Do we need a bit of a reality check?

I was in a client meeting a few days ago where we collaborating on their 2010 social strategy. The social strategy ultimately is tied to the overall marketing strategy and thus the well defined business objectives. As we were plotting out a fairly robust and comprehensive plan, our client paused and asked a great question, “We don’t know if what we have behind the door is a drip or a flood; how will we scale to meet their real time expectations?”

Think about that question. It’s profound really. When we mailed in comments to companies we might have accepted a 30 day turn around for feedback. When we email customer support, it’s reasonable to expect anywhere from 24 to 48 hours for a response. When we call the 1-800 number, we’ll tolerate 15 minutes to hours (depending on call volume and your need) to connect with a real person.

But, in the social space (twitter, Facebook, etc.) we demand, not expect, INSTANT feedback. So, again, I ask, do we need a bit of a reality check? I even find myself expecting immediate feedback when I tweet a company, comment on a post, or make a request via a forum/message board. Is that right?

Let’s consider a few things:

1. Customer service is important and consumers expect great customer service
2. Providing great customer service is expensive – technology while an enabler, still requires REAL humans to deliver on that great customer service experience
3. Customers want value…and by value I mean they don’t want to spend a lot
4. Quality customer service is derived from both what is said/done and how quickly service is provided

There seems to be a gap here, no? Let’s assume you’re a company that offers a service. If you have 10 customers and 1 customer service person, you’re probably ok. But, if you have 1,000 customers and still that 1 customer service person, you’re going to be stretched. Ok, so what happens if you have 1,000,000 customers and still only 1 customer service person? Well, you aren’t going to be able to provide great customer service. Hmmm…ok, so we’ll just hire 99,999 more customer service people to bring us back to our ratio of 1 customer service person per 10 customers. Cool, but we’ve got to pay these people. For the purposes of round numbers let’s assume each person costs the company $100,000 in salary, benefits, and operations. Well we just went from $100,000 of customer service overhead costs to $9,999,900,000. That’s a big jump, no?

Is the company going to eat those costs? Of course not. They’re going to pass those costs on to you. If amortized equally, each customer will now be paying at a minimum $9,999.90 more. Guess what’s going to happen? Yeap, we’re going to have some pretty ticked off customers.

Look, that’s an extreme situation, but the round numbers show us that customers like you and me need to be willing to do 1 of 2 things:

1. Pay more for better service
2. Have more realistic and lower expectations

Surely, there’s a middle ground. Companies like Zappos, Comcast, Southwest and others are showing us the way. But, you can’t simply copy someone else’s model. If you’re a company you need to find your own model; one that works for your culture and customers. And as companies are developing these models what are we to do as customers? Should we change our expectations? I think we should. If we don’t, companies will be reluctant to enter the social space. After all it’s easier to keep us using older and more familiar tools for customer service, like email, letters and the phone.

There’s a reason Apple isn’t in the social space. Part of it is arrogance. But, the other part is they don’t have a model for how to make it work. Think I’m wrong? Consider the Genius Bar. Have you ever tried to walk up and get help at a Genius Bar? If you’re like the majority of Apple customers, it’s a rare occasion when they’ll simply help you on the spot. A more likely situation is the Apple employee will ask you to schedule an appointment at the Genius Bar. Granted, that appointment could be for a time 15 minutes in the future. The point is, they schedule, slot and meter your ability to get customer service. And, while they’re doing that, they’re also getting major kudos for offering amazing customer service. Not too shabby, huh? Imagine if Apple was on twitter and using the platform for customer service…an extension of the Genius Bar, if you will. Do you really think customers would accept an exchange like this:

Customer: “Hey, having a problem with 15″ MacBook Pro. The screen keeps shutting off randomly. Any thoughts? Thanks.”

Apple: “Thanks for your tweet, unfortunately all of today’s, tomorrow’s, and the rest of the week’s slots are filled up. I can tweet you back in about next Thursday. Thanks.”

No customer would dare accept that. After all, if you have time to tweet me that, you should have time help me out. If Apple, instead ignored the customer’s tweet until next Thursday, the customer would still be irritated because of the time lag in getting a response. See, it’s the expectations of the medium. Almost feels like a no win situation.

So, what do we do?

A few months ago I wrote a post outlining 5 brands succeeding despite not being actively involved (whatever that means) in social media.  One of the brands I listed was Apple.  They’ve completely shunned social media.  No twitter, no Facebook, no special Apple Mobile Me only social network.  Nope, none of it.  And you know where it’s gotten them?  An amazingly stable stock price, 26 billion in cash from consumers, and a market cap of 151 billion.

Microsoft (who I love) would kill for this type of performance.  With all that in mind, I had to laugh when I read this article by Tom Foremski at ZDNET.  In the article Tom, bemoans the lack of participation by Apple in the social space and makes the assumption that their lack of participation must be a Steve Jobs directive.  Of course he covers the whole Apple needs to be listening and showing people care by “engaging” and “participating.”  My favorite quote is:

The other thing people will remember is when you show you aren’t listening, you aren’t interested, you come across as arrogant. You have $26 billion in cash earned from your customers and you don’t care about your customers, what they are saying about you, what problems they are having. That’s memorable.

Is that what you want? Is that the message you are striving to communicate? If that’s the case you are succeeding incredibly well.

As usual, social media evangelists and fans are missing the point.  It’s not about relationships, conversations, or engagement – no, it’s about money.  Ironically, Tom, quotes the most important metric, but completely misses the impact.  $26 billion.  That’s right $26 billion.  When you’re results are $26 billion and increased share across phones, mp3 players, and computers that’s a good thing.  It’s not a bad thing by any means.

Clearly, what Apple is doing is working from financial, marketing, and business stand points.  Apple, as much as I loathe them (and I’m typing on a 15″ MacBook Pro while looking at my iPhone) has been very successful without social media.  To that I say bravo.  Perhaps other companies will look at Apple and realize you don’t need social media to succeed…well not everyone does…most don’t.  You get my point.

Here’s a simple question. Do you believe that consumer loyalty should be rewarded? Let me rephrase. Isn’t it better to reward your customers for being loyal than to pay them to be loyal through so-called “loyalty programs?”

If you’ve answered YES to those questions, good for you, you understand customer relationship marketing.

If you haven’t been following all the conversations about the pricing structure for the new iPhone 3Gs, let me know bring you up to speed:

1. Apple announced the third generation iPhone – it’s called the 3Gs. the “s” stands for speed.
2. If you aren’t currently an AT&T customer, you can purchase the iPhone 3Gs for $199 (16gb version) or $299 (32gb version).
3. If you are a current AT&T customer, that does NOT own an iPhone, you also qualify for the $199/$299 pricing.
4. If you are an existing AT&T customer and a current iPhone owner, you get to pay $399 (16gb version) or $499 (32gb version).

So basically, AT&T is opting to reward:

1. Non-AT&T customers
2. Non-iPhone AT&T customers – you know, the ones not paying over $100 a month for the iPhone monthly service plan

If you’re an existing AT&T iPhone customer you are out of luck. Huh? The rationale being pedaled by places like Gizmodo, is that AT&T is subsidizing the cost of the iPhone for customers. And, given that existing iPhone users were subsidized once (when they originally purchased their iPhone) they shouldn’t be fully subsidized again. To give you an idea of how much they are subsidizing, a brand new iPhone, with no contract would cost $770/$870. Thus, everyone is receiving some type of “benefit” from AT&T in the form of a subsidization.

You know what? In theory, I don’t disagree with this at all. HOWEVER, and this is the key, if that’s the approach you want to take, then I should be able to buy an iPhone 3Gs directly from Apple and then use that phone with any cell phone service provider. I should be able to use the phone with Verizon, Sprint, T-Mobile, or any other provider.

That seems fair, no? If I don’t want to pay for the subsidization I should be FREE to use any carrier, because AT&T wouldn’t be providing me any benefit. Shouldn’t that be an option?

So, that’s my beef.