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Some pundits will tell you that you should do away with brand messaging and positioning all together, since you cannot control it anyway. Not so fast! People need to know what bucket to put your offering in, and if they can’t, they won’t know how to assign value to what you have to offer. Tivo ended up in that pickle, with consumers not quite sure what category of products to compare the offering with. Was it more like a DVD player or was it more like a computer?

Knowing that a good positioning will impact your revenue and profits, and realizing that you still have a seat at the customer decision making table (it’s just a much more crowded table and your share of voice has significantly been reduced) you need to develop a point of view about your positioning and try to get it co-opted by your tribe. Like in most social interactions, your chances to get someone to adopt your point of view are going to increase if you involve them early on. The more say you give them in the process of co-creating your products and services, and the earlier you get them involved (preferably at the product concept stage) the more they will embrace a shared view of the brand and product positioning. An added benefit of co-creating products with your customers is that those who are involved in the design of new products will typically pay higher prices for those products .

Marketing executives have come to understand, sometimes the hard way, that brand perception is only as good as the last interaction the customer had with it. When I spoke with Mark Colombo, senior vice president of digital access marketing at FedEx he described the challenge as follows: “In the 50’s and 60’s, brands used to be built on a set of attributes. Now brands are built by customers, one experience at a time, and those experiences are, obviously, more and more online experiences.” So you cannot just convey a brand’s promise or a product’s positioning through advertising and packaging anymore, you also need to deliver against that promise across all your other customer touch-points, and at any time. That becomes especially challenging when you have complex product distribution channels, high numbers of people involved in your service delivery, or a high level of interaction between your customers and your customer service and support center. It gets further complicated by user generated touch-points that people will encounter in the form of online reviews, blogs, and online communities. All those touch-points can make or break your brand, product, or service promise and position. Like many other things in marketing, this is not something new; it’s just something that we used to get away with because our customers, prospects and detractors could not behave Hyper-Socially and hold us accountable for our actions.

The way you control a brand promise through multiple touch-points is not through elaborate process manuals that we have grown accustomed to in business. The way to do it is by embracing Hyper-Sociality and all the messiness that comes with it and allow all the people involved in the process to behave like humans. Some companies like Zappos and JetBlue achieve that through a shared values-based culture that creates a common sense of belonging among their employees. Others like Western Union achieve it by becoming customer-centric to a fault. Still others, like IBM, are doing it by encouraging all their employees to set up communities with whomever they want, wherever they want, and about anything they want.

The key to success is to embrace all four tenets of Hyper-Sociality: think tribes, knowledge networks, customer-centricity, and be willing to accept some of the messiness that comes with Hyper-Sociality.

What do you think? I would appreciate your feedback.

Many senior sales executives are still looking for a predictable flow of leads at the end of a lead acquisition and nurturing “funnel.” And while many marketers have been struggling with expectation settings around predictable lead delivery for more than a decade, their sense of panic and angst around this issue has risen to alarming levels.

So what’s going on?

First of all, the funnel metaphor is broken. People no longer make buying decisions in a linear fashion. Second of all, people no longer listen to companies, but instead they turn to advise from their peers, friends, and other users of those products. Third of all, the potential number of choices they can have in their product consideration set is much larger than it ever was before, and the information sources that can get products into a buyers consideration set has grown exponentially.

A new study published in McKinsey Quarterly (requires subscription) reports that 2/3rd of touch points in a buyer’s active evaluations process are now consumer-driven marketing touch points: user generated reviews, word of mouth, and in store interactions. Only 1/3rd of the touch points are still company-driven. DID YOU HEAR THAT? You still control 1/3rd of the touch points!

So how should you think differently about lead generation?

First of all, ditch the funnel concept, and educate sales why the funnel no longer works. Second of all, make sure that there is uniformity among all the different customer touch points that you control: in-store display, packaging, attitude of your customer service department, online product information, educational information, etc. Third of all, position yourself to be findable for when customers can be influenced during their buying cycle – and in many cases that includes post sales as well.

One of the best things to happen to marketers is that most buyers leave a digital trail as they move through their journey. When they ask friends on twitter, you can see it. If they ask peers in communities, you can see it. And when they read or contribute to online reviews, you can see it if you want to.

You just need to make sure that you are there and generally helpful when those interactions happen. You also need to make sure that your branded content can travel as part of word of mouth, not just sit idle on your site. As the McKinsey Quarterly study says, you need to give prospects reasons to switch to you instead of excuses to stay with what they have – and you need to make it super easy for them to progress through their buying cycle.

I know: easier said than done. I am hoping that in the next few weeks we can expand on some of those concepts with some real case studies.

If you follow behavioral economists like Dan Ariely, who I recently interviewed as part of the CMO 2.0 Influencer Conversations, you will know that there is such a thing as anchoring when it comes to pricing. Basically you can set an anchor for the value of a good and then have people judge all offerings within that space against that anchor. Anchoring is especially important for new product offerings – the ones for which people do not have an assigned value for – like the iPhone when it came out or the Amazon Kindle.

Let’s take a look at the differences between the product pricing strategies for those two products. The iPhone was introduced at $600, only to be reduced two months later to $400. Of course $400 looked like a great deal – when the anchor had been set at $600. And as Dan Ariely explains in a recent MIT Sloan Management Review interview $200 iPhones today look like an even better deal.

The Amazon Kindle on the other hand was announced with books at $9.95 – a subsidized price as Amazon is paying publishers more than that. But that set the anchor for the value of a book on Kindle in the mind of consumers. Now that they raised many books to $15 and up, it does not look like a good deal anymore – in fact it looks like it’s not worth switching to electronic versions of the book anymore. And the Amazon Kindle boards are full of protests by angry customers who are calling for boycotts.

Would Amazon have sold fewer Kindle’s if it had set the price of a book at $15 to start with, and tout some of the other benefits of reading on a Kindle – like searchability, note taking, etc.? It’s hard to prove of course, but I do believe that I would have bought the two Kindles that I bought so far with books at $15 and not feel as bad as I did when they increased their price. Subsidizing prices in a new product category is as bad a strategy as having free offerings to stimulate usage in a new category.

For my first CMO 2.0 Influencer Conversation, I spoke with Rob Kozinets, a professor of marketing from York University in Toronto, about communities, consumer tribes and word of mouth marketing – not surprising considering that Rob was the editor of Consumer Tribes, a collection of research papers on consumer tribes, recently finished a book on word of mouth, and is one of the few researchers looking at the practice of business through the eyes of an anthropologist/ethnographer (among other things).

We started the conversation by talking about the disconnect between the world of academics and the world of business, especially as it relates to marketing. It is an unfortunate fact that many mistakes could be avoided if marketers were making informed decisions based in part on some of the recent findings in the fields of behavioral economics, anthropology, complexity theory, sociology, and psychology.

One of Rob’s main themes is that consumer learning, opinions and transmission of influence happens in smaller groups – hence the idea of tribes. Today’s tribes have looser affiliations and are more hedonistic in nature than ancient tribes. They are nomadic by interest, rather than geography, and centered around expertise and commercial culture. Consumer Tribes are also not typically focused on a single brand but rather on a whole group, a whole culture or lifestyle, or a set of activities. Another challenge for marketers, according to Kozinets, is that consumer tribes don’t typically develop long-lasting relationships. Even some of the stronger tribes, like the Star Trek groups that were so popular in the 90′s, aren’t as active anymore – people move on as they get more options. It would actually be interesting to see if the Harley community is still as strong as it used to be. People move in and out of consumer tribes, and the tribes seem to have a natural life and death cycle – including a revival stage sometimes.

Of course, most marketers don’t think of their customers as tribes yet, or don’t realize the enormous impact that successful customer communities can have, so for many of them this is an non-existent problem.

According to Rob, one of the big problems with communities is that companies are setting them us expecting fixed ROI. In reality the measurement of the the impact of communities is very hard. They are hard to set up, take time to take off, and are challenging to maintain. And, as Rob points out, a lot of the successful community marketers have had their communities formed for them by their customers – much like Harley.

We also talked about the proliferation of special interest communities sponsored by various companies – e.g., small business focused communities, of which there are dozens. Obviously members will not want to belong to multiple small business communities, so what then? Consolidation, with most members gravitating towards the most successful small business community, or further fragmentation, with more user-driven communities aggregating around micro objectives? It’s hard to predict where we will see consolidation vs. fragmentation of communities as we do not quite understand how people move in and out of those spaces.

An interesting concept which Rob brought up was “share of community time,” which, in a way, is a measurement related to John Hagel’s Return on Attention (John has also agreed to conduct a CMO 2.0 Influencer conversation with me – stay tuned for a date). The problem with calculating share of community time is that there is a huge spread in the estimated number of people who participate in communities – between 100M and 1b.

Other things we talked about include:

• The role of payments and incentives in communities
• Whether online focus groups are stretching the possibilities of online community environments
• How to engage with your detractors as well as your champions
• How, if you are going to open things up, you should have a strategy to deal with criticism that will come
• The pros and cons of having a neat classification system for communities based on the different needs that they are trying to solve
• How community organizers need to think about members first and brand second

We also touched on word of mouth and how most marketers expect word of mouth to amplify their message, when in reality most word of mouth will transform your message.

As usual, you can listen to the podcast on the CMO 2.0 site, and we will be releasing transcripts soon.

Words and metaphors are great when used properly – they can also severely limit our views and thinking around certain topics.

Look at marketing as an example. There are a ton of words that we use as part of our jobs that are actually limiting our capabilities to think differently and to innovate. Let’s take a look at a few of them:

Market.

By definition, a market is any place where the sellers of a particular good or service can meet with the buyers of that goods and service where there is a potential for a transaction to take place. The buyers must have something they can offer in exchange for there to be a potential transaction.

So by thinking about markets we are automatically focusing on the transactions, and forgetting about the behaviors that causes people to buy products in the first place.

As I said in previous posts, a better alternative is tribes.

Consumer.

As I was talking with Joel Rubinson yesterday, the Chief Research Officer for ARF, he said “Your focus on the human, and the emphasis on tribes rather than segments caught my eye.” continuing “We do not like the word “consumer” since that is really a state of being in the context of what you (the marketer) care about.” BINGO!

If you think about your prospects as consumers, you are thinking about it in a way that is way too narrow. If you can expand your view and think of them as humans, people with other needs, wants and problems besides the need for your product you may be in for some surprises.

Let’s use the the real estate market with consumers for rental units as an example. Thinking about it that way will lead you to match an apartment with the needs of the renter. Thinking about the consumers as humans, with their specific ethnic backgrounds, family configurations, love for animals, and history, you will recommend a rental unit within a specific neighborhood that has neighbors who love animals and is located within an area that has the right school system – a much richer match.

So the alternative to consumers is humans or people.

Social Media.

This is a new one, and most people focus on the media part of social media. Doing so automatically triggers thoughts around a channel for communications, a way to reach people, and other spam-like activities. What is really important about social media is of course the social – how the social with all its messiness is invading all business processes but also offering tremendous opportunities to those who can harness what emerges from this chaos.

So don’t think about social media, focus instead on social media.

There are other words like that which are causing us to have blinders when we think about marketing. Another obvious one is product, which automatically makes you focus on the features of the product instead of the human who might buy it from you. A much better term would be solution, which includes the buyer as part of the thinking.

Do you know of other words or metaphors that we should try to change in the world of marketing?

Most marketers embrace the economists’ worldview – we are rational people who buy products to fulfill our needs and when confronted with choices we make rational decisions.

Unfortunately that is not always the case – if ever.

Our buying behavior is very much influenced by our social behavior, which in turn is mostly determined by hardwired reflexes. That is what makes it so hard to predict what will sell and what will not. We buy things because they make us look cool, intelligent or well informed. We buy things because our mirror neurons drive us to want to imitate others. We buy things even though we know they are not good for us, and we do not buy things that are proven to have a positive effect on our condition. We buy things without the latest bells and whistles because we hate change. We buy things because we want to belong.

When we buy things, we do not act as rational beings.

Sure, we buy things based on recommendations from others, and avoid things that people badmouth. But it goes further than that – we buy things based on the behavior of the people who bought the same product, and more importantly based on the behavior of others who are observing the original buyers. That is true for personal fashion items as well as for enterprise software solutions.

On the one hand, that makes it a heck of a challenge to predict winners and losers in the marketplace. On the other hand it provides marketers with an opportunity to incorporate expected social behavioral reactions to new products into the product innovation process…

What do you think? Have you seen good examples of that? Hindsight of course is 20/20…but who does it well as a predictor of success?

If you are trying to leverage communities as part of your marketing, there are a few things you need to approach differently. Some of them have already been described in other posts but I wanted to reiterate them here as part of a bigger picture.

1. Think consumer tribes – not market segments

As I described last week, the most important thing to know about your potential community members is how they behave with one another. That is much more important than to understand the market segment to which they belong based on market characteristics. That does not mean that traditional market segmentation will not allow you to discover tribes in some cases. As someone pointed out last week when we presented this concept at the BRITE conference, traditional market segmentation might have uncovered the stay-at-home moms as a segment in the health market. While true, traditional market segmentation would have described them by age bracket, income level and other such characteristics – and not by the behavioral characteristics that are so critical to understand how to structure the initial community.

2. Think network – not channel

Many marketers consider social media as another channel through which to push stuff to their customers and prospects. What they do not yet understand is that the conversations that are happening between those customers and prospects are much more important in making buying decisions than the conversations that they might have with those same people. So of the essence are the people networks through which the most influential conversations and recommendations are flowing, not the inner workings of social media as a communications channel.

Related to that is how marketers create and distribute content. Instead of creating lengthy white papers and long in-depth case studies, successful marketers are chunking up their branded content, or as my partner Lois calls it “social mediafying” their marketing content, so that it has a higher chance of being picked up and redistributed as part of the network conversations that matter.

3. Think customer-centricity – not product/brand/ or company-centricity

To be successful in today’s marketing 2.0 world, marketers need to rethink many other traditional marketing concepts as well. In most cases all it takes is to recast those concepts in the context of the consumer instead of around your products, brands or company. Examples of concepts that need to be reevaluated include:

• Value proposition – instead of being product-centric, a value proposition needs to become consumer-centric. Look to position your offering as a customer-centric solution, not as feature, function, benefits.
• Brands – most brands are product or company-centric. They need to become customer-centric. How do your customers feel about themselves in the context of your brand? Do they look cool, smart or informed? That is what really counts.
• Focus groups – are usually “focused” on your products or company. They need to become customer centric. Get insights from ongoing customer communities instead of having focus groups, and don’t run those communities as focus groups.
• Product platforms are important, but in addition to that companies now need to look for customer platforms. When a company as diverse as GE can find consumer platforms, that means that most other companies can find it too.

So recapping – every community-based marketing 2.0 activity you undertake needs to have the customer at the center of the activity. When you think about how to engage with those customers and prospects, think behavior, not market characteristics. And remember to always focus on the networks that matter.

If you are running communities, make sure to participate in the 2009 Tribalization of Business Study. You can take the quantitative survey here or you can visit the new companion web site at http://www.tribalizationofbusiness.com.

It’s a fact that brands which are associated with rituals are stickier. In fact, you can find some research to that effect in the book Buyology, which I wrote about a little while back.

Think eating Oreo cookies (do you take them apart first?), think using your iPod, or think buying a book on Amazon. All of them have some sort of ritual associated with them, which can be different for different people, but which make the products more memorable. Once you develop habits with your iPod, you will not switch to another player when this one breaks – you will buy the same product again.

According to Martin Lindstrom, rituals commit habits to your “implicit” memory, “which encompasses everything you know: how to do without thinking about it, from riding a bike  to parallel-parking to tying your shoelaces to buying a  book effortlessly on Amazon.”

Once a product experience is at that level – why would you change?

Have you thought whether your brand might get associated with a ritual? Have you seen some great examples out there? If so, please share.

One of the things I learned as a marketing consultant looking at marketers’ behavior from the outside in is that many of us all too often become very self-centered.

We get so absorbed into our own world that we start thinking of our products and services as the center of the universe (and in fact they are the center of our universe). By talking about the space we live in day in and day out we start suffering from the curse of knowledge – resulting in the fact that nobody, save for a few industry insiders, has a clue of what we’re talking about. Often times this situation gets aggravated by arcane company structures and cultural artifacts.

The problem of course is that prospects rarely think of your products as the the center of their universe, and while you babble about your products using all the fashionable industry buzzwords, your customers use much simpler terms to talk about your products. And of course, while you may think that a certain type of prospect belongs to a particular industry bucket because that is how your company is organized, rarely do they in fact fit into the buckets you put them in.

So why is it important to break out of this self-centric view of the world?

It’s simple – because most of your prospects will increasingly get the information they use to make buying decisions from friends and peers. And if they cannot reuse your information to convince their friends and peers they will make it up, and most likely mangle it. Or they will use information from a competitor that is much easier to retell and push their peers into the camp of your competitor who uses much simpler stories to describe what they do.

I have been enjoying the book Buyology: Thruth and Lies About Why We Buy, which is based on a three-year neuromarketing study that involved brain scans of 2,000 volunteers from all over the world.

The book is a great read and describes some amazing findings – like the fact that the cigarette warnings on cigarette packages and ads may in fact be the killer marketing tool for cigarette manufacturers, as it induces craving for smoking in smokers.

Another finding is that we tend to lie to market researchers – not consciously, it’s just that our unconscious mind is better at interpreting our behavior (including why we buy)  than our conscious mind. Needless to say that this finding spells disaster for the market research industry, on which companies spent $12 billion in 2007 in the US alone.

And if you thought it was getting harder to reach people with your advertising, check out the following passage:

By the time we reach the age of sixty-six, most of us  will have seen approximately two million television  commercials. Time-wise, that’s the equivalent of  watching eight hours of ads seven days a week for six  years straight. In 1965 a typical consumer had a 34  percent recall of those ads. In 1990, that figure had  fallen to 8 percent. A 2007 ACNielsen phone survey of  one thousand consumers found that the average  person could name a mere 2.21 commercials of those  they had ever seen, ever, period.1 Today, if I ask most  people what companies sponsored their favorite TV  shows—say, Lost or House or The Office—their faces go  blank. They can’t remember a single one. I don’t blame  them. Goldfish, I read once, have a working memory of  approximately seven seconds—so every seven  seconds, they start their lives all over again. Reminds  me of the way I feel when I watch TV commercials.

Yikes…

The book also describes the importance of mirror neurons on buying behavior, the importance of “cool” on genetic survival, and much more…maybe I’ll have a few more posts on the topic in the near future.