Social Network Marketing- A New Openness Concept

George Wang

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

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

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.

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

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?

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?

Beer Commercial

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

Website and Email Still Dominate but…

Source: Forrester Q1 2009 B2B Marketing Budgets and Tactics Online survey with Marketing Profs

B2B Marketers Begin To Adopt Social Media

Source: Forrester Q1 2009 B2B Marketing Budgets and Tactics Online survey with Marketing Profs

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

Integrate Different Media/Tactics Together

Make Product Demos Interesting, Fun, and Viral

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

Social Technographics Groups

19%

25%

12%

25%

48%

44%

Publish a blogPublish your own Web pagesUpload video you created Upload audio/music you createdWrite articles or stories and post them

Post ratings/reviews of products or services Comment on someone else’s blogContribute to online forumsContribute to/edit articles in a wiki

Use RSS feedsAdd “tags” to Web pages or photos“Vote” for Web sites online

Maintain profile on a social networking siteVisit social networking sites

Read blogsWatch video from other usersListen to podcastsRead online forumsRead customer ratings/reviews

None of the above

Source: Q2 2007 US Social Technographics® Online Survey, N= 10,010

US onlineadult population(at least monthlyparticipation)

Creators

Critics

Collectors

Joiners

Spectators

Inactives

Tech Buyers are Socially Active Crowd

Your Options

An organization can choose to Ignore Control Mimic Embrace

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

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

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)

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

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

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

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

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

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

This is Your Company…

This is Your Customers…

This is Your Customers in the Groundswell

Four-step Approach to the Groundswell

P PeopleAssess your customer’s social activities

O ObjectivesDecide what you want to accomplish

S StrategyPlan for how relationships with customer will

change

T TechnologyDecide which social technologies to use

Key Roles and their Groundswell Objectives

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

Supportin

g

Talki

ngEm

brac

ing

Spreadin

g

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)

Case Examples

Collaborative Innovation

Captive Community Yield Insights on Demand

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.

More Insights from a Private Community

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

Salesforce.com Encourages Third Party Application add-ons

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

Microsoft Encourages People to Share Templates

Cisco Delivers Key Content and Asks Partners to Critique/Vote on It

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/index.html

American Business Media http://americanbusinessmedia.ning.com/