The Basement

Wow, what a week. The Basement has seen a dramatic increase in traffic this past week or so - mostly from folks flocking to one of my many Volkswagen posts. There's been an particular interest in Volkswagen's Director of Brand Innovation, Kerri Martin. In fact, I've begun receiving accounts of personal experiences and impressions of Ms. Martin from folks that have worked directly with her. Interesting stuff really. I've learned lots about the inner workings of Volkswagen's marketing machine, the relationships between Ms. Martin and her coworkers, the politics of VW, and Ms. Martin's ladder climbing antics. In fact, I'm compiling some of these tidbits for future publication – really insightful, interesting stuff. In fact, if you or someone you know have had the pleasure of working directly with Ms. Martin or anyone involved with Volkswagen marketing, I'd love to hear from you. Please call me at 918-808-3072 or email me at this address. I never publish stuff folks ask me to keep confidential. Just ask Mr. ... oh, almost slipped up there.

Most recently there's been a lively discussion going on in the comments section of one of my post. Amongst some dialog between myself and someone calling themselves MM is a wonderful comment left by Word of Mouth Marketing researcher Martin Oetting. Martin has done work for folks like P&G and is currently preparing his doctorate in the field of WOMM at ESCP-EAP in Berlin and maintains a couple of interesting related blogs Consumer Empowerment (English) and Connected Marketing (Germany). In short, Martin is way more qualified that I am to be talking about this stuff so I'm always flatter when folks like him stop by.

Martin writes

What I wonder is this: if every person on the planet driving a VW or considering owning one were to handle their "VW brand trouble" the way you are on this blog, how could any company keep up? I am not asking this as a criticism about your post. (I too find it interesting that VW are not responding, and yet I too wonder whether they actually should.) But I am just curious how companies could actually handle the amount of online WOM that's (going to be) out there without going completely bonkers? What is the best way forward? Are the Intelliseeks and BuzzMetrics of this world going to be the ultimate answer to it all? They can analyze as much as the like, but they won't manage the exchange and interaction with all those Online-WOMers, will they? So again - if everyone claimed this level of interaction, how can companies live up to that, in the long run?

This, as it turns out, is the million dollar question. In fact, as I talk to companies that are actively trying to figure out the online consumer generated puzzle, the brick wall seems to be scalability. "What if all of our customers and prospects wrote nasty things about us on their blogs? We couldn't possibly afford to respond." the thinking seems to go. The result, unfortunately, is a do nothing response - which, in my opinion, is the worst possible response.

Why is do nothing so bad? Might not these online detractors just go away? Maybe, but what if they don't. If they don't go away, like me, they get louder and stronger. The more I write about Volkswagen, for example, the higher I move in search engine placement. Most folks that read my VW posts no longer come from blog reading tools – they come straight from Google. "Hear Me" bloggers, as Ketchum's Paul Rand calls them, only want, as the name implies, to be heard. They are like kids who won't stop saying your name until you acknowledge them. When you don't, things get worse... as Mr. Rand says, they can become "Reputation Terrorists". Genuine online detractors (not shills or "Competitive Destroyers") aren't doing this for money and all it costs them is time, but what is the cost to the company's they attack?

This brings me to the Inequity of the Online Detractor.

Because it's handy, let's use my VW case as an example. VW wasted 2 hours of my time. This costs VW nothing. Subsequently, I wrote about it on my blog and sent VW an email. I get no response from VW, so I call VW's customer service line and spend 45 minutes or so explaining how I felt and trying to understand what the problem is. Of course, the only thing the poor customer service rep can do, it take down the information but I get no answers. This costs VW the salary of the CSR (maybe $12) plus the toll-free phone call (maybe $1.50). No big deal. I still got no response though... except for an auto-generated email a week later that only made things worse. This still costs VW very little – except maybe a sale or two from someone that might have read one of the posts. But in the mean time, someone at VW spends lots and lots of time reading my blog.

Now things get interesting.

How much did VW spend in salary for the hundred plus hits I got on September 26? How about the phone call to my local dealer that prompted them to start hitting my blog 2 hours later? After I posted my logs, VW started using anonomizer technologies so I don't have accurate counts but I know that they continue monitoring my blog. I know that people at VW maintain Microsoft Word documents that contained a list of URLs to my posts. I have been told by insiders that VW filters and monitors access to my blog by VW employees. They took the time to deactivate my media site account. How much money did they spend on these activities?

This is the inequity of the online detractor. What did all of this cost me? I had to stop watching CSI for a few weeks. What has it cost VW? My guess is probably thousands of dollars... at least.

Until recently, consumers couldn't afford to spread their stories beyond a small sphere of influence. Only the most powerful ideas were carried into WOM epidemics. But today, this is no longer true. Over 100 people visit my blog everyday from all over the world. Over 10,000 visits since I started talking about VW and this doesn't count RSS subscribers. And it's cost me nothing except a few hours a week. But what does it cost VW?

A few years ago, companies like VW didn't have to worry about everyone – only about a handful of media outlets. Because the relationships between auto industry media and auto manufacturers is symbiotic, there was usually lots of time to react. Since only a few relationships needed to be maintained, lots of resources could be put into each one. And the focus was getting the sparklyperfect marketing message printed.

This brings us back to the question of scalability. If VW, or any company, tried to maintain the type of relationship that they traditionally have had with formal media with online detractors (and promoters for that matter) it would indeed be cost prohibitive. What is needed here is a different kind of relationship.

Right now, VW is spending lots of money watching me, but doing nothing. Is this scalable? Can they watch every online detractor with this level of focus? Of course not. So what's the future of this strategy? How does it scale?

Clearly, the do nothing strategy is lose-lose. Unless you have near flawless products and great customer service (VW at the moment has neither) the do nothing strategy will eventually kill you.

So, back to Martin's question. How does a company keep up with detractors without going bonkers?

Well, I hear Pete Blackshaw is working on book titled "101 Ways to Act on Consumer-Generated Media" that he recently wrote about in his ClickZ column. I'm excited to see what he comes up with. Pete's a serious marketing pro and I'm just a guy that writes about what I think about this stuff in his spare time, but I tend to have a more simplistic view. Maybe I'm naive but I think the secret is as simple as engage and acknowledge.

Let's look at VW again. If in response to my original email, post, or customer service call, a person at VW spent 10 minutes writing me an email thanking me for my feedback, explaining to me how long it takes to change their website and telling me that the Jetta Wagon was coming off the website on or about X date, things probably would have ended there. This is basic customer service 101 with a pinch of active listening skills for good measure.

Most detractors (online and off) aren't as upset about the original problem as they are about the company's response. I wasn't too upset that VW didn't have a Jetta Wagon for me. I was upset about the fact that no one seemed to care that they wasted a huge amount of my time and were not interested in finding an alternative solution. This is typical. Online detractors can help companies identify service failing. Once someone has reached the point of frustration that prompts them to spend the time and energy to post online, there is probably at least some fault on the part of the company. If I were VW, I'd want to know where the failing was. And, I'd want the customer to know that the problem is being taken serious – otherwise, the customer thinks I'm clueless.

I think that providing a single proactive acknowledgment to detractors could dramatically reduce their volume.

So is this scalable? What, as Martin asks, if everyone started posting online? Well, quite simply, they won't. Not everyone calls the customer support hot line today and that's a lot easier than posting online. So what make you think that everyone will post online? Besides, if everyone becomes an online detractor, the problem is likely not customer service – it's a lousy product. No amount of customer service can save a lousy product.

So yes, what if, in addition to inbound call centers, companies used services like Intelliseek and BuzzMetrics to look for online detractors and they sent each one a personally written email. To put this in perspective, there are typically anywhere from 200 to 600 blog posts per day about VW. Most of these are positive or are casual mentions. Only a small number are detractors – maybe 15% and that's probably high. So, that's 30 to 90 posts per day. My guess is that a staff of two to three people could easily handle the volume. If this staff is empowered to get stuff done – like authorize major component replacements or even whole cars – then online detractors could be flipped into promoters. Sure, not all, but lots. Just think, if VW had done this and their team could have found me my Jetta Wagon in Boise or Madison and called me and asked if I still wanted it – I would be driving it today. I'd be a satisfied customer and promoter who was impressed with their proactive response instead of a detractor trying to rattle the cage of VW executives.

So what would this cost? Well, they would need access to Intelliseek or BuzzMetrics services – say $150K/year. Three full time staff members and associated costs – say $300K/year. And a budget to get things fixed, of course this depends on the problems, but let's say an average of $50/incident. Let's say 45 incidents/day on average. 45*365*50 = $821,250.

Grand total... $1.3M ish / year.

Now that might sound like a lot, but, consider that VW's marketing budget is around $345M. So, for less than 0.5% of their marketing budget, VW could deal with these types of issues in a very direct and meaningful way. The detractors – who you already know are inclined to promote their ideas online (what some folks call influencers) – turn into promoters. Use the information from these folks to drive change in the organization, change in the product, and change in services to lower the number of negative incidents in the future. Learn from you detractors as you convert them into promoters.

This is what a Word of Mouth Marketing strategy might look like.

So, is this scalable? I think so. The thing to remember is that we're not talking about everyone here – we're talking about the most vocal and most disenfranchised. This is usually a small number of people... unless they are ignored, in which case they will begin to multiply. (Look at how many negative VW stories have shown up in comments on my blog, for example.) I'm also not talking about catering to every whim. I'm talking about creating a dialog with these folks and explaining to them what went wrong, explaining the fact. I think most detractors are reasonable people. Saying "sorry" if it is warranted. And, if there is a real problem, fix it if possible. In my case, a single phone call or personal email would have shut me up.

So how do you start? Well, Google "yourcompany sucks" and read the content from all the hits on the first page of results. Then email them. See if you can fix their problem. Start with the loudest, most popular and work your way down the long tail. Don't worry about fixing every problem. Don't worry about scalability. Just try to fix one problem today, and maybe two tomorrow.

So now for an example. I made a mistake and I'm sorry.

Martin also writes:

And by the way, I do agree with the very first comment - I would avoid making fun of terms like "der Fuehrer". I think that only makes you look bad.

It was stupid of me to make the "der Fuehrer" reference. It was a poor choice and I should have realized how emotionally charged the phrase was. Not only did I offend people who were kind enough to be reading, I also detracted from the point I was trying to make. It's not a mistake I will make again. I'm sorry Martin, and I'm sorry to anyone else that this offended. I have removed the reference from the post.