Social Networks and the Ah Ha moment - from Serendipity to systematic research

Remember your first focus group. I'll admit that my memory is a bit fuzzy. I think it was sometime in 1985 when I was working at Foote, Cone, and Belding, an advertising agency. We were listening to people discuss laundry detergent, looking for that "Ah ha" insight that would help us reposition Dynamo and make it relevant again. As the respondents gave their feedback on different positioning concepts (recommended by DuPont as effective at preventing future stains!), we sat in the back room eating M&M's and hoping for that great quote, that key moment when someone said just the right thing for us to move forward with advertising.

Now 25 years and literally hundreds of focus groups later, it all seems so quaint in the world of digital social networking. Thanks to Facebook, Twitter, Survey Monkey, and a host of other tools, we no longer have to rely on the serendipity of catching an individual respondent at just the right moment. You can survey virtually all of your customers, or at least the ones that matter most, and get their insights in a systematic way through sentiment analysis or harvesting verbatim comments and organizing them by keywords. The biggest challenge is no longer collecting - every customer comment about your brand or product is captured digitally for all eternity. The challenge now is sorting. At 1800flowers.com, we did bi-weekly customer surveys with thousands of respondents, and the challenge was always how to review the answers to open ended questions. Like Google, algorithms are being developed to sort, parse, and refine the customer comments, like panning for gold in a stream. These algorithms can help provide a ranking system to be used systemically for product positioning, new product development, loyalty building programs, and improvements in customer experience. Qualitative has become Quantitative, and as a result we now have "Ah ha" moments to choose from as long as we are willing to invest the resources to find them.

Intimacy and your mobile phone

No, it's not a joke about the vibrate function. The relationship people have with their mobile phone (or device, since 40% have smart phones with the number climbing rapidly) is a much closer one than with their TV, Computer, video game, ipad, or any other consumer electronics product. It's part of their wardrobe, an essential item they won't leave home without. One former colleague of mine used to joke that her husband and son called her Blackberry "the precious", reflecting that it was as important to her as the famous ring was to Gollum in Lord of the Rings. If I want to discipline my kids, the only thing that works is threatening to take their phone away (Losing TV, Internet, video games, dinner - all are ineffective in scaring them). Your mobile device has your carefully selected ring tone, your music, your contacts, your long running IM or BBM conversation with your best friend (two years and counting!), pictures of your kids, funny videos, and all of the information you'll need to find a restaurant, buy clothes on sale, or settle a bet on who was the female lead in "Dirty Dancing" (Jennifer Grey). Based on several surveys (including one indicating 2/3rds of people sleep with or near their cell phones - http://bit.ly/aK50yf ), people would be most disturbed to lose their phone above any other possession - over house keys, car keys, or even their wallet.

So what does this intimacy mean in terms of marketing? It means the expectation of personalization and relevance is higher for a cell phone than any other device. Spam text messages are intrusive, not just irritating. Irrelevant ads annoy - they aren't just ignored. An advertiser has to earn a relationship with a cell phone customer. That means giving them something relevant and of value. It means recognizing what's relevant to THEM, not just what you want to push. On virtually all smart phones, there is no way to identify and track the user, making it very difficult to do targeted advertising (I'm on the advisory board of a company called Collider Media that has patent pending technology to solve this problem by identifying customers through matching the device ID to an individual via a database look up, all while adhering to the strictest privacy guidelines. For more information, check out www.collidermedia.com). Successful mobile advertising will provide relevance and create a tighter relationship with existing customers by providing personalized service, offers, and information. Perhaps it's a coupon specifically for a product the customer frequently buys ($2 off a Venti Carmel Frappuccino for me please - sorry, its a weakness). Maybe a geo location play (the $2 off offer is good at the Larchmont Starbucks on Palmer Ave). Finally, information relevant to me (My friend Steve is at that Starbucks right now - would you like to let him know you'll be stopping by?)

Looking at smart phone advertising through the lens of its intimate relationship with its owner raises the bar for the advertiser in terms personalization. But the payoff is increased effectiveness. Now I'm off to pick up that Frappuccino :)

Engagement - who cares how many fans you have if you're not on their newsfeed

According to AllFacebook.com (touted as the Unofficial Facebook Resource), Starbucks (14,748,880 as of 10/8/10), Coca-Cola (13,262,027), Oreo cookie (10,693,331) and Skittles (10,289,154) have the highest number of fans (technically number of people who like the company/brand and link to it like a friend) of any non entertainment company or brand. They are the only consumer brands in the top 30, and all have done extensive marketing and promotion to attain their lofty status. But what does it mean for a company to have millions of fans? How does it generate value? Can you calculate an ROI?

Certainly there is some tangible value to having fans as a company or brand. Starbucks leverages their Facebook page to provide special offers to drive store traffic, get customer feedback, tout events (Pumpkin Spice Latte photo contest anyone?), and engage customers in product development and promotions. They also use it to tout their social good advocacy efforts (as does Coke). Interestingly enough, they don't push you to "friend" them. Coke, Oreo, and Skittles all route you through their app page which requires you to friend them, allowing them to see your profile and friends. The applications are fun (Create your own DRSL team on the Oreo cookie page , Fan downloads and contests on the Coke site, and Mob the Rainbow on Skittles), but based on the numbers only a small percentage of the fans (less than 2%) seem to be participating. More telling, the Wall comments (which would get exposure on fan pages to their friends) are relatively sparse given the number of fans. While all of these sites are adding friends at a rapid click, how is it impacting their sales and brand?

The key to social networking and engagement is not the number of fans, but their level of engagement. How often are they interacting with the brand? What are they posting about their experience with you on their own walls? Are they using other social networking channels such as Twitter to spread the word about an app or offer? These metrics are far more important that the number of fans who "friended" a brand to enter a sweepstakes or get a discount. The true success of social networking for a brand or company is to provide a forum for brand advocates to communicate with you and influence others into behaviors desired by the company. At 1800flowers.com, we started a "Spot a Mom" movement last year with bloggers which we spread to Facebook and Twitter. The goal was to get people to "spot" different types of moms (Green thumb mom, Pet lover mom, Mom of a mom, etc.) leading up to Mother's Day, as part of our marketing strategy to leave no mom behind and ensure all of them get flowers on the highest transaction day of the year for the Floral business. While we only had around 25,000 fans, we were able to influence over 6 million potential customers and exceeded our projected business goals by 9%.

The key with Social Networking is to connect and marshal your core, loyal, passionate fans to get the word out and influence their friends. Whether that's 6 people or 6 million, those are the fans you truly want to be your "friend".

P-Comm - Participatory Commerce and the next wave of Social Marketing

Its been called Crowdsourcing, Social Merchandising, Social commerce, and a host of other names. My favorite name for it is Participatory Commerce (P-Comm), which I'd love to take credit for (I will take credit for the shortened version - P-Comm), but Mark Pincus (founder of Tribe Networks and Zynga, which counts Mafia Wars, Cafe World and Farmville among its addictive online games) coined the phrase in October of 2005. Essentially, it means that the classic one way model of the marketer developing his/her product or service in a lab or back room, and then using mass marketing with a lowest common denominator messaging strategy to sell it to consumers is quickly disappearing in several categories.

In the era of social networking, everyone is not only a critic, but can also become part of the product and marketing process. Some of the key aspects of Twitter reflect P-Comm, as their users created or defined many of the key elements of the service (including the name Tweets, #tags, and retweeting). The founders stepped back and let the users decide how their service should evolve, and then fostered initiatives that seemed to gain traction. Data indicates that ratings and reviews improves conversion rates on E-Commerce sites, as 70% of online consumers indicated they trusted opinions posted by other visitors (Nielsen Global Online Consumer Survey, 7/09). Blogs attract over 80 Million unique visitors, and mommy bloggers have become a key marketing partner for advertisers looking to reach mothers (At 1800flowers.com, we worked with Mommy bloggers to launch our Spot a Mom campaign last year, with strong results). Youtube has enabled anyone with a digital camera (or digital phone) to create their own mini-movies, and the world is a better place now that everyone can share the antics of their adorable pets. Last, but certainly not least, Facebook has reconnected millions of former roommates, boyfriends, girlfriends, and stalkers while providing a steady stream of what is going on in their lives.

P-Comm will take social networking and E-Commerce to the next level. How about asking your customers to create a new product or service for your company? Or asking them what offer they'd find compelling? Maybe they could develop your logo as part of a contest? We've already seen user generated commercials which advertisers have aired on the Superbowl, so why not outsource your advertising to your most loyal customers? The opportunities to have your customers create products, services, offers, and messages that are relevant to them turns one way marketing around and creates ownership. And if customers feel part of the process of creating and marketing your product or service, they'll be more loyal and more likely to provide the most effective marketing ever created - positive word of mouth.

ROT (Return on Time)

To paraphrase the Rolling Stones, "Time, is NOT on my side". With multiple e-mail accounts, Facebook updates, Tweets, Texting, cell calls, and, oh by the way, the demands of the Real World, we don't have enough time. Same is true at work. I recently calculated I was spending over 5 hours a day just on e-mail (I'm fixing that one). So with time becoming an increasingly rare commodity, it is as important to look at ROT when evaluating an investment as it is to look at ROI. Exploring that new product or partnership, revising that presentation one more time, having a meeting to discuss an issue - are they worth it? You need to look at the time spent on something through the same lens as spending hard dollars. Because the opportunity cost of your time might be even more valuable than an out of pocket investment. Are you getting the time to just sit back and think about how to move your business forward? Are you meeting with a vendor who just might be the next Google or Facebook and would offer you to get you in on the ground floor? Is there an agency who might have a game changing idea for you business? You'll only know if you meet with them, and you'll only have time to meet with them if you spend less time on low ROT activities.

Go to where the people are

Retailing hasn't always been as simple as setting up a store, either physical or virtual, stocking up with merchandise that people wanted at a price they were willing to pay, and then marketing to let customers know you were open for business. Centuries ago, merchants had to go where the people were. They'd stock carts with goods that weren't readily available and then go from town to town selling them, pricing them at whatever price they thought the customer was willing or could afford to pay. They'd go to town squares, churches, synagogues, barn raisings - wherever people gathered - so they could sell what they had brought into town. They'd get to know their customers, building relationships over the years. They'd be welcomed as an honorary member of the village (unless someone felt cheated, in which case they'd be run out of town). It was social, relationship based commerce, and it continued with Avon, Tupperware, Pampered Chef, and other door to door and house party retailers.

In the modern age, the rise of mass merchandisers changed mobile commerce to destination commerce. People started going to retailers, searching out what they want to buy rather than waiting for it to show up at their door. Retailers knew that if they marketed, they would come (or they could send them a catalog so they could shop at home), and having a relationship with your customer was secondary to having a range of products at appropriate prices. The Internet started the same way. Sites were built, banner ads were purchased, people came and shopped. Like catalogs, they used e-mail and affiliate programs to reach customers in their virtual homes or at sites they were surfing, always bringing them back to their site store.

Now that the the Social Web has transcended teens to include baby boomers, it is time to consider going back to bringing the store to where the people are and building community based relationships. Stores need to be within social networking sites, offering products relevant to customers while they interacting with them in their virtual villages. You need to be welcomed in, allowing people to discuss what you are offering, both positive and negative, and even allowing people to haggle if they want. But by engaging with them in their "town square", you have an opportunity to bring back the connection the shop cart owner had with his customers. It is the era of "social commerce". How will your business adapt?

The future of content

Leveraging content assets across new, revenue generating distribution channels is a critical challenge for media and entertainment companies as the nature of media consumption shifts. The days of consumers enjoying TV, music, video, film, radio, and print content in the forms created by media companies, at the times programmers or editors wanted to deliver the content, and at the price the company choose to charge for it have faded rapidly over the last 10 years. It started with print media, as newspaper circulation eroded, replaced by real time Internet news sites and ultimately customized, on demand or streamed news feeds. It was followed by the record industry, which ignored customer demand for downloadable, individual songs and as a result saw a rapid decline in CD sales. Radio listenership has declined, with the rise in pod casts, ipods, and streaming music. Finally, over the last two years, it has expanded to video content, which is quickly shifting to the web and mobile and gaming platforms.

What this means for media companies is that they need to rethink their content and how to distribute it. Customers want their media on demand or streamed to them, to their computer and, perhaps more importantly, their mobile device. They want it on their schedule, not the media companies. They want it in time frames that work for them - 2 minutes, 5 minutes, 30 seconds. And they start with the assumption that if there is advertising (and sometimes even if there isn't), it should be free. For publishers facing significantly lower online CPM's, which are under pressure by ever expanding inventory, the math of purely ad supported online content doesn't currently work except for niche and technology oriented content. For publishers to succeed, they need to revalue their content by considering charging for it. Paid circulation magazines and newspapers generally commended higher rates than free publications because they illustrated customer loyalty and engagement while helping to defer costs. As content migrates online, smart publishers will figure out how to successfully parse their content and get readers to pay for at least some of it, creating a second revenue stream.

Social Media and E-Commerce - Fad or Fundamental Change - Interview with Steven Groves and Guy Powell

Check out my interview on "Social Media and E-Commerce - Fad or Fundamental Change" at http://www.iirusa.com/upload/wysiwyg/2010-M-Div/M2208/downloads/MeasureUp_LewisGoldman.pdf