emergencemarketing.com

I had a lot of fun conducting this CMO 2.0 Influencer Conversation with John Hagel, the Co-Chair of the Center For the Edge at Deloitte, and one of my all time favorite business thinkers.

John started off by explaining the meaning behind the name of the center which he co-leads with John Seely Brown – the Center For The Edge. For them, the edges are those areas on the periphery where you first see emerging new opportunities. The challenge with the growth opportunities at the edges is to scale them – either by connecting them to the core where all the money and all the people are, through collaboration, or through competition. There are many different types of edges, including geographic ones (think China, India), demographic edges (e.g., the younger generation entering the workforce), marketplaces with unmet needs, or technology edges. The key take-away for executives is to keep focusing on those edges as they are the places where future growth opportunities will first show up. They also need to realize that many of those edges are not part of their organizations or their existing ecosystems.

Next we talked about the newly released Shift Index, a set of three indices and 25 metrics designed to make longer-term performance trends more relevant and actionable (you can download the full report here). The Index, which was based on a yearlong research project, helps explain, among other things, the intensification of competition that many companies are witnessing today, and which has lead to the mean for company survival to come down to 10 years compared to 75 years in the 1930′s. Other metrics within the index help executives measure the consequences of that intensifying competition and also allow them to measure their performance relative to others. The research also uncovered some concerning trends – one of which is that ROA (Return On Asset) in the US decreased by 75% in the last four decades. And that in the face of consistent increases in labor productivity over that same period.

One of the key conclusions of the study is that competition is intensifying and that companies are not doing so well – their existing management practices are not keeping up with the changes.

We talked about some of the things that companies can do in order to cope with the changes afoot. One of those is to shift from a knowledge stock mentality, where you aggressively protect and hoard proprietary knowledge, build scalable offerings around it, and then extract value from it for the longest possible time, to a knowledge flow mentality, where you realize that what you know today has rapidly diminishing value and where you refresh your knowledge stocks by participating in knowledge flows. One of the big challenges for companies is that unlike information or data flows, knowledge does not flow easily – as it relies on long-term trust-based relationships. So the key to success in this new economic reality is to move from a transactional world to a long-term trust-based world. Examples of taking on a knowledge flow approach include letting your key customers participate in product innovation, or turning them into affiliates to allow them to help one another.

In this increasingly fast-cycle world, John believes that the role of serendipity will be progressively more important. He defines serendipity as “unexpected encounters that are valuable and generate pleasure when you encounter them,” and rather than believe that serendipity is based on pure luck, he believes that we can shape serendipity – both by increasing quality and quantity of unexpected ecounters. One way of doing that is by selecting location. By choosing a “spiky” physical location where there is a high concentration of talent you are much more likely to encounter serendipity than if you were on a farm in Iowa. The same is true for the virtual locations you decide to hang out in – whether social networks or communities. Choosing location by itself won’t do the trick however. If you want to shape serendipity you still need to set yourself up so that you are attracting attention, and increasing visibility and findability for yourself.

Another thing that companies need to focus on to better deal with this new economic reality is to shift from a push model to a pull model – one in which you attract partners, customers and talent, instead of pushing out products and messages. John reiterated the importance of shifting from an intercept, insulate and inhibit marketing mentality to one of attracting, assisting and affiliating customers and prospects.

We wrapped up by talking about John’s evolving views about business communities since he wrote Net Gain almost 12 years ago (to date, and in my biased opinion, probably still one of the most important books on business communities). He would reaffirm that there are huge challenges to building communities, but that if you build them around the needs of the members they can be very powerful. He would also expand on the need for three distinct, and sometimes conflicting, skill-sets or cultures that are required to ensure successful communities – centered around content, social interactions, and economic business models. Unfortunatelly, most communities only have one or two of those skill-sets engaged.

We also talked about:

• The need to shift from firewall around the company mentality to a modularized firewall around core company IP
• How you cannot participate in knowledge flows for very long if you are only a “taker”
• The importance of face-to-face in building trusted relationships
• The importance of having hyper-local face-to-face components in large online community
• The balance between the need to increase the number of partners we engage with with the need to build deep relationships in order to allow knowledge flow
• The talent Dilbert paradox and how talent is motivated by the talent development
• How you need a high growth strategy to attract and keep talent
• The importance of the “collaboration curve” in scaling the organizational learning, which they described in detail on their new blog - The Big Shift
• The importance for companies to start adopting a federated view/architecture for their online community efforts

You can listen to the actual CMO 2.0 Influencer Conversation on the CMO 2.0 Conversation site and soon we will be putting up a transcript of this conversation.

For those who have had their head in the sand in the past couple of weeks, #IranElection refers to the hashtag that is being used on twitter and other social media sites for anyone who is posting tweets and posts about the ongoing election protests and government brutality in Iran – some call it the latest revolution.

Having been a relatively active “armchair” participant in this latest drama, and always thinking about the impact of social media tools on the world of business, I thought it would be good to take a quick look at some of the lessons that can be drawn from what is happening in the #IranElection campaign.

Lesson #1 – You Cannot Stop It!

No matter how hard you try, you cannot stop the social from taking hold anywhere – not within your employee community, not within your customer communities, and not within your community of detractors. People will find ways to help one another reach and help other people. In this case the government tried to blindfold the country – jamming satellite feeds, shutting off sms and mobile phones, doing deep packet scans on internet traffic, filtering sites, etc – it did not make a difference.

People are hardwired to be social, they now have the tools for the social to scale to where it makes a difference, and they will use it whether you like it or now.

Be like Obama, and embrace it, and don’t emulate Khamenei and his band of crooks.

Lesson #2 – Leadership and Leaders Are Defined By Their Tribe.

In this case we had an accidental leader – Mir Hossein Mousavi. While it is impossible to predict what kind of leader he would have been if he had been declared the winner of the election, most people agree that he would not have been the same leader as the one that emerged in the past two weeks. He has been reshaped by the people who consider him his leader, and is in fact allowing his leadership to continue to be transformed by the people who support him.

There has been a great deal of research on the subject of Tribal Leadership, and how successful leaders are defined by their tribes – you can find much of it in the Tribal Leadership book.

Lesson #3 – The Best People for the Job Will Emerge

Nobody appointed people to play different roles in the self-organizing #IranElection campaign. The best curators bubbled to the top automatically, the best front line reporters, the best organizers, the best leaders, the best technical advisers – all emerged from this chaos in which we also had many trolls and impersonators who tried to disrupt the process.

At different stages of a process lifecycle you will need different talent. That talent cannot be hardwired into fixed hierarchies. You need to enable the social infrastructure that supports your process to allow the right people to step up at the right times.

Lesson #4 – The Best Rules Will Emerge From the Social Messiness

In #IranElection, nobody set rules upfront, yet most people quickly agreed to settle on one dominant hashtag, not retweet names from people who are in Iran, on how to communicate the setup of proxy servers to help people inside Iran access outside services, on how to track impostors and to filter out spammers. Those rules emerged, they were not imposed or dictated by the leadership, nor were they democratically selected.

You have to have trust in your teams’ ability to sense and response and make up rules that are appropriate as the landscape in front of them constantly changes.

Lesson #5 – Social Media Is Not an Information Channel, But A Social Platform

Some debated whether twitter had more value as a news channel or an organizing tool during this latest #IranElection. In a lot of ways that mimics the discussions that many people in business are having around social media tools – is it a new way to reach employees, customers and prospects, or is an inevitable environment in which they can organize themselves into powerful social tribes.

Of course it is the latter – and of course the value as an information/news communication platform is very high as well. It is a platform of participation that allows the social to scale to where it can be turned into movements, both in politics as well as in business. But it is also a platform that allows people to interact, share information, and help other people – whom they trust, much more than faceless corporations or corrupt governments. So it is both an organizing tool as well as a information/news tool.

Everybody will agree that the social has reentered business and commerce as we know it.

In fact, in the beginning, all business was social. If someone sold you a bad chicken, you would badmouth the business and others would shun it until the merchant cleaned up his act. Then the business infrastructure scaled and we ended up with large multi-national companies. People were still social, but the impact of them being social was no longer affecting business – we became at their merci and the social all but disappeared from business. That is when businesses started to develop real bad habits – treating their employees as commodities and waging war with their customers. With social media, a massive platform of participation, the social infrastructure scaled to the point where the social made a difference once again. And because humans are hardwired to be the only Hyper-Social species without all being siblings – the social made a comeback in business with a vengeance.

So what do you do with that? Smart business people, like many of the ones I interviewed as part of the CMO 2.0 Conversation, will tell you that the only thing you can do is to allow your business processes to become social. Barry Judge, the CMO from Best Buy who I interviewed said: “So to the extent that we can basically be human with what we know, and share it as freely as we possibly can, I think we’ll go a long way towards gaining a higher or stronger level of trust with the consumers.” In talking with Luis Suarez recently, he told me that IBM went as far as letting its complete knowledge management process go social. Pfizer’s Sr. VP of Strategy and Innovation, Kristin Peck, was recently quoted in an interview about their innovation process as saying: “when we thought about innovation,we asked ourselves “how do we make it more social?”"

It looks so obvious, right? Yet what do many companies do? Looking at how to commercialize the social that is happening between their customers and prospects. Buying ads on social networks, trying to develop buzz networks, and paying people for recommendations and word of mouth.

That unfortunately will not work much longer. Let’s just hope that those who try to commercialize the social do not muddy the waters with decreased levels of trust among customers and prospects for the rest of us.

As part of the ongoing CMO 2.0 Conversation series we are hosting in the Marketing 2.0 Community, I will be interviewing Virgin America’s’ CMO Porter Gale on Tuesday May 12th from 3-4 pm EDT. I hope you can join me!

It was fun to have a CMO 2.0 Conversation with Pete Blackshaw for a variety of reasons. First, it was reminiscent of a great SkypeCast conversation he and I had a few years back (right after Skype launched Skypecasts – we felt like pioneers), but also because he brings three distinct angles to the CMO conversation – that of a CMO, that of a person who markets to marketers, and that of a thought leader and author. Pete is the author of Satisfied Customers Tell Three Friends, Angry Customers Tell 3,000, and also blogs at ConsumerGeneratedMedia.com.

We delved straight into one of Pete’s favorite topics, which is what he calls the great “Conversational Divide” that exists between marketing and customer service. Pete believes, and I agree, that is unfortunate that customer service is so frequently considered a non-strategic part of the business, with little integration between what companies know about their customers from their CRM systems, their social media strategies, the promises they make through marketing , and what actually happens in their customer service departments when they talk with customers. Pete’s take is that it is time for CMO’s to step up to the plate and define a unified conversational ecosystem. It makes no sense, he says, to have different rules in the different parts of the organization.

Companies should also start capturing information about their customers’ influence in their CRM system, i.e., do they have a popular blog, do they have a lot of twitter followers, etc. – especially since the people who typically use the customer service back channels are the same people who tend to use megaphones to express their dissatisfaction. If you do it right you could develop a so-called user contribution system, where consumers help one another and become advocates for the brand, reducing not only your customer support cost but also other costs like consumer research.

Pete talked a lot about the importance of credibility in the age of consumer generated media, and described in detail the six drivers of credibility: trust, authenticity, transparency, listening, responsiveness, and affirmation. He is convinced that trust is perhaps one of the most important competitive differentiators that companies can develop.

We also spent a fair amount of time talking about the benefits of building brand communities, and whether companies should all have their own or affiliate with one another to deliver better value to their members. And we discussed the community efforts at Intuit as we both have familiarity with Scott Wilder’s work – and especially highlighted the importance of setting up a cross-functional center for excellence to capture all the potential benefits of communities, as well as the power of a credentialing model to ensure quality control when customers help one another.

Other things that we discussed include:

• How Dell Hell could have been prevented
• The importance of emotion and fairness in word of mouth
• How the new customer service motto might be “this company is being monitored for quality improvements”
• How there is a real risk that bad marketers will spoil it for the rest of us
• The symbiotic relation between traditional marketing tools and social media based tools

We wrapped up the conversation by talking about the challenges that Pete is facing as a marketer, and how he measures progress and success. Not surprisingly, his primary way to measure success is by monitoring his client advocacy. Are customer willing to get on a stage with him? Are they willing to recommend his company?

We also talked about the challenges associated with competing in a world with many free offerings – and with Nielsen actually having their own free offerings. Interestingly enough, the way Pete looks at it is the same way you would look at it from a consumer packaged goods manufacturer’s perspective like P&G – which is that “sampling” does lead to purchases.

As usual you can listen to the recorded podcast on the CMO 2.0 site, and we will put up a transcript as soon as we can.

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.

More so than for any other department within your company, taking advantage of the social in customer support requires that your organization be allowed to behave social as well. The reason for that is twofold – people will seek help from others about your products in a variety of places, not just your customer support community; and people want to be helped by people, not faceless organizations.

While it may seem obvious that customer would seek support for your products in your customer support community, in reality they will look for it across a multitude of sites. That is especially true for products that have complex distribution channels. When you have a problem with your shiny new Canon lens, do you look for help on Canon.com, Bestbuy.com, Amazon.com or GetSatisfaction.com?  Or do you turn to your independent photography enthusiast community, or maybe a photography Facebook group you belong to? If you truly want to support your customers, you need to empower your employees to engage those people where they are. Sometimes that is your site, sometimes it is all over the place, and sometimes it’s on a focused destination that you did not set up. That was the case with TiVo, where a vibrant TiVo customer support community was set up by users and ran independently from the company. Tivo did not try to set up their own customer community and lure people away, which many companies would have attempted in the name of controllable knowledge management – i.e., access to people’s profile, ability to mine the content, ability to generate reports, etc. They engaged where people were already hanging out, and turned the existing community into a real competitive advantage. They realized that in order to take advantage of the social in customer support you need to behave social yourself.

(cross posted on the CMO 2.0 Site)

I had the pleasure of conducting another CMO 2.0 Conversation with many teachable moments – this one with Mark Colombo, the Senior Vice President of Digital Access Marketing at FedEx. For the sake of full disclosure, I should say that Mark is a client of Beeline Labs, the company I co-founded and where I am a partner.

Mark set the stage by giving an overview of the FedEx business, a $36B company. Mark described his business as a “network business,” with very similar characteristics as telecom carriers, railroads, and airlines – facing unique challenges in that they can not easily reconfigure their network based on specific market segment requirements.

We talked a fair amount about the changes in marketing caused by shifts in audience expectations. In this case the audience expectation shift has to do with how customers interact with FedEx and with one another. People increasingly want to interact on their own terms. In Asia that may mean through a text based interface on a cell phone, while in the US people expect a richer Web experience. Meeting expectations gets further complicated by generational differences – with some people using technology only when they interact with FedEx, and others expecting the same rich interfaces that they have grown accustomed to in using other online environments and applications. FedEx now handles 13 million digital experiences with their customers every day, making them not just a business services company, but also a software application development company – and one that has to deliver on its brand promise of trust and reliability through all those software applications. Managing the shift from having most of your customer touch-points happening through digital interfaces instead of through humans (the FedEx drivers) is not a trivial challenge.

From a brand perspective marketing has gone through some interesting transitions. 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. Fedex has seen additional changes in branding as their offering is increasingly becoming a critical part of their customers’ offerings – thus becoming an “ingredient brand.”

Mark also talked about changes in market research and in measuring marketing effectiveness – with the most important measure of marketing effectiveness at FedEx now being customer loyalty instead of customer satisfaction. It’s not hard to understand when you realize that a 1% increase in loyalty comes with an extra $100M straight into the bottom line. Interestingly enough, loyalty is strongest among people who had a problem that was resolved to their satisfaction, not among those that never had a problem. When discussing market research we also talked about the power of the 2.0 world and how it makes it so much easier to get instant feedback.

Other interesting topics that we touched on include:

• How Fedex uncovered affinity-based group behavior in their community, and the role of cognitive surplus in brand champions and customer (self-)support
• How the new “word of mouth” is increasingly coupled with customer support
• How they set up a listening infrastructure to monitor what is being said about the company and to be able to quickly turn negative word of mouth into positive word of mouth to increase customer loyalty
• The importance of co-marketing with customers
• The role of listening in innovation, and how listening is the most important thing you can do as a marketer
• How fairness plays an important role in customer loyalty. You can fail to solve a person’s problem but still instill loyalty if what you did appeared to be fair in the eyes of the customer.

Mark also touched on the type of marketing people he is looking for – well rounded people with strong technical skills who are good listeners.

You can listen to the recorded call on the CMO 2.0 site and soon we will be posting a transcript of the conversation as well.

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.

(Cross-posted from the CMO 2.0 Conversation site)

Today’s CMO 2.0 Conversation with GE’s CMO Beth Comstock was packed with interesting insights. On a personal note it was certainly neat to get a one hour personal marketing tutorial from the CMO of one the largest companies in the world. By working in a real marketer’s laboratory, Beth must be one of the luckiest marketers around.

We touched on three main topics: the role of a corporate marketing group in a large diversified company with strong operating companies, how to foster innovation at GE, and general changes in marketing.

As a central corporate marketing group, Beth’s team is responsible for sales growth, innovation, and the GE brand platform. Even though the company has very diverse operating companies, her team has also been able to find opportunities for developing a customer platform (i.e., cross-sell accross business units), as well as product platforms (i.e., ecoimagination, the GE green platform, and a cross-operating-business battery project).

On the innovation side of things we touched on the importance of having a robust pipeline of innovations and on the need to have the right resources deployed across the right portfolio of innovations. We also discussed the need to kill ideas faster and the opportunity to create an innovation marketplace for ideas that may not be a good fit for the company. Beth described GE’s robust innovation process, and how they have both a formal process that very much resembles an in-house venture process as well as an online imagination network that relies much more on the wisdom of the crowd – in this case their employees. Other innovation related topics we covered include:

• how they use outside coaches and customer discovery sessions to bring outside insights into their innovation process
• the importance of including detractors in the innovation process
• how innovation is not just about technology innovation, but also about commercial innovations – and how they are constantly looking for new ideas around product, space, and business model
• the cultural changes required for fast-paced innovations and the creative tensions between being a process-driven organization and the inherent messiness and chaotic nature of innovation
• how in some cases you need to step away from traditional metrics to measure progress and success of ideas that are being incubated

We also talked about the changes afoot in marketing and how the new marketing challenge is in fact a knowledge management challenge – knowing enough about your customers so you can feed them data that will make them smarter.

On the need for new marketing skills Beth listed what she is looking for in marketers – people with new world skills, people who can simplify things and engage in customer communities, and people who can curate an experience for the customer. She also described how they set up a team of “rogue marketers” within the company, whose job it is to come up with rogue marketing techniques. It would be really interesting if at some point they would publish their findings in rogue marketing innovations.

You can listen to the podcast over at the CMO 2.0 Conversation site, in the near future we will also post the transcript from the interview.