Common Sense

The Liquid Network: What it is and why it matters

Water has amazing properties.  It is in continuous movement.  When it is “organized”, it can move together with tremendous force. But it can also evaporate, condense and fall down as precipitation.  If you try to pick it up, it simply slides out of your hand. In many respects, water decides what water wants to do.  It appears to be predictable in its patterns, but it can surprise you at anytime. 

 

Same for customers online.

 

We are entering the age of the Liquid Network after wallowing through the age of the Illiquid Network….one filled with catalogs that you get whether you like it or not…emails that repeatedly show up in your inbox…ads that pop up in front of you…..all ways that companies decided to communicate to you…at you…..

 

In the world of Liquid Networks, the game is different.  We can access the world’s greatest operating system – the web – by ourselves.  We can access content of our choice wherever or whenever we want.  We are starting to decide more and more how we want to be reached by companies and each other.  Our loyalty to communities can last over time, but if there is a reason to move, we move.   We constantly evolve who is in our network.  Essentially, we are in control of our own liquid networks and we decide how they work best for us.    And we don’t hesitate to change them.

 

I believe there are five key principles of the Liquid Network. 

 

#1 – Word of Mouth Drives Interest & Action – whether we know it or not, we generally like to see what is cool.  We may decide on our own which news is worth listening to, which communities are fun to join, which apps we talk about, but we also naturally gravitate to what is interesting, new and hot, according to our peers.  Word of mouth matters online.  If the content is interesting, we listen and learn.  We count on our friends to share what is important.  And we adjust our content flows as our needs change.  We’re not locked in to a pattern that we are aware of.   We’re fluid and we’re listening. 

 

#2 – We Decide Who We Listen to at Work – we used to be limited to what our department manager told us in conference rooms or via memos or other closed systems.   Now, with Yammer and IM and internal blogs and forums, we decide who is relevant to our work.  We decide who we will listen to….and we don’t overtly tell anyone this is the case, since we don’t need to.  We morph our network based on our needs, not based on the mandate from headquarters. 

 

#3 – Our Learning Habits Change with Technology – as video has matured, we have decided that YouTube is a great place to have fun, learn and share.  It’s why YouTube is the 2^nd largest search engine.  We may not realize it consciously, but we can absorb content far quicker visually than we can via the written word.  We’ve decided that twitter is useful, so it takes off.  We decide what is successful and make it happen by our actions.

 

#4 – We Decide Which Communities Matter – not so long ago, many folks said Facebook would never attract people in their 30’s, 40’s and 50’s.  However, people in their 30’s, 40’s and 50’s never heard this and have flocked to Facebook.  The Liquid Network doesn’t listen to prognosticators, they listen to their friends. 

 

#5 – We are Technology Agnostic, but Results Driven – we don’t care about the name of the software or platform.  We simply want our content in the device we want it in whenever we are ready for it.  We’re loyal to getting the right content and we’ll go wherever that is.  Results matter more than the name of the technology.   

 

Liquid Networks will change based on personal desire, peer influence and technology.  They will change far faster than the average company can plan against.  Only folks who are actively involved online each and every day will see the subtle changes at work as the networks they are participating in change. 

 

The reality is we’re all part of Liquid Networks and that’s the way we roll. 

 

All the best, Bob

Return on Information – Why Social Media Requires New Thinking

No matter how many times we all say it, we can’t help ourselves in applying old measurement models to measure new ways of doing business.  It’s human nature.  It makes us feel comfortable.  And it justifies our investments in platforms.  The only problem is that it is often wrong, particularly in new areas, such as social media. 

 

Think about your company.  I will bet you have a lot of data and research.  You have dashboards.  But you don’t receive “actionable insights” every day or  week that can improve your business.  You’re stuck looking at old data about stuff that happened weeks or months ago to justify whether you should continue a project or activity.   The old way is to look at data and then contemplate what is next, rather than the new way, which can lead to immediate action, maybe even during your meeting.  You are not satisfied with the old way of doing business.  You know it in your gut. 

 

So change. 

 

What’s really required is a more intense focus on “Return on Information”, which is directly related to “Return on Investment”.   Here is a way to look at why this is important.  

 

Social media and the online experience are not the only areas that are immensely quantitative.   Yes, in social media we can see views, visitors, downloads, posts, comments, registrations and much more.   But, in baseball, my favorite sport, we can see hits,  runs, strikeouts, walks, ERA and an endless number of ratios and percentages.   There are many other examples, of course, but they are just random data points until they fall into the hands of a leader. 

 

The key is how people use data to get a return on information.  If you are a baseball player, you study a pitcher and catcher so you know when to steal second base.  If you are a pitcher, you’ve studied a hitter’s habits so you know where they are weak and how to get them out. 

 

It is essentially an amazing capability to take statistics, create a great “cumulative gut feel” and then utilize it to be successful, often at a time when the data is not right next to you. 

 

Leaders in social media are like the best baseball players.  They have every stat at their disposal, they know the habits of their marketplace and they are ready to meet the needs of their customers due to their fluency in what matters and their gut feel on what is needed.  The rest of the world is just getting up to the plate and  swinging at whatever pitch is thrown to them.  Guess  who wins. 

 

Here are four examples of how you  can get a better return on information and avoid common traps today. 

 

#1 – Share of Conversation Matters, Not Blog Traffic – if you measure blog traffic, then you are in the wrong place.  Your best customers are subscribing to your blog in some manner, so they will never actually visit your site.  So what matters is to measure share of voice on key topics that you are addressing and to understand your share of the conversation.  Once you do, you know which influencers you need to keep in contact with.  You’re getting a return on information that is valuable. 

 

#2 – Customers Appreciate Relevant Next Steps -- think of Twitter.  Which matters more – that you have a lot of followers or that the followers you have get real value from your content and conversations? When you think about it, it’s obvious.  What matters is  that we can take a relevant action, if we want to, as a result of receiving your content.  Twitter has these examples, ranging from OneKingsLane to Zappos to Dell to Kogi BBQ.  Imagine if we took this one step further and really helped society, for  example, by making it easier for people with a form of cancer to find the right clinical trial or for homeowners to get the tips they need to improve their carbon footprint and did it in a way that didn’t require you to understand how to navigate a maze of websites.  If your conversion rate goes up due to highly targeted and useful information, I would say that is valuable…and cost-effective…and customer-driven….anything not to like about it?

 

#3 – Community Alerts Are Needed, Databases are Just Big Closets -- so many people like to build databases and “capture” people’s info in them and then brag about how many people are in it.  Hello out there….does anyone know where this has worked really well?  If you do, please share.  There seem to be more databases than people sometimes, but they sure aren’t what customers want.  I know I don’t brag about how many  databases I’m in to my friends.  Customers want us to know their preferences, so they can get information or alerts they want when they want them that  are actionable.  So, if I want to know when a 2 terabyte Western Digital portable hard drive is available at <$300, for goodness sake, don’t tell me about every 500 gigabyte or 1 terabyte drive you have ever created.  Just find me when you are ready and tell me and I will buy it that day.   I like my Western Digital 500 gigabyte drive, by the way, but do need to upgrade.   Return on Information, when done well, will enable us to eliminate costly ways to communicate today. Imagine junking your email lists someday…..

 

#4 – Integrate Ideas to Build New Products & Services, Don’t Just Collect Them -- if you receive ideas from your customers, the key is to “gather, integrate and report”, ala Starbucks or Dell.  If ideas impact your future products and services because your  engineers and designers are learning together with customers, you are receiving a tremendous return on information.  If you simply gather ideas and call this a victory, you have actually made it worse, since you’re only pretending to care.  The value of partnering with your customers goes way beyond any short-term economic value.  It’s the way of the future. 

 

There are many ways to look at Return on Information.  The key is that you know how to utilize your statistics to figure out actionable next steps every day to improve your value to your customers. 

Customers are hoping you do this, I’m quite sure.

 

All the best, Bob Pearson

Do You Know the Employees or Agencies Who Are Gambling with Your Reputation? The Importance of Disclosure…..

If you work at a company and you find that someone is talking to the media without authorization, well, watch out.  We know that is not acceptable. 

 

If an employee wrote blog posts under an alias so no one knew who they were and recommends your product, you  would tell them to stop immediately.  You might even fire them.   

 

If an employee suggested that you ask customers to give testimonials for your products in offline ads without ever reviewing the product, you would  throw them out of the conference room! 

 

I will bet your policies are clear.  Your ethics are strong and your instincts, your common sense, is right on target.  You know what to do and how to act in the offline world. 

 

So why are we allowing unnecessary risks to be taken in social media?  Why are we allowing others who haven’t read your policies to gamble with the reputation of your company or brand? 

 

Let’s think about how easy it is to conduct proper disclosure. 

 

If an employee or your agency or one of their sub-contractors is speaking/interacting with online outlets, they should do this as part of your policies and umbrella of authorization.  Can you say today you have that covered? Have you clearly communicated to everyone who works for your company?  Do your agencies know the rules of the road?

 

If an employee writes about work  related issues online, they must follow your  policies.  Period.  No exceptions.  Don’t need a Ph.D. to figure this out.

 

If a third party is giving a testimonial for your product in any online forum and you are paying for it or sanctioning it, you are certain they are following your company policies.  You know what your vendors are doing on your behalf because your brand’s reputation is that important to you.  You’re  not “hoping” they are doing the right thing.   

 

So what is reality?  Well, the good news is most people want to follow policies and see themselves as ethical.   However, I am continually made aware of examples, such as the following:

 

A company is allowing blog posts to be done reviewing their products, but its unclear if the bloggers actually reviewed the products.  Ouch.

 

An agency is endorsing a new offering of a company but not identifying who they are.  Wow.

 

Third parties are putting disclosure so low in a blog post that the majority of readers will never see it or realize a disclosure occurred.  Why?  Isn’t it more powerful to hear direct conversations from a company or it’s representatives that are honest, candid and real-time?  What am I missing?

 

Here’s the key point.  Nothing is more important than the reputation of your company and its brands.   You can build tremendous value via social media for your brand, more than ever before.  Social media represents the most direct and best way to build a long-term and valuable relationship with your customers. 

 

Of course, you can also do harm if you do not oversee how your brand is being represented by your employees, your agencies, sub-contractors and freelancers.   

 

Are you managing your reputation or are you a gambler?  It’s worth thinking about.    

 

All the best, Bob

 

Note: I did not use any links on this post, since my goal is not to out people or firms, but to have a conversation on the importance of this topic. 

When Will E-Commerce Become E-Community?

When E-Commerce started to gain traction in 1995-96, many people thought that online sales would be cute to watch, but not substantial.   After all, how could customers trust giving their personal information to a company online?  How could they review a product as well as they could in a retail setting where they can touch, feel and discuss the product with a human being?  I mean, come on, who would have been crazy enough back in 1995-96 to think this would really be a substantial source of revenue?  Well, how about Amazon.com, iTunes, Dell and many others.  E-Commerce is now mainstream.   That game’s over.  

 

And now, in 2009, we’re ready for another revolutionary change.  One that will be met with equal skepticism.  It’s the long overdue morphing of E-Commerce into E-Community.   Think about how we make it hard for customers today.  We ask people to visit us at our .com and at sites we build for specific brands, including social media sites – a proliferation of places that are often unconnected.  We are too site focused.  We are too transaction focused.  Most companies are trying to get customers to visit and buy, hopefully in one visit.     The customer doesn’t visit for long on a site, but we sure hope they buy when they are there. 

 

There’s only one problem.  Customers spend <1% of their time making purchases online in their entire lifetime.  99% of their time is spent browsing and socializing with peers.  In other words, they have often made their decision before they visit.  And they are not that likely to be talking with your company directly before they make this decision.  Their peers are more likely to influence their future purchase once they leave your site than you are.

 

Imagine you are running a local camera store in a mall.  What if your customers had to go to a different mall to find out about your cameras because you only provided pricing and content on your cameras, but they didn’t get enough context to help them decide?  What if they spent most of their time asking their friends about your products before they came in to your store?  And what if you realized that all of the advertising in the world didn’t help them make better decisions, since it really just increased awareness and they still had to answer their questions outside of your store.  To cap it off, when customers visit your store, you are never really sure who they are or know what they want until they decide to buy or leave and then it is too late.   You are really analyzing your customers habits after they leave, not before they arrive.  If this was the case, you would realize you had a model in need of major improvement. 

 

Online, this is basically what happens today.  Customers ask peers 75%+ of the time for advice on what to buy.  They go to different sites than your own to figure out what to buy.  They are influenced far more by blogs and search and forums, e.g. valuable peer-driven content, than they are by ads.  If they are convinced by an ad to visit your  site, they often realize they don’t have enough information, which is why they most often leave to learn more before they come back, if they do.  And since they are only visiting your site for a transaction, you know very little about them.  If you have single sign on, you may know their purchase history, but you don’t know their passions, what they like to talk about online and how they want you to relate to them.  You are not really partners.  You don’t have a strong long-term relationship.  You have a .com that may provide a wonderful transactional experience, which is great…..until the next purchase is ready to be made.     

 

Customers want to visit less sites, engage in the conversations that matter to them and do it in an environment where they can gain their peer’s input and decide when they want to socialize or browse or buy.  They want a community to be their community, not yours. 

 

The future, I believe, will involve the convergence of E-Commerce sites into E-Community sites.  Leaders will create communities that enable customers to gain the benefits of contextual browsing, so relevant content is at your finger tips (if you want it).  Blogs and forums will be fully integrated.  You will be able to co-shop and co-learn with your peers via remote access technology, so a fellow customer can walk you through the site in a live manner and answer your questions, whether they are on purchase or support.  Ratings and reviews will be more personal, so you can ask the reviewer for more information or you can ask peers to help you do an instant review together on your own.  You can save your content in a browsing cart for later use, if you want, since you might not want to buy something for months.  And you could do all of this without ever seeing a single banner ad, pop-up or any other annoying reminder. 

 

For customers, it would increase your knowledge.  It would be peer-driven.  For companies, your representatives who earn the trust of the community will be welcomed as peers, since you are there to help customers enjoy their long-term experience with your brand.  The participation would be direct and personal and it  might actually become your favorite place to learn, shop and hang out.

 

I believe it is the future.  And years from now, it will seem rather obvious. 

 

All the best, Bob

Twitter: The Move from “Why” to “What” to “How” and soon to “Where”

We move so fast in social media, that it’s a good exercise to step back and reflect now and then on the pace of change. 

 

In many industries, such as pharmaceuticals or energy, a new idea may take 10 or more years to become available on the market.  Think of prescription drugs or the first use of a new oil field.  Even in technology, the advent of the worldwide web in 1989 didn’t cause us to drop everything we were doing overnight and change.  The reality is that it is normal for change to occur over a decade or more. 

 

In social media, our ability to use a new platform or tool immediately can sometimes cloud our perspective on it’s long term utility.  We all fall into the habit of judging what a tool is doing “right now”, rather than what it will evolve into.  Why?  Well, it’s easy to analyze what is in front of us.  Much harder to see around the corner.  And yet, history shows that what’s around the corner is often much more interesting. 

 

Let’s focus on Twitter today, as an example.  When it started in 2006, it was met with “why” as in “why would I ever use this tool”?  That evolved by March, 2007 at SXSW as bloggers answered the why.  It was a completely new way to keep in touch in real time, quickly, accurately and with a dash of fun.  So, the momentum slowly built and slow is accurate.  It really wasn’t until the fall of 2008 that Twitter started to become a tool where larger numbers of companies and individuals were asking the “what” question, as in “what value will this bring to my business or effort?”.    The what started to be answered by Zappos, ComCast, Dell, Kogi BBQ, J&J, GE and many other companies who realized that Twitter could drive revenue, improve customer service, serve as a great way to share company information and much more.  In 2009, we are now in the land of “How”, as companies across the board are addressing “how they will most effectively utilize Twitter”.  It’s no longer a question of should one participate, but how do you do it in the best way for your company. 

 

So, in three years, a lot has happened.  An amazing amount of progress.  But, we are yet to address “where” as in “where does this tool/platform evolve and how does it truly disrupt how we do business?”   In the “where phase”, we’ll start to talk about topics, such as “How do you build a global network of twitter accounts to drive revenue for a particular product? Today, our best examples tend to be U.S.-centric, yet Twitter has a very strong global audience. 

               

We’ll also address much more provactive topics, such as “can microblogging replace email”?  After all, who enjoys getting emails in their inbox reminding them constantly of discounts?  Marketers know emails have low utlility, but they hope that the law of big numbers works in their favor.  Send out a gazillion and some folks will respond.  You cannot get more counter to the revolution of social media.  I am fairly sure there will not be protests in cities worldwide if email advertising stopped tomorrow.   All we have to do is develop a way to create one message and deliver it to the  account you want (Facebook, Orkut, LinkedIn, Plaxo, etc) on the information that you have expressed an interest in receiving, e.g. size 36 blue jeans of a certain type when on sale vs. “Company x now has 25% off everything on Saturday”.  When customers can get what they want wherever they are, email is irrelevant.  It will become an unncessary middleman between a company and its customers.

 

So back to perspective.  Twitter is just getting started.  We are all just three years into a journey on how to share content with each other in new ways that are more cost-effective, more targeted and, ultimately, much more in line with what we all want as customers. 

 

The next three years will bring change that will make the first three look simplistic.  Will be fun.   

 

All the best, Bob

 

Note: I’ll be speaking May 5^th at the www.gravitysummit.com  at Stanford University on top social media trends for the Fortune 500 and moderating a panel at www.twtrcon.com on May 31^st in SF.