Software as a Service (SaaS)

CRM News: Customer Loyalty: Social Networking’s Limits
By Denis Pombriant

Marketers with high expectations for their data and low thresholds for interpretation can be surprised when reality does not live up to the numeric expectations generated by a community. Furthermore, if a company’s production apparatus takes the raw data and runs with it, complications can be nasty.

I am still trying to figure out what the primaries are telling us about
social networking. I think some of this will be important for CRM and
as I have noodled on what it all means, I have been surprised myself.
Before I go on, this is not a discussion of who won or my candidate
preferences, just musings on how it went down.

First, I think there is
something overlooked about the differences between Iowa and New
Hampshire — and if it has not been overlooked, it certainly has been
underreported. The big difference is in how the votes are cast — and
it’s important. In Iowa, as everyone knows, the general description is
caucuses and the format is open voting; in New Hampshire, they have a
formal election and use a secret ballot. Caucuses are a form of social
networking designed to form consensus. In a traditional secret ballot,
the consensus is made evident only once the votes are counted.

Secret Ballots

It might be surprising, but the secret ballot is a relatively recent
introduction to politics. The ancient Greeks and Romans used a form of
secret ballot, but when democracy made a comeback after a roughly
17-century hiatus, a lot of people couldn’t read and open balloting was
the form.

In the 1850s, Australia
introduced the concept of a secret ballot, and in the U.S. in 1888,
Massachusetts was the first state to do so. Kentucky was the last
adopter in 1891, which means that Grover Cleveland in 1892 was the
first U.S. president to be elected solely by secret ballot.

Consensus is a good thing, but
open balloting is open to abuse and intimidation in voting, and that’s
one reason secret balloting came into being. Intimidation can be a
subtle thing. It doesn’t require a bunch of big guys with narrow
foreheads to affect a vote. For some people, it can take a lot of
courage just to stand in a small group to be counted for a particular
candidate, or anything else for that matter.

Outcome Impacted?

I wonder whether Hillary would have won in New Hampshire if they had
not used secret ballots. Since many people apparently made up their
minds late (according to news reports), some of them may not have had
their reasons fully worked out in their own minds.

In other words, their choice
might have been more gestalt than conviction, and they may have not
been able to articulate their reasons. Without the ability to clearly
articulate their reasons in a caucus format, some people might have
folded and selected another candidate. We will never know, but we
certainly have proof of a big discrepancy between the information the
pollsters collected and the final results.

It’s quite a different thing in the marketing
world, though, and one of the valuable attributes of social networking
outside of politics is its ability to capture the thought process as an
idea percolates and matures — and consensus is reached — in a
population. Since people make actual purchase decisions in the privacy
of their own minds, the intimidation factor is either not operative or
greatly reduced.

Not Created Equal

That brings us to a related issue, the sample population. Diane Hessan, CEO of Communispace,
a company that develops and manages customer communities on behalf of
corporate clients, gave me a few insights about populations last week.
One of the overlooked issues there is the quality of the population as
measured by individual activity levels.

As with any population, there
is a bell curve for participation — some people participate a lot,
some visit once to sign up, look around and never return. Within those
extremes there are gradations — people who visit a site but only read,
some who read and post new content, people who show up once in a blue
moon and others who are addicts.

When a social networking site’s
raw population numbers are quoted, beware. We also need demographics,
metrics and filters to understand the meaning of the data that gushes from these services.

According to Hessan, a site’s total membership
cannot realistically be expected to be engaged in any single issue, so
understanding who is engaged — and how many of them there are — can
mean a lot if you are expecting that population to act as a surrogate
for the market.

Context Is Key

Marketers with high expectations for their data and low thresholds for
interpretation can be surprised when reality does not live up to the
numeric expectations generated by a community. Furthermore, if a
company’s production apparatus takes the raw data and runs with it,
complications can be nasty.

All this goes to show that
we’re still finding our way. The technology available is powerful,
important and valuable for politics as well as conventional marketing
but we need to learn how to use it effectively. We need controls,
standards and insights to truly understand the data that comes to us in
torrents from new tools.

At this point, we’re still
watching for ultimate results to see how it correlates with the data
we’re collecting. Nothing wrong with that, it’s just the adoption
process at work.

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