I truly enjoyed my CMO 2.0 Influencer conversation with Tom Asacker – who I consider a friend and also admire as an original marketing thinker. Tom is the author of multiple books, including Opportunity Screams: Unlocking Hearts and Minds in Today’s Idea Economy, and also blogs at A Clear Eye. Before becoming a successful author and speaker, Tom started his career at GE, where he participated in a management buyout of an electronics firm. After that he became the founder and CEO for a medical devices company.

The first topic we tackled is that of marketing in a world where everyone, including executives, is increasingly overwhelmed with the amount of information that is coming at them. Tom is convinced that most executives need to pause and rethink their purpose and how they will execute that purpose. While the priorities of marketing have not changed all that much  - drive top line growth and grow marketshare -, those are results that come from understanding and feeding the hungers of your audiences and the customer insights, and from better defining one’s brand and how to deliver a differentiated value proposition. Marketing executives cannot optimize their way to success by measuring everything and everyone to death. They need to care deeply about their audience and create unique value that improves their audience’s lives. You cannot expect results from spreading messages all over the place hoping that somehow you will connect with the feelings of your audience – you have to really care.

Marketers also have to rethink their content, and develop it in a way that it will travel in those circles where buying recommendations are being made. That means that we have to understand what value people will derive from using the content we develop with others. After all, most people only do what they value – and that is true for making recommendations and reusing vendor content. Marketers need to switch from their traditional inside-out perspective and start looking at everything they do through the eyes of their audiences.

People need to realize that everything in the marketplace has changed – the amount of products and services is overwhelming, and the amount of information is overwhelming, buyers’ attitudes about how they filter and process information and how they are making their decisions has changed.

Next we switched to one of Tom’s favorite topics – branding. Branding is of course something that exists in the mind of a customer – it’s an expectation of value that gets created through interactions in the marketplace. Those interactions can include advertising, pricing, social exchanges with other users, packaging, financing options or interactions with company employees. As you can see, many of these interactions are happening with touch points that are somewhat controlled by the company. So to say that the consumer owns the brand is a fallacy. Tom wishes we would have a Deming-like figure in the branding space – someone who could influence how everyone in a company feels responsible for the brand.

About engagement, Tom said: “People at successful companies love what they do, they believe in what it is they get up in the morning and go to work to do every day. Secondly they love who they do it for; the’re interested in in their audience and what they’re all about and how to improve their lives and how to make things better. And the third thing, is which I call engagement, is that they like the process of keeping what they do and what they love connected to others: others’ interest and others’ values. They love the idea of injecting energy into their idea and bringing it to life for everyone’s benefit.” How is that for a definition of engagement? Much better than most definitions being bantered around in the agency space if you ask me.

Continuing on the topic of engagement, Tom described the three steps you need to follow to engage people – three steps that are described in more detail in his latest book “Opportunity Screams: Unlocking Hearts and Minds in Today’s Idea Economy.” The first step is you want to engage people’s conscious attention. How do you get someone to stop and think about what’s being presented? You do that by charming them and by providing some cue to value. Once you feed their hungers and you’re reflective of them and their self-identities, you entice them to participate. All they want to do then is believe, and you can help them believe in what you do by conveying purpose through your actions, by stimulating interaction and sharing like you discuss all the time. But you always have to have value and unfortunately most businesses don’t believe in the distinctive value they add to people’s lives.

You cannot have a conversation with Tom without talking about culture and so we talked about this whole notion that culture trumps strategy, and what that means for older companies that may not have ideal cultures to roll out new strategies. In older companies you often have what Tom calls cultural immune systems that end up blocking new ideas and new perspectives. Leaders need to be aware of this and be willing to take off their cultural glasses and expose themselves to new ideas (Note that we will be conducting a research project on culture and strategy in partnership with the Schulich School of Business at York University, email me if interested).

“Business is about people, it’s about culture, it’s about feelings, it’s a way to help people feel prosperity and well being. It’s not about numbers,” said Tom, and I must say that I could not agree more.

We talked about a lot more things than can be captured in this blog post. I hope you will find the time to listen to the podcast.

Other things we discussed include:

• How Drucker’s moto that business is marketing never materialized
• The importance of the last transaction on the brand perception
• How the expectations that we have from brands has soared
• The role (or lack thereof) of agencies in meaning making
• How engagement is not the same as sustained attention
• The resistance of middle management to cultural changes
• Ways to change corporate cultures that do not involve a near-death experience
• The importance of finding meaning at work and being able to bring passion to work

As usual you can listen to the full conversation at the CMO 2.0 Site.

My CMO 2.0 Conversation with Tom Nightingale, the CMO at Con-way, a $5B publicly traded transportation and logistics company, was very enlightening to say the least. When I spoke with Tom, he had been the CMO at Con-way for 5 years, where he overlooks public relations, web and digital marketing, product marketing, lead generation, events, direct marketing, new product development, customer satisfaction and voice of the customer – generally what you would expect the responsibilities of a CMO to be. He is also responsible for internal communications and enterprise sales management. One of the things that was intriguing, and that I think we will see more of as part of a CMO’s responsibility in the future, is that he is responsible for recruitment marketing, a major effort as they recruit over 6,000 drivers a year at Con-way (Note: we will be launching a research project on recruitment marketing in partnership with Monster.com — more on that later, email me if you have an interest in participating).

When Tom talks about being in charge of recruitment marketing, he talks about having the responsibility to fill the funnel, which then gets processed by his partners in HR. His role is to bring in quality candidates who align with the Con-way brand and their employment value proposition. Being in charge of employee communications means he communicates with employees from the day after they process through the HR funnel till the day that they leave.

Like most CMO’s, Tom has seen some big changes in marketing over the past few years, with the two most notable being the rise of social media and the decline in effectiveness of TV and print advertising. Another big change is the increase of content curration across all channels.

As in most industries, word-of-mouth is an important vehicle to reach customers, prospects, and prospective employees. At Con-way they make sure that the content they create can easily travel and be used when friends recommend them as a potential vendor or employer. A good example of that is how they share their job feed on their Facebook page for others to see and share with friends.

As said earlier, social media has made a big difference in Tom’s job over the past couple of years. While on the commercial side of their business the use of social media is still in the early stages, they see it playing an increasing role in customer service related inquiries as well as in requests for proposals and quotes. They also use social media internally, one example being the use of twitter to connect truckers with their load boards.

An interesting challenge facing Con-way marketing is that they have thousands of customers with whom they have a pretty shallow relationship, in essence moving freight for them from point A to point B, and which differ from one another on a regional basis. They also have several hundred customers with whom they have very deep relationships – those that outsource their entire supply chain to Con-way, and who have needs that are different based on industry. Tom is convinced that the latter group presents a bigger opportunity to connect customers with one another using social media or social CRM – ensuring that the collective becomes smarter than the individuals. When he thinks about a community for those customers, he also envisions hyper-local and face-to-face components – which is the right way of looking at customer communities when you have that opportunity.

We also talked about accountability and metrics – a topic that is top of mind for many marketers. At Con-way, marketing is accountable for three things – reducing the cost to acquire and retain customers, attracting and retaining the best and brightest employees, and positioning the company for growth. All metrics that are being used at Con-way support those three overarching goals.

The conversation then switched to the role of culture in a services company like Con-way. Con-way has a simple set of values that they truly live by – integrity, commitment, safety, and excellence. With a business where the brand is impacted by lot’s of employees who interact with customers, it’s critical to  the brand to have simple values that everyone can live by.  That is also why the employee brand and the customer brand have to be the same – if employees are the ones that will influence the brand promise in customers’ minds, they need to live that brand promise. The values at Con-way are so important that they are discussed every day during pre-work meetings with 8,000 drivers who interact with an average of 25 customers every day.

We closed the conversation by talking about innovation. At Con-way, they make a distinction between process innovation and product innovation. Process innovation is key when you have to constantly increase efficiency in a low margin industry to maintain profitability, while maintaining very high levels of customer service. Product innovation at Con-way is based partly  on Voice of the Customer and partly on trend spotting to see where the industry is headed. Launching new products in a service company like Con-way can be a tricky proposition. Unlike with product companies, where they can launch a product that is 80% complete and fix it later, in a services company the product has to be 100% perfect when you launch it.

It’s really interesting to see how the issues of a CMO in a more traditional business are not all that different from those in more recent industries, like for example the high tech space.

Other things that we discussed include:

• The importance of alumni  in marketing and new employee training
• More detailed conversation on how the overarching goals drive metrics
• The integration between sales and marketing
• Marketing content co-creation with sales
• The use of social media for internal communications
• The importance of content curration and thought leadership
• How you need to adjust your business practices to the local culture
• The differences in employment marketing in different cultures

As usual, you can listen to the full CMO 2.0 Conversation on the CMO 2.0 site.

Having known and admired Grant McCracken for a few years, I knew I was in for a intellectual treat with this CMO 2.0 Influencer Conversation. Grant is an academic with a background in anthropology, economics and complexity theory, a blogger and also the author of multiple books, his latest being The Chief Culture Officer, how to create a living, breathing corporation.

Grant has always focused on contemporary American Culture, making his knowledge a real treasure trove for marketers who are trying to understand people’s buying behavior rather than shoving products down people’s throat. His interest in economics comes from the fact that when you study American Culture, you quickly see that it comes from the interaction of culture and commerce.

Having so many definitions of culture out there, we started the discussion by defining what culture means for Grant. Forgive the technical nature of this part of the conversation (and also the fact that Grant was cut out for a bit – we my rerecord that part in the future), but being a new student of Culture, it was important to me. Grant does accept the classic definition of culture as presented by Geertz – which says that culture if a transmitted pattern of meaning embodied in symbols by which people communicate, perpetuate and develop their knowledge about and they attitudes towards life.

Grant then took us through the evolution of culture over time. In hunter gatherer societies, culture was very egalitarian, like language – everyone shared it and nobody had a disproportionate influence over it. In more developed and structurally more complicated societies with hierarchies, we saw the creation of elites who decide what meanings should be and what shape culture should take. In Western societies and all the way into the 20th century we had magazine editors, the keepers of mass media, marketers, and agencies that shaped public opinion and cultural meaning making. In the last 10 years, we have entered a new era, one in which the production of meaning and culture became more egalitarian once again. A kid with $2,000 worth of computer equipment in his parents’ basement can now influence public opinion as much as the elites do. A question in Grant’s mind is whether, with the democratization of culture and the emergence of the long tail, we may lose the centricity and shared-ness that Geertz was talking about and end up with a solipsistic world when everyone is their own universe. We both agreed that while it is structurally a possibility to end up there, we probably will never see that happen.

Next we talked about the importance of culture in business – and started with the example of Coca Cola, which without culture would be nothing more than sugared fizzy water. In the early days Coca Cola had the world to itself, with Pepsi not showing up for another 30-40 years. At the time, Coca Cola’s advertising shaped America’s concept of itself and even influenced how we think about Santa Claus. But then came the competitive phase , and a market crowded with alternatives. Brands now had to keep up with contemporary culture rather than shape it – you would pick a trend and ride that wave into mainstream acceptance. Now that world has completely gone as well. With culture coming from so many places, in so many forms, and lasting such a brief time. It’s like a perfect storm out there, you pick a trend and it’s gone before you know it. And so many companies end up engaging in a desperate game of catch-up, which means that they don’t really have any strategy at their disposal.

That is why Grant makes the case that every company should have a Chief Culture Officer (CCO).

We then talked about the role of agencies in the marketing and meaning making mix and how Grant believes  that  30 seconds spots are still powerful tools in shaping meaning. Contrasting a Volvo ad with the Ford Fiesta Movement program in social media, he argues that the Volvo ad did great things for the brand that could not be achieved in social media. In fact, and while the Ford Fiesta Movement was a brilliant program, it did not sell any cars.

Next we talked about slow culture vs. fast culture, and how most companies forget slow culture. Fast culture comes from the cool hunters who know only the hippest things. What they don’t understand is that 80% of all the meanings in our culture are relatively ancient – they come to us from the 19th or 16th century, or even beyond that. Focusing on the 20% cool hunting or fast meanings is what causes everyone to play the desperate game of catch-up he talked and to constantly repudiate their own brand.

I could have written a book with all the information that flowed during this conversation. You will have to listen to the recording to hear Grant talk about some of the other things we discussed, which include:

• How many companies have lots of CCO kinds of people on staff, but no-one in the C-Suite
• How agencies will have to adapt moving forward and how cultural intelligence is so important that you cannot outsource it to them
• How successful brands are a set of meanings that are exquisitely responsive to the consumer and delicately and brilliantly crafted by the tactician, the brander, the marketer or the ad agency.
• How brands are bundles of meaning that need to be manufactured and can be a conduit for sociality
• The lack of culture training in business education
• Whether co-creation of meaning making with consumers can work
• How the older generation had multiple group memberships while teenagers have multiple selves
• How social status no longer plays a role in American culture and how it was replaced by celebrity culture
• How Gen Yers get their security from their networks where we got it from the workplace

As usual, you can listen to the complete interview at the CMO 2.0 Site

The big day has arrived – our first book is officially out and can be purchased at Amazon.com (Borders and Barnes & Noble still show the old release dates for some reason).

Needless to say that this  is a moment that I am very proud off.

Over the next couple of weeks and months, I will write about some of the principles that we developed as part of the book. Many of those posts will be repeat topics as I tested a lot of those concepts as we were writing the book.

The writing of the book and the sense-making that came with it has had a profound impact on my thinking – so deep in fact, that I am repositioning my company around it. I had hoped to re-launch my business before the book was out, but that was preempted by the early release of the book by Amazon. Stay tuned for an update on that in a few weeks.

The book has three parts to it. The first part deals with the fact that if you want to understand this current wave of innovation – powered by social media, social computing, or social networking - you are in fact better off understanding what we termed the Human 1.0, which has been around for tens of thousands of years, rather than the Web 2.0 tools. We describe the main elements of the Human 1.0, including reciprocity, our innate sense of fairness, our need to look cool and to attain status and power, and other human quirkiness that can explain a lot of what is happening in business today.

The second part of the book deals with the fact that companies that are successful in harnessing the power of Social Media, Communities, or the Web 2.0, think differently about their business and they act differently. They focus on Tribes and Knowledge Networks instead of the more traditional Market Segments and Information Channels, and they are human-centric to a fault, ditching the old company and product-centricity.

The third part of the book talks about what successful companies actually do differently: they turn all their business processes into social processes and they embrace the messiness that comes with the social. In our research we have found examples of companies turning every business process into a social process except two – finance and legal.

I have not frequently asked for help, and have focused most of my work on this blog on providing value. Today I will ask for your help. Please buy the book, help promote it if you like it, and help us develop a better second book. Here are some ways in which you could help:

• Buy the book – for now the best way is on Amazon.com – http://amzn.to/9hRSok
• Become a fan of our Hyper-Social organization fan page on Facebook – http://www.facebook.com/hypersocialorg
• Sign up for our upcoming webinar about the book – https://www1.gotomeeting.com/register/558348201
• Leave us comments, write reviews, and let your friends know.

We have many more endorsements of the book, but for now I will leave you with what Barry Judge, Chief Marketing Officer for BestBuy had to say: “To the extent that we can be human with what we know, and share it as freely as we possibly can, we’ll go a long way towards gaining a higher or stronger level of trust with our consumers. The authors of the Hyper-Social Enterprise not only explain why that happens – they also provide a roadmap for how to embed it in all your customer-facing processes.”

THANK YOU!

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.

(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.

It is a recurring theme now – people often ask us: why are you doing what you doing? Why are you doing the CMO 2.0 Conversations, why are you doing the Marketing 2.0 communities, the Marketing Intelligencer, and what’s up with the Tribalization of Business Study?

The simple answer – we’re practicing what we preach.

We do not interrupt people and try to convert them into clients – rather we engage them in conversations that they want to have. And we make sure that we package the content that comes out of those conversations in such a way that they want to reuse it with their friends and colleagues (several CMO’s have now told me that they tell every single one of their team members to listen to the CMO 2.0 interviews). These offerings and activities also allow us to reach members of marketing industry associations who see benefits in sharing that content with their members.

Or take another example: our Marketing Intelligencer newsletter in which we are not trying to exclusively push our stuff, like most marketers do, but rather add real value by being trusted curators for what’s most important for marketers to read on the web – even if it means pointing them to content from competing firms. The Tribalization of Business Study is a lot of work – but it got thousands of people to download that information and pass it along. And our Marketing 2.0 Communities have almost 15,000 members – what push marketing program would give you this amount of attention you think?

We do not try to buy attention from people – we try to earn their attention.

Just as important as getting all that attention from people we may want to engage with commercially at some point is the learning that we get from doing these programs. We get to fully understand the issues that marketers are facing in today’s economy, and how they frame those issues. And equally important is that we have fun doing it!

I enjoyed attending the 2009 IDC Directions Conference in Boston yesterday. By listening to marketers who attended the conference, I realized that many tech marketers are still solidly grounded in a Marketing 1.0 world – a marketing world with few leverage points, and one that is increasingly hard to sustain.

Statements like “We look at how many new names we have in our database,” or calling social networks “the digital marketplace,” or just the fact that they lament that only 20% of all content developed by marketing gets used by sales, illustrate my point.

Let’s take them one at a time.

When someone measures success of a marketing program by looking at how many new names there are in their database they are only concerned about one thing – having a one way monologue with that prospect. You know the routine, after that comes the qualification process – spamming everyone in that database so that the ones who are not about to buy can be ejected from their prospecting funnel. Those marketers do not realize that the most important conversations in the marketplace are those among prospects, customers and detractors – not the ones that happen between companies and those people. They need to develop content that will become part of those conversations and set up ways to attract only those prospects who are ready to engage with the company.

Calling social networks a digital marketplace is not only wrong, it also shows the mindset of marketers – always focused on the transaction part of customer relations, not the relations (in a very broad sense). It is wrong to confuse the two because the underlying driver in social networks is the social, while the underlying driver in marketplaces is the economic transaction. You can have a marketplaces with social networking capabilities (i.e., eBay), although most marketplaces do not have social networking, and most social networks do not have marketplaces.

Only 20% of content produced by marketing gets used by sales. That is a shame and should be corrected, but focusing on that again exposes the mindset of the marketer 1.0 – empowering sales to interupt and catch that prospect and turn them into a customer. Based on the conversations I heard yesterday nobody seems to be concerned about the percentage of content that actually gets used by prospects. Which brings me back to the first point – the most important conversations are those among your prospects, detractors and customers, not the ones you intend on having with them.

An interrupt-driven Marketing 1.0 world has no leverage points.

Ok, so you have a vibrant community. People are submitting ideas for your next generation products, they seem to be having fun, they are engaged and keep referring new members. Your community is growing at a healthy clip and you are happy.

Be careful – your chances of failure are still fairly high.

Let’s look at a couple of reasons why vibrant communities may not achieve the goals they were set up to deliver.

1. You are getting the wrong ideas from your community

There are all sorts of reasons why you could get the wrong ideas from your community. One of them is the use of wrong incentives. If you pay people $10 for 10 ideas you will get 10 ideas – but are those really the ideas that will make a difference in your new product innovation?

Dan Ariely, the author of Predictably Irrational would argue that by tapping into people’s social framework instead of their market framework, which is what you do when when you pay them, would deliver better results. The Economist argues a similar point as it relates to customer reviews (h/t Matt Rhodes).

2. You are getting too close to your community members

There is such a thing are listening too closely to your customers. First off, your customers may not know how to express their needs in a way that would let you help them. They may complain about group scheduling issues, but that does not tell you whether they need a group calendaring or a group task management solution. In new product innovation, there is a huge difference between what is being said and what is being meant.

Second, it is a known fact that innovations based on direct customer feedback leads to incremental innovations at best, not the breakthrough innovations that allow you to steal marketshare from your competitors.

Lastly, and as the late Peter Drucker once said, for most companies a majority of their future revenue stream has to come from people who are not yet customers (Drucker estimates that to be 70% across all industries). If that is the case, then listening too closely to your existing customers may result in products that will stand in the way of acquiring first time users.

So yes, communities are a must in today’s economy. And getting communities to work is hard – really hard. But once you have it working, it may still not deliver what you are looking for. Communities have to be fully integrated with the business processes they are intended to support and need to be driven by the same common sense principles (not that all real world processes are driven by common sense).

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.