The 4C's of the Conversation Company

Katia Pallini

About this research report InSites Consulting, together with sample and data collection partner SSI and the translation agency No Problem! conducted a quantitative online survey among 1,222 senior managers.

The targeted markets included are Belgium, The Netherlands, France, Germany, the US and the UK. All respondents are senior or top managers from companies (+20fte) in different sectors, with different sizes and offers. Splits per sector, region… are shown if the results are relevant.

What to expect from this research report Market circumstances are forcing companies to change their marketing, their behavior and their leadership style.

In his book, The Conversation Company, Steven identifies four pillars that will guide companies through this change process. These pillars are rethinking customer experience, conversation management, content strategy and collaboration.

This research project measures the current state of companies in their journey to become a conversation company.

The Conversation Company Philosophy ‘The Conversation Company’ is a metaphor for the most consumer-centric organization one can imagine, using the power of the people as a positive lever and thankfully accepting social media as an ideal business partner. Company culture is the conversation guide for all employees and clients. To optimize its conversation potential, the Conversation Company invests in 4 C’s: Customer Experience, Conversation management, Content marketing & Consumer Collaboration.

4C IMPACT MODEL The 4C impact model shows how ‘identification with company culture’ and ‘social media integration’ influence the adoption level of the 4C pillars, which in turn have an impact on employee satisfaction and the likelihood of staff recommending their own company to others. Both are objective parameters of business performance.

Identification with company culture

Satisfaction & recommendation

Social Media adoption

5 KEY CONCLUSIONS OF OUR RESEARCH

1 Lack of identification with the corporate values among top management blocks social media integration

2 High social media adoption

61%

Low social media integration

29% 29%

27% 27%

17% 17%

39% 29% 24%

Doing nothing with social media

Doing nothing with social media

First steps in social media

First steps in social media

Pilot phase in social media

Pilot phase in social media

15% 15%

Integrating social media

Integrating social media

12% 12%

Social media is integrated

Social media integrated

3 24% 39%

Conversation management

Customer experience

Still a long way to go before the world is full of conversation companies

16% 19%

Collaboration management

Content management

Current adoption of the 4C components

4 A digital gap is created in the business world: Those who invest today, are the ones who will invest tomorrow

Companies that invest in all 4 C’s have a higher satisfaction & recommendation rate among their own employees

5

Full Research Report

4C IMPACT MODEL

Identification with company culture

Satisfaction & recommendation

Social Media adoption

The Company Culture is your company’s Conversation Guide The most commonly used definition of company culture reads as follows: “Company culture is a series of shared values and convictions which help individuals understand the functioning of the company.”

A transparent company culture makes it easy for the employees to understand exactly what the company expects of them. Culture gives people an insight into the type of behaviour the company considers appropriate.

Research confirms that company culture often forms the basis for the successful implementation of a strategy. A strong company culture also has a positive impact on the performance and productivity of its employees. This culture is a kind of „mental programming‟ that sets an organisation apart from its competitors.

Your culture is the personality of your organisation and the foundation your Conversation Company is built on.

Your staff and customers make this culture tangible to others. This involves a method of reasoning that works from the inside out. A traditional company is first and foremost interested in keeping its shareholders happy.

Making customers happy only comes second, with the staff coming a poor third. A Conversation Company turns this logic on its head. Happy staff are more than willing to keep the customers happy; happy customers mean higher profits and this makes the shareholders happy as well. Or, as CEO of Southwest Airlines puts it: “We take good care of our staff. Our staff take good care of our customers. And our customers take good care of our shareholders.”

Your company culture is the conversation guide for employees and clients. Employees know how to behave and how to communicate with clients, whereas clients know what to expect.

Lack of identification among top management blocks the evolution We looked for the reasons why some companies are refusing to invest in new media. Looking at the data, we found some typical results: the healthcare industry is lagging behind; media is a frontrunner; smaller companies are in the lead compared to bigger companies. But I have to admit, these differences are rather small.

There is a bigger and more fundamental reason why some companies are lagging behind: their leaders. This survey was undertaken among top managers from companies in the US, the UK and Europe[p1]. It was quite shocking to see that about half of these top managers do not identify with the corporate identity and culture of the company they preside over. This parameter is crucial to being open to change and evolution. Leaders who have a less emotional bond with their company, invest less in social media. The transparency, openness and authenticity of the social web must scare them away.

This shows that conversational leadership becomes a critical success factor for adapting companies to the transparent world we live in. Leaders can hate their job but need to love their company. The more extreme the „love‟ (emotional bond) between the leader and the company, the higher a company scores in social media adoption/integration.

‘First who, then what’ I am a big fan of Jim Collins‟ book „From good to great‟. In his work he states that great companies first decide on the „Who?‟ and then on the „What?‟. Our research about social media integration and adoption has the same conclusion.

If you are serious about social media, the two elements you need are a conversation leader and a corporate culture which acts as your conversation guide. After that, implementation of new projects will go a lot faster. This study also shows that some companies (with the wrong leader and wrong culture) will never be successful in this field. Probably these companies have even more serious problems to deal with first, don‟t you think?

It’s remarkable that half the senior and top-level managers do not or hardly identify with the culture of the company they work for.

The two main reasons are the lack of visibility of company values throughout the organization and a limited focus on company culture in the recruitment process.

Company culture is built on having strong values and living these values…

The 5 most common values are…

27%

26% customer centricity

professionalism

16%

More than 1 in 4 companies has ‘professionalism’ as a value.

France is an outlier regarding company values: values such as responsibility, trust and respect carry more weight.

expertise

16% result driven

19% service-oriented

But how are people living these values…

No fit between company & personal values

Perfect fit between company & personal values

Company values

Personal values

51%

49%

Only 1 in 2 feel their personal values fit closely with those of the company they work for.

This percentage is significantly higher among top-level managers, managers with more than 20 years of experience, B2B companies and companies not listed on the stock market.

The better the value match the more satisfied people are and the more likely they are to recommend their company to others

37% of managers claim their company values are not clear to everyone in the company

54% of companies recruit employees based on matching values

Company values…

To what extent do you agree with the following statements regarding company culture?

Agree

Our company values permeate everything we do

64%

Openness, authenticity and happiness are somehow incorporated in our values

64%

Our company values are clear to everyone in the company

63%

If negative customer comments appear online, we do not remove them but instead we try to help the customer

61%

Our internal and external values are the same

60%

If a staff member says or writes something wrong, we help him adjust his behavior

60%

New employees are only recruited if their values match ours

54%

As an employee, you have access to social media at work

52%

My company encourages online conversations with customers

44%

Employees are allowed to talk about their work on social media

41%

4C IMPACT MODEL

Identification with company culture

Satisfaction & recommendation

Social Media adaption

Social network adoption is high in companies. The most actively used platforms are Facebook, Twitter, LinkedIn and YouTube.

However, integration of social media in business processes is low. Only 12% of businesses have fully integrated social media in their business.

Yet our study shows that social media integration has a positive impact on satisfaction and recommendation.

Social Media Adoption Which of the following social media platforms is your company active on?

61%

Facebook

39%

Twitter

29%

LinkedIn

24%

YouTube

17%

A corporate blog

9%

MySpace

Flickr

Foursquare

Netlog

Badoo

5% 5% 4%

3%

Most actively used platforms:

61%

39%

29%

24%

Social Media Adoption Which of the following social media platforms is your company active on?

<500

500+

B2C

B2B

65%

56%

60%

62%

41%

37%

39%

38%

33%

25%

22%

41%

26%

21%

24%

24%

Social Media Adoption Which of the following social media platforms is your company active on?

Products

Services

Products & Services

60%

51%

70%

39%

32%

45%

32%

24%

33%

25%

16%

30%

Social Media Adoption Which of the following social media platforms is your company active on?

80%

61%

51%

56%

59%

53%

45%

44%

35%

25%

39%

45%

48%

30%

8%

8%

35%

42%

31%

23%

19%

25%

20%

22%

Social Media Adoption Which of the following social media platforms is your company active on?

Tech & Telco

Travel & Leisure

78%

67%

62%

37%

66%

52%

50%

29%

26%

29%

38%

24%

30%

24%

46%

36%

35%

Healthcare

Finance

Media

63%

43%

55%

42%

39%

28%

27%

FMCG & Retail

Social Media Integration More than 1 in 2 companies are still in the early stages of integrating social media.

12% have fully integrated social media in their business processes.

29% 27%

17% 15% 12%

Doing nothing with social Doing nothing media

with social media

First steps in social media

First steps in social media

Pilot phase in social media

Pilot phase in social media

Integrating social media

Integrating social media

Social media is integrated

Social media integrated

Social Media Adoption To what extent has your company integrated social media?

<500

500+

B2C

B2B

Doing nothing with social media

27%

32%

29%

30%

First small steps

30%

24%

27%

26%

Setting up/ running pilot projects

17%

17%

18%

15%

Integrating social media

15%

16%

15%

17%

Social media are fully integrated

12%

11%

11%

12%

Social Media Adoption To what extent has your company integrated social media?

Doing nothing with social media

26%

31%

46%

19%

32%

23%

First small steps

24%

27%

20%

28%

30%

33%

Setting up/ running pilot projects

23%

18%

15%

19%

15%

13%

Integrating social media

17%

14%

10%

20%

15%

17%

Social media are fully integrated

11%

10%

10%

13%

10%

15%

Social Media Adoption To what extent has your company integrated social media?

FMCG & Retail

Healthcare

Finance

Media

Tech & Telco

Travel & Leisure

Doing nothing with social media

30%

38%

26%

27%

24%

30%

First small steps

19%

26%

24%

20%

22%

33%

Setting up/ running pilot projects

19%

12%

22%

13%

22%

16%

Integrating social media

20%

13%

15%

23%

19%

13%

Social media are fully integrated

12%

11%

13%

16%

14%

9%

Companies that have fully integrated social media in their structure use an average of 3 different social media channels.

52% have access to social media at work 41% are allowed to discuss their work on social media 44% are encouraged to communicate online with customers and consumers

Companies where social media is fully integrated have more satisfied employees who are more likely to recommend their company to others.

4C IMPACT MODEL

Identification with company culture

Satisfaction & recommendation

Social Media Adoption

Why these Four Components?

These four new disciplines have been chosen after careful consideration.

A survey of 400 marketers has shown that companies grow faster than their sector rivals when they use these four components in unison.

These four pillars help build a conversation lever for both your employees and your customers. Moreover, the entire process is in line with your company culture and company values.

The first pillar, customer experience, is the most important conversation starter. If your employees and your customers feel well-treated, they will mention this to each other.

Managing customer experience means investing in word-of-mouth. You are developing a focus for staff and consumer satisfaction. As a result, service is no longer be seen as a cost but as an investment in conversations.

Managing the conversations is the second pillar. This involves observing, facilitating and participating in conversations. Your participation in conversations in social media will help humanise your company and make it seem less distant. Asking and answering questions boosts the interaction between the company and the market.

In addition to the reactive answering of questions, the Conversation Company also adopts an active strategy with regard to content. Your content proves you are an expert in your field. Your company moves away from campaign-based thinking and towards the planning of impactful, conversation-generating content.

The final pillar is the pillar of structural collaboration between your company and the market. The customer wants to help you and you welcome that help. The Conversation Company builds various communities of customers, who help determine the future of the organisation.

The 4C components Current adoption levels…

24%

39%

Conversation management

Customer experience

16% 19% Content management

Collaboration management

Today, customer experience is the most adopted pillar. Compared to the other countries, US-based companies score significantly higher on customer experience and conversation management adoption. Overall, countries providing both products and services score better on each of the pillars than companies providing either products or services.

US-based companies with less than 500 employees in the media or technology sector are the top performers across all 4 Cs

<500 Media Tech & Telco

<500 Only services Especially Belgium-based companies with less than 500 employees providing only services need better 4C leverage

Customer experience is the main driver of satisfaction and recommendation.

Offering strong products and a decent customer service will boost business through positive conversations.

However, only 54% of companies today manage those customer expectations by delivering slightly more than promised.

Moreover, just 2 out of 3 are open to conversations with customers in every phase of the purchase process.

54%manage customer expectations by delivering slightly more than promised

60% always opt for solutions that benefit the customer in the event of a problem

43% offer the same services both online and offline

Customer Experience…

To what extent do you agree with the following statements regarding customer experience?

Agree

The staff are trained to deliver adequate customer service

70%

My company tries to be open to conversations with customers in every phase of the purchase process

63%

In the event of problems, my company always opts for a solution which benefits the customer

60%

Our customers can choose their own preferred channel of communication to address their questions

59%

Every employee knows how to react to both satisfied & dissatisfied customers

59%

My company innovates sufficiently in terms of customer service

57%

More than 80% of the comments (online and offline) about my company are positive

56%

My company manages every touch point with customers as a conversation starter

55%

My company manages expectations. We deliver slightly more than what we promise

54%

My company offers the same services both online and offline

43%

Conversations should be managed in three stages: observing, facilitating and participating.

Only 40% monitor customer conversations whereas 36% also participate in these online conversations.

Remarkably, less than 1 in 2 companies manage their conversations themselves.

Also, just 38% share the outcome of these interactions with the entire organisation.

In other words, much of the conversations potential remains unused.

40% monitor customer conversations both online and offline, 36% participate in online conversations

48% of companies manage their own conversations

34% use the real names of the people who administer the company Twitter account

Conversation Management…

To what extent do you agree with the following statements regarding conversation management?

Agree

My company always answers when a customer asks a question online and/or offline

69%

My company admits its mistakes and apologises to the customer

69%

Employees participate in conversations with customers and clients

57%

My company offers objective added value when dealing with commercial questions from customers

56%

My company manages its conversations itself

48%

My company monitors customer conversations both online and offline

40%

The conclusions of these observations are shared with all employees

38%

My company sometimes posts questions on public forums to gain input and feedback from customers

37%

My company participates in online conversations

36%

My company uses the real names of the people who administer the company Twitter account

34%

Content management is becoming increasingly important. More companies acknowledge the need to change their commercial model due to the rise of social media.

However, only 39% currently have a content plan.

Less than 1 in 2 believe their company is fully aware of the opportunities each channel has to offer in terms of spreading content.

A 6-Step Approach in Content Marketing…

50%

43%

39%

45%

40%

Topic Selection

Content Conversion Strategy

Editorial Content Planning

Create Shareable Content

Manage Content Conversation

Define what you want to be famous for.

Select your content domains wisely and be consistent in your choice.

Content marketing should result in increased revenue.

Think beforehand about where you want a conversation to take place. Define a top conversion point and lead people to this point through your content

Set up a roadmap so you know when and where content will be shared. Streamline the content calendar with all other marketing actions in order to increase impact.

The content must be easy to share and worth sharing.

People tend to spread positive, relevant and appealing content that offers a benefit.

Once the content is launched, people will react to it. Be open to this engagement from your audience and be prepared to answer questions or to give feedback.

Measure Success

The moment the content strategy is up and running, you can measure its impact through a set of relevant KPIs. These KPIs should be a combination of business generation measures and conversational measures.

39% have a content plan 48% use the right online channels to spread content efficiently 44% has well aware of the opportunities each channel has to offer in terms of spreading content

56% have employees who are responsible for creating content.

36% have bloggers amongst their employees

44% have an editor of sorts who plans and organizes the content

Content Management…

To what extent do you agree with the following statements regarding content management?

Agree

My company has employees who are responsible for creating content

56%

My company knows on which content areas it wants to focus

50%

My company uses the right online channels to spread content effectively

48%

My company is well aware of the opportunities each channel has to offer in terms of spreading content

47%

My company has software to process content efficiently

45%

My company facilitates the sharing of content

45%

My company has an editor of sorts who can plan and organize the content

44%

My company has a plan to convert content into leads

43%

My company has a content plan

39%

My company has bloggers amongst its employees

36%

Customer collaboration has the highest impact on employee satisfaction and the likelihood of someone recommending their company to others.

Employees value this new form of consumer commitment.

Still, to date, only 53% have already taken decisions in conjunction with their customers and only 1 in 2 involve their customers in the development phase.

37% actively manage their relationship with fans and ambassadors

50% involve customers in the development of new products

28% have a small closed fan community 27% have a large open fan community they consult with 43% have a staff/employee community

Collaboration Management…

To what extent do you agree with the following statements regarding collaboration management?

Agree

My company has already taken decisions in conjunction with its customers

53%

My company involves customers in the development of new service possibilities

50%

My company involves customers when launching new products

48%

My company involves customers in the development of new products

45%

My company has a staff/employee community

43%

My company takes most of its decisions in collaboration with staff and/or customers

41%

My company actively manages its relationships with fans and ambassadors

37%

My company involves customers when choosing new suppliers

29%

My company has a small, closed fan community it consults with

28%

My company has a large, open fan community it consults with

27%

Willingness towards Future Investment To what extent do you agree that, in the future, your company should invest in….?

47% Overall, less than 50% of companies are willing to invest in these 4 pillars

45% 40% 44%

It’s time to act! Disbelievers will lag behind….

Companies with a high score on the 4C pillars display a significantly higher intention to keep investing in these 4 pillars, which will result in a continued growth in business performance.

Low

62%

11%

High

Low

Intention to invest in 4C

18%

High

This will create a gap between the unwilling majority and the investing few.

10%

Currently investing in 4Cs

Combining these two dimensions creates 4 relevant quadrants. Each quadrant requires a different approach.

Low

Low

Today, companies have the opportunity to build structural relationships with their customers.

Apart from these structural contacts, companies can also benefit from open relationships with customers.

Structural Collaboration

High

Placing the 4Cs in a broader perspective….

Reach

Social media can help you generate content efficiently either on a large scale or on a one-to-one basis.

Consumer consulting board Low

15%* Broad open collaboration

Conversations

Customer experience

14%*

High

Content

Low

Structural Collaboration

20%*

High

Placing the 4Cs in a broader perspective….

Reach

* % of companies who adopt the C pillar today and have the willingness for further investment

16%*

4C IMPACT MODEL

Identification with company culture

Satisfaction & recommendation

Social Media Adoption

A close fit in values and social media adoption have an impact on 4C integration, which in their turn have an impact on satisfaction and recommendation

Companies scoring high on the 4C pillars boast an average satisfaction score 23% and recommendation score 27% higher than companies

* High is defined as an average score of minimum 4 on 5 on the 4 pillars.

Thank you!

Let‟s connect on linkedin.com/in/stevenvanbelleghem @steven_insites Steven@insites.eu

The research partners

Fieldwork

The field work for this study was conducted by SSI: • SSI helps companies make decisions • By offering access to consumers and business professionals • In more than 75 countries • Through online and telephone methodologies • For over 2,000 clients across the globe www.surveysampling.com

* High is defined as an average score of minimum 4 on 5 on the 4 pillars.

Our translate agency parnter

Your foreign-language communication partner • • • • •

Translations Copywriting User-generated content summaries Coding of open-ended questions Language consultancy

www.no-problem.be

InSites Consulting

InSites Consulting was established in 1997, and although a marketing research company, the founders never really wanted to be market researchers. InSites Consulting really is a crazy blend of academic visionaries, passionate marketers and research innovators that are determined to challenge the status quo of marketing research. Over the last 10 years the company has grown at an amazing 35% per year.

Today, there‟s more than 130 employees working in five offices (BE, NL, UK, RO, US) getting their energy from helping world leading brands to improve their marketing efforts and to develop deeper connections with consumers on a global scale via Research Communities. InSites Consulting is rewarded with no less than 15 international awards The recipe for success: a never-ceasing enthusiasm, a lot of hard work, a culture of sharing, and permanent innovation in research methods and marketing thought leadership. And last but not least: positively surprising clients every day. www.insites-consulting.com