mediation

Planning for a start not an end: how Skype's Phone Box Experiment is encouraging us all to call more landlines by sending their man into the middle of nowhere

so you're Skype and you're brilliant and everyone using you loads for free internet to internet calls.  but the value ready to be unlocked in your business is in paid for calls to mobiles and landlines.  what to do?  ...well in an email this morning from Skype they pointed me in the direction of their solution...  in a cool idea, Rob Cavazos has journeyed into the middle of nowhere and is awaiting our calls, whilst always staying within the frame of a camera.

the website seamlessly introduces you to the idea whilst clearly articulating the options and benefits of adding credit to your Skype account so that you make calls to non-internet destinations.

the challenge now is amplification, amplification, amplification.  Skype need to ensure they capitalise on their investment in getting Rob into the middle of nowhere and land the idea in spaces and places beyond their site.  they have a YouTube channel which is a great start, but I can't seem to track down any kind of live feed?  the project now needs to go into overdrive to create WOM and conversations in and around what's going on with their experiment...

getting their man there was one thing, I look forward to seeing if Skype can pull off the other trick of ensuring that the idea has traction and momentum so that their idea is a starting not an end point.

Doing and Saying: what a WOM study from HBR can tell us about understanding customer groups

formulas for calculating CLV and CRV: copyright of Harvard Business Review / V. Kumar, J.Andrew Petersen, and Robert P.Leone

the joy above are two formulas, developed for an article by V. Kumar, J.Andrew Petersen, and Robert P.Leone published in the Harvard Business Review entitled How Valuable is Word of Mouth?  Mediation is a big fan of planning and incorporating WOM - in a structured way - into brand strategies, and have written a fair bit about it on this blog, so was more than a little happy when Mark H and Guy C sent me the above article.

the awesomeness of the above formulas get the authors to a place where they can compare CLV (Customer Lifetime Value) with CRV (Customer Referral Value), and something really interesting happens - there's no direct correlation.  it doesn't - I don't think - occur to planners often enough that those groups of customers who are valuable because they buy the most are not necessarily the some groups of customers who are valuable because they talk about a brand the most.

so on the basis that CLV added to CRV is not a good predictor of overall customer value, the authors develop and propose a rather useful matrix of low buying / low advocacy bottom left to high buying / high advocacy top right (with the obvious skews top left and bottom right).

...by splitting customer segments out in this way you get a very clear and potentially dual role for a strategy and schedule...  what's the plan (if any) for getting less vocal customers who buy a lot to talk more about your brand?  versus the plan (if any) for getting the less frequent purchasers but most vocal groups of your customers to buy more of what you're selling?

data, data, data ... getting it and more specifically understanding and using it to illuminate what's going on in and across brands' customer bases.  better strategies, better plans and better schedules.  what's not to love.  you can get a copy of the report at HBR Reprints.

Smart and Relevant Customer Relationship Building from Atlantic

a lovely example of talking to your existing customers from Atlantic Gas and Electric who this week sent me two free energy saving light bulbs.  I - like many people I suspect - get a plethora of items through the letterbox from brands with which I have an association; egg in particular is never shy of sending me an invitation to increase my ARPU.

so great to see Atlantic putting their CRM where there mouth is and sending me something which is tangible, practical and above all pertinent to the credentials there aiming to build.  more of this please.

The Double-Edged Sword of Hoxton Hotel's £1 Room Sale

so I've just bagged a room at the Hoxton Hotel  (the £17m establishment opened in 2006 by Pret founder Sinclair Beecham) in their sale...  a quarterly event which this time round offered 500 rooms at £1 and 500 rooms at £29 to the first to book them online from noon today.  the sale lasted 19 minutes.

as expected, online demand at the booking engine was high and much page refreshment was required before I finally got to the booking.  others didn't make it...  a friend messaging online commented on the frustration being felt (and verbally articulated) around his office.

these frustrations were acknowledged by the Hotel's General manager David Taylor, who in an online statement after the sale commented:

"The booking engine once again struggled to keep up with the huge number of people trying to book rooms ...  We are sorry if you were not successful, We are sorry of the booking engine stalled on you, We are sorry that not everyone could be a winner"

and that's the problem with sales like this, the CRM fall-out can be painful.  the website experienced 500,000 hits in the 19 minute duration of the sale, with only 1,000 'winners', that potentially leaves 499,000 disappointed potential customers.  but there's a flipside...  boy is there a flipside.

using the lowest standard room rate of £59 as a base, the sale cost the Hotel £44,000 worth of income.  but to recoup this income Hoxton has (only) to sell 746 rooms it otherwise wouldn't have done.  so of the half a million hits they received today, they only have to convert 0.0015% of them to get the money back.  which shouldn't be too tall an order at all.

but money aside, the sale is delivering across a number of other key metrics.  I'm willing to bet the quarterly spikes in the below Google Trends result for 'Hoxton Hotel' is driven by their quarterly sales.

added to this increase in website traffic is the surge of new email addresses and mobile phone numbers to their database (I surprised myself at how much personal information I was happy to throw at the website when the clock was against me), and of course the word of mouth effect that this generates...  I found out about the sale from a friend, who found about it from his friend, who in turn found out about it from his girlfriend who was already on the database.

it's one hell of a sales promotion that can generate this kind of response whilst almost certainly paying for itself...   a double edged sword it may be, but I'm sure it's one that this Hotel is more than happy to wield.