Altimeter Group

Wanted: Your opinion on book titles (Part 2)

2009-10-27T18:16:52Z

Previously, I asked for help in naming the book, and we’re done to the wire in terms of finalists. I’m hoping you can take two minutes to complete a very short survey on our title possibilities.

I realize that asking an audience of people who are pre-disposed to being open is probably not the most scientific way to do this! So taking a page from Tim Ferris, I’m also running the title possibilities against specific search keywords to see which ones get the most clickthroughs.

I’ll post the results from both the survey and the search engine test shortly.

Book Title Survey

International examples of “open” organizations and leaders needed

2009-10-27T18:02:15Z

I’m wrapping up work on my next book “Open” and am in need of a few examples of organizations and leaders outside of North America.

In particular, I’m looking for examples of organizations that have put in place more open information sharing or decisions making processes or technologies, and as a result, have seen substantial business impact. In particular, I’m interested in learning how they went through the journey of letting go of control, and in the process, transformed the relationship they have with customers and/or employees.

Here are a few examples:

- Employees using social media tools inside the organization helps spreads mission critical information throughout the organization, so that decision making happens faster, with better results.

- Customers are invited into innovation and decision making sessions to help the company develop or improve products and processes.

- Basic operations such as marketing, sales, and customer service are becoming more open and public, using communication and social technologies like discussion forums, blogs, Facebook, Twitter to engage with customers. The key: that this is opening to customers is leading to a transformation internally as well.

- People who you believe exemplify what it means to be an “open leader” - someone who is leads with transparency and authenticity.

I’m also interested in learning if “being open” differs substantially in different countries, or if there are some universal tendencies in the way people organize and work. There will always be different cultural differences, but I find just as many different company cultures and degrees of openness in just the US alone!

And of course, if you know of any interesting examples from North America, please let me know as well!

My deadline is fast approaching, so please leave suggestions in comments or email me at charlene (at) altimetergroup (dot) com. Thanks!

Social Search: Customers Influence Search Results Over Brands

2009-10-22T16:43:21Z

This post was collaboratively written (in real time) on a wiki by Charlene Li, who maintains a focus on Leadership Strategy and Jeremiah Owyang, who maintains a focus on Customer Strategy. Together, we’re covering the convergence of emerging technologies at the Altimeter Group.

Twitter brokers a deal that offers search engines Microsoft Bing and Google Search access to their real time data streams. Also, Facebook, offers up public status updates to be searched and served up to Microsoft’s Bing. This trend towards micro media requires companies to pay attention to the real time and social web for marketing, support, and competitive strategies. There are several impacts to the ecosystem, here’s what you should know:

Deal Fills In Technology and Relationship Gaps for Twitter. Twitter lacks the computing power of a premiere search engine, as their current Twitter search results are littered with spam, duplicate tweets, and are only sorted by time. Leveraging the sophisticated engineers at Microsoft and Google affords Twitter an opportunity to focus on their platform –not search. From a business aspect, this deal makes sense is that Microsoft and Google both have relationships with advertisers and brands, with trained sales forces to cut deals. Although the terms of the deal aren’t public, it’s suspect there was an exchange of material goods, it’s likely that Twitter will benefit from revenue share in the near future.
Social Search to Serve Results Based On Time, Authority. Expect real time data to merge with existing search engines, as a result we should see Google Search and Bing to serve up search results based on: 1) Real time information based on what Twitter users are saying, including memes from trending topics, 2) Preference given to links and URLs that are tweeted by users with more followers or authority, 3) Geo location of tweets to influence search results. As users seek “Thai Restaurants in San Mateo” location based tweets could provide additional context. 4) Eventually results will be served up by your friends. Google has given a nod to serve up information based on your social graph (your friends) using Google Profile.
To Compete, Facebook Must Make More Content Public. For closed social networks like Facebook, this means they need to continue to offer up more data that can be searched in public by search engines. With default settings in Facebook set to ‘friends only’ this will continue to be a challenge as Facebook’s community prefers the filters and privacy settings that this closed social network provides.
Twitter’s Future: Seamless Integration with the Web. Success for Twitter isn’t about becoming a destination site, but instead about becoming a data protocol that’s embedded everywhere. Like “Air“, microblogging features are already present in multiple applications, desktop and mobile clients, and the bite-sized information is becoming available in context wherever it’s needed.
Consumers Influence Search Results. An even more amazing impact of these announcements is that for the first time, consumers will be able to directly impact web search results. Although companies spend thousands of marketing dollars controlling their search results by using Google’s advertising services, customers and competitors can quickly and cheaply impact search results using simple tools like Twitter. Consumers, empowered using mobile devices as a publishing platform can link to content and influence search results. Now, a simple tweet with a picture of a plane landing on the Hudson from a mobile phone will show up at the top of search results.

Key Takeaways: Customers Impact Brand Search Results Using Twitter
Even if your company is not active on Twitter, your customers can influence the search results related to your company –you must pay attention to this trend. Just as your company likely already has a search strategy through search optimization or paid search terms, you’ll need to extend micromedia to your strategy. In order to be prepared for this change, companies must:

Develop a Listening Strategy That Starts With Roles and Process. Every business and market is now moving faster and faster as information spreads around the globe in minutes –if not seconds. Companies must be ready to quickly identify flare ups, be ready to respond, and correct incorrect information. Develop a listening strategy that has internal roles set in place, a process to respond and the right tools like Radian 6, Visible Technologies, BuzzMetrics, or Cymfony.
Change The Marketing Mindset –Legacy Methods Ineffective. Search marketers must understand that blasting marketing information through Facebook or Twitter won’t be effective, as search engines will filter out irrelevant messages that nobody listens to. Instead, marketers should allow content on all web properties and email marketing to be easily added to Facebook, Twitter, and other social sites by offering icons that encourage people to share. Providers like ShareThis and AddThis make this simple to do.
Develop Influence Marketing Programs. Since these search engines have all noted that they will rank real time information on a person’s authority and not just traditional page ranking, marketers must double down on building these relationships. More than ever, brands will need to foster discussions within Twitter as retweet, replies, and linking behavior will influence what is served up on results pages. It takes time to build real relationships that develop into public conversations so get started now.

Can you control your customers?

2009-10-15T13:12:43Z

I just received an interesting email promotion for an upcoming conference. At the top of the email, in big bold letters was this:

“It’s time to take back control!”

Now that definitely caught my eye, as I’m writing a book about being open. That’s because the number one concern I hear from executives — and especially marketers — is how out of control they feel these days.

Here’s some more text from the email:

“Reaching today’s consumers is more challenging than ever. Both savvy and wary of marketing, they control when, where and how they see your marketing message. With the power of social networking, they pull all the strings. But there are ways to win back some of that control. Give your message more impact and improve your chances of influencing the behavior of your current customers and prospects.

Join us at xxx where our industry’s best will show you how to master a multi-channel approach to give you more power and more control over your campaigns, your costs and your consumer.

This conference is a stepping stone towards harnessing the power of direct marketing.

Take back control.”

This event will likely draw a lot of people, because it plays to one of the largest concerns of marketers. But when a marketer approaches its customers with this mindset — that it is in a battle to control customers — it’s clear to me who will prevail. The customer, not the marketer will be the victor. That because there’s no way for the marketer to really “control” its customers. Who out there wants to be messaged to, to be controlled, by even the best brands out there?!?

What this copy refers to is this innate desire for marketers to time warp back to an era, not that long ago, where they felt that they were in control. Where they could chose when to “engage” with their customers, or shut them out because they weren’t saying the things the company wanted to hear. The reality is that they weren’t really in control even back then – they just felt like they were.

So to marketers who ask, “How can I control negative comments?” or “How can I control what people say about me on social sites?”, I can offer no solace. And I warn them from trying to find the relief they so desperately seek in new products, creative techniques, or consultants that promise greater control. These companies sell the equivalent of today’s snake oil.

Instead, I hope that the conversation at this event begins with the simply acknowledgement that marketers are no longer in control, and instead, stress that it’s time to think about building a real relationship with those customers, one that is based on trust and dialog. To me, that would seem to be a much healthier way to approach the problem of feeling out of control.

Technorati Tags: social,marketing,control,open,charleneli

Revealing Google’s Stealth Social Network Play

2009-10-07T16:50:42Z

This post was collaboratively written on a wiki by Charlene Li, who maintains a focus on Leadership Strategy and Jeremiah Owyang, who maintains a focus on Customer Strategy. Together, we’re covering the convergence of emerging technology at the Altimeter Group.

Google has quietly been launching a social network right under our own chins. No, it’s not about Google extending Orkut, a social networking platform they developed a few years ago, or growing Google groups, or even launching their own version of a twitter. Instead they’ve been releasing small bits of social networking features, little by little. Previously, we’ve made the case that email is already the largest social network, however Google’s plans go beyond Gmail. First, let’s define what to look for, in order to identify what Google is concocting.

Defining Social Networks

To start with, we define a social network as having three baseline components: 1) A profile that contains a person’s information; 2) The ability for people to connect to each other via those profiles, often called a social graph; and 3) the ability to do something useful or valuable they couldn’t have done otherwise. Features such as discoverability or public access are often cited as social network features, but we believe that the common denominators across most social networks are the three characteristics we listed.

Now that we agree on the definition, we can see that Google is launching each of these features with little fanfare. Let’s break down what’s happening. Google allows people to:

Maintain a rich profile. Google recently launched new features called Google profiles which allows users to upload profile pics, include personal information and preferences, and allow it to be discoverable on the web. These are coupled with a Google account such as gmail, and is at the core of these efforts.
Connect and Communicate With Others. Individuals using the Google profiles can connect to each other and share information using a variety of tools, not all of them necessarily social. For example, Gmail and Google Talk contain not just your contacts, but also understand with whom you communicate the most. Google doesn’t explicitly ask if you’re a ‘friend’ or ‘fan’ of someone, but rather, allows people to connect to each other in a variety of communication tools. And most recently, Google launched Google Sidewiki, which allows anyone to add comments to any page on the Web with just a Firefox plug-in.
Centralize Information In A Useful Way. Allowing people to build profiles and communicate with each other isn’t of much value unless it can provide a more useful experience not previously available. Google provides a number of tools like Google Wave, a collaboration tool we’ve started to experiment with, Gtalk instant messanger, and Gmail which rivals Facebook’s newsfeed, chat, and inbox respectively.

Google’s Stealth Threat

The difference between Google and destination social networks like MySpace, Friendster, and Facebook is that Google doesn’t have a specific URL. Instead, it is creating elements that envelope the web, by enabling every online (and mobile) activity to possibly be social one –then running it all on their own centralized platform. Google isn’t going after a frontal, brute force assault on Facebook and the other social networks — it simply can’t win at that game on a global basis. Instead Google is pursuing a softer approach, a zen-like attach much like water flowing around a rock. It is using its strengths — ubiquity and open platforms — to put “social” into every corner of the Web.

This is the stealth threat — that today’s social networks won’t really be losing share to the “Google network”, but rather, that they will become slowly less relevant as EVERYTHING gets social thanks to advances by Google. Their end goal? Google’s social network is designed to exist everywhere –not be centralized in any one location. By the way, two can play at this game and we see Microsoft making similar moves in the future. (Edit: It was pointed out to me that Yahoo! is also making similar moves with its social APIs).

Key Takeaways

1. Enveloping The Social Web Is Core To Google’s Strategy. This is inline with Google’s traditional strategy of organizing the world’s information –then serving up monetization options around it. Although a few years late to the game, Google’s move is crucial as they already have large amounts of information about what you look for, who you know, and the activities you do. It’s a natural step for them to also organize and make sense of the social and behavioral information that people create. In addition, Google — who already has long term relationships with agencies, brands, and marketers — will be a natural place for companies to look to for advertising and marketing opportunities around social data, rather than new players and start-ups.

2. Google’s Recent Moves Threaten Incumbent Social Networks. Facebook and other competitors will need to quickly spread it’s Facebook Connect platform and evolve it to something that doesn’t even require APIs or registrations. The challenge with Facebook Connect is it requires the website owner (publisher) and the user to opt-in and allow for content to become social. With Google’s SideWiki, only the users need to opt-in, which will cause adoption to spread must faster. Facebook will need to extend it’s inline browser (surfing the web within the context of facebook.com) or developing their own browser to counter Google’s moves. Facebook’s core conundrum is balancing personal and often private information of its community with the need to expose information in public in order to be relevant in search and eventually advertising.

3. Despite Privacy Concerns, Users Will Continue To Use Google. Although privacy concerns will continue to be the mainstay of objections, the benefits to the common user will outweigh any critics. We know that people will verbally object to their privacy being an opportunity for another company, yet they continue to behave in a way opposite to their objections. Why? For most, they’ve grown to trust players like Google. Or they are willing to give up control of some information in exchange for convenience, such as having social data conveniently show up on Google Maps on your phone. And for others, the price of privacy can be measured by what information they will give up to get ‘free shipping’. The root concern isn’t broadly about privacy, but specifically about privacy in the context of when you’re not in control of it. Google is highly motivated to maintain the trust of users and will do everything possible to continue earning and deserving that trust.

We’re not the only ones to notice this trend, Search Engine Watch also characterizes Google as a social media company. We hope our viewpoint sheds light to where Google is heading, and hope to hear your viewpoints too.

Thank you for attending our “Open Hangar”

2009-10-05T11:22:03Z

In the spirit of an open house, we opened our HQ office, dubbed the “Hangar” to the community. To us, the Altimeter Group is designed to be a connect part of the larger eco-system, from those that are implementing emerging technology, to those that are creating it. We’re very thankful to those who attended, met with us and others, and contributed their photo to the community wall (see above picture).

Susan Etlinger comments that she sees the Hangar as a place for big thinking, with an accompanying video of Charlene explaining the origination of the Altimeter name. To get a sense of the event, Ken Yeung, took photographs of the event –which are all on Flickr.

We couldn’t invite everyone in the ecosystem we wanted to due to limited space, but are already planning other unconferences, workshops, and events at the Hangar for others to attend.

Image credit: (cc) Kenneth Yeung - www.thelettertwo.com

Humorous example of social media monitoring: Sydney University

2009-09-07T18:31:13Z

I was doing some research for my book, looking for instances of interesting social media monitoring when I came across this humorous example (thanks to BuzzNumbers).

Jonathan Pease (not sure if it’s the same Jonathan Pease who is on "Australia’s Top Model"). was apparently bored in a university classroom and wrote this tweet:

To which Sydney University replied in a tweet:

To Jonathan Pease’s credit, he took it all in stride and ended up retweeting Sydney University’s and admitting that he was "BUSTED".

The Takeaway

It’s one thing to monitor social media. It’s another to tell people you are monitoring without invoking Big Brother feelings. As you embark on more and better listening via social media monitoring, think about how you will use that information — when will you engage with people who are talking about you, and how will you do it? Sydney University did this in a humorous way with a light touch.

I’d love to hear more examples of how you have reached out and engaged people who may not have realized that you actually are listening to what they are saying. The key is how to do so without freaking them out, but instead, delighting them with the fact that you were listening and heard them.

Technorati Tags: social,media,monitoring,listening,charleneli

Altimeter Welcomes New Partners

2009-08-28T12:59:47Z

It’s with great excitement that I’m announcing the addition of three new partners to Altimeter Group. Joining me will be Deb Schultz, Ray Wang, and Jeremiah Owyang (read their thoughts) — three bright minds, true professionals, and most important of all, great people. (Read the press release.)

Our Mission - Providing A Strategic Approach to Emerging Technologies

Together, we are taking on the mission of helping clients understand and adapt emerging technologies into their strategies in a holistic way. Note that we emphasize “emerging” — today, the focus of many organizations is on social technologies, but we also believe trends like mobile, location-based devices and cloud computing can and will be disruptive to companies.

Most organizations struggle with emerging technologies because they lack the time and resources to follow them closely. And when they do decide to adopt they move too slowly. As Ray Wang puts it, “The rate of obsolescence outpaces the rate at which companies change.”

We want to provide an integrated and strategic approach to integrating emerging technologies, one that is centered around the strategic goals of the company. We’ll do this by bringing together a rich, diverse, and ever-changing ecosystem of technology vendors and start-ups, service providers like agencies, and business end users

A Holistic Approach

Take for example social networking sites. For example, most organizations look at Facebook as a new way to engage with customers. Jeremiah Owyang will continue his thought leadership on how to do this in his role as our Customer Strategy practice lead, providing examples and advice on how to best connect with these fans.

Deb Schultz will tap her deep connections in the tech start-up world and create opportunities for companies to experiment with new technologies like OpenID — which can help tie social networking profiles back to company CRM systems. This is just one of the ways that Deb will be helping clients with our Innovation & Best Practices offering.

Ray Wang will contribute his understanding of the inner workings of companies, in this case by advising how a company needs to transform their traditional enterprise systems to handle “social CRM” data. In his Enterprise Strategy practice, Ray will also help organizations understand how to tap into the power of their employees and partners with new social enterprise apps and cloud computing technologies.

And I will focus on helping the leaders of these organizations figure out what kind of culture and structures need to be in place to ensure that these fledgling efforts gain a foothold and not be swept away by the urgencies of day-to-day operations. In the case of a Facebook page, giving employees the permission to speak on behalf of the company — in an official capacity or not — calls into question organizational hierarchies and power structures. The Leadership & Management practice that I will run addresses many of these issues, and will be supported by the research and writing efforts of my next book.

Altimeter Group’s Four Practice Areas

Continuing The Discussion

We humbly acknowledge that we are but one part of a larger strategy and emerging technology ecosystem that encompasses technology vendors, service providers, and business end users, as well as many other thought leaders, consultants, and agencies. The world of emerging technologies is so big and so ever-changing that we all benefit from greater, not lesser sharing.

To facilitate the discussion, we are launching “The Hangar”, a physical space in San Mateo, California, where we will host events, training, community gatherings, and un-conferences that bring together parts of the emerging technology ecosystem. It’s one thing to meet and collaborate online — it’s another to see potential partners face-to-face, or to see a demonstration of a new mobile technology in your hands.

Altimeter Webinar: The Future Of Business And Virtual Open House

Please join us in for an upcoming Webinar to discuss “The Future Of Business.” We’ll kick off the discussion with perspectives from each partner, provide some background on how Altimeter works, and then open it up for discussion with anyone who cares to join us. And of course, we’ll cover it live on Twitter as well as with follow up posts on our blogs.

When: Thursday, September 10, 2009 10:00 AM - 11:00 AM PDT

To register, please go to https://www2.gotomeeting.com/register/725944010

And A Big Thank You

From providing thoughtful advice and constructive criticism to being supportive readers and friends, you have been there for me — and for that, I am deeply grateful. As I transition from being a sole practitioner to a partner in a firm, I hope that we will continue the dialog. Our success will be due in no small part to how well we can keep the conversation going.

Technorati Tags: altimetergroup,charleneli,webinar,

Announcing my next book

2009-08-18T16:05:24Z

I got the itch again and will be working on my next book over the next few months. The book is being published by Jossey-Bass and will come out in May 2010.

I’ve included a description, some working titles, and chapter outline with the hope that you will share 1) what issues I’m addressing resonate with you; 2) sources and case studies that you think should be in the book.

My biggest need right now is to figure out the title — the publishing world’s schedule requires that I have a title submitted by the end of this week (I know, it’s crazy, but that’s the way it works!). So I would appreciate it if you would take a minute and respond either via comments which title(s) you like the best.

Description of the book

Talk with your customers. Listen to your employees. These are long-time, well tested truisms of business. But ask a businessperson to engage with people on Facebook or Twitter, or create a forum where employees can connect, and a look of sheer terror crosses his face. Rather than jump at the opportunity to interact, engage, and dialog with customers and employees, s/he runs in the opposite direction.

Why, in the midst of the largest seismic technological and sociological shift our generation, are organizations so hesitant to engage? Companies push back – how open, how transparent, how authentic, and how real do they need to be? The problem is that they are asking only half the question — it’s not just a matter of how open they should be, but also, how comfortable they are giving up control. The new reality is that customers, partners, and employees are demanding that they be given a role in the process and forcing organizations to give up control – or more specifically, the semblance of control.

In this tempest, command-and-control leadership and traditional hierarchical structures are too brittle to deal with fast-moving changes. But there is also a very real limit to how much control a business, organization, or association can give up. This is more than simply being open, authentic, and transparent. It’s a considered and rigorous approach to leadership, strategy, and management that can be studied, emulated, developed, and most importantly, measured.

This book posits that it is essential that the modern organization and the people who run them feel comfortable working in a world where they are not in control — but are able to command and get things done with the very technologies that caused them to give up that sense of control in the first place. The book will lay out a process of how companies can bring their employees, partners, and customers into the process of running the organization, giving them control – and thriving in the process.

Questions The Book Will Address

What are the benefits of open leadership and open organizations?
How do you define and measure openness within an organization?
What are the characteristics of open leaders? How can they be measured?·
What tools and technologies are enabling open organizations to thrive?
How can open leaders be identified and developed?
How do open leaders and open organizations deal with risk?
What will the future of leadership and organization look like?

Working Titles

You can see the titles I’m considering below. I would love to hear your feedback on what reasonates, as well as othere options I should be considering.

Open Leadership: How to Give Up Control But Remain in Command
Letting Go: How Leaders Give Up Control But Remain in Command
Open Leadership: Why Leaders Who Give Up Control Can Retain Command
Letting Go: Why Leaders Must Give Up Control To Retain Their Authority
Leading Without Controlling: The Case For Open Leadership
Lead Without Limits: Why Leaders Must Give Up Control to Retain Their Authority
Open Now: How To Give Up Control But Still Be In Command
Open Now: The Upside Of Giving Up Control

Outline

This is a draft outline and is subject to change. I’ve included here with the hope that people will help challenge and improve the ideas, and also provide examples that would be relevant for each chapter.

Part 1: The Upside Of Giving Up Control

Chapter 1: The Challenge Of Social Technologies

Companies are intrigued and excited about the opportunities opened by social technologies. But despite best laid plans, they didn’t have the right organization, cultural and leadership to engage the Groundswell. This is the inevitable democratization of leadership, and it’s not optional. Leadership is about building relationships, and you can’t “control” relationships. Just ask your spouse! What’s required is a new approach to building business relationships, one that is founded on trust but also structured with just enough rules so that things can get done.

Chapter 2: What Giving Up Control Can Do for You

There are five benefits to organizations can realize from being more open: 1) scale to engage with customers and employees; 2) scale to lower costs; 3) speed to market; 4) dealing with complexity; and 5) increasing commitment and loyalty. Each of these can be measured and weighed using existing metrics within an organization.

Chapter 3: What Drives Openness (or Not)

The fundamental question is now how open to be? Three factors determine this: 1) your goals and the benefits you receive from being open; 2) the need of your audience (employees, customers, partners) for you to be open; and 3) the competitive context.

Part 2: The Open Leader

Chapter 4: What an Open Leader Looks Like

Open Leadership is the way a person approaches relationships. It’s a mindset, not the title. Open leadership is something that you may be naturally inclined towards, but it is more importantly something that you decide to do. There are archetypes of leadership, ranging from the Fearful Skeptic to the Realist Optimist. The skills of these open leaders are those of traditional leaders — empathy, humility, inspiring trust. But add to that a new list of skills needed in the newly social world - collaboration, agility, and most importantly, adopting to the culture of sharing to build that trust.

Chapter 5: Create and Apply a Sandbox Covenant

When leaders open up and give up control, they also need to know that things are getting done. The Sandbox Covenant is the process by which the open leader defines how big the “sandbox”, and then in concert with employees, customers, and partners, defines the walls of that sandbox clearly. Leadership doesn’t happen in a vacuum – it’s defined by how you will interact and engage with your employees, customers, and partners.

Chapter 6: Finding And Nurturing Your Open Leaders

A key trait of open leadership is that you develop other open leaders. You may find them in unexpected places, and sometimes you will need to go outside of your organization to find them. These “revolutionaries” will need special development as your organization will not be accommodating of them.

Chapter 7: How to Deal with Risk and Failure

A key part will be how you as a leader deal with the inevitable mistakes and failures people will make. Like any relationship, the mettle of leadership is tested through crisis, even the small, every day ones. The Sandbox Covenant also supports ongoing open leadership, so that it is ingrained into the organization.

Part 3: The Open Organizations

Chapter 8: Redefining the Customer Relationships

How will your relationships with customers change with open leadership? You will not only get closer to them, but the walls of your organization will begin to fade.

Chapter 9: Redefining Employee Relationships

How will you work with newly empowered employees? Everything from how you handle benefits and career planning to how and when you include employees in strategic planning and product development will change.

Chapter 10: Redefining Partner Relationships

Your partners, resellers, and shareholders will require that you be more open about how you work — primarily because they need the information to be better partners.

Chapter 11: The Lifecycle And Future Of Open Organizations

As we’ve seen, just as openness is not an absolute, how open you will be will also change as your goals and circumstances change. New technologies will always be appearing, changing the balance of power, but your open organization needs to have the resilience to adapt quickly. The organization of the future will look and function very different from today’s hierarchical structures — that’s because they will be built for the organic, open way that people work and get things done.

Technorati Tags: book,open,charleneli

New study: Deep brand engagement correlates with financial performance

2009-07-20T06:19:04Z

I’m releasing today a new research report that I wrote in conjunction with Wetpaint called “ENGAGEMENTdb“. The study looked at how the 100 most valuable brands — as identified by the 2008 BusinessWeek/Interbrand Best Global Brands ranking — engaged in 11 different online social media channels.

We critiqued the brands on not only their breadth of engagement across these channels, but also their depth, such as whether they reply to comments made on blog posts. Each brand was given a numerical score. The top 10 ENGAGEMENTdb brands with their scores are:

Starbucks (127)
Dell (123)
eBay (115)
Google (105)
Microsoft (103)
Thomson Reuters (101)
Nike (100)
Amazon (88)
SAP (86)
Tie - Yahoo!/Intel (85)

The report is available at http://bit.ly/KRGNt and the main site is at engagementdb.com (includes ways for you to do a quick ranking of your engagement). A very neat interactive feature of the site is the ability to see the rankings in different ways, from highest to lowest scores, alphabetical, etc.

Engagement Correlates To financial Performance

But even more interesting is that we also looked at the financial performance of the brands, grouping the companies with the greatest depth and breadth into a group called “Social Media Mavens”. These Mavens on average grew 18% in revenues over the last 12 months, compared to the least engaged companies who on average saw a decline of 6% in revenue during the same period. The same holds true for two other financial metrics, gross margin and net profit.

Note that we are not claiming a causal relationship — but there is clearly a correlation and connection. For example, a company mindset that allows a company to be broadly engage with customers on the whole probably performs better because the company is more focused on companies than the competition.

The study also looks at the engagement best practices of four companies: Starbucks, Dell, SAP, and Toyota. Some of the key findings include:

Emphasize quality, not just quantity. Engagement is more than just setting up a blog and letting viewers post comments; it’s more than just having a Facebook profile and having others write on your wall. It’s also about keeping your blog content fresh and replying to comments; it’s building your friends network and updating your profile status. Don’t just check the box; engage with your customer audience.
To scale engagement, make social media part of everyone’s job.
The best practice interviews have a common theme — social media is no longer the responsibility of a few people in the organization. Instead, it’s important for everyone across the organization to engage with customers in the channels that make sense — a few minutes each day spent by every employee adds up to a wealth of customer touch points.
Doing it all may not be for you — but you must do something.
The optimal social media marketing strategy will depend on a variety of factors, including your industry. If your most valuable customers do not depend on or trust social media as a communication medium, or if your organization is resistant to engagement in some channels, you will have to start smaller and slower. But start you must, or risk falling far behind other brands, not only in your industry, but across your customers’ general online experience.
Find your sweet spot.
Engagement can’t be skin-deep, nor is it a campaign that can be turned on and off. True engagement means full engagement in the channels where you choose to invest. Thus, choose carefully and advocate strongly to acquire the resources and support you will need to succeed. If you are resource-constrained, it is better to be consistent and participate in fewer channels than to spread yourself too thin.

Disclosure/Acknowledgements: The research report was done in conjunction with Wetpaint as a partnership - neither Altimeter Group nor I were paid to write the report. I designed the study, created the criteria, developed the engagement scoring, and wrote the report. Wetpaint provided the people-power to conduct and execute the evaluations, helped with the data collection and analysis (thank you Jean Lee!), developed the Web site and handled public relations. All in all, this was a model of partnership and I am grateful to Wetpaint’s Kevin Flaherty and Ben Elowitz for their support.

Press Release

A press release is also available - it is copied below in full. I encourage you to read the study, engage with us and with each other at engagementdb.com, and to give us you feedback on how we can improve the research going forward.

New Study Indicates Social Media Pays; Wetpaint and Altimeter Group Find Correlation Between Brands’ Social Media Efforts and Financial Performance

ENGAGEMENTdb Report Ranks Who Is Succeeding and Who Isn’t With Social Media; Starbucks, Nike, SAP, Thomson Reuters Hit the Top Ten; Website Launching Today Lets Anyone Evaluate Their Own Social Media Efforts

SEATTLE, July 20 /PRNewswire/ — A new study released today from Wetpaint and the Altimeter Group confirms that deep engagement with consumers through social media channels correlates to better financial performance. The ENGAGEMENTdb study (www.engagementdb.com) showed significant positive financial results for the companies who measured as having the greatest breadth and depth of social media engagement. These “Social Media Mavens” on average grew company revenues by 18 percent over the last 12 months, while the least engaged companies saw revenues sink 6 percent on average over the same time period.

The ENGAGEMENTdb study reviewed more than 10 discrete social media channels, including blogs, Facebook, Twitter, wikis, and discussion forums for each of the 100 most valuable brands as identified by the 2008 BusinessWeek/Interbrand Best Global Brands ranking. Activity in each channel was ranked for depth of interaction on measures that corresponded to that specific channel. Scores for overall brand engagement ranged from a high of 127 to a low of 1. The top 10 ENGAGEMENTdb brands with their scores are:

Starbucks (127)
Dell (123)
eBay (115)
Google (105)
Microsoft (103)
Thomson Reuters (101)
Nike (100)
Amazon (88)
SAP (86)
Tie - Yahoo!/Intel (85)

Qualities of Success

Companies that scored well in the study generally have dedicated teams, however small, active in the social media channels they utilize. The study found that the most successful teams evangelize social media across the entire organization to pull in a broad range of stakeholders. These companies view social media as an indispensable tool to help them achieve results, and their approach is conversational. This mode of operation differs from the approach of traditional communications and early corporate blog experimentation, which emphasizes messaging and talking points.

“This is the first study of this depth on the top global brands and we think the results provide a good guide for corporations and brand marketers in every industry,” said Charlene Li, Founder, Altimeter Group. “The success stories we have uncovered provide a blueprint for companies making decisions about how to best apply their marketing and consumer relations resources.”

“The ENGAGEMENTdb study goes a long way towards validating the importance of social media for business,” said Ben Elowitz, CEO of Wetpaint. “The closer any company is to its customers, the better, and it’s hard to argue with the ability for social media to create such proximity. In this day and age, companies should feel much more comfortable investing in social media — the correlation to results is so clear.”

Four Quadrants of Engagement

While each company in the study received a quantitative score, the ENGAGEMENTdb study revealed that companies fell into four specific categories in terms of their breadth and depth of investment in social media channels — Mavens, Butterflies, Selectives, and Wallflowers.

Mavens – brands that have made social media a core part of their go-to-market strategies and are very active in many channels; usually driven by dedicated teams assisted by company-wide awareness and participation.
Butterflies — brands that recognize the need to be in many channels but have only met with real success in a subset of their activities; these companies are usually spread a bit too thin.
Selectives – brands that focus on just a few channels and excel in those; these efforts are usually initiated by an internal evangelist.
Wallflowers — brands present in only a few channels and very lightly in those; these brands are sitting on the sidelines and are wary of the risks. They are still trying to figure out the best next steps and investments in social media.

Rank Your Company Against the ENGAGEMENTdb Top 100

Launching today, the ENGAGEMENTdb website (www.engagementdb.com) makes it possible for companies and brand managers to quickly find out how their social media efforts rank as compared to those of the world’s most valuable brands. After taking a quick survey, respondents will receive an email evaluation of their social media efforts compared to the companies in the ENGAGEMENTdb report. Additionally, companies can detail their social media efforts for inclusion in the ENGAGEMENTdb through the website. This data will be used in future research and study of the benefits of social media.

The Wetpaint/Altimeter ENGAGEMENTdb Report can be found at www.ENGAGEMENTdb.com

About Wetpaint

Wetpaint provides the leading platform for fans and brands to easily create and participate in online communities around the topics they care about most. Wetpaint offers businesses a turnkey solution for creating and fostering passionate communities that drive traffic and increase loyalty. Consumers flock to http://www.wetpaint.com to create sites around topics they love. For more company information, visit http://press.wetpaint.com

About Altimeter Group

Altimeter Group provides advice and consulting on digital strategies, with a focus on how organizations can leverage social and emerging technologies to achieve results. It is led by Charlene Li, the co-author of the best selling book, “Groundswell”. For more information, please visit http://www.altimetergroup.com.

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