Innovator’s Dilemma

August 28th, 2014 By Ted Paff

In 1997, Clayton Christensen wrote a book that coined the term “innovator’s dilemma”.

repair moving plane

In his book, he described how industry-leading companies eventually fall behind by putting too much emphasis on customers’ current needs, and failing  to adopt new technology or business models that will meet customers’ future needs.  The “dilemma” is the need to choose between getting better at what you already do vs. creating a new way of doing business for the future.

Customer Lobby’s Dilemma

Today, Customer Lobby is the largest and most successful company in the “review generation, syndication and management” industry focused on service businesses.  Things are going great for us right now.  We are growing, successful and having fun doing it.  No complaints.

However, a couple of years ago, the innovator’s dilemma became very real for us. Yes, customer reviews are becoming more important in buying cycles.  However, we believe that reviews, how they are generated, consumed and managed will change substantially over time.  Our long-term vision of how successful businesses will communicate with their customers (from reviews/feedback to various forms of marketing) requires us to change the services we offer to our customers.  These changes require a very different solution than we currently offer.

The challenge for us (and for other businesses facing an innovator’s dilemma) is that we want to find a way to be great at our core business today and still create what we need to position ourselves for the future.  It feels like doing upgrades to an airplane while its still flying.

Our solution to the innovator’s dilemma is to change what we do.  For nearly 2 years, we have been changing our product from the inside out.  Last week, we released a new version of our product that removed some features and added others.   However, what was visible in our recent release was a small fraction of the changes we have made over the last 18-24 months. Most of the work we have been doing has been to enable us to launch a series of products that will be available over the next 12-18 months.

We believe that we are on a path to create something truly remarkable. Stay tuned for many more announcements from us.

Never Done

It’s never done.  That has been one of my key take-away lessons from this process so far.  As soon as a product is built, it is becoming obsolete.  When you think you are great at delivering a service to your customers, there is a still a better way.  Even now, in re-imagining how businesses might communicate with their customers, I can see how data and technology will keep revolutionizing how it happens for many years to come.

The insight I am left with after reviewing our multi-year process is that the “innovator’s dilemma” is not a dilemma faced by innovators but a choice to continue to innovate or slowly become less relevant that every business faces.  That’s because, what ever you are doing, you know that there is a way to do it better and, eventually, someone will.

 

 

 

 

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Reading on the Web: The Exception to the Rule

August 21st, 2014 By Kevin Baca

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From neuroscientists to UX designers, the consensus is clear: No one reads on the web. In fact, according to Tony Haile of Chartbeat, a web analytics software, 55% of web traffic “bounces” after 15 seconds. For the 45% of you who are actually still reading, I have a revelation: Reviews are the exception to the rule. More on that below.

But first, it’s worth looking at how we consume written content online. It seems we have become conditioned to skim and scan our way through the web, largely out of necessity. Aside from some poor reading habits, this need to navigate quickly has led savvy designers and copywriters to format information to be more digestible to the skimming brain; e.g., large headings, short snippets, and bullet points.

Something like this:

No One Reads

Research shows people spend very little time reading content on the web.

    1. 55% spend 15 seconds or less on a site
    2. Less than 20% of content is actually read
    3. You get the point?

 

While the above formatting is definitely more likely to relay vital information to the average person navigating the web, the fact is, not all content is equal. It turns out, the way we read has everything to do with what we read. For example, research shows that we slow down and read more deliberately when the content is pleasurable to the reader.

Want to know what else gets read? You guessed it…

Reviews also yield longer read times than other written content on the web. This may seem obvious on its face, but this week I conducted a cursory analysis of traffic data to more than 2,000 reviews pages over the span of June and July and found an average read time of about 56 seconds.

It makes sense. Unlike other forms of online content, people actually seek out reviews. When they find them, they read the content earnestly because they are conducting research with consequences. So while it’s a truism that no one reads online, the caveat is that context matters.

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“About Us” Reads, Solid Leads: Part II of How to Capture Your Online Audience

August 14th, 2014 By Kelsey Brown

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Hello and welcome back to “How to Capture Your Online Audience”.

I mentioned in my last post on website content clarity that this topic would be extended into a miniseries because it’s one that can seem either frustratingly opaque or way too obvious. For a more productive outlook on site design, remember that your site visitors don’t just need a nice place (page) to land, they need a next step.

One way to turn your site browsers into real buyers is with an attractive “About Us” section. You are the service provider and the visitors need something done (that and your online reviews are why they’re visiting in the first place), but why should they feel more comfortable with you than the other guy/gal?

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For any size or kind of business, having your customer reviews and your mission statement mesh lends more credibility to your current and past customers’ feedback, and illustrates that you don’t just say, you do.

If you are a local business specifically, a “meet me” invitation like the About Us page also presents you the opportunity to establish a stronger connection with your prospective customers before they even pick up the phone or shoot you an inquiry. Local businesses can use personality and approachability to highlight their statuses as community companies, while larger-scale businesses can add a valuable personal touch.

Tips for an inviting “About Us” page:

  • Write like you’re conversing. This series was inspired by short online attention spans, so avoid writing tomes when you’re trying to entice readers. You don’t need a novel chock-full of details that could (and probably should) be addressed once you’ve actually gotten the customer engaged in dialogue about their project.
  • Give choice details on how you got started, and why you’ve never stopped. If superhero blockbusters are any indication, people like origin stories. While sticking to your short ‘n’ sweet format, tell your prospects why you do what you do, and why they can trust your expertise.
  • Introduce members of your team (with visuals). Even in the age of advanced technology, there’s no substitute for a friendly human face for instantly establishing stronger rapport. Using more than words to introduce yourself to your customers shows confidence, too. Here’s a nice introduction video example, and here’s a great page from one of our very own local businesses. Walking or calling into either business, you’d feel like you’d already met the owners and crew — and that’s powerful.

I’ll be posting the third and final installment next time: the “Contact Us” page. Your prospects came, they saw, and now they want contact. Find out how to make this crucial transition as easy as possible for the people who want to pay you.

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Email vs. Direct Mail: 3 Reasons Why This is the Wrong Question

August 7th, 2014 By Ted Paff

Since the mid-1980s when marketers discovered that email is a low cost and scalable way of marketing, businesses have asked the question: should I do email marketing or direct mail marketing?

choice

Here are 3 reasons that is the wrong question to ask:

#1: You don’t have and won’t get everyone’s email address. 

Most businesses ask their customers for an email address.  They recognize that email marketing is low cost and effective.  However, even with an active effort to get them, the average local service business has less than 30% of their customer’s email addresses.  That means that the best your email marketing could ever do would still be ignoring over 70% of your customers.

#2: Even if you had everyone’s email address, you could only reach 22% of them.

When you send a commercial email to a prior customer, only 22% of them will open your email.  That number might be even lower in your industry.  Lets do some math on that… so if you have 30% of your customer’s email addresses (see #1 above) and only 22% of them ever see the email then only 6.6% of your customer’s will ever see your email.  That means ignoring over 93% of your repeat business.

#3: ROI is great but you pay employees and build your nest-egg with dollars.

There are countless articles on the return-on-investment of email marketing.  Let me save you some reading time: email marketing to your prior customers (see caveat at the end of this post) pays off big time.  However, what is left unsaid in articles like this one is that the ROI on direct mail is still really good.  Some numbers to illustrate my point:  If I pointed to a machine that gave you $2,600 for every dollar you put into it but said you can only put a few hundred dollars into it every month, I am guessing that you would max out every month.  That is email marketing.  If I pointed to a machine next to it that gave you $27 for every dollar you put into it but said you can only put several thousand dollars per month into it, I am guessing you would still max it out every month.  That is direct mail.

The direct mail machine reaches that 93% of your past customers that the email machine can’t.

More to come on this topic….

Caveat: There are, broadly speaking,  2 types of marketing: marketing for new customers and marketing for repeat customers. Marketing for “new customers” using email or mail is what is known as spam.  Although sending unsolicited marketing (i.e. spam) can be effective in some circumstances, this blog post is focused on repeat customer marketing.  I recognize that many local businesses want to focus on new customer marketing because they are convinced that they already capture all the the repeat business from their existing clients.  However, after years of looking at hard data on this topic, I am convinced that the vast majority of local businesses are loosing way more repeat customer business than they suspect and that this represents the “lowest hanging fruit” to be picked from their revenue tree.

 

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Lessons from Comcast: Service Matters

August 1st, 2014 By Kevin Baca

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I’m a little late to the dance, but by now you’ve probably read about and possibly heard the viral audio recording of a Comcast subscriber’s nightmarish phone conversation with an ambitious, if somewhat misguided, customer service rep. And if you haven’t, well, here it is: Nightmare Service Call.

The recording is about eight minutes long, and it’s comprised, in its entirety, of a subscriber trying in vein to cancel service with a Comcast rep who fights him every step of the way. In full disclosure, I haven’t listened to the whole thing. I can’t. After just two minutes in, I felt my blood pressure going through roof.

The thing is, I actually manage a customer support department for a subscription service, so this dialogue was of particular relevance to me. I have had this conversation many times and I train a team to field similar support requests, which is probably why I can only bear two minutes of the recording. It’s a train wreck.

However, it’s an inspiring train wreck. So, after two minutes, and while the inspiration was still fresh, I drafted an email to my member services team with the subject line “Required Listening.” In it, I outlined several ways in which the Comcast rep’s “service” differs from our approach. Here’s an amended *ahem publishable* version of what I shared with my team:

1. Say Yes

When a customer calls a support line, they have certain expectations. The last thing they want to encounter is a roadblock or a hassle. If the answer is “yes,” say it up front. Once you have established that you will fulfill their request, people relax, and they are almost always willing to share their experience, feelings, and thoughts.

2. Never Debate

Who calls customer support to have a debate? There’s no debate. Ask if there is a main reason for cancelling and if there is anything you can do for them. Then actually listen. If you have new, helpful information, politely reveal it without challenging anyone’s perceptions. And whatever you do, don’t just beat them over the head with canned proof points and value propositions. Yikes.

3. Check your Ego

Somehow, the dialogue between the Comcast subscriber and the service rep turned into a war of attrition. You can hear the anger and indignation in the Comcast representative’s tone, and from my perspective, that is at least partly because he was taking the whole thing personally. This is a fallacy of attribution, and it devolves the conversation into an unprofessional exchange. It’s not about you.

 

Final thoughts: A support call is part of the user experience, and like all human interactions, it is an emotional exchange. Branding in this context is not simply a matter of messaging, it is also expressed in tone. When someone calls a support line, the representative with whom they interface becomes the product. The best way to ensure the correct tone is to reinforce the goals of customer support and the values of the brand. The rest should take care of itself.

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Are You Reading This?! Part I of How to Capture Your Online Audience

July 24th, 2014 By Kelsey Brown

Back in April, media organization NPR played a little prank on its Facebook followers with this post, proving that a snazzy image and a gripping headline really do get a lot of attention.

Often, all of the attention readers want to give.

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So, how do you make sure your online package packs a punch sans information overload? For both of our sakes, I’ll make this brief:

  • Know your Web audience and put yourself in those shoes.  Your prospects need service, you provide service. To polish up this practical reality a little, aim for a website design that answers visitors’ questions while also proving why YOU are a cut above the rest.
  • Don’t be afraid to use images. “Too much of a good thing” can definitely apply here, but having a gallery of previous projects you’ve done, people you’ve worked with (if they’re okay with it, of course), or some choice before-and-after photos gives visitors stronger confidence in what your service can provide them. Plus, you can break up intimidating text blocks.
  • Your reviews are ready for their close up. Did you know I was going to say that? Just remember that 88% of today’s consumers trust online reviews from other customers to the same degree they trust personal recommendations when choosing businesses. Get consistently updated and verified reviews from your valued customers, then put that content in a visible location on your website (like on the right-hand panel over there –>). You did the work, now let the reviews work for you.

I’ll be making a miniseries out of this topic, as I feel it’s a hugely important one that is often either taken for granted or played up as more complicated than it needs to be. For now, take a moment to look over your website. Would YOU give yourself a call for service?

Thanks for reading.

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Negative Reviews: How to Handle Stalkers

July 17th, 2014 By Ted Paff

I have written and spoken extensively about how to handle negative reviews in the past.   I continue to believe the basic advice in that blog post  is appropriate in (nearly) every situation.

However, some circumstances are worthy of extra commentary and review stalkers are one of those.

Review Stalker

stalker

A review stalker is:

  • someone who writes multiple reviews, typically on multiple review sites.
  • focused on a situation that is not a fixable by you.
  • not willing to let the issue go after you do your best to help them.

A review stalker is NOT someone who writes one bad review. They also tend not to be typical customers.  Often, they are not customers at all.  If a potential stalker has an issue with a situation that is fixable by you without compromising your business ethics or values, then it is usually worth doing what you can (in considering the cost/benefit of this, think through the cost of your time, the bad PR, the lost customers, etc.) to make the problem go away.

Responding Publicly to Stalkers

Once you have tried to talk with the person and done your best to fix the situation, your only option is to respond to the review (one caveat is when the reviewer is not a customer of your business and leaves the review on Customer Lobby, we will remove that review).  In responding to stalkers:

  1. Carefully read the review and determine all of the issues that a *potential customer* might have in choosing your business that are raised or are hinted at in the review.
  2. Use these basic response tactics and respond by discussing what changes you have made (or are in the process of making) so that this issue will not happen for a future customer.  Be creative here.
  3. Avoid the temptation to call them out as a stalker.  Most likely the reader of the stalker’s review will not see other reviews written by that person so calling them out as a stalker makes you sound defensive.
  4. Repeat each time a new review is posted by this person but avoid the temptation to copy/paste your response.  Treat each review as a new situation.

Lastly, let us help you.  Even if you are not a customer of Customer Lobby, we are happy to discuss your stalker and help you craft a response.

 

 

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Free, Awesome Thing: Email Marketing Edition

July 10th, 2014 By Kevin Baca

freeapps

You know those ads on the Google Search results page? Well, they make Google a ton of money. So much so, Google can afford to devote incredible development resources toward building robot cars and free products.

While the robot cars are pretty fascinating, small business owners would be wise to acquaint themselves with Google’s Apps product suite, in particular Google Docs and Google Sheets. You can think of Docs and Sheets as free, if less robust, versions of Microsoft Word and Excel. Not too shabby.

Google Drive

If you have a Google account, for example a Gmail account, you can access Google Docs and Sheets via Google Drive — that’s where you’ll be saving your Docs and Sheets. And, that’s the other cool thing: Google Drive is in the cloud, so now you have free cloud storage too. You can upgrade to Google Apps for Business to increase your cloud storage and customize your business email, but for now, I’m interested in the free stuff.

Email Marketing Add-On

For the purpose of this blog post, I’m going to skip ahead a bit and talk about a new “Add-on” to Google Docs and Sheets. It’s an email marketing tool called Merge by MailChimp. Merge by MailChimp is an incredibly robust tool for sending newsletters and other email marketing campaigns, and it’s free.

Here’s how it works:

1. Install Merge by MailChimp

To Install the Add-on, all you have to do is open a blank Google Doc, click on the Add-ons option in the toolbar, and scroll to get Add-ons From there, a pop-up will appear with logos for various applications you can install.

addonspompt

2. Create List

Your next step should be to create a Google Sheet consisting of the contacts you intend to email. You can do this by entering the contact information directly into a Google Sheet, or by uploading a list of contacts into Google Drive, which then gives you the option of converting the file to a Google Sheet.

Be sure to name the Sheet with a title that corresponds to your email campaign. The spreadsheet should include at least an email address, but you can use merge tags to dynamically pull any other fields in your email, for instance first name.

3. Create Email

Now the fun part. The hardest thing about email marketing has always been creating the HTML for the email campaign. The magic of Merge with MailChimp is that it transforms the formatting in a Google Doc to HTML formatting, so all you have to do is type your message into a Google Doc, format it as you would with a word processor, and add images, such as your logo.

email_layout_example

4. Send Email

While you still have the email doc open, go to Add-ons in your tool bar, scroll to Merge by MailChimp, and select Send email.  From there, you will be prompted to select the Data Source. The Data Source, as you can probably guess, is just the Sheet you created in step one. Find it. Click on it.

With your data source selected, a sidebar will appear with all of the control necessary to launch your email campaign. The MailChimp app does an excellent job interpreting your data source, but take a quick look to make sure they have everything correct.

You can then preview your email by clicking  preview  at the bottom of the sidebar. If you want to get an even better sense for how your email will appear for your recipients, you can click the send a test button, which will allow you to send an email to an email address you want to see a test version.

Once you are all set, click send, and Mailchimp will prompt you one last time to make sure all of your contact information is correct.

 

Confirm the sheet and columns are correct:

Sidebar

 

Make sure MailChimp recognizes the merge tags:

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Finally, set your return email address, from name, and fill out your business address to be compliant with CAN-SPAM laws:

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MailChimp will prompt you one last time to make sure all of your contact information is correct, then it’s all high fives!
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5. Track Results

Perhaps the slickest aspect of this free feature is the reporting. Once you have sent your email campaign, you can track the results with open and click-through analytics.

To see your campaign report, at any time, just click on the Add-Ons link at the top of your toolbar, and instead of selecting send email, click view reports.

Again, the sidebar will appear, but this time it will have the latest data, including the number of unique opens and clicks. Below that data, you will see a list of the recipients and the number of times they opened the email.

reports

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All Roads Lead to Reviews: BrightLocal’s Annual Survey Highlights Shifts in Consumers’ Buying Processes Online

July 3rd, 2014 By Kelsey Brown

BrightLocal just revealed its latest findings on where online reviews fit into the purchasing processes of consumers.

Oh yes, this is big.

You can read this year’s full Local Consumer Review Survey here, and check out Greg Sterling’s insight here.

What does the release of this 4th annual Survey mean, exactly? It means it’s Christmas in July. It means an excellent elucidation of the who, what, when, where, and why of online consumer reviews and why we are passionate about pushing those reviews to the forefront for businesses.

For example:
do you trust online reviews as much as personal reccs

Among their sample size of 2,104 individuals from the United States and Canada, BrightLocal found that an impressive 88% put their trust in reviews they read on the Web — as much trust as they put into advice from personal contacts.

Just as fascinating is the “No” category, down 8% in the last year and a whopping 20% from the foundation of the Survey in 2011. These numbers are undoubtedly further proof of the times we’re in and how the times are shifting market dynamics.

Where do those trusted and noticed online reviews lead potential new customers next? Well…

next step after reading review

With 57% of consumers saying they go to a business’s website after reading good reviews they’ve decided are trustworthy and verifiable and only 6% of consumers reporting they take no further action/don’t pay attention to online reviews at all, we get back to why reading BrightLocal’s insightful annual report feels like unwrapping that gift you’ve been waiting for.

Actually, the best part comes after the unwrapping, when my colleagues and I have opportunities (like today’s post) to help local businesses answer the “So What?” of online review and reputation marketing with results like those outlined above. The focus on online reviews is increasing — and that’s a fact — so take advantage of the tools you have for generating that feedback and attracting prospects. After all, online reviews are not the only major evolution in today’s online marketplace, and staying ahead of the shifts is a very bright idea.

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Local Business Survival in Age of Marketplaces

June 26th, 2014 By Ted Paff

There is a new threat on the horizon for local businesses: online marketplaces for local services.

Hamster wheel

Online Marketplace for Local Services

These new marketplaces are similar to the online marketplaces that have closed thousands of Main Street retailers over the last decade but selling local services.  Think Amazon selling moving services or Houzz selling general contractor services or Angie’s List selling plumbing services.  These are marketplaces where consumers can now shop for local services.

Today, these sites are mostly set up as “deals” businesses.  This was the industry that Groupon made popular with consumers.  However, coming soon, these companies (and several others) will be offering price comparison and the ability to book services directly creating an online marketplace for local services.

Future Threat

So why are these companies a threat for local businesses?  The situation is clearly different than retailers where online price shopping has revolutionized the distribution channel for most products.  While hiring a plumber is different than buying a toaster, new customer acquisition is a substantial part of the value equation of any business.

Here is an example.  Lets say you are a offering a local service (e.g. plumber, auto repair, lawyer, doctor, etc.).  You know that on average it will cost you $100 to provide the service (cost of labor, materials, etc.) and, on average, you will bill $200 for that service resulting in $100 of profit.  Now the interesting part:

  1. If a company offers to sell you access to that new customer (e.g. a “listing fee”, a transaction fee or a membership fee, etc.), how much are you willing to pay?  Said another way, how much are you willing to cut into your profit percentage to get more profit dollars?
  2. Imagine that all of your competitors are also on this network and imagine that the online marketplace starts to increase fees.  Do you have some aggressive competitors in your local market that are willing to pay more than you are to get that new customer?
  3. Now imagine that the majority of all of your new customers are coming through this channel that will likely have a very low, or even negative, profit margin.

In this scenario, a local business owner’s choices are stark: either give up much of the profit of each new customer or give up getting most of your new customers.  But is this really a threat or just one more item on a long list of problems that might “one day” happen?

Today, it is a non-issue.  However, when Amazon, Yelp, and several others all push services in a direction that could have a substantial negative impact on your profit margin, its time to pay attention.

How to Win in This Game

This may or may not be the way that local services are sold/bought in the future.  However, if this trend starts to take off, here are somethings you can do about it:

  1. Stay in the game.  As marketplaces begin to gain traction, make sure you are listed and generate transactions in each of the major marketplaces.  Pay careful attention to your cost to capture a new customer in each of the marketplaces.  For most local businesses, it will be worth being aggressive in paying for new business if you are…
  2. Get VERY good at getting repeat customers.  To me, this is the main take-away of these marketplaces: they are a great way for local businesses to generate new customer flow but you could easily go bankrupt if you are not good at capturing the contact information of your customers and marketing to them to generate repeat business from those customers.  Because much of the profit will be taken out of the first transaction with a new customer in the form of lead capture costs paid to the marketplace, the profitability of your business will mainly come from repeat customers with a much lower marketing cost per revenue dollar.

As early Groupon customers learned the hard way, if you do not create a strong system to market to past customers, you are destined to be stuck on the hamster wheel of low-margin new customer generation.

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