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At the recent 2010 CIO Summit – The Year Ahead – Tony Scott, the CIO from Microsoft asked the audience the question: “who here is best friends with their CMO?” Only about 1 in 5 hands went up, to which he made the comment that by next year everyone should be friends with their CMO or risk to no longer be in their role.

That struck a chord with the audience. CIO’s should be best friends with their CMO counterparts and here is why:

1. Changing processes will require a different infrastructure
   Whether companies pro-actively embrace the social wave that is currently hitting businesses or not, most marketing and sales processes have already profoundly been affected by the social. People no longer listen to companies and instead make their buying decisions based on recommendations from peers. The funnel disappeared and is being replaced by a messy, swirly social buying process. Innovation and support can now be turned into social processes involving customers and employees whose job it is not to design and support new products. The CMO cannot enable his team to support these new processes without the CIO and the CIO’s team cannot build the right infrastructure without thoroughly understanding the new processes. They need one another to succeed in this area.
2. Cultural environment conducive to high technology adoption rates
   CIO’s need to find pockets of culture within their company that are ripe for social technology adoption or enterprise 2.0 adoption. In many companies the marketing department may be that department. Most marketing departments are being forced into adopting social tools by their customers, prospects and detractors. So for CIO’s to get a win under their belt with social tools, they may benefit from befriending the CMO.
3. Together create an opportunity to regain senior strategic roles at the executive table once again
   Many CMO’s and CIO’s have lost their strategic place at the executive table. At a recent large investment banking portfolio company retreat, the three execs from the portfolio companies that were invited to represent the  executive team were the CEO, the CFO and the Exec in charge of Human Resources. Look at many executive teams on company web sites, many of them don’t have a CMO or CIO reporting all the way to the top. The CMO and the CIO can team up together to regain a strategic seat by representing the voice of the customer within the company. That will require for the CMO to stop thinking of their role as the company advocate in the marketplace and instead become the customer advocate within the company, and for the CIO to stop thinking about how to build hard walls around the company and instead to find ways to extend the edge of the company to encompass customers, prospects and detractors. 

There are many other reasons why CIO’s and CMO’s should be best friends, but those three alone should make for the divide that exists between them to disappear now.

[self-serving ad coming up]That is also the reason why the upcoming Hyper-Social Mini Summits are now focused on both CIO’s and CMO’s – which should make for a great brainstorm session.[/ad]

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.

There is a lot of research on Brand Communities, defined by Muniz and O’Guinn as “a specialized, non-geographically bound community, based on a structured set of social relationships among admirers of a brand.” (Muniz and O’Guinn 2001).

But do brand communities really exist?

Brand communities imply that the brand is at the center of the community. So in the Harley community it would mean that the Harley bike is at the center, in the Jeep community the Jeep Wrangler or the Cherokee, in the Mini Cooper community the Mini, and in the Fiskateer community, the Fiskars tools.

Is this really what is happening? I don’t think so.

For communities to work, the members need to be at the center of the community, and so the motivations have to be different from the pure hedonistic pleasure of owning a brand/product. The Fiskateers may be the people who come up with most of the new Fiskars products ideas. And they may be their staunchest defenders when the brand comes under attack. But the reason they form a tight-knit community, one that some members say changed their lives, is because they share a passion for scrap-booking. The reason that Harley owners get together is because they share a riding lifestyle passion. Jeep owners, probably because they have a shared aspiration for being adventurous by “off-roading” their cars. Mini owners? Not sure, but according to ethnographic research even people who no longer own a Mini Cooper stay with the community, so it cannot be that the car is at the center of the community.

So why Jeep and not Ford, why Fiskars, why Mini, why Harley ? Because in all those cases the companies have provided environments in which those member communities can operate and thrive. Jeep marketers are providing training camps, and are organizing the barbecues around which members can share their passion. Fiskars provided an online environment for their members to thrive and connected those with offline events as well. But in all cases they are enablers of a shared passion that exists within a tribe or community.

The result of that is what I described in a recent blog post – people use the Jeep, the mini, the Fiskars scissors, or the Harley as symbols to associate with others who share that passion. In some cases they take that a step further and create rituals around those brands, which make the brands more sticky. But at the end of the day, these are not brand communities, they are passionate rider communities, scrapbooker community, adventure seeker communities.

What do you think? Do you buy that, or do you think I am missing something?

A recent survey from Anderson Analytics conducted for the Marketing Executives Networking Group found that most marketing executives are sick of hearing about web 2.0 and are going back to basics this year – putting renewed focus on satisfying and retaining customers and investing in research and insights.

Duh…what were they doing with their web 2.0 stuff in the first place? Were they trying web 2.0 programs in a way that was not connected to satisfying and retaining customers?

Unfortunately I think that is the case. Many web 2.0 programs are not connected to core marketing business processes and are not measured the same way as you would measure the impact of any other program on those processes. And when the economy hits the skids, the first things to go are those with soft returns or those that fall outside of the core business needs.

It is unfortunate that companies feel that way, because those that integrated their web 2.0 efforts within their core marketing processes, and measured the impact on those processes the same way as you would measure the impact of any other program, derived great results from it and are now doubling down on those social media initiatives. In the long run, they are the ones that will steal marketshare from their competitors.

So how did this happen?

Two reasons: bad advice and low risk tolerance for risk on the part of many marketers.

Let’s look at the bad advice first. The market is littered with companies and individuals who are claiming to be social media/web 2.0 experts. Some claim to understand social media and web 2.0 but in fact they do not, and build pretty websites masquerading as communities or corporate blogs with no or poorly designed and administered commenting capabilities. They stick to their legacy business, whether advertising or PR, and put social media lipstick on their offering. Unfortunately that does not work. Then you have a slew of social media/web 2.0 pundits – many of whom have never been responsible for any marketing process. They think that all marketers are evil and that you cannot put an ROI on any social media program. Unfortunately, their advice does not deliver results either. Now, don’t take me wrong, there are some great agencies and individuals that really grok social media and web 2.0 and how it can be used to improve and transform your marketing results.

Then there is the fear of the unknown that is plaguing many marketers. They knew they had to try something in social media and web 2.0 – often times getting pressure from top executives to do so. But when they did it, they did it in a very timid fashion – starting small underfunded pilots that never delivered results. So now that it is time for cutting, it’s easy to make decisions on canning those.

The other unfortunate aspect of this attitude is that we are dealing with programs that engage people to help us or help one another. When people do engage, they expect someone to engage back with them and they spend or build some of their social capital in the process. When you have programs like that, even in pilot, you cannot just shut them down without angering people. It’s not like an ad or a direct mail campaign, where you can test it and then shut it down if it does not work without getting people upset.

The good news is that those who do it right will gain game-changing results – forcing others to follow suit. So while we may have suffered a temporary setback in terms of adoption, it is only a setback.

This will not prove to be another fad.

A number of recent examples, including the mass migration of community members from UrbanBaby.com to YouBeMom.com, as reported in the latest issue of Wired Magazine, make you wonder why some communities have strong built-in switching costs while others seem to have none.

I believe that the answer is in having communities that are tied to a transactional infrastructure. As I described in an earlier post, there are 4 forces of increasing returns in communities – members, content, member profiles and transactions. If your communities are purely member and content-driven, without a solid transactional component – like buying, or getting help – then it is much easier for members to pick up their profile and go hang out somewhere else. It is only if the transactions that I need to do become easier and more effective because of my interactions with the community – i.e., buying a book, renting a movie, getting recommendations for photographic equipment purchases – that I will have a hard time to pick up my stuff and go somewhere else.

If that is the case, then you wonder why so many communities are not directly integrated with the transactional infrastructure of the company that is hosting it. If I am a frequent buyer with a company that is now hosting a community – they should enable my buying experience to become better because of that community.

It also makes you wonder how magazines and newspapers, who typically have content-based communities, can increase their community switching costs. Maybe they could affiliate with their advertisers’ transactional infrastructure instead of selling banner ads which annoy all the members anyway.

In the webinar today on the 2008 Tribalization of Business Study that we did with Deloitte and The Society of New Communications Research it was interesting to see how more attendees who attended the webinar had their communities managed by IT rather than by Marketing. Of course, the poll is not scientific and does not reflect the percentage of companies who have their communities managed by IT, as multiple attendees could belong to the same company – but it is an interesting trend that somewhat confirmed a recent Forrester report that got some commentary in the blogosphere.

So is it a good idea to have your community efforts led by IT, or not?

Personally I think it is not a good idea for two reasons. First off, the default first step that you would expect an IT department to focus on is technology. And as we have found and documented, that is the wrong place to start. If your community will not survive in a discussion thread it will not survive anywhere. The key forces generating dynamics of increasing returns are content, members, member profiles and transaction – not the technology infrastructure nor the social infrastructure as described in this post.

The second reason why IT may be the wrong place to start is because if they get the budget and the mandate to build a community, they will do exactly that – build one. And yet your community may already exist somewhere else – on Facebook, Yahoo Groups, or in some other user-started community like the Tivo community. If that is the case then the best results from leveraging communities will be gained from engaging with the community on their existing turf instead of going through the expense of trying to get them to relocate on your turf.

What is your opinion?

A new report jointly produced between Forrester Research and Heidrick & Struggles paints a bleak picture of the (d)evolved CMO (Chief Marketing Officer). You can download the report here, but only after agreeing to become a “lead.”

While two thirds of CMOs want to get a higher involvement with business strategy development and increased P&L responsibility, the reality is that far too many of them are in fact disconnected from where the real action is.

Some of the findings are mind-boggling:

• Only 45% of CMOs have responsibility for product, service or solution development. Only 37.5% are responsible for pricing.
• Only 27.5% are in charge of sales  training.
• Only 25% are responsible for in-store buying experiences.
• Only 12.5% are accountable for the activities associated with customer service and support.

How can you be the Chief Market Listener and not be in charge of what customers say after they buy your product? If you are the Chief Market Officer, how can you not be in charge of deciding what gets sold in the marketplace and how much it will cost the buyer to acquire it? And if you are the Chief Customer Officer, how can you not be in charge for the in-store customer experience? The sales training issue is either a cause or effect for the ongoing rift between most sales and marketing department…

But wait, it gets worse…here is some data about their top objectives:

• Only 27.5% have “increase customer life-cycle value” as one of their top objectives.
• “Innovate” is an objective for only 40% of the survey takers
• Only 27.5% have “increase customer retention” as an objective

And just when you thought you got the extend of the sorry state of CMOs, you find this:

• Only 12% consider “personal knowledge of your customers” as one of their top 5 competencies to their personal success.
• Only 17% consider technology savviness to be one of those top 5 skills

Thankfully (sarcasm intended), more than 65% see people management as one of those top skills. But wait a minute…isn’t it leadership characteristics that get you into the C-suite? Management skills are so Industrial Revolution/last century skills…

Other interesting tidbits from the report include:

• On a scale from 1-3, with 3 being the most important, CMOs found marketing measurement (2.55) to be way more important than customer community development ((1.89) and social computing/web 2.0 tools (1.73).  That goes hand-in-hand with the fact that 92% have advertising as one of their main responsibilities.
• There is room for new industry marketing organizations, conferences and publications. Those three resources come in dead last in a list of 16 resources that CMOs ranked most valuable to their professional career development.

 The recommendations from the authors to improve the situation?

• Spend more time on career development
• Seize the opportunity to lead the organization towards customer-centricity
• Build credibility through the marketing team and leadership contributions.

How about not accepting the CMO job if it does not mean you are really the Chief Market Officer, or the Chief Customer Listener, or the Chief Voice of the Customer Officer, or the Chief Customer Lifecycle Value Owner?

While most people haven’t really yet grasped the meaning and the potential impact of the web 2.0, some are already trying to define the Web 3.0, and along with that comes the usual litany of buzzwords – let go of control, more pervasive, more intelligent, always on, we are in control, etc. (Stephen Baker from Business Week talks about it here and here, Valeria Maltoni has a very eloquent post with a great discussion here, and then of course Phil Wainewright and John Hagel were already having this debate two years ago).

One of the things that most people forget is that we always overestimate the amount of change in the short term and underestimate the amount of change in the long term.

Let’s start by taking a look at the short term. The adoption of web 2.0 is not anywhere near a done deal – with very powerful barriers to adoption standing in the way of success. Many of those barriers were the same that the web 1.0 tools and even pre-web tools faced. In fact many of those barriers are the same as the ones described in the context of innovations as far fledged as agricultural innovations in third world countries by Everett Rogers in his seminal book on adoption of innovations – Diffusion of Innovations.

Most of those barriers are from people, culture and political nature – the hardest of all to overcome (I like how Valeria calls it the Human 1.0 ability). Web 2.0 tools and processes have the potential to change organizational structures and to overhaul existing hierarchies, causing people in charge to resist those tools and come up with smoke-screens to defeat them – think security and compliance. Web 2.0 tools are social and collaborative in nature and many organizations just do not have a collaborative or social culture. And because of the collaborative nature of the tools, even self-organized groups face the classic collaboration conundrums – the white screen syndrome (how do we get started and who in the group decides how we organize ourselves in this collaborative space), and the fact that the value of the tools goes down to zero for all team members even if only one of them decides not to adopt the tools.

So with that in mind, trying to extract what the web 3.0 will look like based on what is currently happening with the web 2.0 is an exercise in futility. In fact, many of the extrapolations have been part of the innovator’s toolbox or vocabulary for a long time. Are we not overestimating the amount of change in the short term?

On the flip side, the web 3.0 could come with new forms of organizational structures, new political realities, and a new workforce – one where a new class of artisans bring their own tools to “the” work at hand. Some thinkers have painted big picture futures, including many great sci-fi authors, but also some business thinkers and magazines like Kevin Kelly, or FAST Company, just to name a few.

So, aren’t most of us underestimating the amount of change in the long term?

Giovanni Rodriguez found that the business benefits of social media are becoming quite apparent, but the pressure to stand out — and do something different — is mounting (disclosure – I am on the advisory board of Hubbub PR). He starts his excellent post by saying that: “There’s no question – the early success of peer-driven, social-media programs will put pressure on businesses to both adapt and adopt. But, for some leaders, there’s another question: in a world where everyone participates, what does it mean to lead?”

In their rush to stand out, companies and people will screw it up – let’s just hope that they don’t break it for the rest of us.

Don’t take me wrong – I am totally excited about this current wave of web innovation and a big believer in where it might lead us (as I wrote about it a few times – including here). What confuses me is the fanaticism with which the current tools are being promoted – and the associated “death of the old tools” predictions that go with it.

I already wrote what I felt about Business Week’s prediction that “email is so five minutes ago”. But the blogosphere is littered with other such examples. Take Basecamp – which is hailed as a “must use” web 2.0 collaboration tool for anyone that wants to be perceived as an insider of this current wave of innovation. More than once have I been dinged for using a Yahoo group for simple collaboration instead of Basecamp. But what’s so 2.0 about it?

If I have a Yahoo Group – I can email to the group – I do not have to ever log in to the Yahoo Group itself to participate. While Basecamp will also give me email notifications – I have to log in if I want to comment or post something. If I have multiple Yahoo groups that I want to send the same message to – I email it once to three email addresses and everybody gets it in their email inbox. In Basecamp I have to log in to each project and cut and paste my message. If I want a to put something in italic or bold in my Yahoo Group message – I click on the B or the I icon. In Basecamp I have to remember to put a * before and after the stuff I want to appear in Bold and an _ before and after the stuff I want in italic – not to mention that I have to add h1. or h2. before stuff that I want to appear bigger as a header (I guarantee you that very few people are using bold, italic, or headers in the projects that I run in Basecamp). In Yahoo groups I can organize my files in folders, in Basecamp I cannot. So what’s so 2.0 about this? Oh yeah – Basecamp has RSS feeds which you cannot have with private Yahoo Groups. But to me, project related work and alerts should come in my email inbox, and subscriptions should stay out of it and go into my RSS aggregator – a personal preference – I agree.

I am sure that Basecamp will improve over time – and although I am a firm believer that the wiki metaphor is a better collaboration metaphor than blogging – I am convinced that they will develop a loyal “mainstream” following over time. There are however collaboration lessons that were learned during the web 1.0 wave and the pre-web wave that will always stand in the way of group adoption. And the are remaining web 1.0 tools that are still working fine for certain applications – let’s not become too snobbish about this whole thing – because that will impede innovation.

In general, and for the web 2.0 tools to find broader acceptance, they will have to have much better UI’s, more depth, and be much more robust…

We knew how to do that before – why are we giving it up in this wave of product innovation?

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