Micro-targeting and organizational communication theories fueling word of mouth marketing

Below are two fascinating studies on communication theory and practice. The commonality between both is the nexus between effective use of social media and word-of-mouth marketing.

The first study Social Media Marketing vs. Prevalent Marketing Practices: A Study of Marketing Approaches for Micro firms in Sweden (.pdf download) focuses on micro firms leveraging social media to promote higher customer loyalty. The author sought to answer the following questions:

  1. Which of the two types of marketing is more effective in terms of targeted segment coverage and expenditures?
  2. Which marketing approach enables micro firms to maintain better relationships with customers?
  3. Whether or not it is the right time for micro firms in Sweden to adopt social media marketing practices?

The heart of the study is Section 4.2.3.

The second study, Structured Viral Communication: The Political Economy and Social Organization of Digital Disintermediation (.pdf), is the best analysis I’ve read of how Obama used structured communication plans to spread his message and increase loyalty.

Photo credit ssoosay

Research on social proximity

In response to a request by @Gahlord to research the concept of “social proximity” I have found eight articles that broadly sketch the primary issues and principles related to “social proximity”.

In Towards Design Guidelines for Portable Digital Proximities A Case study with Social Net and Social Proximity (.pdf), the authors apparently introduced the concept of social proximity, which they define as:

[T]he relationships between people in space, within social networks, and through time.

In Life in the network: the coming age of computational social science, the authors discuss the rapidly changing pace of computational social science.

In To join or not to join: the illusion of privacy in social networks with mixed public and private user profiles (.pdf) the authors discuss privacy issues related to social media and the natural tension between “public” and “private” information (see also my earlier article relating to this topic).

In Inferring friendship network structure by using mobile phone data, the authors found that it’s possible to infer with 95% accuracy friendships based on mobile data.

In Bridging the Gap Between Physical Location and Online Social Networks (.pdf), the authors demonstrate how to predict friendship between two users using their respective location trails.

In Social distance, heterogeneity, and social interactions (.pdf, and I hope you’re good in mathematics to understand this article), the authors propose a new model to analyze peer group interactions.

In Connectivity Does Not Ensure Community: On Social Capital, Networks and Communities of Place (.pdf), the author proposes that the strongest online communities are those create senses of social ownership within the community.

In Semantic Grounding of Tag Relatedness in Social Bookmarking Systems (.pdf) the authors discuss how collaborative tagging systems can be used to derive a global tagging relatedness structure from an uncontrolled tagging folksonomy.

In The anatomy of a large-scale social search engine (.pdf) the authors present Aardvark, a social search engine.

Google Chrome Cr-48 Notebook Chapter 1

Using a Chrome Cr-48 Notebook is a bit like skiing powder: it’s a little weird at first, if one is used to groomed slopes, but once you’re used to skiing in powder snow it’s a seriously cool experience.

Sublime. Zen.

These are the words I routinely use to describe my powder skiing experiences. Similarly, using a Chrome Cr-48 Notebook approaches these experiences. What I will focus on in Chapter 1 is the initial experience of getting started with the Chrome Cr-48 (which is very “un-Apple” in a fun way).

First, you receive a cool geek cardboard brown carrying case with a funky-cool graphic screened on the front…
…then you open the box and find a simple activation schema…

…then you unwrap the battery back from the bubble wrap and place it in the notebook and begin charging the battery…

…then you add stickers…

…then you join the Cloud.

Easy. And you’re “in”.

The first thing I realized using the Chrome Cr-48 was that I never fully worked “in the Cloud”. Rather, I have been operating as some type of Cloud-borg: half-in (operating in Google Apps word), half-out (using a notebook to do things such as load docs to “the Cloud”, rather than creating and storing files solely while working within “the Cloud”).

With the Chrome Cr-48, one must fully commit–there is no desktop/laptop option, per se. Consequently, I am completely rethinking file management, creation, access, and storage. And I must say I am loving the challenge, so much so, that when I use my “other” computer it feels like I’m skiing on 1960’s era wooden skis, rather than the modern fat Icelantic Nomads I use to surf the powder and carve it in the trees.

There have been interesting cases where I’ve had to redeploy “the old one” to execute a routine task: adding a dual monitor did not work on the Cr-48 (i.e., “no signal found” by the monitor, a known issue in the Chrome forum), and my Android phone was not recognized when I “mounted” it to the Cr-48 via the single USB port, another known issue in the Chrome forum). I’m sure I’ll find other bugs, but that’s part of the early-adopter life-cycle.

Regardless, the Cr-48 is easy to set up, easy to use, and seamlessly integrates with Enterprise Google Apps. Given this synergy, I feel my productivity has not taken a hit and in some cases has increased. I am really looking forward to the next chapters.

Web intelligence and the dispersion of public thought

Two seemingly unrelated articles recently caught my attention. Both articles touch on a similar meme: making sense out of the data bog which is le Web.

Article one: The Path to Web Intelligence Maturity (.pdf) discusses how companies can leverage Web analytics to gain behavioral insights on individual prospects and customers. The author walks you through how you turn such insights into targeted marketing initiatives at key stages of the customer life-cycle.

Article two: Social Network Markets and ‘Public Thought’ (.pdf), written in response to Clay Shirky’s Internet post The Shock of Inclusion, the author takes you through a fascinating and enlightening read on the quality and reach of public thought. Indeed, the paper touches on themes raised by Gahlord Dewald during his recent presentation at Inman Connect NYC 2011 on “convergence” versus “dispersion”, where Dewald essentially argued that dispersion as opposed to convergence should function as the governing archetype that drives social web app and platform development.

Three top sources discussing collaborative and collective innovation strategies and theories

As you head into 2011, here are three sources to get your innovation game plan together:

In the research paper, Collective Intelligence for Competitive Advantage: Crowdsourcing and Open Innovation, the author–a global transition manager at Nike Inc–conducts an exhaustive analysis of current research on the topic of leveraging crowdsourcing concepts and open innovation principles to deliver innovative products and services. The author makes the following recommendations:

Recommendation # 1 – Focus on creating an innovative organizational culture, in which experimentation and failure are supported and encouraged. Use the seven lessons of innovation by Koulopoulos (2009) as the guide.

Recommendation # 2 – Create a collective intelligence (CI) system by answering the four primary questions: Who is performing the task? Why are they doing it? What is being accomplished? How is it being done?

Recommendation # 3 – Focus on the utilization of an open innovation business model by developing a plan for and defining the primary tenets of the model, to include (a) value proposition, (b) market segmentation, (c) value chain, (d) revenue generation, and (e) competitive strategy.

Recommendation # 4 – Map out the four types of innovation: 1) Neutral, 2) Positive, 3) Negative, and 4) Open. An organization should operate in all 4 quadrants, but for market leadership open innovation is the most critical (Koulopoulos, 2009).

Recommendation # 5 – Understand how the CI system can be deployed into the value chain where internal and external knowledge is leveraged. Define how the CI system will integrate with the current value chain and which parts exist to support the system and which elements need to be developed.

In the paper, Organizing Innovation: Complementarities between Cross-Functional Teams (.pdf), researchers found that deploying cross-functional teams across new product/systems development processes yields positive gains for consumers and companies. The researchers also found that marketing departments are critical components of an innovative-driven cross-functional team because of the customer-centric views customarily espoused by such departments.

In the Harvard Business Review podcast, The Economics of Mass Collaboration (~ 15 min) the commentator, Don Tapscott, author of Macrowikinomics: Rebooting Business and the World, discusses the concepts of how companies can harness mass collaboration to deliver innovative products and services.

User experience and product innovation

Recently, at the Web 2.0 summit, Palm’s CEO said (as reported in All Things Digital):

Palm created the PDA space with the Pilot and the smartphone space after it with the Treo…So by birthright, Palm should have owned the smartphone market, but it just lost its way.

I’ve been intrigued by this facet of the “smartphone era”: Palm’s, NOKIA’s, Motorola’s whole job—theoretically—was to understand the needs, wants, desires of the mobile phone user. Theoretically they each spent millions of dollars a year in R&D, consumer research, prototyping, product development, etc. Yet Apple smoked them all. Apple focuses on the user experience—from the moment a user decides to enter Apple’s commerce stream, to the moment a user opens a box, to the moment a user first sets up a device to the moment a user interacts that device. With Apple, product = experience and experience = product. It seems a superior user experience—a 365 degree, multi-dimensional experience—is the ultimate killer product/app.

The importance of users versus consumers in building a community

The book Democratizing Innovation by MIT Professor Eric Von Hippel (available via free .pdf download) makes an interesting observation about the term “consumer”. Throughout his book, Von Hippel employs the term “user” as opposed to consumer:

Users, as the term will be used in this book, are firms or individual consumers that expect to benefit from using a product or a service. In contrast, manufacturers expect to benefit from selling a product or a service.

This is a powerful–albeit simple–point of distinction within the context of the social web, with implications for social commerce too (which I have recently written about here). Focus primarily on the benefits of the user, not solely on your needs as a “manufacturer”. What value are you bringing a user of your content, service, advice, etc? By constantly evaluating the needs of your user-clients and delivering benefits based on these needs, you’re increasing the odds that your user-clients will become a passionate community centered around this value as opposed to simply a crowd that wanders by.

Information sharing across the social web: usability, minimalist design, and consumer choice

This article in the Atlantichttp://www.theatlantic.com/technology/archive/2010/11/the-undesigned-web/65458/ by Dylan Tweney (@dylan20http://twitter.com/#!/dylan20) essentially argues that as consumers adopt a minimalist approach towards reading, sharing (i.e., reformatting content to meet their needs and the needs of their social sphere), and generally consuming content (information), devices like the iPad will engender even more pressure on publishers align usabilty concepts with sound information architecture concepts. Indeed, the iPad imbues a sensual, tactile element to information consumption. Fingertips are one of the most sensitive areas on our bodieshttp://en.wikipedia.org/wiki/Merkel_nerve_ending, and by virtually touching, massaging, moving, aligning, etc, information via the iPad transfers a degree of intimacy unmatched by even printed material. Tweney seems to argue that the tactil nature of iPad represents an inflection point in future information design, publishing, and consumption.
As a slight counter-point to Tweney’s missive, this articlehttp://www.fastcodesign.com/1662630/is-undesigned-the-next-great-web-trend-fat-chance argues that Tweney misses the point by claiming that design is dead and makes some excellent points:
“The future is all about designing for multiple use cases[.]”
“Digital design isn’t fading, but it is changing: to keep pace with evolving technology, to drive new economics, to satisfy users’ dynamic desires. Indeed, the fact that we tend to call them “users” in the first place–instead of viewers, readers, or audiences–is important to keep in mind when considering the role or future of digital design.”
The author, John Pavlushttp://twitter.com/johnpavlus, cites many useful sources to support his argument that a minimalist-centric interface is actually the result a complex design-thinking (ala, a Ferrari on the outside appears simple and elegant but underneath the hood it’s a complex machine). Similarly, a minimalist approach can actually be brilliantly enhanced by restricting consumer choice by presenting consumers with well thought-out, curated, and highly selective choices (ala 37 Signals). Finally, both Tweney and Pavlus are joined by researchers who are conducting some very interesting research on this topic: The Paradox of Simplicity: Effects of User Interface Design on Perceptions and Preference of Interactive Systemshttp://aisel.aisnet.org/mcis2010/30/ (registration required), A Model of Experience Test for Web Designershttp://eprints.qut.edu.au/18371/1/c18371.pdf, A Model for Understanding Social Commercehttp://proc.conisar.org/2010/pdf/1511.pdf
Photo credit: seier+seierhttp://www.flickr.com/photos/seier/493929328/
This article in the Atlantic by Dylan Tweney (@dylan20) essentially argues that as consumers adopt a minimalist approach towards reading, sharing, and generally consuming content (information), devices like the iPad will put even more pressure on publishers to align usability concepts with sound information architecture concepts. Indeed, the iPad imbues a sensual, tactile element to information consumption.
Fingertips are one of the most sensitive areas on our bodies, and the iPad transfers to a consumer a degree of intimacy by enabling him/her to virtually touch, massage, move, and align information in a very personal way. Tweney seems to argue that the tactile nature of an iPad represents an inflection point in future information design, publishing, and consumption.
As a slight counter-point to Tweney’s missive, this article argues that Tweney misses the point in claiming that “traditional” digital design is dead; as counterpoints, the author points out:
“The future is all about designing for multiple use cases[.]”
“Digital design isn’t fading, but it is changing: to keep pace with evolving technology, to drive new economics, to satisfy users’ dynamic desires. Indeed, the fact that we tend to call them “users” in the first place–instead of viewers, readers, or audiences–is important to keep in mind when considering the role or future of digital design.”
The author, John Pavlus, cites many useful sources in his article to support his argument that minimalist-centric interface design is actually the result of complex design-thinking. Similarly, a minimalist approach can actually be brilliantly enhanced by restricting consumer choice by presenting consumers with well thought-out, curated, and highly selective choices (ala 37 Signals theories). Finally, both Tweney and Pavlus are joined by researchers who are conducting interesting studies on this topic: The Paradox of Simplicity: Effects of User Interface Design on Perceptions and Preference of Interactive Systems (registration required), A Model of Experience Test for Web Designers, A Model for Understanding Social Commerce.
Photo credit: seier+seier

Influence in the social web and social commerce

http://www.web-strategist.com/blog/2010/11/02/altimeter-report-social-commerce-how-brands-are-generating-revenue-by-lcecere/
http://www.briansolis.com/2010/11/the-rise-of-the-social-consumer
http://www.fastcompany.com/magazine/150/the-new-influentials.html
http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.156.8795&rep=rep1&type=pdf
This article on social media New Influentialshttp://www.fastcompany.com/magazine/150/the-new-influentials.html raises an interesting question regarding “incluence” on the social web: what’s the core driver of influence in the social web when it comes to commerce, a person, her community, or both? The article profiles six individuals who have variously used YouTube, corporate resources, quasi-anarchist tactics, and curation to attract dedicated audiences to their brand (whether personal or corporate). Indeed, the question of “what constitutes influence in a social network” has captured the interest of researches, as is evidenced by the articles “A model of influence in a social network”http://halshs.archives-ouvertes.fr/docs/00/49/65/60/PDF/td08.pdf and “Learning Influence Probabilities In Social Networks”http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.156.8795&rep=rep1&type=pdf. Similarly, Brian Solis has written an excellent post on the genesis of the social consumerhttp://www.briansolis.com/2010/11/the-rise-of-the-social-consumer. According to Solis:
When a brand does its job right, it creates an emotional connection. The affinity it engenders contributes to who we are as individuals and how others perceive us. In the social web, sharing our purchases and experiences serve as social objects which are essentially catalysts for sparking conversations. At the center of this discussion is the product. Experiences, impressions, and perceptions cast bridges that link us together. As the conversation unfolds, the hub connects the product to individuals who not only respond, but also consume, where information directly or indirectly influences behavior and opinion. This form of subconscious empowerment seemingly builds confidence according to some new research. As social capital factors into the equation, these conversations represent touchpoints where positive experiences take the shape of endorsements and ultimately c0ntribute to the overall branding process.
Solis’ sentiments are echoed by a recent Altimeter Reporthttp://www.slideshare.net/loracecere/rise-of-socialcommercefinal (also accessed her on Jeremiah Owyang’s bloghttp://www.web-strategist.com/blog/2010/11/02/altimeter-report-social-commerce-how-brands-are-generating-revenue-by-lcecere/:
<div style=”width:477px” id=”__ss_5637236″><strong style=”display:block;margin:12px 0 4px”><a href=”http://www.slideshare.net/loracecere/rise-of-socialcommercefinal” title=”Rise of social_commerce_final”>Rise of social_commerce_final</a></strong><object id=”__sse5637236″ width=”477″ height=”510″><param name=”movie” value=”http://static.slidesharecdn.com/swf/doc_player.swf?doc=riseofsocialcommercefinal-101101160620-phpapp02&stripped_title=rise-of-socialcommercefinal&userName=loracecere” /><param name=”allowFullScreen” value=”true”/><param name=”allowScriptAccess” value=”always”/><embed name=”__sse5637236″ src=”http://static.slidesharecdn.com/swf/doc_player.swf?doc=riseofsocialcommercefinal-101101160620-phpapp02&stripped_title=rise-of-socialcommercefinal&userName=loracecere” type=”application/x-shockwave-flash” allowscriptaccess=”always” allowfullscreen=”true” width=”477″ height=”510″></embed></object><div style=”padding:5px 0 12px”>View more <a href=”http://www.slideshare.net/”>documents</a> from <a href=”http://www.slideshare.net/loracecere”>lora cecere</a>.</div></div>
Going back to the original question I posited, I’ll say “influence” is a combination of both a brand (personal or corporate) and respect and empowerment of one’s community, but community is the main driver. Solis describes how American Express empowers its community by facilitating conversations along with promoting commerce (and doesn’t this remind you of fundamental concepts discussed in the Cluetrain Manifestohttp://www.amazon.com/Cluetrain-Manifesto-End-Business-Usual/dp/0738204315, particularly chapter four?). But for an empassioned–and spending–community, American Express would not necessarily be influential. Thus, the core question of what defines influence hinges on how committed you are to your community, what value you bring to your community, and how well you are developing and fostering that community.

This article on social media New Influentials raises an interesting question regarding “influence” in the social web and in social commerce: what’s the core driver of influence?  A person? Her community? Or both? The article profiles six individuals who have variously used YouTube, corporate resources, quasi-anarchist tactics, and curating to attract and sustain dedicated communities. Indeed, the question of “what constitutes influence in a social network” has captured the interest of researches, as is evidenced by the articles “A model of influence in a social network” and “Learning Influence Probabilities In Social Networks“. Similarly, Brian Solis has written an excellent post on the genesis of the social consumer. According to Solis:

When a brand does its job right, it creates an emotional connection. The affinity it engenders contributes to who we are as individuals and how others perceive us. In the social web, sharing our purchases and experiences serve as social objects which are essentially catalysts for sparking conversations. At the center of this discussion is the product. Experiences, impressions, and perceptions cast bridges that link us together. As the conversation unfolds, the hub connects the product to individuals who not only respond, but also consume, where information directly or indirectly influences behavior and opinion. This form of subconscious empowerment seemingly builds confidence according to some new research. As social capital factors into the equation, these conversations represent touchpoints where positive experiences take the shape of endorsements and ultimately c0ntribute to the overall branding process.

Solis’ sentiments are echoed by a recent Altimeter Report (also accessed here on Jeremiah Owyang’s blog:

Going back to the original question I posited, I’ll say “influence” is a combination of brand (personal or corporate) and respect and empowerment of one’s community, but where community is the main driver. Solis describes how American Express empowers its community by facilitating conversations along with promoting commerce (and doesn’t this remind you of fundamental concepts discussed in the Cluetrain Manifesto, particularly chapter four?). But for an empassioned–and spending–community, American Express would not necessarily be influential. Thus, the core question of what defines “influence” hinges on how committed you are to your community, what value you bring to your community, and how well you are developing and fostering that community.

A simple lesson from Steve Jobs

Thank you to @sherrychris for finding this article on Steve Jobs. What I like about this article is that it delves—slightly–into Jobs’ mindset via an interview with his “last” boss. It’s a fascinating romp. Here’s one key take-aways that were meaningful to me:
“What makes Steve’s methodology different from everyone else’s is that he always believed the most important decisions you make are not the things you do, but the things you decide not to do.”
Very simple concept, yet powerful. Reading through the interview we learn that Steve regularly met with the leader of SONY and was given a prototype of the first SONY Walkman. And the first thing he did was take it apart to look at its component parts. I can image Jobs making a list of “not likes” with the Walkman over a decade, which yielded the iPod. The same can plausibly be said for a mobile phone too. I can imagine Jobs using NOKIA and Motorola products and making a list of “not likes”, which yielded the iPhone. Focus on making a “not like” list to improve your product offering or client service delivery. Who knows, maybe you’ll revolutionize an industry too.
http://farm3.static.flickr.com/2783/4270425994_508f78a00f_m.jpg
timtakhttp://www.flickr.com/photos/nihonbunka/4270425994/
Thank you to @sherrychris for finding this article on Steve Jobs. What I like about this article is that it delves—slightly–into Jobs’ mindset via an interview with his “last” boss. It’s a fascinating romp. Here’s one meaningful take-away:
“What makes Steve’s methodology different from everyone else’s is that he always believed the most important decisions you make are not the things you do, but the things you decide not to do.”
Very simple concept, yet powerful. Reading through the interview we learn that Steve regularly met with Akio Morita, co-founder of SONY, and was given a prototype of the first SONY Walkman. And the first thing he did was take it apart to look at its component parts. I can image Jobs making a list of “not likes” with the Walkman over a decade or more, which yielded the iPod. The same can plausibly be said for a mobile phone too. I can imagine Jobs using NOKIA and Motorola products and making a list of “not likes”, which yielded the iPhone. Focus on making a “not like” list to improve your product offering or client service delivery. Who knows, maybe you’ll revolutionize an industry too.
Photo credit: timtak

Collaborative innovation, good ideas, and competitive differentiation

According to this Harvard Business Review podcast on collaborative innovation, the Internet dramatically drops collaboration and transaction costs thus enabling corporations to orchestrate capabilities more efficiently. Collaborative innovation can yield dramatic results in meaningful new product designs, service delivery models, and customer satisfaction; potentially yielding an endless supply of “good ideas”.

But where do good ideas come from? This video gives a succinct explanation of the basic genesis of good ideas:

Assuming good ideas require a certain period of gestation to manifest, collabortive innovation principles can collapse the time required to let great ideas blossom. MRIS recently took a bold step in collaborative innovation by incenting university students to use MRIS’ data resources to create novel, customer-driven products (in 2009 I suggested that MLS’ follow a similar model). The real estate industry is a perfect industry to employ collaborative innovation principles; it will be interesting to see what the crowd develops for MRIS.

Photo credit: jacreative

Related posts: Innovation and competitive differentiation using idea management systems and Sustainable innnovation and excellence in product development

Aligning real estate services to the Gaps Model of Service Quality theory

This research paper on the Gaps Model of Service Quality (GMSQ) serves as an excellent framework by which real estate brokerages could begin analyzing their service value. As compared to tangible goods, there is little focus on service excellence, service research, and service innovation, say the authors. They posit that the GMSQ (introduced in 1985) is a perfect model to foster service quality assurance and quality control as well as service innovation because of the inherent cross-functional elements and voice of customer perspectives a company must adhere to in applying the GMSQ.

The research article delves into the impact technology has had on service delivery. Companies like Amazon, eBay, and Zappos obviously have leveraged technology to deliver superior service. Similarly, technology has enabled many customers to serve themselves more effectively and efficiently while giving companies a global reach. But as the expectations of customers and the pace of technological innovations increase, firms will encounter obstacles to delivering a superior customer service experience.

The GMSQ explores the gap between a customer’s expectations, their perceptions, and the reality of what they experience. Technology profoundly affect these relationships. To illustrate this, the authors focus on personal photography. In the past, individuals took photos, passed film off to be processed by a service provider, and then shared printed photos amongst family and friends. Now many individuals take digital photos, download those photos to their computer or upload those photos to a photo-sharing site, and digitally share their photos, albums, etc. An individual engaged in this process is a co-producer with the technology service provider. Thus, technology fundamentally affects a customer’s expectations and perceived value of the service provided and the GMSQ offers a way to ensure that firms leverage technology to meet customers’ expectations.

There are four gaps in the GMSQ: Listening, Design and Standards, Service Performance, Communication.

Listening Gap
What is the difference between a customer’s expectations and a firm’s understanding of those expectations? That is the gap. In other words, a customer could have a different set of expectations than what a firm understands those to be. Thus, firms need to engage in active and passive listening. Active listening can take the form of surveys, polls, etc, and passive can take the form of web data analytics. Close the gap by: (1) engaging in customer research, (2) focus on building relationships over time by meeting customer needs (i.e., CRM and relational database marketing), (3) when there is a service failure actively solicit input from customers on what went wrong and rectify this failure.

Design and Standards Gap
Focus on developing systems that meet customer needs while setting standards to measure your service operational environment against customer expectations. Close this gap by: (1) engaging in services R&D, (2) conduct 365 degree service mapping or blueprinting (i.e., map the customer lifecycle through all points of engagement), (3) measure operations against CUSTOMER-DEFINED rather than company-defined standards.

Service Performance Gap
Even though a firm may have closed the listening and design and standards gaps, if employees or independent contractors lack motivation or lack proper training and support, customers’ needs could remain unmet. Close this gap by: (1) aligning HR policies and practices around delivering superior service (Zappos’ core values are a great example of this tenet); similarly you should consider employee reward practices as articulated in the book Drive, (2) clearly tell customers what’s expected of them (oftentimes customers have no clear understanding of what they’re to do), (3) ensure that technology designed to support employees’ core functionality maps back to the listening and design and standards gap analysis (a good book to read in this regard is Rework)

Communication Gap
If your communications do not actually reflect what’s delivered to customers, there’s a gap. Close this gap by: (1) employing integrated messaging strategies, (2) actively manage customer expectations over time as their needs change (e.g., integrate social media messaging options in your drip marketing messaging platform), (3) ensure that you have consistent messaging before, during, and after a transaction, and make sure this messaging aligns with and reinforces customers’ expectations.

Photo: malias

Twitter sentiment analysis and media influence

This study and this presentation are fascinating examples of what’s occurring in sentiment and message analysis. The first study focuses on a sampling of 9,664,952 tweets from 2008 and found that Twitter (surprise ;-D) is an excellent media for analyzing public sentiment on topics of national significance (e.g., the 2008 Presidential elections). The authors find that social, political, cultural, and economical issues have relatively short-lived effects on public mood, but that Twitter may “highly affect the dynamics of public sentiment.”

The presentation cited above gives an overview of the concept of media influence modeling to better predict audience opinion formation. The author cites as theoretical underpinnings: Agenda-setting theory, opinion leadership theory, social influence theory, co-orientation behavior, priming and framing theory, and information theory. What’s interesting about this presentation is the depth and sophistication going into analyzing message influence. The bibliography (page 13) is an excellent resource too.

Social cues, social responses, humans know when a computer is engaging them

This research paper from Nokia Research Center, Stanford, and Queens University implies that humans can ascertain with an uncanny degree of certainty when a social message is sent from a computer versus a human. Social responses to communication technologies theory (SRCT)  predicts that humans cannot reliably ascertain such nuances. This research contradicts this premise.

The research team, using prior research in SRCT theories, tested whether humans could discern whether a text message was sent via a human or computer when flattery was an element of the message. They found that humans reliably discern the originator of the message apparently because certain social cues were missing in the computer-generated messages.

Why this is relevant research: SRCT theories could be used by software designers to create computer programs to engage social network users with the goal of getting them to increase self-disclosure under the guise of an interaction seemingly being conducted with a human. With the FTC recently considering allowing people to opt-out of behavioral targeting on the Web, the issue of nudging people towards more self-disclosure is timely given all the issues surrounding privacy and use of PII in social networks, especially if a user discloses such PII under the assumption they’re interacting with a human. This is a very interesting article and quick read (four pages).

Persuasive design principles and website user behavior

Motivation, ability, and triggers influence users’ website behavior, according to this research paper by Stanford researcher BJ Fogg. This is important if you’re targeting specific behavioral action (e.g., filling out a lead form). Before a user takes a desired action, she must be sufficiently motivated to perform the desired action, have the ability to do so, and be appropriately triggered to take action.

Fogg’s model is fairly easy to digest. For example, let’s say you want to drive more listing appointments (the target behavior), there is a trade-off between motivation and ability. In this scenario, a user’s motivation is somewhat variable (either they are interested in the property or not). Thus, as website designer you should concentrate on the “ability” side of the equation: do you make it a simple fill-in-your-email-address form, or do you make users fill out more detailed information prior to submitting their request? On this issue, Fogg concludes:

The implication for designers is clear: Increasing motivation is not always the solution. Often increasing ability (making the behavior simpler) is the path for increasing behavior performance.

Contemplating appropriate triggers is where it gets really interesting for website designers. According to Fogg, without an appropriate trigger, targeted behavior will not occur even if motivation and ability is high. There are three elements of a successful trigger: the trigger must be noticed, the trigger is associated with the targeted behavior, and the trigger occurs WHEN we are both motivated and able to perform the targeted behavior. Fogg argues that timing is THE critical element and is often missing:

In fact, this element is so important the ancient Greeks had a name for it: kairos – the opportune moment to persuade. As I see it, the opportune moment for behavior performance is any time motivation and ability put people above the behavior activation threshold.

Poorly-timed triggers (e.g., pop-ups) generally do not drive a user to take a targeted action and can even cause a negative emotion. Thus, Fogg argues that proper triggers will align with collaborative CRM concepts (which I earlier discussed), functioning mostly as “signals” or “facilitators”. I encourage you to read Fogg’s research paper (all 7 pages) as he further details the discreet elements under motivation, ability, and triggers that influence website behavior.

Photo credit: ell brown (off to Italy)

Gartner hype cycle and emerging media curve balls, change-ups, fastballs and Steve Harney’s 5Cs

The Gartner Hype Cycle is a useful graph for analyzing technology hype. Looking at the Gartner graph, I’ll posit we’re somewhere near the “Slope of Enlightenment” and the “Plateau of Productivity” with respect to social media. Over the past couple of years, business leaders have stepped up to the plate and faced some serious pitches while trying to figure out a sound business strategy that leverages social/emerging media. Indeed figuring out how to intelligently deploy emerging media can be like facing pitcher Stephen Strasburg.

Are augmented reality concepts a curve ball to your mobile strategy? Are emerging legal issues surrounding privacy, intellectual property ownership, open source and cloud computing licensing, etc, a change-up to your business game plan? Is the iPad a fastball?

It’s clear the pace of emerging media will continue unabated. Business leaders will continue to face a tsunami of innovation. Thus, it’s great to have a working archetype, or mantra to fall back on when analyzing whether to adopt an emerging media in your business plan. To this regard, Steve Harney has some excellent tips.

During a recent interview I had with Steve, he articulated a process he calls the “5C’s”. Harney’s list of 5C’s is a useful checklist to run through when you’re thinking about how to leverage emerging media—particularly social media—to achieve a business objective. Steve’s successful blog, Facebook page, and KCM Quick Report represent a choreographed social presence that he’s used to build a community that supports his business objectives.

Steve Harney’s 5C’s:

  1. Concept: Understand the concept of what you’re trying to do. What is your brand? What do you want to be seen as? What are your core values?
  2. Conviction: Have conviction to your brand. Once you have established your concept, how much conviction do you have to that brand concept? Ensure that your brand concept is translated into everything you do. The allure of emerging media—particularly social media—is that it’s omnipresent and relatively easy to deploy…and easy to get side-tracked. For example, when Steve launched his Facebook page, he decided that he did not want to dabble in Farmville, Mafia Wars, etc, because those social media activities—although fun, engaging, and playful—were not aligned with the core concepts of his brand.
  3. Consistency: Let your community know that you’re there for them on a consistent basis. For Steve’s brand it’s important to blog every day and update Facebook every day. His community has come to expect this. He therefore must maintain consistency to meet this expectation.
  4. Content: Focus on getting and supplying great content. Ensure that your content is strong and relevant to the community you’ve developed. Act like a curator.
  5. Collaboration: Allow your community to come up with the answers. Provide an environment that promotes sharing of ideas. Bringing minds together so they can learn from themselves is the key driver to getting the community passionate about you and your brand. Actively facilitate discussions that align with the Concept of your brand.

Photo credit: david.nikonvscanon

Finding user similarities in social networks

This study focuses on how to find similarities amongst individuals using social media based on their behavioral characteristics. Finding such similarities across myriad social networks has beneficial uses: making users aware of other users with similar interests, finding users who comment on the same blogs, and enhancing already existing recommender systems (e.g., Pandora’s partnership with Facebook). Would be interesting to see a real estate application using these theories.

Facebook privacy vs publicity debate

Facebook is at the epicenter of issues surrounding “publicity vs privacy” as marketers seek to leverage the social web to engage existing and new consumers. This CNET article is a really good summary of issues swirling around the latest changes Facebook has made to its data sharing policies. Here are the salient take-aways:

  • Facebook marketing “partners” (e.g., shopping sites, news sites, etc) have seen huge jumps in referral traffic after implementing Facebook’s “social plug-ins”
  • Despite the success Facebook marketing partners may experience, security issues have emerged with the implementation of these social plug-ins
  • Facebook’s brand image is rising with adults 18-34 but dropping with adults 35+

Brands appear to benefit by tightly integrating Facebook into their customer outreach efforts. For example, this MediaWeek article (thanks @ReggieRPR for the heads-up) reports that Starbuck’s Facebook page is valued at $20 million. Nevertheless, the CNET article points out interesting issues that could impact Facebook’s marketer outreach efforts. The core of the issue is the inherent tension between publicity vs privacy; that is, just because someone makes something public does not mean they necessarily want it publicized. Danah Boyd in her keynote address at the 2010 SXSW Interactive made this latter point, as well as the following observations:

  • Technologists’ have a mantra that “privacy is dead”, but this is not true
  • People still care about privacy and the “public by default” “private through effort” dichotomy represents an inherent tension for individuals wanting to navigate online social worlds (Danah was referencing the fact that in many social networks users’ personally identifiable information and activities conducted through these social networks are rendered “public” by default and that users have to proactively change their privacy settings to make such information and activities less public or wholly private)
  • Marketers should remember that just because you can “see” someone does not mean they want to be “seen” by you
  • A Pew study showed that most adult social network users are privacy conscious (see related Pew study here showing that younger adults seem to be exerting even more control over their digital reputations)
  • Product developers need to think through publicity-vs-privacy-vs-control issues if they want to develop and launch successful products that tap the inherent benefits of the online social world

It will be interesting to see whether consumers will or will not readily use Facebook’s social plug-ins as privacy issues continue to gain mainstream media attention. What are your views?

Photo: alancleaver_2000

Leveraging data analytics for competitive advantage

Two articles recently caught my interest. The first article from the Financial Times, Smarter leaders are betting big on data (registration required) focuses on how companies use data analytics for business intelligence purposes. The best quote from this article:

Data is the new plastics

The second article from the Los Angeles Times, He’s start-ups’ best friend, profiled angel investor Ron Conway and his theories about investing in start-ups. The most telling quote from this article:

His current focus is “real-time data” companies that help people share what they’re doing instantly – using text, photos and video. “This sector is going to be huge,” he said.

As real-time data begins to inundate firms more and more by virtue of their forays into the social web and mobile world, data analytics offers a way for firms to utilize this data in novel ways to deliver more engaging and relevant experiences to their customers. For example, a firm could use data analytics in a predictive manner to dynamically deliver more relevant web pages based on consumers’ behavior throughout a firm’s website. Similarly, firms can use a service like Flowtown in conjunction with a service like First American Core Logic’s lead qualification services to gain insight into a registrant by combining their social persona with their transactional persona and then deliver relevant data and content based on this combined persona. Firms that begin to leverage data analytics will have distinct advantages over their competition in the near and long-term future.

Collaborative CRM strategies and concepts

Collaborative CRM strategies offer firms unparalleled opportunities for establishing more meaningful relationships with their customers and clients.  Mobile CRM is closely aligned to collaborative CRM concepts. This research paper characterizes collaborative CRM as:

The notion of collaborative CRM is still in discussion and has two interpretations that are often mixed…The first is closely connected with communicative CRM and focuses on interaction channels (e.g. phone, fax, e-mail, self service portals) between a company and its direct customers. The second extends the CRM concept on the level of value chains and business networks. This approach consolidates concepts of networked organizations and marketing to enable the creation of customer relations and value at a network level by sharing or pooling of network resources and capabilities…It enables producers, distributors and service providers to extend their customer acquisition, retention and development beyond their company borders and even to involve the customer directly.

Fundamental concepts of Web 2.0 and the social web such as transparency, authenticity, trust, engagement, and listening underpin collaborative CRM concepts. Similarly, customers’ demands for immediacy and relevancy in communications further support collaborative CRM. And mobile technologies have the potential to be the catalyst to firms’ implementation of collaborative CRM practices. But as pointed out in the research paper mobile technologies are not a panacea for collaborative CRM. The researchers point out that to facilitate collaborative CRM goals, existing business processes must be redesigned so as to take advantage of the unique characteristics of mobile technologies while delivering additional value to customers. Many companies are simply using mobile technologies to deliver information in a one-dimensional manner (i.e., a messaging service) as opposed to a multi-dimensional manner.

The authors conclude with several recommendations to consider when setting up a collaborative CRM strategy:

  1. Set up appropriate customer segments, which allows firms to deliver individualized services
  2. The CRM system must integrate mobile data (mobile sales, mobile content usage, location based services, etc)
  3. Ensure customers understand that a firm’s mobile services offer enhanced value so they will make use of these services
  4. Firms should consider specialized mobile CRM data analytics platforms that integrate with core CRM systems because current core CRM platforms lack sufficient sophistication to account for mobile CRM data needs

Photo credit: The Lightworks

1) Set up appropriate customer segments, which allows firms to deliver individualized services
2) The CRM system must integrate mobile data (mobile sales, mobile content usage, location based services, etc)
3) Ensure customers understand that a firm’s mobile services of enhanced value so they will make use of these services
4) Firms should consider specialized mobile CRM data analytics platforms that integrate with core CRM systems because current core CRM platforms lack sufficient sophistication to account for mobile CRM data needs
Photo credit: The Lightworkshttp://www.flickr.com/photos/leonardlow/1142365603/

Innovation and competitive differentiation using idea management systems

This research report delves into how Microsoft used a grassroots idea management system to encourage individuals who do not routinely participate in “formal” product development processes to contribute their ideas to new product development initiatives. Out of 1,491 users, 315 ideas were generated, 100 prototypes produced, with six ideas absorbed into product teams.

Microsoft approached this process in four phases: pose a challenging business problem (Microsoft posed challenges on Peer2Peer advertising, identity-based systems services, and social computing), foster community ideation, filter/refine the best ideas, and launch/integrate qualified ideas into designated product pathways. Once an idea is submitted, community participants had a chance to vote, comment, and extrapolate on those ideas. Not so surprising was the fact that development and sales/marketing personnel participated the most. Nevertheless, the researchers cited several instances where other types of participants valued the exercise because it allowed them to informally break out of their silos and contribute to an overall corporate goal.

Despite the success of the system, the researchers recommended several areas for Microsoft to improve:

  • Foster meaningful participation across the broader corporate community by offering incentives that would allow individuals to justify deviating from their normal job functions
  • Use business relevant criteria in the voting process, not “popularity” voting
  • Measure and appreciate outcomes beyond revenue (the authors cite improved workforce ideation skills, cross-functional cooperation and pollination of ideas, and breaking down silos)
  • Structure the idea submitting phase so that it cuts off at some point; some ideas that were submitted towards the end of the process were not seen or voted on
  • Great ideas center around challenge problems (i.e., focus ideas around business critical issues to resolve)
  • Have ideas meet some minimum threshold so as to weed out truly frivolous ideas
  • Encourage product developers to review relevant ideas in the system that previously had not been acted upon; this ameliorates the perception that the system is an “idea graveyard”
  • Clearly label each phase of the innovation system/process so it enables users to fully understand their contributions within each phase
  • Create a support system for users whose ideas were not selected but nevertheless want to further develop them; some people are simply passionate about their idea and are willing to spend their own time developing such, and the idea management system should have a template for them to follow

A idea management system can operate as a competitive advantage for firms. By internalizing and facilitating an idea groundswell not only are firms harnessing internal talent but they’re creating valuable intellectual property assets that can potentially deliver a huge competitive advantage.

Influence on Twitter

Influence on Twitter is not necessarily tied to the number of followers one has, at least this is one of the conclusions in this report on Twitter influence which came to my notice by a @papadimitriou recent tweet. The core finding: it’s more influential to have an engaged audience that actively retweets and mentions the user, and one keeps this audience engaged by frequently interacting with this audience (see common sense paragraph below).

The dataset used in the report consisted of nearly 2 billion follow links among over 54 million users who produced over 1.7 billion tweets. Here’s a link to a website the report authors set up that further describes the dataset. The report compares three measures of influence: indegree (i.e., number of followers one has), retweets, and mentions. The most followed users were news sites, sports stars, and politicians. The most retweeted were content aggregation sites like @Mashable and @TwitterTips, @GuyKawasaki, and @TheOnion. The most mentioned individuals were mostly celebrities.

The report found that retweets are primarily content driven (including both the username and link to a source), whereas mentions are mostly identity driven. In looking at retweets and mentions, individuals who were both retweeted and mentioned the most showed the highest engagement metrics (i.e., conversing with their audience), as well as posting creative and interesting tweets.

Finally, the report focused on how much influence “ordinary users” can exert within the Twittersphere. In this case, the authors looked at how completely unknown users exerted tremendous influence (as measured by retweets and/or mentions) during serious news events. By limiting their tweets to a single news topic, users like @oxfordgirl quickly gained influence.

This report, I suppose, just reinforces common sense at some level. But it’s nice to see someone crunching the numbers to reinforce one’s intuition.

Photo: soundfromwayout

Satisfied customers are more loyal than delighted customers

This research paper focusing on the hotel industry indicates that although delighted customers have generally positively views of brands, a satisfied customer will more likely take action supportive of loyalty marketing constructs (i.e., actually book a return trip) because they have an emotional connection to the brand. Thus, the researchers suggest that marketers focus on loyalty programs that seek to instill positive emotional experiences with the brand. Such mechanics go beyond baseline experiences like prompt response times, meaningful communications, knowing where a customer is in the life-cycle of a transaction, and extend to activities that prompt a positive emotional response (like receiving a handwritten thank you card).

Influence of word of mouth on customer perception of service

This research paper focuses on the influence of word of mouth (WOM) on customers’ perception of service. It’s axiomatic that negative WOM can significantly impact brand reputation. Studying the effect of WOM on such perceptions, though, is another matter. And the research article delves into some interesting bits. First, customers’ perceived service value influences their revisit intention, which in turn influences positive or negative WOM. Second, gender influences WOM. The study points out that women trend more towards a relational aspect versus men who are more trial-and-error focused:

  • For female customers, relational service quality will have a stronger total influence on the WOM than core service quality.
  • For male customers, core service quality will have a stronger total influence on WOM than relational quality.
  • The total effect of relational quality on WOM will be stronger for female customers than the male.
  •  The total effect of core quality on WOM will be stronger for male than female.

The implications seem fairly obvious: focus on delivering superior relational and core experiences. The study suggests different methods of CRM (call scripts, greetings, etc) based on gender, especially where the CRM involves human-to-human interaction. In real estate, this could trickle down to agents’ initial interactions with cusomters too: for men, generally, get right to the point, whereas for women, generally, focus on establishing a relationship first and ease into the data as relationship-focused interactions mature.

Customer loyalty CRM and customer satisfaction

This research paper on CRM strategies used by RBC Royal Bank of Canada (Bahamas), analyzes whether the bank successfully applied the four P’s of CRM (planning, people, process, and platform). It’s well established that financial success is tied to a well executed CRM strategy which drives customer loyalty and customer satisfaction. What this research paper found was that although the bank lists CRM as a strategic initiative and policy, it has not integrated the CRM process at each customer touch point. The methodology used to correct the problem was instituting a wide-ranging customer satisfaction survey initiative to ascertain–from the customers’ viewpoints–where the service breakdowns and gaps actually occurred and to make changes accordingly at those points.

Small agile groups drive innovation

According to this MIT Technology Review article, agile groups with fluid ideation and development team dynamics routinely create more innovative products. Yet commercialization of an innovative product is another matter. Successful monetization of a product requires a disciplined approach towards continuous systems and process improvements. But herein resides a trap: once an innovative product becomes systemized, further innovation on that product can become frozen as profitability goals dictate less variance in the process. Companies like W.L. Gore & Associates seemed to have solved this dilemma.

Curating content and user experience on the Web

This blog article on “controlled serendipity” spurred me to conduct a little content curating of my own, resulting in this gem of a research paper that documents how the BBC utilizes Linked Data technologies to make it easier for BBC users to navigate its vast programming database.

The first article discusses how the Web collective–the user commons if you will–is benefiting from individual efforts at curating content, done largely as a free service driven by a spirit to share.

Sharing has become a reflex action when people find an interesting video, link or story. Great content going viral isn’t new. But the sharing mentality is no longer confined to the occasional gems. It’s for everything we consume online, large or small.

I think anyone engaged in the social Web would readily agree with this sentiment. It’s what makes participating in this distributed forum so fun. The article also points out, however, that the vast content mines that exist can be somewhat difficult to navigate to find true gems. Thus, the implication is that content providers need to step up to the plate and deliver content systems that make it easier on Web “content curators”.

The research paper referenced above describes how the BBC used a concept called Named Entity Recognition (NER) to extract concepts from textual input. This allowed for more efficient human editorial input to ensure that these concepts were accurate. Once approved these “concepts” were transformed into links appearing on a Web page. This process then allowed the BBC to use the “concept links” to create user journeys through their site. All this is based on semantic web principles. The future looks bright, indeed, for those of us who constantly scour the Web for salient content.

I think anyone engaged in the social Web would readily agree with this sentiment. It’s what makes participating in this distributed forum so fun. The article also points out, however, that the vast content mines that exist can be somewhat difficult to navigate to find true gems. Thus, the implication is that content providers need to step up to the plate and deliver content systems that make it easier on Web “content curators”.
The research paper referenced above describes how the BBC used a concept called Named Entity Recognition (NER)http://en.Wikipedia.org/wiki/Named_entity_recognition to extract concepts from textual input. This allowed for more efficient human editorial input to ensure that these concepts were accurate. Once approved these “concepts” were transformed into links appearing on a Web page. This process then allowed the BBC to use the “concept links” to create user journeys through their site. All this is based on semantic webhttp://en.wikipedia.org/wiki/Semantic_Web principles.

Using text analytics to increase customer engagement and loyalty

I love it when research/theory manifests in application/practicality. In 2007, I wrote about research being conducted on semantic analysis related to social media and blogs, and now there are companies using products stemming from this type of research.

Information Week covered text analytics, describing how JetBlue uses text analytics to understand customer sentiment from email messages, which informed the airline how to draft its customer bill of rights. And KMWorld discusses how the burgeoning field of “customer experience analysis” uses text analytics to increase customer engagement and loyalty.

Customers today aren’t just customers–they’re influencers and social networkers. Across the Web at any hour, they’re sharing observations about your company’s products and services, and those of your competitors…These new modes of customer behavior make it essential for companies to move beyond traditional ways of gathering, analyzing, and acting on customer information – Information Week

For a long time, text analytics was a technology in search of a business need. Now, thanks to social media, the need is there; the question is whether the technology can ramp up fast enough to be commercial – KMWorld

Where social media in real estate sometimes has the floor manners of a dog’s breakfast, it’ll become increasingly important for real estate firms to engage in text-sentiment analysis as part of their overall CRM and customer experience efforts. Here’s a list of companies that offer text-sentiment analysis services:

Photo credit: mnapoleon

New media innovation issues and risks

This research paper, Power, media culture and new media, delves into social justice issues surrounding the democratizing effects of new media. The paper points out that new media benefits (e.g., easier access to information through widespread platforms like mobile devices) are not equally shared or distributed across class, race, or national origin. The paper also implicitly points out that the use of mash-ups along with the increasing diversity of media outlets could create a “ripe” environment for effective government-sanctioned propaganda campaigns.

Similarly, the new media environment where essentially everyone can be a “content producer” offers unprecedented opportunities for government surveillance and ultimate suppression and/or obfuscation of speech by using new media outlets as viral engines to discredit speech that’s counter to government views or objectives. The author does point out some positive reverberations from new media harmonics; and this is the alignment of human rights initiatives with new media (as embodied in such organizations like Mothers Fighting for Others). Nevertheless, the paper ends with a caution that discriminatory (and by implication, repressive) actions can re-emerge in new media, despite the overarching democratizing effects of the medium.

Does this paper relate to real estate? Not directly. It’s simply a great education piece on the broader implications of our new media economy and society.

Using play-scripting as a means to develop effective corporate strategies

Writing a “playscript” is an incredibly powerful way to conduct a competitive business review, according to this Harvard Business Review article (subscription required). The article advocates writing a “playscript” using characters and character analysis to define your company and competitive landscape for use as a foundational element in corporate strategy development.

The article argues that “traditional” strategy tools like five forces maps and blue ocean thinking are outdated because they assume a static competitive environment as opposed to a rapidly evolving one. The article argues that by drafting a “playscript”, companies are in a much better position to map the landscape and anticipate emergent competitive forces.

In developing a playscript, the article suggests focusing on the following:

1) Draft a current playsript: Broadly describe the setting in which you operate by identifying the other characters, their motivations, what role your company plays, how this role is perceived by others; it’s important to view your role as critically as you can through the eyes of others (i.e., perception is reality); map the links among all the actors and the rules that govern them; give voice to the value your organization adds.

2) Rewrite your playscript: the goal here is to rewrite your playscript and, if possible, reinvent the playscript for an entire sector by answering such questions like “Can my organization attract new alliances to my sector where I can then leverage these alliances to add to an existing link or create a new link in a customer-centered value chain?”; determine where there’s a value need and fill this need (the article cites Intrawest as an example of a company that filled a value need by creating alliances with partners that deliver an exceptional destination living experience which has allowed Intrawest to emerge as a dominant player in managing experiential destination resorts, whereas before its focus was on developing these types of properties).

3) Future-proof your playscript: consider how changes in your customer needs will affect your company by finding the correlation between who your customers are, what they want, and how they get the things they want (the article cites IKEA as a company that’s done this well by foreseeing high volatility in the prices governing the wood it uses to make its products so it purchased forests in Poland and the Baltic states to help stabilize prices, thus allowing it to confidently focus on dominating the low cost segment of the “lifestyle furnishings” market).

Since 2005, we’ve seen many playscripts written and re-written in the real estate industry with the advent of Trulia, Zillow, Redfin, etc. Since 2007, we’ve seen new marketing and customer acquisition playscripts written and re-written via the explosion of social media and social networking. And currently we’re seeing playscripts written and re-written with the emergence of mobile applications and augmented reality. What’s your playscript that will allow you to position your firm as a dominate player in your market? How do you plan to adapt to the changing needs of your clients and customers, especially in terms of mobile solutions? Who are the dominate characters in your company, your competitors, and the industry at large? Who’d you cast as Othello, Brutas, Caesar, Puck, Mr. White, Mr. Pink, Mr. Blonde?

Photo: tanakawho

Customer strategy departments driving customer loyalty

This Harvard Business Review article (subscription necessary) makes a strong case for companies to create customer strategy departments and positions. One section of the article focuses on “Customer-facing functions” and makes some great recommendations:

  • Customer Relationship Management (CRM) responsibility should migrate away from corporate IT and into the customer strategy department since CRM helps companies assess customers needs and wants and that’s the role of customer strategists
  • Market research should break-out of the marketing department silo and extend to all departments and focus bilaterally on the aggregate and the individual (for example, creating customer profiles as espoused in the book, The New Rules of Marketing & PR) with a singular focus on customer for life (CLV) and customer equity metrics to measure success (here’s a sample lifetime value of a customer analysis from the Database Marketing Institute that will help you begin thinking about CLV metrics
  • Customer strategists should drive the product development process rather than the engineers; the article notes that NOKIA launched NOKIA Beta Labs in Asia and enjoys 60% market share there because, in part, this developer community helps drive the product development process, whereas in the U.S. Nokia pursued a different strategy that has far less consumer input and has suffered

Voice of the customer is not a new concept in product design and development. It’s sure refreshing to see HBR tackle this issue. What’s your view of creating a customer strategist role in a company?

Photo: ishrona

Innovation and cross-functional team differentiation for competitive advantage

What factors influence effective cross-functional team environments that spur the greatest innovations and competitive advantage? The authors of this study (.pdf) (focusing on manufacturing) determined that baldly implementing a cross-functional team approach is not a universal good. Notably, the authors found that cross-functional teamwork involving marketing may have a negative effect (the authors noted too, however, that this finding contradicts earlier studies). The authors conclude that companies should focus cross-functional teams on product design, development, and engineering so as to yield the highest gains in terms of innovation. I’ll posit that this finding can be applied to firms outside the manufacturing industry that are focused on software development and related product development activities.

Interestingly, this study (.pdf) concludes that many marketing departments exert positive influence on a firm’s overall market innovation in the following areas: advertising, relationship management, segmentation, targeting, and positioning. Marketing departments can influence product innovations through their overarching customer knowledge and insight into trends. Thus, a way to effectively involve marketing in cross-functional teams focused on software-related product development activities is to have the marketing team drive a voice of the customer ethos throughout the ideation and development process.

Online community management and social ties

This study (.pdf) delves into programmatic methodology that can be used to predict strong and weak ties between users of a social network. From a community manager’s perspective, this is important because predictive activities can alleviate some oversight tasks while intelligently satisfying the needs of community members. As an example of practical implications of their research, the authors note that:

When users make privacy choices, a system could make educated guesses about which friends fall into trusted and untrusted categories.

…and…

Consider a politician or company that wants to broadcast a message through the network such that it only passes through trusted friends.

From a marketing perspective, it’s important to understand this as way to drive customer loyalty because as social networks continue to grow, predictive systems that deliver more relevant information in meaningful ways will drive overall customer loyalty. This could be a huge value add for such social network marketing/branding services like Facebook pages.

Related post: Peering Under the Hood at Facebook

Customer loyalty and corporate reputation

To what extent does corporate reputation affect customer loyalty? This study (.pdf, begin reading at page 28) found that corporate social responsibility (CSR) is the second most important factor influencing corporate reputation (with overall competency being first). In fact, CSR was found to have a higher impact on corporate reputation than product price. The authors posit that CSR impacts customer loyalty because such corporate behavior elicits customers’ positive emotions. Left unresolved is whether a company can over-leverage such CSR activities in its push to drive customer loyalty. In other words, where is a marketing line crossed in customers’ eyes where a negative emotion is associated with a company’s overt efforts to leverage its CSR activities; is there diminishing returns on such “cause marketing” activities.

Related post: Positive Authority and Digital Reputation

Customer loyalty and online community development

What factors keep an online community happy, involved, and engaged? The authors of this study (.pdf) found four primary things influence these three factors:

  • Purpose: Clearly define the purpose and values of the community space with a well-articulated and succinct statement so people who join the community know what to expect, while internally defining your (i.e., corporate) goal of the community
  • Monitor: Before you can know how a community vibe ebbs and flows, you must monitor the community’s interactions, and “embrace” community leaders perhaps by elevating their status within the community
  • Feedback: Implement meaningful rating systems (the authors site a rating system that reflects users’ behavior as an example of a meaningful rating system, as opposed to a simple “top ten” type system)
  • Organization: Clearly guide new community members about where to go, what to do, how to get acquainted, etc, while cuing or gently nudging existing users with meaningful suggestions and topics on how the community can grow and evolve

Related post: Community crowdsourcing and innovation

Customer loyalty and employee engagement

To what extent does employee loyalty and commitment to a brand drive overall customer loyalty? This research paper (.pdf) tackles that question and concludes that employee attitudes toward their company have a high degree of impact on customer loyalty. What the authors essentially argue is that fostering a corporate environment that espouses a unique and positive corporate culture grounded in clearly defined values goes a long way to inspire employees to be more engaged with their company and brand.  Once this baseline is met, the authors propose that brands create internal employee engagement indexes to monitor employee sentiments toward the brand (similar in concept to consumer engagement metrics) to ensure they remain committed to the brand and ultimately the customer. Thus, the company can ensure that it’s employees are working towards increasing customer loyalty. A perfect example of this is Zappos.

Related posts:  Creating a culture of creativity and innovation and Creativity Integrity and Brand Differentiation

Customer loyalty and customer trust

Trust is a major driver of customer loyalty. How does a corporate brand secure this trust following a breakdown in service delivery? The authors of this study (.pdf) ponder this question and proffer some intriguing insights. The authors argue that negative emotions experienced by a customer following a negative service experience do not necessarily change his or her attitude towards the service provider; rather, the customer simply leaves the service provider. Although losing a customer is never good, this finding is somewhat good news because it seems that customers are unlikely to carry a negative emotion for long with respect to the brand following a service break-down, thus minimizing the chance of an emotive outburst via social media that negatively affects the brand. On the flip side, a brand can enhance the trust and loyalty of its customer base if it honestly admits a mistake and vigorously works to correct such.

Related post: Trust indicators in social network marketing

Social Web resources 12-11-2009

Very well drafted and inciteful list of predictions for 2010. The author, Ravit Lichtenberg, delves into what will impact innovation, while opining that mobile become even more central, integrated/social search relevancy will begin to trump search aggregators like Google, and marketers will demand ROI.

Excellent discussion on measurment tactics for Google AdWords campaigns. Discusses basics of setting up a custom report in Google Analytics to tips on interpreting data.

This research paper (pdf link) explores the “viral effect” in Flickr (used as a model of social networks in general) and found that the viral effect generally stays within close proximity of the original uploaders, social links are the dominant method to share and spread a message, and popularity of pictures grows over years. The paper is not a “gentle” read, but worth your time if you want to dig in deep on data analytical methodology.

Future of search and search engines

Here’s an article that details some interesting issues relative to search, recapping a Xconomy Forum on the Future of Search and Information Discovery panel recently held in Seattle. On the dais were Microsoft, Google, and a couple of University of Washington professors. Here’s some salient take-aways:

  • It’s still unresolved whether vertical search will significantly impact general search
  • The nexus between real-time search, consumer intent, and semantic search is where the search gold resides
  • Hurricane Katrina taught Google a lesson about relevance and real time results
  • Opportunities to compete with Google and Bing exist, but only on the edge or fringe such as applications that bypass search engines, employ automated content discovery mechanisms, use semantic search, or perfect mobile geo-search

Interesting quotes:

Google is like smoking cigarettes, it’s a habit that’s going to be difficult to give up. So what can you do? You have to think about the problem space. Google’s approach is to get people in and out of search engine quickly with their result. Not the right way to think about it. Right way to think about it is to think about minimizing time of completing a task, not minimize the amount of time to match a query with a url.

[O]rganize the information in a way that synthesizes the task that you want to accomplish.

Mobile is huge. Apple is the big fish at the moment. Android coming on strong. Won’t hold my breath on Microsoft.

Two things which potentially threaten us. [1] As we become bigger and older, it could become more difficult for Google to innovate…[2] Also worry about diminishment of sense of entrepreneurship.

Community crowdsourcing and innovation

The Wall Street Journal recently profiled calculator hobbyists who hack calculators to do weird (but ostensibly fun) things like making an Etch A Sketch, or a Tetris game, or synthesized music. The WSJ article also relates how a calculator company that was the target of some of these hacks sent cease and desist emails and letters to members of the calculator hack community for violations of intellectual property rights.

First, it’s understandable why the calculator company sought to protect its intellectual property. But there’s also an opportunity for the calculator company to foster a user community from this hack community, and the LEGO MINDSTORMS community offers an intriguing parable.

Product directors at LEGO MINDSTORMS first reacted negatively to a budding hobbyist community centered around their product, according to this MIT lecture, but have now embraced this community to drive product sales and innovation. Similarly, IBM has a developer community. And this research paper details how individuals update Google’s mapping system to make it more accurate, while this New York Times article discusses how a community of volunteer cartographers are logging details of neighorhoods.

Leveraging user-generated content

Razorfish points out keen ways to leverage user-generated content (UGC). In the midst of all this social media mania marketers can leverage UGC to gain insight and develop relationships. A poignant take-away from the Razorfish blog post: UGC is  not problematic in it’s own right, rather it’s filtering UGC to gain actionable intelligence that will make for meaningful engagement with customers and clients to build long-term relationships with them. Best quotes from the article:

The problem isn’t with UGC, it is with the filtering, sorting and prioritization and that’s where the technology, the semantic web and also the ability to filter through the lens of a social graph is going to make a big difference.

Leveraging user-generated content are the same ones that marketers and sales people have been preaching for decades: 1) build relationships, and 2) provide value that fills consumers’ needs/wants.

Companies (and individuals) have long espoused transparency, of course, but the economic and viral advantages of tapping and responding to user-generated content are nudging us into arenas of more authentic rather than staged transparency.

The future of UGC global rights management will lie in solutions that strike a perfect balance between the goals of the copyright holder and that of the user.

Photo credit: jelene

Sustainable innovation and excellence in product development

In this MIT Sloan School of Management lecture on sustaining innovation, the CEO of W.L. Gore & Associates, Terri Kelly, has some great insights on how creative knowledge environments drive profitability.

W.L. Gore is a diverse and innovative company, creating products ranging from GORETEX to surgical devices. Kelly stresses to give your team the right tools, promote the right culture, maintain minimal bureaucracy, have high expectations for networking within the organization to connect and share knowledge, and recognize that leaders are “leaders” only if people actually want to follow them.

Define what you believe, define your guiding principles, define your core values, and define key disciplines. Use these four elements as the framework around which culture is nurtured, all the while recognizing that these elements must work as a system; any one element does not ensure success…it’s the interrelatedness of the components that promotes success. Culture is an active investment in terms of time, energy, and dollars, not a cost.

For W.L. Gore, this investment in culture results in amazing products like OPTIFADE hunting gear (play this game to see how it works). Obviously, W.L. Gore is doing something right. This Kelly lecture is well-worth 54 minutes of your time to gain some amazing insights.

Related post: Creating a culture of creativity and innovation

Creating a culture of creativity and innovation

Viewpoints on the future of free

Free is not the future of business.

Jason Fried, founder of 37 Signals, made this argument earlier this year at the Future of Web Apps conference. And this comment to Fried’s statement  makes a great argument based on simple economics: free is unsustainable from a product development perspective. So how does Red Hat make money by leveraging an open source system like Linux? Here’s a recent article that sheds some light on this, Red Hat is contemplating building a North American channel partner program, and it’s recently inked a deal with Amazon, and here’s an academic paper that points to three dominant ways by which to make money on open source:

  • consulting and support services around the software
  • derivative products built on the community project
  • increased revenue in ancillary layers of the software stack

The article goes on to predict that by 2012 more than half of open source revenue generated will derive from commercial open source.

I’m in agreement with Fried, and align with Robert Scoble,

I love paying for apps. Why? Because when I do that I encourage developers to build more cool apps for me…Anyway, the main point here is that it’s not the app store that’s screwed up: it’s our expectation that developers should work for free.

Scoble’s argument also aligns with Chris Brogan,

Don’t ever feel embarrassed to charge for value. Never apologize that something costs money if you’ve determined the value of it.

Makes sense to me.

Moving beyond social media

The label “social media” has lost its resonance in so far as the concept of “social media” has been reduced to a series of marketing tactics. As David Armano says in a Harvard Business Review blog article:

Let’s start with the challenges — the term “social media” itself is indicative of the state of affairs. “Media” limits our view of the movement, and brings with it the baggage of decades of advertising. Marketers are only too happy to view the social web as a new array of channels to market their goods in some shape or fashion. That’s because it’s a model they’ve used since the beginning.

Armano goes on to essentially say that “social media” represents a fundamental cultural shift. It’s a shift that started many years ago. In 2006, Cory Doctorow on BoingBoing uttered 10 words that embody this shift

Conversation is king. Content is just something to talk about.

This sentiment was re-articulated recently by Jay Thompson’s humorous, yet prescient, “Og the Caveman” parable

Back in the day, Og the Caveman would sit around the fire and talk about his day to anyone who would listen. The cave-ladies would roll their eyes while Og recounted his manly adventures, and cave-dudes would all be one upping each other with tales of who speared the bigger Mammoth…They had friends, and followers. There were popular cave-people, and there were annoying cave-people. And everything in between. Just like we have today. Only today we have whiz-bang technology tools to take our socializing and networking planet wide.

Indeed, it’s the technical infrastructure that’s a catalyst to this conversation enflamed cultural shift, most recently embodied by the battle for real-time search dominance. For example, a friend of mine recently commented on the uselessness (to him) of CNN in terms of real-time news and authority where, in the midst of the Mumbai attacks last year, the CNN anchor kept referring to Twitter as the source. Given this, my friend’s legitimate question was (still is) “So why am I wasting my time with you?” As a brand, CNN took a negative body blow.

Brands are not incognizant to this sentiment, this cultural meme, or gestalt-like shift to mine the real-time conversation core, and have launched full-bore social media marketing efforts to be part of the vein. But have these efforts been designed? Again, Armano, is on the money with this post on “filtering” the network economy and this presentation, Social Business By Design,

I especially like slide 23 where he points out an article discussing the concept of having a “Chief Social Media Officer”, which reminds me of turn-of-the-century job descriptions like Chief Electricty Officer and how irrelevant those titles were when electricity became as ubiquitous as air. So at a high-level what’s brand to do, be it a brokerage or agent brand?

As Armano demonstrates brand impressions–positive or negative–occur through many touch points, and as a brand you only have so much control. What you can control is 1) how you listen (through Twitter, Facebook, LinkedIn, blog, etc), 2) how you respond via these same channels, 3) what brand “persona” you want to convey via these listening and responding posts, 4) who you put in place to manage this process (are you serious and demonstrate that by hiring the right person for your brand versus having interns manage this process; the former indicates you’re in for the long haul whereas the latter indicates you still consider this cultural change child’s play), 5) architect your tactics by following a “designed” strategy. Here are four places to begin your strategy:

David Armano’s mind meme on design and his post on experiential design
Adam Singer on niche versus mass media
Understanding and measuring user engagement by Eric T. Petersen

Related posts: Choreographing Client Experiences on Your Website, Theatre of Cruelty in a Carnival of Real Estate, Twittering Away Your Digital Legacy

Photo credit: vkurland

List of social Web resources 09-19-2009

Social media monitoring
Here’s a great list of conversation monitoring tools. The article points out some very interesting and straight-forward tips; I especially like the tip on this social media monitoring wiki.

Search use up, email use down
The Online Publishers Association released a study showing that consumers are spending more and more time on search  and content centered sites while dropping their use of email and instant messaging.

Social network use by mobile device
This study by AdMod shows that social networking is the most used application of iPhone and smartphones users and that Facebook is the number one accessed social networking site.

Innovation in a competitive marketplace

Target, 1958, oil and collage on canvas by Jasper Johns
Target, 1958, oil and collage on canvas by Jasper Johns

Perfectly Competitive Innovation is a fascinating article on what drives innovation. The authors argue against the notion that patents and copyrights promote innovation. Rather, its a rich competitive environment that drives innovation.

In other words, regardless of copyright law, movies will continue to be produced as long as first run theatrical profits are sufficient to cover production costs; music will continue to be produced as long as profits from live performances are sufficient to cover production costs, books will continue to be produced as long as initial hardcover sales are sufficient to cover production costs, and financial and medical innovations will take place as long as the additional rents accruing to the first comer compensate for the R&D costs.

This sentiment was echoed by MIT Professor Eric von Hippel in a lecture where he discussed innovation occurring in kite surfing where practitioners put their innovations under a creative commons licensing scheme to thwart an attempt by manufacturers to exploit their innovations under traditional intellectual property rights law. Perfectly Competitive Innovation similarly points to many case studies and scenarios demonstrating that innovation does not necessarily need the traditional intellectual property rights rubric to thrive and survive.

Photo credit: cliff1066

Innovation driven by extreme user communities

According to MIT Professor Eric von Hippel’s lecture, Democratizing Innovation, manufacturers traditionally look to the center of the market to drive innovation; that is, with their penetrative questions to and analysis of this market, manufacturers think they can discern what to do in terms of innovative product development initiatives that meet consumers’ needs. What Professor von Hippel actually found is that innovation does not come from the center of the market, it comes from an extreme market fringe driven by localized users and early adopter user communities pushing the limits of an original device or prototype. As an example of this, about 22 minutes into the video, von Hippel discusses how these types of communities quickly drove up sales of Lego’s Mindstorm product, while morphing Lego’s original concepts of the product. And about 28 minutes into the video, von Hippel goes into how user groups drove innovative design in the kite surfing market while putting their design innovations under a creative commons licensing scheme which hobbled manufacturers’ attempts to exploit these innovations. This video runs a little over one hour.

Innovation and design thinking

Empathy, collaboration, human centered feature/functionality, storytelling, and culture are themes that drive innovation through design thinking. Core phases of design thinking: inspiration, ideation, implementation.

On inspiration of ideas: use the world as a source for new ideas; focus on research that is ethnographic, anthropological, and qualitative versus just quantitative; focus on extreme users and strive to understand their world from cognitive and emotional levels.

On ideation: build things to learn about your ideas; rapid and low cost prototyping and iteration is key; prototyping allows you, as the designer/innovator, to get a sense of what you’ve learned and refine your ideas over time with stakeholder feedback driving the process.

On implementation: use storytelling and construct a story around the ideas you have, the more likely that your idea will make it out of R&D; a story frames the idea.

Culture ties together inspiration, ideation, implementation. Culture is its own inspiration.

This is a  fascinating lecture on innovation (57 min, well worth your time).

Innovation and the future of corporate R&D

This New York Times article on how corporations can foster innovation within their R&D departments by adopting decentralized (i.e., “federated”) approaches to funding and team structure, spurred me to conduct some research regarding this topic; here are two great finds:

TED conference speech by Charles Leadbeater on outside-in innovation and how this type of “innovation-in-use” phenomenon has profound impacts on business:

Research article discussing how universities can support and spur regional innovation; fascinating read on Georgia Tech’s success in this regard.

Related posts: Creating a culture of creativity and innovation, Innovation considerations for real estate firms