Community Service: Social Interactions and Service in the 21 Century Prof. Barak Libai 1 Arison School of Business, IDC, Israel Institute of Service Excellence (ISES) Singapore Management University July 2014

A moment of history In the 1990’s we learned about customer relationship management and customer centricity And began to manage by individual customer value, looking at retention and satisfaction, and building loyalty programs Prof. Barak Libai2

3

We increasingly understand now that we need to manage “communities” of connected customers, not only individuals Prof. Barak Libai4

Communities created by someone’s close social network Prof. Barak Libai5

Communities created by social media recommendation sites Prof. Barak Libai6

Communities that exist at large video and sharing sites Prof. Barak Libai7

Managing in a world of connected customers Hard to predict Hard to control Non-linear Prof. Barak Libai8

9

10

The “future of service” is social Prof. Barak Libai11 We must talk the “social language” !

The “black box” of customer social interactions begins to open Prof. Barak Libai12

סדנא ברשתות חברתיות13 Data

סדנא ברשתות חברתיות14 Duncan J. Watts, a Columbia University sociologist now on leave and heading a research unit at Yahoo!, marvels at the change. "When I started network research 12 years ago, we had virtually no data," he says. Now he and his team can study the network behavior of 295 million ers and legions of the 200 million Facebook users. For social scientists, Watts says, this flood of data could be as transformative as Galileo's telescope was for the physical sciences: "It gives us a new understanding of our world and ourselves." BusinessWeek May 09

סדנא ברשתות חברתיות15 Tools

Associations 16סדנא ברשתות חברתיות

Understanding community based customer relationships will be an essential part of service management in the coming years The “books” are still being written They demand understating of social interactions in general They change with technology And the advice cannot typically be unequivocal Prof. Barak Libai17

Some things that we learned in recent years on social interaction, consumers and profitability Relevant to services, hospitality, and markets in general Prof. Barak Libai18

19סדנא ברשתות חברתיות Prof. Barak Libai19 1) Social effects from others have an essential effect on everything we do

Clearly on consumers decision making Prof. Barak Libai20 Nielsen Global 2011

And stronger for services than for goods Probably related to the risk and uncertainty associated with services Prof. Barak Libai21

2) Social media increasingly becomes the place where customer service interactions happen Prof. Barak Libai22 Eileen Brown ZDNet 2014 Survey "Customer Engagement and Today’s Consumer"

Prof. Barak Libai23

3) Online review are of noticeable effect on customers Prof. Barak Libai24

Yet the answer of how they affect is still unclear, and possibly depends on the category Prof. Barak Libai25 Blal and Struman 2014 The impact of Volume and Valance of online reviews on hotel RevPar

Prof. Barak Libai26

4) Social media is the battleground of a new power struggle Prof. Barak Libai27 Customers enjoy to see the power goes back to them

סדנא ברשתות חברתיות28

In this new environment individuals realize their disproportional power Prof. Barak Libai29

July

Some individuals are more powerful than others Prof. Barak Libai32 Forrester Research, Empowered

We may need to update customer relationship management systems Prof. Barak Libai33 Customer lifetime value Customer social value

34

5) Some optimism about negativity Prof. Barak Libai35

Most of the word of mouth, offline and online, is positive, not negative. This is strongly consistent across studies, by academics and practitioners !!! Prof. Barak Libai36

Our job is to create positive word of mouth, more than to mitigate the negative ! Prof. Barak Libai37

6) The “community” of social media can complement and replace existing business functions From Groundswell 38CRM- Prof. Barak Libai How things are different with social media Now you can pursue this objective You already have this business function Ongoing monitoring of your customers’ conversations with each other, instead of occasional surveys and focus groups ListeningResearch Participating in and stimulating two-way conversations your customers have with each other, not just outbound communications to your customers TalkingMarketing Making it possible for your enthusiastic customers to help sell each other EnergizingSales Enabling your customers to support each other SupportingSupport Helping your customers work with each other to come up with ideas to improve your products and services EmbracingDevelopment

The rules of “community service” are still being written We should study them carefully ! Prof. Barak Libai39

Thank you !!! Prof. Barak Libai40