Utilizing social design principles to improve a customers shopping experience has the potential to bring tremendous benefit to a company and its customers.  However, no matter what conversations take place, there are two key components essential to the fourth principle: active listening:

• Maintain your commitment to having conversations – companies must be dedicated to maintaining their social channels to keep content fresh and new.
• Admit your mistakes, and do something about them – part of having authentic conversations is being prepared to accept negative feedback and to do something about it.

Maintain your commitment to having conversations.
Social Design is only powerful when the content is new. Customers will not participate in a conversation if there are very few others or if the thread is old.  If there is little or no activity, then people are not likely to participate.  Therefore, companies must be prepared to maintain their blogs, video and photo galleries, Twitter broadcasts, Facebook groups, and whatever myriad of social technologies they choose to pursue.
More importantly, companies  need to mean every word they say.  If a company promises to modify a product or improve a service in response to an upset customer, they must do so. Engaging customers then failing to follow through and deliver on those promises damages the company’s brand, reputation, and credibility.

Admit your mistakes and do something about them!
The reality is that when a company makes the commitment to listening to and engaging with customers, the company must be prepared for the instances when the feedback is not positive. The biggest challenge is to have a plan to respond to negative feedback and act to solve the problem so that the company is perceived as being customer-focused and dedicated to customer satisfaction.
Dell is a great case study.  In 2005, a single instance of poor customer service resulted in extensive negative publicity.  Joshua Porter writes about the blog series by Jeff Jarvis that started the avalanche of Dell discontent (called “Dell Hell”) in Designing for the Social Web:

“Pretty soon others had picked up on his plight and joined him in a chorus of hatred for Dell. Hundreds and hundreds of people left comments on his blog.”

Eventually, Dell listened.  They apologized, and they acted to reverse the damage by starting a number of customer service initiatives.  One in particular is a great example of active listening: Ideastorm.com.

IdeaStorm engages Dell’s customers by asking for ideas to help improve everything from customer service policies to product features. This dedication to social engagement shows that Dell has become serious about customer satisfaction.  By listening actively, admitting when they were wrong, and actively addressing the problems, Dell successfully pulled out of the “Dell Hell” episode and improved customer satifaction.

Another good example of active listening is the social networking giant Facebook.

They recently announced a change in their Terms of Use, and the new agreement contained vague and ambiguous language about Facebook’s ownership of user contributed information.  This update was very poorly received by the Facebook community, and they immediately questioned the changes and expressed their dissatisfaction and uncertainty. The response was so great that Facebook restored the previous Terms of Use and engaged their users to get feedback in rewriting the new Terms of Use in a manner people could understand and accept.  Mark Zuckerberg, the CEO of Facebook, wrote in his blog about this community backlash:

“Our next version will be a substantial revision from where we are now. It will reflect the principles I described yesterday around how people share and control their information, and it will be written clearly in language everyone can understand. Since this will be the governing document that we’ll all live by, Facebook users will have a lot of input in crafting these terms…”

Dell and Facebook have shown that opening and maintaining channels of communication, admitting mistakes, taking responsibility, and correcting those mistakes are the essential ingredients in active listening. Opening an authentic conversation with your customers can help keep customers happy, strengthen brand loyalty, improve your reputation for customer service, and ensure continued support of your brand and products by your customer community.

Social Design can recommend products in a smarter, more relevant way that appeals to your customers’ unique individuality.  It is more powerful to present a customized list of items “We think YOU will like…” rather than simply presenting “Related Items.”

Previously we discussed the value of customer reviews as a source of unbiased product information, but in some cases they may be puzzling or less useful to customers. Reviews may have less value when shopping for certain types of products. Books, movies, clothes, and shoes are often reviewed based solely on personal preference. While one person may love a movie, another may hate it.  With this in mind, how do customers find or know what is relevant to them?  Making better connections between customers and products requires a better recommendation system to identify items that will appeal to the unique individual:

1. Personalize the Recommendation– Present recommendations in a context relevant to the individual, and they will be more likely to engage with your products.
2. Build Customer Reputation – Encourage participation by allowing customers to earn a reputation for themselves in the context of the rest of the community.
3. Give users a “Me” page –Give customers a unique space dedicated to content meaningful to their shopping habits. This can be a valuable tool and help inform purchasing decisions.

Personalize the Recommendation

Movie reviews are often based on personal preferences and may not always be meaningful to a customer. Just because customer A likes or dislikes a movie does not mean that customer B will feel the same way.  Netflix.com addresses this relevancy problem using a “Percent Like You” feature and their “Movies You’ll Love” tab.

The “Movies You’ll Love” tab provides movie recommendations based on star ratings a customer has given to movies they have seen previously. While on the site, the system regularly reminds customers to rate more movies if they want better, more accurate recommendations.  The design effectively engages customer interest, because it reinforces the value customers get in return for rating movies.

Encourage Reputation

Amazon.com utilizes their customer reviews to integrate a reputation system where the community can appraise and monitor itself.  Customers rate individual reviews as “helpful” or “not helpful”, and the site then presents the most helpful reviews first. Top quality reviews are further sorted according to the number of reviews an individual has contributed. This system encourages passionate customers to contribute many high quality reviews.

Yelp.com takes Amazon’s reputation system to the next level by encouraging reputation building. Instead of “useful” or “not useful”, Yelp’s rating criteria are ‘useful,’ ‘funny,’ and ‘cool.’  People visiting the site can even add a reviewer to their favorites list, befriend them, become a fan, or compliment them.  Building relationships through reputation systems encourages unique identity, high quality, repeat visits, and increased participation.

Give users a “Me” page

A “me” page specifically tailored to your customers’ activities on your site is a resource and channel to provide meaningful information presented in the context of the products and activities the products support.  It is like a personalized profile in the context and for the purpose of  shopping.

Amazon.com incorporates the successful use of a “me” page.  A customer’s Amazon.com page is a central repository for everything specifically pertaining to that customer’s unique shopping habits.  From there, they can find all of their past purchases, account information, lists, communities, recommendations, most frequent search results, and on-site contributions.

Incorporating personal relevancy into the site design adds personalized value to products and services, and has the potential to create a community dynamic.  Designing for unique individuals increases the likelihood that customers will participate on your site and be less likely to abandon or fall off.  They will feel compelled to make contributions if they understand the value of increasingly personalized recommendations, and those recommendations in turn will help facilitate purchases and increase active participation and return visits.

Previously we identified how important it is to deliver unbiased information to consumers and cited the Amazon Effect as evidence.  Authentic conversations promote products, get valuable customer feedback, and establish a presence and a voice for your brand.  There are many methods, but the two most common are:

• Maintain a blog – Blogs are great for engaging in dialog with customers and initiating ways to discuss products, services, and future feature development.
• Use Authentic Advertising – Promote products in an unbiased, authentic way.

Start a Blog
How can a company initiate authentic conversations?  First, start and maintain a blog.  It’s easy, it’s cheap, and it’s familiar to customers as a way to interact and communicate with both the blog authors (the company) and other blog readers (the community)!   Make your blog a window on your company and reach out to customers.  Engage them, and ask them about both their good and bad experiences with your products and services.

“When you have authentic conversations with people, you learn enough to actually improve your product with them, freeing you from the need for the hard sell.  No longer will you have to convince people your software is worth it, because by working with the very people you’re selling to, you’re guaranteeing a valuable product.” – Joshua Porter, Designing for the Social Web

Some retail web sites place their blog on the homepage of their store.  Woot.com, an online retail web site features one discounted product per day on their homepage, and they present it in the context of a blog post.  This product is then advertised via RSS and Twitter feeds, and the blog post attracts hundreds of customer comments and even more exposure every day.  This daily blog guarantees a constant stream of fresh, new content and drives return visits.

”Blog post as advertisement” is a new form of advertising and is becoming more popular.  Using social design a company can essentially advertise without advertising, which is referred to as authentic advertising.

Use Authentic Advertising

CC Skye’s website is an interesting example of a successful use of authentic advertising. They leverage celebrity endorsements without making it look like a celebrity endorsement. On their product detail pages, they identify the colors of their products with the celebrities who have been seen wearing them. This is reinforced with a photo that looks like it was taken by the paparazzi.  The “guerilla style” photography works and makes the photo appear authentic.  In this example, the image implies that Kim Kardashian was not paid to promote the product, and that she genuinely likes the product and the style.

Authenticity, if delivered in a meaningful way that is relevant to the products, has the potential to be more powerful than traditional advertising.  A customer may be more inclined to buy a bracelet if their friend has one and raved about how cool it is, or even if they knew that an admired celebrity also likes it.  Social influence can be a powerful tool to attract attention to products. The trick is to create designs and build web applications supporting both authenticity and delivering the experiences in ways relevant to the customers and the products for which they are shopping.
Committing to authenticity helps your business in several ways:

• Engaging in conversations via blog posts helps address the needs of customers quickly and efficiently.
• Exposing products via authentic advertising generates interest and associates products with admirable individuals and desirable outcomes.
• Encouraging people to provide constructive feedback about products and services benefits the company and makes customers happy.

People appreciate that their voices are heard and are even more impressed when the company acts on that feedback with future product enhancements or service initiatives. Providing customers a way to become invested in the products through authentic conversations will make them more likely continue to do business with the company and more likely to bring their friends along, too!

The average person is bombarded with 500-3000 advertisements per day.  With so many ads surrounding us, it is not surprising that people to receive them with distrust and skepticism, “Of course an ad is only going to tell me what the company wants me to hear!

Traditional advertising, as done in the 1940s and 1950s, is more effective when there are only a limited number of brands from which to choose, but as Barry Schwartz wrote in The Paradox of Choice, this is far from the case today.  The industrial age has resulted in hundreds of brands, and social applications are a highly successful technology we use to help us efficiently sift through all of this information to find what is valuable and meaningful.

Amazon.com smartly solved this little problem and became enormously successful by utilizing customer reviews more than a decade ago. Joshua Porter (Bokardo.com) has written some insightful blog articles and dedicated a section of his book ‘Designing for the Social Web’ on what he calls, “The Amazon Effect:”

“Customer reviews allow people to learn about a product from the experience of others without any potentially biased seller information. No wonder everyone wanted to shop at Amazon.  They had information that no other site had: They had the truth.” – Joshua Porter, Designing for the Social Web

Online reviews provide customers with a source of information independent of the seller or manufacture.  There is more credibility in reading a review from someone who was not paid to promote a product.  But what if this person is nothing like me? How do I know if their review is one I can trust? Smart recommendation systems, such as the ‘Movies you’ll Love” tab on Netflix are designed as solutions to this problem. We’ll discuss the issue of how people identify with one another in the upcoming entry  on social  design principle #3, Appeal to the Unique Individual.

Sharing tools are an effective way to get meaningful feedback and allow customers to freely exchange information with friends about products they are interested in buying. Allow your products to be shared on networks such as Facebook or Digg.  Making it possible for customers to involve their social networks in the shopping experience helps inform their purchasing decisions.  For example, last summer I was agonizing over what shoes my bridesmaids should wear for my wedding.   I went on Zappos.com and selected 4 or 5 pairs of silver open-toed shoes that I thought would look good with the dresses, and I saved them all to a wish list which I made public.  I sent my bridesmaids the link via Facebook.  We used Facebook to communicate in a threaded conversation about the shoes.  My bridesmaids voted for two favorites, and I bought a pair of each.  The only bridesmaid who lived near me tried the shoes on for fit and comfort.  We kept the winning shoe and returned the other (with convenient free shipping.)

Reviews, sharing, public facing wish lists, and threaded conversations are social design tools and effective ways to help inform purchasing decisions when shopping online.  However, implementing sharing tools requires the retailer to relinquish some control of the product information on the web site where it is sold.  Retailers are often concerned that negative customer reviews may hurt sales.  This is a possibility, but the benefits of social design outweigh the possible problems.  In fact, a negative review could be seen as potentially beneficial, because it provides valuable insight on ways a company can improve their products and services for the future. Negative reviews may also increase credibility for customers; when reviews are all positive and glowing, customers may suspect that the retailer edits or filters submitted reviews, but neutral or negative reviews create a sense of balance and objectivity.  A proactive company will contact customers who submit negative reviews, engage them in dialog, and ask them to provide additional and constructive feedback.

In the next entry we will further explore how retailers can open effective and productive dialog with their customers when we discuss the second social design principle: authentic conversations.

A large part of the fun in shopping is being able to do it collaboratively.  Friends help inform our decisions about what we should buy. They give their opinions on fit, help pick out the perfect pair of shoes, and they are a part of what makes shopping fun.  Unfortunately, this desired social interaction has largely been lost as stores move online, and while the fun one has when shopping with friends cannot be wholly replaced, social design continues to introduce new ways to improve the collaborative nature of the online shopping experience.

“Social Design is the conception, planning and production of web sites and applications that support social interaction.” – Joshua Porter (bokardo.com), Designing for the Social Web

The following social design principles offer tactical methods for retail companies to bring social interaction into the online shopping experience.  Not only is it designed to inform shoppers, but if done successfully, can also inform the company to help make better decisions in the future.

The social design principles are:

1. Encourage Information Sharing – Encourage customers to share information about your products to help inform their purchase decisions and influence the purchase patterns of others.
2. Encourage Authentic Conversations – Reap the benefits of engaging your customers in conversation and advertise your products in an unbiased way using social influence.
3. Appeal to the Unique Individual – Design for the individual shopping on your website with personalized recommendations and an emphasis on uniqueness.
4. Participate in Active Listening – Do not ignore negative feedback. Embrace it, learn from it, act upon it, and make your customers love you for doing something about it.

What I will be discussing in upcoming entries are ways that retail companies can leverage these principles to help increase sales, satisfaction, and loyalty.  This is especially important given the drop in consumer confidence and the current economic conditions.  Social design does not cost much to implement and can yield tremendous value.