Is Social Networking The Gap in eBay’s Armor?

Is the lack of an integrated social network and reputation management system the Achilles heel of the eBay juggernaut? Overstock.com seems to think so. On Friday, Overstock.com launched a new auction site code-named “Ocean” that is “powered by social networking” and is aimed squarely at eBay.

“We sought a way to integrate the trust inherent in these networks into e-commerce. To achieve this, we have integrated into our auction tab a system that allows for social and business networking unlike any that has ever connected businesses and consumers on-line. It may evolve into a massive, intelligent marketing organism, or into a system of personal introductions, or in some direction we have not foreseen. One thing we do anticipate, however, is that these “reputation networks” will work particularly well for on-line auctions, where buyers, sellers, enthusiasts and experts are traditionally anonymous — and opinions are often biased (as evident in the declining value of ratings and the increasing tendency for retaliatory and spiteful ratings). – Patrick Byrne, President, Overstock.com

A quick perusal of the system yielded a number of pros and cons. Overstock’s president seems to strongly feel that there is significant value in providing this “friendly” (their word) connection between users of the network. And anything that brings rational, personal interaction between buyers and sellers is a good thing in my book. That’s where real relationships come from.

Byrne also clearly recognizes that trust and “reputation networks” are important in building a business and a community. He also is willing to take a risk in this ‘ready, fire, aim” approach…he seems to know that there is *something* there in providing these connections, even if the hard benefits of community-building are not clearly defined. On the other hand, getting “into” the network is a bit of a hassle. Multiple registrations are required (one for Overstock, and then a separate one for the auction and social network).

In aggregate, I view this with guarded skepticism. First off is the increasing issue of “social network spam,” where individuals with even the weakest ties to a person are innundated with “requests to join my network.” Additionally, while the fundamental idea is sound, it will likely be difficult for Byrne to build critical mass in this network for the casual buyer/seller. That being said, those individuals who are very deep into a community, however (such as memorabilia collectors), may embrace this to find other individuals who have similar interests and passions.

Of course, the biggest confusion will be the question of “why?” For the average buyer and seller, what will be the benefits to them of investing the time needed to create, grow and nurture their network?

How To Drive Your Customers Away, The AT&T Wireless Way

Having myself been stung by the AT&T Wireless process and service nightware, I read with great interest the story of their downfall and presumed sale next month. The toll: a significant number of the company’s 31,000+ employees will likely lose their jobs, and the remaining customers will have to migrate. One take on the root cause:

“Years of substandard customer care, spotty coverage and dropped calls had taken their toll.

‘The line from the company was that we lost those people out of bad luck,’ said a regional sales manager. ‘But they walked away flipping us the bird. They aggressively walked away from us. They couldn’t wait to get away from us.'”

Ok, it’s not rocket science, folks. Do these things:

  • Listen to your customers
  • Make sound business decisions based on that input
  • Do what you promise, when you promise to do it
  • When your customers are defecting in droves, don’t spend millions of dollars upgrading the “company’s Falcon 50 jet to a bigger Gulfstream jet for commuting — then put millions of dollars more into a new interior for it.”

(shakes head…)

I Don’t Trust You. Yet.

The concept of “I can’t trust you, until I get to know you better,” is at the core of a great posting by Christopher Allen in the Life With Alacrity blog. Christopher’s thoughts are a great window into how real relationships are built with customers. When two people are “building rapport” with each other, they are going through this process:

This is how I typically explain progressive trust when I meet someone in-person at a conference:

You are now spending your most precious resource, that most unrenewable commodity — time, in order to listen and understand what I have to say.

Why do you do so? Because by the act of us being here in this common space, at this conference, you have found a very simple credential from me–that I’m willing to spend time here in a place that you are interested in as well. In turn, I’m willing to spend more time chatting with you for the same reason.

Why do we continue to chat, and not move on to other people to discuss with? Because as we chat we are exchanging a number of credentials — people we know in common, common interests, meaningful ideas, etc. We may also present credentials typically issued by others, like our business cards, or explain our relationship to the host…As our collaboration grows, we will find ourselves seeking more and more credentials, endorsements, etc., but they will not be enough. The next level of trust can only be established by experience of commitment — for instance do we call back when we said we would? These tests typically start with small things, and then grow to larger things. At some point this may ultimately grow to form simple verbal contracts; over time richer, deeper social contracts are agreed upon that might not be written down.

Ultimately we may bring in third parties to witness, and thus possibly enforce our mutual obligations…

Some great thoughts there, along with a followup by Clay.

Progressive trust is required to create real relationships with customers. How do you do it?

Taking Outsourcing One Step Further

Ok, this is pretty cool. In what appears to be a successful effort to both improve customer service and reduce costs, a fast-food restaurant in Brainerd, Minnesota (yes, the same Brainerd of FARGO fame) has outsourced its drive-through to Colorado. According to reports:

As she leaned out the window of her Chevy Blazer to place her order through a speaker box, Feld was greeted by the friendly voice of an order taker she thought was working inside…Four states away in a Colorado Springs, Colo., call center, “Linda” recorded Feld’s order and flashed it onto a computer screen inside the kitchen of the Brainerd McDonald’s. Less than two minutes later, Feld drove away, a smile on her face and a burger in hand.

From a business point of view, management claims that fewer mistakes are being made on orders and turnaround time has improved by an average of 20 seconds per order.

Neat.