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Learn to use sociology techniques to derive a clear, precise and quantifiable definition for relationships, then apply the resulting concepts to brand-customer relationship. We will explore the metrics and potential ways to measure and quantify relationship and address the question of whether we can beat the Dunbar Limit of 150 friends. We will also revisit the Dunbar Limit and its implication for brands under the concept of attention economy. How can brands can leverage various components of a relationship to build stronger customer relationship to bring ROI through loyalty and influence?
Citation preview
The Science of Relationship
Michael Wu, PhD (mich8elwu) Principal Scientist of Analytics @ Lithium
April 24th, 2012
Track: Social
twitter: mich8elwu linkedin.com/in/MichaelWuPhD #scon12
agenda ▪ Introduction: CRM data
▪ Development and maintenance of relationship • Anthropology: complementarity between social network and community
▪ Interpersonal relationship and the Dunbar limit • Sociology: the attention economy
▪ Customers relationship (with brands) • Application: dealing with the Facebook irony
▪ Future work
twitter: mich8elwu linkedin.com/in/MichaelWuPhD #scon12
what’s the “R” in social CRM
3
▪What data do CRM system store? • Contact record
• email, phone, address • twitter, facebook, linkedin?
• Transaction record • purchase/sales history • order/fulfillment data
• Support record • support case history • service delivery data
▪ Where’s the “r”elationship data in CRM system?
twitter: mich8elwu linkedin.com/in/MichaelWuPhD
#scon12
Today’s CRM system
“R” ≈ record
≠ relationship
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twitter: mich8elwu linkedin.com/in/MichaelWuPhD #scon12
where do we find relationship data? ▪ On social media • Facebook • Linkedin
▪ It’s a huge ecosystem of tools+services
▪ There are too many places to look!
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twitter: mich8elwu linkedin.com/in/MichaelWuPhD #scon12
where do we find relationship data? ▪ On social media • Facebook • Linkedin
▪ It’s a huge ecosystem of tools+services
▪ There are too many places to look!
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twitter: mich8elwu linkedin.com/in/MichaelWuPhD
#scon12
Social is not new!
Human have been social since they were caveman
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twitter: mich8elwu linkedin.com/in/MichaelWuPhD
#scon12
Social anthropology perspective of social
Tech relationship
1. Social network 2. Community
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twitter: mich8elwu linkedin.com/in/MichaelWuPhD
#scon12
Social anthropology perspective of social
Tech relationship
1. Social network 2. Community
7
twitter: mich8elwu linkedin.com/in/MichaelWuPhD #scon12
how do social networks form?
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Emeryville = community
Bob old members new / casual members
weak ties strong ties
A story of how Bob’s social network was built
twitter: mich8elwu linkedin.com/in/MichaelWuPhD #scon12
how do social networks form?
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college
work
Emeryville = community
Social networks form naturally within communities as people establishes relationships
Social network maintains relationships as people move between communities
twitter: mich8elwu linkedin.com/in/MichaelWuPhD #scon12
what do real social network data look like?
10
twitter: mich8elwu linkedin.com/in/MichaelWuPhD #scon12
▪ Social Network • Held together by pre-existing
interpersonal relationships between individuals
• You know everyone in your network (ego-network), people who are connected to you directly
• Each person has only one social network, despite there are many social network platforms
• Structure: Network
communities vs. social networks (on/offline)
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▪ Community • Held together by some common
interests of a large group of people
• Most people, especially new members, do not know majority of the members in the community
• Any one person may be part of many communities at any given time
• Structure: Hierarchical, overlapping & nested
twitter: mich8elwu linkedin.com/in/MichaelWuPhD #scon12
▪ Social Networks
communities vs. social networks (on/offline)
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▪ Community
twitter: mich8elwu linkedin.com/in/MichaelWuPhD #scon12
lifecycle of relationships
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disconnected
weak tie
strong tie
2. building tie strength
3. maintaining relationship
1. creating a weak tie
do nothing
do something
bad
Easy! All it takes is an “hello”
twitter: mich8elwu linkedin.com/in/MichaelWuPhD
#scon12
But what is relationship?
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twitter: mich8elwu linkedin.com/in/MichaelWuPhD #scon12
▪ Relationship: sociology perspective • A tie or a connection between two entities (e.g.
people, companies, cities, or even nations) • Tie strength = strength of the relationship
▪ Granovetter: components of tie strength • Time: • Intensity: • Trust: • Reciprocity:
▪ Strong relationships requires more time & attention
the components of a relationship
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Time: amount of time spent together Intensity: emotional intensity & sense of closeness Trust: intimacy or mutual confiding (transparency) Reciprocity: amount of reciprocal services
twitter: mich8elwu linkedin.com/in/MichaelWuPhD #scon12
▪We only have 24 hours a day
▪We only have fixed amount of attention
▪ How many meaningful relationship can we have?
the attention economy
16 via nielsen
twitter: mich8elwu linkedin.com/in/MichaelWuPhD #scon12
▪ Prof. Robin Dunbar found a relationship between brain size of primate species and their group size
▪ Extrapolate data from 38 primate species to human neocortex ratio Dunbar number = 148 (~150)
▪ Verified by surveying pre-industrial villages/tribes
~150: the Dunbar number (or Dunbar limit)
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we know the human neocortical ratio
148
twitter: mich8elwu linkedin.com/in/MichaelWuPhD #scon12
▪ Order our relationship from the strongest (immediate family) to the weakest (acquaintance)
▪ This creates a relationship profiles for each person
▪ In pre-industrial villages & tribes, people only know ~150 people on average
does Dunbar limit still applies in modern society?
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wife children
parents
siblings close friends
…………
# of relationships
tie s
treng
th
16 ~150
acquaintance
twitter: mich8elwu linkedin.com/in/MichaelWuPhD #scon12
▪ Dunbar’s limit may not apply in modern society b/c • necessity for social cohesion is
substantially lower • communication (an important part
of socializing) is much more efficient
▪ But our brain hasn’t changed for millennia…
does Dunbar limit still applies in modern society?
19
wife children
parents
siblings close friends
………… 16
acquaintance
# of relationships
tie s
treng
th
~150
twitter: mich8elwu linkedin.com/in/MichaelWuPhD #scon12
we can have more than 150 friends
20 # of relationships
tie s
treng
th
~150 strong ties weak ties
if have fewer strong ties
attention shift from stronger ties to weaker ties
twitter: mich8elwu linkedin.com/in/MichaelWuPhD #scon12
we can have more than 150 friends
21 # of relationships
tie s
treng
th
~150 strong ties weak ties
if have weaker strong ties
attention shift from stronger ties to weaker ties
We can shift our time/attention around, but the total amount of time/attention remain roughly the same
area under the yellow relationship profile
area under the blue relationship profile =
twitter: mich8elwu linkedin.com/in/MichaelWuPhD
#scon12
What about the relationship between customers & brands?
22
customer relationship < personal relationship (with brands) (with people)
always weaker
twitter: mich8elwu linkedin.com/in/MichaelWuPhD #scon12
▪ Facebook contains a lot of our strong ties • By definition, these stronger ties will demand more attention, and will win more
of your limited time/attention
▪ Irony: because Facebook is “too good” at maintaining our strong ties, it created problems for itself: • In the presence of strong ties, weaker ties
are harder to develop into strong ones • If you already have strong relationship with
your customers. Great! maintain them with Facebook is the way to go
• Otherwise, the strong ties on Facebook will hinder the development of weak ties
the Facebook irony
23
but it’s too fast for your dog
twitter: mich8elwu linkedin.com/in/MichaelWuPhD
#scon12
How can brands build stronger relationships with their customers?
24
twitter: mich8elwu linkedin.com/in/MichaelWuPhD #scon12
▪ “time” = time spent together ≠ duration of relationship
▪ “time” increases tie strength if the desires to spend time together is mutual
component #1: time
25
time
trust
reciprocity
intensity
LOVE
desire = mutual
twitter: mich8elwu linkedin.com/in/MichaelWuPhD #scon12
▪ “time” = time spent together ≠ duration of relationship
▪ “time” increases tie strength if the desires to spend time together is mutual
▪ Key: know when your customers want to spend time with you, and be there for them
component #1: time
26
trust
reciprocity time
intensity HATE
desire = non-mutual
twitter: mich8elwu linkedin.com/in/MichaelWuPhD #scon12
reciprocity
▪ Customers’ intensity for brands is much lower than their intensity for friends
▪ It is genetic! We have no control over it
▪ Tactic: appeal to greater causes that customers have strong emotions for
▪ Key: don’t try too hard on this component
component #2: intensity
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intensity
time
trust
twitter: mich8elwu linkedin.com/in/MichaelWuPhD #scon12
▪ Transparency creates an environment that’s more conducive for building trust
▪ 2 types of transparency • brand–customer
• blog, twitter, etc • customer–customer
• community discussion forum
component #3: trust
28
trust
time reciprocity
intensity
twitter: mich8elwu linkedin.com/in/MichaelWuPhD #scon12
▪ People trust themselves, so they tend to trust brands that co-create with them
▪ 2 types of co-creation • passive: listening + collect customer input • active: crowdsourced ideation + filtering
▪ Key: 1. Create transparent & authentic
communication channels to customers & among customers
2. Co-create with your customers
component #3: trust
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trust
time reciprocity
intensity
twitter: mich8elwu linkedin.com/in/MichaelWuPhD #scon12
time
trust
▪ Reciprocity = reciprocal services
▪ Customer Brands • Make it easy for them to help other
customers of yours • Reward them properly and serve
right
▪ Create a sustainable cycle of reciprocity by co-creation
▪ Key: don’t forget to let your customer help you
component #4: reciprocity
30
reciprocity
2 way
intensity
twitter: mich8elwu linkedin.com/in/MichaelWuPhD #scon12
trust
time
▪ Customer community • Opt-in: it’s there when the
customers want it • May have a great cause • Transparent channel • Platform for co-creation • Enables reciprocity
▪ Customer relationship are build the same way as inter-personal relationships, in a community
building customer relationship
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intensity
reciprocity
twitter: mich8elwu linkedin.com/in/MichaelWuPhD
#scon12
Now we know how relationships are built, can we measure it?
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twitter: mich8elwu linkedin.com/in/MichaelWuPhD #scon12
not yet, but each pillar is ~quantifiable~
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how much time spent in your brand community?
how much time spent engaging & participating on your fan page, youtube channel, etc.?
how deep are the engagements with your brand?
sentiment ratio, emotions
hard to measure. But that’s OK, b/c it’s hard to influence too
how transparent is your brand to your customers?
how responsive you are to your customers?
how many inter-customer discussion do you enable?
at what rate are content being co-created w/ your customers?
at what rate are reciprocal and mutual services being carried out?
twitter: mich8elwu linkedin.com/in/MichaelWuPhD #scon12
future CRM
34
Big challenges:
Combining the metrics for the 4 pillars into a single metric that quantifies the
strength of relationship.
There are nonlinear dependencies between the 4 pillars of a relationship, so
a simple linear model, such a weighted average, won’t be sufficient.
Hopefully, future CRM will not only have data on your customers’ relationship with
your brand, but also the strength of relationships among your customers.
twitter: mich8elwu linkedin.com/in/MichaelWuPhD #scon12
Thank you Q&A + discussion
@mich8elwu
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4/24/2012 ©2012 SugarCRM Inc. All rights reserved. 36
#SCON12