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2011-10-04 Reinventing Marketing for a World of Customer Networks
 

2011-10-04 Reinventing Marketing for a World of Customer Networks

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Keynote speech by David Rogers at Brand Innovators Summit, 2011-10-04 in NYC....

Keynote speech by David Rogers at Brand Innovators Summit, 2011-10-04 in NYC.

Our old model of marketing to customers is broken. In the new age of customer networks, brands will not be built by broadcasting messages via mass media to passive consumers. Today's customers are dynamic, independent and connected. They have power and influence online that can make them your biggest threat, or your greatest marketing asset. To tap the power of customer networks will require more than just setting up a Facebook page and Twitter account, however. To thrive today, brands must know how to innovate the products, services, and communications that help the customer do what they most want – to access, engage, customize, connect, and collaborate in the digital world. These five network strategies will ensure the success of any brand in the digital age.

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  • Until recently, if a government controlled its country’s mass media, individual citizens had no way to spread their own point of view, to get their voices heard outside their borders, or to organize themselves easily on a large scale. With the rise of customer networks, however, even the most authoritarian government has much less control over the flow of information.In the summer of 2009, the supreme leader of Iran announced that incumbent president MahmoudAhmadinejad had won reelection in a landslide during the first round of voting. The announcement was widely disbelieved by supporters of the opposition candidate, who had expected that a close vote would force Ahmadinejad into a second-round run-off election. Iranians took to the streets in the hundreds of thousands, but they didn’t just march. They used every variety of digital technology available to communicate with each other and the outside world, including the Twitter microblogging service. Although the Iranian government ruled the airwaves and promptly ejected every foreign reporter from the country, still the protesting citizens were able to report their own view of events on the ground. The U.S. State Department even requested that the owners of Twitter delay a scheduled maintenance that would have taken down the service in order to leave it accessible to citizens of Iran during the protests. As days of turmoil led to a brutal crackdown in the streets of Iranian cities, local citizens spread images of the violence online to viewers around the world as evidence against the regime. The murder by security forces of one young Iranian woman, NedaAgha-Soltan, was filmed on a cell phone, and the video clips spread rapidly online, making her a martyr and symbol of the struggle for Iranians. The protesters’ call for a rerun of the election was not successful. But in this new globally networked world, the government could not easily squelch the voices of their protest.
  • Until recently, if a government controlled its country’s mass media, individual citizens had no way to spread their own point of view, to get their voices heard outside their borders, or to organize themselves easily on a large scale. With the rise of customer networks, however, even the most authoritarian government has much less control over the flow of information.In the summer of 2009, the supreme leader of Iran announced that incumbent president MahmoudAhmadinejad had won reelection in a landslide during the first round of voting. The announcement was widely disbelieved by supporters of the opposition candidate, who had expected that a close vote would force Ahmadinejad into a second-round run-off election. Iranians took to the streets in the hundreds of thousands, but they didn’t just march. They used every variety of digital technology available to communicate with each other and the outside world, including the Twitter microblogging service. Although the Iranian government ruled the airwaves and promptly ejected every foreign reporter from the country, still the protesting citizens were able to report their own view of events on the ground. The U.S. State Department even requested that the owners of Twitter delay a scheduled maintenance that would have taken down the service in order to leave it accessible to citizens of Iran during the protests. As days of turmoil led to a brutal crackdown in the streets of Iranian cities, local citizens spread images of the violence online to viewers around the world as evidence against the regime. The murder by security forces of one young Iranian woman, NedaAgha-Soltan, was filmed on a cell phone, and the video clips spread rapidly online, making her a martyr and symbol of the struggle for Iranians. The protesters’ call for a rerun of the election was not successful. But in this new globally networked world, the government could not easily squelch the voices of their protest.
  • When Cisco announced its Innovation Prize, or I-Prize, in 2008, the company placed an open call for teams anywhere in the world to identify billion-dollar business opportunities for Cisco’s Emerging Technologies Group. After several rounds of winnowing down twelve hundred business proposals received from 104 countries, Cisco announced the winners: Anna Gossen, NielsGossen, and Sergey Bessonnitsyn, a wife, husband, and brother team of two computer science students and an engineer. The three not only received $250,000; they were also given the opportunity to work for Cisco on their proposed new venture, a “smart grid” framework to reduce the passive consumption of power by electronic devices. The prize award was a small price to pay for Cisco, which estimated that the project could generate a billion dollars in revenue within five to seven years.12
  • Virgin America was the first airline to introduce in-flight Wi-fi throughout their fleet (videochat with the kids at 35,000 feet!). Passengers, needless to say, are delighted. In fact, 76 percent reported that they would change airlines to have in-flight Internet access. Access to networks is no longer a premium experience; it is becoming like the air we breathe, something that customers expect everywhere.
  • 2. Be helpfulHome Depot's has attracted nearly 7 million views to its YouTube channel. But instead of selling products, it offers help to its customers, with 191 videos offering "step-by-step instructions and advice for a variety of home improvement projects that help you do more and save more."
  • The My Virtual Model Web service lets users create an avatar to try on clothing and other products from such online retailers as Adidas, Levi’s, Land’s End, Best Buy, and Sears. As customers use it, the system narrows the full assortment of products to specific options and recommendations that match their needs. Retailers like Land’s End have seen a 45 percent jump in its conversion rates and 15 percent increases in the average order value of customers using this choice schema. Adidas has used My Virtual Model with its retail business partners, letting merchandisers see and give feedback on virtual prototypes of shoes Adidas is developing, thereby saving the manufacturer millions of dollars each season.11
  • One model we’ve seen was InnoCentive, with its open competitions… challenging a network of “solvers” to come up with the best solution to an organization’s challenge.In open competitions it can be useful to pose a problem to an established network of innovators. These kinds of networks are managed by companies like InnoCentive, NineSigma, and yet2.com. InnoCentive has a global network of 175,000 of these “solvers”—independent academics, graduate students, and experts in a variety of fields who are based in 175 countries and linked by the Internet. More than a hundred organizations, among them Procter & Gamble, Eli Lilly, and the Rockefeller Foundation (called “seekers”), turn to InnoCentive’s network to tackle the toughest problems that have stymied their own research and development departments. InnoCentive’s network brings the advantage of a much larger and more diverse set of minds. Typically, the toughest challenges are solved by someone from outside the standard area of expertise. When the Ocean Spill Recovery Institute posed a challenge to separate frozen oil from water in an Arctic sea cleanup, the solution was proposed by John Davis, a nanotechnology expert from the cement industry who applied a technique normally used to vibrate cement and keep it in liquid form. When another “seeker” company was looking for a chemical to use in art restoration projects, the answer came from a twenty-year-old chemistry student in Indiana based on a solution he had found to help his mother dye cloth. The winners of a challenge for a new polymer design included the owner of a small agriculture business and a veterinarian. InnoCentive’s global reach is also evident in its competitions. Texas-based nonprofit SunNight awarded an engineer in New Zealand for the design of a solar-powered flashlight that is now bringing light to communities without electricity in Africa and the Gaza Strip, providing safety outdoors and allowing children to study at night. More than a thousand previously unsolved problems have been posted to InnoCentive, in these and other fields such as remote sensing, public transportation, and plant genetics. An independent analysis for a Swedish packaged goods company found that it received a 74 percent return on its investment and a faster research cycle by using the InnoCentive network.24InnoCentive’s process begins with the “seeker” developing a clear technical problem that can be posted publicly without giving away vital trade secrets (for example, a company developing a new shampoo might post a challenge seeking one chemical compound that will bind effectively with another under specific circumstances). The challenge is posted along with a prize amount, ranging from five thousand to a million dollars. Solvers then review an initial description of the challenge; if they are interested in pursuing it, they sign a nondisclosure agreement to receive more detailed information. After solvers submit their solutions, the seeker can choose to buy one or more solutions at the agreed prize amount, with InnoCentive ensuring the transfer of intellectual property and the rights of all parties. InnoCentive has found that many of its most productive “solvers” have assembled their own teams of collaborators, whether in an academic lab or on an ad hoc basis. To better leverage the formation of teams within its network, the company is developing tools based on discussion forums, shared workspaces, and social networking sites. The goals are to help solvers find others with complementary skills anywhere in the world, to encourage team formation, and to easily manage teams’ shared intellectual property.
  • The best part of the iPhone is its app store, which is not even run by AppleThey have 140,000 diff applications for saleThat's why, if you look at 3 people's iPhone's, you will see each one is customized with different content, games, and tools that they likeThe phenomenal success of the iPhone has been due, in large part, to the fact that it is an open platform for innovation by developers like these. Apple's SDK (only $99 to download), its huge built-in audience of customers, and the relatively small share of revenues that it takes (only 30 percent) have all attracted developers to write for the platform. The iPhone's unique hardware and operating system have given them a creative set of tools to play with: a large touchscreen interface, an accelerometer that detects any movement of the iPhone (allowing it to respond to users' shaking or turning), location awareness, a camera, a compass, and more. For Apple, making the iPhone an open platform has unleashed an army of collaborators who have created more software than Apple could have ever imagined, let alone designed in such a brief period. There are apps to turn the iPhone into a language translator, gaming device, musical instrument, restaurant finder, mass transit guide, and much more. Other mobile phone makers, seeing the App Store as the key advantage of the iPhone, quickly began to develop App Stores of their own. Their stores will need to offer an equally open platform as Apple's (or moreso), if they hope to foster as much innovation for their own devices.
  • No, it’s Lim Ding Wen. He is… [9 yrs, etc.] One of 50,000 app developers The real power of iPhone is that it has created an open platform for this network of collaborators to create whatever they want for iPhone turning it into a XX, YY, ZZ Far surpassed anything Apple could ever have invented on its own Others are copying the touch screen, improving the keyboard, etc. etc. But only way they will overthrow the iPhone is if they can attract their own network of thousands of collaborators to innovate for their phones too
  • Matching the five strategies appropriately to your organization takes careful thinking… … will not be the same for any two businesses.It requires a planning and implementation process, becauseFor each org, a customer network strategy requires understanding:ObjectivesYour own customers & how THEY are using digital technologyYour competitionYour organization, strengths & weaknessesExecution may require new skills, as well as an interdisciplinary approachMeasurement needed to be sure you are achieving goals you set outMay be lots of different goals! (Intuit vs. Ford Fiesta vs. Obama)A process for how any organization can tie together and successfully implement the five customer network strategies. Imagine you are put in charge of developing an overall customer network strategy for your organization, or for a division or a product line: Where do you begin? How do you decide which of the five core strategies to deploy, and how to connect them? How do you sell your project to upper management, and, if you move ahead, how do you know if your project is working? Chapter 8 presents a five-step process for the development of an overall customer network strategy for any brand, business unit, or organization (see figure 1.2). This process includes:Objectives—defining the most important business outcomes for your organization.Segmentation&Positioning—understanding who your customers are, how they are participating in networks, and what your brand positioning and value proposition are.StrategySelection&Ideation—choosing which strategies to pursue (A-E-C-C-C), and developing specific initiatives by mapping those strategies to your customers, your competitors, and your own business.Execution—implementing your strategy using skills from across traditional disciplines like marketing, customer service and operations; as well as developing new capabilities suited to customer networks.Measurement—putting in place metrics to measure the results of your strategy against defined objectives, and gathering feedback to continuously build and improve your strategy.

2011-10-04 Reinventing Marketing for a World of Customer Networks 2011-10-04 Reinventing Marketing for a World of Customer Networks Presentation Transcript

  • Reinventing Marketing for a World of Customer Networks
    David Rogers
    Author, speaker, consultant
    Faculty director, Digital Marketing Strategy
    Columbia Business School
    www.davidrogers.biz
  • #TNIYC
    @david_rogers
  • Customer
    Customer
    Customer
    Customer
    Customer
    Customer
    3
  • Story #1: Self-organizing
    4
  • 5
  • 6
    Story #2: Bashing your brand
  • 7
    Story #3: Loving your brand
  • Story #4: Driving your business
  • Mass market model
    mass production
    Company
    Customers
    mass communication
    9
  • Customer network model
    Customer
    Customer
    Blogs
    Comments
    Customer
    Customer
    Company
    Forums
    Customer
    10
  • Rethinking the “marketing funnel”
    OLD: Broadcast
    NEW: Customer Networks
    Search, buzz, blogs
    TV, radio, out-of-door
    ,
    Online research, user reviews
    Direct mail, brochure
    Social networks, YouTube, local search
    Product test, comparison
    Group discounts, purchase on-line/in-store/mobile
    In-store purchase
    “Friending” (FB, Twitter, email),customized up-selling
    Reward points
    Reviews, links, “likes,” social buzz
    11
  • Access
    CustomerNetworks
    Collaborate
    Engage
    Customize
    Connect
    12
  • Be faster, be easier, be everywhere, be always on
    13
    The ACCESS Strategy
  • ACCESS: Always-on connectivity
  • ACCESS: Communicate at point-of-purchase
  • 16
    ACCESS: Embed the network
  • Become a source of valued content
    17
    The ENGAGE Strategy
  • ENGAGE: Offer utility
    18
  • 19
    ENGAGE: Make it a game
  • Make your offering adaptable to your customers’ needs
    20
    The CUSTOMIZE Strategy
  • CUSTOMIZE: E-tail that is tailored just to you
    21
  • CUSTOMIZE: Recommendations for the social graph
    +
  • Become a part of your customers’ conversations
    23
    The CONNECT Strategy
  • CONNECT: Listen and learn
    24
  • CONNECT: Inspire influencers to spread the word
    25
  • Invite your customers to help buildyour enterprise
    26
    The COLLABORATE Strategy
  • COLLABORATE: Open contribution
    27
  • One “Wiki unit” = 100 million hours of human thought
  • COLLABORATE: Open competition
    29
  • COLLABORATE: Open platforms
    30
  • Where do you start?
    Customer
    Customer
    Customer
    Customer
    Customer
    Customer
  • Where do you start?
    Video
    Social networks
    Blogs
    TECHNOLOGIES??
    Mobile
    Location
    Wikis
    Reviews
    Communities
    QR codes
  • Where do you start?
    Product innovation(General Mills)
    Retail Traffic(Home Depot)
    Website sales conversion(Walmart.com)
    Amplify TV ads(Doritos)
    Market entry(Ford)
    OBJECTIVES!
    Word-of-mouth(Victoria’s Secret)
    Service differentiation(Virgin America)
    Lead generation(IBM)
    Product differentiation(iPad)
  • 1. Objectives
    2. Segmentation & Positioning
    3. Strategy Selection & Ideation
    4. Execution
    5. Measurement
    35
  • Customer networks
    Customer networks
    Customer networks
    Customer networks
    Customer networks
    Customer networks
    36
  • Access
    CustomerNetworks
    Collaborate
    Engage
    Customize
    Connect
    37
  • Get more.
    Email me
    at contact@davidrogers.biz for
    • Sample book chapter
    • 2 articles on social media ROI
    38
  • How can I help your business?
    • Public speaking
    • Workshops
    • Executive education
    • Strategic consulting
    contact@davidrogers.biz
    www.davidrogers.biz
    www.linkedin.com/in/davidrogersnyc
    @david_rogers
    39