One Quarter of U.S. Consumers Far More Likely to Spread the Word About a Bad Experience than a Good One

Consumers have sounded a clear warning to brands in COLLOQUY’s latest research into the word-of-mouth (WOM) sharing practices of U.S. households: Bad news travels fast.

Of 3,295 U.S. consumers surveyed by COLLOQUY, slightly more than one out of every four (26%) said they are far more likely to spread the word to family, friends and coworkers about a bad experience with a product or service than a good one. COLLOQUY, owned by LoyaltyOne, is a provider of loyalty marketing publishing, education and research.

In a survey finding of equal significance, even among consumers who are most loyal to, engaged with and willing to recommend brands they like a group COLLOQUY calls WOM Champions, 31% said they are far more likely to share information about a bad experience with a product or service than a good one.

Among key demographic groups, Affluent consumers, at 30%, scored highest for saying they’re far more likely to spread a bad experience. Seniors scored the lowest at 19%. In the other demographics, 25% of Young Adults and 25% of Women said they’re far more likely to share a bad experience. Hispanics’ score was 21%.

More information can be found at www.CRMindustry.com.

By 2015, Digital Strategies, Such as Social and Mobile Marketing, Will Influence at Least 80 Percent of Consumers' Discretionary Spending

A digital marketing approach and its associated channels are critical for overcoming the declining effectiveness of mass marketing, according to Gartner, Inc. Although marketers have been using digital channels as part of their campaign management strategies for more than 10 years, most are using them for traditional push, mass-marketed, interruption-type execution of campaigns rather than a two-way engagement approach.

Gartner analysts said that this evolving customer-focused strategy harnesses digital techniques and channels that will increase engagement, response and conversion rates.

The online environment continues to expand, and marketing organizations have more opportunities to be effective. By 2014, 6.7 billion devices will be connected to the Internet. Mobile marketing in the U.S. reached $877.2 million in 2010, up 138 percent from the $368 million spent in 2009. The developing social CRM application market reached $600 million in 2010, and it is expected to reach $1 billion by 2013.

Gartner's operational definition of digital marketing includes addressable branding/advertising, contextual, marketing, social marketing and transactional marketing. Digital marketing extends the marketing process through channels such as the Web, e-mail, video, mobile applications and social applications, point-of-sale terminals, interactive television, digital signage and kiosks.

Although digital marketing represents an opportunity for two-way engagement, digital channels, access to a customer view and precise attribution metrics, campaign management represents multiple processes and channels, online and offline integration, and a complete customer record. Going forward, marketers will need to consider campaign management as a way to orchestrate the complexity of a complete online and offline marketing strategy, while incorporating the evolving customer approach of digital marketing.

More information on CRM can be found at www.CRMindustry.com.

Research Shows Significant Increases in Financial Professionals' Use of Social Media

Even though many financial intermediaries are still "lurking in the shadows" and trying to understand the value of social media, most are participating regularly, according to American Century Investments' second annual Financial Professionals Social Media Adoption Study.

Half of the financial services professionals (including financial planners, brokers and registered investment advisors) participating in the study indicated they have moderate or extensive experience with social media. Most (86%) have a business or personal profile/account and roughly 43% regularly participate regularly in at least one medium. Nearly 10% characterized themselves as "social media addicts."

The research examined attitudes toward and usage of social media such as Facebook, LinkedIn, YouTube, Twitter and MySpace. Again this year, Facebook had the highest percentage of respondents with accounts at 71% (vs. 55% in 2010) and LinkedIn retained the second place spot with 55%, versus 45% in 2010.

General Findings-Social Media Business Users

Of the financial professionals who use social media for business purposes, more than half (55%) do so at least several times a week; almost one quarter (24%) use it daily.

Similar to 2010, top business uses continue to include monitoring industry and market news, researching people such as prospects, contacts and current clients, and reading expert commentary and insights.

In terms of planned business uses for social media, many combined mentions in the 2011 study were significantly higher than last year: maintaining a professional blog increased to 18% from 8%; using social media for customer feedback jumped to 21% from 12% and sharing best practices went to 18% from 12%.

Concerns about Using Social Media

Regulatory or compliance issues continued to lead concerns for using social media, but dropped this year to only 38% from 47% last year. However, the percentage of financial professionals concerned about a potential privacy breach increased to 26% from 21%. Also, respondents reporting that their single biggest concern dealt with technology or security issues rose from 2% to 6%.

Additionally, more than half (53%) of study participants indicted that their firm has a social media policy or guidelines.

Attitudes and Overall Value-Trending Upward

Roughly 45% of respondents were generally positive when asked about the overall value of social media as a potential tool to grow their business. Fewer than one-fifth expressed a negative opinion; the rest were either neutral, mixed or didn't use it and had no opinion.

Although few study participants ranked social media as having "high business value," those who ranked it highly increased this year over last: 13% in 2011 versus 8% in 2010.

Also trending higher were the number of financial professionals who feel that social media is an "emerging trend with significant future potential," coming in at 56% this year, versus 44% last year.

More information on social media and CRM can be found at www.CRMindustry.com.

Survey: Cloud Computing Has the Power to Enhance Consumer Data Consumption, But Obstacles Hinder Greater Short-Term Adoption

As the growth of connected devices is expected to reach 22 billion within the next decade, according to IMS Research, there will be a greater need for consumers to move their data to cloud-based services. However, while nearly half of consumers are aware of the cloud, only nine percent acknowledge that they fully understand it.

Cloud computing is used to describe applications and services hosted and run on servers connected to the internet that end users do not have to maintain or support. Consumers are increasingly in need of cloud-based services with data spread across multiple devices, including laptops, cell phones and tablet computers. As 4G data networks begin to roll out over the next year, consumers will be consuming and needing to access greater amounts of data across all of their connected devices.

However, while there is a general understanding of what the cloud is, the vast majority of consumers don't fully understand what it does. Interest in storing data within the cloud is significantly higher in younger consumers, with approximately 60 percent of users between the ages of 18-35 interested in moving their data to the cloud. In older age groups, though, that number drops significantly, with only an average of 25 percent of users over the age of 50 interested in moving their data to the cloud.

There are also concerns among consumers about moving their data to the cloud. Nearly two-thirds (61 percent) of consumers surveyed by GfK said that they are concerned about the security of their content if they were to store it in the cloud. Additionally, 47 percent of consumers surveyed said they would never use the cloud unless they have a simple and easy way to store their content, while 39 percent say they are concerned about the ability to play content on different devices from the cloud. This statistic in particular points to the need for greater compatibility and accessibility to content across devices, so that the same content purchased for one device can be accessed across multiple devices.

More information on cloud computing can be found at www.CRMindustry.com.

Majority of US private companies have identified workforce skill gaps; more than three-quarters plan to hire over next two years

With their renewed optimism about the economy and intention to focus on strategic growth over the next 12 months, US private-company CEOs are making talent management a top priority. The majority (51%) of Trendsetter chief executives say that they need to fill certain skill gaps to meet their business objectives over the next one to two years, while 49% believe they have the right skills in place.

Notably, more international marketers reported that they have skill gaps than their domestic-only peers -- 57% and 46%, respectively. Among private companies overall, the largest skill gaps identified were in middle management (53%) and skilled labor (48%). Those companies with skill gaps will focus on several areas over the next one to two years, including marketing and sales (65%), information technology (36%) and engineering/design (35%).

Private-company leaders who say their businesses have skill gaps expect to grow at a rate of 11.4% over the next 12 months (compared with a rate of 8.5% among companies claiming to have no skill gaps). They're also planning major new investments (40%, compared with 29% of companies without skill gaps) and plan to hire new employees over the next year (69% with gaps vs. 45% without).

Hire or Train Existing Talent to Fill Skill Gaps

While 79% of all companies surveyed plan to hire new talent, more than three-quarters (80%) intend to develop existing talent. Hiring talent is more of a focus for companies with skill gaps (91%), with 52% of those companies considering it a major initiative. Slightly fewer (89%) of companies with skill gaps plan to develop existing talent; only 42% of them say it’s a major initiative.

Challenging Workforce Issues

As private companies reposition themselves for growth, they are facing several distinct workforce challenges. Over two-thirds (69%) of Trendsetter private-company executives overall rank maintaining competitive compensation and benefits within acceptable costs as the top challenge among those they were asked about. Of those Trendsetter companies confronting skill gaps, they rank sourcing and securing needed talent as their most challenging workforce issue (82%), followed by maintaining competitive compensation and benefits within acceptable costs (73%) and hiring/retaining skilled professionals (73%).

Attracting and retaining talent is clearly a concern for the vast majority of Trendsetter executives. To address that concern, three-fourths of all private companies surveyed are investing (or planning to invest) in two key areas over the next two years: in-depth training programs (77%) and healthcare/benefits programs (75%). Firms with skill gaps are also investing (or planning to invest) in special incentive programs (74%), formal mentoring/coaching programs (73%) and formal career-path development (70%). 

More information can be found at www.CRMindustry.com.

Four Risks CIOs Should Address When Contracting for Cloud Services

Although cloud offerings are rapidly maturing, the immaturity of cloud service contracting means that many contracts have structural deficits, according to Gartner, Inc. Gartner has identified four risky issues that CIOs and sourcing executives should be aware of when contracting for cloud services:

Cloud Sourcing Contracts Are Not Mature for All Markets

When analyzing cloud sourcing contracts, it is often obvious whether the cloud service provider wrote the contract with larger, more mature corporations, or the consumer side of the market, in mind. For example, there are cloud service contracts from traditional service providers for their private cloud offerings; these tend to include more generally acceptable terms and conditions. Gartner also sees many cloud-sourcing contracts that lack descriptions of cloud service providers' responsibilities and do not meet the general legal, regulatory and commercial contracting requirements of most enterprise organizations.

Gartner advises organizations to carefully assess the risks associated with cloud sourcing contracts. Areas such as data-handling policies and procedures can have a negative impact on the business case (for example, additional backup procedures or a fee for data access after cancellation) potentially creating compliancy issues and cost increases, and indicating specific risk mitigation activities.

Contract Terms Generally Favor the Vendor

Organizations that successfully outsource, evolve more partnership-style relationships with their vendors. Cloud service contracts do not lend themselves to such partnerships -- mainly because of the high degree of contract standardization-- where terms are consistent for every customer, and service is typically delivered remotely rather than locally.

An organization needs to understand that it is one of many customers and that customization breaks the model of industrialized service delivery. Cloud service contracts are currently written in very standardized terms, and buying organizations need to be clear about what they can accept and what is negotiable. To manage cloud services contracts successfully, organizations need to manage user expectations.

Contracts Are Opaque and Easily Changed

Contracts from cloud service providers are not long documents. Certain clauses are not very detailed, as URL links to Web pages detail additional terms and conditions. These details are often critical to the quality of service and the price (such as SLAs) for uptime or performance, service and support terms, and even the description of the core functionality of the offering. Clauses that are only fully documented on these Web pages can change over time; often without any prior notice.

Organizations need to ensure that they understand the complete structure of their cloud sourcing contract, including the terms that are detailed outside of the main contract. They need to be sure that these terms cannot change for the period of the contract and, ideally, for at least the first renewal term without forewarning. It is also critical to understand what parts of the contracts can be changed and when the change will take place.

Contracts Do Not Have Clear Service Commitments

As the cloud services market matures, increasing numbers of cloud service providers include SLAs in URL documents referenced in their contracts and, in fewer cases, in the contract itself. Usually, the cloud service providers limit their area of responsibility to what is in their own network as they cannot control the public network. Things are improving, but service commitments remain vague.

When deciding whether to invest in cloud offerings, buyers should understand what they can do, if the service fails or performs badly. They should understand whether the SLAs are acceptable and if the credit mechanisms will lead to a change in the providers' behavior; if not, they should negotiate terms that meet their requirements -- or not engage.

More information on cloud services can be found at www.CRMindustry.com.

More Marketing and Advertising Executives Expect to Hire in Second Quarter

Marketing and advertising executives anticipate increased hiring activity in the second quarter of 2011, according to The Creative Group Hiring Index for Marketing and Advertising Professionals. Twelve percent of executives interviewed said they plan to add full-time staff in the next three months, and 3 percent expect reductions in personnel. The resulting net 9 percent increase in hiring activity is up 5 points from the first-quarter forecast.

Marketing and advertising executives were asked, “Does your company or agency plan to increase or decrease the number of full-time marketing/advertising personnel on your staff during the second quarter of 2011?” Their responses:

Increase - 12%

Decrease - 3%

No change - 81%

Don't know - 4%

Marketing and Advertising Specialties in Demand

Social media expertise is in greatest demand, with 19 percent of marketing and advertising executives planning to add staff in this area. This was followed by media services (16 percent) and account services and brand/product management (tied at 14 percent). Thirty-nine percent of executives surveyed said it’s challenging for their firms to find skilled professionals, and 36 percent of respondents indicated they are concerned about losing top marketing or advertising performers to other job opportunities in the next year.

Marketing and advertising executives were asked, “In which of the following areas do you expect to hire in the second quarter of 2011?” Their responses:

Social media - 19%

Media services - 16%

Account services - 14%

Brand/product management - 14%

Web design/production - 13%

Interactive media - 12%

Public relations - 12%

Marketing research - 11%

Print design/production - 10%

Creative/art direction - 10%

Copywriting - 8%

Note: Multiple responses permitted. Top responses shown.

Perspectives on Business Growth

Marketing and advertising executives’ confidence in their ability to attract new business, while still strong, dipped slightly from last quarter: 84 percent of those interviewed said they were somewhat or very confident in their firms’ prospects for growth in the second quarter, down 9 points from three months ago.

More information on marketing and advertising can be found at www.CRMindustry.com.

Use of Social CRM for Customer Service Will Grow Rapidly Over the Next Two Years

During the next two years, 30 percent of leading companies will extend the goals of their online community activities to the design of enhanced service processes, such as social CRM, according to Gartner, Inc. Social CRM for customer service has the potential to bring new and dynamic methods for improving customer service, and in doing so is creating opportunities for new and existing providers in the customer service and contact center infrastructure markets.

As awareness and use of social networks increases, customer service executives and planners are feeling increasing pressure from corporate executives to articulate a strategy for how this new communication channel will be harnessed so that they don't get left behind.

Most deployments of social CRM are taking place in corporate marketing departments as an exercise in brand management, such as maintaining a presence on Facebook or Twitter. However, savvy customers are learning that the employees that manage interactions across these channels can also provide customer service functions -- sometimes with much-faster responsiveness than that provided over formal contact center channels. As customer awareness and use of social CRM for marketing as a back door to customer service increases, Gartner believes it will rapidly progress from an exception-handling situation to a process that needs to be standardized to scale to broader use.

Despite these powerful drivers, social CRM for customer service also faces several significant adoption inhibitors. Although there is significant awareness and hype regarding social CRM for customer service among corporate and customer service executives, the lack of broad-scale adoption of the technology makes the business case more theoretical than proven. This has the effect of slowing adoption by mainstream and late adopters who traditionally look for proven technologies and shy away from those perceived as "bleeding edge."

In addition, social CRM for customer service is still in the early stages of adoption, and as a result the business processes and policies for handling these interactions are still being determined. Many contact centers in mainstream and late-adopter companies struggle for budget and focus their efforts on streamlining their present operations. Adding social CRM for customer service to their operations has the potential to add high-profile uncertainty, and many will hold off on bringing the new technology into their contact centers until optimized processes and policies have been vetted by earlier adopters. Instead, they will opt to allow their marketing departments -- which often have access to near-term budget for such investments -- to take the lead in handling all social CRM interactions in the interim.

A further barrier to success is the fact that social networks are a rapidly evolving technology space, making it difficult for social CRM solution developers and users to know where to place their bets in terms of creating systems and processes to support those networks. An example is Second Life, which only two years ago drove significant hype as a potential customer service and e-commerce venue, only to slip rapidly to obscurity for all but its most ardent participants. Many contact centers are not equipped or managed to support rapidly changing communication paradigms and are choosing to "wait until the dust settles" before choosing which social networks to support.

More information on Social CRM  can be found at www.CRMindustry.com.

Enterprises That Harness the Power of Collective Behaviors Will Be the Ultimate Winners With Social Media

Many social media efforts are failing, because some enterprises just don't understand how to employ social media to facilitate collective behaviors, according to Gartner, Inc. Gartner conducted a 10 month effort collecting data and analyzing 200 successful social media implementations to identify how enabling collective human behaviors can lead to enterprise value.

Enterprises can employ these collective behaviors as the link between business value and social media technologies. They can use them to examine a target community and formulate new ways that people can interact to achieve enterprise value. By understanding the most prevalent technologies, collaborative behaviors, business use cases and business value for six collective behaviors, enterprises can more effectively plan for successful community-based social media initiatives. The six collective behaviors include:

Enable Collective Intelligence for Operational Effectiveness

Collective intelligence is the meaningful assembly of relatively small and incremental community contributions into a larger and coherent accumulation of knowledge. Enterprises looking to improve internal operational effectiveness through enhanced collaboration, especially around product delivery, customer service and creation of a corporate memory, should examine employing blogs and wikis.

Gartner's research indicates that pursuing collective intelligence to achieve operational effectiveness is one of the most successful social media adoption trends. Furthermore, collective intelligence is one of the earliest and most mature patterns, meaning that skills and tool capabilities are relatively widespread, and success in this pattern is proven.

Employ Expertise Location for Sales Effectiveness

Expertise location involves specific expertise from the masses of people and among the often staggering amount of available content. Enterprises seeking to improve sales effectiveness should examine the potential of social networking to enable expertise location behaviors associated with product delivery, product utilization and customer service.

Gartner's research shows a strong CRM-related social media adoption pattern in employing social networks for expertise locations. It often involves the enterprise identifying a small number of customers or prospects out of the masses in the market who can assist in enhancing a product or service or in improving the customer experience.

Unearth Emergent Structures for Operational Effectiveness

Emergent structures are structures that are unknown or unplanned prior to social interactions but emerge as activity progresses. The goal of emergent structures is to gain insight into the true "nature of things" to more effectively organize, manage or interact with a community. Enterprises advancing their use of social media should explore emergent structures as a means to better understand how organizations actually behave and accomplish work. Emergent structures is a more advanced collective behavior and is relatively less mature. Once enterprises understand the value of social media and experience some initial success, then emergent structures become more appealing, and the chances for success are higher.

Increase Sales Through Interest Cultivation

Interest cultivation is the collecting of people and content around a common interest, with the goal of growing the community of interested people and increasing their level of engagement. Enterprises pursuing social media for brand awareness and sales effectiveness should employ social media to foster mass interest cultivation. Gartner has found that enterprises that have successfully facilitated interest cultivation have experienced stronger customer loyalty and increased customer engagement, leading to better brand awareness, increased customer feedback and increased sales.

Engage in Mass Coordination for Rapid Response

Mass coordination involves rapidly organizing the activities of a large number of people through fast and short mass messaging that is often spread virally. Early adopters of social media should examine mass coordination for rapidly coordinating a mass response to a significant event. Emergency response, search and rescue, sense and respond, political activism, marketing campaigns, and management of large programs are some appropriate scenarios for mass coordination. Gartner believes that by effectively employing mass coordination, enterprises can more rapidly marshal a powerful response to an important occurrence. However, mass coordination is an emerging collective behavior and comes with the risks associated with immaturity.

Build Relationship Leverage for Brand Awareness

Relationship leverage is the seemingly contradictory practice of effectively managing and deriving value from a huge number of personal relationships. Enterprises pursuing social media for brand awareness and sales effectiveness should examine the potential of the relationship leverage collective behavior. Enterprises that have successfully facilitated relationship leverage experience benefits in brand awareness and customer engagement and relationship leverage is often a cost-effective and lower-risk social media effort.

More information on social media can be found at www.CRMindustry.com.