Passenger's Justin Cooper provides guest editorial for Jennifer Leggio of ZDNet.

Gartner’s Adam Sarner recently released a report predicting that more than 60 percent of all companies will have a community for engaging their customers by 2010. This is a clear sign that many brands are coming to terms with the huge opportunity that social media offer companies to communicate directly with and learn from their customers, but it still begs the question of how they will get tangible ROI out of these communities. As companies begin to embrace social media as a strategy (rather than as a tactic or a campaign), we see many examples of how the conversation can help or hurt household names. These high profile successes and failures are a good thing because we are learning, but also indicate that we are still navigating the social media waters.

The next area for developing understanding is how companies can appropriately engage with their customers in a way that is mutually beneficial to consumers and the brands alike.

Marketing executives need to do away with the “top down” mentality in reaching their customers. Traditionally, marketers create their messages, test them with some people in their deemed “appropriate” demographic (often other marketers and analysts, not customers), fine tune them, and then push the message out to the masses. With the Internet, we now have the ability to hear directly from consumers what they want, and need to embrace this way of communicating. Whether we like it or not, social media and technology in general are changing the way that marketing and advertising executives have to approach their customers, and if they don’t change their approach, they should be prepared for a public flogging. Dell is one example of a company that has learned from harsh criticism that the social Web has enabled, and is now recognized as one of the more innovative companies that utilizes social media to collaborate with its customers.

While we have taken great strides since the inception of social media, I see a big hurdle that people are only just beginning to get over: the “build it and they will come” model (i.e. create a “social media campaign” that typically has a beginning and an end, or set up branded social networks or Facebook fan pages and wait and see what customers will say). This model of building a campaign and simply listening to your customers is flawed for few reasons:

1. You can’t just listen because you may misinterpret what is being said. Social media is more about purposeful discussions - it should be used to set goals and have conversations around specific ideas or issues, whether it be your next ad campaign, product development or marketing initiative.

2. Listening doesn’t mean waiting for your turn to talk: the second flaw with the general social networking approach. Consumers want to interact with the people at the brand that are making decisions and do so because they hope to impact those decisions. Therefore, not having this conversation jeopardizes the opportunity to have a great competitive advantage. By inviting consumers to be a part of the behind-the-scenes action that goes on with a brand, you’ll see how enthusiastic they are about providing feedback that is meaningful and worth the investment.

3. Listening without actively participating is difficult to measure. Opportunities to learn from customers through the social web are endless, but if you can’t analyze it and report back to the folks footing the bill for your efforts, it will be all for naught. You need to know what to do with the information you learn, and have the tools to analyze and harvest it into a useable fashion and then act on it.

This is an exciting time to be a marketer because social media allows us to finally have two way conversations with our customers. The market researchers have historically only listened to customers in focus groups whereas marketers are blamed for only talking at them. Brands need to embrace this concept or inevitably get left behind.

Justin Cooper is the co-founder and head of marketing + innovation for Passenger. An expert in customer experience design, brand strategy and customer collaboration, Justin’s work bridges the traditional rift between brand objectives and consumer expectations through a creative, but business-pragmatic approach to innovation. You can stay up to date on his work via the Passenger blog.

As posted by Steve Smith from MediaPost's Behavioral Insider, Friday, December 5, 2008.

PROFILE SCRAPING AND USAGE TRACKING is one technologically advanced way to leverage online community behaviors, but interactive technology also makes the direct human approach more efficient. Marketing firm Passenger has erected what it calls a "customer collaboration" platform that major clients like Mercedes-Benz, ABC, Adidas and Chrysler have used to watch and listen to their customers in more contained and controlled environments than the typical social network or message base. Co-founder Justin Cooper recounts some of the experience with that model and the willingness of customers to help brands build better products and marketing. It is not good enough just to listen. You have to let customers see you listen and learn.

Behavioral Insider: Your company talks about 'customer collaboration.' Is this an advanced sort of market intelligence?

Justin Cooper: Intelligence is certainly one of the benefits of customer collaboration. There is an opportunity to talk about the things that are important to those people. It is about focusing, capturing that insight as well as the opportunity of thinking about this as foresight. We often talk about customer collaboration as giving our clients the ability to tolerate change.

BI: The Passenger platform lets clients bring consumers into an online environment where they can talk to them about any program or topic. How is this different from a standard Web forum?

Cooper: The difference is really about a purpose. There is this shared value proposition there, where the brand is benefiting from direct conversation and direct insight coming from these conversations with their customers. The customer of the client is able to directly impact the decisions that are being made within these organizations.

That is the incentive that drives these engagements. It is not about giving people an open forum to talk to one another. It is really geared toward giving customers direct access to people that can influence the decisions made in the organizations.

Mercedes really wanted to understand how to serve an underserved target for them, Generation Y. This is a group they never have been focused on. A Session is where hundreds or thousands of people can concurrently log in and have real-time conversations around any sort of content they might be viewing. They might be seeing segments from advertising campaigns or new product renderings from the design engineering group. Or they might be seeing something related to the retail experience and talking about improving that.

But ultimately, these conversations are very purposeful and focused on discussing the things that need attention. It might be capturing new ideas and innovations. If you can capture new ideas from customers and then work with thousands of customers to refine that idea and bring it to market, then the chances of success are much greater than they have been.

BI: How do you establish purpose and the right mix of people?

Cooper: We are invitation-only engagements. All the communities we host for clients are private. The exclusivity of it actually helps drive the participation levels and the quality of the insight and the content exchanged within.

In ABC's case, they simply put invitation links on the Web sites of their shows and asked if users were interested in shaping the future of these shows?

You go through a very quick screening process for COPA compliance, etc. And some want to manage the composition of the community. In the case of Mercedes, because they wanted to specifically engage with a target that has traditionally been underserved for them, they wanted a majority of non-Mercedes owners. I think that is something exciting. I had not seen communities formed by companies looking to talk to people who are not yet actual customers.

BI: With ABC, how does consumer collaboration work with entertainment products?

Cooper: They have the opportunity to engage their most passionate viewers across their program matrix to understand how to shape the future of the character, plot, storyline, and development for things like 'Lost' and 'Desperate Housewives.'

We have seen producers at 'Lost' collaborate directly with their viewers to determine which segments are submitted for Emmy nominations. We have seen them in a situation where they thought they had to reshoot some key scenes only to talk to their viewers, who thought the scenes were great. These guys have seen 44-minute long cuts directly from production and they can talk about them as they see it live through the platform. Producers are taking that input and making refinements.

BI: Is the opportunity to be an insider enough for participants?

Cooper: In over three years of doing this, we never had a client have to incentivize anyone to take money or rewards.

BI: Is there an ideal group size?

Cooper: It is geared towards where you gain value. For some clients it might mean a few hundred people. We had a fashion client who went live last Friday -- and by the following Monday they had 4,200 women that have registered and set up a profile with the community.

BI: What is the nature of the conversation itself? Real-time events or on-demand experiences?

Cooper: It is both. Many times users just want to dip their toes in and observe. You might come home at midnight and have an idea to share or initiate a discussion topic. The CMO of Chrysler engages in a dialogue directly with typically around 200 of her Chrysler customers. You can imagine, at a time where the auto industry is in this place, there are a lot of people with a lot of questions for her and a lot of ways she might think about solving the problems she has. It is those counterintuitive things, the things she might not have thought to ask or didn't know she didn't know, that can really help her see her blind spots in the auto industry. The things you don't see coming until it is too late are the kinds of things customer collaboration helps you uncover.

BI: What form does the output take for clients?

Cooper: Through the discussions there is the collaborative filtering techniques we employ to make sure the most important things surface to the top. We can weight different input and see how people ultimately are influencing the discussions. There are also things called Activities where clients provide customers assets they can works with. We have a major apparel client who wants to understand what their customers' lives look like, so they had them send in pictures and videos of their closets to showcase all the shoes they were excited about.

So there is a variety of ways the client can interact with the customer as well as ways for the customers to network with one another and form micro-groups. At ABC, we have seen people form affinity networks around specific shows. We saw something called the 'Grey's Girls' for 'Grey's Anatomy,' and these folks met offline. They might go back out to Facebook and share information firsthand, because the brand gave them direct access to that content.

BI: What are the customer expectations here? What validation does the brand need to exercise?

Cooper: You don't have to act on everything they say, but you need to show them you are listening. J.C. Penney told customers that they heard what they were saying about a line and decided not to pursue it at the moment, but here is why. And that is enough for these customers. But if someone doesn't say anything and just hopes these people will continue to come back and give them insight -- that it is not the case. You have to show them you are listening and recognize their contributions publicly within the community itself.

Passenger will be hosting a FREE webinar featuring Analyst Cindy Commander and Researcher Chris Townsend, both of Forrester Research, Inc., in a session planned for Tuesday, Dec. 9th entitled:

“Customer Collaboration: Learn from Your Customers Before You Learn the Hard Way.”

Moderated by Passenger’s Co-founder and Chief Innovation + Marketing Officer Justin Cooper, this interactive panel will discuss ways companies can turn this valuable customer insight into meaningful company change.

Who:
Cindy Commander, Analyst, Forrester Research
Chris Townsend, Researcher, Forrester Research
Moderated by Justin Cooper, Passenger

What:
FREE webinar: “Customer Collaboration: Learn from Your Customers Before You Learn the Hard Way”

When: Tuesday, Dec. 9th at 10:00 a.m. PST/1:00 p.m. EST

Where: Click Here to REGISTER

All companies know that their customers are already talking to one another about their business, its products and services ― both online and offline. By deciding not to participate in and learn from these conversations, key business decisions will be made based on general assumptions of what customers want, which are frequently off base. This interactive session will review different approaches to Customer Collaboration and provide answers to the following questions:

1. How to integrate customer communities into my business?
2. How can I get my customers more involved and engaged in the innovation process?
3. How can customer communities help me grow my brand?
4. What’s the difference between this and an open community?
5. What are best practices for engaging a customer community?
6. How can I measure the ROI of customer collaboration?
7. How does this replace/differ from the traditional research I’m conducting?
8. How do I position this is a “need to have,” not just a “nice to have” to my bosses?

About the Participants:

Analyst Cindy Commander helps senior marketers develop strategies around issues of marketing organization, culture, team development, and relationship building. Her research in the innovation space covers two key areas: (1) how marketing leaders should get consumers more involved in innovation; and (2) how marketing leaders can drive innovation more broadly within their own organizations with a focus on building innovation teams, culture, processes, and insights.

Researcher Chris Townsend’s primary coverage is innovation management, including the software and IT services to support corporate innovation, as well as the internal management best practices for creating a corporate culture of innovation. Previously at Forrester, Chris has worked extensively with innovation and global management expert Navi Radjou, researching technology trends in developing countries.

Justin Cooper is the co-founder and chief innovation + marketing at Passenger. An expert in customer experience design, brand strategy and customer collaboration, Justin’s work bridges the traditional rift between brand objectives and consumer expectations through a creative, but business-pragmatic approach to innovation.