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With the advent of social media, the concept of 'conversational marketing' has taken on new life.

Being part of the 'conversation' is now pitched as a necessity for brands. Some go so far as to encourage brands to build 'friendships' with consumers.

To be sure, good companies have always engaged in a form of dialog with consumers but "conversationalists" (as some marketers now apparently call themselves) often hint at the notion that words are the keys to success.

Yet in my opinion, a major flaw with the modern concept of conversational marketing is that far too much emphasis is placed on conversation and not enough on making sure that conversation is meaningful and leads to outcomes that create tangible value.

This, however, isn't conversational marketing's greatest flaw.

The biggest problem with conversational marketing today is that brands are being led to believe that a conversation is more important than action.

This is exemplified by Shel Israel's recent interview with Richard Binhammer, "the Dell communications officer most involved in social media".

Shel notes:

"In 2006, Dell was scorned by bloggers who accused it of shoddy support and products. I was among them.

"Dell today is praised as one of the companies that 'gets it,' when it comes to social media marketing, and the company's social media activities are a key component to a turnaround-in-progress."

These two paragraphs provide a subtle demonstration of the fact that there's apparently an increasingly unrecognized difference between talk and action.

Observe that the first paragraph notes the criticisms Dell received for lacklustre products and support. The second paragraph states that Dell understands social media. It says absolutely nothing about what matters - whether or not Dell improved the quality of its products and support.

Binhammer states that Dell's primary use of social media is to "listen to customers and respond to what they want from us."

Given that, the obvious question is: has Dell effectively leveraged its investor relations blog, Twitter account and IdeaStorm site to respond in a manner that satisfies consumers on a large scale?

Apparently not.

According to the University of Michigan's American Customer Satisfaction Index, Dell was at the bottom of the pack in 2007 and actually lost 5 percentage points from the previous year. As reported by News.com:

"Dell also dropped 5 percent after raising its ranking last year. Dell's problem is customers' perception of product reliability as well as service, Fornell said. As examples, just this year, both shipping delays of the much-anticipated XPS M1330 notebook and the New York Attorney General Office's decision to sue Dell for consumer fraud have made news."

Interestingly, the article notes that Dell's decision to launch its Direct2Dell blog is a "direct result of the troubles they've had in the past".

Unfortunately for Dell, last week's New York Supreme Court ruling that it "engaged in repeated misleading, deceptive and unlawful business conduct, including false and deceptive advertising of financing promotions and the terms of warranties, fraudulent, misleading and deceptive practices in credit financing and failure to provide warranty service and rebates" is probably not going to help its image and won't help Dell make "friends" with the consumers it cheated.

John Spooner, an analyst at market research firm TBRi notes:

"Customer perception doesn't change very fast. You can do tremendous amounts of work and not move the needle very much. It's going to take a long time."

And therein lies the rub with conversational marketing.

Consumer perception is based primarily on the quality of the products and services you provide and improving those things is often not easy for companies.

Companies with less-than-stellar reputations can converse with consumers and the mere act of conversing will fool some of them (like Shel Israel) but such engagement realistically has little tangible impact if consumers are not satisfied with what you sell them.

In the case of Dell, listening and conversing means nothing if consumers don't see talk matched by action. In that sense, consumer sentiment currently essentially indicates that "Dell is more talk than action."

None of this is to say that brands like Dell shouldn't talk with consumers. But they do need to understand that the old adage "talk is cheap" applies to conversational marketing too.

It's very easy to start a "conversation" with consumers but it's usually much more difficult to provide a product or service that meets their expectations.

Successful businesses, however, are built on the latter - not the former.

While consumers may appreciate the fact that a company will "talk" to them, companies relying on conversation more than the strengths of their products and services have serious problems.

As such, companies should invest first and foremost in making sure that they do a good job of providing consumers with the products and services they want and need.

I would also point out what may seem counterintuitive to conversationalists - the fact that sometimes silence is the best indicator of consumer satisfaction.

Many consumers - if not most - don't want to hold a conversation with a company, however.

If I buy a computer from Dell, for instance, it's my hope that I will never talk with Richard Binhammer because if I have to, it probably means that there's a problem.

The truth is that good products and services speak volumes for themselves. They don't need dedicated "conversationalists" and "community managers" speaking for them.

Drama 2.0

Published 29 May, 2008 by Drama 2.0

237 more posts from this author

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emsquared

I couldn't agree more. I feel a lot of this 'conversational' marketing can become a kind of warped belief that presenting an accessible niche public face via social media is enough to continue to engage new customers via unsubtle viral marketing techniques rather than a method to increase transparency that would stand up to scrutiny and allow useful feedback. Poor product and customer support will cause some social media contact points to be used as the best place for consumers to share bad customer experiences.

almost 8 years ago

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Chee Lo, SEO Specialist at Trustpilot

I agree with the point that marketers should both listen to what their customers are saying, and act on this where possible. What I think is worth consideration however, is an understanding of the appropriate level of brand interaction. Whilst companies should listen to the conversation, their part in this dialogue should be limited. The fact that they’ve provided a platform (such as IdeaStorm) for that conversation to happen demonstrates an understanding of social media – they cannot then expect to fully ensure the conversation is meaningful. That’s a risk you take when you open your company up to negative feedback & truly understand the importance of the word ‘social’ in social media.

almost 8 years ago

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RichardatDELL

Thanks for the feedback and perspective. I too hope that if you ever buy a Dell computer you and I will not have to speak, although lots of customers connect with me to let me know what they like about their Dell's too. We agree wholeheartedly that social media is ultimately about action.

Just to clarify, my actions on behalf of Dell are not mere talk and conversation. Everyday we follow up on the online listening and the learnings we get from customers, fixing issues and bringing customers' perspectives inside Dell -- real time, real views and real customer experiences.

We believe that is improving our response times, contributing to better products and services and making us a better company, that is directly connecting with customers who care enough about us to talk about us on the web every day.

We have implemented over 150 ideas from Dell Ideastorm alone and brought thousands of customer perspectives inside the company in real time everyday.

Do we need to get better? Absolutely. But, this is not a waste of time or conversation for its own sake -- it's about relationships and customer connections. Make no mistake, we dont see social media as a substitute for great products and services. We do see conversations as a contributor to delivering even better products and services and an important way to connect with customers.

almost 8 years ago

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Nick DiGiacomo

It's true that capturing the conversation is not enough - there ultimately needs to be appropriate action on the part of companies. But before they can act, there has to be some analysis - quantification - of the conversation.

And that quantification has to be done in the context of what the conversation really is - a sort of "gossip cloud" that surrounding the company. And you don't quantify gossip by equally weighing all the voices you hear. It's much more subtle than that.

So when it comes to "conversational marketing" - particularly in a Web 2.0 social media context - the key is a careful evaluation and quantification of the "gossip cloud".

Not to be (too) self-serving, but we're trying to do just that. Check us out:
http://www.vanno.com/

almost 8 years ago

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shel israel

Thanks for a very interesting and different perspective on my interview with Dell. There are a few clarifications that might helpful to your readers. A few of them:

1. You cite a damning judgment against Dell by the NY State Supreme Court. From my reading of that case, Dell's violations all occurred in 2005, before Dell embarked on it's social media strategy and before Michael Dell took back the reigns to the company.

2. At no point, in anything that I have written or stated to the best of my knowledge have I ever implied that social media is a replacement for excellent products and services. In fact, I emphasize that great social media will never fix broken products. I often note that Google and Apple are two companies wth awful social media programs and the continue to do exceptionally well because of their extremely well-received products and services. I have noted that in most cases, companies with problems are the ones who usually turn earliest to social media. In automotive that would be GM. In tech, that would be Microsoft, Sun and Dell. In telling Dell's story during my interview with him Richard talked about how broken things were at Dell and how Dell is using social media to get closer to customers and to learn what needs to be done. There is no single phrase uttered by Richard during this interview that implies Dell's products and services are now completely repaired or that social media is doing anything in that area but improving response time and making it clear to the company what needs to be done soonest.

Turning around a company the size of Dell, or for that matter, GM is like turning around a supertanker traveling on open seas at full throttle.It takes time.

3. The reason I champion social media is that it allows two-way conversations to scale from the backyard fence and water cooler to global spaces on the Internet. Social Media is a replacement for one-way, message distributing systems of which you may be a fan. But my sense is most people are tired of being recipients of unsolicited marketing messages. The issue you raise seems to me to be a bit of red herring. This issue is not--nor has it ever been--about social media v products and services. The issue is about conversations vs direct marketing campaigns, or so it seems to me.

almost 8 years ago

Drama 2.0

Drama 2.0, Chief Connoisseur at The Drama 2.0 Show

Richard:

Thanks for your comment. I think it's good that Dell is making an effort to reach out to consumers but the challenge you face is that conversational marketing isn't scalable for a company the size of Dell and in the absence of fundamental improvements to the way Dell operates its business, conversational marketing will play a miniscule role in your attempted turnaround.

You can reach out to dissatisfied bloggers, users who post complaints on message boards, etc. but all the publicity about the New York court ruling against Dell, for instance, reached far more consumers and will realistically have a greater impact on your brand than one-by-one individual outreach ever can.

Conversational marketing will do little to change whether consumers, on a large scale, are satisfied with your products and support. The only way to truly satisfy consumers is to provide them with the products they want/need at a price they deem reasonable with a level of quality and support that is acceptable.

Doing this entails more than talking with consumers and while I don't doubt that Dell understands this and is trying to do more, clearly market sentiment isn't (yet) reflecting it and I think it’s a bit disingenuous for people like Shel to overplay your social media efforts while at the same time avoiding what consumer sentiment is still saying.

Shel:

To respond to your points:

1. The court ruling, as mentioned above, was highlighted merely to demonstrate the fact that a single PR nightmare will have a wider impact on mainstream consumer perception of a brand than individual one-at-a-time "conversations."

2. I did not claim that you have stated that social media is a replacement for great products and services. What I do find worthy of criticism, however, is the fact that social media proponents (not just you) often overemphasize the importance of conversation and underemphasize the importance of action. That is the point of the post.

Again, the introduction you wrote for your video is telling:

"In 2006, Dell was scorned by bloggers who accused it of shoddy support and products. I was among them."

"Dell today is praised as one of the companies that 'gets it,' when it comes to social media marketing, and the company's social media activities are a key component to a turnaround-in-progress."

Today, Dell is still scorned by many bloggers for making shoddy products and providing poor support. What does that mean?

You seem to think that Dell should be praised for engaging in a conversation with consumers. Fine, but I'd note that until Dell finds a way to boost consumer satisfaction based on the quality of its products and support, no amount of conversation is going to protect it from continued scorn.

3. Again, the issue that I have with your position is that I think it's extremely unrealistic in places. It exaggerates the importance of social media while glossing over the inherent limitations.

First, as mentioned above, the "conversations" you speak about actually don't "scale" very well. Companies can only have so many people like Richard reaching out to consumers on an individual basis and while this can be worthwhile, you seem to ignore the fact that, when looked at in perspective, it's a solution extremely limited in scope and impact.

Second, most of the "two-way conversations" I see being implemented by social media marketers are less-than-useful.

As I mentioned in my post, most people don't want to "converse" with a brand. The truth is that while brands are very important to us in many ways (just look at the rise of luxury goods as vehicles for self-expression), the average person does not have the time or desire to constantly interact with most brands via two-way conversation.

I think many brands overestimate the roles they plan in consumers' lives when assuming that consumers want to "converse" with them. Tide provides the perfect example of this:

http://www.drama20show.com/2008/02/14/note-to-tide-detergent-is-detergent/

As you've noted, the brands that seem to be engaging most in social media seem to be brands that have been plagued by certain problems. In these cases, the conversation potentially serves as an opportunity to find out why the consumer isn't satisfied and (to sometimes pacify the consumer).

There's nothing new about this – good brands have implemented feedback mechanisms for decades. The problem I observe is that many brands involved with social media see their involvement as the end, not the means. Your posts and videos appear to as well because simply being involved with social media seems to win a brand kudos from you without question.

Let's stick with Dell. While I'm sure that Richard is sincere about engaging with Dell customers and I know that the company isn't going to be turned around overnight, I find it disingenuous to "champion" the company's social media efforts while glossing over their realistic impact on the problems the company faces.

You don't need to be a cynic like me, but a healthy dose of some critical questioning would benefit the social media world quite a bit.

For instance, if I had interviewed Richard, one of my questions would be:

"You've been reaching out to consumers quite a bit since you implemented your social media program. Yet you still rank near the bottom of the American Customer Satisfaction Index and your rank dropped last year. Dell continues to receive quite a bit of criticism, even in the blogosphere. How do your social media efforts fit in to this picture? Do you see social media making an impact on the broader perception of your company, and if so, how?"

I get that you are passionate about social media and don’t have a problem with that. If you take one thing away from the "conversation" here, however, it's this: your "reporting" on social media and its impact on marketing comes off more as hype than realistic "championing."

almost 8 years ago

Drama 2.0

Drama 2.0, Chief Connoisseur at The Drama 2.0 Show

So disappointed that Shel has apparently dropped out of the conversation. :(

almost 8 years ago

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RichardatDELL

Dear Drama 2.0

Nice to finally have a name in the interest of transparency, Drama 2.0. When youo have a real name, we might actually do a real interview to answer your other questions. Come on...if you want to debate it, lets know who you are.

If you followed my own commentary on these issues you would know I have never said that conversational marketing replaces media coverage of previously difficult times. Of course, not every customer is online....this is way to connect with a certain customer group. The world is not black or white, there are grays....many factors come into play. Conversational "marketing" is but one aspect of many ways to connect with customers.

Your comments about scalability are equally curious. We believe it is scalable, is driving business improvements, and, depending on what survey you look at, there is ample proof it's driving customer satisfaction, improving our business and contributing to bottom and top line growth. And there are more people than just me doing it.

I happen to believe its highly effective and producing phenomenal results. In today's connected era, conversational connections are one of many factors -- they are working; they matter and they are improving relationships with real customers every day....putting us closer to them and keeping us in closer touch with them.

almost 8 years ago

Drama 2.0

Drama 2.0, Chief Connoisseur at The Drama 2.0 Show

Richard: tsk tsk.

First, I never asked to interview you. I simply provided an example of a question that Shel could have asked that would have added some balance to the interview. Ironically, it would have also provided you with an opportunity to give a more interesting and compelling response.

Second, who I am really has no basis on this discussion. If you think my arguments are faulty, you should be able to refute them. Period.

Refusing to address the points I've made on the basis that my identity is unknown is, for lack of a better term, a cop out. Arguments live and die based on their validity, not the person behind them. I could be the CEO of a Fortune 500 company or a janitor and it wouldn't matter. Logic and reason are available to everyone.

You state:

"We believe it is scalable, is driving business improvements, and, depending on what survey you look at, there is ample proof it's driving customer satisfaction, improving our business and contributing to bottom and top line growth."

"I happen to believe its highly effective and producing phenomenal results."

We all know you and people like Shel "believe." The point of this discussion is to see if you and Shel can back those beliefs up with fact.

If you can't provide some solid, quantitative evidence that social media is scalable, driving business improvements, driving customer satisfaction and contributing to bottom and top line growth, you shouldn't be surprised that somebody is eventually going to express skepticism.

Dell posted solid Q1 results so let's look at the results to see if there's any evidence for your beliefs:

- Much of the improvement in the company's financial results came from cost-cutting measures. Dell cut 7,000 jobs last year and according to reports, is hoping to cut costs by $3b by 2011.

- Dell is tapping an increasing amount of growth from non-US markets. Non-US revenue topped US revenue for the first time, led by strength in the BRIC nations. One of Dell's presidents (Steve Felice) indicates that two-thirds of revenue could come from outside of the US in 5 years.

In other words, your Q1 results had everything to do with changes in business operations and growth in emerging markets.

There was no mention of social media's impact on the bottom line, and unless you speak Portuguese, Russian, Indian and Chinese, I suspect that consumers overseas are buying your products because they've been designed and priced for their markets.

Let's make this really simple. You "believe" a lot of things. I'm skeptical about many of them. There's no reason you shouldn't be able to prove me wrong if your beliefs are valid. Thus:

1. As it relates to scalability, how many consumers have you and your team had "conversations" with? Do you have any measurement of the total reach of these conversations? How does this compare to the reach of your other marketing campaigns?

2. Please explain how social media has contributed to a tangible, measurable improvement in Dell's business (i.e. lowering production costs).

3. I noted that a prominent customer satisfaction index reflected a drop in Dell's ranking last year. Since you believe social media is helping drive customer satisfaction, please provide a link to an independent survey demonstrating this.

4. Please provide some numbers demonstrating that social media is contributing to bottom and top line growth and how this was measured.

If you can provide solid quantitative data that proves my skepticism to be misplaced, I'll be more than happy to admit I was wrong. Who knows - I just might become a believer.

On the other hand, if you don't want to provide any evidence for your beliefs
under the guise of refusing to "debate" somebody whose identity is unknown to you, it will be evidence that you talk a good game but can't play ball.

almost 8 years ago

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RichardatDELL

Hi Drama 2.0

Conversations are great using web 2.0 tools arent they. Just imagine we would not have this dialogue if it were simply the old media world.

On the metrics, I have stated them often in discussions on and off line....there are *about* 4000 online conversations related to Dell every day. We do not enter every one of them. We do listen and learn from many of them. We have seen negative commentary about our company decline by over 30% in 8 months and positive commentary increase.

Here is a third party, recent and relevant study you might find of interest:
http://www.nuance.com/news/pressreleases/2008/20080422_customerservice.asp

Over 500k people go online for the first time everyday. Reach and awareness are simply one part of a much larger and more complex equation. As I said before, there are a myriad of tools, this is one and one that is highly effective. Today, reach and awareness are one part of a much more complex and multi faceted world where the number of conversations is exploding. Digital data is exploding. It's increased 6 times over the past 4 years --conversations are increasing exponentially; being be part of the conversations and connections matters.

You could do focus groups with 10 people or even 100 people. We listen to thousands of people, debate ideas for a few months and ask them questions throughout the process, implementing over 150 new business ideas, from Linux on more products to retaining XP to host of other product improvements and market success stories.

Our communities are more powerful than individuals, Communities want to help each other improve. We recently launched "Accepted Solutions" and has generated over 5000 solutions customers share with each other.

Our conversations and online connections are helping us become the most green tech company. Just one example can be found here:
http://www.web-strategist.com/blog/2008/03/24/case-study-dissecting-the-dell-regeneration-graffiti-facebook-campaign/

Or look at the plant a tree campaign and how we partner together to all be more repsonsible. Again a host of initiatives, I am just citing a couple successes.

How about a 1/2 million in sales through Twitter and I have paid for my salary three times through online conversations and connections, with additional one to one sales, that I neither sought nor promoted but people contacted me and asked for assistance. Not Dell replacement by the way but HP and Apple converts based on Dell being part of the conversation.

Hope that helps you, Drama 2.0.

Clearly, you believe in the old way and I believe in the new. Looks like we will just have to agree to disagree.

almost 8 years ago

Drama 2.0

Drama 2.0, Chief Connoisseur at The Drama 2.0 Show

Richard: you failed to answer every single one of my questions substantively.

1. You can't tell us how many consumers you've reached and how it compares to Dell's other marketing efforts. Frankly, I have no idea what your point was in discussing how "the number of conversations" and "digital data" are "exploding."

2. You tell us that you use social media to get feedback from customers. As I've mentioned before, companies have used many methods to solicit feedback from their customers over the years. It's the quality of the feedback and what's done with it that counts - not the fact that it was obtained through some fashionable technology.

You haven't provided any detail as to what the tangible impact of the 150 new "business ideas" you've implemented are to important metrics (sales, costs, etc.).

3. You tell us that negative commentary about Dell has declined by 30% in 8 months but provide no context (what constitutes a "negative commentary", how are "negative commentaries" measured, what are the baseline numbers, etc.).

You link to a study by Nuance Communications, a corporation that just happens to promote the fact that Dell is one of the companies that it "maintains strategic relationships" with. See:

http://www.nuance.com/company/fastfacts/

Further, you didn't find it convenient to tell us that you worked directly with one of the people who was involved with this "study" and that you apparently contributed to the study's conclusions:

http://pr.typepad.com/pr_communications/2008/04/new-comm-foru-1.html

Putting aside the fact that this is not an independent and unbiased "study" in any sense of the word and that it is quite disingenuous to tout it as a "third party" study given your involvement, it's worth noting that this only claims that Dell has done one the "best job[s] in using social media to respond to customer care issues."

The American Customer Satisfaction Index, on the other hand, is an established, reputable index that measures *overall* customer *satisfaction* - not how well companies use Twitter to respond to a subset of customers.

4. While I think it's great that you've paid for your salary (all employees should be "profitable"), Dell did $16.08b in revenue last quarter. Even if your "conversations" generated $1m in revenue, the amount of revenue generated is less than a rounding error.

This has nothing to do with "old ways" and "new ways." The world isn't black and white and not everything is a revolution.

The apparent difference between us is that I try to put things in perspective and question claims when they don't make sense.

Again, this has nothing to do with whether or not there's some value in social media. I quite honestly think that what you're doing for Dell does have value and is worthwhile. It's a form of PR, marketing, sales and customer service.

The problem is that the value of social media has been significantly exaggerated. Instead of telling me 1 + 1 = 2, you're trying to tell me that 1 + 1 = 7. I know better, and outside of the small group of social media hypesters, others do too.

If and when Dell makes a complete turnaround, it will be because it improved the quality of its products, operations and support across the board - not because it had a team of people specifically tasked to respond to "negative commentary."

Drama 2.0
Satisfied Lenovo Customer

PS: your green comment brought a smile to my face. A graffiti application on Facebook making the world a better place? I'm sure Al Gore would love to hear about it since he's the inventor of the internet and global warming, but there's no need to expose the readers of this blog to that greenwash.

almost 8 years ago

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