Traditionally, companies have focused on these key areas: sales, finance and operations. This is natural because they provide real, solid, measurable numbers: you can quantify cost savings from operations and you can measure sales in very specific ways (by region, by product, by sales rep). These are the metrics that count, right?

Sales and operations are not the only important measurables. They’re like the engine room of a ship. It’s important to make sure the engine runs smoothly, but how important is this if you are headed in the wrong direction, or toward an iceberg?

Recognize Dan Hesse from the commercials?

Marketing can be the internal champion for a new customer-centric focus. Dan Hesse, CEO of Sprint, took the stage at the Forrester Customer Experience Forum in New York this week to talk about Sprint’s customer-centric approach. Imagine his outlook and options on his first day as CEO: In 2007 the company lost almost $30 billion dollars. In Q1 2008 alone the company lost over a million customers.

If Hesse was like most CEOs, he would have spent all his time in the engine room, believing this was the heart of the problem—the heart of any possible positive change. He would have been under enormous pressure to engage in broad cost-cutting and to focus almost exclusively on improving internal efficiencies and operations. And he probably did a fair amount of this type of work. But Dan’s number 1 priority was improving customer experience. He knew that making customers happy is a good strategy for long-term success. He refocused the entire company around three key initiatives:

1. Customer Experience
2. Build the Brand
3. Conserve Cash

Every single Sprint resource was realigned around these three objectives.

During his talk, Hesse outlined his “magnificent seven” change-drivers:

1. Align compensation and rewards
2. Knowing the agenda and knowing what the boss checks on
3. Root-cause analysis/data
4. Accountability
5. Project leadership
6. Simplify
7. Living the brand

Instead of going on a cost-cutting spree and inflating prices, Dan chose to simplify Sprint’s product offerings, making them easier to understand, less expensive to customers, and ensuring a better overall customer experience.

“Our core problem is cost cutting that led to customer satisfaction problems”

The result? $2 billion in savings just from customer service operations. Simplicity and better customer experiences result in fewer, shorter calls to customer service. Sprint was recognized by Forrester by having the highest improvement in customer experience across all industries by earning a 15-point jump. They were recognized as #1 in customer satisfaction for mobile, and J.D. Power recognized Sprint with a 17-point improvement.

The effect on earnings? In Q1 2010 the company reported their first profit (EBITDA) in a long time, the best improvement in net post-paid customers in five years and the first sequential increase in net revenues in three years. Sprint is not at the finish line, but is clearly getting there.

Hesse understands the value of satisfied customers and the power of word of mouth:

“In terms of how much will it influence customer purchase behavior, a TV ad would probably be a 1. A really good TV ad is probably a 2. Someone you know telling you about a product they like is a 9 or 10.”

Here's Dan Hesse announcing Sprint's "wireless revolution", back in early 2008:

One of our Community Managers, Lisa Tu, used Wordle’s “word cloud” generator to create a graphic word collage of Free People’s Ratings & Reviews. The more a word was used, the bigger it appears in the collage, creating a fun visual of what Free People’s customers have to say about the brand.

Words like “love,” “cute,” “great,” and “dress” showed up most frequently in Free People’s reviews. The collage shows how Free People’s customers are able to reflect brand associations back to the company through user-generated content.

We decided to create our own Wordle collage for Bazaarblog. Not surprisingly, our biggest keywords included “community,” “recommendations,” “brand,” and “word-of-mouth.” But the most prominent word in our collage by far was “customers.” We’ve said it before, and we’ll say it again – Bazaarvoice solutions put the voice of your customers to work for your brand. Customer centricity is core to everything we do; it’s no wonder discussion around “customers” dominates our blog.

Check out our Bazaarblog Wordle, below. You can create your own using the online generator.

Improving your offering

The most obvious positive potential in negative reviews is the opportunity for your company to improve its products and services. Customer feedback helps companies discover weaknesses in their offering, and act on them to deliver a better customer experience.

Oriental Trading Company uses information gathered in negative reviews to work with manufacturers to improve hundreds of their toys and party supplies. This proactive quality management allows the company to discover and fix quality issues much earlier in the production process, saving the company the expense of excess inventory of faulty products after an item is introduced.

QVC uses negative reviews to take action on products and customer service and delivery issues, often by reaching out to directly customers. For example, when they recently discovered that a product had issues with quality and delivery, they contacted 900 customers with an offer to replace the product. They worked with the vendor to return the remaining product inventory and improve it. Internally, QVC executives hold monthly meetings to discuss all aspects of customer feedback to determine areas the company should emphasize and improve.

Building trust in your brand

The mere presence of negative feedback on your site builds transparency in your brand. Customers see that your online community hasn’t been white-washed with rose-tinted marketing speak. And taking this feedback a step further – listening to and acting on the opinions of dissatisfied customers – can build invaluable customer trust in your brand.

QVC took this step further to let customers know exactly what they do about poorly-reviewed products. In an online blog post by their Senior Vice President of Customer Service, Dan McDermott, the retailer detailed their process of low-rated product examination, improvement, and in some cases, elimination. Negative reviews are “how we learn and bring you products you want,” the email said.

Acting on negative feedback proves to your customers that you are listening – which is often all they really want. Ignoring your dissatisfied customers can be disastrous for your brand, especially with the presence of so many outlets for customers to voice their dissatisfaction. See the #amazonFAIL Twitter-storm fiasco as an extreme illustration of what can happen when your customers feel your brand isn’t listening.

If your customers have negative feedback, they will find a way to share it – whether you allow them to do so on your site or not. Plugging your ears and pretending you can’t hear it won’t make your customers’ dissatisfaction go away. Embrace negative feedback as an opportunity to improve your offering and build trust in your company, and you’ll find that “bad” reviews can be great for your brand.

Sam Decker, Chief Marketing Officer at Bazaarvoice, Seth Greenberg, Director of Online Advertising and Internet Media at Intuit and Matt Corey, VP of Marketing at Golfsmith joined forces to present Real-World Tips to Evolve into a Customer-Centric Culture.

One resounding concern from senior marketing executives is how to champion change in a large organization – how to create a sustained culture shift that improves a company from the top-down.

Both Matt Corey and Seth Greenberg drove change throughout their organizations by using customer reviews as a “Trojan horse” for positive, customer-embracing culture.

According to Matt Corey, getting senior management on-board with a customer-centered strategy requires both financial and philosophical proof.  First, show your senior managers the ROI of your proposals.  Remember, it all begins with the P&L, and money is the language of business.  Leverage case studies, and be sure to define the measures of your success.

To appeal to the philosophical side of the business, see online examples of other best-in-breed brands.  What are they doing differently?  How are they engaging their customers?  Use those discoveries to fuel a unique vision for your brand. Also find relevant articles to support your point, and circulate them where necessary.  Matt recommends reading Roger Fisher's Getting to Yes.

Seth Greenberg made similar inroads at Intuit, where even their new logo has come to directly reflect their commitment to customer-centricity.  Seth embarked on a campaign he calls “Socializing Social,” which he describes as having the courage to open up his brand.

Seth was a pioneer of user-generated advertising, launching the largest online campaign to promote customer reviews (see "Intuit Launched the Largest Online Promotion of Customer Reviews in History"). But he took customer engagement to the next level with a Vanilla Ice endorsement and a video contest called The Tax Rap. Seth’s philosophy: “We need to make fun of ourselves before they make fun of us.”  Today, TurboTax and Intuit have made tremendous progress online by embracing the power of customer-created content.

From reviews to video and beyond, Seth and Matt both helped drive “customer oxygen” throughout their organizations.

I was happy to see Andy leverage the valuable community we assembled at our first-ever and sold-out Summit in May by recording five video interviews. It was truly an amazing group of individuals, charged with word of mouth marketing at many of the largest companies in the world, from Bank of America to Wal-Mart. It was humbling to be in the presence of so many smart industry leaders, sharing best practices with each other in our rapidly emerging field. Because of them (as well as the hard work by our team), we have set a very high bar for our Summit next year.

Andy recently published his interview of me. We discussed how user-generated content is changing the merchandising culture at companies, helping them become more customer-centric and successful as a result.

Click here to view the embedded video.

Read on to see more interviews by Andy.

Andy previously published an interview of Ze Frank, another one of our keynotes and one of the funniest but smartest online personalities you will ever meet. Ze's interview at our Summit by Kelly Mooney (a Summit keynote speaker, author of The Open Brand, and President of Resource Interactive) was a personal mental highlight for me, probing into some very deep issues. Andy covers topics like viral marketing with Ze. By the way, that gong behind Ze in the interview is a very important part of Bazaarvoice's culture, and has been since the beginning. You can thank my co-founder, Brant Barton, for that, and you can find multiple gongs in our Austin office and one in our London office (so far).

Click here to view the embedded video.

Andy also previously published an interview of Steve Leveen, the founder and CEO of Levenger. Steve is a very smart leader, and brought his son to our event. Steve gave me some great tips on raising our daughter, Rachel, and is a very kind person (as is his son, by the way).  In Andy's interview of Steve, they talk about the use of video reviews and Flickr as a natural medium for Levenger's sophisticated customers.

Click here to view the embedded video.

If you have not subscribed to Andy's blog yet, do it today. Incredibly useful tips are published on an almost daily basis. I found myself recently evangelizing on why to follow it to the founder of Hey Cupcake, a local joint in Austin. I connected with the founder, Wes Hurt, recently after reading about him in Tribeza because we may be related (it is a long story). You must try these cupcakes the next time you are in Austin – they are unreal. But I'm off topic – I was telling Wes to read Andy's book and subscribe to his blog because he will quickly learn how to build his business as a result. I also found myself telling Wes the story of how Krispy Kreme lost its "specialness", parroting Andy telling me the same story.

On Andy's blog, he will soon be publishing the remaining two interviews he did at our Summit: Bryan Eisenberg (highly respected industry consultant, co-founder of the Web Analytics Association, keynote speaker at our Summit and several other conferences, prominent author [ClickZ, Call To Action, and Waiting for Your Cat to Bark?], and Bazaarvoice Advisory Board member) and Seth Greenberg (former CEO of eHobbies.com – one of the online pioneers, former Shop.org Board peer, and leader at Intuit).

* Note: we are proud members of WOMMA and our own Sam Decker serves on the Board of Directors while WOMMA's President is my fellow Board Director at Bazaarvoice, Ed Keller (keynote speaker at our Summit, author of The Influentials, former CEO of Roper, and co-founder and CEO of The Keller Fay Group).

117 days and counting to the opening night of the first annual Bazaarvoice Social Commerce Summit. Questions you have will get answered: Where is Social Commerce going. How do I maximize return. What am I missing that others have discovered? What are the pitfalls. How to I evolve my strategy? There will be la lot of learning, networking and fun (and yes, free stuff and the best BBQ in Central Texas!). We're capping attendance at a max of 200 spots, and we're already starting to fill up! Strategic sponsors are signed up, including Cheetahmail, Endeca, ATG, Omniture, Aggregate Knowledge, Coremetrics, and others.

And the agenda is now posted at www.socialcommercesummit.com. Below are some of our topics and speakers for our 2.5 day summit in Austin TX, May 28-30…

• How to Grow Your Social Commerce Strategy
• Strategies for Opening Your Brand
• Word of Mouth Marketing:  Increase Visitors and Buyers By Creating Conversations
• 10 "Must Do" User-Generated Tactics (How Do You Score?)
• Is Your Ecommerce System Anti-Social?
• Case Study: Customer-to-Customer Answers with Answer Depot
• Turning Negative and Rejected Reviews into Assets
• Research & Strategy: Unleashing the Power of Influencers
• Insights for Driving the Highest ROI from User Content
• Feeding the Voice: How to Increase Participation
• Dell UGC Case Study: Culture, Organization & Metrics
• Social Commerce Analytics: How to Measure ROI and More
• How to Scale Up Search Visits with UGC
• Turning the Social Technology Groundswell to Your Advantage
• Ze Frank Q&A: How Do We Interact?
• Bazaarvoice Product Roadmap Lightning Round
• Real-World Tips to Evolve into a Customer-Centric Culture
• 10 Ideas for Online Advertising "2.0" 
• Beyond the Web: UGC Goes Multi-Channel
• Social Networking and Web 2.0: Practical Ideas that Work for Retailers
• The "Just Ask" Session
• and more…

Speakers include:

• Andy Sernovitz, author, Word of Mouth Marketing
• Bryan Eisenberg, Co-founder, FutureNow and author, Call to Action and Waiting for Your Cat to Bark
• Ed Keller, CEO, The Keller Fay Group and author, The Influentials
• Ethan Holland, E-marketing Manager, Jewelry Television
• Jim Osborne, VP eCommerce & Online Marketing for Loblaw
• Josh Bernoff, Vice President and Principal Analyst, Forrester Research
• Kelly Mooney, President, Resource Interactive and author, The Open Brand
• Matt Corey, VP Marketing for Golfsmith
• Paul Miller, SVP Direct Commerce for Sears
• Sean McDonald, Director, Communities and Conversations, Dell Inc.
• Seth Greenberg, Director, Online Advertising and Internet Media for Intuit
• Simon Rodrigue, Sr. Manager eCommerce, The Home Depot Canada
• Stuart Wallock, Sr. Mgr, Global Consumer Online Marketing, Dell Inc.
• Ze Frank of zefrank.com (Video Blogger)
• and more…

Online registration is available now for clients and invited prospects. If you do not know your registration code, email summit@bazaarvoice.com. The cap is 200 registrants and we're getting signups every day, so register now!

Today’s consumer is presented with more retailers, products, options, advertising, promotions and ways to buy than ever before. So now, they are finding products the way a honey bee finds nectar. It’s called the Honey Bee Waggle Dance. First the ‘scout bees’ go out to find sources of nectar. Each comes back and it communicates the strength of the nectar source by the strength of its waggle dance, literally shaking its body more vigorously if it found the mother load of nectar. The strength of that waggle dance determines how many bees will follow it to the source.
Word of mouth has always been the leading form of marketing. But now, with the growth of web accessibility, web commerce, and tools to share opinions, word of mouth is critical for customers and marketers alike. If a brand surveys customers after an online purchase and asks how they found the site or why they chose a product, it’s likely the majority will reference something like ‘advice from a friend’

On the web, word of mouth takes the form of user-generated content or customer-created content (choose your term). Essentially, a small percentage of online consumers are giving waggle dances for the rest of us in the form of online product reviews. Shoppers desperate to find authentic, credible and relevant sources of product advice follow these dances to make their purchase.Analyst firm Forrester found that 77% of online shoppers in the US seek out ratings and reviews before making a purchase. 97% of consumers said they trusted recommendations from peers. In addition, a study by Edelman Public Relations (US-based) found that ‘trust in someone like me’ has tripled in three years, from 20% to 68%. Why are people turning to the advice of strangers?
Figleaves (www.figleaves.co.uk), an online retailer of lingerie, recently launched ratings and reviews on their site. Online Merchandising Director Catherine Hewison explained why: “Shoppers will be able to make the best choice about what is right for them, and we’ll be able to apply this wisdom towards our own marketing and merchandising efforts in both our US and UK markets.”

Early Learning Centre, a multi-channel store for children’s products, will soon launch ratings and reviews using the Bazaarvoice platform.

“Due to the increase in social networking and the focus on user generated content, it’s become increasingly important to effectively engage with our customers and give them a way of contributing towards the site. Adding a ratings and review function is an ideal way of enabling this,” said Matthew Legge, e-Commerce Manager at Early Learning Centre. “Peer reviews are so much more effective than the brand reviewing its own products – Mums value and trust what other Mums think.”

Connecting customers to each other to drive results is the foundation for social commerce. Bazaarvoice has worked with many brands to drive immediate results, but over time, they see a social commerce strategy leading their company towards a more customer-centric culture.

The steps to this ‘social commerce evolution’, and the resulting benefits, look something like this:

1) Get to know your influencers:  According to the book The Influentials, approximately 10 to 15 percent of a brand’s customers are ‘influencers’; meaning they have a psychographic profile to share their opinion with others. The profile of an online reviewer spans across multiple demographic segments, but in the main they are the most loyal and frequent purchasers. According to a study by management consulting firm McKinsey, users who post reviews revisit the site nine times more than users who don’t participate, and are twice as loyal. With a ratings and reviews system integrated with a site’s “My Account” login, brands can invite and identify their most valuable customers to share their voice; further cementing the relationship between brand and consumer. From there, companies can launch new relationship campaigns such as discounts or early bird notifications.

2) Accelerate customer purchase decisions:  Once authentic reviews from a brand’s most influential customers are visible online, shoppers then have the credible and relevant content they need to make a purchase. With ratings and reviews next to a product, customers get what they need to accelerate a purchase decision. Bazaarvoice clients have seen anywhere from 16% to double conversion rate on products and categories that have reviews. With ‘top rated’ product merchandising, navigation and sorting, brands can create a new purchase path delivering up to 60% higher conversion than other purchase paths.

3) Attract user-content-seeking customers:  One of the key benefits of product reviews is that they attract new customers through natural search optimisation. Search engines, and the shoppers who use them, feed on this authentic content, and an increasing percentage of shoppers are searching for phrases and keywords that match review text. Bazaarvoice has analysed web analytics for several clients and found that more detailed searches, such as “Puma shoe reviews”, are growing faster than generic searches such as “football shoes”.  Brands can also use ‘top rated products’ merchandising in emails, RSS feeds, and other online marketing to improve the impact of these vehicles. Golfsmith, a US Bazaarvoice client, saw 46% higher revenue per email featuring top rated products.

4) Market and advertise with customer voice:  Now that you have the voice of your customer as a digital marketing asset, it’s time to take it offline. Brands can also feature top rated products and quotes from customers in catalogues and advertising to boost their impact.

5) Improve products and assortment:  I once attended an online retailer industry conference where the Director of eCommerce for Gap suggested he saw their job to be a ‘trusted editor of fashion’. The best retailers are the trusted editors of products for their customers. What they choose to put in catalogues, online and in stores is a key part of their brand and shopping experience. Product ratings and reviews help retailers choose the right products to buy, promote and merchandise. Moreover, brands can help suppliers improve products they carry.

6) Power your partnerships:  Many online marketers short change the impact and opportunity for reviews, limiting their usefulness to the product page. However, they can use the rich data from product ratings to improve their site search and web site navigation (top rated products), integrate with a web analytics platform, improve personalisation and cross-sell algorithms and integrate into email for automated campaigns. One Bazaarvoice client saw a 49% higher conversion and 60% higher average order value when featuring the “Top Rated Products” navigation filter to each category, through an integration with their search partner.

7) Develop a customer-centric culture:  The final step of evolution in a user-generated marketing strategy is a change of the culture. Ultimately, brands need to integrate the voice of their customer into their day to day activities, so that employees pay closer attention to what customers are saying about products. As the results from user generated marketing become clear, they will start to look at the reports and leverage the data in many of the ways described above. Once that happens, a higher level of customer-centricity will be achieved than could ever be reached with research reports and focus groups.

Over the past few years, several factors have conspired against marketers to remove them from the driver’s seat. Customers have more control, more choices, more information and more access to opinions of others. At Bazaarvoice we have a Latin motto for the new marketing strategy of today and tomorrow: Aquiro, Sermo, Dilato. Translation: Acquire the conversation and amplify it. With the right tools and strategy, brands can enable their ‘scout bee’ customers to do their waggle dance on their web sites, for the rest of their shoppers.

Take this situation for example. Let's say you're a VP of Marketing for Multi-Channel retailer, and the GM of one of your stores asks you to email the customers in their geographic area 3 times a week. As a customer-centric VP of marketing you can try to rationally explain that you need to retain the trust of registered users, and you've set a policy of only one email a week. You can try to have the GM put himself in the shoes of a customer and ask, "You get email…would you want 3 emails a week". But, the GM try to argue his way out of that one and say he wouldn't mind because the 'emails are so valuable…" etc.

Now imagine you get these kind of suggestions and ideas all day long, from people who come up with ideas with ONLY the company's interest in mind. A simple statement and reaction such as, "There's no customer in that idea", used repeatedly, could remind everyone that they better think on behalf of the customer prior to suggestion ideas. They should consider ideas that do have the 'customer' in them…and have some basis for the idea based on customer-centric insights or data. 

Or maybe this is for you…are there customers in your ideas, suggestions and strategies? It's a simple one item checklist before you start working on any idea!