Emergence Marketing: Strategy Archives

November 15, 2007

Measuring ROI on social media investments

need%20help%20sm.jpg A lot of people and companies are struggling to come up with good ways to define an ROI for social media investments - Patrick Schaber's recent post on the topic is just one of the many thoughtful pieces on the topic.

The key to measuring your investments in social media is to first define what it is you are trying to do - are you trying to increase sales, improve the SEO of your site, get more new product ideas into your new product development funnel, trying to improve customer service, or enhance your PR by getting a bigger share of voice in the social media space? And yes, you can do all that with various social media strategies - we have case studies in each and every one of them.

So once you have defined what it is you want to do - measure it the same way you would measure any other program deployed for that same purpose. If you already track idea sources and various percentages to gauge the success of your new product development pipeline, just add a category for the new social media-based community and measure everything else the same way. If you want to increase sales, just measure the efficacy of the social media based campaign the same way you would measure any other lead generation program. And if PR/awareness in the social media space is your goal, then there are many more tools at your disposal in the social media space to measure progress than there are in traditional media. One bonus of social media-based programs is that they will impact multiple marketing functions much more so than traditional marketing programs. So in effect you might develop an ROI in one area and see the cost of doing business in other areas go down at the same time.

Now, the real problem is that we measure traditional marketing programs the wrong way. Almost everything in traditional measurement programs is customer transaction-based - how much will it cost to get a customer to buy...ONCE. What we really want to measure is how programs affect a customer's life-cycle value - including his/her ability to influence others in making buying decisions. The other problem with most traditional measurement yardsticks - and ROI is perhaps the most famous of them - is that they are trailing indicators, not leading indicators. Not enough companies measure things in ways that give them indications of where their business is going, or how sucessful add-on programs will be.

We are currently working with Deloitte on a research project to uncover how companies are measuring the progress and success of various social media-based external communities. If you would like to help with that or if you have opinions on the subject, feel free to email me at francois [at] emergencemarketing [dot] com.

[Tags: marketingt social media ROI marketing measurement marketing 2.0]

August 16, 2007

The CMO role is broadening...

McKinsey Quarterly has an interesting article on the evolving role of the CMO (requires subscription). In it they argue that while most CMO's have their hands full, their role should be further expanded - to represent "the voice of the customer" throughout the organization.

(Yes! finally some common sense on the role of the CMO from an authoritative voice ...)

In the face of a rapidly changing customer - ignoring "push" marketing and making buying decisions based on their own research rather than sales recommendations - and with bloggers and other consumer-generated content now determining corporate reputations, companies need to change the way they meet customer needs, the way they innovate, and the way they behave in the marketplace. That will require change efforts across the entire corporation, and who is better positioned to lead those charge than the CMO?

You don't buy the fact that "push" marketing is dead? Then consider this: in consumer electronics more than half of the buyers buy products based on their own research rather than advice from sales staff. More than 60% of baby boomers use the Internet to supplement their doctor's advice (so pharma marketers have to rethink the pitch to doctors). And by 2010, it is expected that 80% of all insurance purchases will be based on consumer research rather than information supplied by insurance agents.

You are not worried about consumer generated content? McKinsey Quarterly says" "User-generated media account for almost one-third of all the time individuals spend on the 100 most visited US Web sites, up from roughly 3 percent just two years ago."

The change in consumer buying habits is broader than some may expect. It is not just that the number of customer touch points with a company has increased dramatically, there is also a more rapid growth of the low and high ends of the the market at the expense of the middle.

So a marketer does not just need to understand the changing customer need as it relates to their product or service, they also need to understand the changing buying needs of those same customers and adapt the whole company to deal with those changes.

[Tags: CMO marketing corporate reputation buying habits customer needs voice of the customer]

July 24, 2007

In New Product Introduction - more is less

The Executive Corporate Board has a great white paper entitled "Boosting the Impact of Innovation and New Product Launch Processes." In it they have some mini case studies of how companies who try to achieve top line growth by introducing an increasing number of product/service extensions often times end up with reduced revenues instead.

They also recommend that companies focus on "market segment" innovation rather than pure product innovation - which has traditionally been used to help differentiate products. With the advent of fast followers becoming increasingly faster, product innovation no longer helps with product differentiation. They describe the case studies of P&G and Best Buy as good examples of "market segment" innovation - where you look at product innovation based on the insights gained from well defined market segments.

[Tags: innovation product introduction market insight]

May 17, 2007

Companies need to add "Customer UI" expertise to their talent pool

And I am not talking about product UI (User Interface) - I am talking about the "company" UI from the customer's point of view. After all my poor buying experiences with companies that have very bright and dedicated people working for them, it became clear to me that most companies should hire or staff a group of independent customer advocates with UI experiences to ensure that all the touch-points through which a customer can interact with the company are all compatible with one another and are all delivering against the same promise that is being made during the pre-sale cycle. That includes packaging, in-store support/returns/etc, phone support/billing/etc., web support/shops/registration/etc, and any other way through which a customer could interact with the company after they first buy a product.

The fact that HP as a company has multiple logins for different shops, and that a "customer" case manager for one division can not handle problems the customer has with another division would go away if you would have a customer-centric company UI group who would police this stuff. The fact that my insurance company sends me statements with a different look and feel, different information in the same places, and different content for the various policies I have would go away as well. The fact that most corporate web sites are organized around the companies' divisions instead of being customer-centric would also go away...you get the point.

A good example of a company doing this right is Apple. I recently bought a new iMac for my son, as well as a new Airport Extreme to upgrade my home office network. I registered those products online, and required some support for setting up disk and printer sharing with the new Airport. I have also been using iTunes to buy my music for years. At Apple, all the touch-points reinforce the same message - we are easy and fun to work with. From the store interactions to the packaging, to the online support and registration systems, all the touch-points are perfectly tuned to one another and they all have "me" at the center.

[Tags: company UI customer service customer-centricity wom apple marketing]

March 20, 2007

Is the end of the hierarchical organization in sight?

The latest issue of FAST company has an interesting article on how the traditional business organization is meeting democracy and how that could radically transform the way we think of enterprises in the future.

It's not a new notion - the idea of the "externalized" project-based organization and talk about the impact of the disappearance of friction in communication, cooperation and collaboration on traditional corporate business models and the power that goes with it have been around for a long time. It has become an agreed upon fact that in this interconnected world, size and scale of an organization no longer ensure viability. The notion that only large companies have enough resources to market their products to mass markets of consumers, and to fund serious scientific research, has been shattered for a long time. According to the article, recent scientific breakthroughs in the area of nanotechnology may now break one of last remaining reasons for large companies to exist - namely that they are the only ones having enough capital to build and run manufacturing plants. Heck, even Caterpillar now thinks of itself as an "intellectual property company!"

So are we moving towards a world of a billion single-person enterprises? Probably not soon enough...

[Tags: future of work organization 2.0]

March 19, 2007

Marketing shift: from 'one->to->many' to 'many<->to<->one'

At last week's Community 2.0 conference, an interesting discussion developed after John Hagel's keynote address, in which he said that customers do not want 1:1 marketing, but that they instead want to be put in touch with many connections and resources.

In a way, that is like describing marketing evolution from the one->to->many, to the 1<->to<->1 to the many<->to<->one, with the vendor having the opportunity to facilitate the connections between customers and other people and resources - also called community building. Despite a wave of excitement about the potential of 1to1 marketing in the 90's, popularized by the success of the One to One books by Rogers and Peppers, one attendee argued that we were never able to successfully achieve 1to1 and that therefore many-to-one may be an elusive goal as well.

But is this true? Is this truly an evolutionary process in which we cannot skip a step until the previous one is complete? Or did we missread the need for many-to-one as the need for one-to-one and launched on another marketing fad that never materialized? Could community-based marketing be like that as well?

It could be argued that this time we are dealing with the genuine article - and that some companies have known that for a very long time - skipping the 1to1 marketing wave all together in favor of many<->to<->one, and in the process reaping tremendous competitive advantages (note the bi-directionality of the arrows - a key ingredient to make it work!).

What do you think? Community-based marketing: another fad or a real competitive differentiator?

[Tags: community2.0 community 2.0 1to1 marketing community+marketing one-to-one]

February 15, 2007

You can no longer hold on to your brands...

Last week I moderated a webinar panel on the role of communities in B2B marketing with Rob Leavitt from ITSMA and also with Mike Smith from BMC Software (recording can be found here - requires registration). It was a great conversation with good lessons learned from BMC Software.

As part of my opening comments I harped on one of my favorite topics again - that the field of marketing is undergoing tectonic shifts and that the old rules no longer apply. The old techniques of interrupt marketing that involved interrupting people to show them product or company messages or as Alan Moore, one of the co-authors of Communities Dominate Brands, calls it - the just in case marketing techniques - do not work anymore!

You can no longer broadcast messages to individuals and hope that they will get it and retell your story. Funding traditional communication programs like that is like pouring water into a sinking ship. Not only are people fed up with it, you are also competing with an exponentially growing number of companies who are trying to reach the same people. Plus you now compete across multiple media - many of them always-on and where prime time is between 9-5.

As a marketer you really need to solve the ambient findability problem - be there when people need you and where they need you. Madison Avenue calls it "engagement" - although most agencies are very confused about what engagement means. No it does not mean engagement with the ad...

One way of solving this riddle is to engage with communities who are already communicating amongst themselves about topics that you want to talk about. If your message resonates with them then it will automatically get amplified within the community before being "retold" outside the community. In some cases they may not like your message, but still like what you do and simply replace your message with something else before retelling the story. And then there will always be the case where they really don't like what your doing, will reject your message and talk back and in the process expose flaws with your company or product in public.

This is of course the end of control. This will happen whether you like it or not. You have to give up your brand to your communities to succeed. And if you do it right you will once again reach your customers and do it with budgets that are dramatically lower than what you are spending today.

[Tags: communities community management marketing community marketing]

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.

[Tags: communities community management marketing community marketing]

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.

[Tags: long tail mass market middle market trap community marketing]

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?

[Tags: long tail wisdom of crowds innovation world view]

December 6, 2006

No meetings, no office, no rewards for face time - just get the job done

That is the new way of working at Best Buy, which was written up in both Business Week and the New York Times.

Imagine this - not getting rewarded for face-time in the office but instead for getting projects done, all meetings are optional, work from the beach, work while hunting, work from the road, you chose - as long as your projects get done!

This new work environment at Best Buy is called Results-Only Work Environment, or ROWE. By next March, 75% of all Best Buy corporate employees will be on the program. A modified version of the program is also under development for people who work in stores - although it is a little harder to imagine how face time will be eliminated in those customer-facing positions.

Sure, there are a lot of companies that have gone virtual over the years, including pioneer HP, IBM and Sun Microsystems. But no company of this scale has ever taken it to this level - allowing for a great deal of employee self-organization.

Interestingly enough the program did not come from the top down but instead began as a covert guerrilla action that spread quickly and eventually became a revolution within the company. The top brass at Best Buy really needs to be commended for embracing this change instead of killing it. These practices have been tried in many start-ups, only to be killed when VC's bring in the "professional" or "seasoned" "senior" managers.

Come to think of it, many innovative things get killed or never see the daylight when those "guys" move in...

[Tags: virtual office face time future of work self organization]

December 5, 2006

Social media 2.0: empowering communities to solve problems

In a recent interview for the BBC, Tony Blair's outgoing strategy advisor brings up a few good points on how the Internet is fueling a crisis between politicians and its citizenry. Many of his points are actually valid for the world of business as well.

Too often he says, the web is "used to encourage the "shrill discourse of demands"." What he would rather see is "more needs to be done by the web community in general to encourage people to use the Internet to "solve problems" rather than simply abuse politicians or make "incommensurate" demands on them." Talking about the immaturity of the whole environment he said ""We have a citizenry which can be caricatured as being increasingly unwilling to be governed but not yet capable of self-government," and further comparing the citizenry to teenagers he said "Like "teenagers", people were demanding, but "conflicted" about what they actually wanted, he argued."

Social media empowers people to "speak up" and "make demands." It can also be used to leverage collective intelligence to "solve problems." Yet the tendency at this stage is for people to whine more than to collaborate on constructive problem solving. This can perhaps be explained by the fact that the dominating tool in the new social media toolkit is the blog, which works better as a single person or small group mouth/shout piece than as a true collaborative environment. Sure, blogs are well suited for conversations or raging debates, but that is not how one typically solves problems. Wiki's are more appropriate, but still limited to a very small segment of the population - too insignificant to truly act as an empowering environment for community based problem solving and self-governance.

So maybe that is what we could expect from social media 2.0 - a set of rich and intuitive collaborative environments that enables groups of people to spontaneously congregate and collaborate on helping others to solve problems, whether they'd be socio-political problems or problems related to their favorite brands.

Some interesting experiments in developing collective problem solving environments are already underway - such as the Community Wiki, where Keith Hopper discussed the same BBC interview and suggests a few actual projects projects to tackle as a group.

[Tags: collective intelligence social media self governance self organization]

November 29, 2006

People don't get your marketing speak, nor do they get your strategic executive gibberish...

Chip Heath and Dan Heath wrote an interesting article in the Harvard Business review this month about the "curse of knowledge" (requires subscription).

The curse of knowledge happens when your language, which is based on your level of knowledge, cannot be understood by others. So an executive who uses language like "achieving customer delight!", or "unlocking shareholder value", phrases that have real meaning to him based on his years of immersion in the logic and conventions of business, will sound like a person who has a love affair with vague strategy statements to frontline employees who may not be privy to the underlying meanings.

An interesting experiment done at Stanford University in the early 90's proves that point rather nicely. In the experiment they assigned people one of two roles - "tapper" and "listener." The tapper would pick a well known song, such as "Happy Birthday" and tap it out on the table. The listener had to guess what the song was. Before tapping the song the tapper was asked to predict the probability that the listener would get it right - and they predicted 50%. When they actually tapped the songs, the success ratio was a whopping 2.5% - out of 120 songs, only three songs were guessed correctly. So what sounded like the perfect tune for the tapper actually sounded like some kind of weird tapping code for the listener.

One way to avoid this is by "translating" your message in very simple language, and one company that does this right according to the article is Trader's Joe. They actually develop their messages for the imaginary unemployed college professor who drives a very, very used Volvo.

This is a great reminder of the power of using real and actual scenarios in doing business. Not only can real detailed scenarios with real people help you with messaging, they will also help you with the design of better products and and the development of better customer interaction processes.

[Tags: messaging corporate speak marketing]

November 27, 2006

Would you poison a whole community just to catch a few freeloaders?

Communities are hot - with every other company rushing to deploy them to enhance their innovation processes, their new product introduction success ratios or their customer satisfaction ratings. Yet at the same time most companies seem to be very busy destroying what is perhaps their most important community - their employee community. And they are doing it by affecting one of the fundamental forces that drive communities - trust.

Indeed, according to the American Management Association (free but requires registration - via "It's time to start trusting the workforce" article by Jeffrey Pfeffer in Business 2.0 - not yet online), 76% of companies monitor employee web site connections and 55% retain and review email messages. The number of companies tracking telephone calls, including amount of time spent on the phone and phone numbers called has grown to 51%, up from 9% in 2001. And this does not include companies who require periodic medical checks and random drug usage tests.

So while the balance of power between consumers and companies has shifted towards the consumer in the last few decades, the balance of power between employees and companies has clearly shifted towards the employer. We have to give up our right to privacy in return for a paycheck. And what good does that do? Employees at companies like that feel disenfranchised, lack motivation, distrust their company and management, badmouth the company, etc... Not exactly the motivations that can lead to great results.

The good news is that employees can bail - and with a strong economy, hopefully many at those "big brother" shops will do just that. According to the Business 2.0 article, signs of this happening are already here, with the number of executives, salespeople and production personnel exiting their companies more than doubling since 2003, and with the number of technical and professional people who leave going up 70% in that same time period! Maybe someone will start realizing that the cost of labor in high employee turnover environments goes through the roof. Just ask Walmart - where recent research on their low wages vs. employee turnover compared to Costco's makes for a well documented case study on the impact of employee turnover ratio vs. the real cost of labor.

It all comes down to "return on information." If employees do not see personal benefits in return for the personal freedoms they give up - they will bail. With employees being perhaps the most valuable asset a company can have, it is amazing how many of them squander it in the name of "control."

[Tags: employee communities employee relations work environment trust]

November 24, 2006

Upcoming Community 2.0 Conference

As mentioned before, I have agreed to chair an upcoming conference on the business of communities - Community 2.0, which will happen on March 12-14 in Las Vegas.

Communities are hot – every company thinks that they need one, but no one is too sure how to set them up or how to leverage them. As with most new buzzword-compliant memes many will approach the opportunity by throwing technology at it and fail miserably. Others will inevitably trespass ethical boundaries and muddy the waters for those who follow.

But some will take the lead of the existing pioneers and integrate the lessons learned into their approach to the business of communities. Those companies will succeed and derive returns that will shame their competitors.

Community 2.0 is for those people who are interested in networking with other community professionals to develop a deep understanding of what works and does not in this new world. The conference will provide a snapshot of the current conversations and body of knowledge related to the business of communities. For those who are interested in helping to shape the market, there will also be opportunities to join groups of likeminded people into ongoing community council conversations.

The discussions, presentations, interviews, stories and case studies at the Community 2.0 conference will be organized in three themes:

Strategy and theory - what are the underlying forces that make communities tick? How does social networking theory impact communities? Can you leverage crowd sourcing?

Applications and best practices - where can communities help? Have you thought of communities to bring the voice of the customer into your new product development process? Or to involve employees, partners and customers into improving innovation?

The technology and social infrastructure - what are the technology building blocks beyond the discussion thread that make for successful communities? What rules of engagement do you need to set up to avoid your community to become toxic?

At this stage the program includes leading luminaries from well known academic institutions, professional services firms, solution providers as well as private and public community managers. We can already count on case studies ranging from the world of high tech to financial services to teenage-based communities. The Conference will also include a targeted technology expo where you will be able to talk with product and service providers in this space. The program is continuously expanding, so make sure to periodically check the conference web site for latest additions to the program.

If you think you have something to contribute - please give me a shout (francois AT emergencemarketing DOT com or on my SKYPE which is fgossieaux).!

[Tags: communities community 2.0 community management business of communities]

November 20, 2006

Open Source Innovation - it works!

The latest issue of the Harvard Business School Working Knowledge has a great interview with Harvard Prof. Karim Lakhani (his blog here), in which he describes the results of his latest research - the analysis of how open source norms of transparency, permeable access, and collaboration work with scientists.

After studying the effects of broadcasting or introducing problems to outsiders for 166 distinct scientific problems from the research labs of 26 firms over a 4 1/2 year period they found that this method, borrowed from the software open source movement, was yielding effective solutions. In fact they found that it was those with expertise at the periphery of a problem's field who were most likely to find the answers quickly!

Some of the best innovations do happen at the intersections of disciplines, which is why it is always a bad idea to have siloed organizations.

Another interesting finding is what motivates people to spend time in open source projects. Sure, reputation and the potential for rewards - as is the case for Innocentive - count, but some of the most important drivers are "fun and the enjoyment of problem solving." The more creative people feel in projects, the more likely they are to spend time with those projects!

[Tags: open source innovation problem solving open source innovation]

November 15, 2006

Did the "wisdom of crowds" fail this election?

According to Reason, the wisdom-of-crowds-based prediction markets failed for the Senate race this last election. Most prediction markets were putting the likelihood that the Republicans would keep a majority in the Senate at 75-80%.

Does it really mean a failure of the system? If the probability that most people in the "crowd" would predict that the democrats would win 6 out of 7 tight races in order to win a majority in the senate is less than 50%, then the wisdom of crowds would only reinforce that - at least that is what the Condorcet jury theorem says. Besides, predicting that there is a 20% chance that the dems would win those races and thus take control of the Senate is not a negligible chance. In fact, it probably is somewhat higher than the straight probability that pollsters would have come up with.

What do you think?

[Tags: wisdom of crowds prediction markets forecasting]

November 14, 2006

Dare I say something?

big yawnsm.jpg Are you afraid of speaking up at work? That is the topic of ongoing research reported in the Harvard Business School Working Knowledge. Quoting from their research paper (abstract here) Amy Edmondson from Harvard Business School and James Detert from Penn State, the two researchers, made some interesting observations in this email interview.

While there are individual and contextual reasons why some people speak up more readily than others, the main reason why people do not speak up is "fear" - something that we inherited from our earliest ancestors. As the researchers point out: " it seems we're all hard-wired to overestimate rather than underestimate certain types of risk—it was better (for survival) to "flee" too often from threats that weren't really there than to not flee the one time there was a significant risk. So, we've inherited emotional and cognitive mechanisms that motivate us to avoid perceived risks to our psychological and material well-being...Thus, fear of offending those above us is both natural and widespread."

The interview talks about some ways to change a company culture so that people speak up more frequently. The reality is that changing a culture of hard-wired fear is very difficult. Add to that the fact that change hurts and it may be impossible to really change a company culture without also changing the fundamental hierarchical nature of companies.

[Tags: fear company culture hr change]

November 13, 2006

Increasing customer loyalty by creating deep-soul connections

Reveries.com released a survey and white paper on increasing loyalty by creating deep-soul connections, Harley style (pdf here).

Dori Molitor, the author of the report starts off by talking about the incredible levels of brand loyalty that Harley-Davidson bikers have - attributing it to a deep-soul connection between Harley-Davidson and those who love their motorcycle, and claiming that this is the highest level relationship a brand can have with its consumers.

Companies like Apple, BMW, or Nike can easily be used as other examples of companies that have achieved deep-soul connections with their customers, but can other companies in less "sexy" industries develop deep-soul connections with their customers? The white paper takes us through the stories of less obvious candidates that have achieved that same level of customer connection - including General Mills, Serta, the mattress company and Trader Joe's.

One of the things to remember, says Dori Molitor, is: "A deep-soul connection is not the exclusive purview of ostensibly “sexy” brands like Harley and Nike, nor does it require spending enormous sums of money. It is about transcending those kinds of considerations and connecting with consumers based on a higher purpose than a sterile, financial transaction." And a higher purpose does not mean a "good cause" or a charity - something many marketers will try to use and fail miserably. Finding a higher purpose is all "about the connections that brands can provide to other people (their relationships) or the ways in which they help consumers lead happier, more purposeful lives."

Well said! At the end of the day branding is all about how people feel about themselves...

[Tags: loyalty customer loyalty deep soul connection harley]

November 10, 2006

Email marketing delivers best ROI - but do you buy that?

According to a new study by the Direct Marketing Association, and as reported in DIRECT, email marketing delivers the highest ROI of all media available to marketers. Having just finished reading a pre-release version of WOMMA president Andy Sernovitz' new book - Word of Mouth Marketing: How Smart Companies Get People Talking - he would probably argue that word of mouth marketing would have the highest ROI as you can get that going with no investments.

The DMA research shows that the return on email marketing in 2005 was $57.25 for every dollar spent, compared to $7.09 for catalog marketing and $22.52 for non-email Internet marketing. The study also projects that all the ROI's for the different media marketing options are headed down-ward.

The same research also estimates that the commercial email market in the US was $16.5B in 2005, while the direct marketing-driven sales hit $1.806 trillion in 2005 - projected to hit $2.627 trillion in 2011!

Ouch...that sounds like a lot of wasted dollars...there should be better ways to reach people. And no matter what Set Godin says about messaging frequency vs. "being full ," there ought to be better solutions out there to resolve the ambient findability problem in marketing!

The DIRECT article did not mention anything about the methodology used by DMA - but it is assumed that the study looked at investments vs. "new" customers and "new" revenues - which is a really bad transaction-based metric in marketing.

A more interesting metric would have been to understand how email direct marketing impacts long term customer-relationship-based revenue streams for companies. Isn't that where the real profitability lies?

MARKETING - it's not the transaction anymore, it's the relationship, dummy!

[Tags: direct marketing ambient findability marketing innovation email marketing word of mouth marketing WOM]

November 3, 2006

The winners will be determined because of marketing

$fract sm.jpg$ In a recent roundtable discussion at Wharton, C. Robert Henrikson, the CEO of Metlife said "In our industry, the winners will be determined because of marketing. By that I mean true marketing, not sales support, which is what the insurance industry is about in the United States" (here via a pre reading documents from the Innovation & Corporate Entrepreneurship Research Center at Babson for their upcoming Idea-to-profit event which will cover the intersections of marketing and innovation).

Henrickson went on to say that most insurance firms have no marketing plan other than to be a fast follower of innovations developed by competing firms.

Now isn't that true for most industries. Marketers mimic their competitors, they go after the same customers with the same offerings, and they end up killing the market with price-wars...

The panel which also included an executive from a major drug manufacturer, a major real estate developer, a major bank CEO, a retired partner from a major investment bank, and a few Wharton Professors, were then asked if they saw major innovations coming from India and China.

Almost all said no, which is rather surprising even though there were no high tech players on the panel. After all, Muhammed Yunus just won the Nobel Price for Peace for Grameen Bank - which is not just a do-good organization, but a very profitable one at that. Does this not count as a major innovation in the financial services sector?

The health care experts saw little innovation coming from India because of their weak patent system, which they claim is holding innovation back. They also see the biggest opportunity in India being with clinical trials, saying that "there are massive patient populations there that have not been tapped in any major way."

Ouch! Is this perhaps a case of real-time marketing myopia? Perhaps those experts should take a look at open source business models - especially the ones that have been applied to non-technology products - and their potential for traditional business model destruction (or is it disruption?). And instead of looking at India as a massive source of (probably largely unprotected) people available for early clinical trials or cheap labor, they should look at it as a test bed for new business models. After all, it is because of Indian generic drug manufacturers that the price of Aids treatment came down from $15,000 a patient to less than $200 in 10 years time - and that Indian generics are now being used to treat half of the aids patients in the developing world. Does this not count as innovation in health care?

[Tags: innovation marketing marketing innovation india china]

October 10, 2006

CEO's with big egos are always bad news

CEO's are supposed to be like conductors, impresarios, major league sport team coaches, or movie directors - you pick the analogy that works best for you. The bottom line is that they need to coordinate disparate and sometimes dysfunctional groups of people - including stars (who frequently have good-size egos all by themselves), connectors, and losers - into doing great things! And they cannot limit themselves to internal resources only. The good ones will do it with externalized communities of people that include employees, customers, suppliers, partners, and resellers. And the best ones will even integrate competitors into their cast of characters that they can influence to achieve their goals.

So what happens when a CEO has a big ego? The answer is simple - a CEO with a big ego cannot play that role!

CEO's with big egos will inevitably clash and compete with other egos in their ecosystem - be they stars in research, marketing, engineering, or other successful CEO's in their industry or region. Those people are their true competition. Big egos do not collaborate - they compete on the ego level. So what comes first in the case of a CEO with a big ego is not the company, the employees or the customers - it is their ego. What is important is how they will look in the eyes of constituents that they deem influential or important when it's all said and done?

At the extreme, the only way for CEO's with big egos to achieve their goals - come out ahead of other stars, or worse, eliminate the other stars while coming out ahead - is by weaving webs of deceit, building a protective cocoon around themselves, and by ensuring that there is a podium/pedestal for them to step on. They surround themselves and protect people who will foster their agenda blindly - in the process creating executive echo chambers and increasingly removing themselves from business realities.

Even though some are really good at hiding their true nature, there are so many tell-tale signs that can point to bad behavior and real bad news in the future. When a new CEO of a well known brand tries to inject himself in the brand by appearing in TV commercials - what do you really think the motivation is? Help change the appeal of the brand in the youth market? A subservient chicken or an office chimp seem to achieve that goal much better... And you know you're in trouble when your CEO tries to limit access to certain people - like the board. Or when she starts bad-mouthing other CEO's who happened to be ex-colleagues and who are now very successful and get a lot of credit for their achievements. And we can go on and on with early warning signs of leaders who can do more damage than good to their organization.

There are a lot of examples of companies with CEO's with big egos that ended up in disasters, and many others where ego-less CEO's are achieving beyond-great results. And as always, there are the exceptions - but we can not all aspire to be like Steve Jobs. But besides these extremes, and because of ego-centric leaders, there are too many companies who never achieve their true potential and too many reputations that get tarnished in the process for no good reason.

[Tags: leadership organizational structure ceo hr hr management]

October 4, 2006

There is no room for two in a box....

Jim Lavoie and his partner Joe Marino from Rite Solutions presented at the Business Innovation Factory's second annual meeting today (which is being live blogged on the Corante Innovation Hub)and talked about how they were able to create a corporate environment which is totally project-based and where leadership "authority" is based on employees' "sphere of influence" at any point in time during a given project rather than on the results of more traditional "pyramid" based games.

To make new employees comfortable with the fact that pyramid-based schemes of career advancement are not the way to go and to constantly remind existing employees of that fact, both periodically put on skids to make fun of the more traditional antics of command and control/hierarchical organizations.

They performed one of their songs at the event and keep a web site - called tombtunes - with all their current executive musical productions. The first song is supposed to go up tomorrow - it's a an absolute "must hear" for everyone with experiences in corporate life, especially for those who might have become "unemployable" because they got disgusted with the way those corporate games work. If you are a "company-man," you will not enjoy it!

Note that both those guys acknowledged being really good at playing the pyramid game :)

[Tags: business models organizational structure hierarchy hr bif business innovation factory]

September 28, 2006

Thriving on the edge of chaos

ants small.jpg Fortune's most recent issue has a number of articles on the increasing chaos in markets, technologies customer behavior, and products. Business models that sustained companies for decades no longer work. Companies can now enter and leave markets at a moment's notice. Market disruptions happen faster and faster.

According to the article, the way to manage chaos is not by retraining managers, it's by changing people's mindset and assumptions about business, management, and most economic principles we grew up with. Successful companies are meeting the challenges of a chaotic environment with chaos - by loosening controls, getting rid of hierarchies & titles, providing full transparency into all aspects of the business and more.

What causes all this change? For starters, the fact that companies can now operate free of physical assets makes them both more flexible and vulnerable at the same time. Next is the fact that with the advent of the Internet we have witnessed a dramatic power-shift towards the consumer. Information about products and services, which used to be controlled by the seller - giving them an unfair advantage - is not only widely available, it is complemented with free flowing consumer generated content that gives the consumer the upper hand in the power play.

And the chaos is here to stay. As the article points out "the forecast for most companies is continued chaos with a chance of disaster."

The only way to survive is to allow your company to operate at the edge of chaos - something that nature knows all to well how to do. Perhaps the best training for company executives and employees will not come from business schools but from science departments who are studying complexity theory and how self-organized systems can thrive in nature -even in the worst of circumstances.

If you are starting a new company it may be easy for you to inject that right kind of culture in your company's DNA. For existing companies the only answer is change, dramatic change that is - and as scientists have found,

Emergence Marketing

Thoughts on marketing, innovation, social networking, new products and the impact of technology on all those thingies

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