Tuesday, 15 July 2008

Creating a Community Led Organisation

In the emerging WEB 2.0 world, the next thing since sliced bread is the leverage provided by your communities (users/ suppliers/ influencers) etc. The idea is to empower the community to contribute to product ideas/ innovation/ create content (the so called User generated content) etc. But the question is- how does an organization become community led, and how does one create a vibrant community in the first place?

Well, as it happens, there are entirely new models that are emerging out there that are entirely community led –the best examples I can think of are Mozilla and Wikipedia. Think about it- how can you create a community that is so engaged that it does work for you without getting paid? Mozilla is the creator of Firefox, the browser, which today has a marketshare approaching 20%- approx 1 in 5- which is truly amazing, because, unlike IE, Mozilla does not come bundled when you buy your laptop/pc.

So, what are the secrets to building successful communities?

  • The Cause has to be bigger than just creating commercial success - when you choose a cause to rally your community around, please ensure that the payoff to the community that contributes is beyond business- and has a big feel good factor about it. Mozilla's vision for the world is not a better browser, but a free and an open internet, which of course is enabled by the gateway to the internet, the browser.
  • The community has to be empowered- you have to delegate decision-making to the community- in other words, it is not enough to just tell the community- please do the work, but we will take all the decisions- in some cases this could be against the decisions in your organization, but so be it
  • There has to be sound leadership- a concern with large community led initiatives is that there are too many voices that might be pointing in different directions (classical Brownian motion)- hence there is need for clear lines of authority to ensure things happen
  • The guiding principles have to be very clear about what stays in and what goes out- it is really important to establish what the community will stand for, and more important, what it will not. These guiding principles/ or the constitution if you will, will perhaps be crucial to the community selecting itself, and ensuring that decisions taken are along the guidelines so established (eg Mozilla has taken a conscious call that it will not "sell" any of the browser real estate for commercial consideration, but will be happy to take money off search-engines by inserting those search engines into the functionality)
  • Define the core, but have plenty of peripheral areas- it is not always possible to take on all the ideas that the community is proposing. But one does not want to miss out on any cool ideas either. One way solve for this is to ensure that there are plenty of "sandboxes" where individuals can create stuff for the others to play around with, which, after a process of due diligence can be brought back into the core. This also increase inclusivity.
  • Think different about functions such as Marketing and HR-Mozilla wanted to put up an ad in a mainstream newspaper, they went to their community and raised $10-$20 from about 10,000 of their community, which paid for the ad.

Of course, the above is not to say that if all the rules are followed, the organization will become community led- but it is a start.

Saturday, 12 July 2008

Recession Busting: Same Sales and Marketing Outcomes at 1/10th the Investment?

We are talking tough times here- and the intent of this post is to provide ideas to organizations on how to minimize their sales and marketing investments, whilst not letting go of the outcomes.

We are very familiar with the way businesses build out their customer outreach. They tend to invest in standard marketing vehicles (Events, Market research, Media relations, Direct Marketing etc) to build awareness, and once air cover is created, the Direct Sales-force gets after customers and creates revenue streams. In general this is a capital intensive, high investment model- all the above channels cost serious money.

However, this paradigm can be turned upside down in many industries, and increasingly in many geographies. Why? Customers are changing their behaviour and business need to adopt, and if they do, they save a truckload. Consider the following:

  • 3 Reasons why you don't need a massive advertising budget:
    • If you have a "cool gadget", all you need to do is to send that gadget to the leading edge tech reviewers (zdnet, cnet, gizmodo etc) who would be delighted to review the gadget and put up the video/audio reviews up on their websites. Witness the phenomenon of the apple IPhone (the 3G variant of which was launched this week). How much of the iphone information is coming to you from APPLE as compared to from some blog or some website or something else?
    • Your customers are predominantly searching for you online before they get to you- surely you should be able to leverage that behaviour by going after them in the online space? Target them through Search engine optimization/ through social networks etc?
    • Target alternative awareness generators- blogs, viral videos (youtube channel) which are accessible at a fraction of the cost.
  • Do you really need to have a big direct sales force?
    • If your product is mainly provided online, you can create "free trials" - a 30 day free trial of a software package can do wonders to increase adoption and awareness, and what more, you get to observe your customers using the products through analytics- halve your direct salesforce
    • Product design should be leveraged – entice customers to try with really simple user interfaces and processes, but once they are engaged, encourage them to get to try more complex features and functions, and increase revenues
    • Ensure that you make it very easy for your customers to compliment you and give you feedback (discussion forums etC), so they are selling to other customers
  • Slash all early stage awareness building events:
    • Given people are going online to find out about you, why invest at all in early stage awareness building through events?
    • Are those stalls, product demos, and the physical infrastructure that typically support events really required?

Typically, the above three tend to be the biggest drain on your costs, and hence any significant impact on the above are going to clearly flow to the bottom-line.


Customer forums: the need for “physical touch” in an online world

And yet, people buy from other people, and given that our evolutionary (Darwinian) pace of change much slower than the shift to online- how do we fulfil our need for physical contact? the need to kick the tyres, to get to know who we are buying from, to engage with others who have done the same? This, I would argue is emerging as a bigger reason to invest in a customer forum.

SAP does Sapphire, Oracle does Oracle World, and many organizations that operate in the B2B space tend to get their customers together for a couple of days during the year. There is a lot of organization resources that gets spent (money, management time, ops, etc). What is the value? The value is in creating stronger relationships, and the consequent cross-sell and up-sell opportunities- in short, a revenue accelerator.

Historically, (early 90s), events were perhaps the best means to increase awareness and access the customers that b2b businesses wanted to sell to, and for the customers to find the businesses as well. However, with the advent of the internet, the ferocious change in how businesses and consumers court each other has been breathtaking. Hitherto, a lot of money was being spent in events, and in field sales, the emerging paradigm is to leverage the website and online channels to in the early phases of courtship (google search/ store fronts / free trials etc). This has resulted in a lot of interaction shifting online, and consequently, a significant reduction in person to person contact.

If we extend this notion a bit further, we should be creating a community, which will share, exchange ideas, and create value by interaction- and the physical event is an integral part of that.But beware- the online world is surely creeping up on this physical world too- there is a fundamental need to integrate online capability to create a richer "community experience" even in the events.

Sunday, 6 July 2008

Hype and destruction in product launches…

Remember Zoost? The video platform promoted by the founders of Skype? For all the claims including you-tube killer/ the "will change the way you watch telly" / etc, It has had an underwhelming response (atleast so far) from the marketplace and the community that was supposed to adopt it.

There is a lesson here for us! Excess hype can be bad, period. Thinking through, this seems logical- hype fuels consumer expectations, and the more the expectations, the more difficult that the product will match up. Add to all this the fact that hype cannot be controlled, and you have a situation where expectations could spiral out way beyond anything the product can actually deliver on. There seem to be two particular situations that seem to make for a particularly difficult outcome:

  1. When the hype is being created around a yet-to-be-launched-product. Since the actual product is not in the marketplace yet, the expectations can get very unrealistic, as it comes down to pretty much the imagination of people, and hence the possibility of reality exceeding expectations becomes very remote (For all his marketing savvy, Steve Jobs and the iphone came pretty close to this)
  2. In a "tech savvy" high tech product space, where blogs and other alternate non traditional media hold serious sway because more of them are created by "experts", and more of them are consumed by would be users, the potential for hype is huge- a rumour somewhere can, in no time, become a self-fulfilling prophecy, with a 1000 blogs writing about it in no time.

So, what can you do? Well, as someone who is launching a new product just be extremely careful about what you say or do not say about the product- the adage "under-promise and over deliver" might actually be a great way to go. IF your product is already in the hype territory, you are better off ensuring that you cool it right now- humility can be "cool".

Also, as a consumer/ investor etc, tend to take with more than a pinch of salt anything that is hyped

And how do you recognize the symptoms? If too many people are talking about a product yet to be launched, claims are being made of it being a mainstream product killer/ the miracle cure etc, you know you are in hype territory.