The Dynamic Customer Journey

The Customer Journey is evolving. Well, as a marketing concept, the ‘Customer Decision Journey’ has been coined by McKinsey a few years ago.

Its basic philosophy was to replace the old ‘Marketing funnel’ in which customers move linearly across some ‘purchasing funnel’. For example, 80% may be aware of your brand, 60% may consider it, and only 10% will actually buy it. It was used as mantra for years and taught at most marketing classes in business schools. But then Google appeared. With Google, you could simply type a search term and discover new brands. Suddenly the customer was in control, and the marketer’s job was no longer about pushing more awareness to spit out more sales at the end of the funnel. In theory, you could win with a low awareness but be an ace in the decision through topping the list of search results.

So, there was a need for a new framework. Actually, a need for a (sorry for the buzzword) “paradigm shift”, a move from a ‘marketer-centric’ funnel to a ‘customer-centric’ framework, mapping out how actually made decisions from THEIR point view, not a marketer’s abstract and simplistic view of the world. The ‘Customer Decision Journey’ was born.

They should have hired another designer, I know

People actually have a set of brands they consider initially, then move to an active evaluation phase, in which brands get removed (no longer credible options) or added (discovery through search or friends), to then move to a final decision. This whole process can take months (e.g., a car) or seconds (e.g., an impulse purchase in a grocery store).  I used that often when I worked at McKinsey, as it enabled to start another necessary journey: moving companies to become more customer-centric.

Now, the Decision Journey is becoming dynamic. People can pause their journey, play backward, get influenced by recommendations (this framework forgot one point: advocacy). They can hop on & off. They use more touch points from smart phones to tablets, social channels to get opinion. They become less loyal. As the same time they share more data, and give the opportunity to derive more intelligence. Our clients start to panic – should they invest into an iPad app, a revamp Web site, a new Facebook strategy, Search Enging Marketing, or all the above ?  But then what to do with the TV ad budget ?

Altimeter has now called for experiences on the Dynamic Journey. With pleasure. Our experience at Dialog Solutions has been to say ‘Don’t panic’. Customers, fundamentally, remain the same. They just outsmarted you, marketers. As long as you have a good products, you’ll do fine. Actually, you may end up wasting less marketing money in ridiculous ‘Spray & pray’ media spends. But you need less art & more analytics.  Less hype & more structure. Less gurus & more experts. Less wishful thinking & more careful campaigns. Less ‘viral marketing’ & more ‘content marketing’. Less ‘campaigns’ & more ‘continuous dialogue’. Marketing is no longer a war, it’s a continuous process to optimize the journey, and support the loyalty & advocacy loop. This last point is not innocent, it’s certainly the most dramatic shift of marketing since it was born.

And concretely how do we support companies ? Basically, we use online quantitative research to precisely map out the Customer Decision Journey in their category. We compare how they perform against key competitors, at which steps to gain or lose more prospects. We identify they key touch points used at each steps & how they interfere dynamically with the decision process.   As such, we are able to tell not only how they perform, but where are the bottlenecks (in active evaluation vs e.g. initial consideration set), and more importantly, what are the most influential touch points.  Last, we map out user segments based on purchase behaviors. Here is a secret: in many categories, they nicely map out in 3 segments: those who trust themselves and will form their opinion mostly based on their own research – to then (be ware) communicate it broadly, those who trust mostly family & friends, and those who trust ‘strangers’ – experts, advisors, people writing reviews.

Just as the marketing funnel was flawed, the Customer Decision Journey is not perfect, and it will evolve. As it becomes dynamics and touch points are exploding, so does the complexity of choices for marketers. But the marketing job is moving from good to great. It only requires to stay focused on the fundamentals: the customer.

Fresh Insights. True Engagement… and 7 tips for entrepreneurs

It’s been more than 2 years I embarked on an entrepreneurial path with Dialog Solutions, after meeting with my partner Patrick Willemarck, who founded Brandialog, our well-known portal & panel to help companies engage with their consumers through private communities. We jointly defined our vision as ‘End to end Consumer engagement’ (my white paper is summing it up). We believed then (and do still) that the consumer had evolved much faster than companies, seizing his/her decision journey, reviewing products online to help others make better buying decisions, becoming a most trusted publisher to its network, and leaving many traditional marketing & products in the dust. The only approach towards success, we stated, was a relentless focus on the consumer, by truly engaging with him throughout the value chain, from co-creation of products down to marketing & customer service.  At its core, it’s about making sure that ‘Customer-centricity’ is more than a few words in a poster in the meeting rooms.

We set up a number of tools and approaches to do so, from permanent panels, private communities (Brandialog), to open forum solutions (DialogCube) & social media curation & republishing (DialogFeed). Our focus was and still is on generating new, fresh insights and true engagement. Fresh insights enable to considerably improve products & services, generating even more engagement from new clients & ambassadors, further accelerating the ‘virtuous circle’ of the company. On the other side, driving more engagement through social media & on-site conversations generates even more intimacy with your customers, leading to more insights, more brand equity, leads & sales, decreased customer service costs. “Fresh Insights. True Engagement” is now the official motto & mission of the company.

As we wanted to apply our own philosophy to ourselves, we decided to launch early rather than late, and quickly found our ‘early adopters’ clients like Deutsche Bank and Touring (among others), who joined us in the journey. We sought to quickly incorporate their feedback into our approach and move on faster.

Two years down the road, we have now about 20 clients, including top brand names & smaller clients who love the approach. I am writing this post from the Thalys, as we open our first international office in Paris.  Our company is still small, we are not talking about skyrocketing start-ups of Silicon Valley. But we are proud of our accomplishments, and even prouder that companies large & small are following that approach, and have embarked into customer-driven programs including continuous private & open dialogue.

A few key learnings & tips I’d like to share – stuff I learned, sometimes the hard way:

  1. Focus. Launching multiple products is possible as a start up, but tough. The costs of developments have gone down over the last years, but the management time is still finite. And the key is not necessarily to develop many features, but the ones that matter. How do you decide ? By making “educated bets”, which requires a lot of attention & time.
  2. Take a ‘service’ mindset from the start. You’re not there to ship stuff, but to delight your clients. How can you help them perform better? If that means you have to move out of your ‘strategy’ for a while, that’s not an issue (unless you have millions on your bank account. The straight line is not always the best way to achieve a strategy, because your customers are not necessarily ready for it. While that applies strongly in B2B, I think it’s true in B2C: start up that have a great service end up performing better
  3. Be broad & serious on financing: financing is critical, and it took us A LOT of time. But it’s not only about funds or business angels. Subsidies are really important too and their costs can sometimes be: zero.
  4. It takes more time & frustrations, be ware. Customers will cancel projects before they start. People will not return your calls (never, or almost never).  They will take months, even years to decide. Approach a broad set of prospects and focus on those for which you get traction, but never completely abandon the others (if they have potential). One day, they will come. People change jobs, your competitors will screw up or they will look for a change.  You need to find the right balance between nurturing & strong follow up!
  5. Move fast. It’s critical to move with a sense of urgency on everything, because your time is counted. Speed should be at the heart of everything you do.
  6. Strike a balance between sheer optimism and wishful thinking. Entrepreneurs are optimist by nature, and they should be in order to convince prospects, employees, shareholders, and all other stakeholders about their vision & products. But sometimes that optimism becomes a biased view that, because you wish it, it’s going to happen… It may fool people for some time, but the biggest fool is the entrepreneur himself. The key is to regularly step back (every couple of months) and have a critical look at what you have done, how the market is reacting, and how you should change course. Of course, your board & outsiders are key to help you on that.
  7. Get organized. Entrepreneurship is about multi-tasking to the extreme. Managing a various of stakeholders, plus a product, pipeline & the rest is daunting, even with great partners & staff. For instance, we used a professional CRM tool (Salesforce) from the first month. If you wait, it means you’ll have to think how to ‘transition’ later, and will postpone the project. Get tools & habits quickly that will help you & help your Board, early on.

We look forward to 2012, be it evolutionary or revolutionary. In any case, change will be the norm, and we will be happy to work with our clients to embrace it!

Let me wish you the best for this year, for you, your career, and your family & friends…

12 sectors that are going to suffer in 2012…and beyond

Many businesses have suffered with the rise of the Internet. But, hey, this was only the beginning. Smart phones are going to reach a tipping point in 2012, while tablets will penetrate a second wave or users, further accelerating the revolution of any content, any interaction, anywhere. This is what I call the ‘RTC’ world  for Read-Transact-Connect. The power of the cloud (infinite storage & computing power) combined with the power of social, and the ease of use & access of any device, anywhere, will further erode the power of many traditional industries (ie where the ‘Transact’ part occurs).

Here  are the concerned sectors – in B2C (not necessarily exhaustive, please add in comments):

  1. Traditional Newspapers are going to further erode with the competition of ebooks & tablets, leading to the loss of those who did not negotiate early enough the ‘digital turn’ & put in place a strong monetization system
  2. Bookshops are already closing at unprecedented rate. As they get closer to break-even, many more will close, forcing the remaining customers to change their habits even more – this all will unfortunately lead to more closure. Tobacco is still there to help, but for how long ?
  3. Photography printing & distribution has already completely changed. Photo shops, with the competition of high quality photo to anyone & easy Internet-based printing, are losing out.
  4. Music industry is still looking for another model. Recent hesitations of smaller labels, and the pressure they put on streaming business such as Spotify or Deezer, prove it abundantly
  5. DVD rental  is slowly but surely dying, in face of legal & illegal film downloading, digital TV boxes with Video on Demand, competition for attention by tablets (which favor even more casual watching in the evening)
  6. TV Broadcasting is the next target of the Internet….or its future winner ? The long promised Internet-TV is slowly coming, but there is a long way to go. Delivering it too late might be a tragic mistake, as share of attention is slowly moving away from it (again, Tablets will further accelerate this, as shown by our own research)
  7. Movie industry is not performing so badly, granted. Yet, I was disappointed by the dismal offer in the recent release of the ‘itunes movies renting’ (in Belgium). If Majors fail to understand new consumption models, they will follow quickly the music industry – consumers will have moved on by the time they decide to adapt.
  8. Fixed telephony will soon be fully commoditized. One of the power of the tablets is its ease of use, both in terms of user interface but as well usage ‘position’ (ie: in the sofa). This is of great appeal for the youngest but as well the elderly. With the availability of Skype & other means like mobile phone, fixed telephony’s erosion is going to further accelerate, to reach a free model in a few years. Many of the younger people did not bother to take a fixed line at their first own home. This is still a major challenge for telco incumbents, who rely on those revenue stream to pay dividends to their shareholders.
  9. Consumer games are at a turning point. The rise of cheap, casual games in app stores & social network is not  good news for everyone. Traditional electronic games producers will find it increasingly hard to sell games at EUR30 to 50 when you can have fun for a couple of euros. Offline games will further suffer from competition of online. The promise there is to move from ‘hard core’ gamers to casual gaming, of much broader appeal, and compensate what is lost in unit margin by higher volume. Maybe multiple times. We cross our fingers for them.
  10. Traditional commerce is under question. Will traditional commerce suffer from e-commerce ? Maybe. Will it suffer from the increased price transparency brought by Internet ? Surely.  What has already happened in consumer tech (who would now buy a TV or mobile without checking it out on the Internet, first ?) is moving now to many other sectors, from furniture to apparel, and others. A chance for the nimble attackers, a threat for all others. Hang on!
  11. Mail  – this time it’s coming – or is it? It’s been 20 years that the threat of Internet has been posed to them. Who needs mail when you have email?  So far, they did not perform so badly. Let’s keep in mind that customers of the mail companies are mostly large companies targeting consumers. The rise of direct marketing has saved them..so far. Again, the competition of attention of mobiles & tablets, combined with more powerful multimedia experience will further erode the power of direct mailing. This could be seriously disruptive to them.
  12. Payment needs innovation. The combination of smart phones, NFC & tablets is creating disruption caused by start-up like Square, which offers a free payment device to be attached to smart phones or tablets. Payment has always been a high tech but expensive & slow moving industry, due to huge infrastructure costs and difficulty to reach critical mass for innovations. If NFC chips, protocols, apps on universal devices like smart phones reach that critical mass of merchant & consumer adoption (a difficult chicken & egg issue), they will at some point become the next killer apps, providing cheap, convenient & even fun experiences to both merchants & consumers. When ? Anytime from next year till 2025…

Many companies in those sectors have long understood those threats and acted upon it. Many more did not do anything.

The most admired company (to my eyes), Amazon, has been capable of not reacting but preempting the threat. Jeff Bezos (its CEO) saw that traditional book distribution was an old model of transmitting what is essentially information, and ebooks would be the future – when ebooks were still emerging. But what do you do if you believe your ‘core assets’ is about a great sales & logistics machine ? Most business have done nothing, they contemplated the threat & thought how to ‘defend’ their existing paper-based business through incremental improvements.

Amazon did not do that. They preempted the threat by creating the Kindle, and a business model attached to it. They sell now more Kindle books than traditional books in the US. Competitors like Barnes & Nobles are playing catch up.

I wish all companies would think like Bezos. The point is not to focus on your ‘key assets’, what you’re good at, like your great network, products, logistics, patents, even people. But to focus on the value added you provide to consumers. An ebook offers the power of convenience of purchase, ubiquity, and small storage & transportation costs for consumers, plus many other benefits. For many that’s more value added than a traditional book.

Your business is only a vehicle of some value added. If that vehicle is no longer the best possible to maximize the value added, change it while you can, or invest into a new vehicle on the side. If possible, do it even before it’s even relevant, so that you can drive it with a great business model. Like Amazon.

How to define that new vehicle? Do more exploratory research, and tap into consumers, focusing on the frustrations of existing solutions, the challenges, the creativity of what could be a different vehicle.   Like we do with our clients.

You can contact me through Twitter, or LinkedIn, or email alexandre at dialogsolutions dot com

Is Facebook crossing a bridge too far?

Making people share more has always been the core strategy of Facebook. More sharing means more content on the platform, therefore more reasons to visit, & more advertising revenue. It works – this is what I called, in a previous blog post: the law of gravity. The more content you share, the more often people will visit, prompting to share even more, both by people & brands.

With the release of the ‘open graph’, about 1.5 years ago, Facebook slightly departed from that. By enabling easy, social buttons to be quickly implemented on any website, Facebook reduced the need for website & brand owners to massively put ALL their content on Facebook directly, hoping to gain more viral impact. Of course, the content still grew massively on the platform, since those social buttons had an impact on Facebook’s user newsfeed – but the contents & links were driving people away from the platform. The hope was (and still is) that by helping making the whole Web go social, Facebook would become more of the ‘Web’, because at least it would have more content shared, & more information about the users, which would in turn enable better targeting, and why not, social search – using this intelligence to drive you first to content you’re looking for “approved by friends”.

Now, Facebook has released a new version of the ‘open graph’, which is actually less open. Brands (medias, consumer brands, etc…) can now create immersive experiences which will not require any click to have a viral impact. For instance,  you will be sharing to your network the music you are listening too, the article  you’re reading, the product you’re browsing, by simply opening that song, that article, seeing that product. This will require though that you go through a ‘Facebook app’ and grant initial authorization to that app.

As someone put on Twitter: “Facebook changed its status update: it now wants to be an entertainment hub”. Well, I think it definitely wants to drive back more experiences within Facebook and is trying to craft a new value proposition for those brands willing to embark.  But it will need as well to convince people to sign in! That’s the key trick: will people grant access to those apps who are passively sharing information about what they do ? Some will. But many people never use apps in the first place, so I don’t expect a majority of users to do so.

On the other hand, it is secretly preparing a full Ad Network (à la Ad Sense), which will serve you Ads based on what you ‘did’ on the social network, and even other Websites you’ve visited. Actually it’s only a secret for people who don’t look since you can read the patent application in this post. This will be the ultimate Ad server. Of course, it’s patented & based on their immense reach & information: not only  what millions of people do in Facebook but as well all nice Websites who kindly implemented Facebook social plugins  – handing over tons of information in the process.

If it succeeds, this could make it move to an entirely new category, eating even more share of attention and the online ad market. It now is the fastest growing ‘attention eater’ to the US audience (which is still a few percent of share of attention). Tomorrow it could simply be the company with the biggest share of attention & dominating the display ad market….Hold a minute. One year ago, I mentioned the actual target was the most lucrative Search advertising dominated by Google (cfr my earlier blog post). I still believe it, with as main evidence the recent launch of Google Plus.  Ok, so it will be the online advertising business (both display & search). Hold again. Didn’t I mention earlier Facebook is eating attention away from traditional media like TV, by becoming more of an entertainment hub ?Actually, the untold story of f8 is that Facebook is tackling the entire USD600 Billions advertising industry, brilliantly. Unless people start thinking Facebook’s been a bridge too far.

The illusions of fans as suscribers

Facebook is the ever escaping mystery. As we think it now becomes a ‘mature’ company, it is more than ever in state of flux.  It is closing failed initiatives like ‘Places’ (a copy of Foursquare), or ‘Deals’ (a copy of Groupon), which seems to fall outside of its fundamental revenue model: a mostly self-service ads-based or transaction-share revenue. Both Places & Deals don’t do well on a self-service model: it requires real sales people out there to convince merchants to sign-up.

Lately, Facebook has also been trying to reconcile itselfs with advertisers, and developers. Over the last 2 years, a little drama has been unfolding.  In the period 2006-2009, Facebook has been luring 100’s of developpers, and advertisers to create applications, pages, and get crowds of people to sign up. The promise was twofolded:

  • Instant sign-up: people who register to your application/page don’t need to go through lengthy processes
  • Virality: many actions get published on a user wall, bringing instant virality to the page or app, quickly bringing their friends into the game, app, or page

It worked. Some applications rocketed to 60 Millions users over a month without marketing, and most popular pages reached as well millions.  Then, mid-2009, Facebook decided to introduce a number of rules changes to what was published or not on the people’s newsfeed, previously showing a simple reverse chronological list of activities:  the ‘Top news’ section on the Newsfeed. Contrary to the ‘Recent news’, this section is supposed to make an educated guess about the content that you’ll probably find most relevant. The annoying part is that the algorithm deciding on ‘what’s relevant’ was not published, & even less transparent (there has been some interesting attempts at reverse-engineering it). Even if it was, I doubted it could actually be correct: I might find a post absolutely great, the next silly, and do nothing on any of the two – still any algorithm would not treat them differently.

Obviously this got many developers to fall into disgrace: all those nice (or annoying) updates, including how well your friends performed at this or that game, were suddenly hidden for most.  The same happened for brand pages. Actually, if you compare quickly what you see on your ‘Top news’ and ‘Recent news’, you’ll discover that some people or pages never really quite make it to your ‘Top news’. Bad luck: ‘Top news’ is the default filter. At that time I was piloting a small Facebook application and I instantly hated it.

Marketers hate that. They were supposed to build a page as the easiest, viral way to build audience of followers, who would then see regular updates, promotions, helping thus the brand to remain ‘top of mind’, sell more or whatever. They even paid Facebook ads to get more members. They paid agencies to run the community. And then, those ‘fans’ don’t even see the updates? Tough luck.

With the threat of Google Plus & other, nimble & mobile-based social network rising quickly, Facebook has finally noticed – it seems some changes are cooking. I even had a ‘full activity stream’ on the right hand side of the screen for a couple of days (now gone).

The point for marketers is: you should get a community of followers, but don’t count on big numbers. What matters are the ‘high-engaged': people who comment, like your products are those who will for sure continue to see your updates. The good news is that those are the ones that matter, because they will give the precious testimonials, and they typically have larger base of friends/followers themselves.  The other lesson is: don’t rely solely on Facebook to build a community: use other social network, own site social solutions, & simple email registrations.

Yet, Facebook, is playing too many games, and already behaving like Microsoft did when it became dominant (the shift from dynamic changes to ruthless, arrogant moves, goes really quickly). It needs now to get back on track for a simple rule called transparency: give simple rules & stick to them.  Don’t play games with your most important stakholders: advertisers & developers.

PS/ apologies for little publishing over the last months. I intend to go back to a rythm of biweekly publishing.

Social Media Amplification – on your web site

A topic to which I dedicated much attention, in my role at Dialog Solutions, is to make sure that companies make the best out of online dialogue. So many people are coming back with statements like ‘We have tried Facebook but have capped at 500 fans (or less) – this cannot justify any ROI whatsoever’. Actually, this is right. Until now.

First, let’s get the metrics right. It’s not solely about the number of fans or followers you get. We know that, on most web sites, 95% of visitors are passive. It’s about the ‘social currency’ you build. A social currency is simply a positive sentiment for a brand, created by someone…and shared to its social network (and/or the world). There are two ways to play with that: generate more of those actions through the famous ‘Like’ buttons, testimonials, comments, etc…And give them more exposure, by republishing them (e.g. retweets), including on your web site. Amplifying them. This is precisely the point of our new service, Dialogfeed.

Today (disclosure: I work for the company), Dialog Solutions is launching Dialogfeed, a unique tool to gather your Facebook & Twitter social feeds on your web site,  with smart control – for instance you can ‘highlight’ a conversation, which will appear on top of the list on the site, or hide others (spams or irrelevant messages). It can open up as well the conversation by enabling on site messages, sharing a Tweet to Facebook  or vice-versa, etc….Dialogfeed is a very simple way to make your website social.

Why do it ? You will humanize your site, generate viral loops, but especially show that you are credible, you have a community behind you…and convert more people. With Raz*War (e-commerce for shaving products), we have seen conversion rates (visitors who end up buying something) going up by 30 to 40%.

Touring, the travel & assistance company just implemented it on its new home page – to showcase its community, stimulate debate, and drive revisits through simple animation.

So, the good news is that you don’t need millions of people to ‘like’ you on Facebook, as long as you have quality conversations with a good community, and you amplify their voice where it matters for you: typically on your web site.

If you have a presence on Facebook and/or Twitter, start now amplifying their voice on your site. If you don’t, I hope this is one more reason to get started, because you will quickly see that it pays off.

Take a look by yourself on www.dialogfeed.com and let me know what you think about it. We need your feedback to make it better.

CEOs – 5 steps to take now to adapt to the new customer reality

Dear consumer,

Do you have a customer service department ? Do you have a research division ? Is part of your brain occupied by a marketing office ?

No

But – do you sometimes help someone else struggling with an invoice, a product, a service (think from online banking to public transportation & your consumer tech gadgets) ? In fact, you do substitute a customer service agent?  Sometimes.  Do you sometimes give feedback, participate to a short survey, share ideas on product/service improvement with friends or even the company itself ? You behave like a ‘panel’ member – one of those great consumers willing to spend a bit of time helping companies improving – ie helping their research efforts. Do you sometimes recommand people for the new car, new laptop, new washing powder they’d like to buy or try, or write a review on an e-commerce web site or eBay ? You occupy, even for the space of a few minutes, the marketing department of the company you are recommending.

In fact, any consumer or customer can occupy any of those functions. With the increasing number of touch points, the acceleration of product cycles , short attention span, rough competitive environment, the good news is that companies are increasingly relying on you, the customer or the prospect, to help them moving forward. They will love you helping others, recommanding your brand, giving feedback. Actually, this is becoming the strategic imperative for companies – customer-centricity at its essence.

Dear CEO,

You are not ready for this.  Your company is divided in silos. Customer service hardly talks to marketing. Marketing does his own thing on Facebook but does not really care to answer to questions coming to their fan page. There are no real links between R&D and customer service to ensure ongoing feedback feeds development.  It has never been easy, but now that consumers have seized their ‘Consumer Decision Journey’ and do not simply swallow the messages you push, that the number of touch points have multiplied ad nauseum, you simply wonder whether you need to resist or embrace those changes. Who knows, you might create a company that is ready to become a modern, 21st century, moving from the goold old hierarchical model to a network-based model, with parts of the network inside, parts outside, including customers turned into ambassadors, customer service agents, insights and co-creation agents ? This might turn into better products, more revenue, more customer satisfaction & less costs ?

If you are willing to embark on that trip, here are 5  actions you can take – tomorrow. Those actions are based on real interviews with people like you, and our experience supporting them.

  1. Set up a Customer Steering Board. We are not in favor of ‘things’ that will meet up once a while to decide nothing. Yet, putting together the head of customer service, of marketing, and of Customer Intelligence, with the head of corporate communications (those end up touching customers too) is not a bad place to start. If you attend the meetings too. It will help you understand the key frustrations, opportunities, and the famous ‘quick wins’ so critical to get started. At some point, you will realize that this board needs an operational arm too – an ‘external engagement’ (or social media) command  center.
  2. Define an engagement strategy. Social media is a mean, but online engagement is a end. Value creation through online dialogue with stakeholders is now a proven thing. Develop an ‘engagement strategy’ to define where to focus on (innovation, research, marketing, sales, customer service), get the inspiration from our white paper, and get things moving…But don’t simply send a brief to Web/creative agencies – outsourcing the problem won’t solve it
  3. Meet the new generation. Pragmatic, digital native, critical. They think differently than you do. They challenge conventional wisdom. They value networks more. They value themselves more, don’t ask them to sacrifice their lives against the top of the corporate ladder. But they are as willing to have impact as you are, and maybe smarter. Use their tools, including yes, Facebook. There is simply no way you can understand online engagement & networks if you are not on Facebook (which does not mean Facebook is the solution). 
  4. Engage employees. Do you forbid social media at work ? Do you think your employees need command & control pills as a daily dose? You won’t get far if your corporate culture is old fashioned. Create a blog, a Q&A tool for employees to dialogue & submit ideas to management, change the culture to become more open, transparent, and become an ‘open leader’, or even an ‘inspirational leader’.  Make it participatory, vivid, and engaging. This is not an excuse to avoid decisions or do everything based on consensus, but a way to take better decisions, faster.
  5. Make a quick win. Yes, they are needed too – more than ever analysis is paralysis. There must be one thing that comes up from all the above where you can create value fast. It might be an online private community, an online customer service forum for peer to peer support, an ambassador program, an open innovation program,..  As long as you get it started in 3 to 6 months, and value indicators in the green in less than a year.

Those steps are actually quite simple.  The social media revolution is a whole corporate world revolution, not simply another channel to be included in the media planning by the marketing department. The move from a hierarchy-driven, top-down organization  closed in its ivory tower to a nimble, network-based organizations with fuzzy boundaries & global reach  – what McKinsey calls the ‘Rise of the Networked organization’. It’s only starting. Will it happen with or without you ?

2010 – The year the nerds took power

December was flooded with predictions for 2011. I had played the game in an earlier blog post on Apple’s smart phone strategy, so enough on my side. Social media crowd doest not look back, only forward. 2010 is history.

I am contrarian, so will do the exercise. This blog is about analysis, and it takes a bit of time & distance.  Let me try to recap 2010 as: ‘The year nerds took power’. The major symbol of this being Mark Zuckerberg who got elected as ‘Personality of the year’ by Time Magazine.  Mark is the king of the nerds, as a billionaire who is the driving force behind the world’s biggest internet platform (Facebook, slightly behind Google maybe), he is first & foremost a nerd, as depicted in the movie ‘The Social Network’.

Definition of a nerd according to Wikipedia: Nerd is a term that refers to a person who avidly pursues intellectual activities, technical or scientific endeavors, esoteric knowledge, or other obscure interests, rather than engaging in more social or conventional activities

Or, in short, my definition: nerds are people you should be scared of because they might be secretly working towards the world destruction or the world redemption but you’ll only find out when they click the ‘Go Live’ button.

Clearly, I was a nerd (and maybe still am). My first computer was a ZX Spectrum with an astounding memory of 48K, on which I learned programming (Basic) at age 7. I got on the Internet in 1994 then specialized in computer science at university and learned funny things like C, C++, Pascal, Java, Perl, and other exotic languages whose name I cannot even remember.

My start with personal computing - ZX Spectrum 48k- 1982

But I am not in power, since I left the nerd crowd to pursue an MBA 8 years ago, then got into business consulting and now management (in the Web, not in food, ok). For those few who worry, yes I had a decent social life throughout the process – but granted I was not the coolest guy in the classroom.

Now, with all nostalgia left, what makes me say that 2010 is the year they took power ?

A few points. First, Mark is still the CEO of Facebook. I think he is really in charge. In the past, most nerds got kicked out to get replaced by ‘decent’ CEOs once the company they started had reached a certain size.

Second, this is an increasingly technology-driven world. Or a platform-driven world. The digital economy is driven by links. Links are shared based on goodwill. Goodwill is created when you have ‘Waw’ products. Products are created by nerds.  Mark Zuckeberg told it once: “Facebook is a platform game. This is why I am the CEO”. When you have no money to market your platform, the only way to grow it is to make it vastly superior, viral, and so on. But it does not only affect Web products. Obama won through the Web. The smart campaign was driven by social media experts. Nerds.

Not convinced yet? Let’s look at a few examples. Apart from Facebook, what have been the other darlings of 2009 ?

Groupon, a company which is now valued at USD5 Billions or more (after 1.5 years of operations). In a recent article, the latest investors, who put indecent amount of money at even more indecent valuation, explained that their prime reason to invest in Groupon was not the business model (sell daily deals and retain half the money flowing through). No, it was the analytics, the ‘Power of the data’ they use to tailor the offers and understand the consumers. In short, they said they backed nerds.

Second, FourSquare. Geolocation might still be a niche for nerds (ie clicking on your smartphone to ‘check-in’ at a physical place and uncover some silly badges), but it is definitely of high potential if you think the immense marketing opportunities the sphere provide to better target people based on their preference, their identity…and their location. For nerds & geeks (still), by nerds.

Even in e-commerce, if you investigate the business model of the e-commerce darlings like the ‘Vente Privée’ types of animals, you will see that many are driven by analytics, to best balance the deals & cash flow for the brands, the consumers, and the company. Very analytics-driven, very nerds-driven.

“Yes but of  course in Internet world it’s all about nerds. But it’s a big world outside that, not powered by nerds.” . True. To some extent. What about financial institutions? Well, we now know that most of trading now is driven by automated programs, and hedge funds (who decide what to do based on super complex models). The finance world is more than ever driven by nerds. Probably they hit a down point  in 2008 and 2009 when the whole system crashed as the ‘preconditions’ of their models drifted out of the expected ranges, but by now they have quietly regained power, no worries.

“Yes, but there are still traditional industries like media in which you need non-nerd people like journalists to talk to people and write an article”.  Have a second thought. The big media winner of 2010 is Julian Assange, the founder of Wikileaks. If you have not heard about Wikileaks by now, go back hibernate. This is by far the biggest media hit in 2010, shaking the whole political & economic world. But Julian Assange is not a journalist. He is a former hacker. A nerd.

Clearly, the more we move to the digital economy, and the more the ‘classic’ manufacturing moves to Asia, the more power nerds will have. Does that make you happy or scared ? As far as I am concerned, as a former nerd, it does make me happy… and scared.

Who is going to save the world ? A short summary of TEDx Brussels

Last monday I spent the day watching a serie of 18-minutes speeches.  Most featuring one single person trying to entertain ‘ideas worth spreading’.  I loved it.

For those not familiar with it, TEDx are an outspring of the ‘TED’ events, featuring world-class speakers doing the ‘speech of their lives’. About 2 years ago, the TED organizers decided to ‘loosen it a bit’ and opened up the format to other organizers around the world. TEDx was born.  TEDx events have been a major success, with tens of cities taking the flame and relaying new ideas, many worth spreading.

The TEDx Brussels was the second in our city. According to the organizer(I did not talk to the police), this was the biggest TEDx event ever. So, we (myself and 1000 other attendees) felt special for a minute or so when he announced it.

But the theme was on saving the world. 23 (!) speeches later, after having been through amusement, fear, worry and stupor, I was still not sure about the remedy. Not that I expected an answer, but still.

It was a harsh start with a scientist “proving” us the end of the world would likely came with a resurrection (?).  That kind of led me to believe that scientists were on the wrong track, so rather than summarize 23 speeches, let’s go by species:

  • Scientists. Many scientists actually had great insights – I especially enjoyed the quantum biology, which is pointing to the idea that our functioning is led by quantum effects, in proteins but as well our DNA. Atoms jump back & forth through quantum leaps and this sheds a whole new light on how we are functioning. A little bit remote from my day-to-day issues like getting through my emails and cleaning the dishes though. And will that theory save the world ? Hum.
  • Engineers. The ultimate engineer came on stage. This was Jeffrey Satinover, one of those crazy engineers at Google. He made a car which is entirely self-driven. They use it for Streetview. He believes that could be a solution for traffic jams, road safety, etc… Fascinating speech and solution. It puzzled the whole audience. Unfortunately, engineers are applied scientists, which make their approach too scientific to cater for all irrationalities of politics and hormones (I am an engineer myself).  Another case in point is Marc Millis, planning for interstellar travel (it’s right around the corner, in just a millenium or two)
  • Politicians. Bernard Kouchner gave an interesting, albeit weak compared to the others, plea for a ‘Tobin Tax’ on foreign exchange. His speech was for kids, but there was none in the audience (except for one baby).  My question is that if we manage to convince so many countries, why making it at 0.005% only ? Anyway that’s just me. Another politician (Rik Torfs) closed the day with interesting conclusion on the importance of ‘light profoundness’. I wish this is something politicians would apply to themselves. There was nothing light nor very profound, but at least Mr Kouchner is really trying to save the world, by bringing EUR 30-40 Billions to the 1 billion who don’t have basic access to key resources, like water.  Hats off.
  • Artists. We had the specialist behind the FX of ‘Lord of Rings’ and Stromae giving a performance of ‘Alors On danse’. Well, really enjoyable moments. Artists are not going to save the world, but at least we’ll die while being entertained.
  • Nerds. Dries Buytaert, the founder of Drupal, one of the most succesful open source software, gave a very interesting speech on the ‘importance of getting out of control’ to make things happen. I loved his informal tone and detachment. Can the Open Source movement save the world ? Well, maybe if it extends to other areas. What about open source biotechnology to grow seeds in Sahara ? Nerds can save their world – they just need to expand it outside of computing
  • Philosophers. Since a famous scientist (Stephen Hawking) wrote that ‘Philoshopy is dead’ in his latest book, I guess they were too busy fighting for their own job. I did not see any on stage.
  • Folklorists. There are a  few lost, albeit funny, moments. Like Ms Mc Taggart, who thinks joint thoughts can directly affect material, like water or crime, sickness. I guess she applied the theory to herself first because she really looked convinced about it. Folklorists are like artists, minus the entertainment and the poetic part (not much left though).
  • Economists. The most funny species. For me, economy has always been the science of ‘explaining what has happened’. Latest crisis did not change my intepretation. But now they are more humble. One of them, Dambisa Moyo, started by (almost) acknowledging it was better to be perceived as a communist than an economist those days. Her plea for more protectionism was a bit ‘passé’.  A basic economic principle she re-explained was the economies are based on capital, labor & productivity. Well, what about innovation ? “Innovation you can’t fit in an equation, sorry”. Anyway, who listens to them still ?

All in all, it seems that no profession is a match. But yet, behind all those I think I found a simple answer. Individuals may save the world.

To illustrate my point just try to picture yourself Nicholas Negroponte. He had the idea that every child in the world should have a laptop to boost education, so he founded ‘One Laptop per Child’. That’s a simple but powerful idea he explained to the UN, thinking yes they could support this. His presentation was a serie of pictures of kids and laptops. Only kids & laptops. So, it did not look like the presentation of  a ‘professional’, but rather of a loving father, happy to share pictures of his kids. He did not embrace his idea as a ‘professional’ would do, but as a rounded individual, pushed by a mix of reason, intuition, and, of course, positive emotions. Today 2 Millions of kids have one of his laptops.

So, no profession will save the world but individuals can, especially when they really think and act as well rounded persons who think on their feet, as whole persons, grouped around a powerful idea, not a theory or even an innovation. People who are ‘Citizens’, as their ideas and concerns relate to the ‘city’, not solely to their own profit.

“Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.” Margaret Mead, American anthropologist

Maybe this world has too many professionals and not enough citizens ?

I left the TEDxBrussels with those thoughts in minds. And smiling.  It was a day well spent.

The 4 laws of social media – ignore them at your own peril

I recently was given the great opportunity to present at the global  ‘FIA’ forum in Paris (International Association of motoring & driving clubs). While one of the goal was to provide some education on social media,  I have tried to bring a few additional insights, which, after all, could be relevant to a larger group. You can read the full presentation here

I thought it would be interesting to get your reactions on it.

First, all considered, I could only see 3 fundamental types of social media:

  • Social Networks: well, that’s the one most people associate Social Media with: Facebook, LinkedIn, and a flurry of others. Discriminating factor is mutual acceptance – both side of a potential connection need to agree before that connection is made. Typically only real life connections are mapped into the system, but that does not need to be the case
  • Micro-blogging & curating: examples are Digg.com (bookmark sharing & voting) and of course Twitter. While it may sound unreasonable to include Twitter with the likes of Digg, I do not think so.  The main criteria is the ‘followership’ principle. You simply follow people (or subscribe to their update), content, & vote for what you find interesting (like retweet or vote for Digg). This enables to ‘curate’ content and of course, in the case of Twitter, many other things (like sharing a picture of what you ate for breakfast or your work-out program – or any other critical aspectof your life you want to share with the world)
  • Crowd-sourced media. The main idea is that a small minority of people will create/upload content, and a vast majority watch it (and vote, fund, etc..). Examples are Youtube, Slideshare, and many others focusing on specific niches (e.g. microcredit funding, music financing, t-shirt design like Threadles, etc…)

Sure, there might be other categories, and some sites overlap across categories (see how some sites ‘Twitterize’ themselves so that you can follow anything or anyone).  But it gives a very simple taxonomy to build on. Most of the openings and start-up creations are with the last category. For instance, an interesting one in crowd-sourced media we saw at the FIA is ‘Be-mobile’, which offers a solution in which a small set of ‘passive’ drivers send their position & speed to a central site through a black box in their car, who then do some maths and share traffic information to all registered drivers (eg on their mobile).   Simple yet powerful.

And now: the 4 laws of social media. That came to my mind as I read the last one ‘Zuckberg’s law on information sharing’.  Well, Marc, there are other laws you know very well but share even less. Here they are (including Marc’s):

  • Law of networks. This is the most obvious. If you connect to a social media and you don’t find anyone you can connect with, it becomes rather useless. The more people join, the more value. I had this issue with Twitter initially (zero friends on it). On the reverse side, once a critical mass has been reached, those networks will get extra leverage to gain new members and accelerate their growth (they become sooo compelling – what happened to Facebook).
  • Law of gravity. I like this one because I made it up (not the real one, thanks Newton). Most social media have built-in sharing to your network/followers. If you do something within it (like a page, comment, etc…), your connections will see it – you don’t need to make extra clicks to share your action.  This means that content progressively moved to social networks, as brand saw the value of the ‘built-in’ sharing of actions by their fans and its viral potential. The more content, the more often people check out the site, and the more addictive it gets. There is more gravity on the earth than on the moon.  This law is particularly true for social networks.
  • Law of switch costs. If a competitor of Facebook pop up, with more nice features (or better privacy controls), will you switch ? It takes time & energy to register, build your network, and who knows who will actually follow you once you quit ? You would look stupid all alone in this great new social network, wouldn’t you ? Those are switch costs.
  • Zuckerberg’s law of information sharing. Marc Zuckerberg pointed it out in a recent interview. Every year, people share twice as much information as they did last year. People get more confident, re-assured by privacy, the fact that nothing bad happened with those party pictures they shared, etc… The fight for attention is spreading and more people want a share.  Or just have fun with friends. I think for many people who are passive on Facebook (read: most people, like 90-95%), two times zero is still zero, but ok. It does increase.

Those laws explain why social networks have been as described by Marc Zuckerberg, a ‘platform’ game – Facebook has been capable to build a platform that takes the most of the benefits from those laws and overcome the challenges. They excel at each: network laws through e.g., great onboarding (make sure you find whoever you know from your first connection);  gravity (offering access to brands for free, as opposed to e.g. Netlog); switch costs (constantly asking you to grow your network) & information sharing (encouraging to share always more, poke people, etc…). To do that though, you need a long term view and lots of financing (more than $800 USD Millions for Facebook).

My hope ? That this simple taxonomy and the 4 laws might be useful when planning social media actions (please share your feedback), not simply to explain the past. Last, we shouldn’t be scared by them (albeit a little bit).  There are still rooms for ‘traditional’ web sites…but their integration with social media should be tight. This is for another post.