Are companies afraid to be friendly?

March 27 1:22pm: Update Skype for iphone rumored to be introduced next week. Courtesy of PSFK.

This week I finally crawled out from the rock I’ve been under and downloaded Skype onto my laptop. I had last attempted to use Skype in 2004 to keep in touch with a friend who was consulting in South America, but was frustrated by the microphones and webcams required to make it happen, and a bit daunted by the challenging user interface. Visiting skype.com today it is apparent they have developed a keen sense of their target and aimed to remove barriers to adoption for a much broader audience: you’re greeted by smiling images of families, simple visual navigation, and lots of numbering to lead you from research to using. The site exudes friendliness to a degree only rivaled by a McDonalds Happy Meal or golden retriever.

I am struck by the warm, approachable tone of voice used throughout the communication cycle. After downloading the software, a screen appears that says “we’re glad you’ve joined us” and as the software loads it instructs “take a deep breath.” How reassuring! Very savvy for “new” technology looking to drive adoption beyond their technically-savvy user base. Are companies comfortable using a warm tone of voice? What other brands or categories could use a dose of friendliness?

Any discussion of Skype would be remiss without mentioning their incredible partnership with The Oprah Winfrey Show. What better way to mass market to families than via one of the largest media properties in the world? I’m not privvy to the terms of that relationship, but am impressed by the win-win of enabling Oprah to interact with her audience more significantly, while she’s coined the term “Skyping in” to millions of families on a weekly basis. Amazing.

For those of us who haven’t closed our golden Oprah deal, we should consider the customer’s state of mind when interacting with our companies. Are they anxious or uncertain about using our technology? How can we make the potential points of pain pleasurable, as we move them from research to purchase? A friendly tone of voice in communications may be one tool in our arsenal.

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A smiling face greets returning users.

A word about word of mouth

Most marketers agree that positive word of mouth is an important tool to drive growth. Recent studies underscore this importance: An April 2008 study by Zenith Optimedia found that recommendations from family and friends trumped all other customer touchpoints in influencing purchasing behavior. Not surprisingly, social network users are three times as likely to trust their friends and peers rather than advertising when making purchase decisions. However many misconceptions exist. Let’s debunk a few:

1. Your most valuable customers are your most passionate advocates. Logic would follow that your most loyal and lucrative customers are the most satisfied, and therefore would be most likely to recommend. However a 2007 study by V. Kumar and colleagues published in the Harvard Business Review discovered that customers with the highest lifetime value were not the most likely to refer. Instead, a customer’s referral value (the value of the revenue they generate through recommendation) is not significantly related to their traditional LTV. The authors submit that true customer value is a combination of LTV and CRV, and provide examples in Telecom and Financial Services in which their highest tier customers are actually less valuable than a lower-tier customer with high referral value. Kumar confirmed via email that they’ve replicated the findings across a broad array of industries.

2. Customer satisfaction drives WOM.High customer satisfaction ratings do not guarantee word of mouth. As with many human behaviors, eliciting the action requires a trigger. In this case, the disconfirmation of expectations is most likely to result in recommending or dissuading. At Virgin we often used the phrase “surprise and delight,” and in fact both the element of surprise and delight are necessary conditions to drive positive WOM. If you’re in a category with generally high customer satisfaction, such as commercial banking (pre-2009) and e-commerce, it is more challenging to create an experience which defies customer expectations positively. In categories with low satisfaction, such as airlines in the 1990’s, Jet Blue defied customer expectations of the category by offering friendly service and in-flight TVs. This delta between expectations of the category and actual experience was more likely to result in word of mouth.

3. All word of mouth is equal. I’ve attended several meetings over the years where the ambiguous goal “drive WOM” was uttered. In fact, the type of referrer matters. According to a study by Yankelovich, consumers trust friends above experts in product purchases. 65% trust friends, 27% trust experts, and a mere 8% reported trusting a celebrity. There is some variance by category, as studies have found consumers are more likely to rely on expert opinion in technology more so than other categories.

So, a few questions:
1. Do you truly know who your referrers are?
2. Have you designed industry-defying moments into your customer experience? Investing in a memorable positive point of difference may have higher returns than end-to-end “OK” for both products and services.

Click on the word “comment” below to share your thoughts. Next week: profiles of a few exciting new companies that enable word of mouth.

My nomination of the latest jargon we can live without:trimessaging.

A sexy idea for a decidedly un-sexy topic: Google’s Tip Jar

Lately I am completely enamored with technology that allows us to tap into our networks or broader communities to improve our lives in ways we’ve been unable to before. Two months ago I had a crush on Herman Miller’s Thoughtpile contest to launch their new Embody chair. Each week the microsite thoughtpile.org would feature a question, such as “What’s the one thing we can do to improve innovation at work?” and users would submit their answers, which would appear as bubbles of thought rotating peacefully around an axis. Something akin to a Web 2.0 lava lamp. The community then voted on the best ideas, the best of which won a new Embody chair. Sadly the microsite is no longer, but you can find an image here.

TechCrunch has a great note this week on another community-driven idea aggregator: Tip Jar by Google. Tip Jar is a collection of money-saving tips submitted by the web community and compiled using Google’s moderator service. Google’s moderator service was invented for their internal tech talks and company meetings, and allows users to submit and vote on ideas, and the most popular ideas rise to the top. Kind of sexy for an unsexy topic like saving money, no? My favorite idea to date, under the “home” category, states: “Borrow books from the library. Nothing beats free.” So true, so true.

Tip Jar by Google

What are your favorite programs, apps, or sites that allow you to tap into your friends or the web community in a way that’s improved your life? Click on the word “comment” below to share your thoughts.