Thursday
Sep132012

Announcing Innovatini.com

 

Hi Everyone!

This announcement is a wee bit overdue. 

As many of you are aware, this blog has been a "free-form" intermix of digital media, PR and marketing topics as well as more management topics. 

The topics of open innovation, crowdsourcing and more management/organizational concepts are now moved over to Innovatini.com, an open innovation consultancy I founded with the voraciously curious Diane Court.

If you follow my blog here on these subjects, I hope you will take a moment to join us at Innovatini !

Best wishes,

Lisa

 

Image Credit 

Thursday
Dec292011

Kickstarter: About to Go Supernova in the CrowdInvesting Age?

You can feel the ground trembling.

Is Kickstarter, the crowdfunding site where projects as diverse as artistic efforts, venture and nonprofit causes raise money, about to go Supernova?

Monday
Nov142011

7 Social & Behavioral Lessons for Renewable Energy Marketers

Kelton Research, funded by Schott & SEIA

Can the way we present environmental messages help or hinder true behavioral change?

Too often, in order to encourage the adoption of environmental products, green marketers send messages pursuing simply the line of information, environmental benefits (eg. CO2 reduction) and, sad to say, even the use of what I'd call "scare factics" associated with the woes of climate change. Seemingly, there's a belief that more information per se can sway opinion and therefore sway behavioral change.

Let's look at the website of the Solar Energy Industries Association, which proudly displays on its home page, The Solar Barometer, based on a national poll of Americans' attitudes on solar energy. Truly, it's a very positive message: 9 out of 10 Americans  think it's important to develop and use solar power.

Yet there is a growing consensus that this purely informational approach is not working. As Douglas McKenzie-Mohr wrote in his recent book Fostering Sustainable Behavior: An Introduction to Community-Based Social Marketing

 

The failure of mass media campaigns to foster sustainable behavior is due in part to the poor design of the messages, but more importantly to an underestimation of the difficulty of changing behavior...Information campaigns alone will rarely bring about behavior change.

 

Now I'm not saying that that the Solar Barometer's messaging is poor. The graphic was primarily designed to appeal to legislators, as a "voice of the people", particularly as the data indicates that both Republicans and Democrats alike support solar. In this respect, the message serves its purpose.

But McKenzie is making an interesting point - particularly for those who think that messages such as the Solar Barometer are effective in encouraging solar adoption. In his book and his highly useful CBSM website, McKenzie  shows that such informationally based campaigns as well as those based on self-interested economics (eg. price discounts), simply aren't cutting it. And yet these strategies persist. Are the solar companies which I see rebroadcasting this Solar Barometer graphic reaching out to legislators? Or do some actually believe this will influence public perception and action? McKenzie brings forth data to raise doubt.

And so my last blog post  reviewed One Block Off The Grid's The Science of Social Pressure, an awesome infographic capturing the results of recent behavioral studies on the power of friends and neighbors to influence positive environmental change. The graphic makes a great case that renewable energy marketers would be better off to throw off the the strictly informational approach: Instead, they would be better served in devising a more compelling message to create a new social norm, using a gentler, more positive "Join us" tone of voice. 

As Tina Rosenberg has written in her book Join The Club: How Peer Pressure Can Change the World, if we really want to effect a social change we have to appeal to a basic instinct of all human beings: Our longing to connect with one another.

Today's social networks provide a fine vehicle for marketers to build these connections. For in the end, these online networks are simply a mirror of people's day-to-day real life interactions. But because of the "network effect", these social networks also have the power to amplify influence, aka change behavior, even while extending over a much wider reach than real life.

What lessons do the new behavioral studies, particularly when combined with social media, tell us that green marketers can use to advantage? Interweaving results from the offline behavioral studies and social media marketing worlds, I've summarized seven lessons below for green marketers which promise a more compelling approach.

1. Friend and Follow Your Installation Site Customers 

Most vendors of renewable energy technologies - particularly solar and wind, products which makes a significant physical and visual statement - are well aware that their new installations attract the interest of neighbors , both individual consumers and nearby companies. Solar contractors are quite familiar with this. The equipment goes up on a customer's house and, suddenly, passers-by are stopping. The typical (hopefully rhetorical) question is, "Hey, is that solar on your roof?" 

Less acknowledged is that this same curiosity effect can be multiplied significantly by using social networks. If these same solar installers were to hang out online and watch the stream of conversations, they'd find the same questions and discussions were occurring. 

Lesson? Reach out beyond the real-life physical neighbors of a customer to their online neighbors.  Study the social networks your new customers belong to and listen in. You may well find them bragging. (And if they aren't bragging, well, that's more reason to listen in.;-))

But, hopefully, you already knew all this.

You didn't know this? Your company is  late to use social media or has been giving it scant attention? OBOG's infographic as well as the data summarized in McKenzie's research, should give you pause to reprioritize.  You are not just missing out on conversations about your company. You are missing out on one of the most powerful marketing mechanisms to convert customer's friends and neighbors.

 

2.  Engage Directly Online

Just as when a solar consulting firm is onsite and fields questions for passers-by, this very same tactic can be used online. For it is perfectly acceptable social netiquette to chime in oto an ongoing online conversation, offering more information if the dialog asks for it. For example, a friend may ask a technical question of your customer online regarding your product that the customer can't answer. These types of conversations are occurring all over 24 x 7 the social networks. Below I show a couple of examples from Google+ and Twitter.

 

Don't expect your customer to necessarily point to you. Feel free to respectfully chime in with a substantive answer. And because we tread lightly these days, initially present commercial-free advice representing yourself as an industry source. If the person is moving closer to questions that fall within your product line, then and only then answer with a commercial response. And while it's  my observation that this is hard for many renewable energy marketers to adopt, the rewards for patience can be great.

3. Aim for Shareability and Likeability

As part of their social behavior, human beings who like each other tend to engage in mimicry, resharing good positive messages, particularly if what's provided is information rich , eg. a useful link or a witty statement or one cast alongside an emotionally-riveting photo or video. (You don't have to read the behavioral studies to know this. Twitter users know this well as retweeting, Facebook users know this as sharing)

So stop worrying about that marketing-speak phrase, 'company messaging" or rebroadcasting messages intended to influence legislators. Worry more about how your company conversations  fit inside the social fabric of your customers ongoing conversations. Once you acknowledge this highly social context, you become more aware of how off-putting one-way broadcasting, especially emitting purely commercial messages is.

 By adopting this polite but helpful demeanor, you are on the path to truly personalizing and humanizing your business and products. (Remember, some patience is required: You have to earn that spot to be put inside the trust circle of your customer's social context.) 

By the way, if you don't understand what I mean by "humanize" your company, I highly recommend your getting a copy of the book, Humanize: How People-Centric Organizations Succeed in a Social World. (A great introduction to the book's concepts can be found in this interview.)

 

4. Speak to People's Desire to Be Part of a Group 

You may remember from the OBOG infographic, that hotel visitors are much more likely to re-use their bathroom towels if the message is not just environmental, but encourages them to join in an environmental activity as part of a group.  "Save the planet" is 25% less powerful than "Join Us in Saving the Planet".

What's even more interesting is that  we are not only  more likely to be influenced by the behavior of a group, but results improve considerably  the more that group resembles us. The original study by Goldstein, Cialdini and Giskevicius showed that the more specific the messaging called out a group a hotel guest could relate to, the higher the rate of behavior adoption.


Effect of Social Context in Influencing Hotel Towel Reuse Behavior

When the marketing placard referenced towel  reuse figures for the hotel, the percentage increased to 44%. However, when the specific room that the guest was staying in was referred to, 49% reused their towels.

Given what we know from these behavioral studies, appealing to group behavior should be much more compelling than simply showcasing peoples' attitudes toward your technology.

 

5. Don't "Use", But Be a Participant in Social Networks

This may seem  a nuance. But too often i hear companies and their consultants alike talk about "using social media". That phrase I believe perpetuates a very superficial level of usage.

Here's a great cultural reality check: Are you comfortable describing that your company as belonging and collaborating on social networks?  If you can answer a definitive "Yes" to that question, great! Your company is more likely to be gaining the benefits of social interaction, not simply  replacing your traditional marketing broadcasts with, for instance, Twitter broadcasts or Facebook re-plays of your latest press releases.

Remember, because we are social creatures, it's often the one-to-one interactions that carry the most credibility to other online observers.

6.  Leverage Group Online Buying Psychology

Renewable energy retailers in particular can take a social lesson from One Block Off the Grid's use  of Groupon, an online daily deal site promoting discount coupon sales. During the past year, Groupon and competitor LivingSocial have rapidly expanded their membership base to tens of millions of bargain seekers seeking discounts on all forms of mainstream products and services. One Block off The Grid's use demonstrates that these coupon services can also be valuable to vendors of much high-priced items. The below one-day deal attracted 26 people to spend nearly $100 apiece to save some $1000 on a solar installation.

 

Yes, we've always known as marketers that customers respond to"One Day Only!" as an urgent call-to-action.  But the online daily deal companies go a step further, using an onsite counter that shows how many people have taken the deal, giving onlookers an index of the deal's popularity. This again, speaks to  basic human social psychology: We see other people taking the deal and the deal becomes more appealing to us. These daily deal sites are leveraging the Principle of Scarcity:  The  changing deals-sold counter number appearing nearby a countdown clock fuels urgency among potential buyers-- especially where there is a limited supply. 

 

7. Return to Community Marketing Basics

In a sense, with both social networks and the successes of neighborhood action efforts , we are seeing a return to grass roots community-based marketing. For a great example, check out out Oakland's Solar Mosaic project, a community-based action and creation financing effort, putting solar tiles one by one on community centers.

Oakland Solar Mosaic from Solar Mosaic on Vimeo.

True enough, neighborhood action efforts, especially where arising from an NGO or government initiative, are not disposed to endorsing specific vendor technologies. But that said, companies who  keep their ear to the ground (both offline and online) for these neighborhood action campaigns, especially those ready with easy-to-install, use and maintain products accompanied by solar lease financing,  stand to benefit immensely.

presentation from the National Renewable Energy Lab captures well some of the fundamental state changes we are seeing in energy marketing, moving toward community-based social marketing. Although intended for energy conservation efforts, for renewable energy companies as well, it's a very worthy read.

Both social marketing studies and social media marketing share some common values. Authoritarian voice is out, peer discussion is in.  One-way broadcast persuasion is out, collaboration is in. Madison Avenue tactics are out, recommendations made between neighbors on Facebook or during a group bicycle ride are in.

In both cases, neighbor to neighbor communication is The New Black. (At least in the context we are discussing here, the main difference between the two is whether the successful behaviors are done online or offline.)

So in communicating with the online neighbors of your customers, hyperlocalize your online message for advantage. Don't hold back in calling out in tweets and Facebook  status messages the town names and neighborhoods where you have recently installed a renewable energy technology. This not only adds concreteness and reality to your messages, but provides a valuable search term for your message to be discovered online. Most importantly, in spelling out your familiarity with a locale, you are already one leg up in building trust within that locale.

 

Wrap-up. Before devising your next great marketing campaign around your environmental product, think of it more as a social experiment, one where you connect your company into your customer's community circles.

This is best done as a peer, not as a broadcaster. Sad to say, too many renewable energy companies are still not aware of the behavioral science studies indicating these 80s-90's environmental  marketing tactics need to be abandoned.

What we know now is we should table the information statistics. It's really back to basics, folks.  Your social experiment will be more effective if your message speaks to a very primal social need in people: Their need to collaborate and belong to a group.

Has your environmental company been successful in leveraging social behavior - either offline or online? Feel free to share in the comments.


Photo 1 image credit

References

Goldstein, N.J., Cialdini, R.B., Griskevicius, V. A Room with a Viewpoint: Using Social Norms to Motivate Environmental Conservation in Hotels  J. of Consumer Research, Inc. ● Vol. 35 ● August 2008

 

 

Thursday
Nov102011

Would Friends Let Friends Burn Nonrenewable Energy?

The advent of the social revolution, marked by the rise of social networks like Twitter, Facebook and Google+, makes us increasingly aware that human behavior is tremendously influenced by the opinions of our friends, colleagues and family.

For although we've appreciated since the mid-90s, that word-of-mouth is a powerful influencer, it really wasn't until we could actually witness directly the reaction to our own tweets and status messages that we palpably felt the power of of our closest circles to socially influence us and compel us to take action.

And while some worry that social networks combined with mobile access propel social unrest, it's also true that social connectedness whether via online, wireless or  via simple word-of-mouth, can lead to extremely  positive behavioral change -- whether its personal health, social causes, discouraging terrorism or adopting sustainable technologies.

Nothing so brought this home to me than my recent discovery of a wonderful infographic created by One Block Off the Grid, a group-buying website for green home improvements. In my book, this graphic  is a key study for all green marketers.

Source:- One Block Off the Grid 

Power in Numbers Neighbors

Beyond the studies summarized in the infographic, there are others which indicate that what our friends and neighbors think can have tremendous impact in effecting positive behavioral change.  A 2009 article in Yale's Environment 360 , Can Peer Pressure Promote Greener Choices, described two studies I'll summarize briefly here.

One of the best known is a late 80's campaign taking place in Hood River, Oregon, in which local civic groups collaborated to enroll entire neighborhoods in a weatherization campaign, where green, energy-efficient improvements were made available at  extremely low cost to home-owners.  Although the campaign had a goal of only some 20-30% household participation among the 3500 homes in the project, the end results came closer to 90%. That's right: No type. 90%.

Equally remarkable was that this principally word-of-mouth campaign, neighbors talking to neighbors, was so successful that the project only used approximately 75% of the marketing budget to get this spectacular result.

Similarly, community involvement campaigns in Arizona , have successfully boosted adoption of both household recycling behavior and water conservation.  For instance, even in a community which didn't practice water conservation, researchers found that you could persuade people to reduce water use simply by telling them that their neighbors approve of the idea.  In commenting on his results to Yale, Arizona State psychologist Robert B. Cialdini, remarked,
"People don't just want to conserve energy, they want to be acknowledged for conserving energy".
What's the main message of these studies?  Increasingly, we are learning that compelling people to take action, modifying their behavior, is accelerated not through logical facts like price discounts and data points, but rather even more effectively through influencing their friends and neighbors. As Mark Earls, author of the book Herd said, "most behavior is not shaped by people making decisions independently, based on good or bad information or having their emotions played with. It is shaped by the behavior of other people around us."

 

The infographic holds some powerful lessons that environmental marketers can use in their marketing messaging - both offline and online- namely, go positive and  encourage collaborative behavior.  And even though much of the data depicted is based on offline behavioral studies, we  see the power of near-circles of influence in people's behavior on social networks daily. How can a green marketer take advantage of that online?

 

In my next post, I'll explore nine social lessons from these behavioral studies that  renewable energy marketers, whether inside large suppliers or the smallest of solar contractors, can exploit to create a more persuasive message. To those who have held off on building a social media strategy, who give it low priority, or who simply use social media as another broadcasting platform,  I hope to give you something to reevaluate that decision: You just may be missing one of the most powerful opportunities to encourage adoption of your products and services.
Tuesday
Oct112011

Consumer-Innovators (Part 2) & The End of Social Media 1.0

 

In Part 1 of this series, I described how Social Media campaigns and programs may be unwittingly compromised by a villain residing below: The Industrial Age relic of a one-way product design flow.

I also reviewed Eric Von Hippel's recent work on the surprisingly immense number of consumer-innovators  in the population, suggesting social media programs which target this group are more likely to demonstrate ROI.

In this post, I continue my discussion of how these Open Innovation concepts perhaps offer social media marketers an understanding of social media's next phase.

The End of Social Media 1.0?

It seems the core problem with Social Media 1.0, as principally a communications strategy, is that it does not on its own anticipate any change in the traditional product design or service creation processes.

Think about the way social media campaigns typically connect a company to customers. In most cases teams of social media people chiefly work on programs to amplify the voice of customers, broadcasting it out to a wider realm of customers and would-be customers . The emphasis here is on increasing the total network size. We continue the mistaken viewpoint that increasing influence  is about finding more people to influence, instead of deepening the ties to those we have already influenced.

My thesis is that much of this is perpetuated by the fundamental one-way product design model below.

In some ways, building a sophisticated social media strategy on top of this old model is akin to putting high performance Michelin Bugatti Veyron tires on a V4 engine design: You just can't get their full performance. To get full performance, companies have got to get under the hood, revise the fundamental engine and chassis design. Reading the struggles within the Open Innovation community itself, this is of course no mean feat and certainly far beyond marketing's control alone.

But here's what marketers do have control of: If we take Von Hippel's thesis seriously as a latent opportunity, namely, the opportunity to leverage the  massive number of consumer-innovators out there, companies ought to have an equal size team of social media folks working on getting the customer messages back deep inside the company.

 

What Can Social Media Marketing People Do to Aid the Transition?

 As long as we point to "best examples" in social media as broadcasty, high buzz Old Spice-style campaigns, we're still in a corporate media mode, casting broader nets, rather than tightening our relationships with customers for "what matters most", namely, giving them products they want. 

Von Hippel suggests three steps companies can take to leverage consumer innovation. Here I've recast his points, adapting them to emphasise marketing's role.

1. Marketing Needs to Provide a Bridge Bringing Consumer-Innovators into the Product Life-Cycle

Marketing people need to step outside the traditional serial timeline of internal product innovation where their principal role is to educate consumers on why they need a product design by the company. Instead, they need to focus on reversing the process, bringing lead consumer innovations  into the company, educating the company on what its consumers want. A good start is to review the balance of social media team participants focused on outbound vs. inbound communications. Ask yourself: Are you over-weighted on purely outbound communications?

2. Creating Consumer Incentives to Contribute to Product Design

Marketers need to not only identify and bring those lead innovators into the company design process, but include those lead consumers as part of the company reward system, whether that be by revenue sharing, IP sharing or other. Threadless does it by revenue-sharing and bonuses to designer-users, Quirky does it by sharing a percentage of profit with innovators. As trial programs, companies can experiment with Open Innovation challenges and innovation platforms, allowing lower-risk experimentation without wholesale rearchitecting of fundamental business processes and current operations.

3. Building the Consumer-Innovator Incentives into the Company Revenue Model

Ultimately, given that  incentives to your lead consumers are offered, these costs need to built into the cost of sales for product or services introduction. 

 

Is Social Media 2.0 = Social Innovation?

The much sought-after ROI of social media will come to a greater wealth of companies once we realise that "the people formerly known as customers" are far more than brand ambassadors to spread word of mouth,, more than influencers of  product buying decision, but as users of our products have a great deal of tacit knowledge of our product and services to aid  the product design process itself.

Some may question:  Aren't you simply stating that crowdsourcing is the next evolutionary stage of social media?

And as much as my answer is "Yes",  my point is that companies can't achieve this without deep change in  their product design process, a construct which is usually treated as outside the realm of social media discussion. Von Hippel's research, showing the huge opportunity in tapping consumer innovation, makes it clear that crowdsourcing - with a specific focus on these consumer-innovators - should be the focus of our social media strategies. This keeps us centered on our product and service missions and not just emitting the "clever campaigns and rudimentary conversations" of which Foremski and Solis rightly despair.

Social media marketers wonder "What's wrong with my social media strategy?", "Why have my efforts plateaued?" and "Where's the Social Media ROI?".  But taking a hint from the Open Innovation camp, we realise the problem may not be with social media per se, so much as that the strategy rests on top of a strictly internal one-way design process. What the Open Innovation experts know is this:

You can't build an effective 2-way customer communications strategy on top of an outdated one-way product design model.

In the end, I hope both groups step outside their separate rooms to begin a long-lasting conversation. It seems adopting the best of both paradigms  promises to unleash a tremendous force of consumer and company co-creation, aka social innovation.

What do you think? As a social media marketer, do you regard crowdsourcing consumer-innovators as an optional strategy? Or is it part of the endgame?

 

Bridge photo source (NY Daily News)

 

Postscript. For the sake of clarity, I have simplified real company situations in two respects. First, most companies do not have a strictly one-way flow of design - that's an extreme.  Second and obviously, the use of the term "two-way" in here is more realistically replaced with "multi-way", meaning interaction includes not only other groups beyond end-consumers,  but group collaboration.

 

 

 

Monday
Oct102011

Of Skateboards, Consumer-Innovators & The End of Social Media 1.0 - Part 1

Who should read this post: If you regard crowdsourcing customer ideas as a separate and optional evolutionary branch of social media.

Who should not read this post: If you're already exploring or planning to crowdsource customers ideas.

Ever notice how we  tend to stay safely inside our chosen paradigms? As Frank Beach, the biological psychologist, and a professor of mine at Berkeley once said, "We entertain the hypothesis because the hypothesis entertains us." But a school of thought, a particular approach, even in so much as it provides a framework for thinking, can also trap us inside its frame.

Take for instance two paradigms that have radically shifted the way we do business over the past seven years or so: Social Media and Open Innovation. The first, principally a marketing paradigm, tells businesses that it's time to start listening, engaging and adapting to customers. The second, more strongly affiliated with management consultants, and speaking to a somewhat deeper level of business practice, brings to light that we need to involve business partners, suppliers, potential licensees as well as customers at earlier stages of the product design (or service creation) process, The first focuses on getting closer to customers, the second focuses on leveraging external innovations and spinning out our own "pre-products" (if you will)  to lower costs, increase time to market and find new market opportunities.

But something's been bothering me lately.

Rarely, do experts from the two schools of thought reference each other. (As I've lamented in the past, it seems the Open Innovation school rarely discusses marketing at all.) It's as though the two groups are meeting in separate rooms with corporate management.  And that's a shame. This post explores how current restrictions in the social media paradigm may stem not from within itself, but rather from the foundation of a business structure existing far below the usual level of discussion. I argue that it's in the cross-fertilization of ideas from the Open Innovation camp that the next evolution in social media may occur. 

Source: Henry Chesbrough 2005In some sense, both the Social Media and Open Innovation movements struggle with the same enemy: Namely, the centuries-old serial model of product flow, where design starts internally and the consumer is the passive recipient of a product as a fait accomplis. The stuff of traditional MBA programs, too often embedded in the heads of today's senior management, this principally internally-driven process flow has been identified as the culprit in adopting innovation of both types.

Much as  command-and-control style management style presented resistance to company employees using social media to  directly interact  with customers, this serial process timeline too, perpetuates an operating model of one-way broadcasting. For in this timeline, marketing and PR functions, the champions of social media, are at the tail-end of the process, whose primary objective is to educate customers  on an already internally created-manufactured-delivered product or service.  (Note these diagrams from the Open Innovation community do not even depict marketing and PR as part of the company process!)

 

Yet even at this tail-end of a one-way process, social media and its tools have contributed greatly to companies understanding that they alone do not control their brand or their reputation . Customer service has benefited as well: Rather than using 1 on 1 customer service calls, problems are solved (even while PR takes place) with company representatives tweeting solutions publicly over the web, providing social proof of a company's accessibility and responsiveness. Indeed, in its best incarnation, a great humanization of brand has occurred. 

But for all that social media has accomplished over its fairly brief lifespan,, an e-Marketer report suggested that we were beginning to see a slow-down in social media innovation. Some even  despaired (to some outcries of rage) that we were seeing a plateauing of growth.

Social Media is Not Corporate Media

Ever on the zeitgeist of the social media movement, Brian Solis elaborated on these trends in his excellent post The Demise of Social Media 1.0. writing,

From Social Network Fatigue to Deals Fatigue to Follow Fatigue, businesses are facing a crossroads at the intersection of social and media. Following the path of media continues a long tradition of what Tom Foremski refers to as “Social Media as Corporate Media. ...

As Foremski states, “Social media is not corporate media….if corporations try to turn social media into a corporate sales or marketing channel then they risk losing the naked conversations, and the insight into customer behaviors.”

His point is that there’s more to social media than clever campaigns and rudimentary conversations. Talking isn’t the only thing that makes social media social. Just like adding Facebook, Twitter and other sharing buttons will not magically transform static content into sharable experiences. Listening, learning and adapting is where the real value of social media will show its true colors."

But have we really adapted?  

I'd say, in most cases, no. For there's another ever-present vexation within the social media camp: Social media ROI continues to remain elusive   It seems so few show social media ROI  that some have concluded we are attempting to "measure the immeasurable".

I believe some hint to getting to social media's next evolutionary stage, how to adapt, close the last mile to the customer, is afforded by looking outside the social media paradigm, venturing into that room where the Open Innovation consultants are talking.  Even as much as companies marshal their social media campaign efforts, attempting to widen their influence, ride a large-scale 'network effect', amassing "shares" and "likes" and Google plus ratings, there's a quite independent consumer movement in play. And it has less to do with what consumers are saying, but rather what they are actually doing.

Enter: The New Customer-Innovator Paradigm 

A recent paper by MIT's Eric von Hippel, The Age of the Consumer-Innovator, alerted me to the fact that the serial product design process, as the still dominant business process of most companies, may be the key deterrent to exercising the true value of social media. An extension of Von Hippel's earlier work  and book, Democratizing Innovation, the paper explores how, users, much assisted by improvements in computer and communications technology, increasingly can develop their own products and services. 

We've always known that consumers can be a hot-bed of product ideas and, yeah, new markets. Legendary examples include the skateboard, created by kids by hammering a wheels onto a board. Or take the dish washing machine, devised by socialite Josephine Cochrane  to solve the problem that her servants, in washing, often chipped her fine china. Von Hippel's examples are wide-ranging, including high performance sports equipment, library systems, PC-CAD systems, the Open Software movement and hospital surgical procedures. Even in financial services,  Hippel describes horw sweep accounts, long before they became profitable banking services, were used by retail and corporate banking clients to increase returns from interest payments.across their accounts.

The Millions of Consumer-Innovators

It turns out that consumer innovators are by no means outliers, but rather they number in the millions. Marshalling data from three recent consumer research studies conducted in  Japan, the UK and the US,  Von Hippel's data shows that across these three countries alone, consumer-innovators are estimated to spend some $31.2 Bn on consumer-based product innovations per year and they number 18.5 million strong. Most remarkable is the finding that in the U.K., these consumer-innovators spend 144% more annually than what all commercial enterprises as a group spend on consumer product R&D.

Data from The Age of Consumer-Innovator, MIT Sloan Management Review, Sept 21, 2011. Eric vin Hippel, Susumu Ogawa & Jeroen P.J. de Jong 

What I find ironic here is that even while companies are building social media strategy, growing large social media teams to outreach to consumers, a significant group of consumers independently are creating, modifying and testing novel functionality of products and services.

To me, it's no coincidence whatsoever and Von Hippel's realisation explains why some of the best-known examples of social media success are  companies which have built customer-bridging platforms, if not wholly, at least in part, into their design process. It's initiatives like Dell's IdeaStorm, MyStarbucksidea.com and and the company Threadless that are fully leveraging social media's value. There are other splendid examples: The Fiskars scrapbooking community and the many Forrester Groundswell Award winners, such as Godiva and the Intercontinental Hotel Group & Chase Card Services who developed  a new credit card with the help of and for loyal Priority Club members .

Why did it work in these instances? Because beyond listening, learning and engaging (Social Media 1.0), these companies actually adapted their product design process to incorporate the customer. In other words, they are no longer working off the simple, one-way  product process line.

True enough, only a small minority today, some 3.7- 7% of the total consumer base, are full-fledged, self-initiating consumer-innovators or "lead consumers". But as von Hippel points out, there's every reason to think that this base of independent innovators is expanding: Not only does the cost of computer-aided design tools continue to drop, but new web-based businesses exist to turn CAD design files into actual product prototypes. 

There are  other signs of a broader consumer-innovator and business problem-solver movement afoot: In recent years, we've seen the rise of design challenges (Innocentive, Spigit), third-party innovation platforms (Napkins Labs, IdeaScale) , independent entrepreneur idea platforms (Quirky, Edison Nation) as well as the rise of  Maker Fairs.

All this should be a wake-up call to social media marketers. You think customers are talking about your brand? What about those that are reinventing your products? Even as much as social media marketers continue to vex in search of  larger and larger group of influencers, its seems we've been ignoring those who have already been deeply influenced to become inventors and creators. You can listen, engage -- but if you don't really connect with these true influencees, you may well find yourself competing with them.

This speaks to a key flaw in most social media strategies, what Foremski and Solis are referring to in the (misguided) equation of social media with corporate media: We tend to overemphasise total reach, instead of focusing on the depth of conversation. (As I've written earlier, this fallacy of large networks as a basis of influence underlies many social marketers misguided obsession with the Klout score.)

 

Why Consumer-Innovator Communities are the Next Stage of Social Media

Companies and social media marketers need to stop treating social media as the tail-end of product process as well as an extension of their corporate media. Those that take the bold step to go beyond  listening and talking but to tap into the consumer-innovator communities stand to benefit immensely. The following benefits stem from Von Hippel but really echo what's also been noted independently by crowdsourcing advocates:

  • Decrease R&D & Risk.Since lead consumers are already producing and vetting novel functionality product ideas on web communities, companies stand to benefit in reducing their R&D costs and risk in investing in those same/similar products.
  • Decrease Market Research Costs. As lead consumer-innovators are conducting market research for their innovations, companies stand to benefit in reducing expensive market research costs in detiming what product/service ideas would be in demand.
  • Decrease Inventory Excess. Where a consumer-innovator product/service idea has traction, companies may benefit in taking a high potential product concept to market, leaving them to focus on producing it at low manufacturing cost and with lower inventory as the product has already proven to be in demand.

Looking for social media ROI? Once the gap is jumped, moving beyond social media as a pure communication platform but , taken one step further, implemented as a design platform where co-created products or products created solely by users, herein ROI lies.

Is what I'm saying self-evident? Could it be, in many cases when we measure social media ROI, it's because we're tapping into these consumer-innovators? Could it be where we see a plateauing of social media's effect it's due to an outdated one-way product design process, residing far below our campaigns?


In Part 2 of this post, I'll explore why this means the end of Social Media 1.0 and what marketers can do to aid the transition to true social innovation, a place where ROI becomes less elusive. To do that requires looking a level deeper than the usual social media discourse.

 

Related Posts:

Consumer-Innovators (Part 2) & The End of Social Media 1.0

Four Roles for Marketing in Kickstarting Open Innovation

Open Gov's Prize-Palooza or How We All Became Creatives for The White House

Crowdsourcing and Open Innovation Fuel a Prize-Driven Economy

Start Innovating Already: A Punk View of 13 Poisons to Open Innovation & Building Engaged Communities (Slideshare)

Six Marketing Lessons of the Netflix Crowdsourcing Experiment


Tuesday
Sep132011

Klout May Not Be Serving Online Influence, But It's Sure Dishing Out Hope

Recently, Jay Baer over at the ever-insightful Convince & Convert blog, published a piece, Why Critics of Klout Are Missing The Big Picture. This post is an expansion of my comment to that post.

I'd highly recommend your reading Jay's perspective. Written in response to Paul Gillin's recent and excellent critical review of Klout, Jay's post and the comments that follow give a current barometer reading on the state (and still divided opinions) on Klout.

At the start, I'd certainly agree that Klout's growing list of marquee name Klout Perk partners makes it clear that companies desperately want this number. And as I've pointed out previously, Klout is certainly emerging as the de facto online replacement of the Q-Score for celebrities, an important metric for assessing consumer appeal.

But I will say I don't share his view that Klout bashing has been going on. Rather there have quite a number of quite comprehensive critiques of Klout's technical issues, including my own. Beyond Klout's inability to include offline influence, Jay's post does indeed describe some of the limitations but gives shortshrift to others: It's easily gamed per Adriaan Pelzer's bot experiments, it overweights frequency of tweeting over quality of content (itself related to lack of blog content input), and finally, user reports of continued high volatilty (aka high beta, large standard deviations). These limitations viewed alongside that we have one company with a non-transparent algorithm controlling an individual's published rating of "social net worth" -- and this has some people concerned enough to blog (not bash) about the meaning/accuracy of a Klout score. The 15-25% of negative sentiment ratings on Klout (my offhand appraisal) are, in fact, a healthy rebuttal by those concerned about the science of online influence.

For what's most concerning: If you read the online influence studies, there are some which support the view (eg. see Duncan Watts and C. Christakis' work - summarized here.) that influence is about smaller, tightly connected networks of easily influenced people -- not the large network factors Klout seems to be measuring. If these studies are correct, Klout may be moving us away from understanding online influence.

 

But isn't this all this academic, eh?

Actually yes. For true enough, as Jay Baer writes, Klout critics focused on its technical limitations are missing the Big Picture: Klout is emerging as a true marketing force to be reckoned with. It's becoming (become already?) the online Nielsen rating system for advertisers.

The irrelevancy of accuracy to the Klout score is captured by one commenter to Jay's blog post, who pointed out that Klout is really a marketing promotions company. To me, the reason for Klout's popularity and growing phalanx of ad partner-developers is principally due to the Klout Perks Program combined with Klout the company's laser-sharp understanding of human psychological factors, namely, the hope, the deep-seated need (and associated social pressure) to be a Big I Influential. (But remember- lest you swallow that little blue pill - if you buy Duncan Watts' arguments from his studies, that may have little to do with true online influence.)

Here's my somewhat oddball deconstruction of what matters most: From a marketing and ad effectiveness perspective (and with no disrespect to Klout whatsoever), the Klout score actually doesn't need to be an accurate measure of online influence at all. It only needs to be "the current best guess" and imply that it is (for instance, in the tagline) to enlist High-Klout-Wannabees to perform en masse for advertiser partners.

In the end ----Somehow it all conjures up cosmetics industry giant Charles Revson's famous quote, "In the factory we make cosmetics.  In the drugstore we sell hope". ;-)

Thursday
Sep012011

The Viral Nature of Doing Good & The Search for The Subservient Chicken

Like many a marketing consultant, I often get questions from clients on how their business can achieve a greater brand awareness, more influence, more twitter followers, more mentions, more likes on their Facebook fan page, more WOM, more buzz.

When it comes down to it, most companies have the desire to "go viral". And underlying this is the belief that if only they had the right PR stunt, the right social media strategy and the best platforms and tools to support these, that somehow all would converge to create an unstoppable force of demand for their product or service. I like to think of all this as The Search for The Subservient Chicken.

Yet as much as its relatively easy to go through all the motions - to get the tools and platforms, implant your company on the social networks- the truly hard part is adopting a sustained cultural change of acting outside the usual corporate boundaries. Some of the most successful viral PR stunts work because they go outside these boundaries, striking directly to a pure emotional connection between a company and its fans. Certainly there's a wide spectrum of activities to align a brand with a wider  social and world purpose - whether its to position the brand within a social cause, an environmental concern or by participating in disaster relief. These are so close to corporate philanthropic roots that most companies get that part. The far harder part is to realise that it's the simple acts of kindness, of generosity and helping that can create a powerful wave of good will - the much sought after humanized brand. One of the main posts of this post is that even fewer realize that there's a potent source of viral energy that they're already paying for today - your employees.

Do you really need grand gestures to seize a PR moment? Take a look at the recent publicity when HARO founder and CEO of The Geek Factory, Peter Shankman tweeted on a plane that he'd really like a Morton's porterhouse steak. As described on his blog, the company listened and when Shankman arrived at his destination, a nice 24 ounce steak was waiting for him, brought by Morton's Steakhouse employees. All took place within 3 hours.

Now that's a fabulous PR and brand coup for Morton's.  But I'd submit (along with Danny Brown) that part of the reason this act of goodness met with some controversy  is that the stunt was viewed as not part of the day to day culture of the Morton's brand, but rather a pure PR stunt aimed at a customer known to have 10,000+ Twitter followers. It might have been a steak delivered, but many smelled a subservient chicken in the bag.  (To Morton's credit, the company followed up later by delivering steaks to lesser known customers who tweeted a hashtag.)

But too often, as I'll expand on here, companies have blinders on: The day-to-day actions of their company and  employees are outside the larger world and social context. The majority of firms consider that these externalities are light years away from their daily business interests.

Want to go viral?  Be a mensch of a company. Allow your employees to do good.

For there's a fundamental state change underfoot. And there's indication that humanizing a brand is not an institutional act, but rather best carried out by letting "the humans formerly known as your employees" more than occasionally hold the reins of your brand.

Here are a few stories that make this point in entirely different but interweaving ways.

Twitter: Technology for Scaling Good

Take Amy Jo Martin's recent piece in the Harvard Business Review.  Ms. Martin, founder of Digital Royalty,  knows a lot about scaling smiles to a national level. In her agency's wildly popular "Random Acts of Shaqness", famous NBAer Shaquille O'Neal  posed as a statue in Harvard Square so fans could take pictures of him. Like the steak delivered to Shankman, this is quite a simple act of kindness and celebrity-to-fan connectivity.

Ms. Martin's thesis in the post can be summarized by her revelation that "Twitter creates a strange chemistry between the seemingly immiscible elements of self-centeredness and altruism".  In her view, the brand amplifying power of Twitter, what makes goodness scale on the platform, is that "Twitter connects 200 million participants 24/7 on an open network that enables instantaneous delivery and nearly instantaneous delivery."

 

Similarly, reflecting on what made this year's Woman's World Cup Finals between Japan and US such a phenomenally viral Twitter event,  where twitter records were broken with 7,196 tweets per second, Ms. Martin explores the value of emotional connections of brands to their fans, writing,

"This was about live emotion, feeling good and creating more "good"... People want to help and people want to witness others helping each other."

One feature of Twitter she points out captured my attention. She writes,

"Accountability and transparency spin narcissistic acts into selfless acts. You tend to be on your best behavior in public and on Twitter, everything you say is public...Twitter invites constant surveillance of your ideas. It's the epitome of positive peer pressure, and leads to people using the channel to broadcast what they want the rest of the world to think about them"

Her message to corporations is that too few realise that  these same desires for human-to-human connection as well as  peer pressure forces are operating when people as employees are interacting on social networks. Extending her observation to the corporate world, Ms. Martin intriguingly suggests "This is an opportunity to motivate employees and to add purpose to their work day in a way that's unmatched historically".

Many companies may pause on this point: Is this branding expert really saying Twitter can influence employee motivation? That human to human interactions on a social network can work to a company's unplanned benefit and impact brand? Yes! She like others has come to the view that the emotional ties, the simple day-to-day reciprocities which occur on Twitter and other social networks can create stronger emotional ties to the company brand. It's not viral ad-powered, it's people-powered.

But there's even a more compelling reason for brands  to attend to the emotional connections being sparked by their employees on the social networks. Namely - there's a significant "humanizing" movement  taking place in business practice offline.

You can sniff this  change in the air particularly among new wave of social entrepreneurs. Far from the common corporate view that doing good and philanthropic acts are add-ons to a brand, the movement sees doing good, interacting and collaborating as a key part of a company's actions, as important as its products and services offered.

 

Designing Good into the Product: Stanford's d.school 

The new movement afoot dislodges the traditional corporate mainstay dependence on safe insularity and product focus within a company, emphasising instead integrating the outside world and highly social connections into product design.

Case in point: The Stanford d.school. Most of the write-ups on the d.school focus on its innovative use of work space, its non-hierarchical approach to the design process and its "IDEO in the Classroom" method of  encouraging multidisciplinary and cooperative thinking.

And while all these elements surely play in the d.school's emergent success, my interest here is in its human-centered design, where often social good is a key starting point in teaching the product and service design process.

As d.school founder, David Kelley describes,

"We want to try to develop empathy for people, see what the value is to humans and try to use that to create big ideas, so we call our method human-centered design. There's a creative act in trying to decide what problem is worth working in the first place".

A key part of the school's process is that students themselves think of what problems need addressing, focusing on social or institutional conditions that pose challenges for human beings. Encouragement is offered by the types of courses offered:

  • Designing Liberation Technologies focuses on fostering democracy.
  • d.health: You've Been Warned covers aiding individuals with threatening medical profiles
  • Entrepreneurial Design for Extreme Affordability, focused on products for the developing world

And societal purpose is obvious in the projects and products delivered:

  • A water pump that dramatically improved the ability of Myanmar farmers to irrigate their land
  • The "Embrace", a low-cost baby warmer, designed to decrease the large number of hypothermia-related infant deaths around the world
  • Project Goldfinger, addressing remedies to male mid-life crisis
  • Project Amplify, a crowdsourced micro-investment strategy benefiting emerging musical artists.

It's no wonder that students from many disciplines at Stanford are fighting their way into the d.school.

What's important in our discussion here is that for the first time we have a new generation of entrepreneur and business problem solvers entering the world that are trained to work collaboratively and with passion. 

Common & How The Subservient Chicken Has Evolved

This brings me to a second and highly related case of the new humanized business movement: Common, the brain child of world-class designers and sustainability business thinkers, Alex & Ana Bogusky, Rob Schuham and John Bielenberg, is a newly formed creative community whose mission is to rapidly prototype social ventures --- all done under a unified and collaborative brand. 

Prefatory but important side note: Given that we are discussing the virality of doing good, it is somewhat ironic that Bogusky is best known as one of the primary creators of Burger King's 2005's Subservient Chicken campaign. But let's continue..

As the founders describe, the goal of Common is to "lift up the little ideas that are big enough to change the world." Much as in the d.school, Common's view is that collaboration is the new competition. And their endgame is to create an umbrella brand  "designed by the community, owned by the community and for the community". 

Warning, Onlooking Corporations: These entities are forming a new generation of companies where good is embedded in the product. This is what happens when collaboration is allowed to run rampant. Harkening back to Paul Hawken's The Ecology of Commerce, in these new social entrepreneurial organizations, the corporate good is merged with the common good.

The question is: Why can't today's corporations see the power of harnessing the collective energy of employees much as these newer organizations are harnessing the energy of students and social entrepreneurs?  

It is worth asking yourself: If your company isn't comfortable now with employees collaborating offline and online with customers, how well will your company fare in a new world where...

The New Competition is Collaboration?

Some insight into harnessing the motivational energy  that Ms. Martin is referring to and that both the Stanford d.school and Common are exploring, is provided by Yochai Benkler, Harvard professor and author of The Penguin and the Leviathan: How Cooperation Triumphs Over Self-Interest. Benkler's thesis is there's a misbegotten framework adopted by most of today's corporate leaders trained in an era where  humans, and ergo employees, were believed to be, by nature, hardwired to be selfish, uncooperative and hence, to be distrusted in acting good. (Note: PR, marketing and advertising humans seem to be exempt from this belief system). Instead, Benkler's research - drawing from behavioral studies, nueroscience and more recent economic theories -  supports a view that humans are naturally generous, cooperative and selfless.

In a recent article, The Unselfish Gene, Benkler gives several examples of how humans are naturally collaborative. 

In 2009, Elinor Ostrom was awarded the Nobel Prize in economics for showing how commons can—and do—sustain themselves for centuries as well-functioning systems. The most striking example is in Spain, where thousands of farmers have been managing their access to water through self-regulated irrigation districts for more than five centuries. To take another example, 75% of U.S. cities with populations of more than 50,000 have successfully adopted some version of community policing, which reduces crime not by imposing harsher penalties but by humanizing the interactions of the police with local communities.

He goes on to describe other technology examples of fairly low-assisted human collaboration which are reliable and sustainable: From Wikipedia, the user-generated reviews of Yelp to TripAdvisor, he contrasts these as triumphant over the more traditional command-and-control architectures managed by appointed editors. eg. Encyclopedia Britannia, Zagat's and Fodor's.

The crux of his case though seems to rest on more recent cooperative behavior studies which suggest that only 30% of people act selfishly in experiments whereas 50%-70% behave cooperatively (more or less, depending on the context).

Benkler concludes that "Anyone designing a cooperative system - be it an organization process, a legal regime or a technical platform - optimising it for only 30% of the of the population - leaves on the table a massive amount of human potential".

In a sense, Ms. Martin and Mr. Belcher are discussing the same phenomenon:  There's wasted motivation, unleveraged human (and brand value) potential in the traditional corporate assumption that employees cannot productively and sustainably engage, online or offlline, with other humans.

The Power of Saying Something Nice

So we see, from a variety of different angles, brand savants, design creatives and organizational experts are coming to the conclusion that traditional corporate settings and processes restrict the natural human creative ability to perform their best.

If only there were a palpable, very concrete means to demonstrate to corporations the power of humans as a collective brand?  After all, we see this daily when someone steps out of their way to tell a stranger a kind word, offers a helping hand. We see it in grand gestures such as "Jonathan's Card", where Jonathan Stark offered his Starbucks Card online to whoever wanted a free coffee. The act enthralled many, especially when we saw others pay it forward, adding to the balance of the card, allowing still others to join in. (Yes, even though the venture was "hacked", note this was done by someone intending a different form of good purpose.)

One direct experiential proof of the inherent virality of doing good is captured by last week's YouTube video  created by Improv Anywhere. The agency simply put a wooden lectern in the middle of a busy New York City intersection with a small sign indicating, "Say Something Nice". Then they let the cameras roll. Take a look at it.

 

To me, perhaps the most startling moment in the video is when a small toddler, held up by his mother and with a Buzz Lightyear doll in tow, comes up to the megaphone and shouts, " To Infinity and Beyond!"  Why that three year old boy gets it better than most management consultant trained corporations. And the purity of the message is amplified as we know its unplanned, without contrivance and free of corporate governance. It's said simply because people, with the little nudge of a "Say something nice" sign  and a megaphone, want to share. It's a pure human-to-human communication. And we rejoice in hearing it.

Improv Everywhere's social-inducing street props and the distinctively  human behavior which ensued -  voluntary and spontaneous as it was  -  clearly had a positive effect on the onlooking passersby. The 1.6 million viewings of the YouTube video tell us viral distribution occurs through emotional connections sparked - from individual to individual.

 

Humanizing a Brand: The Human Formerly Known as Employees

 

Strangely, most companies do not realise that this collective human force can be extended to their own brands. They are too impatient for Subservient Chicken to be served.

Yet the power of the legendary @ComcastCares twitter account was not any single viral ad campaign or PR stunt, but rather the persistent and diligent customer service efforts of one employee, Frank Eliason, in serving hundreds of customers online. So too with Zappos: There never was any singular PR stunt, any grand gesture, that humanized the brand. Rather Zappo's reputation for being human evolved from the thousands of tweets from hundreds of individual employees interacting with enthusiastic customers.

Fortunately, as Francois Gossieaux points out in his insightful post, Three Ways Brands Can Be More Human,  we see some companies stepping up to the For-Humans-By-Humans plate. He writes,


At IBM, every employee can create a community about whatever they want, with whomever they want, and using whichever tool they want. What is the company trying to do? It's trying to get 300,000 human seats at the tables where buying recommendations are being made.

At Xerox and Humana, they identified all internal active bloggers and social networkers, 80 percent of whom talk about things that have nothing to do with work. The companies pre-brief them about major company announcements as if they were press. What are they trying to do? Get more human seats at those tables where buying decisions are being made.

 

As much as some managers may blanch pale at the thought of unencumbering employees, it's clear at least some companies are allowing their employees to share their humanity (and indirectly and directly the company brand) on company time.

The irony is that, despite the fact that public trust in government, institutions and large business is low, and that PR and advertising are viewed as among some of the most highly suspect industries, most companies are quite resistant to leveraging  "Brand Force Human", a brand that hasn't been tarnished. It's as though realizing  that word of mouth and product reviews are out of their control and now rampant on the social networks, these companies hold tighter still, controlling their remaining precious cargo.

Perhaps enterprises can learn from recent upheavals in the journalism and news world. There, Jay Rosen, a journalism professor at NYU, coined the phrase "The People Formerly Known as the Audience"  , used to describe the closing gap between the professional media world and readers/watchers wrought by New Media and its newly engaged participants. Rosen was referring to the fact that today's "news readers" are active participants: They can pick up a camera, tweet a nearby event, provide thought pieces on a blog. In short, the traditional tools of professional journalism were now firmly in the hands of the people. Indeed, even as the news democratized, many resisted unleashing their own staff to have the same level of autonomy and access to social tools. For many, it took their news organizations down.

Enterprise business needs to confront the fact that the forces that broke down the barriers between the publishers and end users in traditional media are also at work between corporate brand makers and their audience. More corporations need to realise that  "the humans formerly known as employees" can play an active, constructive role in humanizing their branding, and, as Ms. Martin points out, use inexpensive social networks to do so. 

Until they do realise this, the new social entrepreneurs will lead the way. 

Photo credits:

Women's World Cup: AP Photo/Koji Sasahara
Stanford's d.school whiteboard: Fast Company

 

Wednesday
Jul132011

How I Learned to Stop Worrying and Love the Netflix Price Bomb.  

 

With 23 M subscribers, there’s little surprise that the Twittersphere and other social channels are reacting violently over  yesterday’s announcement of a  60% price hike by Netflix. Nominally, the company introduced a la carte price plans for its DVD and streaming customers. But, for most users, this amounts to a price hike as mail subscribers today can stream at no additional cost.  It doesn’t take a machine learning expert to tell you that, the format of the movie is no parameter of consideration in your movie preferences and selection.

Like a scene from Jaws I,  the water churning around this announcement  is pretty bloody at this point. As of now, the Netflix Facebook page records some 35,942 comments on this with few defending the change, on the NetFlix blog's announcement page, there are some 3900 mostly scathing comments from subscribers. Why even the staid and intellectual  Atlantic website raged on  with 7 Reasons Why Netflix's Price Hike Is a Bonehead Move .

As many make racour, especially considering the laggard economy, with so many out of jobs, well, it’s just inconceivable!

Yet it happened, Cinemaphile Nation.

Note this isn’t the first time Netflix has outraged its subscribers. When they removed the Friend recommendations in 2010, another tsunami of protests arose. (Hint: this point  is a trailer for points made later in this post. ;-))

What’s with you people raging on like villagers with torches outside Dr. Frankenstein’s castle?  Didn’t you realize the free streaming was an introductory freemium offer?

Calm down. Let me give a few reasons to stop worrying and love the Netflix price bomb. 

 

Netflix at the Behavioral Control Panel

 For while I agree with The Atlantic and others that the company could have introduced this new pricing in smaller increments, perhaps even staged  over time, there’s a rationale (unpalatable as it is) for their actions.

There’s a crafty reason Netflix lit this price fire. And if you’ve been reading their strategy plans, you know they soon have some water to douse it out and soothe your red-enveloped tinged fury. For it's fairly clear that Netflix soon plans to introduce personalized subscriptions, where every person in your home can get their own movie recommendations. (For a great discussion of this, check out Henry Blodget’s April interview with Netflix CEO Reed Hastings). It’s further clear from Netflix' Facebook integration strategy, that it’s highly likely they will re-introduce the Friend recommendations feature under that context. And obviously they need the personalized services for that to occur. 

Above all, super-arching over both these anticipated moves, understand that despite the $1 M Netflix Challenge, their Cinematch movie recommender engine is still "the Model T version of what is possible"   ( in CEO Hastings own words). They want to build that ultimately personalized Ferrari, greatly fueled by the recommendations from your social network. But, unfortunately, Netflix has not been able to introduce incentives to get households to fill out the separate profiles.  Why, consumers are lazy clickers, especially when they just want to see a movie.

From Netflix' perspective you are currently getting a Model-T movie recommendation engine, because you folks didn’t fill out your unique profiles! Silly bad users! How do you expect Netflix  to predict your likes and dislikes when that aggregate blob of a  profile (containing sometimes 3-5 people in a household’s movie tastes) has defied the greatest machine learning experts to untwine and refine?

No folks, it seems likely that this is  just a temporary price hike for your movie heroin. Indeed—here’s the reason to stop worrying - it all makes sense if Netflix, on the introduction of the new personalized, socialized service, offers you a discount on the “family plan”, finally enticing you, with both features and a price discount, if you would please fill out those dang profiles. Then they can build the Ferrari. (And you will be singing with the top down.)

You see, Torch-bearing Villagers, you didn’t behave for the recommendation engine to improve on time! And the competition is coming on fast and furious!

So, relax in your seats with popcorn and belly up with the price hike. Since you can’t be algorithmically controlled and continue to feed the Netflix engine bad data, you’ll just have to hang tight until the integrations take place -- and, most importantly, the now-you-can-customize-to-your-family price adjustment occurs.

With the competition coming on heavy, Netflix knows this is No Country for Old Men.  But particularly understanding the strategic backdrop of upcoming Netflix service enhancements, it’s particularly poor they they had to introduce this price change like The Big Lebowski.  But then if they seemed to pull a little Fast Times at Ridgemont High on you, combined with a bit of Dirty Harry, it's because they are afraid they'll be Gone with the [Hulu,Amazon] Wind. (By the way, by some miracle of my choices, you'd only need a DVD subscription plan to see  these movies.)

Sure they clearly pulled a The Full Monty here on the PR positioning of this price announcement.  I suppose that’s the hubris of knowing the competitive size of your movie inventory and  the laziness of lazy clickers to switch. 

What movie does Netflix' pricing announcement remind you of? ;-)

 

 POST UPDATE:

Since I posted this, Peter Kafka over at Business Insider interviewed CEO Hastings who admitted Netflix hiked prices to kill the DVD business. Highly enlightening read!

 

I'd also highly recommend Adam Knight and Reuter's Felix Salmon's take that the movie companies have much to do with the restructuring of the  DVD/streaming products.

 

 

Saturday
Jul022011

Of Cheez Doodles, Sheep & Sleep: Signposts on the Social Media Wall

Despite all that Social Media has done for us, it does have its dark side: For in the crowd enthusiasm for the subject, there are now myriads of marketers  portraying themselves as Social Media Gurus and Ninjas, shouting out their " personal brands" and boasting their ever-pervasive influence scores (and associated Perks).


 One can't help but feel somewhat annoyed by some of this.

 If you too have gagged over the over-hyping of A-listers,  noted the outrageous claims done in the pursuit of high ticket consulting projects and, yes, despaired over the grossly simplified  pseudo-quantifications of social influence, you'll take some solace in these three recent irreverent posts.

 

1. How 'branding is ruining journalism (Gene Weingarten)

Feeling a bit tweeked out about the recent over-focus on personal branding? Washington Post humorist, Gene Weingarten's wry wit and pointed commentary on the subject completely lays waste to the fame game antics - so pervasive as to have entered the field of journalism. To give you a flavor of his style, here are some excerpts...

  

 "...it is disheartening to learn that journalism schools are responding to this challenge by urging their students to market themselves like Cheez Doodles." ...
...."Now, the first goal seems to be self-promotion — the fame part, the “brand.” That’s because we know that, in this frenetic fight for eyeballs at all costs, the attribute that is most rewarded is screeching ubiquity, not talent. It is why Snooki — who is quite possibly literally a moron — has a best-selling book."
 
But go read the full post yourself for a chuckle or a good lulz.  (Hat tips to both Geoff Livingston and David Svet for sharing Weingarten's post.)


2. Make Yourself An Influencer by Playing the Klout +K Game (Danny Brown)

Like many of us, Danny Brown has a few reservations on the usefulness of Klout (aka The Standard of Influence) , and in particular their newish +K feature which allows you a tag a person as an expert on a topic.

To demonstrate the shortcomings, and particularly the gameability of  that feature, Danny and Dino Dogan (of Triberr fame) teamed up to create a hilarious video on Danny's  high K+ score on All Things Sheep Related. Here's the video below...
 

 

3. Lessons Learned from Go the F--k to Sleep (Marc Girolimetti)

Tired of all the rabid  pimpery and shiny object obsessions within the social media crowd? Technorati's Marc Girolimetti provides a fab Social Media Remix  of the best-seller, Go the F--K to Sleep. Marc's comic spin-off is one cathartic read, punking absurdities that deserve a good punking.


Here's a sample. (Preferrably to be read in actor Samuel Jackson's voice.)


The gurus nestle close to their tablets now.
The ninjas have logged on and are starting to creep.
You’re cozy and warm in your Tumblr, my dear.
Please go the fuck to sleep.


The bubble grows big in this town, child
The SEO pros StumbleUpon in the deep.
I'll re-tweet yoru ridiculous post titled "What's ROI?"
If you swear you'll go to sleep.

You can read the rest here...

 

Yes, Social Media needs more snarky posts like these. For just as the total number of posts on a subject serves as a sign of the market interest in a topic, the number of snarky posts on a topic can serve as a sign of a questionable approach or suspect technology.  Just as in the tale of The Emperor's New Clothes, too many hesitate to disagree with the status quo in the fear of being wrong and being punished . But the snark post is really the fearless jester throwing off the status quo, revealing that the king is wearing no clothes. 

And after reading these fine posts you'll agree: Sometimes the Social Media King is ...well...just laughably butt naked.

 

What social media practice or technology do you believe deserves a good snarking?