful conversations with clients, to understand their emotional and financial needs, and to perform well during interactions. They have the positive feelings, values and individual needs; the emotional intelligence required to connect with and help clients at key moments.
Seizing the moment: How managers can help
McKinseys believe that emotional intelligence in business settings typically manifests itself through 4 intertwined characteristics:

 

  • A strong sense of self-empowerment and self-regulation, which together helps employees to make decisions right on the spot if that should be necessary;
  • A positive outlook, promoting constructive responses to the challenges of work;
  • An awareness of your own and other people’s feelings, creating empathy and facilitating better conversations with customers
  • A mastery of fear and anxiety and the ability to tap into selfless motives, which make it possible for employees to express feelings of empathy and caring

These can be intrinsic features of a human being’s personality. Even so, companies — particularly those with far-flung networks of thousands or even tens of thousands of employees — can take practical steps to encourage and enhance them using web 2.0.
Naturally companies should begin by hiring emotionally intelligent frontline employees in the first place; a business starts with an obvious advantage if it can attract people with the right emotional instincts for frontline employment.
Recruitment is only part of the story. If companies understand and act on three key “environmental” levers, they can significantly influence the front line’s emotional intelligence. Activities inspired by these levers must be mutually reinforcing and they create a workplace where excellent customer service can blossom and key moments of truth are handled deftly and successfully.

 

The levers are:

 

  • Creating meaning and clarity of purpose for client facing employees, thereby addressing their thoughts, feelings, values, beliefs and emotional needs. This could, for example, be supported by an interactive Intranet where employees are enabled to communicate with the organisation about how the organisational values translate into the way they do their work
  • Improving the capabilities of employees and influencing their mind-sets so that they acquire the right emotional skills. Once again a 2.0 enabled Intranet with an effective mentorship programme could harness the benefits of collaboration to enhance employee EQ
  • Putting structures, reward systems and processes in place to back up these changes. An Intranet that uses social media technologies to make rewards and recognition explicit to all employees would support these changes.

Get meaning into people’s work
Employees deliver exceptional customer service and perform well at critical moments if they know clearly what they are supposed to do and why. The “what” part addresses their competencies they were employed for and the “why” addresses their motivate them to work.
Efforts to help employees understand the “what” can be complex, but they are more successful when the material is presented as simply as possible. Companies should use general statements of values and principles, repeat them regularly and avoid the extensive protocols that undermine empowerment. The interactive technology offered by 2.0 enables the employees to communicate with the organisation and translate these general principles into specifics which guide their behaviour. Employees are unlikely to react spontaneously, or emotionally intelligently, if they feel the weight of a lengthy and detailed policy document, designed remotely by head office. An engaging intuitive system of communication is more likely to support emotionally intelligent responses to clients.
A range of motives drives human beings: from the purely selfish to the more creative, altruistic and personally fulfilling. Successful companies enable people to discover their motivations themselves. These companies believe that most frontline employees actually want to help customers and to gain their goodwill. Once again 2.0 technologies enable employees to discover their motivation for themselves through working closely with the organisation and collaborating with each other through two way communication.
People work hard when they are given the freedom to do the job the way they think it should be done, when they treat customers the way they like to be treated. When you take away their incentive and make their work rules based you kill their passion.
Align structures, systems, and processes
Employees respond positively if structures and systems reinforce the message. It is necessary to create rewards for behaving in certain ways and for demonstrating an ability to behave in new ways.
Companies should modify their performance-management systems to strike a balance between financial results and things that really matter at critical moments. Web 2.0 technologies provide us with the opportunity to create an employee environment that guides the right behaviours, empowers employees, enhances performance management and simplifies processes because they are based on the human aspects of networking and communication.
Simplifying frontline processes is a key priority; it gives employees time to perform more effectively at moments of truth and reinforces the vital sense of empowerment. Employees often resist change because new initiatives come on top of their existing responsibilities and overwhelm them. They won’t understand why the new initiatives are being deployed, unless the organisation engages with them on a meaningful level. Web 2.0 technologies should be designed to be intuitive, attractive to use and most of all seen as useful by employees.
Emotional intelligence may be inborn, yet companies can take concrete steps to improve the EQ of their customer facing employees. Doing so can pay off in improved interactions and more profitable relationships with customers.
Notes
1 Goleman, D. Emotional Intelligence: Why It Can Matter More than IQ, NY: Bantam, 1997
2 Marc Beaujean, Vincent Cremers, and Francisco Pedro Goncalves Pereira, “How Europe’s banks can profit from loyal customers,” The McKinsey Quarterly, Web exclusive, November 2005.

About Digital Bridges

Digital Bridges creates high performance organisations by unlocking the business value of the web. We create digital strategies, user requirement and functional specifications for Intranets, websites and web applications. We also develop and implement social media strategies and create powerful digital brands using eMarketing and Communication.

Digital Bridges is technology agnostic and partners with great technology companies in order to ensure that our solutions are fit for purpose and deliver on organisational strategy.

Digital Bridges approaches the web from a management consulting position and relies heavily on rigorous academic thinking as well as business experience. It is headed up by Kate Elphick who has a Law degree and an MBA from GIBS. Kate has spent the last fifteen years of her career on the business side of the IT industry with companies such as Datatec, Didata, Business ConneXion and Primedia. Her skills include innovation and growth through marketing, communication, collaboration, knowledge management, human capital, performance management, process engineering and BI.

Digital Bridges has a broad range of experience working with significant, successful clients in the Financial, Gaming, Tourism, Pharmaceutical, ICT, Legal, Airline, Professional Services, Media and Public Sectors.

To find out more about Digital Bridges, please visit www.digitalbridges.co.za or contact Kate Elphick on katee@digitalbridges.co.za.

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