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September 2008 Archives

The Future of Digital Media: Tips for the Fortune 500

Posted by Bill Lee on September 24, 2008 at 02:08 PM

I recently had the chance to have a conversation with Bob Pearson, Vice President, Communities and Conversations, about how Dell is preparing for the future of digital media.

Bob will be speaking at the 2008 Communities Exchange Summit on October 15.

Q. Bob, Dell's impressive recovery from "Dell Hell" to regaining the top spot in customer sat scores through its online community programs has been well documented http://money.cnn.com/2008/09/03/technology/fortt_dell.fortune/. Rather than rest on your laurels, I thought I'd give you a chance to frighten us (and yourself!) and inspire us. Let's get the first one over with. What is it about digital media and the online community revolution that keeps you up at night?

A. Well, our goal is to ensure our customers are enjoying their technology experience and we're learning from each other in real time. So, with an average of 500,000 people going online for the first time in their lives every day and the fact that Dell is mentioned in 5-10,000 conversations per day, I would say it's fair to say we go to sleep every night with a full day of work ahead of us.

Q. Dell has a large Customer Community budget - for example, you've got 42 employees spending their days engaging with Facebook, Twitter, and other popular sites. How do you justify the budget to senior management? Are your increasing customer sat scores, along with your decreasing customer "negatives" scores, enough for them?

A. It's not about budget. It is about having conversations with our customers and becoming relevant members of their communities online. Dell has been direct since the first computer was sold by Michael in '84. We think of this new connected era as providing us with new ways to speak directly with customers, share ideas and, in many cases, empower our customers to help each other out. It's an approach that is part of our culture, which goes well beyond a single group at Dell.

Q. Using IdeaStorm to manage feature requests by your online communities led to creation of the new Latitude laptop. Exciting stuff. But how do you know that input from the "vocal few" accurately reflects the average buyer? How do you plan to address this issue?

A. I would look at it a different way. Since when has a focus group been the right place to make major decisions? Is it better to watch ten people behind smoked glass, feed them sandwiches and ask them leading questions? Or is it best to let the community tell you what they want, customers vote on their own ideas, they discuss their ideas with each other and then we get to ask questions and watch the debate of tens of thousands of people over a period of months? In the case of Latitude, our product team was able to look at over 130 ideas, which led to six features being higher priorities in our launch. The community should be our development partner. Their insights are, ultimately, the ones that truly matter.

Q. You're hiring specialty tracking firms like Radian6 to help you make sense of the volumes of information customers generate about Dell online. What do you see as the greatest potential for such information?

A. We can see a tag cloud showing what is important for a product or a topic, as we speak. We can hear what is being said around the world, so we are more aware of trends, pro or con, in real time. We can also outreach to anyone not having a good experience with their technology to help them far quicker than it was possible in the past. Eventually, it will be important for companies to understand conversations in the ten languages that reach 95% of the online world in real time. We're on our way to doing this.

Q. Rank the following for their business potential: using customer communities to improve innovation and grow revenues, engaging with communities to improve Dell's brand, or using them to supplant cost centers such as customer support?

A. None of the above, since they are all results of doing one thing really well. We want to be a trusted partner of our customers, whether it's to help them with a technology issue, allow them to teach us how to improve via an idea, or to unlock their value to each other by empowering them to share their knowledge with each other. If we do this well, it improves innovation, revenue, our Brand and our costs.

Q. Going forward, what are the top 3 most exciting and potentially rewarding opportunities for firms like Dell in the digital media space?

A. The opportunities for us to learn from our customers via IdeaStorm are endless. So, idea management is key. The second area is to continue empowering our customers to share their expertise with each other. We're really just getting started here. The third is the innovation waiting to explode out of countries, like China, India, Brazil, Russia and more. We like to think of where we are today as finishing chapter one. There is a long way to go in exploring the potential of digital media.

Why Forrester Research is Bullish on References

Posted by Bill Lee on September 22, 2008 at 12:31 PM

Forrester Research, as you probably know, is one of the world's most respected technology and marketing research firms. I recently had the opportunity to chat with Merv Adrian, Sr. Vice President, and Laura Ramos, Vice President, Principal Analyst, on why Forrester is bullish on customer reference programs.

Merv and Laura will be keynoting the 2009 Customer Reference Forum on February 18. For more information about them, please see their bios just following the interview.

Q. Forrester is getting ready to publish articles and conduct research in the area of Customer Reference Programs - which will be presented at the 2009 Customer Reference Forum. What prompted your interest in this field?

A. Our clients: Marketing, Sales, and AR professionals - are all deeply interested in customer reference programs. Customer testimonials are deeply connected to how B2B firms market their products since the most popular source of information to inform and validate product or service purchases is peers and colleagues. B2B marketers must focus more on their installed base - leveraging customers they have is much more cost-effective than attempting to build on new names alone. Our research shows that many vendors are not leveraging higher value programs that can create loyalty retention and advocacy the way that effective CR programs can.

Q. So why DO you feel that the importance of Customer Reference programs is increasing?

A. As more and more firms realize that their practices in this area are redundant, overlapping, and ineffective - and often serve to inhibit customers from participating as advocates - the value of a formal program with clear goals and metrics, one supported by its key internal stakeholders and adequately resourced, becomes more and more clear. The Customer Reference Forum's research of the past few years has shown how this recognition has spread through the top tier firms, and we are both seeing growing interest in smaller firms as well as increased investment to make existing programs more extensive and effective.

Q. Right now you're planning a research project jointly with us and Point of Reference. We've been surveying reference programs now for several years. Forrester is going to add a lot to that effort. Can you give us an overview of what we can look forward to from the information you help us develop?

A. Forrester is excited about partnering to take this research to the next level. The work to date has documented the state of current practice, proved and catalyzed the growth of professional standards and internal recognition. We plan to take a deeper look at ways to ensure and visibly demonstrate the value of customer reference programs to the rest of the business. And how customer reference programs help to extend marketing's focus beyond demand generation and the front of the sales pipeline.

Q. A lot of Reference Managers think that the rise of Web 2.0 -- social media, online communities, customers controlling conversations about companies - will completely change the nature of Reference Programs. I know this is one of the things we'll be researching, but what are your early thoughts on that?

A. We don't believe it will "completely change the nature" of the programs - but it will expand the ways customers can meaningfully participate. Not enough customers are engaged in these efforts - many hate participation in programs that chew up their time. Social media gives vendors other avenues to make participation easier- like creating a blog post on the vendor's behalf, but expressing the customer's unique perspective done at his/her convenience. Or customers could participate in a podcast conducted over the phone from their office, contribute to a wiki or other threaded discussions, participate in online surveys - all these take less time and effort than conventional reference tactics. Web 2.0 technologies enable these and other avenues - and they can be tracked, measured and managed much more precisely with the emerging technologies.

Q. Forrester is, of course, one of the leading technology analyst firms in the world. What are the three most important things a Reference Manager should know about working with analysts?

A. Customer references are used a lot in analyst programs, of course. And the same guidance applies in other uses:
1.) Ensure freshness - an old, untested reference may not be a good one. CR Managers should always know the sate of a customer before using them.
2.) Manage appropriateness, defined as fit to need. Most analysts are looking for references for a specific reason - just like sales prospects or press are. Get the fit right - know why it's needed.
3.) Follow up. How good was the reference? And how did the analyst, or press, or prospect talking to them find the interaction? Was it useful? Measure results, not activity. And as long as you're following up, give the reference a stroke - check in with them, ask them the same questions, uncover any current or outstanding issues, and thank them.

About Merv and Laura Merv Adrian does research designed to serve information technology marketers and strategists. He introduced Forrester's research for the Analyst Relations role, and continues to contribute to that body of work. He has also been publishing research about ISV partner programs and the Business Intelligence market. He is responsible for Forrester's large primary research effort into software demand for 2009 which surveys decision makers in NA and Europe about their plans for spending and technology initiatives.

Laura Ramos primarily conducts research for Forrester's clients who are business-to-business (B2B) marketers. Her research covers a broad spectrum of B2B marketing issues including the integration of traditional and digital B2B marketing tactics, emerging B2B social media use, best practices in interactive demand generation, B2B marketing measurement, and the use of technology to enrich the online B2B customer experience. Laura's work also focuses on effective lead management, lead nurturing, sales and marketing integration, installed base marketing, and the use of digital media and the Web to create customer engagement, loyalty, and advocacy.