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09 openness marketing

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Social Network enables transfer of marketing power from enterprise to end users.

Social Network enables transfer of marketing power from enterprise to end users.

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  • Some believe that advertising has no place in a new open world, and money should no longer be spent on it. A good example of this is Zappos.com. The online retailer started in 1999 with shoes, and by 2003 had $70 million in revenue. They then chose to spend $0 on advertising and instead invest that money in the quality of the customer experience, primarily through free shipping, returns, exchanges, and a call center staffed 24/7. To the shock of advertising agencies, the result is that their revenue for 2007 has increased over ten times to $800 million. This dramatic growth is a result of the new openness of word-of-mouth spreading faster via the web and social computing then was ever possible before.
    Some believe that advertising has no place in a new open world, and money should no longer be spent on it. A good example of this is Zappos.com. The online retailer started in 1999 with shoes, and by 2003 had $70 million in revenue. They then chose to spend $0 on advertising and instead invest that money in the quality of the customer experience, primarily through free shipping, returns, exchanges, and a call center staffed 24/7. To the shock of advertising agencies, the result is that their revenue for 2007 has increased over ten times to $800 million. This dramatic growth is a result of the new openness of word-of-mouth spreading faster via the web and social computing then was ever possible before.
    Some believe that advertising has no place in a new open world, and money should no longer be spent on it. A good example of this is Zappos.com. The online retailer started in 1999 with shoes, and by 2003 had $70 million in revenue. They then chose to spend $0 on advertising and instead invest that money in the quality of the customer experience, primarily through free shipping, returns, exchanges, and a call center staffed 24/7. To the shock of advertising agencies, the result is that their revenue for 2007 has increased over ten times to $800 million. This dramatic growth is a result of the new openness of word-of-mouth spreading faster via the web and social computing then was ever possible before.
  • More then 50% of the features came from customer
    Save development cost
  • Transcript

    • 1. Social Network Marketing- A New Openness Concept George Wang
    • 2. In the Past  Communicate to larger groups were expensive (e.g. TV or newspaper advertising)  Only large companies had the money to spend on distributing product information to large groups  This structure led to companies creating, distributing, and controlling most of what was said about their organization and their products
    • 3. The Early Days of the Internet  Companies, large and small communicate to larger groups through Website  People rely on Search Engine to look for information:  News  Products and services  Companies  The goal of eMarketing was to ensure your company appears on the first 2 pages of the Internet search
    • 4. The Search Engine Ranking Game  It is all about relevancy  The company and keyword pair  How frequently does it appear  Within your website  In new releases  In other websites  Basically, you are in control of how you are ranked Source: Key word survey conducted on November 15, 2010 on Google search result appearing on first 2 pages.
    • 5. The Web2.0 Era  The relevancy took a whole new meaning because in addition to website we now have  Blog  Tag  Wiki  Forum  Community  Social network site, Facebook, twitter, LinkedIn, YouTube  You are no longer in control, people are
    • 6. The Cortina Systems Web2.0 Litmus Test  How well known is Cortina in the Web2.0 sphere?  Delicious  Wikipedia  YouTube  Digg Cortina is virtually non-existent in this new marketing platform. How about your company?
    • 7. Today - Social Computing  Internet can reach over 1.45 billion people  Uses common functionality such as “email a friend”, “promote”, and “rate”  Easy for humorous or shocking content to spread like wildfire - a groundswell of word-of- mouth activity  Seen a funny video lately from a friend?
    • 8. Beer Commercial
    • 9. Why We’re Here Today  Social computing offers new and effective ways to reach and engage B2B tech buyers  Relying on traditional marketing practices is now insufficient  Marketers embracing this new paradigm can build customer relationships that increase market share and loyalty
    • 10. Website and Email Still Dominate but… Source: Forrester Q1 2009 B2B Marketing Budgets and Tactics Online survey with Marketing Profs
    • 11. B2B Marketers Begin To Adopt Social Media Source: Forrester Q1 2009 B2B Marketing Budgets and Tactics Online survey with Marketing Profs
    • 12. Top Marketers Break Out of Traditional Habits  Think buyer first: Know buyer’s propensity to use social media and how to engage them  Set measurable goals: Clearly communicate what success looks like; anticipate what can go wrong  Perfect their basics: ensure search, email, and Web site are fine-tuned into lead generation machines  Experiment: set aside 10% of marketing dollars to spend on new digital tactics  Embrace and integrate digital: Dig deep into what’s happening with social media in your industry
    • 13. Integrate Different Media/Tactics Together
    • 14. Make Product Demos Interesting, Fun, and Viral
    • 15. Social Technographics  Social technographics is used to diagnose current practice before setting a new strategy — and for understanding how Web 2.0 impacts buyer behavior in the sales process.  Buyer behavior can be categorized into the following:  Creators  Critics  Collectors  Joiners  Spectators  Inactives 16
    • 16. Social Technographics Groups 19% 25% 12% 25% 48% 44% Publish a blog Publish your own Web pages Upload video you created Upload audio/music you created Write articles or stories and post them Post ratings/reviews of products or services Comment on someone else’s blog Contribute to online forums Contribute to/edit articles in a wiki Use RSS feeds Add “tags” to Web pages or photos “Vote” for Web sites online Maintain profile on a social networking site Visit social networking sites Read blogs Watch video from other users Listen to podcasts Read online forums Read customer ratings/reviews None of the above Source: Q2 2007 US Social Technographics® Online Survey, N= 10,010 US online adult population (at least monthly participation) Creators Critics Collectors Joiners Spectators Inactives
    • 17. Tech Buyers are Socially Active Crowd
    • 18. Your Options An organization can choose to  Ignore  Control  Mimic  Embrace
    • 19. Ignore  Denial about the impact social computing is easy  An over-hyped fad that is best to ignore  Especially true for industry yet to feel the effects of this new openness  Younger demographics are already immersed in social openness  Ignorance is dangerous- Social openness can move very fast once it starts
    • 20. Control  The Legal departments of most organizations perceive openness as violation of copyrights and trademarks  The entertainment industry is deeply engaged in Digital Right Management (DRM)  Video/audio rights - pay per play  Alienate new product suggestion websites in fear of legal claim from customers  Some control on trademark and copyright is necessary but try not to over do it
    • 21. Mimic  “If you can’t beat them, join them.” Interactive advertising agencies are all aggressively promoting this option to their clients  Consumer behavior online can be segmented into groups  Companies advertise their brands online mimic social networks by adding similar functionality to company sites  Place branded offers in these new online communities (mySpace, Facebook)
    • 22. Mimic is Not the Real Thing  Not simply a new technology to display advertising  It empowers customers to share their thoughts about products with greater credibility and with as much reach as marketing departments  Customers expect an honest direct conversation with companies — not an advertising message  The new openness makes advertising approaches less effective
    • 23. Embrace  Customers are now in control of a company’s perception in the market  Customers will share their positive experiences with many others online  Customers will share their negative experiences, which will negatively impact the company  Current marketing approaches becomes ineffective  It scares Legal and confuses Sales
    • 24. Focus on the Product or Service  Openness makes it harder for an inferior product to success  Negative product information will spread faster than you can ever imagine  Engaging in the new openness is ineffective and dangerous if it is done only at the time of product launch  Began at product inception and development  Engage customers in a process to help improve your product  Create ambassadors to help promote the next release
    • 25. Adopt Open Innovation  Most companies are still rely on internal individuals for product ideas and enhancements  “Voice of the customer” is done under assumption that company is in control  Open innovation asserts that a significant portion of new ideas and enhancements come from outside organizations  Finer enhancements will have to come from the end users
    • 26. Overcome Change Inertia  Disruptive change is hard to getting started  Leadership start in product development  Everyone in the executive core must be prepared for the change  Anyone who has direct interaction with customers regarding the product can begin the process of openness  Active customers are ambassadors for new product launches and could help spread positive word-of-mouth
    • 27. Groundswell  A social trend in which people use technologies to get the things they need from each other, rather than from traditional institutions like corporations Year 2000 or Earlier Now You buy things from stores You buy from other people in eBay You read movie reviews from critics on TV or Newspaper You read movies reviews from others through Rotten Tomatoes You buy movies and music from stores You download music and videos from P2P network like Foxy or PPS
    • 28. This is Your Company…
    • 29. This is Your Customers…
    • 30. This is Your Customers in the Groundswell
    • 31. Four-step Approach to the Groundswell P People Assess your customer’s social activities O Objectives Decide what you want to accomplish S Strategy Plan for how relationships with customer will change T Technology Decide which social technologies to use
    • 32. Key Roles and their Groundswell Objectives
    • 33. The New Collaborative Culture  Share how the product is evolving  Users are helping you to shape your product  User get connected from different regions  Engage education and energize customers  Continuous learning  Real life testimonials Energizing Supporting TalkingEmbracing Spreading
    • 34. Openness Attitude  Humility  Your customers know more then you do  Believe the customers are smarter than you  Customers are in control, not you  Passion  Engaging with customers because you enjoying it, not because it is your job  Legal  Adjustment may be necessary to enforce legality to a social group (not a legal entity but a socially connected individuals)
    • 35. Case Examples Collaborative Innovation
    • 36. Captive Community Yield Insights on Demand
    • 37. A Conversation with Customers Del Monte: What does your dog eat for breakfast George: she would definitely want bacon and eggs and she would want ketchup on her eggs. She loves ketchup!!! Del Monte: Would you buy more treats if they had vitamins and minerals as ingredients?” George: I would buy healthier treats over ones that didn’t have vitamins and minerals. . . . I try to look for amino acids and omega 3 and fish oils.
    • 38. More Insights from a Private Community
    • 39. Credit Mutual  What would you improve if you were the banker?  I will explain the complicated fee more clearly  Done through contest  Crucial to let each other to see their ideas and vote for it
    • 40. Salesforce.com Encourages Third Party Application add-ons
    • 41. Loblaw Supermarket Energizes its Customers through Product Rating  Rate all products online and in stores  Solicit opinions from shoppers  Implement changes as suggested by shoppers and publish it in store and online
    • 42. Microsoft Encourages People to Share Templates
    • 43. Cisco Delivers Key Content and Asks Partners to Critique/Vote on It
    • 44. Useful Reference  Groundswell, winning in a world transformed by social technologies, Harvard Business Press, 2008  Check out the related web resources at http://www.forrester.com/empowered/in dex.html  American Business Media  http://americanbusinessmedia.ning.com/

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