The Voice of the Customer in Agile

The ‘Voice of the Customer’ is the weakest link in Agile web development.

New advances – which make Choice Modelling cheap, fast and relevant – solve this problem.

The ‘Voice of the Customer’ is a poorly taught and poorly understood component of Agile methodologies. There is no consensus on the tools that should be used to capture it.

Of the methods that are in use, the most rigorous are complex, costly and time-consuming, and can’t be easily and quickly repeated at each iteration. The less rigorous methods are cheap and quick, but the information they produce is actually worthless (we have proven this, as I demonstrate below).

So, measuring the ‘Voice of the Customer’ in Agile web development is generally done either:

-          not at all; or

-          poorly; or

-          fairly rigorously at the outset, then poorly or not-at-all throughout.

But there are now Choice Modelling methods available that allow us to quickly, cheaply and accurately measure the Voice of the Customer, both initially and throughout development.

Let me illustrate by example.

On a recent web project we simply wanted to know which features our customers wanted most. So we conducted a basic online survey to build a choice model. In order to prove this was a superior approach, we conducted a parallel online survey using the common ‘rating’ approach (where respondents rate each feature on a scale of 1 to 5).

Both approaches involved exactly the same cost (cheap), time (2 days) and sample (40 people). The results are summarised below.

The Rating results weren’t statistically meaningful. The features all scored about the same average, and the highest scoring feature was actually the number 6 ranked feature in the Choice Model. These results were either useless, or - if you ignored statistical significance and took notice of the highest average rating – wrong.  

Because the choice survey was so quick and cheap, we’ll be able to repeat it between each sprint, in order to see if (and how) customers’ preferences change as they became exposed to more fully developed iterations of some of the features.

Having seen the benefits of this approach, I think you’d have rocks in your head to use anything else.  The adoption of these new Choice Modelling tools can only be a Good Thing for product innovation online.

I am happy to point anyone who wants to know more in the right direction.

Social Media: It’s Social AND it’s 'The Media'

Social Media is a behaviour not a technology. Individuals are simultaneously consumers and publishers of social information (location, mood, likes, dislikes, events, photos, videos, reviews, opinions, news). Furthermore, your social network is your personal editor-in-chief and indexer of the internet.

Social Media was born on the day in 2006 that Facebook launched their News Feed - the perfect merger of Social Networking and Online Media.

Think of Facebook as the world’s largest portal business, with an unpaid editorial staff of 500 million (and counting). Facebook + Twitter adds 200 million (or so) unpaid reporters in every corner of the globe.

 Brands wanting to engage using Social Media should not be asking ‘How do I make friends?’ They should be asking ‘What do I have to offer that’s newsworthy?’

By 2005 individuals had the ability to create and distribute media at no (or low) cost, with the same presentation quality and reach as governments and media corporations. There was probably no precedent for this phenomenon (certainly not since the days of the early 20^th century revolutionary pamphleteer – just before radio arrived).

There were millions of blogs that looked at least as good as one of Rupert Murdoch’s newspaper sites, and were accessible instantly, everywhere, on really cool devices. There were millions of YouTube videos with higher production values and merit than an episode of Big Brother or Funniest Home Videos.

But the problem was one of discovery – it cost time and effort to seek out the content that was truly interesting to you. Google couldn’t help you because its algorithms don’t index based on characteristics of subjectivity or sentiment (interesting, cool, funny, relevant etc.).

The big media companies had mastheads – brands you recognised and trusted. They had editorial staff to aggregate and package content nicely for you. So you the first website you visited in the morning, or whenever you had some time to kill, was probably a news website or media portal.

Then, in 2006, Social Networking and the new online media landscape merged to become Social Media.  Facebook launched its News Feed feature, and the average amount of time spent on the site quickly tripled. Increasingly, the first website you visited whenever you had time to kill was Facebook. And the online media you consumed was increasingly via links shared on Facebook.

What Facebook had done was enabled ‘social search’ (or what I’ve called elsewhere ‘collaborative indexing’).  Your social network seeks out and shares news, videos, blog posts etc. that are interesting and relevant to them, therefore (in many cases), interesting and relevant to you – because these people are your friends, and you share the same interests.  Of course, you return the favour. The larger and more diverse your social network, the more interesting, frequent, eclectic, and broadly topical your news feed becomes. The odd quirky item may come as a pleasant surprise. Even if it strikes a bum note, you don’t blame the mechanism. When a search engine throws up a useless link, you think ‘this search engine is broken’, but when social search turns up a dud you think ‘I have some weird (or boring) friends’. And if you wish, you can call them out by posting a comment.

The News Feed becomes compelling and super-convenient. In one place you can catch up on what’s happening in the Middle East, why your team’s coach is an idiot, a great music video, and who your friend Kylie is dating this week – all probably of equal interest to you. In the same place you can fulfil all your needs as a social being. Extroverts are busy posting chirpy comments and passing on links; introverts and curmudgeons enjoying the fact they can lurk, passively consume, and achieve technical compliance with their social obligations by pressing the ‘Like’ button a few times and sending brief birthday greetings when prompted.   

Social Media (Facebook and its adjuncts) consumes a lot of spare time for a lot of people. And it’s not just eating into ‘other media consumption’ – the time people used to spend watching TV, reading magazines, listening to radio, using internet portals. It’s also replacing ‘social interaction’ – the time people used to spend talking on the phone, chatting over the back fence, hanging around the water cooler. For daily users of Social Media it is ‘The Media’ – the place they get all their information about the world around them, and form their world view. Unlike ‘The Media’ in the traditional sense, there is no central, controlled editorial point-of-view. The ‘spin’ is provided by individuals’ social networks. This is why governments around the world are scared of the internet and want filters, kill-switches, or simply to turn it off.

Is there a place in here for brand marketing? Yes, of course. You may have come across the acronym SMO (Social Media Optimisation). Once you understand that ‘social search’ relates to your ‘brand’ content (which is about subjectivity, sentiment and brand engagement), in the same way that Google search relates to your ‘product’ content (which is about features, price, offers, and making a sale), you’ll realise you need to pay a lot of attention to SMO.

The challenge for a brand is to be more than just present and active on Social Media. If a brand wants to become an influential member of an individual’s social network, it has to be useful. It has to contribute something newsworthy.

Brands need to push content which is relevant, personal, timely, bite-sized, convenient. It can be mundane – 90% of Social Media is completely mundane – along as it’s about the customer.  For example: “your pay is in your account”, “you have reached your savings goal”, “you have earned 100 loyalty points” “you sent 3,000 text messages last month”. ‘About the customer’ is always better than ‘about the brand’. I like it when my cable TV provider tweets about handy shortcuts on the remote. I don’t like it so much when they re-tweet gormless generic praise like “company X has awesome service”.

An aside - in my opinion, one of the best ways for a fearless brand to use Facebook or Twitter is for publicly visible customer service enquiries and resolution.

Anyway, the lesson for brand marketers is this: when you’re thinking about Social Media, don’t overlook the ‘Media’ aspect. Be useful. Be newsworthy. I’m certainly not saying to ignore the ‘Social’ aspect. Yes, develop a persona, develop a tone of voice, and strive for authenticity. But remember in Social Media, as in life, a good friend is not just there to hang out; he’s there to help out. 

It's Banking Jim, but not As We Know It

I’m sceptical about the predicted rise of Social Banking, peer-to-peer banking or ‘Facebank’.

However I think that disintermediation in financial services markets, driven by a combination of social and algorithmic enablers, will be a powerful and disruptive reality in the next few years.  

‘Disintermediation’ was a buzzword of the late 1990s, the fall of the traditional brokerage to low-cost online stock trading was touted as its first scalp, but it seemed to run out of steam and drop off the hype radar.

In other words, Disintermediation was one of those trends that appeared on the cover of Wired Magazine one month, hadn’t transformed the world by the following month, so was quickly overlooked. But while the hype curve subsided, the reality was (and is) slowly, inexorably building.

Disintermediation has at its core the open, free access to individual market participants of: market information (data); and the tools to perform aggregation, search, filtering and analysis on that data. In the pre-digital world, this access was expensive in terms of effort and money, and restricted to intermediaries or agents. It should not be so in the digital world. Although there are regulatory barriers protecting agents in many markets, I believe these will fall as individuals realise they can bypass costly intermediaries, and governments accept that potential gains in productivity far outweigh the interests of the intermediaries.

On the extinction list are the usual suspects - recruiters, real estate agents, etc. But also, more tantalisingly, I think the process of disintermediation may completely transform the global banking system as we know it.

A new financial paradigm will require BOTH ‘social’ and algorithmic governance. The social and altruistic elements of peer-to-peer online banking and microfinance will combine with: tools to perform real-time analysis of risk/return across large, live datasets; and willingness to make personal finances semi-public in order to significantly reduce financing costs.

We’ll see completely new businesses, and new disintermediated relationships between depositor/borrower, insured/insurer in services like student loans, business receivables finance, consumer credit, who knows what else... 

What's eating online publishers?

Published in NETT magazine May 2010

Internet publishers bemoan the ‘commoditisation’ of the banner ad. What really happened is hyperinflation. And it’s the publishers’ own fault. But there is some good news, especially for small players.

Major online publishers complain about the recent ‘commoditisation’ of the banner ad.

They paint ‘commoditisation’ as a pestilence striking the crops of simple, honest farmers of online eyeballs.

As I see it, there are two things wrong with this view. One, the obvious one, is that publishers brought this phenomenon upon themselves. The second is the misuse of the word ‘commoditisation’.

Now, there’s nothing intrinsically wrong with a commodity. Just ask anyone in Western Australia. They love the commodities they’re sitting on, and can’t dig them up and ship them off to China fast enough.

What has blighted the price of ad impressions is better described as hyperinflation.

Hyperinflation is what happens to a currency when a government simply prints more banknotes, without a corresponding growth in the real product or productivity of the economy. Pretty soon you need to take a wheelbarrow full of hundred dollar bills down to the corner store for the loaf of bread that used to cost pocket change. Internet publishers found that internet penetration became saturated and the growth in their audience started to plateau. Addicted to years of double and triple digit growth, publishers started to manufacture more ad impressions, while the underlying commodity that advertisers remain happy to pay good money for – viewing time multiplied by size of audience – remained flat or grew slowly.

How did the publishers manufacture more impressions? A whole grab bag of tricks – photo galleries, multiple-page articles, aggressive auto-refresh, anything that increased the amount of deliberate or inadvertent page requests in a typical visit.

The advertisers are not stupid, nor the publishers immune from the simple laws of economics. The price of impressions (CPM) plummeted.

Large publishers have been heard to argue that the price plunge shows that what advertisers now want, and what will save the publishers from their current predicament, is a more accountable pricing model (Cost Per Action) and better use of data-driven targeting.

They’re effectively saying they need to become Google - targeted online advertising that offers tactical marketers proven results. Google works. Businesses know what they’re getting, they’re happy to pay for it. There’s no question whether the commodity Google sells is value for money. The price is set by the market in real time, via auction.

If these publishers aspire to even approach Google in their ability to use data and achieve goal-based performance... they’re dreaming.

The good news for online publishers is that they don’t actually need to become Google, or compete with Google, in order to survive.  The proof of this lies in the one ray of sunshine for online publishers in the current market – strong demand for video inventory. Video inventory is not somehow more demographically targeted, or more conducive to clicks and conversions than banners. It largely serves the same purpose – eyeballs, recognition, brand awareness. Strong demand for video inventory shows continuing faith in online advertising whose main function is strategic and awareness-focused, rather than tactical and performance-focused.  

The challenge for publishers is what it always has been. Recognise your audience and create content which appeals to that audience. This is particularly heartening for small publishers, who tend to be close enough to their audience to know them extremely well.  And small publishers can build really successful businesses. Sound Alliance is the outstanding example. They started a dance music website ten years ago. Last year they enjoyed double-digit growth, $15 million in revenue, and the longest average session times of any online publisher measured by Nielsen.

Clicks, shmicks – their formula is only about compelling and relevant content. It’s not rocket science, or applied mathematics – leave that to Google.

Social Media Rules: Rule 2 - Listen

First published on the Hyro blog Jan 14 2010.

The previous post in this series [Rule 1 – Don’t’ Believe The Hype], made the case that Online Social Media represents ‘effect’ more than ‘cause’. In social media opinions are aired, shared and confirmed, but not originated. Social media is the water cooler conversation of the digital age, and even though brands and celebrities are allowed to overhear, and even join the conversation, the reputations of these brands and celebrities come largely pre-formed.

Social media does not represent the uniquely powerful new means of manipulating opinion promised by some*.

However, Social Media is a great place to simply listen.

There are many ways to ‘listen’. You can measure aggregate sentiment, gauge the success or failure of targeted marketing and communications activities,  gather feedback from individual customers on products and features, find out what your competitors are doing right and wrong.

The good news: the data is rich, high volume, real-time and 100% free.

 The even better news: the opinions of social media users seem to be a very accurate measure of the opinions of the general population.

Previously, I poked fun at those drawing a very long [and very wrong] bow based on research data. But in doing so, I found that the same research data showed the responses of active social media users did not materially vary from the responses of the general population, including infrequent users. In other words – what active social media users think and say is very close to what everyone is thinking and saying.

Brands can use social media as a real-time, unprompted focus group, tracking actual, intimate, and detailed conversations about their products, price and service.
Brands can measure sentiment, and derive Net Promoter Scores, across large populations, and track how these measures change over time.

Brands can collect immediate feedback on a product launch or marketing activity, and react rapidly.

These possibilities, and the appetite for analytics tools they will create, have not gone un-noticed by the global technology giants. I have seen a few sneak previews of Social Media Monitoring software to be released in 2010 – including Microsoft’s LookingGlass.

Access to these tools will result in an increasing sophistication and subtlety in the way that marketers address social media.

In the next post, I’ll consider whether the best way respond to social media is by using social media, and discuss the pros and cons of active participation.

*Nor is any new medium likely to deliver on this promise. Ever again. The 20th century, one-to-many model of media is in decline, and will continue to decline as long as large numbers of individuals can easily produce content of good-enough presentation quality and access distribution networks like the internet.

Social Media Rules. Rule 1: don’t believe the hype

From Hyro blog, October 1 2009. A caution on confusing cause with effect.

Much of the social media hype emanating from agencies and consultants is based on an astonishing confusion between cause and effect.

To use the analogy of social media as the ‘water cooler conversation’ of the digital age - People don’t formulate the opinion that Bank A has great service, Politician B can be trusted, or Kyle Sandilands is a goose, purely through the mechanism of a debate around the water cooler. These opinions are formed elsewhere, and brought to the water cooler.
The following assertion, published by a leading agency, epitomizes the confusion between cause and effect. 

“It’s important to note that we found no variations in the responses among the people who identified  themselves as active users of social networks and those who use social media less frequently. In other words, as you study the survey responses, note that social influencers and social media have an impact on the general consumer population – not just a small elite of social media enthusiasts.” Shiv Singh Vice President & Global Social Media Lead, Razorfish Social Media Labs. Fluent: The Razorfish Social Influence Marketing Report, 13 July 2009, p 9

Using the fact that research shows no variations in response between those who are active social media users, and those who aren’t, to conclude that social media has a uniform effect on those who use it and (somehow) on those who don’t (by some kind of spooky osmosis?) is wonky logic and wonky science.

Possible explanations for the research observations include -

1. The opinions of those who actively use social media are influenced by their use of social media, and these opinions in turn (by a mechanism unknown) uniformly influence those who don’t actively use social media

2. There is an influencing mechanism, outside of social media, to which both groups are uniformly exposed, and by which both groups are uniformly affected

In the absence of a proven hypothesis explaining the mechanism by which the opinions of social media users influence non-users, the first explanation should be rejected. (Why? Read Wikipedia entries on The Scientific Method and Occam’s Razor).

There we go again - cause and effect.

Social media use is not the mechanism that causes users’ responses. The cause originates in the media in general. What is observed amongst social media users is the effect. The real good news from Razorfish’s research is that the opinions of social media users seem to be a very accurate measure of the opinions of the general population. But more on this in the next post: “Rule 2 – listen”

Before I sign off, one more hype-puncturing factoid.

Dell is one of the poster children for Social Media strategy, especially when it comes to Twitter. Dell have invested properly in their Twitter strategy, and do a very good job at it. In June Dell announced that Twitter had contributed to $3 million in sales revenue over a 2 year period. Dell’s turnover for the same period was $122.2 Billion – so that’s 0.00002% of sales.

- - -

A comment:

Peter Darke Says:
February 3rd, 2010 at 12:51 am
3 Million is 0.00245% of 122.2 Billion.
Just to be pedantic.

Mea Culpa, Peter

Customer Experience vs. User Experience

This is a post from the Hyro blog, from August 14 2009 - another one with a useful comment wasn't forwarded to me at the time. I respond belatedly.

I’ve heard a lot of answers to the question “What is the difference between Customer Experience and User Experience?”, all of them long-winded.

Some of them have been very good answers – but needlessly complex, since there is, in fact, a very simple answer.

The difference between Customer Experience and User Experience is the difference between a Customer and a User, and the difference between a Customer and a User is that a Customer has a choice.

Your digital business is competing moment-by-moment for the customer’s attention with other digital businesses, other channels (TV, Radio, iPod, billboards), and now (on mobile internet) with the good-looking girl/boy sitting near them on the bus. Before the potential customer even thinks about doing anything an usability expert can measure, they are making a split second, emotional decision to give their attention to you.

I particularly like sharing this insight with senior marketers. It instantly transforms them from slightly-intimidated-by-Digital to smartest-guy-in-the-room. Because if there’s one thing marketers know about, it’s Customers, and the Customer Decision Journey. By contrast, we in Digital Services were calling them ‘users’ a year ago - and still routinely refer to them as ‘visitors’ or ‘browsers’. Quaint, really.

“Oh, we have some visitors!
Should we make them a cup of tea?
No don’t worry, they just want a look around, they’ll be off soon.”

Anyway, the point is that the Customer Experience point-of-view allows us to access and apply years of excellent learning from the offline world and marketing science. It allows us to ask how a customer feels about completing an online task, rather than just worrying about how many clicks they have to make. More importantly, it allows us to stop feeling guilty about using emotive words like ‘cool’ or ‘kick-arse’ when talking about the visual and tactile interface.
 
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1 Comment:

Bora Says:
December 11th, 2009 at 11:56 pm
Hello Michael,
I am not sure I understand and agree (from what I understand) with your differentiation of user/visitor vs. customer.
For me a customer is simply a visitor that is either going to buy right now or at the minimum has the potential to buy in the future.
Sounds simple but it seems that many companies and digital agencies forget the word “buy” very often. Instead of creating a website that makes everybody happy, it is in my mind more important to concentrate on the buyer and give them the necessary information that is necessary (providing for their stages from information seeker to actual buying decision).
All this depends on who ever your buyers are, consumers, corporates, investors or even the press.
I do support that a customer makes a split second decision if they find you interesting and trusting enough. But real customers who actually look to spend money to solve a pain/problem are usually easier to convince to stay compared to the browsers who are jumping from site to site.
In my experience the conversion part is more important, because here it will make the difference if one can even collect the low hanging fruits - the customers with their wallet open ready to buy a solution to their problem.
That is also where usability plays a big role - how easy is it for the customer to buy or convert to a lead. One of the studies from Stompernet show that 70% of customers ready to buy from a site never finish their purchase. Imagine that in a supermarket - people leaving in droves because they found it to hard to buy.
I would be interested in your response Michael.
Cheers,
Bora

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Hi Bora

Thanks for waiting patiently for 18 months for a response.

In short, I think we are both right.

I'm arguing here against the past tendency of the usability discipline to be doctinaire and humourless - much like Bauhaus-inspired architects of the 1950's decrying bourgeious ornamentation, and shoe-horning American office workers into buildings designed for 1920's European public housing.

But you are right. The converse - the sole emphasis on 'cool' - is just as unsatisfactory.

There has to be a balance in user interface design - between desirable/emotional considerations, and usable/rational considerations. Ideally, this balance should be weighted according to what stage of the Customer Decision Journey we can infer a user has reached.

As for the store where people are leaving in droves because they find it hard to buy - that store exists in the real world, in high streets and malls across the world. It looks good from the outside, and you want what they sell, but the music's too loud, and the shop assistant is too busy texting her friends to even look at you.

I agree, you don't want your website to be that store.