Brands: you hate them...and you love them...

Economic Conditions Snapshot, August 2009: McKinsey Global Survey Results

noreply@blogger.com (Harald Eltvedt) — Thu, 06 Aug 2009 10:54:00 +0000

Executives’ optimism about the economy has continued to grow over the past month and a half, according to the results of a McKinsey Quarterly survey in the field during the week that US stock markets hit their highest point so far in 2009.

More companies are pursuing a range of growth initiatives than were doing so six weeks ago, and the proportion expecting increased profits this year has risen to 40 percent, from 33 percent. Similarly, the share of those saying that their nations’ economies have improved since September 2008 has risen, though only to 26 percent, from 20 percent.

More executives—42 percent—pick the description “battered but resilient” for the global economy than any other. Yet their other responses indicate that they see the economy as battered enough to prevent a large-scale economic recovery from arriving anytime soon. The share expecting an upturn to begin in 2009, for example, has fallen to 20 percent, from 28 percent, over the past six weeks, and the percentage of respondents who think that their national economies will be better at the end of the year—37 percent—equals the percentage who think their national economies will be worse.

Your Medical Information in the Digital Age

noreply@blogger.com (Harald Eltvedt) — Mon, 03 Aug 2009 12:40:00 +0000

by John D. Halamka, MD

The U.S. is moving toward electronic health records. Here’s how to make that work for you.

You probably take for granted that you should manage your own résumé. After all, it catalogs your professional history and accomplishments—who else would manage it well? But chances are you don’t oversee your own medical records. Until now, doing so has been difficult because bits and pieces of your information are probably scattered across the files of several doctors, hospitals, labs, and pharmacies. That’s an inconvenient—and potentially dangerous—state of affairs, but one a new federal law may help to remedy.

The American Recovery and Reinvestment Act is providing about $30 billion to improve the exchange of health care information. One trickle-down effect will likely be greater access to your lifetime medical information through a personal health record in electronic form. The underlying idea is simple: Compiling your medical data in one place lets you be the steward of your health information.

Like first writing up a résumé, creating a personal health record takes time, but there are several payoffs. Having the record can prevent unnecessary testing and treatment (and, in turn, save you money), reduce the chance of a medication error, and instantly provide vital information in an emergency. It also can be used to keep track of your weight, blood sugar, and much more.

So far, four types of electronic personal health records are available:

Hospital- and clinician-hosted records are great if all your information resides at a single institution. One example is PatientSite, used by more than 40,000 patients of Boston’s Beth Israel Deaconess Medical Center to view their hospital records, send secure e-mails to doctors, make appointments, refill prescriptions online, and the like. But this kind of service is not widespread. A recent study in the New England Journal of Medicine found that only 9% of the acute-care hospitals surveyed had an electronic-records system in place in even one clinical unit.
Payer-hosted records, such as HPHConnect from Harvard Pilgrim Health Care, give you access to claims information relating to your medications, doctor visits, and hospitalizations. Some let you share information with family members or doctors. On the downside, you may not be able to access all of your lab and radiology results, and there’s no guarantee that you can take your record with you if you change insurers.
Employer-sponsored records are typically hosted by a trusted outside firm, creating a firewall between the employer and the medical data. For example, computer storage giant EMC partnered with WebMD to offer claims-based personal health records to all of its employees. Employer-sponsored systems aim to keep you healthy and productive by, say, recommending an exercise program if you are overweight. They can also help you manage your health care–spending account. However, you may not be able to take yours with you if you change jobs.
Commercial offerings, such as Google Health and Microsoft Health- Vault, allow you to link to your electronic records stored at participating hospitals, pharmacies, and laboratories. In addition to collecting existing data, you can add your own, search for information about medical conditions and drug interactions, and share information with your doctors and other appropriate parties. These services let you keep your health record for life, regardless of your job or insurer. Google recently implemented secure “social networking” for personal health records. Call it Facebook for health care. It allows you to invite caregivers or family members to access your personal health information. Invitees can be removed at any time.

What about privacy? Each of these products has strict policies stipulating that the host companies will not mine personal health data, share them, or use them for targeted advertising. Hospital and payer data are covered by rules in the Health Insurance Portability and Accountability Act of 1996. Google’s and Microsoft’s offerings are outside HIPAA’s scope, but both firms have developed policies that are even stronger than the legislation mandates. I trust those policies enough to have stored my lifetime medical record on Google Health and Microsoft Health- Vault. (I share it with you on my blog – http://services.bidmc.org/geekdoctor/ johnhalamkaccddocument.xml – at my own discretion.) Whatever record system you choose, make sure it has robust privacy policies that keep you in control of your information at all times.

This new world of connected health care has tremendous potential to increase both personal and systemwide efficiency. What’s in your interest complements what’s in the interests of the larger health care system as we all try to reduce costs and improve care.

Unprepared for changes in health care: McKinsey Global Survey Results

noreply@blogger.com (Harald Eltvedt) — Sat, 18 Jul 2009 05:12:00 +0000

Only 30 percent of executives representing the health care industry in the United States say their companies are ready for reform and changing economic conditions, according to a McKinsey survey on how prepared industry players—payers, providers, and pharmaceutical companies—are for change.¹ However, 76 percent say the impact of reform on the industry will be significant, and 54 percent say the same about the effects of the current economic crisis.

The survey asked executives where their innovation efforts are focused, which areas are likely to provide the greatest benefit to their companies in the near term, how the importance of innovation has changed within respondents’ companies since the financial crisis erupted, and how ready they are to adapt to ongoing reform and the new economic environment.

The minority of companies whose executives say they are ready to adapt have a different strategic focus than the others. Their top priority is to increase the value of health care by, for example, reducing the misuse, underuse, and overuse of care or increasing the quality of care received. In contrast, at most companies, the top priority is increasing revenue or membership growth. Also, companies prepared for change innovate differently: they can count on leadership’s support, for example, and drive innovation in a wider range of areas, including product design, customer service, and IT.

Traditional Marketing Budgets Lose to Interactive

noreply@blogger.com (Harald Eltvedt) — Thu, 16 Jul 2009 21:49:00 +0000

Traditional Marketing Budgets Lose to Interactive

According to Forrester Research, reported by Richard H. Levey at Directmag.com, 60% of marketers surveyed will increase their interactive marketing budgets by shifting funds from traditional media. Direct mail was cited by 40% of marketers as being one being cut, outranking newspapers (35%), magazines (28%) and television (12%).

Among the interactive channels, the study finds social media and mobile marketing spending expanding between 2009 and 2014, with social media jumping by 34% on a compounded annual basis and mobile marketing increasing by 27%. Social media starts at $716 million in 2009, increasing to $3.11 billion by 2014. Mobile marketing expenditures stand at 319 million this year, and goes to $1.27 billion by 2014.

Online display advertising, which currently stands at $7.83 billion, will rise by 17% annually, ending up at $16.9 billion in 2014. Search marketing, which currently accounts for $15.39 billion in spending, will jump by 15%, to $31.59 billion, and e-mail, now at $1.25 billion, will increase 11%, to 2.08 billion.

Shar VanBoskirk, Forrester analyst, says "Email marketing is having a banner year as marketers:

Grow their lists with the promise of ‘green marketing'
Turn on more and smarter programs to boost sluggish sales
Shift money to email from direct mail
Improve email effectiveness by linking it to other channels like search or user-generated ratings and reviews."

And, while social and mobile media expand, a corollary report from Forrester shows marketing officers reporting that budgets for traditional media, such as television, print, radio or magazines, along with staff and training spending and branding and advertising expenditures had been cut by two-thirds from last year's levels, and more than half of their direct mail budget was gone.

Budget reductions from the 2008 level include:

29% reduction in marketing technology
27% in online advertising
22% in Web site development budgets were reduced
21% reduction in loyalty program spending
11% reduction in E-mail marketing
7% in social media spending from the 2008 level

Among CMOs facing lower budgets:

19% said they cut branding and advertising because "I can't track its results"
26% said the same about their TV, print, radio or magazine expenditures
19% reduced their direct mail spending because it delivers the lowest ROI

On the other hand, 47% of CMOs whose budgets have been cut are increasing their spending on social media, while another 44% are increasing spending on Web site development. 40% will spend more on online advertising, and nearly that amount will increase financial resources in e-mail, considering these functions critical to their businesses, or needed to maintain competitive advantages.

In a glimpse into how marketing is viewed throughout a number of organizations, just over half of the CMOs see it as a revenue enhancer that needs to be supported. But 41% indicated marketing efforts are under increasing scrutiny from all levels of the company, and 18% are working in firms where marketing is seen as a cost center that needs to be cut.

To read more about the interactive budgets, visit Direct here, and for more on the continuing Forrester report on marketing budget reductions, please go here.

Prizes: a winning strategy for innovation

noreply@blogger.com (Harald Eltvedt) — Tue, 14 Jul 2009 11:16:00 +0000

Good article in McKinsey on the value of innovation:

Prizes: a winning strategy for innovation

Personalized medicine: An interview with Esther Dyson

noreply@blogger.com (Harald Eltvedt) — Wed, 17 Jun 2009 23:44:00 +0000

Personalized medicine: An interview with Esther Dyson

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Marketers Moving to Social Media - eMarketer

noreply@blogger.com (Harald Eltvedt) — Mon, 15 Jun 2009 12:55:00 +0000

Marketers Moving to Social Media - eMarketer

Shared via AddThis

Best-in-Class Companies More Likely to Use Social Media Monitoring

noreply@blogger.com (Harald Eltvedt) — Sun, 14 Jun 2009 11:16:00 +0000

BEST-IN-CLASS ORGANIZATIONS ARE MORE THAN 680% more likely than laggards to improve their ability to predict customer behavior through the use of social media monitoring and analysis tools, according to a new report conducted by Aberdeen, a Harte-Hanks Company, and underwritten by word-of-mouth measurement company Andiamo Systems.

The report was comprised of 250 companies surveyed to determine how companies can successfully compete in a world in which Web-based consumer-generated content is marginalizing the value of traditional media channels.

By blending the use of social media monitoring solutions with marketing dashboards (57%) and campaign management tools (60%), Best-in-Class companies were able to gain a clear insight into the effect of marketing promotion on consumer sentiment, according to the report.

The Client-Vendor relationship

noreply@blogger.com (Harald Eltvedt) — Mon, 08 Jun 2009 17:01:00 +0000

Preventing a ghost town community

noreply@blogger.com (Harald Eltvedt) — Tue, 02 Jun 2009 11:34:00 +0000

Good article from BazzarBlog where the author analyzes how some communities work and others don't.
Gartner reports that 50% of brand communities will fail. And by fail, they mean ‘shut down’. That leaves the other 50% still live. But are they successful? How many “ghost town” communities are out there? Over the past couple years many progressive brands have explored social media and community marketing initiatives — Twitter, Facebook, blogs, viral videos, forums or fully-fledged online communities.

The Community Concept Isn’t to Blame

Communities succeed if they solve a need, share an interest/passion and/or connect me with people I care about.

Facebook works because most of your and my friends are there, so it solves the need to connect, stay up to date and carries more weight as a “social resume”. Dell support forums work because they allow asynchronous conversations to solve a technical problem for a a frustrated computer user.

There are many more examples like these of successful communities. So what's the recipe for success?

What’s a Community For?

Brand communities are configured to create social interactions between customers, allowing them to share opinions and interact via blogs, wikis, polls, forums and private messages. There are a lot of technological bells and whistles that the product manager can get excited about, but let’s look at it from the customer’s point of view.

People participate in communities to:

Solve a problem / need (or help others)
Share an interest or passion
Connect with people I’m interested (develop social capitol)

#1 is the reason support forums exist, and they reduce support costs, not sales. #2 and #3 are usually what Brands are looking for, expecting community to drive engagement and sales. But when the community audience is small and unfamiliar with one another, a prospective visitor’s motivation to build social capital or help others dissolves. If visitors are not passionate about the topic, they are less likely to jump in.

A study from Deloitte reports that two of the top three obstacles to make communities work has to do with getting people to engage or visit (and the #2 issue doesn’t help solve this problem!):

Getting people to engage
Finding enough time to manage
Attracting people to the community

Research from Communities

A hundred or a thousand participants in a community may not make a sizeable impact on your sales, but they can provide valuable insight. If your objectives are for research or product co-creation, than a community that facilitates that interaction between your brand team and your customers can be very successful. Customers are much more engaged when they know the purpose of the community is for the company to listen to their ideas. The measures of success there are insights gathered in a much more scaleable and frequent way than traditional market research.

To read more: http://www.bazaarblog.com/2009/05/31/ghost-town-brand-community/

Online community beats ads for P&G

noreply@blogger.com (Harald Eltvedt) — Mon, 25 May 2009 14:37:00 +0000

CINCINNATI: Beinggirl, the online community created by Procter & Gamble for its feminine hygiene brand Always, has proved "four times as effective per dollar spend as advertising" in encouraging sampling and driving sales, says Forrester analyst Josh Bernoff.

Speaking at the IAB's Social Media Conference, Bernoff, who is the co-author of Groundswell – which is reviewed here – argued that brands like Always constitute an "obvious" example of a product that faces the challenge of communicating with a young, hard-to-reach audience about a difficult topic.

Despite this, Procter & Gamble's community portal for the product only had a "little subtle branding message," and focused instead on "problems of being a teenage girl," from relationships with parents to healthcare issues.

The success of the site in generating interest around the Always brand meant it was rolled out to 21 markets, from the UK and Canada to Saudi Arabia.

More broadly, Bernoff, argues this examples shows that "engaging in conversations can actually generate sampling and sales."

He thus advised marketers that with most brands, as was the case with Always, "people don't really want to talk about your product."

Rather, he said, "unless your product is incredibly exciting, what you really want to talk to people about is their problems. That will give you the opportunity to talk to them about your products."

Data sourced from AdAge; additional content by WARC staff, 25 May 2009

New Influencers in Social Media

noreply@blogger.com (Harald Eltvedt) — Fri, 15 May 2009 23:45:00 +0000

New Influencers in Social Media - introductory remarks Conference Board keynote presentation from Francois Gossieaux

New Influencers in Social Media - introductory remarks Conference Board keynote presentation

View more presentations from Francois Gossieaux.

Are some profits bad for companies?

noreply@blogger.com (Harald Eltvedt) — Tue, 12 May 2009 15:24:00 +0000

Why do companies bind customers with contracts, bleed them with fees, and baffle them with fine print?
Because bewildered customers, who often make bad purchasing decisions, can be highly profitable.
Most firms that profit from customers' confusion are on a slippery slope. Over time, their customer-centric strategies for delivering value have evolved into company-centric strategies for extracting it. Not surprisingly, when a rival comes along with a friendlier alternative, customers defect.
Adversarial value-extracting strategies are common in such industries as cell phone service, retail banking, and health clubs.
Overly complex product and pricing options, for example, may have been designed to serve various segments. But in fact they take advantage of how difficult it is for customers to predict their needs (such as how many cell phone minutes they'll use each month) and make it hard for them to choose the right product.
Similarly, penalties and fees, which may have been instituted to offset the costs of undesirable customer behavior, like bouncing checks, turn out to be very profitable. As a result, companies have no incentive to help customers avoid them. Tactics like these generate bad publicity and fuel customer defections, creating opportunities for competitors. Virgin Mobile USA, for example, has lured millions of angry cell phone customers away from the incumbents by offering a straightforward plan with no hidden fees, no time-of-day restrictions, and no contracts.
ING Direct, now the fourth-largest thrift bank in the United States, offers accounts with no fees, no tiered interest rates, and no minimums. In industries where squeezing value from customers is commonplace, companies that dismantle these harmful practices and design a transparent, value-creating offer can head off customer retaliation and spur rapid growth.

A need for change in Agencies

noreply@blogger.com (Harald Eltvedt) — Fri, 01 May 2009 11:08:00 +0000

Are ad agencies destined for some significant changes? Structural changes are coming to the industry, and we may very well see some of them start playing out.

The holding companies have not been able to change as fast as the landscape has changed around them. What needs to change:

New competencies - In the recent ANA, IAB and 4A's study on the Marketing & Media Eco-System 2010 conducted by Booz Allen, brand marketers identified their most critical needs in marketing today to be the acquisition of consumer insights, behavioral targeting and brand strategies. They are looking for leadership from agencies, not just execution. This is good news for agencies, but will require that they make significant investments in competencies and technologies to deliver these insights, targeting and strategy capabilities. Over the past year, we have seen WPP buy 24/7 Real Media and Publicis buy Digitas, but it will probably take much more. Let's not forget that it was Microsoft that paid $6 billion for aQuantive, not a marketing services company.

Talent - Service businesses run on talent, and when those services involve the Internet, technology or data and marketing analytics, that talent is in extraordinary high demand and expensive. Digital marketing may not command the lion's share of ad spending today, but it will at some point in the not-so-distant future. This means investing in that talent now, knowing that it won't fully pay off until the future. Obviously, this is hard to do in digital media buying, since the margins are so thin and the projects aren't always very scaled, but that is the cost of market entry. Of course, it may mean using geography as an advantage. Some of the hottest ad agencies today are not in one of the traditional media metropolitan markets. The Martin Agency is in Richmond, Va. Crispin Porter is in Miami. Wieden Kennedy is based in Portland, Ore

Consumer generated content - agencies will need to incorporate consumers not just in the validation of their deliveries, bur also in the creation process as well as in the distribution.

Listen, Learn, Engage

noreply@blogger.com (Harald Eltvedt) — Tue, 21 Apr 2009 18:15:00 +0000

User-generated content has clearly changed the shape of the online environment we live in today. In fact, the growth of UG content so far is turning the Internet into a non-interactive medium. It’s created the quagmire we’re in today because the industry is treating all information the same — meshing UG content with professionally produced brand content.

The publishers and marketers who climb to higher ground, who see above the fray looking at all online content the same way - combining UG and professionally produced - know that to build brand equity, to move product, to engage your customers, you must meet or exceed their expectations, and online that means being interactive.
On the Internet, consumers expect to be able to interact with the content.
Brand marketers have the opportunity to use the brand to directly sell products by allowing the consumer to interact with the brand message, its products, characters and presentation — putting consumers in control to make a decision.

People want information: What’s behind the curtain? Who is that? Where are they? What are they wearing? To show the same commercial online as they saw on television doesn’t answer any of those questions.
It doesn’t even meet their expectation. The compelling advantages of the internet should be used to open the door and invite the consumer in to explore additional content and get more information related to the ad, i.e., product, brand or service.

Online marketers and publishers heading in the race should be thinking about what they need to do to build relationships with their customers and create loyalty. The top priority will be to deliver the consumer an interactive experience knowing it will lead to transactions, sales and revenue.

Study: ROI May Be Measurable in Facebook, MySpace After All

noreply@blogger.com (Harald Eltvedt) — Tue, 14 Apr 2009 22:39:00 +0000

What it reaped

MySpace marketing ROI for unnamed personal-care brand:

Total consumers exposed: 76.9 MILLION

Percentage of internet population: 40%

Total impressions: 1.1 BILLION

Media outlay: $1 MILLION

Offline sales generated from campaign: $1.28 MILLION

Sources: ComScore, MySpace, Dunnhumby

What is Conversational Marketing?

noreply@blogger.com (Harald Eltvedt) — Sun, 12 Apr 2009 13:03:00 +0000

Where it comes from
"Conversational Marketing" was a term that entered into the lexicon on the coattails of "The Cluetrain Manifesto;" it described a fundamental shift in thinking that needed to take place. The gist was that companies needed to start thinking of marketing as a bottom-up operation rather than a top-down one.

The internet was bringing a new dynamic into play, changing the ways in which people connected with one another, and Cluetrain helped to highlight opportunities for companies to connect directly with their customers online, in lieu of taking a broadcast approach to the marketplace. Conversational marketing emerged as a favorite term to describe the notion of connecting directly to customers online, in part because the first of the 95 Theses within the manifesto is "Markets are conversations."

Conversational marketing was founded on ideas that came out of The ClueTrain Manifesto and the basic rules of human communication that we observe in action every day in the blogosphere and in online communities in general.

One of those rules calls for complete transparency-- something that's not exactly compatible with the idea of paid agents spreading a marketer's message, even if relationships are disclosed.

Leveraging The Internet In The Recession

noreply@blogger.com (Harald Eltvedt) — Tue, 07 Apr 2009 13:20:00 +0000

This will be the first recession in which the Internet will play a central role for the American consumer--and for marketers.

Of course, the Internet was around during the shallow recession of 2001, and almost 50% of Americans were using it. But it was not yet embedded in our way of life, largely because broadband penetration was, at the time, only about 20%. Today, more than 70% of the population is online, with more than 80% of these Internet users having high-speed access.

The Internet has empowered consumers as never before, providing previously unknown and unimagined opportunities to make informed decisions with detailed information, product ratings, expert and user-generated reviews and price comparisons on anything from computers to coffee beans to cat food.

In good times, when consumers feel cash-rich and time-poor, they can afford to be less diligent about their spending. But as economic pressures mount, sentiment changes. People feel cash-poor and are more willing to invest time and effort in getting the best deal.

What sets the current recession apart is that, for the first time, consumers have a tool that empowers them to subject everyday buying decisions to the kind of scrutiny formerly reserved for big-ticket items and large business-to-business transactions.

Marketers should anticipate this shift. They will not be able to rely on ads to pull the wool over consumers' eyes--or on imagery to wow them.

Maybe even more important, it won't be as easy for companies to control the expense line to make up for the loss of top-line revenues. In past downturns, cutting corners on quality has been a virtually foolproof way to cut costs and boost margins, at least in the short-run.

Not this time. Not when consumers can set the bar higher and easily find what they want at the lowest possible price. Not when any degradation of product quality or crummy service experience is subject to being instantly "outed" by the bloggers and reviewers on the myriad user-generated consumer review sites.

"Caveat emptor" now has a companion: "seller beware." Even the slightest marketing chicanery is liable to be instantly pilloried on a global network, especially when consumers are fearful and on edge.

A confluence of factors has increased the likelihood of more consumers turning to the Internet to manage their way through their personal household recessions.

Let's start with the price of gas. Shopping online is just less expensive than driving to a store. Depending on how and where you shop, you can find tax savings and shipping deals online.

And the downturn is dovetailing with a plethora of new, category-specific consumer review sites. Joining broad-based veterans like Epinions, BizRate and CNET are narrowly-focused comparison shopping sites specializing in coffee, beauty products or pet supplies.

There's also been an explosion of online retailers: from Amazon and its brethren, to the online divisions of bricks-and-mortar retailers, to the many niche stores that exist only online. And then there are the Internet's versions of "mom and pops," "stores" that do business within the cozy confines of eBay (nasdaq: EBAY - news - people ) or Craigslist. It all adds up to a bonanza of choices for cash-strapped consumers--and a new set of challenges for those who sell to them.

Virtually anyone selling anything should be online, with as much sophistication as they can afford or muster. And they should follow two cardinal rules:

--Maintain quality and don't over-promise. When anyone who uses your product or service can readily find an audience to whom to complain, the road from credibility to ruin is very short.

--Keep a close eye on pricing. The online dynamic is totally different than having customers in your store, where they might be willing to pay a premium because they're there. Facing a page of pricing options online, shoppers can go to another "store" in a matter of seconds.

Online shopping--and the use of price-comparison engines and consumer-generated reviews to make buying decisions--has been growing steadily throughout the decade. The recession is going to supercharge that growth as current users find new categories in which to shop online and as millions of others jump in to manage their shrinking budgets.

As shoppers become increasingly comfortable with the process during this downturn, it is likely that the combination of convenience and easy-access to comparative information could cause enduring changes in consumer behavior.

Why do I need or want a community?

noreply@blogger.com (Harald Eltvedt) — Thu, 02 Apr 2009 01:24:00 +0000

Clients ask me all the time, "why do I want a community?",
My reply is to listen to Confucius.
Confucius said
"Tell me and I will forget
Show me and I will learn
Involve me and I will understand".

Involvement and Engagement both describe the value of community marketing. By engaging your constituency in conversation, you are creating an opportunity to listen, learn and respond to your customer directly, immediately and involve them in the marketing process. This involvement fosters trust between the company and the constituency and as trust grows, value is created and loyalty builds. Sounds easy? well I wish most marketers felt that way. The challenge is that as marketers our organizations and business processes do not align with changing consumer preferences and a quickly evolving media landscape.

In this blog, I will begin to examine the processes and benefits of community marketing. Today, I would like to speed the plough and offer the 10 rules of successful community marketing.

The first rule has to do with business processes. If your business processes are not aligned with community development you have to look at evolving business processes to be in harmony with the coordinating activities of the community.

Here is an all too familiar example. If you work in a premier marketing company and have responsibility for the P & L of your brand, product or service and you don't control the web, red flags must be raised. Whether you know it or not, like it or not, or believe it, the web is the primary contact source for connecting your brand to its constituencies. As we have said, the "currency of community marketing is conversation", valuable conversations that occur between the brand and customer, between customer and brand and between customers. Tapping into the vernacular in conversations amongst constituents reveals more than just insight, it provides the opportunity to create immediate feedback loops directly with customers. This a relationship that can be built upon for mutual satisfaction!!!! So the first rule of community marketing is that you must have the ability to own the constituent experience online. Keep in mind that with the new "currency of conversation" owning this experience comes with responsibilities and community expectations. Be prepared to manage these expectations responsibly (more on this later).

Rule Number 2 --- Is the Bo Didldley rule, or "Who do you Love?" You must find out who you love? The second rule of community marketing is understanding who you serve, who do you want to understand? Whose needs to you want to fulfill and anticipate? Make the value proposition relevant for these people and create a user experience that is meaningful by involving them and be open to new points of view always.

Rule Number 3 is my personal favorite, it is simply "Roll Up Your Sleeves". The qualities of marketing in community may be a little different then your current coordinating activities of your group so make it your business to get into the detail. You want people in your group to explore the community environment, document the use and effectiveness of the current toolset, document the themes the thoughts and existing behaviors. Make your people be a part of the community and find out who else is doing thing in this area. With high affinity groups, experts, who is blogging what are they saying. The idea is to create a culture internally and in the community of -- learning from passionate people.

What should you have in your community? That brings us to rule # 5, mandatories of community. Every community must have a personal homepage, profile page that is a consequence of registration. The benefits of registration are intuitive but you must have the ability for personal content creation, the ability to interact with others content and the ability to share content and create relationships between those sharing.

Rule Number Six: Create Community Rules and Rights. Creating rules of engagement and community rules and encourages feelings of membership, feelings of membership are fostered by establishing boundaries for engagement, creating emotional safety, a sense of belonging and identification with the members, Use common symbols and language to convey these rules. Always allow for lots of personal and group expression greet new members and introduce them to others with similar interests, invite participation in everything you can.

Rule # 7: Create a culture of Influence. Make sure that you value influence in the group. Enstill in the community that your voice is important and will be heard. Enable learning and influence by other members or sub-groups. Importantly, a culure of ifluence demands feedback responsiveness, and encourages rule creation and enforcement by members and adherence to and maintenance of norms, This is where your communication platforms and tools become important, this could include forums, chats, comments, ratings, blogging, personalized emails, quick polls and surveys.

Rule # 8 Foster shared emotional connections amongst in the community. Trust is built upon shared history and experience, high quality, frequent interaction, discreet/shared events and the personal investment that each member invests with their time and opinions. These shared emotional connections create the bonds that form the important foundations of any great community experiences. Remember, that shared emotional connections cannot be manufactured. Authenticity of , shared experience is critical in that they need to be constant, continua and foster deep interaction within the community.

Rule #9 Integrate mutual fulfillment of needs. By gaining direct access to consumers you can foster a feeling of fulfillment by encouraging the support of you and others in the community. Always stress the rewards of being a member, allow the program to create status and expertise, creating a sense of purpose and competence within the community or group. Create a currency within the culture by featuring members, a vip group, and create continuity programs based on contributions and achievements, reward your members, create special promotions for the community as well as special events that validate the community, its members and the achivements/charter.

Rule #10 Have a voice to allow the voice. Be transparent, but use a human voice as the voice of the community, get involved in the conversations, blog with passion, dont just have the party be the host that everyone loves.

Fresh from Adweek this week comes the news that (unsurprisingly), consumers are more tech-savvy and connected than marketers.

noreply@blogger.com (Harald Eltvedt) — Thu, 26 Mar 2009 11:45:00 +0000

"IBM found that between 2007 and 2008, the proportion of consumers saying they used social-networking tools soared to 60 percent from 33 percent; for online and portable music services it more than doubled to 46 percent; mobile Internet nearly tripled to 41 percent; and access to mobile music and video quadrupled to 35 percent."

But, despite what you would hope those numbers would lead to, 80 percent of advertising executives expect that the industry is still a whopping five years away from being able to deliver "cross-platform advertising, encompassing sales, delivery, measurement and analysis."

The lessons to be learned, per IBM: Traditional industry players need to identify ways to monetize new consumer experiences before new entrants do; and there are significant new consumer opportunities-beyond just the value of content through value-added services, hardware and software offerings.

For its research, which will be released this week, IBM conducted 70 interview sessions with global industry execs and surveyed more than 2,800 consumers in Australia, Germany, India, Japan, the U.K. and the U.S.

DOWNLOAD IBM RESEARCH:

http://www.adweek.com/aw/photos/stylus/75848-BeyondAdvertising.pdf

Focus on the "why", not on the score

noreply@blogger.com (Harald Eltvedt) — Sat, 21 Mar 2009 13:35:00 +0000

How actionable is any satisfaction or loyalty score if you can't link the reasons behind the score that people give you?
The truth is, it probably does not mean nearly as much as we think. One of the best examples of this is the phenomenon of "the ultimate question", as presented in Fred Reichheld's book, The Ultimate Question. The ultimate question does not ask about satisfaction, it asks how far customers are willing to go to put your personal reputation on the line by recommending a product.
Even more importantly, how can you reproduce what you do well, if you don't know the reasons why people are satisfied with you? And how can you increase your customers satisfaction if you don't know what turns them off. In today's world, you simply don't have the luxury to wait for your focus group to deliver insights, or the results to your annual long boring satisfaction tracking. By the time you get the resulst, your unhappy customers have already gone to your competitors and talked negatively to all their friends about you.
People who are really angry usually have a specific, concrete grievance with you. You can become their hero if you solve their issue.
Corporate Blogs and Forums are a great way to understand these people. Even then, it requires skill and imagination to really get into the mind of the person who considers you a merely "fine" choice. You need to piece together the threads you discover to create an accurate picture of who these people are, what drives them, what is underlying force behind their likes and dislikes.
You sometimes cannot unearth these drivers, because they are overwhelmed by other issues--things you as a company or brand cannot see or will not acknowledge.
But once you have dealt with these, you unearth and discover the underlying needs and desires of your customers--the things you need to move from good to great, from a fine choice, to a to-die-for choice.

What Consumers Really Want: Authenticity

noreply@blogger.com (Harald Eltvedt) — Thu, 12 Mar 2009 18:41:00 +0000

Business today is all about being real, so why do companies keep on trying to be phony?
In the recent years of My Space, YouTube or FaceBook, one would imagine that big corporations would try to adapt themselves and learn more about their most valuable customers, but they just tend to apply old marketing techniques to a new space.
What these companies don't understand is that these new destinations are not the new media itself; the new media is the people using these websites and the way they interact and trust each other.
Though most often, companies will use their agency, come up with a "viral marketing campaign" that "looks and feels" like it was done by a true and genuine consumer but that was developed and validated by the brand. They will then infuse it on these websites and measure how people react to the new campaign.
I was recently at a conference organized by WOMMA (the Word Of Mouth Marketing Association) and attended a presentation hosted by a famous gaming system company and their agency of record.
They wanted to share a recent case study that they did together to support the launch of their new system and described exactly what I talked about above.
Why don't brands just trust their consumers? People no longer want fake offerings from slickly marketed phonies; they want real offerings from genuinely
transparent sources. Think eBay: they have 15,000 transactions a minute. Why does it work so well: because you can view the ranking of users and track their reputation.
I wonder how a brand would feel about such a ranking system that consumers could track...

The Breakup: why traditional advertising doesn't work anymore

noreply@blogger.com (Harald Eltvedt) — Fri, 27 Feb 2009 14:02:00 +0000

Interesting video on how advertisers treat their consumers.

The numbers are compelling: individuals are exposed to an average of 3000 messages a day.
On average advertisers spend 50x more time and money talking than listening to consumers.
Imagine being in a relationship like that....Wait you are, with the brands you listen to.

Six ways to make Web 2.0 work

noreply@blogger.com (Harald Eltvedt) — Wed, 18 Feb 2009 19:35:00 +0000

A recent article of McKinsey reviews how companies use web 2.0 tools and what the opportunities are:

To help companies navigate the Web 2.0 landscape, McKinsey has identified six critical factors that determine the outcome of efforts to implement these technologies.

1. The transformation to a bottom-up culture needs help from the top. Web 2.0 projects often are seen as grassroots experiments, and leaders sometimes believe the technologies will be adopted without management intervention—a “build it and they will come” philosophy. These business leaders are correct in thinking that participatory technologies are founded upon bottom-up involvement from frontline staffers and that this pattern is fundamentally different from the rollout of ERP systems, for example, where compliance with rules is mandatory. Successful participation, however, requires not only grassroots activity but also a different leadership approach: senior executives often become role models and lead through informal channels.

At Lockheed Martin, for instance, a direct report to the CIO championed the use of blogs and wikis when they were introduced. The executive evangelized the benefits of Web 2.0 technologies to other senior leaders and acted as a role model by establishing his own blog. He set goals for adoption across the organization, as well as for the volume of contributions. The result was widespread acceptance and collaboration across the company’s divisions.

2. The best uses come from users—but they require help to scale. In earlier IT campaigns, identifying and prioritizing the applications that would generate the greatest business value was relatively easy. These applications focused primarily on improving the effectiveness and efficiency of known business processes within functional silos (for example, supply-chain-management software to improve coordination across the network). By contrast, our research shows the applications that drive the most value through participatory technologies often aren’t those that management expects.

Efforts go awry when organizations try to dictate their preferred uses of the technologies—a strategy that fits applications designed specifically to improve the performance of known processes—rather than observing what works and then scaling it up. When management chooses the wrong uses, organizations often don’t regroup by switching to applications that might be successful. One global technology player, for example, introduced a collection of participatory tools that management judged would help the company’s new hires quickly get up to speed in their jobs. The intended use never caught on, but people in the company’s recruiting staff began using the tools to share recruiting tips and pass along information about specific candidates and their qualifications. The company, however, has yet to scale up this successful, albeit unintended, use.

At AT&T, it was frontline staffers who found the best use for a participatory technology—in this case, using Web 2.0 for collaborative project management. Rather than dictating the use, management broadened participation by supporting an awareness campaign to seed further experimentation. Over a 12-month period, the use of the technology rose to 95 percent of employees, from 65 percent.

3. What’s in the workflow is what gets used. Perhaps because of the novelty of Web 2.0 initiatives, they’re often considered separate from mainstream work. Earlier generations of technologies, by contrast, often explicitly replaced the tools employees used to accomplish tasks. Thus, using Web 2.0 and participating in online work communities often becomes just another “to do” on an already crowded list of tasks.

Participatory technologies have the highest chance of success when incorporated into a user’s daily workflow. The importance of this principle is sometimes masked by short-term success when technologies are unveiled with great fanfare; with the excitement of the launch, contributions seem to flourish. As normal daily workloads pile up, however, the energy and attention surrounding the rollout decline, as does participation. One professional-services firm introduced a wiki-based knowledge-management system, to which employees were expected to contribute, in addition to their daily tasks. Immediately following the launch, a group of enthusiasts used the wikis vigorously, but as time passed they gave the effort less personal time—outside their daily workflow—and participation levels fell.

Google is an instructive case to the contrary. It has modified the way work is typically done and has made Web tools relevant to how employees actually do their jobs. The company’s engineers use blogs and wikis as core tools for reporting on the progress of their work. Managers stay abreast of their progress and provide direction by using tools that make it easy to mine data on workflows. Engineers are better able to coordinate work with one another and can request or provide backup help when needed. The easily accessible project data allows senior managers to allocate resources to the most important and time-sensitive projects.

Pixar moved in a similar direction when it upgraded a Web 2.0 tool that didn’t quite mesh with the way animators did their jobs. The company started with basic text-based wikis to share information about films in production and to document meeting notes. That was unsatisfactory, since collaborative problem solving at the studio works best when animators, software engineers, managers, and directors analyze and discuss real clips and frames from a movie.⁴ Once Pixar built video into the wikis, their quality improved as critiques became more relevant. The efficiency of the project groups increased as well.

4. Appeal to the participants’ egos and needs—not just their wallets. Traditional management incentives aren’t particularly useful for encouraging participation.⁵ Earlier technology adoptions could be guided readily with techniques such as management by objectives, as well as standardized bonus pay or individual feedback. The failure of employees to use a mandated application would affect their performance metrics and reviews. These methods tend to fall short when applied to unlocking participation. In one failed attempt, a leading Web company set performance evaluation criteria that included the frequency of postings on the company’s newly launched wiki. While individuals were posting enough entries to meet the benchmarks, the contributions were generally of low quality. Similarly, a professional-services firm tried to use steady management pressure to get individuals to post on wikis. Participation increased when managers doled out frequent feedback but never reached self-sustaining levels.

A more effective approach plays to the Web’s ethos and the participants’ desire for recognition: bolstering the reputation of participants in relevant communities, rewarding enthusiasm, or acknowledging the quality and usefulness of contributions. ArcelorMittal, for instance, found that when prizes for contributions were handed out at prominent company meetings, employees submitted many more ideas for business improvements than they did when the awards were given in less-public forums.

5. The right solution comes from the right participants. Targeting users who can create a critical mass for participation as well as add value is another key to success. With an ERP rollout, the process is straightforward: a company simply identifies the number of installations (or “seats”) it needs to buy for functions such as purchasing or finance and accounting. With participatory technologies, it’s far from obvious which individuals will be the best participants. Without the right base, efforts are often ineffective. A pharmaceutical company tried to generate new product ideas by tapping suggestions from visitors to its corporate Web site. It soon discovered that most of them had neither the skills nor the knowledge to make meaningful contributions, so the quality of the ideas was very low.

To select users who will help drive a self-sustaining effort (often enthusiastic early technology adopters who have rich personal networks and will thus share knowledge and exchange ideas), a thoughtful approach is required. When P&G introduced wikis and blogs to foster collaboration among its workgroups, the company targeted technology-savvy and respected opinion leaders within the organization. Some of these people ranked high in the corporate hierarchy, while others were influential scientists or employees to whom other colleagues would turn for advice or other assistance.

When Best Buy experimented with internal information markets, the goal was to ensure that participation helped to create value. In these markets, employees place bets on business outcomes, such as sales forecasts.⁶ To improve the chances of success, Best Buy cast its net widely, going beyond in-house forecasting experts; it also sought out participants with a more diverse base of operational knowledge who could apply independent judgment to the prediction markets. The resulting forecasts were more accurate than those produced by the company’s experts.

6. Balance the top-down and self-management of risk. A common reason for failed participation is discomfort with it, or even fear. In some cases, the lack of management control over the self-organizing nature and power of dissent is the issue. In others, it’s the potential repercussions of content—through blogs, social networks, and other venues—that is detrimental to the company. Numerous executives we interviewed said that participatory initiatives had been stalled by legal and HR concerns. These risks differ markedly from those of previous technology adoptions, where the chief downside was high costs and poor execution.

Companies often have difficulty maintaining the right balance of freedom and control. Some organizations, trying to accommodate new Web standards, have adopted total laissez-faire policies, eschewing even basic controls that screen out inappropriate postings. In some cases, these organizations have been burned.

Prudent managers should work with the legal, HR, and IT security functions to establish reasonable policies, such as prohibiting anonymous posting. Fears are often overblown, however, and the social norms enforced by users in the participating communities can be very effective at policing user exchanges and thus mitigating risks. The sites of some companies incorporate “flag as inappropriate” buttons, which temporarily remove suspect postings until they can be reviewed, though officials report that these functions are rarely used. Participatory technologies should include auditing functions, similar to those for e-mail, that track all contributions and their authors. Ultimately, however, companies must recognize that successful participation means engaging in authentic conversations with participants.

Get into the conversation

noreply@blogger.com (Harald Eltvedt) — Thu, 12 Feb 2009 13:56:00 +0000

Many companies are starting to engage their customers in their marketing activities -- or are they?
Most marketers have always conversed with their consumers -- through focus groups, surveys, and other research studies. But like a lot of what happens in marketing, the conversation tends to be a tactic, not a strategy, short term versus long term. And the conversation is often a one-way dialog in a control environment, either behind four walls or behind a firewall.
The conversation starts and stops at the pleasure of the marketer, who firmly controls every step of the way.

With consumers getting more and more control everyday, sharing their experiences with each others online, marketers have to find new ways of engaging with them in order to keep being innovative and being able to stay in the conversation.
A recent Business 2.0 article “Companies tap into consumer passion”, argues that your best customers are often better informed of your brand than you are. Why? Because they consume your brand, endorse it, love it and often recommend it to others. They also have a more sophisticated understanding of your products than you do, and tend to rely on each others to share information and experiences on your brand and not on the information you provide them anymore.

The blogosphere is full of examples of consumers taking control of the brands, leading the message and the direction of these brands’ future. There are also some unfortunate examples of brands trying to use consumer techniques a la YouTube, to seed products and messages to the market that ultimately fail, because consumers know when it’s a consumer talking and when it’s a brand or one of its agent pretending. The number one rule in this new marketing era is that you have to be honest with your consumers, because they will ultimately find out if you’re not having a truthful conversation with them.

So, the question is, how do you get back into the conversation, without sounding phony?
One of the ways to do so is to create a dedicated environment where you can engage in conversations with your consumers, collect their insights and share back with them what you are doing as a result of their feedback. You have to let them know, right from the beginning, what your intent is: getting back into the conversation, creating products and messages that will meet their needs and wants, or whatever your objective is for your brand. Consumers will appreciate the fact that you are engaging with them, and little by little you will be accepted in this new circle of trust. As a result, your best consumers will provide you with their insights, you will be able to innovate, and cultivate their advocacy.