January 31, 2007
New Wikipedia case study from HBS
Karim Lakhani just posted about a new Wikipedia case study he developed in partnership with Enterprise 2.0 guru Andrew McAfee on the Future of Communities blog. Like Wikipedia itself, the case is available for free online and is published under the GFDL.
2000 Bloggers initiative
Tino Buntic's 2000 blogger initiative is a cool one - with some unintended SEO side effects :)
Ridiculous Business Jargon Dictionary to the rescue of non corporate jargon users
The Ridiculous Business Jargon Dictionary has some interesting definitions for those of us who are not all that familiar with corporate speak (via lifehack.org). Here are some favorites:
Assmosis [v.] The apparent absorption of success that comes from sucking up.
Blamestorming [v.] Meeting to discuss a failure and find a scapegoat.
Bouncebackability [adj.] The ability to reverse a losing situation and then succeed.
Head shunting [v.] The secret hiring of a head hunter to persuade an ineffectual employee to take a position at another firm. Nicely eliminates the mess of having to fire someone.
Prairie dogging [v.] The simultaneous pop-up of several heads when something interesting is happening around cubicles.
Presenteeism [n.] The practice of working ridiculously long hours.
Zerotasking [v.] Doing nothing.
January 30, 2007
More research on viral marketing - and supporting the limited role of "influentials"
Right on the heels of learning that the influentials may in fact not be all that influential in causing trends and other social "epidemics", here comes more research (pdf) confirming the limited role of the influentials and heeding marketers that some viral marketing techniques could easily backfire on them.
Jure Leskoved from Carnegie Mellon, Lada Adamic from the University of Michigan and Bernardo Huberman from HP Labs collaborated on this research project where they looked at the dynamics of viral marketing.
Here are some of their findings:
- We find that most recommendation chains do not grow very large, often terminating with the initial purchase of a product.
- Marketers should take heed that providing excessive incentives for customers to recommend
- product purchases are not far from usual 80-20 rule (the top twenty percent of the products account for 20 percent of the sales), with the top 20% of the products contributing to about half the sales
- individuals' likelihood of purchasing a product initially increases as they receive additional recommendations for it, but a saturation point is quickly reached. Interestingly, as more recommendations are sent between the same two individuals, the likelihood that they will be heeded decreases
- Marketers should take heed that providing excessive incentives for customers to recommend products could backfire by weakening the credibility of the very same links they are trying to take advantage of.
- ...we find that the probability of purchasing a product increases with the number of recommendations received, but quickly saturates to a constant and relatively low probability. This means individuals are often impervious to the recommendations of their friends, and resist buying items that they do not want.
- we find that there are limits to how influential high degree nodes are in the recommendation network. As a person sends out more and more recommendations past a certain number for a product, the success per recommendation declines. This would seem to indicate that individuals have influence over a few of their friends, but not everybody they know.
- Finally, we presented a model which shows that smaller and more tightly knit groups tend to be more conducive to viral marketing.
This paper also exposes the potential long term negative effects of commercializing relationships on the value of personal recommendations and word of mouth in general - a practice used aggressively by some well known marketers.
links for 2007-01-30
Great list of ideas by leading thinkers - open till the end of February
Buying someone's "life" on eBay
January 29, 2007
Cool piece of CGM
This is pretty cool (via Crunchnotes)
Breakthrough ideas for 2007
Some of my favorites include:
- "...influentials have far less impact on social epidemics than is generally supposed. In fact, they don't seem to be required at all." - Duncan Watts, reporting on recent research he conducted on the role of influentials in trends and other social epidemics.
- "Today, customers aren’t just voicing their needs to companies that are willing to listen; they’re inventing and often building what they want." - Eric Von Hippel, reporting on research that shows that the 70% to 80% of new product development that fails does so not for lack of advanced technology but because of a failure to understand users’ needs.
- "As businesses respond to this backlash—as they consider management styles and marketing messages that effectively meet people’s needs for relief from continuous partial attention and the sensory overload it creates—they can differentiate themselves by offering what their employees and customers increasingly crave: discriminating choices and quality of life." - Linda Stone, reporting on living with continuous partial attention.
- "By almost any measure, the larger a city’s population, the greater the innovation and wealth creation per person." - Geoffrey West, reporting on recent research that found a general mathematical relationships between population size, innovation, and wealth creation.
- "People who are social, religious, or political conservatives tend to have more children...In the United States, for example, fertility rates are 12% higher in states that voted for George W. Bush in the most recent presidential election than in the more liberal and secular states that supported his opponent." - Philip Longman, reporting on research that shows that we are headed for a more conservative period worldwide (YIKES!)
- "...the key to getting payback on investment in a network is to think hard about exactly what kind of value you want the network to create. In other words, you must put the work in “network” first." - Chris Meyers arguing that "work" needs to be at the center of collaborative environments to predictably succeed (something we clearly found when studying successful collaboration teams & projects amongst eRoom customers.)
January 28, 2007
links for 2007-01-28
Interesting documentary about life extension
January 27, 2007
Size does not matter
This is a great ad for the new Golf GTI with its tiny engine that still produces plenty of horsepower...(via the thinking blog)
links for 2007-01-27
Great way to develop an ROI for externally facing blogs
January 26, 2007
Skypecast did not work...so we recorded a Skype interview
The Skypecast session with Sylvia Marino from Edmunds that was scheduled for today did not work. Since I knew that many people would want to hear her story, we recorded a Skype interview which I posted on The Future of Communities blog.
I apologize for the technology failure and if Skype can fix their problem - which happened twice now - we will resume our series of Skypecasts. For now we will continue to do Podcasts.
January 25, 2007
Skypecast - How Edmunds Leverages Wisdom of Crowds
Tomorrow, Friday (1/26) at 2pm ET, we will be holding our first Skypecast conversation leading up to the Community 2.0 conference. This one will be with Sylvia Marino, the Executive Director for CarSpace at Edmunds. Sylvia is responsible for all consumer-generated content and interaction on three web sites that make up the Edmunds Automotive Network: Edmunds.com, Inside Line and CarSpace. Additionally, Sylvia oversees all aspects of design, features, business operations and strategy for CarSpace, the online automotive social network for car and truck enthusiasts.
This discussion will center around how Edmunds is leveraging the wisdom of crowds in their business.
The Skypecast will be recorded and posted on the future of communities blog. During the Skypecast we will open up the mic for questions from the audience, but if you have any questions and will not be able to attend, or would prefer us to ask the questions, please put them in the comment section of this post.
January 24, 2007
Online word of mouth is much more powerful (or dangerous) than offline word of mouth
The latest issue of Revenue magazine has an article on the impact of online research on off-line purchases. Quoting from comScore Networks research they found that in the "toy and hobby" category, 42% of people who did online research bought a product directly related to that research - except that 88% of those people made their purchase off-line and only 12% made their purchase online. In the Consumer electronics space, 18% bought based on online research - but 93% of those bought off-line.
Quoting from Opinion Research, they found that "77% of people who do online research before buying a product purchase something when they went to the store the last time they did online research," with "over half (52%) purchased just the item they did research on, while another 18% purchased that item and additional items."
Another Research paper, this one from Perfomics is quoted as saying that "the majority of consumers conduct research online during his year's holiday season and 43% plan to make both online and offline purchases based on that research." It goes further to say that "the majority of consumers become more brand- sensitive after conducting online research."
That pretty much confirms that unlike what some analyst firms pretend, online word of mouth has the potential of being much more effective or dangerous than off-line word of mouth.
Take the personal example of Mercedes Benz which was well documented on this site (Mercedes - a case study on how to squander a great brand, Mercedes says that cars fail in the first 50K miles - after that it's the fault driver, Mercedes Benz does not care about its customers, and Mercedes Benz - poor customer service ROI). For a long while, those rants came out on the top of a variety of Google searches. So if half of the potential buyers do online research before buying, a disproportionate number of them will run into my online rants and at least pause, if not decide against buying this product. The online negative word of mouth reaches a much larger audience than any off-line word of mouth recommendation would have, plus it spans over a much longer period of time, and it also attracts additional negative word of mouth, which only makes the case stronger!
As an example, witness some of the comment excerpts that are still being made on those stories on a regular basis:
- "Just read your blog, Just decided not to purchase a 60K Mercedes I was looking to buy." (01/04/07)
- "I drive a C180 classic kompressor 52 plate with 35K on the clock. Since day of purchase in Feb 06 the colland warning light comes on every few days. The feeder hose has been replaced, the cap and the head gaskett and still the coolant light comes on every few days. My local MB dealership are at a loss what else to do." (11/21/06)
- "I for one will never buy a Mercedes Car again and will continue to discourage others from doing so" (11/07/06)
- "I PURCHASED MERCEDES ML 350, 2006 IN APRIL 2006. FROM DRIVER'S SEAT, THE LEFT SIDE VIEW MIRROR IS ONLY PARTIALLY VISIBLE! I SHOWED THIS TO HBL DEALERSHIP IN TYSONS CORNER VIRGINIA, AND THEY AGREED TO THIS DESIGN ISSUE, WHIC CANNOT BE FIXED, EVEN IF IT IS A SAFETY HAZARD...THE BEST REMEDY IS TO SHUT OFF THE AC DUCTS ON BOTH DRIVER AND PASSGENGER SIDE! THIS IS THE RESPONSE I GOT, FOR PAYING HIGH PRICE FOR THIS EXPENSIVE CAR " (11/03/06)
- "I like most people who feel badly let down by MB will never buy another car from them, I thought I was buying quality and reliabilty." (07/27/06)
- "Like some other people, I decided I shall never buy or even hire a Mercedes car again." (06/22/06)
- "Funny that I stumbled on your site googling MZB's home office customer service...I should have learned my lesson the first time. I will never lease/own a Mercedes again. They do not stand behind their quality, or service. I hope people read this and take notes." (05/26/06)
- "I've run an independent MB repair shop for over 20 years & believed in the quality of their cars...until now. I'm loosing customers left & right. I can't, in good concious, recommend a new merecedes to my loyal customers, some have been with me since I started & wish to keep me as their mechanic.I am seriously thinking of switching to Lexus,since Mercedes stated this is the car it will try to get as good as by 2009." (04/22/06)
There is no way that these stories could have affected that many people over such a long period of time in the off-line world.
January 23, 2007
Wiki's work, but team collaboration adoption is still a problem...
According to a new survey, Wiki's in the Enterprise seem to deliver real results and appear to be sustainable (via Headshift). All that being said, team collaboration adoption in general is still something that 40% of companies give up on as they run into too much resistance.
Here is a community I would like to join!
I do have a 2nd Life account, but this seems so much better!
January 22, 2007
The community-driven marketing department - a romantic notion or a possible reality?
In a couple of different discussions (on this blog as well as on the Future of Communities blog) I was taken to task over the suggestion that a company could eliminate their marketing department and replace it with customer communities much like what happened at Ducati.
Over at the Future of Communities blog I looked at what it would take to replace a traditional marketing department with a more lightweight community-based group - concluding that while you may not want to get rid of your marketing department, you should definitely look into making it much more community-driven.
January 20, 2007
Interesting Oticon ad
January 18, 2007
Full eBay research report available
As we reported last year, the eBay customer service community research conducted in Germany was a real interesting case study of how the deployment of customer communities in support of business processes can lead to game-changing competitive advantages.
One of the two lead researchers on the project, Prof. Paul Dholokia, who had commented on the original post, agreed to make the whole research paper available on The Future of Communities, where he will also join the growing roster of contributors.
January 16, 2007
Escaping the middle-market trap
The latest McKinsey Quarterly (requires subscription) has an interview with Electolux CEO Hans Straberg in which he describes how Electrolux escaped the middle-market trap.
The middle-market trap happens when a market gets polarized with low cost Asian brands taking the low end of the market and premium brands growing at the high end of the market at the expense of the middle-of-the-road brands. This is a common occurrence in markets, a threat to which most companies respond by cutting costs. History is littered with companies - some well known icons - that have cut themselves into oblivion.
One of the main changes implemented in marketing was the way they segmented customers. Instead of using the traditional industry segmentation based on price and a "good-better-best" hierarchy they started segmenting customers by lifestyle - ending up with more than 20 different product positions. Amazing how companies are only now discovering the power of actual customer scenarios as a basis to segment markets - a technique described by Tom Peters in his very early books.
Another change they implemented - which allowed them to play at both ends of the market - was to set up two different business models, with separate sales forces, to serve the value end of the market differently than the premium end of the market.
Mass-segmentation does not work anymore, except perhaps for some commodity products - like gas, or corn. Most mass markets, however, behave like collections of micro-niches and benefit from being served the same way you would serve customers in the long tail.
January 15, 2007
The power of communities...and a new group blog
It is unquestionable that if done right, deploying communities in support of specific business processes can lead to game-changing benefits. To cite just a few examples:
- Ducati was able to fire their marketing department and replace it with a central customer community group responsible for all aspects of marketing - from product design and marketing communications, to creating the overall brand experience.
- In Germany, eBay was able to increase its revenue by 56% by getting existing eBay users to join customer communities.
- And through their "Connect and Develop" strategy - which involves employees, customers, prospects and even competitors, P&G is now able to derive 35% of their innovations and billions of dollars in revenue from the community it's developed.
But it is also true that a majority of business community initiatives fail, and will continue to do so. Some companies focus too much on the technology architecture to support communities rather the social architecture - forgetting that some of the most successful communities are facilitated through email lists and discussion threads. Others are not investing enough in getting their communities up and running. And then, of course, you have those companies who try to exert too much control, not realizing that communities are like any complex system - you have too few rules and connections and the system disolves in chaos, too many and the system freezes up.
It is with these issues in mind that we are launching a new group blog on the Future of Communities. We have a terrific line up of contributors and hope that you will join the conversation.
January 11, 2007
"Thin-slicing" marketing plans
There is a new 5 "things" meme going around and I have just been tagged for it by Mary Schmidt. This time the idea is "thin-slice" a particular topic - a term coined by Malcolm Gladwell in his latest book Blink, and described as follows:
"Thin-slicing is a neat cognitive trick that involves taking a narrow slice of data, just what you can capture in the blink of an eye, and letting your intuition do the work for you."
My task was to thin-slice a marketing plan - so here we go:
1) Do you really need a marketing "plan"?
Very often people just need to get out and engage with customers, prospects, influencers and connectors. There is no need for a marketing plan to do that. Often times marketing plans are just produced by marketing luddites as a CYA document. Granted, for some very large projects that involve large teams of people a plan can be useful - but more as a check-list than as a marketing roadmap.
2) Does the marketing plan show the addressable market being in the billions of dollars?
Any VC will scoff at these numbers - yet they won't invest if it is not true. Don't talk about the total addressable market, tell me how you will get your next 10 or 100 customers. Who are they, what do they do, where do they live, how will you reach them? Give me real life scenarios of potential customers and how you will help them solve their problem. Don't give aggregate figures that have zero meaning.
3) Are you pretending or intending on being a leader in a category that nobody ever heard of?
Most companies I have worked with consider themselves the category leader in a category with one player - themselves. A category is recognized by others as a category and has other players in it. You can "create" a category, but you need help to create a new one - including help from competitors. Show me how you will create a new category, and who you will enlist to help with the creation? Show me how you will change the rules of the game in that category, how you will change the players or change their respective value as you enter the category - now that's interesting!
4) Does your competitive review result in your company or product being in the upper right hand corner of some diagram?
Do I need to elaborate? You and everybody else lives there...it must be pretty tough to compete there. Show me where you are on the BS curve compared to others - that would be much more interesting...
5) What part of the plan deals with how you will deal with change?
The biggest danger with plans is that they become "bibles" - and once they are approved nobody can deviate from the chosen path. Yet most successful marketing programs are emergent in nature, they are like a jamming sessions...and so back to point 1) do you really need a marketing plan?
And now my turn to tag:
- Tara - how about engaging communities as part of your marketing plan?
- Pito - what about product plans?
- Jackie - how about word of mouth marketing plans?
- Chris - what about customer service strategies?
- Tom - what about brand strategies?
- [updated] I decided to add a 6th one as I care about PR and Europeans :) - Neville, what do you think?
January 10, 2007
The "Inter" Personal Enterprise
As part of a client project I ran across a set speeches that former Oracle COO Ray Lane has been making on the "inter" Personal Enterprise (you can find a slide deck used at a Sandhill conference here).
In his recorded keynote presentation, which can be found at IT conversations, Lane reminds us that eighty percent of the enterprise software industry profits currently go to just three companies, while seven thousand companies fight over the remainder. In order to succeed in this environment, he recommends that enterprise software vendors focus on ease of adoption, instantaneous value and a minimum IT footprint. He also says that "...vendors need to make it easy for users to get started and provide real value to the customer before she is required to pay. The user experience should be personalized and contextualized and the product should spread through the enterprise organically, via user recommendation, rather than by management edict."
That is in fact how we built eRoom Technology to become a profitable $40M company in the early 2000's. We provided easy ways for individuals and small teams to get started after which the solution would spread organically throughout the enterprise through user recommendations. By the time the CIO at KPMG decided to standardize on eRoom as their collaboration platform, there were already over 2,000 happy eRoom users in the company. We then tried to scale the ease of adoption process by releasing an ASP version of the product. While I still believe that was a good idea, that strategy was not widely successful as the ASP offering never fully got embraced by our "enterprise" sales force. The shift from big upfront payments and fat commission checks to a more predictable pay-as-you go scheme was just too much of a culture shock.
In a lot of ways, that is also what is happening with Enterprise 2.0 tools - the adoption of Web 2.0 technologies within the enterprise. But as Harvard Business Professor Andrew McAfee, who coined the Enterprise 2.0 term, predicts, most Enterprise 2.0 tools will remain confined to geek-heavy groups, companies or industries, or at best they may find spotty mainstream penetration.
Interesting discussion on neuro-economic
HBS Prof. James Heskett is having an interesting discussion on the age of neuro-everything. Are new neuroscience-based findings going to topple long lasting theories or confirm them?
January 9, 2007
Interesting new research from Pew on Teens and Social Networks
According to a new Pew Internet Report on Teens and Social Networks, 55% of online teens (12-17) use social networks and 55% have created online profiles.
Interestingly enough, the survey found that "...older teens, particularly girls, are more likely to use these sites. For girls, social networking sites are primarily places to reinforce pre-existing friendships; for boys, the networks also provide opportunities for flirting and making new friends." For the older girls (15-17), the percentage is 70% who have used an online social network.
January 3, 2007
You are your context
Try tapping a song for someone else – chances that the person you are tapping it for gets it right is 2.5%. What makes a lot of sense to you, because you have the song playing in your head – sounds like total gibberish to others. The same is true when you meet someone online for the first time – their chosen handle may symbolize some imagery for you that was totally unintended by that person.
The difference here is that we all interpret signals based on the context we have. And when our context is different, we interpret things differently. A different context is also the main cause for friction and conflict between people.
In the past, there was a higher likelihood that people’s context in a particular geographic region was somewhat similar – there were only a limited amount of TV programs and radio shows, people had a much more limited supply of books and newspapers, music preferences were more uniform, there were fewer options for schooling and there were less churches to choose from. Now on the other hand, much of the popular culture is consumed through 100’s of cable channels or through the internet, you can read books that are self-published and reach audiences in the 100’s of people, you can read any newspaper in the world online or get your news from specialized blogs, you can pick from music bands that self-publish their music on social networking sites and have fan clubs in the tens or hundreds of people, and you can come up with educational programs that are totally unique to you. Add to that the increased mobility of people and the ongoing trend towards more extreme and fractioned faith-based groups – and you have a world when there is almost no shared context anymore. It’s what Wired Editor Chris Anderson calls the long tail…except that perhaps there are more people moving into the long tail now that it can be served.
Marketers, advertisers, communicators and politicians have been struggling with this phenomenon for a few years now – mostly because the old ways of “framing” issues does not work in a world where people’s context or “world-view” is so vastly different from one another.
A world populated with people that have very different contexts should also be a world where innovation explodes – or is Kathy Sierra right when she says that the “wisdom of crowds” mostly results in safe, well-balanced and non-offensive solutions?
What do you think?
January 2, 2007
[off topic] Unexpected reading...
Here are two interesting and very unexpected things that I ran across this weekend...
First from the New England Journal of Medicine review of Love on the Rocks: Men, Women, and Alcohol in Post-World War II America on Amazon:
Alcohol has always had a special role in the United States. From 1620, when the Puritans were forced to land on Plymouth Rock because the Mayflower had almost run out of beer
(via Rageboy email)
Then next from Richard Dawkins' new book - The GOD Delusion:
The Penguin English Dictionary defines a delusion as a 'false belief or impression'. Surprisingly, the illustrative quotation the dictionary gives is from Philip E. Johnson (the leader of the creationist charge against Darwinism in the US): 'Darwinism is the story of humanity's liberation from the delusion that its destiny is controlled by a power higher than itself.'
(italic text was added by me)
Hilarious! The puritans running out of beer and the creationists calling a higher power a delusion!!!
January 1, 2007
Tag, I'm it!
My friend Pito tagged me - so now I am supposed to reveal 5 thinks about myself that you might not know...
So here we go:
- My first job after graduating from engineering school was selling wine
- I volunteer as a mountain ambassador during weekends
- I am an avid reader of everything related to current events, business, politics, science, but also science fiction
- Religious extremism (and I am not just talking about the turban-variety) is slowly but surely moving me from being religiously agnostic to a die-hard atheist
- I am actually a very shy person
So now I get to tag 5 other unlucky people:
Tag, you're it!
Happy New Year!
First off - Happy New Year everyone!
As a friend wished for me - may peace break into your house and may thieves come to steal your debts!
We will soon return to regular blogging!