The New Rules of Customer Engagement

The rise of the culture of the Web has revolutionized the nature of how businesses and customers relate to each other. Whereas companies could once shape and direct the perception of their brand through carefully crafted ad campaigns, direct mail and press releases, today the flow of information runs fast and free, and customers now own the conversation. And because whoever owns the platform dictates the culture, the world is a more human, less institutional place to do business. Today’s customers want to feel good about the products they buy, where they came from and how they were made. Moreover, they want to like the company behind the product – that is, genuinely like it, not just press a Facebook button. We are entering an age of emotive economics. Corporations have been forced to adapt to this new, people-centric culture by connecting with customers on their own turf in more casual, conversational ways. There’s little room or respect for old-school corporatism’s pomp and protocol. And those businesses that cling to traditional behaviors in the online community will earn its scorn very quickly. Those companies that have embraced this new landscape and its risks have enjoyed great reward. For this reason, the human face, rather than steal and glass, has become the façade of big business. Yet with style must also come substance. It is no longer acceptable to be about profit alone. Companies are expected to contribute to the world in ways that make their customers’ lives better. Consumers are demanding that business be done on their terms. It should come as no surprise, then, that human values – transparency, respect, conscientiousness, kindness, trust, generosity and the like – are the keys to engaging with customers in this brave new world of business. So how can you use this new dynamic to your advantage to grow your business? You must embrace the new rules of engagement, understanding that when you put people first, profit will follow:

1. Don’t treat customers like they’re stupid.

When Netflix bungled its attempt to change its pricing structure last year, the backlash in the online community was severe, with many customers threatening to cancel their accounts immediately. It was clear that customers viewed Netflix as a value-priced alternative to more expensive traditional paid media channels, and therefore many felt betrayed by the company’s sudden doubling of their fees. While the price increase itself wasn’t really so unjustifiable, what made it unpalatable for customers was the company’s lack of transparency in explaining the business drivers behind the rate hike – the rising operational costs of maintaining a physical DVD business and the growing licensing fees for content streaming. Instead, Netflix spun the move as giving customers a “choice,” offering the option to subscribe to a DVD-only service at its lowest price ever. Here's an excerpt from their ill-advised news release: To his credit, CEO Reed Hastings acknowledged the poor handling and chalked up the misstep to “overconfidence,” which still sounds like PR spin, but hey, we’re making progress. The lesson? If a change in product or policy may have negative consequences for your customers – even if only in perception – acknowledge them, express empathy over the inconvenience or added cost, explain the reasons if possible and then point out the benefits or offer alternative options. People understand that businesses must evolve and that profit is still part of the equation. Don’t assume that your customers are beyond reason or treat them like they’re too stupid to detect what’s really going on.

2. Over-serve your customers.

It’s always good business to go the extra mile for customers, but never more so than when trying to recover from a mistake. How you handle disappointment is what determines whether your customers write you off and tell everyone about it or trust you more and spread the good word about you. When Google decided to phase out Wave due to poor user adoption rates, they didn’t just shutter the windows and bury the technology as if it never existed. Instead, they gave users months to move their data off the service, converted Wave into an open-source project and gave the Wave community the tools to get involved:

3. Be humble and listen to your customers.

Building on the success of its breakthrough app Wunderlist, Berlin-based software firm 6Wunderkinder recently launched Wunderkit, a project collaboration and management tool designed around the social connections of today’s work environment. Wunderkit was made available in a “freemium” model, offering standard features to all users for free with additional functionality available for a small fee to power users. As the company analyzed feedback from its beta release of Wunderkit, they realized the community’s dissatisfaction with project collaboration between users – one of the platform’s central features – only being available to premium users. What follows is a fantastic example of how to demonstrate that you’ve heard your customers loud and clear, understand their feelings and are acting to resolve the issue:

The customer is king, and the king is here to stay.

Never underestimate the commitment required to engage with customers effectively in today’s marketplace. Human relationships are not managed well with rigid rules and policies but instead must be governed by human values like compromise, sensitivity and transparency. It takes much more than a Twitter account and Facebook page to win the hearts of customers. You must develop a culture that is focused on and driven by the customer through and through. Be purposeful in growing such a culture. Establish your own rules of engagement. Make sure every employee is encouraged to embrace and exhibit those values. Empower them to do whatever it takes to take care of your customers. The journey may be a bit rocky at times, but if you walk the line faithfully, you’ll earn something from your customers that can never bought with advertising dollars – trust, respect and even passion for your brand and what it stands for.

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We the Media

Even before the first iPhone 4 left stores, and even as customers were enduring all manner of conditions while waiting in line for a chance to get their hands on Apple’s latest mobile phenomenon, the Web was already ablaze with reports about a possible design flaw in the wrap-around antenna that interferes with reception.

The story begins on the afternoon of June 23, when Fame Foundry started a discussion thread on the MacRumors community forum about a problem we encountered straight out of the box. Among the lucky 600,000 to successfully pre-order the highly sought-after device on June 15, we shot and posted this video to demonstrate the issue we had discovered:

In just over 24 hours since, the conversation in the discussion thread has continued across 46 pages, as other users have chimed in with their own theories, reviews, experiments and videos.

More significantly, the story of the apparent operating glitch has taken on a life of its own, leaping from the obscure fanboy territory of the MacRumors forum and ascending to the upper echelons of media.

The first to pick it up were tech blogs like Gizmodo, Mashable and Engadget. Soon after mainstream outlets including The Street, MSNBC and CNN followed suit. By the afternoon of June 24, Fame Foundry was fielding phone calls from reporters from national media organizations, all tracing back to the original YouTube video, which has received more than 400,000 views at the time of this posting.

The launch of the iPhone 4 has been a remarkable case study in the nature of today’s media and the ways and speed at which information spreads.

When photos and videos of a still-in-development iPhone 4 were published on Gizmodo, the story of how the device escaped the grasp of Apple’s famously impenetrable security and landed in the hands of a tech blogger became a much bigger story than the gadget’s shiny new design.

The launch of the iPhone 4 has been a remarkable case study in the nature of today’s media and the ways and speed at which information spreads.When the time arrived for the official announcement on June 7, Steve Jobs proved that the leaked photos had hardly stolen the device’s thunder, as he proudly introduced groundbreaking features such as video calling, 960-by-640 resolution display and high definition video recording. However, it is likewise worth noting that there were so many bloggers in attendance reporting live from the WWDC keynote event that a network overload brought Jobs’ product demonstration to a temporary standstill.

The hype surrounding iPhone 4 hit fever pitch on the first day of pre-orders. Apple racked up record-breaking sales, but this success story shared the headlines with the technical difficulties caused by the massive influx of traffic hitting their website, propelled largely by vocal frustrated customers who spent hours trying in vain to place their orders.

Returning to the events of the past two days, if a similar problem had occurred even just a few years ago, it would have taken much longer to come to light. In the absence of the instant connectivity of social media platforms and fan forums, users who encountered a reception issue might have assumed it was an isolated problem or that their particular device was defective, and Apple's customer service department would have been the only channel through which they could address their concerns.

By contrast, within hours of the first video being posted, there were legions of interconnected customers, bloggers and media outlets on the case, executing their own tests and drawing their own conclusions.

Interestingly, as of the time of this posting, the only response from Apple has come in an e-mail exchange between Steve Jobs and an iPhone 4 user (via MacRumors), in which Jobs describes the problem as a “Non issue. Just avoid holding it that way.”

Later, Jobs elaborated further on his position in a follow-up message:

Gripping any phone will result in some attenuation of its antenna performance, with certain places being worse than others depending on the placement of the antennas. This is a fact of life for every wireless phone. If you ever experience this on your iPhone 4, avoid gripping it in the lower left corner in a way that covers both sides of the black strip in the metal band, or simply use one of many available cases.

And so begins the next chapter in the iPhone 4 saga. Not surprisingly, this response is already showing up on blogs across the Internet, spreading just as quickly as the initial complaints.

Such is the nature of PR in today's 24-hour, on-demand information free-for-all. A single user-generated video becomes a viral sensation that far outshines the typical puff piece stories on how many people are eagerly waiting in line to buy the next great thing. Consumer backlash starts with a groundswell that becomes a tidal wave. A few brief sentences in an e-mail from one of the world’s most powerful CEOs stands in lieu of a carefully crafted press release as the company’s official statement. There is constant push and pull as corporate entities like Apple attempt to steer public sentiment in their favor – a delicate balancing act that requires juggling the mainstream press, the blogger nation and the average consumer with a Facebook or Twitter account.

As the course of events surrounding the iPhone 4 launch demonstrates, no one is safe when there is a potential reporter behind every keyboard and every camera phone – not even Apple with its notoriously loyal fan base.

More...

June 26

Test Shows iPhone Antenna Issue Impacts Voice Transmission Too [Gizmodo]

June 29

Leaked: Apple's Internal iPhone 4 Antenna Troubleshooting Procedures [Boy Genius Report]

June 30

First iPhone 4 Class Action Suit Filed Against Apple and AT&T [Gizmodo]

July 2

Letter from Apple Regarding iPhone 4 [Apple]

Apple "Stunned" to Find iPhones Show Too Many Bars [AP]

Class Action Lawyers Predictably Unimpressed with Apple's Statement [TechCrunch]

July 5

Apple Waiving 10% Restocking Fee for Returned iPhones [IntoMobile]

July 6

AppleCare: The iPhone Update Won't Solve the Antenna Problem [Gizmodo]

The iPhone is Ruining My Life! [Aol Small Business]

July 7

iPhone 4 Complaints Mounting: A Rocky Rollout [CIO]

iPhone 4: Officially a Hot Mess [Inc.]

July 12

Apple Deleting Mentions of Consumer Reports' iPhone 4 Piece on Forums, Can't Delete Your Thoughts [Engadget]

PR Experts: iPhone 4 Hardware Recall Is "Inevitable" [Cult of Mac]

July 13

iPhone Antenna Outcry Escalates with Recall Demand [MSNBC]

July 14

What Apple Must Do to Stop the Bleeding [Mashable]

Microsoft Exec Mocks iPhone 4, Dubs it Apple's Vista [Computerworld]

Video: Does iOS 4.1 Fix the iPhone 4's Death Grip Antenna Issue? [TechCrunch]

Every Week Apple Doesn't Act on iPhone 4 Antenna Could Cost $200M [AppleInsider]

Report: Apple Holding Friday Press Conference on iPhone 4 [PC Magazine]

July 15

Apple Engineer Told Jobs iPhone Antenna Might Cut Calls [Bloomberg]

New York Senator Charles Schumer Writes Open Letter to Steve Jobs [Boy Genius Report]

iPhone 4 Signal Issue Can Be Fixed With a Software Update? [MacRumors]

July 16

Live from Apple's iPhone 4 Phone Conference [Engadget]

Apple's "Antennagate" Mea Culpa – Free Case Until September 30 [ZDNet]

A Defiant Steve Jobs Confronts "Antennagate" [The Wall Street Journal]

Jobs Calls Bloomberg Antenna Article a "Total Crock" [MacNN]

July 17

Apple's Claims About Other Phones – There's a Response For That [The Wall Street Journal]

July 18

iPhone Defense Prompts New Debate [The Wall Street Journal]

July 19

"Antennagate" Reactions: RIM, Nokia, Taiwanese Animation [MacRumors]

HTC, Samsung Rebut Apple's Smartphone Claims [The Wall Street Journal]

Steve Jobs's Disastrous iPhone 4 Press Conference [Harvard Business Review]

 

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