Relationship Mining: Ready for Prime Time?

Gwynne Young
Managing Editor, CustomerThink
Member

Posted 23-Mar-2005 03:50 PM
CRMGuru.com is starting to hear from firms that do relationship mining and customer reference programs. We received a press release from one company, Branchit Corp., touting its selection by international law firm Pillsbury Winthrop LLP for global relationship mining needs.

What do you think of relationship mining? Does it increase sales effectiveness? Is it a sales "tool," or should it be in marketing's realm. And how do you do it successfully without irritating your customers?

Graham Hill
Guru
Member

Posted 23-Mar-2005 11:31 PM
Gwynne

An interesting and timely question.

Relationship Mining seems to be a new vendor 'meme' for what has long been known as Social Network Analysis (SNA).

SNA has been around for some time and has been used in a wide variety of situations to look at relationships between people. For example, Valdis Krebs (one of the founding fathers of SNA) used it to look at networks of relationships between the 9/11 terrorists (see http://www.orgnet.com/hijackers.html for more details). On a more mundane level, I used it on a large customer-driven change project to identify highly influential staff in the organisation, who were then recruited to drive word-of-mouth communications on the organisation's social 'grapevine'.

The difficulties with relationship mining are not in the mining, but in the application of the results. The three main difficulties are finding the right networker, using the networker's relationship appropriately and avoiding invasion of privacy.

FINDING THE RIGHT NETWORKER
Viral (word of mouth) marketers who exploit social network effects to sell products through personal recommendations will tell you that not all well connected people are equally effective as networkers. The best networkers not only have large networks, they also are good 'market mavens' and great salesmen. Finding the best networkers clearly requires more than just social network analysis software.

USING THE NETWORKER'S RELATIONSHIP APPROPRIATELY
Viral marketers will also tell you that viral marketing is very dependent upon the strength of relationship that the networker has with others. Real relationhips are very personal things developed over time. And these relationships are easily damaged by crass attempts at overt selling, particularly where any benefits from the sale are not fairly shared. Imagine your reaction if one of your best friends came up to you and tried to sell you something they didn't really believe in but were being paid to sell. I know my own reaction. Too much of selling is still at the crass overt message level!

AVOIDING INVASION OF PRIVACY
Putting relationship dynamics to one side, the biggest potential difficulty is invasion of privacy. The Visible Path website suggests that 70-80% of the information it analyses are messages between staff. Although this is a complex legal area, I would suggest that analysing these personal messages in the context of outbound selling could easily constitute a gross invasion of privacy for the staff concerned. Ditto with the pressure that could easily be applied on the best connected staff to 'facilitate' the contact and ultimately the sale. Clearly an area that needs very careful handling.

So there you have it. A tool with great potential, but with even greater potential to be abused. Use it with care and with strong oversight.

Graham Hill
Independent CRM Consultant

PS. If you want to find out more about Social Network Analysis, look at Valdis Keb's website
http://www.orgnet.com/

And at books by Duncan Watts ('Small Worlds' and 'Six Degrees'), Al Barabasi ('Linked: The New Science of Networks') and Rob Cross ('The Hidden Power of Social Networks').

The more mathematically inclined should also look at some of the working papers posted on the Santa Fe Institute's website
http://www.santafe.edu/research/publications/working-papers.php

Ignored post by Graham Hill posted 23-Mar-2005 11:31 PM
Jesse Sandqvist
Member

Posted 05-Apr-2005 10:18 AM
We have created a marketing microplatform that facilitates campaigns that enable our customers to find their ambassadors and brand heroes. The finding of these evangelists is based on marketing campaigns that facilitate viral growth in the target customer base for certain marketing offers. We have also created a methodology of how to measure of the importance of the clients based on their activity and their network "family tree".

As Graham mentioned, networks can be easily misused. However, the potential is huge, especially for smart marketers that understand relationships and personal recommendations. It is extremely important to treat the relationships between people with care offering them relevant offers to participate in campaigns. We emphasise to our clients not to even consider misusing their clients' private relationships because that will just hurt their brand and alienate their existing customers and well as new prospects that get recommended by their friends. People are usually not stupid and they understand if the value proposition for them or for their friends is not fair or not in balance.

The motivation for pass-along of the message is however the key to success. Our incentives need to be carefully chosen and the campaign has to be executed in an non-intrusive and personalised manner. The best campaigns we have done have actually been a combination of motivational incentives and what people call "viral content". In some campaigns even the customers themselves create the content for their friend!

And of course the privacy issues and ethics are extremely important, we have also strict policies on this front to weed out the unserious clients. You can destroy a brand in 5 minutes in the internet.

We have seen from our extensive campaign experience that there is a great potential in network marketing. Good network marketing campaigns nurture the existing relationships and creates a great customer acquisition channel from your existing customer base. The trick is to know what you are doing (like in everything in life). After targeted network marketing campaigns we have the data to analyse for finding the brand heroes and the ambassadors.

Best Regards,
Jesse Sandqvist
Responsewave Ltd.