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The Amazing Reach of Apple iTunes

I have to admit that I had no idea Apple iTunes was so big internationally.  In the comScore Consumer World Metrix Report, I learned that nearly 25% of Japanese Internet users accessed Apple iTunes during the month of August 2008.  That’s one out of every 4 people who use the Internet in Japan or 13.5 million Apple iTunes users.  Now, that’s a significant statistic.

Globally, the reach of Apple iTunes is at 11.2%, so clearly, there is something to be said for how Apple markets its products internationally.  Other countries reported similar Apple iTunes reach statistics. 

Check out the Apple iTunes stats from comScore below: [Read more…] about The Amazing Reach of Apple iTunes

The Secret to Success for Social Media Sites

What is it that can make a social site like FaceBook or MySpace unquenchable to other heavy Internet competitors? What keeps these sites from going under when a new, more fun and exciting site is launched and (seemingly) everyone goes over to the new kid’s playground to play? How can social media sites make themselves unstoppable? What is the key?

Digg, Stumble and Twitter, Oh My!
There are only a handful of social media sites that are so common, you don’t even have to offer an explanation of who or what they are when used in a sentence. Sites like Digg, StumbleUpon and Twitter have become so entrenched in the mental landscape of Internet users, that to even think of using a different site can be almost offensive to people. Users find what works best for them, use it to its maximum and passes the word along to others. There are very, very few sites that can tout this user-loyalty, and, never will they say that it was an easy task to win the hearts and admiration of their readers.

The one notable factor that these social media sites can say resonates, among other factors, is their dedication to consistency. Users can be very serious, and rightly so, about their technology and their expectations of it. In other words, they want it to work when they need it and want it to work. Outages are understandable, periods of down time are also understandable, but users can be unforgiving when a site promises one thing and fails to deliver. Or worse, they deliver something altogether different.

Gauging Consistency

The secret to success for social media sites is not a mystery. Consistency is key and the ability to fully deliver the product is desirable and demanded. Sites like Twitter have enjoyed immeasureable success because they have harnessed the ability to remain consistent yet flexible in a fast changing social media world. How can that be? Twitter boasts the 140-character micro-blogging interface where users can make snappy, quick posts multiple times in a day or at one sitting. They have never veered from that platform. They have not implemented any other tool that would take them from the premise that they are “quick and easy.” They have not included the ability to upload videos, display photos or images or even the option to upload a podcast. They have not tried to market themselves as a full-service blog, and therein lies the beauty of their micro-blogging platform. They keep it simple. Of course, if users desire more, they are welcome to find other programs and platforms that fit their needs. However, part of the success that I’m speaking of is utilizing a particular platform for what it is specifically intended for to its maximum use.

How can your social media presence be successful? Deliver your goods promptly and as accurately as possible without veering away from your purpose. Simple as that. Users want what they want and expect you to deliver just what you say you will. Give them anything different, and they will seek consistency in other areas.

What Good Are Those IR Awards?

If you’ve ever found yourself off the IR awards list (or the short list, for that matter) your reaction was probably something along the lines of, “Well, they’re just beauty contests anyway and they really don’t signify much”.  I know, I felt pretty much that way when I practiced investor relations on the corporate side.  It seems there just were not enough trophies to hand out to all of the campers.  

Unfortunately, I’m here to tell you that there is actually academic research that shows that being nominated for investor relations awards can help your stock price.

In a March, 2008 working paper, Professor Richard J. Taffler of The Management School, University of Edinburgh, together with Vineet Agerwal, Angel Liao and Elly A. Nash authored a study entitled “The Impact of Effective Investor Relations on Market Value”. In their study they use nomination for IR Magazine’s “Best Overall Investor Relations” awards over a three-year period as an indicator of quality investor relations. Their study shows that firms that are seen as having effective investor relations, as indicated by being nominated for the awards, earn superior abnormal market returns both in the year of nomination and the year following the awards.

The part of the study that is of the most interest to me is the quantification the authors put on the abnormal risk adjusted stock returns earned by firms in the year following their nomination for an award. The results show that all nominated companies earned 80 basis points per month superior market returns. When you compound 80 basis points per month over a full year, the result is an excess return of 10%.

So while the awards may be a beauty contest, they appear to be one where there is genuine prize money at the end.

Getting Satisfaction from Customer Complaints

How easy is it for customers to contact you if they have a problem with your product or service?

There are usually several routes available for a customer to make a complaint:

  • In person. This only works if you have a physical location that customers can visit – you’re probably a retailer. Some companies have built a solid reputation on their customer service (such as John Lewis) and this works well for them and is intrinsic to their brand. I imagine that their staff receive comprehensive training in how to handle difficult customers and defuse tricky situations. But it can be inconvenient for the customers, as they have to make a special trip.
  • By phone: but we’ve all had bad experiences at the hands of a call centre. So much so that it is a surprise to find one that works, with pleasant, helpful staff who pick up the phone quickly, and are empowered to solve problems. If your call centre works like this, congratulations! Please keep it up – and reward your staff, too, because they’re doing a great job at maintaining your brand. Famously good at this are Lakeland, who have built a special relationship with their customers. So much so, that when their customer service director died a few years ago, this was met with an astonishing outpouring of sympathy and distress from their customer base.
  • By email. This tends to be slow, despite the instant-response ‘We’ve received your email; our staff will be dealing with it as soon as possible’. (Does this remind you of ‘your call is important to us, please continue to hold’?). Again, some companies monitor emails in real time, and respond quickly with a resolution: this tends to be a surprise, and therefore, to use an old phrase, truly does delight the customer. You will all have your own favourites here: I’m going to nominate Grand Illusions (who responded to a complaint last week with speed and humour) and Nativespace (whose technical support is always timely). Both smaller companies – I wonder if this kind of response works better with the smaller companies, or those problems which need investigation before a response can be made?
  • By post. This is probably the slowest means of communication, but for companies that require documentary evidence of a problem, such as financial institutions, this may be a necessary route to go, possibly in conjunction with a preliminary phone contact system.

  • Twitter. For the vocal customer, particularly those with online influence and a large audience, this can be a very effective means of alerting companies to issues, and has had some successes, notably for Comcast. The companies concerned need to have someone monitoring what is said about them on Twitter – which can be time-consuming – and that person needs to be able to resolve the issues – which may mean giving them power across corporate boundaries. This can be a problem for some companies. However, not having someone monitoring the Twitter stream can be dangerous, as it is a very public means of making a complaint, and bad news can spread virally. On the other hand, a public resolution of the issues can impress others and leave a positive impression of the brand.

  • Get Satisfaction. This is a tool that has been around for a while now, and I’ve been impressed by the concept every time I’ve come across it. They say:

    Get Satisfaction is a direct connection between people and companies that fosters problem-solving, promotes sharing, and builds up relationships. Thousands of companies use this neutral space to support customers, exchange ideas, and get feedback about their products and services. Get Satisfaction is open, transparent, and free. You’re free to ask, free to answer, and free to start a new conversation. Everyone is invited and encouraged to participate: companies, employees, customers — anyone with an opinion, an answer, or something to say.

    It is essentially a forum in which customers can raise issues which they are experiencing with a product or service. Other customers using the forum can add their voices to that issue, and staff from the company can interact with them to keep them updated on the resolution to the issues. Old issues remain on the system, so that if a customer has an issue that has arisen before, they can find the resolution. This is a great way of bringing together customers and companies to find a solution, and is used by such companies as Adobe, Dell and the BBC. Again, it does require staff from the company to use the forum regularly to deal with problems and keep customers updated.

So: which of these would work best for your company?

Each has its advantages and disadvantages, and it will depend on your customer base, but somewhere in there is the perfect combination of contact methods for you. Like John Lewis and Lakeland, though, you will need to have dedicated staff who can both solve problems and deal with customer relations whichever you choose. And that is the difficult part …

Investor Relations and Corporate Governance

When it comes to investing, knowing about what a company does, who its competitors are, and how its financials look are all critical factors.  But, there is another critical factor that any savvy investor will list right at the top, and that is the quality of management.

Judging managers on an individual basis is a process which must be handled by each individual investor.  There is no way to quantify the quality of a manager or executive in such a way that can be usefully published by the IR department.  However, there is something that Investor Relations can do to help investors determine how those managers can and should behave.

Corporate governance became a hot topic in the stock market meltdown following the bursting of the Internet bubble.  It is once again on the lips of many investors as revelations come to light about how many companies behaved during the recent sub-prime mortgage build up and how they reacted once it began to become clearer that there might be a problem.  Investors want to know: who is it that is running the company, how are they held responsible, and what rules guide their behavior.

The Qualcomm Investor Relations page contains the kind of information that investors are looking for these days.  Under the Corporate Governance section of the IR pages, there are several documents available for download and review by investors.  These documents include the Governance Principles and Practices of the company as well as the oft requested “Code of Ethics.”  Additionally, the same page also lists the membership, structure, and charter of important management committees.

Under the Audit Committee section, for example, an investor can learn exactly which board members are on the audit committee.  The investor can also read the mission of the audit committee (here as “Purpose”).  Even more detail is available such as the fact that the audit committee should meet at least four times per year.  If an investor feels this is too little, they can look elsewhere for their investment opportunities, but regardless of whether they choose to do so, no one will be able to later complain that they were unaware of just how often the audit committee was required to meet.

Then, the authority AND the responsibilities of the committee are laid out in full detail for the investor’s inspection.  Most companies have similar documents, but not all of them make them so easy for the prospective investor to find and view.  Such easy access to valuable information like this is a key goal for investor relations departments and websites.

It’s not just the Audit Committee.  The same information is also available for the Compensation Committee, the Finance Committee, the Governance Committee, and the Strategic Committee.  What is even better is that all of these documents are available in the investor’s choice of format.  Regular webpage (HTML) files are available as well as a PDF file download.

It is no wonder then that Qualcomm is able to boast of many awards related to its company and the Investor Relations department’s efforts to communicate openly and easily with its investors. 

Best Practices for Investor Relations

Look into getting similar information on your company website.  After all, most of the “mission” documents of these committees are already public information in some format in other locations. Putting them on your IR site shows your investors that you are serious about your communications with them and keeps them from having to dig all over the place to find these important documents.

comScore Measures View-Thru Value of Online Advertising

Online advertising is where it’s at for many brands and companies, but click-thru rates are typically less than 0.1%.  Knowing there was more value to online advertising than click-thru rates, comScore developed its Brand Metrix norms database, which is used to measure the “view-thru” rates of online advertising. 

In short, just because a person doesn’t click on an online ad when they see it, doesn’t mean it hasn’t had some kind of effect on that person’s future behavior.  The comScore Brand Metrix was created to measure that added value to online advertising, and it shows that online ad exposure is undervalued by 20% or more when only click-thru rate is used to determine the impact of an online ad.  [Read more…] about comScore Measures View-Thru Value of Online Advertising