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The Quantified Value of Great Customer Experience

Posted by Patrick on August 7th, 2014 in Research

Customer Experience Score ChartWhen you have a choice of where you do business, you tend to go with the company that you have had a better experience with. Many would refer to that as common sense. Any decent company tries to provide the best customer experience that they can. But when deciding what level of resources you can invest in customer experience, there is a question of how much it is actually worth to the company. What is the value of improving customer experience? That’s what Peter Kriss of Medallia and Vision Prize sought to quantify.

In an article for the Harvard Business Review, Kriss explains how they did it. They analyzed customer data at two different billion-plus dollar companies. One was a transaction-based business. The other was a relationship-based subscription business. Controlling for an assortment of factors that could skew the data, they took customer feedback and paired it with future spending by those same customers.

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I’ve been a fan of Gary Vaynerchuk for a long time. Well before he released his first book, 101 Wines. I’ve also been managing online communities for a much long time. I always enjoy when Gary touches on our profession because he’s smart and, no matter what, him talking about it is good for us.

At the end of July, Gary talked about community management in a big way when he released a slide deck titled “Go Big on Community Management!” On LinkedIn, he wrote a blog post titled “Why Community Management Works.” On his personal site, he went even further: “If You Don’t Invest in Community Management, You’re Done For. Here’s Why.”

In the slides, Gary makes a point of saying that he has the data that supports the value of community management. “This time I have all the stats,” he writes. “Or at least the stats that mean something to all my corporate pals out there.”

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It’s natural to want to make decisions quickly, and most decisions happen just like that. There is this pressure online to act fast and respond quickly. Otherwise, you are asleep at the wheel, or you don’t care. Sometimes you just have to put those pressures aside, take a step back, and speak to those who are directly affected by the decision you will make.

At KarateForums.com, we have an articles section where members submit long form pieces that are then proof read and published. They receive a bit more polish than the average post. Due to that, they are placed in their own section and, on average, receive more attention than they might as a random thread.

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Long-running online communities have a challenge when it comes to highlighting newer members. Old members – many of which may not even be active any longer – tend to be the members with the most total posts, most reputation or some other accumulated number.

One of the reasons people participate in communities is for recognition, and one of the ways that happens is through these metrics. If the path to recognition seems impossible, that makes some people less likely to participate.

Community software (or, perhaps, add-ons for our chosen software) can help us here, by displaying metrics that are more timely, in addition to the overall ones.

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Amazon PrimeIf you are launching paid (or premium) memberships on your community – or if you have them already – I’d encourage you to take a good, hard look at how Amazon has treated Amazon Prime. Especially when it comes to pricing and how they add new features to the program.

As a point of disclosure, I am both a Prime member and an Amazon shareholder.

The History of Amazon Prime in the U.S.

On February 2, 2005, Amazon Prime launched. It was priced at $79 a year, and the benefits were completely tied to shipping. Free two-day shipping on items sold directly by Amazon, as well as discounted one-day shipping, for up to 4 members of your household. Give or take, the shipping benefits have pretty much stayed the same over the years. But not much else has.

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Last week, I published an interview with Bassey Etim and David Williams. Respectively, they lead the teams that moderate comments for The New York Times (NYT) and CNN. They said a lot of great things, and I really enjoyed reading it.

I didn’t want to dilute their words by making it a 2-parter, but the resulting article was so long (more than 4,000 words), that I decided to hold off on sharing my favorite takeaways. Here they are.

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CNN and The New York TimesNews organizations and online comments. If you think about that combination, what comes to mind?

There was a time when many regarded the comment sections on mainstream media sites as an example of some of the worst discourse on the web. But it is slowly getting better. Among the community management professionals leading the charge, at the highest levels of the media, are Bassey Etim and David Williams.

Respectively, they work as community managers at The New York Times and CNN. Both have been in the field since 2008, both lead the teams responsible for the moderation of comments posted on their news organization’s website.

I’ve known David for a few years now and just recently connected with Bassey. They are tremendously smart community managers and experts in moderation. If you work in this profession, you should know their names. They deal with moderation at a volume that few can fathom, in an environment that is highly charged, in a space where many people expect to be able to say their piece, no matter what that is, without restriction.

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There are organizations that host online communities that have been or are now successful that have also been able to get away with not making a full time paid employee responsible for the community. Managing, growing and moderating the community just falls to whatever time other paid people can make available, and to volunteers.

I don’t think anything is wrong with that, necessarily. But what I notice is that when things get stale or activity declines, what happens is that some of these organizations throw a software update at the community. A redesign, new software, a substantial upgrade in feature set – something along those lines.

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I opened TweetDeck yesterday and immediately saw a tweet from someone I didn’t know, raving about the customer service that they received from a particular brand. The tweet itself had been retweeted by a friend, which is how it ended up in my stream.

The company he was talking about was not one I had heard of before, and I’m not likely to buy their products. But I clicked the tweet to check out the image that was attached to it. And then I saw this tweet (I’m paraphrasing, not looking to call out the individual):

“They do have great products and customer service! Their customer service could be even greater if they used [name of customer service related software].”

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Patrick O'KeefeFor a long time, I have been quietly working toward simplifying my life and cutting away most of my commitments. I was juggling so many things that it began to feel stifling. I wanted to do something else, but I couldn’t. Now that I have successfully cleared my plate, I can talk about why I did it.

I wanted to open myself up to tackling my next big work. Whatever that may be. I have some ideas. Most of them involve some form of entrepreneurship. Writing a book, launching a start-up, etc.

But I am also really intrigued by the idea of joining a company. Over the years, I have been contacted about numerous opportunities, but I have always turned them down. I am at a point in my life where I am really hungry for change and a new challenge. I am more open to taking a role at a company than I have ever been before. If you have ever been interested in hiring me, now is a great time to get in touch.

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