Monday, August 18, 2008

Netflix Customer Satisfaction

Netflix's delivry problems of the last week have been widely publicized -- both by the mainstream media and by Netflix itself. In fact, yesterday when I was on eVite, they posted a prominent message from Netflix identifying me (correctly) as one of their customers and letting me know the status on their recovery. Now THAT is going above and beyond!

It will be very interesting to see how Netflix rebounds from this service incident. So far, they have been a best practice in every respect -- apologizing profusely, providing continous service updates, and proactively offering credits to those who experienced a delay.

So far, their customers appear to be fairly understanding. In fact, as I discovered years ago when doing customer satisfaction research, satisfaction ratings actually tend to be highest among customers who have experienced a service failure in the past -- IF it was followed by stellar resolution efforts by the company that made the error.

Here's what happens. If you never have a problem, you tend to be "passively satisfied," perhaps rating your service provider an "8" on a scale from 1 - 10. But, if you experience a problem -- a double processing of your payment, wrong item delivered, etc. -- they have the opportunity to either hit a home run or strike out. If they rise to the occasion and perform beyond your expectations -- such as not just fixing the problem, but offering you a credit without you even asking for one -- your satisfaction becomes based on something tangible, and often goes up to a 9 or 10.

Of course, this only works so often. Given that this was Netflix's third major outage in just over a year. they may just be pushing their luck.

Thursday, May 22, 2008

Digital Production Moving Offshore

Interesting story in today’s Wall Street Journal titled “More Digital Ads Are Produced Offshore.” I’m not certain what prompted the author, Emily Steel, to write about this phenomenon just now, as it’s been going on for years. In fact, many Web projects today are done by virtual teams with members around the world -- and that’s probably a good thing, both for those of us who make our livings off the Web and our clients.

In the early 90s I worked for a company called marchFIRST that was formed, grew to nearly 10,000 employees, and then vanished within a year. One of m1’s many mistakes, (apart from bad timing and highly questionable accounting practices) was that it tried to build a “one stop shop” in which every specialty skill set needed for interactive strategy, design or development was available in one company. That sounds great, of course, but in reality it is quite a resource juggling act. If you have highly specialized skills, you have to scour the country, or the world, to find projects that will utilize and expand your skills. Since most offices are measured on their local bottom line, they would prefer to keep you on their own projects, whether or not you are working in your specialty. And so you have a constant tug of war, with agencies pushing staff onto projects regardless of fit in order to keep them utilized, and staff members struggling to stay at the cutting edge of their profession.

Now I have my own agency. I can listen to what my client needs, judge exactly what skills would be most useful to them, and find the perfect staff for their engagement – regardless of location. Sure, it’s cheaper to hire someone in Bulgaria or Uruguay, and sometimes I staff from those countries to keep costs down. But it’s also great to be able to find the perfect person, with availability at just the right time, to meet my client’s needs. And it’s nice for people who work on the Web to be able to live anywhere and still find interesting work. I work with a great programmer who lives in Sweetwater Texas. And another one who lives in a small town in Spain. And another one in Bulgaria. You get the idea. Meanwhile, I get calls from other small agencies to help them with brand and digital strategy engagements. I offer them a far superior resource to the minimally trained 20-something "strategy" resource that most large digital firms have on staff today. In short, it’s a win/win for all, as long as you stay competitive and offer world-class service.

Tuesday, May 6, 2008

The Key Trend for 2008

I think it's clear that the key trend for 2008 is social networking. Both MySpace and Facebook are maturing as platforms, both in terms of their demographics (both are growing most rapidly among the over-35 crowd) and as viable advertising channels. So, if you've already dipped you toe in the social networking waters, good for you! Hopefully it was a good learning experience. Whether you feel your initial forays were successful or not, at least you're on the learning curve. If you're looking to get into the social networking arena, wait no longer. Social networking is bigger than you realize, and its impact is here to stay. A few statistics of interest:

  • 8 – 10% of all time spend on the Internet in North America is now spent on MySpace.
  • Both MySpace and YouTube now far exceed in monthly visitors.

Where to Focus
Your focus this year should be on widgets and communities. Frankly, traditional advertising on social networks is unlikely to provide you with a reasonable return on investment. Click-through rates for ads placed in social network environments are a fraction of the already dismal rates you would get from running banners on a traditional site. Better targeting may improve this over time. Realistically, though, the social network environment is just not optimal for selling most products.

Brand awareness is a different story. I suggest focusing your social networking energies today on building fun, engaging widgets that make your brand relevant and interesting. Widgets are still novel enough that interesting new entries gain rapid trial, at little expense for the marketer. And joining channels or groups with shared interests may provide you with the opportunity to gain market intelligence, watch trends, and push viral promotions.

The Impact of Social Networks on Your Site
As users of all ages become accustomed to common social networking features such as widgets, User Generated Content (UGC), peer reviews and more, they are starting to expect these features in other sites as well. Would you believe that the Wall Street Journal now invites you to link your subscription to your Facebook account so you can see which articles your network finds most interesting?! It's true, and a great, simple way to leverage the network effect in traditional media.

As you plan your marketing investments for 2008 and beyond, start thinking of your site in terms of distributable functionality. If an application is valuable on your site, with the limited traffic that it receives, how much more valuable would it be as a widget that your customers can share with their friends? Or put on their phones? In short, if it's worth creating, it’s worth distributing.

What You Should Do This Year
The marketplace is still very dynamic, so experimentation is the key strategy for 2008. Establish multiple small pilots, set realistic goals, measure your results, learn from your mistakes, and make plans to build on your successes in 2009. And don't overlook B2B opportunities for leveraging social networks. If you’re looking for ideas, or to refine raw ideas into a successful pilot program, we will be happy to help.

Monday, March 10, 2008

Privacy and Control

In yesterday's interview with Mark Zuckerberg at SXSW in Austin, he addressed the failures of Facebook’s Beacon advertising launch last November. Today’s quotes Zuckerberg as saying, "Almost all of the mistakes we made, we didn't give people enough control. We need to give people complete control over their information. The more control and the more granular the control, the more info people will share and the more we will be able to achieve our goals."

I agree wholeheartedly with this assessment, and hope that Beacon will be able to overcome its rough start. Beacon tracks online purchases from participating partners (such as Amazon and Blockbuster) and announces them in a user’s newsfeed. Similar news is already shared when users add a new widget, upload pictures, change their profile, etc. However, when adding a new Facebook widget, the opt-in process is made clear to the user, while it was originally buried in a pop-up served during the Beacon purchase. Given the fact that this was a new feature, opt-in disclosure should have been made very clear as well as reversible, and should have been duplicated on Facebook as well (rather than residing only in a short-lived pop-up). Today these controls are in place.

Some privacy advocates feel that such disclosure is never appropriate, and would like to see Beacon killed off. I disagree – and apparently so do most of the users on Facebook, who freely share quite a bit of information about their changing interests via their Facebook pages. As a Facebook user, I love seeing what books my friends have bought or movies they have rented – that’s exactly the kind of sharing I value on Facebook. Tools such as Beacon make that a lot easier than having to remember and take the time to post what I'm reading or watching. However, I also want the ability to choose to share that information with full disclosure, change my mind, and opt-out completely if I like.

Facebook’s mistake is difficult to understand, since they faced much the same kind of uproar when they first introduced newsfeeds, again without proper user controls. Today, I consider the newsfeed a great feature. Hopefully they have finally learned their lesson.

That lesson goes far beyond Facebook. In today’s environment, consumers expect control over their information. They expect control over their experience. They expect control over how you communicate with them. They expect control, period. And if you fail to provide that control, you will have a rebellion on your hands – if you’re lucky. If you’re unlucky, your customers will simply quietly leave and go elsewhere. Because, after all, they really are in control.

Friday, November 2, 2007

What OpenSocial Means to You

Wow! Just when I stopped reeling over the 100 million users impacted by the new Google-led OpenSocial API standards, MySpace comes on board and doubles that number! This is big!

What is OpenSocial, and why is this so groundbreaking? Marc Andreessen gives an accessible, if somewhat lengthy, description on his blog,

In a nutshell, what it means is that creators of the nifty widgets that you’ve seen grow like wildfire on Facebook can now create similarly cool tools that will work on virtually all the other major social networks. And users can share them with each other across all those networks as well. Which means, on one hand, that the barriers between the different networks are coming down, but also that all the major networks will probably experience greater growth and more interesting content as a result. Along with MySpace saying that they will start allowing ads in widgets on MySpace via a revenue-sharing model, this will really pump widget growth into the stratosphere.

Of course, it begs the question – if all social networks start to share similar tools, what will differentiate them? Probably natural segmentation of their communities based on demographics and interests. I predict that twenty-somethings will soon be on an average of five to seven social networks, and the next big thing will be profile management tools like These are interesting times!

Thursday, October 25, 2007

Launch of mEgo and Other Adver Widget News

Last month launched at TechCrunch40 in San Francisco to strong reviews. You can experience a mEgo by clicking on mine, posted 9/18 to this blog. mEgo is a portable profiling application for use across multiple social networks. And as such, it's part of a major trend sweeping the interactive landscape: ubiquity. In other words, being able to place an application in multiple social network environments, and transfer it virally. Adver-widgets are one expression of this trend, and in some ways mEgos are adver-widgets, although they are of far greater complexity and functionality than any others that I've seen.

The key insight here is, how will users, social networks and advertisers react to the growing proliferation of social networks? Over the next few years, I anticipate that most adults between 18-34 will be on an average of 5+ social networks. Those that acknowledge that trend and plan for it will be the winners of the social network world, while those that try the "walled garden" approach of keeping their users on only their platform will end up like...well, like AOL. We remember them, don't we? Web gardens were not meant to be walled! Are you listening, MySpace?

Wednesday, September 19, 2007