Why Social + Mobile = Shopping

July 27, 2010

What happens when you take two hot growth areas—Social Networks and Mobile–and combine them with good old fashioned shopping? You get a phenomenon people are just now beginning to understand: the convergence of Social, Mobile & Shopping—let’s call it SMS for short. 

SMS - Social, Mobile & Shopping

 

What’s the SMS convergence? It’s the increasing ability of shoppers to use social networks to inform their shopping experience, access information about products, and broadcast their product experiences – all in real time via their mobile phone. 

Let’s look at the trends in Social Media and Mobile that are powering this convergence. 

Social Media Trends

  • Social networking penetration is increasing.  Facebook now has over 500 million users, growing its user base by +69% from 2009 to 2010.
  • Consumers are spending more time with social networking.  In the past 3 years, the average time spent has risen from 2 to 6 hours per week.
  • Social networks are mass.  There are now more people aged 50+ using social networks than people <50. They’re not just for students anymore—anyone can be reached thru social networks.

Facebook: Social Networking Growth

 

Mobile Trends

  • Penetration is growing. Within 10 years, there will be as many mobile phones in use as there are people on the planet.
  • Smartphones are taking over.  Smartphones are growing disproportionately fast. It’s projected that by the end of 2011, more people in the U.S. will use Smartphones than standard cell phones.
  • Usage is becoming more sophisticated.  With more Smartphones, come more apps. The average Smartphone user has 22 apps versus only 10 for regular cell phones.

Smartphone Penetration (image from Nielsen Wire)

 

How Social Networks & Mobile Intersect

The stats above probably confirmed what you already knew: Social Networking and Mobile are high growth areas. What you may not have realized is this: Social networking and Mobile are increasingly intertwined. Specifically, social networking apps are: 

  • #1 on the iPhone
  • #1 on the Blackberry
  • #2 on Android phones

It’s easy to see where this is all going. Social networking on Mobile is going to get bigger, more sophisticated and more enabled over the next few years. And this has some interesting implications for shopping. 

Social Networks & Mobile

 

Enter Shopping – A Social and Information Driven Activity

Social networks and Mobile are ideally suited for shopping. Why? 

First, shopping is a social experience.  People love to shop, but they really love to shop with other people. Unfortunately, this isn’t always possible. Enter Social Networking on Mobile. 

Second, shopping is about finding the right product at the right price.  This requires information. Consumers can access the opinions of their friends and acquaintances as they shop. And they can get real time access to valuable information—pricing, quality, etc.– about products and services. 

Third, people love to share their experiences with products and services.  Going forward, consumers will be able to broadcast their own shopping experiences via mobile, to both friends and others, and in close to real time. Had a bad experience with the service desk? Consumers will tell everyone they know—before they leave the store. 

Social Media & Shopping: Users Share Experiences

 

5 Actions for Marketers

The SMS convergence has numerous implications for Marketing organizations. Here are 5 to think about: 

  1. Brands must be open and transparent to win in this environment.  As I wrote in a previous post,  consumers are becoming more knowledgeable about your product and your company. The merging of Social and Mobile only accelerates this trend. Brands cannot afford to hide.
  2. Brands have an opportunity to improve their consumers shopping experience. Brands can now create apps and content that make their target consumers’ shopping experience better. Better could mean simpler, easier, more social, or any other improvement that’s relevant to their shopper.
  3. Brands must invest in creating Social CRM capabilities. Jeremiah Owyang has written extensively about the need for Marketing organizations to create social CRM capabilities. That is, to create a function to listen and engage with consumers in authentic dialogue about your brand.
  4. Brands can drive Social Shopping.  Making the buying process part of a social event is increasingly feasible. Disney recently created a Facebook app which enabled friends to buy movie tickets for the same movie. This is a great example of social shopping.
  5. Brands should experiment with shopping based App advertising.  The advent of Apple’s iAd system opens up a whole new advertising platform. This will create all kinds of new opportunities to advertise to consumers in context relevant ways. Imagine your target consumer walking into a store, snapping a photo of the UPC of your competitors’ product via a shopping app to learn more. Is this a place you might want to advertise?

SMS – Now or Later ?

SMS, like most changes, isn’t happening overnight. So, there’s always a tendency to say “it’s not big, let’s wait to see where it goes…” But the trends are clear and CMO’s need to pay special attention. 

It would be wrong to suddenly shift huge amounts of your Marketing budget into a largely unproven set of opportunities. Yet, the most prudent CMO’s will invest in a measured approach to learning what works and what doesn’t, and ultimately learn how to win in this nascent but increasingly important space. 

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Zapped by Zappos – Learnings from CEO as CMO Tony Hsieh

November 9, 2009

The best CMO is a CEO who believes in Marketing. By this definition, Tony Hsieh, CEO of Zappos.com, must be one of the best CMO’s around. Hsieh, known for his firm’s digital and social networking prowess, had over 870k Twitter followers the last time I checked. I recently talked with Tony after he participated in a “What’s Your Digital?” panel discussion. And what he had to say might surprise you.

TonyHsieh

Tony Hsieh -- The Zappos CEO as CMO

Zapped by Zappos

Before that, however, let me tell you about my own Zappos experience—which is instructive. Seeking a pair of dress shoes for my new job, I went on-line to Zappos, and saw a great pair of shoes on the Mezlan Zappos homepage. I searched for the shoes all over the site — to no avail. Exasperated, I sent Zappos an e-mail, asking: “where are those great looking shoes?” No response. I sent another e-mail, and waited…and waited.

Finally, I received a short e-mail:  “Yes, you’re correct; we don’t carry that particular pair of shoes and will remove the photo from our site.” And they did. In fact, here’s the new picture sans shoes:

Mezlan_Shoes

Mezlan on Zappos - Without the Shoes

This is great customer service? So, I related my story to Tony. He seemed mortified, especially after talking about how much Zappos cares about customer experience. He then followed up to have someone reach out to understand what happened so they could fix it, followed by an offer to send me a free pair of any shoes I wanted. Now, not everyone gets to talk to the CEO about their poor customer experience, but Zappos clearly IS different.

What Makes Zappos Different?

Simply stated, Zappos believes that customer service = marketing. Instead of spending loads of money on traditional (and non-traditional) marketing, they focus intensely on delivering a great customer experience—and recovering from mistakes with grace and humility. Tony believes that “the Zappos brand manifests itself through every employee/customer interaction,” and that brand is a lagging indicator of customer experience. His key points:

  • “The phone is a great marketing tool” – I’m not taking about mobile marketing here. Tony made the point that 5 minutes with a customer on the phone is far better Marketing than any web experience can ever deliver. He loves the phone and bricks and mortar touch points and thinks they are often undervalued by companies.
  • “Culture is our number 1 priority” – Many companies talk a good game about culture, but Zappos actually lives it and uses it as a core part of their business model. Zappos has 10 cultural norms that they instill in employees. They interview for these 10 norms, evaluate employees on them in their annual performance reviews, and let people go who don’t follow them.
  • “Authenticity and transparency are really important” – Tony sees authenticity and transparency (to read more on this topic, see my blog post) as a core part of the Zappos brand. When reporters show up at Zappos, they’re shown the bathroom and lunch-room and then told to roam around and talk to whomever they like. Tony’s daily Tweeting is less about Marketing than it is about him trying to make Zappos more authentic and transparent for followers.
  • “Zappos wants totally engaged employees” – Tony only wants people working at Zappos who are really passionate about the company and delivering great customer service. How much does he believe in this? So much that the company offers every new employee $2k to quit after two weeks on the job – they only want the truly committed.

What About Digital and Social Media?

But isn’t Zappos a social media icon? What about Tony’s almost 1MM Twitter followers? Well, get this: Tony hates the “social media” tag. He says they don’t even bother to measure the ROI of their digital and Twitter efforts.

Further, he’s not a believer in creating marketing “buzz.” Instead, he believes the primary role of every employee is to create “positive customer stories” about their Zappos experience. If they do this–everything else, including buzz, will take care of itself.

Oh, and one more thing. Tony does believe in the importance of “influencers,” but not necessarily the digital kind you might be thinking of. He noted that to this day, when his mom calls, he really listens.

Key Learning’s for Marketers

First, having a CEO who really believes in the brand and customer experience sets the tone for the whole organization. This job shouldn’t and can’t be left to the CMO; it’s the CEO’s job too. The CEO and CMO need to be partners in driving a truly customer-centric, marketing focused organization and business model.

Second, actually delivering a great customer experience, particularly in a service oriented business, comes down to employees delivering each and every time they interact with a customer. Building a culture that attracts the right kind of employee and fosters this kind of performance is just as important as any Marketing program.

Zappos Secret Weapons

These are Zappo’s true secret weapons—their CEO as CMO and their unique culture. So what about my Zappos experience? I like Tony’s description of what employees are supposed to do: “Create positive customer/employee stories.” But what I love most of all is that Tony, as the CEO, does what he says. After all, you just read a story about how Zappos recovered brilliantly from a terrible customer experience. Clearly, Tony knows how to create a good story, too.

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Should Your Brand Focus on “Energy” To Drive Growth ?

July 7, 2009

What if I told you that one of your core beliefs about brand equity is wrong? If you’re like me, you were trained to believe that as a brand manager, you should define your key brand equities, develop marketing programs to communicate these to consumers, and over time, “own” these attributes. If you believe that, you’d be right, but not totally so. It seems there’s a special kind of equity your brand needs to own these days. And one that very few brands understand, much less drive.

Brand Market Value vs. Brand Consumer Value

In recent years, brand value has climbed inexorably higher, as measured by Millward Brown’s Brand Z Most Powerful Brands and others. Using the Millward Brown data, brand value climbed from 5% to 30% of the S&P market cap over the past 30 years. Brand experts cheered; it was an implicit endorsement of the great brand building efforts across companies.

Brand Market Values Rising vs. Consumer Brand Equities Falling -- A Brand Bubble ?

Brand Market Values Rising vs. Consumer Brand Equities Falling -- A Brand Bubble ?

But, a curious thing was happening. Brand equity measures, as measured by consumers, were falling.  Traditional measures such as awareness, trust, etc., were eroding based on surveys by Y&R Brand Asset Valuator (BAV). How could this be? How could market driven brand values be going up, while consumer driven brand equity scores were going down?

Causes of Declining Brand Equity

John Gerzema and Ed Lebar of Y&R think they know the answer. The markets were wrong. Brands and branding are in a serious state of disrepair. In their excellent and well researched book, “The Brand Bubble,” they cite the following for the deteriorating health of brands. They are declining because of:

  • Excess Capacity– There’s been an explosion of choice. Consumers are drowning in more products and services than ever. There is less differentiation and greater commoditization.
  • Lack of Creativity – With more choices, consumers increasingly look for creativity and unique experiences from brands. Yet most brands today are highly similar, and deliver modest incremental improvements.
  • Declining Trust – Brands considered trustworthy have eroded from 52% in 2007 to 25% in 2006. Why? Public scandals, corporate misdeeds and institutional crises. Perhaps more important is transparency of information on the web—no brand can hide or say things not consistent with reality – authenticity counts.

You may or may not agree with these causes. What seems inarguable is this – key brand equity measures have generally declined over the past 20 years.

Growing and Successful Brands

There is a small minority of brands that are growing both market brand value and consumer brand equities. Companies as disparate as Google, Subway, Lego, Dove and Axe have shown it can be done. When Gerzema and Lebar searched the data to understand what was driving this growth, they identified a new factor – “brand energy.” They describe energy as “the consumer perception of motion and direction in a brand.” They describe brands with energy as being irresistible and differentiated because they:

  • Move with innate purpose and conviction
  • Constantly reinvent themselves
  • Engage consumers on their own terms
  • Compel devotion
  • Move culture and categories

Branding Implications – From Current to Future

What’s interesting about their learning is the following: it refocuses marketing from what the brand currently delivers—a static state–to where the brand is going. Motion and direction mean the brand is going somewhere. Consumers want to be with brands that are on a compelling journey. They want brands that:

  • Create a sense of mission. Dove is about redefining beauty.
  • Continually surprise and delight them with new products and services. The iPhone and apps.
  • Engage them in a conversation, not talk at them. Subway’s fresh, healthy tips for parents.
  • Creatively use new communication channels. Best Buy people on Twitter.

These are behaviors consumers expect from great brands—now and in the future. There’s an implicit “contract” these brands have with consumers that says: we will be dynamic and ever changing in meeting your needs. And the brand is as much about the future as it is about the present.

This change in orientation from the current to the future is a huge mindset change for most Marketing organizations. Going forward, brands will still need to stand for important functional and emotional equities – bigger, faster, better, etc. What’s different is that to be successful, brands will need to spend an equal amount of time and effort communicating and delivering what they’ll be in the future. Because the most successful brands will provide energy–direction and motion that helps take consumers forward to where they want to go—not just stay where they are.

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How Authentic Is Your Brand ?

June 23, 2009

Authenticity is a term we hear bandied about a lot these days, but it’s one that you need to pay particular attention to. In a recent post “What Marketers Can Learn From The Obama Campaign — Part 2,” I talked about the importance of authenticity in the Obama campaign. Authentic means honest, real and not manufactured–adhering to facts and supported by experience. And it’s increasing in importance because of several key factors.

What’s Driving The Need for Authenticity ?

  1. Crisis — The economic crisis revealed that things aren’t exactly what they seemed. Or, as Warren Buffet puts it: “when the tide goes out, you find out who’s wearing bathing suits.”
  2. Digital — The web has democratized information and consumer sharing. Brands are increasingly unable to hide as consumers uncover facts, inconvenient truths and rapidly share information. Advergirl.com has an excellent post on this at: “Social Media Demands Authentic Brands.
  3. Marketing Excess — An awful lot of Marketing feels like used car sales. Companies exaggerate their product benefits and often avoid the reality of their product experience. Marketers are partly responsible for consumers becoming jaded and less trustworthy of their messages.

Financial services marketing is a case in point. Battered by the economic crisis, subject to negative sentiment across the web, and Marketing that tells people to trust and be confident. In the land of happy, content, retired people walking on the beach and playing with grandchildren, few brands stand out as being different — and authentic.

Charles Schwab — An Authentic Brand

One brand that does is Charles Schwab. No doubt you’ve seen the unusual looking Schwab ads:

The Charles Schwab Brand -- An Authentic Marketing Message

The Charles Schwab Brand -- An Authentic Marketing Message

The ads have the air of authenticity. Why ? Because the Schwab brand:

  • Is irreverent– willing to say what other brands would rather not have you hear.
  • Shows real people saying what they think– and connecting with consumers real world experience.
  • Encourages a conversation: “talk to Chuck.” How can a brand be authentic without conversation ?

Becky Saeger, Head of Marketing at Charles Schwab notes:

“One of the most important and challenging things financial services companies are faced with today is rebuilding the trust of consumers. This principle of authenticity is central to rebuilding trust and conveying that you are trustworthy: You cannot TELL people to trust you, or even convince them to by telling them why they should. Every manifestation of your brand–from communications to products to human or web interactions–needs to be true to the promises of the brand, and deliver the actions that are proof of those promises and collectively signal trustworthiness. The only way I know to do that is for your brand and your marketing, and therefore all of the above, to be grounded in the authentic purpose and values of your company. Yes, this is a huge and potentially lofty goal, maybe even more an aspiration. But how else can you trust that your brand–buffeted about in the wild and crazy, social, digital, consumer-in-control world we live in–will rise above the fray and earn the trust of those very savvy and often disappointed consumers?”

Authenticity and Creativity

A final point. Authentic doesn’t equal boring. The Schwab campaign is very differentiated in the financial services space. The use of rotoscope animation enables the campaign to both feel authentic and look differentiated at the same time. A real creative hat trick and one that other Marketers could learn from.

So how does your brand rate on the authenticity scale ?

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What CMO’s Can Learn From the Obama Campaign — Part 2

June 9, 2009

In an earlier Blog post, I asked the question “Can politics teach Marketers anything?” and answered with some learnings from David Plouffe, the chief architect of President Obama’s election campaign. Plouffe recently spoke at the M50 CMO Summit I attended.  To summarize that post, I said Marketers could learn two important lessons from the Obama campaign:

  1. The importance of staking out a brand position and sticking with it. Consistency counts.
  2. The ability to leverage the brand’s strategic message across all relevent marketing touchpoints in a coordinated and integrated manner.

These are Marketing truths often forgotten in even the best Marketing organizations. But what else can we learn from the Obama campaign?

Brand Obama: A Consistent Message Across Media Channels

Brand Obama: An Authentic and Transparent Brand

Plouffe outlined how transparency and authenticity, both of which are discussed in depth in the excellent book “Radically Transparent: Monitoring and Managing Reputations Online,” were the twin character traits to the Obama campaign. In Marketing terms, these would be Obama’s “Brand Character,” or personality. The two are related and both speak to what is required for a brand — Obama or otherwise — to inspire trust and confidence.

Authenticity

Obama, according to Plouffe, wanted the campaign to be “authentic.” Over time, they learned — sometimes painfully — about authenticity and what it really meant to voters. When Will I Am came forward with the idea for his “We Are The Ones” song, the original idea was for the Obama campaign to produce and promote it. While control can be a good thing, Obama rejected the offer because he felt it wouldn’t be authentic. So Will I Am produced the song and it was a huge YouTube sensation with 3.5 million views–an authentic tribute to Obama.

In another example, Plouffe developed short video clips explaining to supporters various campaign topics–e.g. the Obama strategy in Florida; how they would use the web; etc. After several low production hand-held videos, someone in the campaign naturally decided the videos there was a need for more professional video. This led to new slicker, high production value video–which immediately prompted a barrage of complaints from supporters. Low tech was good–and authentic.

Transparency

Plouffe held a contrarian view when it came to campaign strategy and tactics–to be completely open and transparent with supporters.  He did so with the full knowledge that the McCain campaign would ultimately see the communications and understand the Obama strategy. He felt the benefits outweighed the risks. 

Example:  the Florida strategy. Plouffe developed a video which outlined exactly how they intended to win supporters, how much money they would need, and how it would be spent. Of course, the Republicans learned what the Democrats would do in Florida. But transparency was part of brand Obama and the video helped energize and ultimately win the Florida campaign.

Interestingly, the Obama administration is now extending transparency beyond the campaign with the launch of Data.gov, a website designed to disseminate government data to voters

What Marketers Can Learn

First, understand your consumer.  The Obama campaign understood that American voters were looking for authenticity and transparency in their president. Like good Marketers, they understood their consumer–and had a clearly defined brand character to address their needs.

Second, communicate in an authentic manner.  Authentic means honest, real and not manufactured–adhering to facts and supported by experience. The Obama campaign had a clear message, but beyond this, they communicated in a tone and style that increased the believability of their message.

Third, communicate with transparency.  Transparency means telling people exactly what’s happening and what they would like to know–even when there is some risk in doing so. Obama’s strategy for Florida was very clear to Democratic supporters–and Republicans as well.

So what did Obama gain with authenticity and transparency ? Trust and confidence. When people believe they are being told the full story, they’re treated as adults, and being told the truth, they’re more likely to trust and have confidence–something in very short supply for many brands these days.