Archive for the ‘social marketing’ Category

Rolling Out An Idea

Posted: December 5, 2012 in CRM, social marketing

Has the emergence of social technology been faster than the roll out of other advanced technologies like CRM and ERP and why?
 

I have recently been reading a dense technical book from 1990 with the improbable title (for CRM), The Rise and Fall of Infrastructures — Dynamics of Evolution and Technological Change in Transport, by Arnulf Grübler.  It’s a well researched examination of some of the social and economic trends that influence adoption of new transportation paradigms such as rail and autos.  But it also has some nuggets applicable to CRM today.

I have lately wondered if our industry has speeded up in adopting innovation.  That was my hunch, and I am pleased to say that Grübler confirmed it.  His book was published in 1990, well before so much of what we take for granted such as the ubiquitous Internet and social media, were even close to business reality.  But it has a lot to say about those topics even now.

Grübler quoted other researchers and sources, most notably, Everet M. Rogers and his 1962 book, Diffusion of Innovations.  It is hard for me to say definitively, but many of the ideas from Grübler and Rogers appear to have found their way into our consciousness through popularizers such as Geoffrey Moore and Clayton Christensen.  That’s not to discount Moore’s and Christensen’s work; it is only to show that their ideas spring from deep sources.

Interestingly, while they and we are familiar with the bell curve segmentation of innovation adoption (Early Adopters etc.) the original concept of adoption was actually that of diffusion, as in the diffusion of an idea through a market or social network.  I think we lost something when we began thinking in terms of adoption rather than diffusion.

The change represents the commercialization of an academic idea and the concept became one of vendors persuading adopters and we lost the connotation of a natural rhythm.  The concept of diffusion carries with it the idea of a rate by which adoption takes place by more or less organic means — someone you trust gives you an idea that you validate for yourself and later you may influence others just as you were initially influenced.

I found two ideas under Rogers in Wikipedia that I think are relevant to this discussion.  The first one defines three types of innovation-decisions (my comments in Italics)

  1. Optional Innovation-Decision — made by an individual who is in some way distinguished from others in a social system.  This individual might be the “cool” kid in school that everyone wants to emulate, such as the quarterback or someone who has distinguished him or herself.  It could also be the class rebel.  When this kid does something, others take it up to be like him or her.
  2. Collective Innovation-Decision — made collectively by all individuals of a social system.  It is hard to distinguish this as a cause or as an effect of the decision above.  When “everyone” is doing something, the original seed crystal — the cool kid — might be lost to history.  Regardless, this decision appears to be a driving force behind exponential growth of an idea.
  3. Authority Innovation-Decision — made for the entire social system by a few individuals in positions of influence or power.  This is typically how big organizations buy and why salespeople try so hard to reach the C-level.  When the idea becomes institutionalized, i.e. everyone has to have it and the adoption is taken over by management.  This is especially noted in business adoption of large or expensive systems such as CRM.  Social media is right at the interface of a Collective Decision and an Authority Decision.

The second concept defines the intrinsic characteristics that influence an individual’s decision to adopt (or reject) an innovation.

  1. Relative Advantage — How improved an innovation is over the previous generation.  Vendors of new category items always score high here because there’s little to compare with.
  2. Compatibility — The level of compatibility that an innovation has to be assimilated into an individual’s life.  In software this issue is often dealt with by the CIO who can over rule a purchase if it conflicts with the established order.
  3. Complexity — If the innovation is perceived as complicated or difficult to use, an individual is unlikely to adopt it.  Departmental buyers often have the say here, even after a purchase as anyone who has ever tried to get sales people to use a difficult SFA package knows.
  4. Triability — How easy an innovation may be experimented with.  If a user is able to test an innovation, the individual will be more likely to adopt it.  SaaS and subscriptions have a big advantage here, no wonder they are in the ascent.
  5. Observability — The extent that an innovation is visible to others.  An innovation that is more visible will drive communication among the individual’s peers or personal networks and will in turn create more positive or negative reactions.  We use case studies to fill this need but also, late adopters need good observability to make a positive decision.

We see much of these five characteristics woven into sales and marketing strategies aimed at helping a new idea become diffused in a market.  In fact if you take these five characteristics and apply them to the bell curve of adoption —including Innovators, Early Adopter, Early Majority, Late Majority, Laggards — you can reasonably show a one to one correlation demonstrating these characteristics as the dominant features for an adoption (or diffusion) phase.

If you apply this knowledge you can begin answering the question I posed at the beginning, namely, has our marketplace speeded up somehow?  I say the answer is “yes” in large part due to social media.  What’s interesting to me is that social media  is also the best mode of promoting itself to the marketplace.

As an innovation decision, social began as an Optional-Innovation Decision.  Recall that only kids at Ivy League colleges were able to join Facebook initially but then the phenomenon quickly spread to other schools (a Collective-Innovation Decision).  When Facebook and other social technologies let down their barriers to entry the rest of the market, from high school kids to adults, joined in to the point that if Facebook were a country it would be one of the most populous on the planet.

But, back to the speed up.  It took, by my estimate well over a decade for CRM to become mainstream.  If you go back to the first release of ACT! in the mid-1980s to 2000, the year that Siebel’s revenues surpassed the $1 billion mark, it took about fifteen years for CRM to become prominent. By 2002 Siebel (founded in 1993) was cresting because of persistent rumors that it was hard to use (the Complexity characteristic).  Also Salesforce was out flanking Siebel with the Triability characteristic of its SaaS model.

Now take a look at social.  The signal event of the social revolution in the front office is the fourth edition of Paul Greenberg’s magisterial study, CRM At The Speed Of Light, published in 2009, just five years after Facebook was founded in a dorm room at Harvard.

So as we turn the corner into 2013, we can look back on a very rapid adoption of social media, and it’s not an illusion.  It happened in part because the medium became the message in the same way that Marshal McLuhan described TV.  But more to the point, as a network, social had the advantage of bi-directional communication and instant feedback that TV never had and that only accelerated things.

What this rapid adoption, thus far, says about the future is somewhat puzzling.   Social adoption is now at the level of an Authority Innovation-Decision but at the same time, entrepreneurs continue innovating on their original innovations and popularizing them through the same channel that has already demonstrated a propensity for truncating adoption and refining innovations with record speed.

But innovation is proceeding down numerous smaller pathways as we discover more uses in segmentation, sentiment and all the other ways there are to analyze customer and market behavior.  Will these permutations drive a round of complexity or will vendors skip over that and drive Triability and Observability?  They will if they’re smart but maybe they all don’t read my column.  Ha!


I tried to wait a bit before commenting on the election and the Social CRM implications partly out of respect and in part to give everyone a chance to rev down.  And these observations have much more to do with social media than with any political party or policy initiative, so please believe me when I say I come in peace.

According to the New York Times the major candidates and their surrogates spent over six billion dollars on the presidential campaign making it the most lavish in history, if that’s the right word.  If you live in a swing state you were hammered by ads, many financed by big Super-PAC donors.  But looking at the results, especially for big donors as reported again in the Times, the results were paltry.

So what happened?

Very simply put, we began hearing the words, “micro-targeting” on election night.  The specific reference was to social media, data capture and aggregation and using analytics to both build models of “ideal” voters and then to find them and get them to the polls.

Mobile technology was also employed giving field workers maps and walking directions to the homes of their best-case voters.  This get out the vote part of the campaign proved critical to the outcome.

Finally, if you are Nate Silver, the statistician and blogger for the New York Times, you have to be feeling pretty good at this point.  Silver predicted the outcome precisely only making a wrong call on a North Dakota senate race that turned out better than he’d predicted.  Call it the triumph of the nerds if you must.

All of the modeling, analyzing and grouping that we’ve seen in conventional marketing over the years got a turbo boost from modern technology this year and it bodes well for both the public and private sectors.

In the private sector, social techniques have been validated on a major scale.  If you are not embedding your marketing with social technology and most importantly social techniques you no longer have a reason to wait.  Notice I said techniques too because research I’ve done recently shows too many organizations using the technology but clinging to old techniques with miserable results.  For instance using Twitter or Facebook to simply broadcast an unfocused message.  I wrote about this in my first book, “Hello, Ladies!” That has to change simply because using the new technology with the old methods yields mush.

On the public side, I am going out on a limb.  It’s conceivable that the six billion bucks just handed over to local TV and radio might prove to be a high water mark.  Micro-targeting is far less expensive and more effective and I think the era of big advertising is over in politics as it is in business.

Also, I think the technology from the general election will, four years hence, be cheap enough to penetrate the primary process even more than it has.  Further use of this marvelous technology will actually reduce the polarization we’ve experienced in the last few election cycles.  Here’s why.

In primaries it’s widely known that candidates run more to their extremes, Democrats are more liberal and Republicans more conservative.  The reason is simply that primary voters tend to be more passionate about their beliefs, you almost have to be to go out to a caucus for a relatively unknown candidate on a cold January night in Iowa.

Old broadcast techniques can reliably drum up the most passionate partisans to go to primaries and caucuses but with the down side that candidates win by being less mainstream and it’s the mainstream that votes in the general.  The Obama campaign understood that this year.  With no primary to engage in, the campaign maintained a centrist position, which was enough to win the general.  Micro-targeting worked well enough to enable the president to win all but one swing state, which turned out to be his margin of victory.

So this election was a great proof point for social both in its theory and its practice.  And not just the social media that many people are familiar with.  It was a big win for analytics and modeling, which means big data too.  We tend to forget about analytics and too often when we think about big data at all it is in line with storage needs, but that is changing.

Finally, this election gave a big though implicit nod to cloud and mobile technologies.  As mentioned above mobile devices in the hands of field workers made them far more effective.

In 1952 the fifth machine of the UNIVAC I series was used by CBS to predict the result of the 1952 presidential election.  With a sample of just 1% of the voting population it correctly predicted that Dwight D. Eisenhower would win.  It was a watershed moment for the information age.  It would take more than a decade before computing started to become ubiquitous but it spawned everything around us today.

This election was just as important but its significance may be leaning in the opposite direction.  Rather than telling us of a new computing trend forming, its real message is the full bloom of the trend that started all those years ago.  And its lesson is that computing is so embedded in our lives today that attempting to live without it is like a return to a world lit only by fire.


You might be tempted to consider social marketing just another idea in an endless stream of things dreamed up by the software industry (and pundits like me!) to generate more business.  Well, you’d be right about some of that but I’d like to argue that the idea is more than hype and is, in fact, in synch with the times.

Conceptually, marketing and sales have not changed for a very long time.  It’s all about finding someone with a problem to solve and budget for the purpose.  It doesn’t matter if the situation is business to business or business to an end consumer, it’s all about finding a need and filling it.  I can agree with that but at the same time I know that if this is as far as you take it you’ll starve.

Look at what’s going on in the marketplace.

Things are getting incrementally better nearly four years after the bottom fell out of the economy but CFOs still watch budgets like hawks.  Demand is still squishy everywhere and the gross domestic product of the U.S. — and the whole planet for that matter — hasn’t grown in five years.

Moreover, new product category introduction is low, and this is very important.  When a category is new everyone, at least in theory, needs it and sales people do great business.  Marketers’ jobs are streamlined too.  They need to focus on building brands and communicating the basic features and benefits of what they have.  Products are also relatively simple.  They typically come in one flavor and function as general purpose cousins of what they will eventually become as the market grows and differentiation sets in.

If you take an objective look at most of the marketplace today that’s about where we are.  Established markets are already crammed with products that may not be the latest and greatest but they work and customers need compelling reasons for buying what’s newest.

You might say, what about products like the iPhone or the iPad?  Every time Apple comes out with a new version the market goes wild and buys the new product even though the old ones still do their jobs.  That’s all true but the phone industry has a different cadence run by the planned obsolescence embedded in the service contract.

After two years, you get a new phone and a new contract.  If you don’t you stay on your old plan paying the same rate.  Effectively, you pay the same rate to use a new phone or to stay with the old one, so it’s no surprise that iPhones sell briskly and no surprise that the company sells an increasing record number of new phones with each introduction.  Every two years there are more “old” iPhones than ever and more people ready to change.  But this is a digression.

In today’s markets, where there is no forced obsolescence, we need other reasons to buy new and there are smaller numbers of new buyers entering the markets for the first time.  Smart vendors have realized that this means taking a different approach to sales and marketing.  Rather than the selling-to-anyone strategy of early markets, smart vendors today recognize that they have to model who their customers are as well as model the sales cycle.  For many this means using social tools but it also requires a different set of techniques with the tools themselves.

In one approach, marketers simply substitute outbound social media for things like email and direct mail.  This gets them into social but not very effectively since their technique is still decidedly old school but with new technology.  In my research, more vendors find themselves right here at a transition point somewhere between conventional marketing and social marketing.

The other approach, which I think is closer to “real” social marketing, marketers make great efforts to capture customer data so that they can filter it for telltale signs of interest.  The same approach also works for service organizations seeking signs of customer dissatisfaction.  That’s all good but it is also limited.  If a vendor relies on keyword filtering or hashtags it will miss many instances that need a little nuance in the filtering.

The nuance takes a lot of forms.  I once did a small project in which I searched for sentiment.  My criteria were simple.  In repeated Google searches I looked for two word combinations, a company name and the word ‘sucks’.  Now, I will admit this was crude but it was also extremely effective.  Suck may be the generic summation and judgment in our society for all that is wrong in any situation.  My searches always came up with hits — hundreds of thousands of them.

So, the experiment proved a point but it also proved to be a rather blunt instrument.  The search approach did nothing for a legitimate cry for help like Company + Product + Problem unless I made an explicit search.  But you can see where this is going.  If you had a way to do all kinds of searches at once you could turn up signs of people interested in a solution or a product category, people looking for help and people upset with something related to your business and much more.

To get there you need analytics and not just one kind but several.  Humans can determine the difference between someone with a real problem and somebody just being sarcastic.  Computers need to do multiple scans of the data using different software tuned to each to arrive at the same conclusion more or less.

In social marketing today there is a proliferation of software packages that help marketers to get close to understanding customers and markets in multiple dimensions.  There are tools for emotion analysis, natural language processing (NLP), predictive and trending analytics, affinity and segmentation and influence.

Last week at Cloudforce, New York, salesforce.com announced the Social Insights Partner Ecosystem, a partnership between third party analytics suppliers and its Radian6 division.  The announcement’s significance is that Radian6 users can now process their social data through as many filters as make sense for their situations.  This was an important introduction because it addresses the way we market (and sell) today and it’s different from the way it was several years ago.

Now let’s go back to our original discussion.  In a marketplace as constrained as today’s it’s critical for vendors to understand at a very fine grained level what customers are thinking.  Are the installed customers generally happy?  What are their simmering issues?  Might we want to proactively address those issues before we introduce the new version of the product that won’t be successful unless we have significant buy-in from the base?

What about the possibility of gaining net new customers from the competition?  How satisfied are our competitors’ customers?  What openings might there be?  How can we exploit them?

Don’t for get brand new customers.  What ideas are trending in the market that relate to our business?  Finally, are there new product ideas lurking in the data stream?

To me answering these questions is the key to successful social marketing because they are crucial to success in business today.  Salesforce’s announcement suggests to me that they continue searching out Blue Ocean opportunities — markets and niches that have either not been penetrated at all or that have only been lightly touched.  I expect that our dependence on social marketing will increase and that the approaches now being proposed through announcements like this will be critical to future success.