Empowered

Customer Experience and Outside In thinking (and our book about it)

Josh Bernoff — Tue, 22 May 2012 09:11:20 -0400

by Josh Bernoff

About a year ago I devoted myself to finding the biggest, coolest, most important book we at Forrester could write. We reviewed all the potential choices and then decided we should do a book about customer experience.

Forrester's Customer Experience team has been working for 14 years now on the idea that improving the experience your customers have is the most important thing you can do for the growth and profitability of your business. That turns out to be easy to say, but very hard to implement. Book-worthy, you might say.

Outside In: The Power of Putting Customers at the Center of Your Business is the result of a year's work from Harley Manning, the research director of our Customer Experience team, and Kerry Bodine, a highly creative analyst on that team. I will go out on a limb here and predict it will be one of the most important business books you'll ever read.

We made the unconventional decision to choose Amazon Publishing, the publishing arm of Amazon, as our publisher. In all other respects this is a traditional book -- it went through the same rigorous publishing process and will be available in print and ebook formats, just like any other book. But working with Amazon has worked out well for us.

Even though the book is not officially published until August 28, there are ways you can get on board now. You could:

Read Harley and Kerry's posts about it.
Sign up to get one sent to you soon -- it's available now for preorder at your favorite online bookstore.
Go the Forrester Customer Experience Forum. Not only will you hear Harley and Kerry and some of the world's customer experience leaders, you'll be able to get a free full pre-release copy of the ebook.

The Story Behind "United Breaks Guitars" -- a new book

Josh Bernoff — Mon, 30 Apr 2012 10:16:52 -0400

by Josh Bernoff

I was delighted to get the chance to interview Dave Carroll, creator of the amazing "United Breaks Guitars" video, for my book Empowered.

Luckily for me, my relationship with Dave went beyond an interview. I know a little more about his story, and a fascinating story it is. Now you can hear that story, too, since he wrote a book about it: United Breaks Guitars: The Power of One Voice in the Age of Social Media.

Here's the foreword I wrote for Dave's book. Buy a copy. I think you'll find it revealing.

In July 2009, Dave Carroll stepped onto a United Airlines plane from Halifax to Chicago and changed the world.

Dave is the iconic creator of United Breaks Guitars, an impassioned video ballad that describes his months-long trek through the world of airline customer service, illustrated with Mariachi singers, catchy country-style music, and clever visuals. But United Breaks Guitars is far more than music. With more than 10.7 million views, it’s a highly visible marker that business has changed forever, and that customers have taken over. This is truly the age of the customer, because any customer can, in theory, do what Dave Carroll did: use talent, fight back, connect with millions of other customers, and knock hundreds of millions of dollars off the market value of a massive corporation.

This engaging book tells Dave’s story from the inside. As you’ll learn, he’s one of the nicest guys on the planet, just a musician trying to do a great job. Despite the way he was treated, Dave shares the almost loving way he tweaked United after trying every other imaginable strategy. This may be one of the most humble stories every told by a man who changed the world. You’ll read about Dave’s upbringing and the family life that shaped him, his struggles as a musician, and how he’s taken this experience and used it, not only to build his career, but to give back to the people who helped him along the way, and to support the causes – like first responders and local news coverage – that he feels strongly about.

Embedded in this story are also nuggets of insight for anyone in a business, large or small. If you’re wondering what social technology means to your company, take a close look at what it meant to the companies Dave talks about in this story – not just United Airlines but Taylor Guitars, Ford, and Chubb Insurance. These companies have been changed by social technology – United now uses United Breaks Guitars in its customer service training, for example. They understand that social sites like YouTube and Facebook represent not just a threat from unhappy customers, but a unique way to listen and engage with all customers, improve your products, and improve your company’s image.

As a business author, my stock in trade is case studies and strategy frameworks. But Dave’s experience frames these ideas in a wholly personal way. In hundreds of stories and interviews, from CNN to The View, Dave’s story has become familiar to many of us, but inside it is an uplifting tale of how you can change the world with a smile and a guitar. As you read about Dave’s personal journey from musician to video star to activist to social media expert and public speaker, I hope you think, “Hey, I could do something like that.” Because in the totally connected world of social technologies, each of us now has the potential to change the world.

Proof that Facebook fans are worth more to brands

Josh Bernoff — Mon, 09 Apr 2012 10:43:39 -0400

by Josh Bernoff

The debate about the value of Facebook fans continues to rage on. I hate raging arguments in the absence of solid evidence. So I was delighted to see that analyst Gina Sverdlov of Forrester Research had applied actual statistical modeling to address the question, in a new report called "The Facebook Factor."

Gina's technique is simple to understand. Using a statistical technique called logistical regression, she examined a large number of factors that potentially contribute to whether a consumer will purchase, consider, or recommend a brand. The technique could work for any brand; the report specifically analyzes Best Buy, Walmart, Coca-Cola, and Blackberry.

The results are very suggestive.

Here are some facts from the report.

For all four brands, being a Facebook fan of the brand boosts purchase, consideration, and recommendation. For example, 79% of Best Buy Facebook fans bought there in the last 12 months vs. 41% of non-fans. And 74% of them recommend Best Buy vs. 38% of non-fans.
Of all the questions we asked (and there were many), being a Facebook fan had more influence over these behaviors than any other factor. Being a Facebook fan of Best Buy increases the odds that a customer will purchase by 5.3 times; the next closest influence factor is having researched consumer electronics, which only increases the odds of purchase by 1.4 times. The pattern is repeated for every single behavior and every single brand. For example, having a Walmart nearby doubles the odds that you'll consider buying there, but being a Facebook fan of Walmart increases those odds by more than a factor of four.

Does this mean you should pour your budget into building fans for your brand? No! While there is a strong correlation between these positive behaviors for your brand and being a fan, there's no proof that being a fan causes people to buy, consider, or recommend your brand. If you boost your fan base artificially, those fans will be less avid on average.

What this analysis does show is that fandom is worth something. Your Facebook fans are more likely to buy from you, consider you, and of course, recommend you.

This means that cultivating them with content and interaction on your Facebook brand page is well worth it, because this is where your most enthusiastic customers are. You have the opportunity to supercharge them, not just to buy, but to spread your message. For companies that don't provide these fans what they want -- interaction, content, things to share -- this is a wakeup call. And if your brand doesn't have a Facebook page, this report is proof you're stuck in marketing thinking from the previous century. Use this analysis to justify putting your marketing budget and effort into a Facebook page and the staff to keep it lively.

Media, Google, and shades of grey on April Fool's Day

Josh Bernoff — Mon, 02 Apr 2012 09:33:14 -0400

by Josh Bernoff

A headline stating that Mitt Romney was dropping out of the presidential race and endorsing Rick Santorum appeared at the top of Google News on Sunday. It was clearly false. How did this happen?

It starts with the bloggers posting on news sites. Len Burman blogs for the Forbes site as "The Impertinent Economist." Len is no joker. He is the Daniel Patrick Moynihan professor of public affairs at the Maxwell School of Syracuse University, and was a senior official in the Clinton Treasury Department. Until yesterday, his blog mostly focused on pointedly skewering much of the partisan tax debate with both fact and well considered opinion. (I also know this guy a little more than most of the bloggers out there, since he's my smartest cousin.)

Does Len Burman belong on the Forbes site? Sure. Serious news sites feature bloggers, and with this kind of pedigree, he's the kind of guy we want to hear from. He's not a reporter, but these are shades of grey.

On Sunday April 1, Len posted a piece on his Forbes blog called "Romney Drops Out of Race, Endorses Santorum." It's pretty funny -- it makes an entirely believable case that Romney took credit for the Massachusetts health care law he presided over, decided Santorum would lose anyway, and wanted to wait four years to have a better chance. Of course, it would never actually happen, which makes it just a clever April Fool's joke. It's amusing -- go ahead and read it.

Like many Web sites, Forbes doesn't police its bloggers ahead of time. So the piece went up on Sunday when Len posted it, and an email went out to everyone following his blog. Should Forbes police every post its bloggers put up? Shades of grey.

Should Forbes allow April Fools jokes on its site? A lot of sites do. They know we can tell the diference. Shades of grey again.

The post ended up at the top of Google news. Why? Google News is an algorithm. It knows there were lots of stories about Romney and Santorum so this must be important news. And it knows Forbes is a respected news site. So Forbes articles about Romney and Santorum go on Google news. For a short moment, my cousin was in the most coveted spot in the news business. (The screen shot you see here was taken by Gawker.)

Should Google News have shown this article? Good question. But how would you stop it? Should human editors vet stories on Google News? That undermines the whole algorithm. Should it censure Forbes for hosting bloggers? Most other news organizations would be banned, too. Should it learn to identify jokes? That's would a fun artificial intelligence project. A little more vigilance would be a good idea on April Fool's Day, perhaps. Shades of grey again.

Or maybe the story belongs there, and we should learn to tell the difference between news and satire. It's the headline, though, that many would read and perhaps even believe -- and the headline looks like news.

What happened next is instructive. Forbes yanked the blog post (Len tied to repost it, it disappeared again) and also yanked a subsequent post in which Len explained himself. Why yank it? There are a number of possible explanations, but in my opinion, it was Google News that got in the way. This satirical post would probably have stayed there, but I think Forbes didn't want to look bad on Google News. All those people clicking on the seductive title on Google News, Facebook, and everywhere else it was shared then got a broken link on Forbes' site.

But you can't get things off the Internet. Len's post lives on a blog he set up for it. And in a classic example of the Streisand Effect, yanking the post led to other stories about the joke and the reaction in the sites of the Washington Post's, the San Francisco Chronicle, the New York Daily News, and Mashable. Not only that, it became a trending topic on Twitter. The story lives on. Shades of grey indeed.

You can imagine ways that Forbes or Google could fix this. Or you could see this as part of a trend that ranges from Fox News to This American Life. There is no longer a way to restore the black and white distinction between truth and the mass of opinion on the Internet. We must all become skeptics. Especially on April Fool's Day.

Mike Daisey, "This American Life," and you: Who is responsible for the truth?

Josh Bernoff — Mon, 19 Mar 2012 10:46:40 -0400

Thoughts on watching the fascinating interplay between Mike Diasey, Ira Glass of the NPR radio program "This American Life," and Apple. . .

In a nutshell: Mike Daisey describes himself as "Actor, author, commentator, playwright, and general layabout." He took a trip to China to see how Apple products are made in a factory at Foxconn, then wrote a monologue about it, which he delivers off-broadway in a show called "The Agony and the Ecstasy of Steve Jobs." Ira Glass' "This American Life" is a non-fiction radio program that tells stories about people (I've written about Ira before.) "This American Life" broadcast a piece with Mike Daisey about Apple and China on January 6.

Eventually, NPR reporters in China raised questions about the story. Much of it was not true. Incidents that Daisey described never took place, or were extrapolated from news stories of which he had no firsthand knowledge. His translator, whom "This American Life" finally located despite Daisey's attempts to obscure her identity, reveals what he made up, and where he stretched the truth. Glass dedicated his whole program this week to what they got wrong, how, why, and what is still true -- he pulled no punches in his apology. That program is absolutely worth a listen. I've embedded it below.

What are we to make of this? Who is responsible for the truth?

The frontlines of truth are in the mind of you, the reader. In today's world we have sources like The New York Times and ABC News, that we generally trust with facts. This is because of the standards they use and their reputation depends on those standards. But make no mistake: the "story" you read is a story -- it is written to engage you. Some facts are included, some facts are not, those choices determine the story. Balance is an interesting and slippery theoretical concept. Luckily, in a world that includes Google News, you have access to many points of view.

Generally, though, you can count on those facts. "This American Life" and NPR have a reputation for getting the facts right. This is why Ira Glass put together a whole show in this retraction; his reputation and NPR's are on the line.

What about opinion?

Forrester reports include two elements: facts and opinons. If we get the facts wrong, we fix it. If you have a problem with our opinions, tough. But any reader will find it easy to tell which is which.

News stories are supposed to be facts. But they are filled with opinions as well. Often, those opinions are given in the form of quotes from knowledgeable people (sometimes, those are analysts). But again, the journalist chooses those quotes. Often, reporters call me and ask my opinion, and I can see they are trying to confirm their prejudices, and if I say something that confirms them, I get quoted. My favorite is the "However, analysts say . . . " which is pernicious -- they generally talked to one or two people, confirmed their idea, and then can put it in print without even identifying who supposedly agreed with them. (A quick Google News search shows the words "Analysts say" appear in 14,000 news stories in the last 30 days.)

Of course, once you get past traditional media it gets far worse. Fox News and MSNBC cherry-pick facts and mix facts and opinions far more than less slanted media. Bloggers range from high ethical standards to no standards at all. We have all learned this, and we need to teach it to our children.

I believe Mike Daisey violated people's confidence twice. First, and he disagrees with this, his off-broadway show is a sham. When you tell a monologue in the first person, even in a theatrical setting, people believe it is the truth. His idea that the truth is flexible in the context of a monologue is wrong. We know "based on a true story" means that playwrights or story writers for television or movies have dramatized events. "The Social Network" is not the actual story of Facebook. But a monologue told in the first person is not a play.

Second, and he admits this, he should not have agreed to present his dramatized version as fact on "This American Life." Glass's mistake was to believe him, and he has paid the price for this.

What are the lessons here?

First, there is such a thing as truth. Second, even in normal situations, truth shifts depending on who is telling the story, because of the choices they make. Third, always consider the source -- this may the only remaining differentiating factor for conventional news media. And fourth, with all the resources available to you online, it is your responsiblity to seek out more viewpoints. The truth will out. But only if you, the reader, do a little more work.

Graphic: Actor's Guild of Lexington

. . . and we're back

Josh Bernoff — Fri, 16 Mar 2012 11:42:54 -0400

by Josh Bernoff

Due to some obscure issues regarding the way our Web content is served, the Empowered site and all the elements of it were inaccessible for most of the last two weeks.

It was a strange problem, because the site was visible from inside Forrester but not from outside. This led to some charming Twitter interactions (Josh: "It's working now." Site visitor: "Um, not it's not.")

Here's what I learned.

I made a promise when I put this content up and told people to use it. They expect it to be there. I was surprised how many people apparently use the Forrester Social Technographics Profile Tool regularly and complained when it disappeared.
My first instinct to communicate with the world was to blog and use Twitter. Luckily, Twitter was still working. Diversify your channels.
The generosity of the audience continues to impress me. Tweeters: thanks for not ripping into us for the downtime, and thanks again for being my unpaid tester corps -- and helping me show the Web team here that there is an audience that cares about this stuff.

Some URL aliases are still down but we're working on that, and everything is accessible from empowered.forrester.com by clicking on the tabs.

A public thank you to the following people who helped us debug the site from all around the world:

Pablo Sanchez Kohn (@pablo_sanchez_k)

Xenia Jones (@jonesx)

Elaine Young (@ejyoung67), a professor whose students were using the tool.

Taqi Rizvi (@taqirizvi)

Grant McDougall (@grantmcdougall)

Chris Maher (@chrishmaher113)

Suzi Craig (@SuziCraig)

Anita Loomba (@anitaloomba)

Max Faingezicht (@maxcr)

How social networks make money

Josh Bernoff — Fri, 27 Jan 2012 12:35:40 -0500

by Josh Bernoff

We're arguably 10 years into the social network phenomenon (Friendster was founded in 2002). By now we should know the main business models. But popular sites like Tumblr (no visible means of support) raise the question, are there really any other good ways to make money other than advertising?

Here are the significant models:

Advertising. Facebook is already making multiple billions on ads on pages. Networks without ads on pages make money form ads on search (Twitter promoted tweets, for example).
Brand pages. Twitter has started to roll these out. As I understand it, you don't have to pay for the Facebook brand page, you just pay for ads to drive people to it.
Premium accounts. The freemium model is in place at sites like Flickr and DeviantArt. Charge members more for extra storage or to avoid ads.

There are others you hear about that haven't gotten big yet. Second Life created an economy around selling land. There are virtual goods. Merchandising the vast amounts of data that these networks collect is a possibility, although obviously it has privacy implications (Is there a market for behavioral data in the aggregate? Is it legal to sell targeting data at all?).

And I'm discounting the "get a lot of users and then sell to a bigger company" model. This just shifts the revenue question to the new owner. (YouTube's model is advertising now, even if that wasn't that big at the time it was sold.)

I'm interested in what you've seen -- what other models are out there, and how promising are they? When this finally matures, will it all be advertising based?

Five stages in dealing with Google's control of your data

Josh Bernoff — Thu, 26 Jan 2012 14:42:46 -0500

by Josh Bernoff

There's plenty of serious analysis going on about Google assembling all your data (and using it to improve your experience across devices). This is going to make Google stickier and harder to live without, ramp up the pressures on how they expose controls on data collection and use, and increase the seriousness of possible data breaches.

But most of all, it's raised everyone's consciousness about just how much data Google collects, and made us wonder if we should be worried.

As we're all grieving the loss of our privacy, maybe Elisabeth Kübler-Ross can help us to get through the five stages of dealing with Google's knowing everything about you.

Denial. Wait a minute, Google. You're customizing search results based on my queries about erectile dysfunction? You read my gmails and are offering me vacations in Tijuana and criminal defense lawyers? My social security number is in some of those emails. You won't use that, will you?
Anger. How can I stop using these indispensable Google tools? Everybody already knows my gmail address, I'm lost without Google maps on my iPhone, and I gave up my newspaper subscription for Google News. Untangling this will destroy my productivity. I hate you but you're so useful I can't live without you. Dammit, Google, how could you do this to me?
Bargaining. Let me see your privacy controls. I guess I could turn personalization off on some of those searches I did for untraceable poisons. I'll tell you what, let's just hold onto the last three months data, then I'll feel better. And if you promise you won't boost your Google Plus search results over Twitter, we'll be fine. I guess. Let me try this for a while and see if it bothers me. Just promise me you'll let me opt out and delete everything later. And don't tell my wife. OK?
Depression. I guess I'm stuck. My choices are to give up Google, spend hours tweaking privacy settings, or just live with you knowing everything about me. I'm just going to curl up and stop clicking and tapping now. I have no friends in real life and my wife already left me since I spend all my time on the smartphone. This has gone far enough. Right this second, I'm googling how to give up your devices. Oops! Damn!
Acceptance. I admit it. I can't live without you. I love you more than anything else in my life. Just collect everything. I guess I trust you. I can live with this. You're a good friend and helper to me, and all you need is data I don't use much anyway. What the heck. Go with it. I feel so much better now.

Photo "Angel of Grief" by Konrad Summers via Flickr.

We are all pirates -- SOPA-inspired stories from 15 years of media analysis

Josh Bernoff — Thu, 19 Jan 2012 09:57:24 -0500

by Josh Bernoff

With SOPA blackouts all over the news, I wanted to take a step back and ask: do we know what piracy is? Sounds like a simple question, but here are a few stories that show just how confused people are.

In the 2000s, I wrote a Forrester report about file sharing. Our reports are available to paying clients or for a fee. But we share the reports with the people we interview as a courtesy. Among the people I interviewed was one at a prominent media-company lobbying organization that represents copyright owners -- one of the very organizations that is right now pushing SOPA and ridiculing the opposition. So when the report was done, I contacted the staffer at the organization to send him a copy of the report. "Don't bother," he said, "We already have a copy." "How did you get it?" I asked. "One of our member companies, a movie studio, had a copy and they emailed it to us."

I had to point out that our reports are copyrighted content and cannot be shared indiscriminately. Slowly, the staffer realized that he had revealed something embarrassing -- that to his organization, movies or music were worthy of protecting but Forrester's report, since it was just print, didn't seem to require the same protection. There was no further comment from him or his company. And there was no apology, either.

In 2003 I interviewed an executive at LimeWire (since shut down), a company that produced file-sharing systems used by many to trade copyrighted music, obviously mostly without permission. LimeWire was free, but made some of its revenue by selling a premium version. Waggishly, I asked "Are there any copies of the files for LimeWire's premium software on your file-sharing service?" Suddenly, he became shocked. Creating software is a lot of work, he explained, and the results are valuable -- sharing it this way would be very wrong. I pointed out the hypocrisy of his position, he couldn't see it. When we published what he said in the report, he again objected to my telling the story and sent me a blistering email in protest.

Attitudes vary. A friend of mine gave me a gift of a hard drive full of pirated music and movies from Bittorrent -- obviously he didn't see a problem with it. (I have never used it.) I also have a 12-year-old son who regularly creates YouTube videos and watches them. Once I explained that music was subject to copyright and using it without permission was stealing, he removed copyright music from his videos and started asking a lot of reasonable but very difficult-to-answer questions. He is attempting very carefully to do the right thing, but the online world he lives in exists because people don't obey the rules.

What have I learned?

Digital piracy is frictionless and nearly riskless. We all do it. And all of us who create content are victims. Go ahead, comment on this blog if you never do it. Never share a copyright article. Uh huh. I thought so.

We all value our own content more highly than content from others --that's clear from the stories I've heard.

Here's the difference between fair use and a copyright violation: When I use your content it's fair use. When you use mine, it's a copyright violation.

Whatever you can say about SOPA, it is an attempt to give copyright owners tools to interfere with copyright violators, tools that are easier to use than lawsuits.

Since we all violate copyrights, there are far more violators than copyright owners. All those users rose up yesterday, goaded on by the companies and organizations that have built their popularity on frictionless digital activity, like Google and Wikipedia. Their awareness tactics worked brilliantly and will water down SOPA or kill it.

The forces behind SOPA want to create friction. The people who consume Internet content -- all billion of us -- hate friction. And we're scared about giving the power to create that friction to people who may make arbitrary decisions.

Interactive marketers aren't the only ones who'll suffer if SOPA passes. Copyright owners: I think you're going to have to find another way.

Photo from OakleyOriginals via flickr -- used through Creative Commons license, of course!

Do people care about the data you collect? Now, more than ever, they do.

Josh Bernoff — Wed, 18 Jan 2012 13:00:16 -0500

by Josh Bernoff

Today Forrester published survey results intended to answer the questions "Do people care if companies collect their data, and does it affect their decisions about the companies?"

The short answer to both questions is, yes.

In a survey of 37,000 US and Canadian online adults, we first asked how concerned people were with companies accessing their personal information. More than 70% were concerned about social security numbers and credit cards. Less than half cared about their phone number, and only 19% were concerned about their online reviews. This proves people are at least thoughtful, and distinguish between extremely sensitive information and other information.

The second big conclusion is that age matters, and young people are more open. For example, 47% of 55-64 year-olds were concerned about access to their behavioral data, compared to only 33% of those 18-24. Young people were also far more willing to give up information in exchange for discounts.

Finally, 44% of consumers say they have not completed an online transaction because of something they read in a privacy policy. Again, this is far more likely to happen to older consumers, and the percentage has increased since 2008.

Marketers -- especially direct marketers -- love data. But now, over 15 years into the Web, consumers are becoming far more aware of how data collection can go awry, and are voting with their pocketbooks. You can collect and use this data broadly and hope you don't run afoul of an angry consumer with a lot of Twitter followers ready to destroy your brand with your own behavior. You can exploit young people's willingness to part with data -- they have so much less to protect, after all. Or you can adjust your policies based on this rising level of awarness. It's up to you.

The report, by Forrester Customer Intelligence analyst Fatemeh Khatibloo, is available here. (Non-Forrester-clients will see an excerpt.)