Lessons Learned: Quit early, quit often
Sunday, March 9th, 2008Seth nails the sunk costs considerations in technology when evaluating how to go forward or not:
One of the most important lessons they teach in business school is to ‘ignore sunk costs’. It doesn’t matter how much time or money or effort you’ve invested in something, if that project no longer makes economic sense, you should stop.
Another benefit of quiting early? You can avoid brand erosion and profit drag by quiting quickly. Sunk costs should also not influence pricing if you make it through the toll gates. Read the whole thing here, gets a little dippy and I’m not sure what “winged”.
Social Media: Reducing friction and establishing a NEW discipline
Sunday, March 9th, 2008What is social media? A better question is what isn’t. It’s not big, it’s not broad and it’s not for sale for the most part. That’s a HUGE problem for traditional marketers. To keep it simple - you know social media when you see it. The Social Media Club provides this definition/framework:
Social (from Merriam Webster)
“1 : involving allies or confederates
2 a : marked by or passed in pleasant companionship with one’s friends or associates social life b: SOCIABLE c: of, relating to, or designed for sociability
3 : of or relating to human society , the interaction of the individual and the group, or the welfare of human beings as members of society < social institutions>“Media (from Merriam Webster)
” 1 : a medium of cultivation, conveyance, or expression;”Wikipedia defines Social Media as “the online tools and platforms that people use to share opinions, insights, experiences, and perspectives with each other. Social media can take many different forms, including text, images, audio, and video. Popular social mediums include blogs, message boards, podcasts, wikis, and vlogs.”
By this definition social media is essentially a set of infomediary channels. These conversational channels are equally available to individuals and corporations which makes “controlling the message” or positioning the brand a little more dynamic. The dynamic and egalitarian realities are requiring organizations to add corporate bloggers, community managers and SEO folks to the payrolls to shape the discussion. This latest corporate internet frenzy does have a little bit of the “we got to be there” feel of the early internet which spawned the explosion of webmaster roles in IT which transitioned to more creative roles in marketing many organizations. Technology has a way of developing new disciplines and requiring new skills and investment in people - social media is no different. Social media may actually be organizational development writ large - a new model for organizations, Social Management.
With the new roles on the org chart comes a new worker, a connected conversationalist, where work and life are a balanced set of commingled actions which are agnostic to both place and time. I’m not saying everyone is going beduin, but personal is becoming professional and where and when work happens is different. Markets are becoming social, professionals are becoming personal and brands, at social media’s most atomic level, are their tags.
Social media is changing relationships within a business and how everyone at a company contributes to the success in the marketplace and how customers are re-defining old brands and showcasing new brands. The change will be bigger than it appears on the surface.
Yes - looks are deceiving and that’s a fairly sweeping statement, but the new roles in organizations and the proliferation of platforms such as Facebook and Twitter ARE the leading indicators of change, it also loosely ties into my recent theme on corporate gardening, which I see as a good thing. (The other challenge is there is not a whole bunch of empirical data, so you take what you have and create a plausible relationship and hiring practices for social media roles is a fairly compelling data set.) Social media is on the edge of mainstream for corporations the graphic from Indeed below shows the historical growth of social media roles in the marketplace:
The initial focus of change in many companies is within the marketing group, but support and development jobs are also carrying the social media tag. For now, social media is changing marketing more so than any functional group. When will it be a requirement to show your social portfolio as part of the interview process? How long until there are generally accepted new media launch toolkits and methodologies in the marketplace which start showing up on monster profiles and ads?
Understanding/Overstating/Underestimating the Impact
Social media is not so much about direct influence of revenue, but more of a market optimizer - which DOES impact revenue. Current revenue streams AND future opportunities. Essentially social media aids in making markets more efficient with pervasive communication, connectivity and real-time transaction capabilities. It’s a fundamental change in market mechanics.
Think about it - People buy from people right? Social media is about people. Not huge logic jump that times they are a changin. The change in the mechanics can be seen in the rise of social media platforms as preferred places for interaction and research for many consumers/individuals/employees. The emergence of the social customer isn’t just the re-tooling of word of mouth marketing, it is a change in influential scale - a single customer’s opinion can now influence 1000’s of prospects, not just a handful at the barbershop.
Social media is essentially just starting to prime the market pump - removing the air from traditional “brand out” messaging and requiring more substance for “brand flow”. It will clearly take some more time to have all the “plumbing” in place and air out of the line, but we can see that folks removing the air from the buying process, such as Cushman’s Toyota Yaris experiment. Don’t like the pump metaphor - another way to look at it is as a market lubricant which reduces transactional friction caused by the legacy market mechanics.
A Frictionless Market
Markets traditionally are made less efficient due to brokers, intermediaries, traditional marketing, limited access, price variability and the inherent transactional costs of the exchanging goods of value. The fundamental mechanics of communication, value creation and brand management has been diffused into a community of infomediaries - customers, former customers, competitor customers, employees and former employees. For good or ill access to people, information and influence impacts loyalty, awareness and product placement. There is a downside - the risk of commoditization exists with the reduction of transactional friction in the market. Easier to compare, easier to shop - essentially accelerated discovery and understanding.
The Back End Brand
Discovery and access is changing the messaging imperative from who can shout the loudest to the biggest poplution to be considerably narrower engagement - a conversation. Reviews, diggs and micro-content will essentially piece together a brand mosaic which is the brand identity. Today marketers spend time, energy and money on developing mass awareness and cultivating a sense of value before the commercial transaction. Social media is allowing the customer to do this now in parallel.
Essentially the front end brand investment seen today, will need to shift product focus on service and the ability to influence the conversation in a segment. Brand management has moved from perpetuating a mass market myth to influencing post transactional conversations and community lore. Ultimately social media transitions the definition of brand and value to the service chain.
If this is the case - should customer care/support be part of marketing? Or should support be a standalone product with a product manager? Is this the new portfolio manager? This is going to be an exciting time and good market change. So as a marketer, manager or contributors what can you learn and unlearn to leverage this change in the mechanics of the market? I don’t know what the future holds, but I thank Jeremiah and for getting me thinking about it based on the Tweet below:
@oracletechnet says community managers (before social media) used to be called ‘editors’. I’d say they were called Support or Account team
Not sure I made a point, but sometimes you just have to press publish and move on…..
Social Brand Management - Shaping the Tag Cloud
Saturday, March 8th, 2008
If brand management is increasingly about customer input, feedback and how they share their experiences, does that mean more investment in “after the transaction” is required to differentiate?
Roadside Observations: Population moves and a sign of the times
Saturday, December 29th, 2007So I was doing a little bit of travel over the holidays and got to see a good bit of the back roads country and survey roadside advertising. The quality, product mix and “vacancy rates” appeared to have changed from what I historically remember. Although I will say that promotional messaging for empty billboards is getting much better. The other interesting thing is the use of “shared space” appears to be up for billboards….
Billboards may be a bellwether for the state of the economy and represent a great part of the cultural landscape which I like to appreciate. I originally wrote myself a note on this topic last week, but was reminded of the concept by Vaguery on twitter, who in real life is Bill and blogs over @ Notional Slurry. Economic trends and perceptions of the economy impact individual, local and regional buying behaviors and how marketers appeal to buyers.
Vaguery’s tweet of “…considering the likelihood of any Michigander doing real five-figure cookery” seemed to align with billboards, data and articles I’ve been reading/seeing, such as the USA Today piece I read over my free continental breakfast the other day. So things are changing - spend patterns, the movement of people and general open market activities.
The USA article spoke of the current housing woes and how they impact population movement. “Michigan hard hit by cutbacks in the auto industry and other manufacturing sectors” has seen population decline and housing value declines ahead of the rest of the nation. This was unscientifically verified as I drove around and saw more for sale signs than I think I have ever seen.
At the most basic level, demographic changes impact market dynamics - specifically how people market and what they market. With a more granular look at the population shift, by state, it becomes evident that Michigan and RI are seeing a different level of change than other markets.
With the change in the economy and population, the roadside marketing landscape has changed as well since general investment patterns change from all key constituents segments - government, national brands and local SMBs. This change appears to be visible in the current billboard mix being mainly casino oriented in Detroit - no longer automotive/manufacturing innovation related. The overall billboard content also appears to be on a different level of creative quality as well, not just the type of advertiser. I was able to find the following billboard just outside Lansing in Portland, Michigan which is an example of the changing billboard landscape throughout Michigan.
I’m glad I’m not in billboard advertising with a weakening dollar, tempered consumer confidence and the apparent need for cheap pepper spray as a stocking stuffer.
Lessons Learned: What is Value? Depends on how/when you look at it
Sunday, December 16th, 2007So I spent a good deal of time thinking about value this weekend for a couple of reasons:
1. I had to spend way too much time in a vet hospital for my dog panic and cost/benefit never really entered my mind, but I did do some quick budget math out of financial diligence - couldn’t help it.
2. I need to find Guitar hero and I can’t. But I did find out some guy paid $10,000 for one, not me though - cost/benefit entered my mind on this one.
3. The dollar menu at McDonald’s - how are those items only worth $1? I mean I like double cheeseburgers.
So I thought about it and realized that value is in the eye of the beholder or rather the coveter - but perhaps the marketer as well. Not sure if value is ever the same or within banded limits at any point in time and this is the most confusing thing about value. Value is about the buyer, so as a marketer and product manager know how can you optimize the value or perceived value of your product. Effective product placement can significantly change the value of something - right channel, the right package, the right promotion…. Often the value of something is marketed and delivered to market based on a plan, so perhaps a double cheeseburger is only worth a $1, if share of wallet is a key careabout. Value is situational for both the buyer and seller. So I’ve cut in a general overview from Wikipedia on Value for consideration:
The economic value of something is how much a desired object or condition is worth relative to other objects or conditions…
In neoclassical economics, the value of an object or service is often seen as nothing but the price it would bring in an open and competitive market. This is determined primarily by the demand for the object relative to supply. Many neoclassical economic theories equate the value of a commodity with its price, whether the market is competitive or not. As such, everything is seen as a commodity and if there is no market to set a price then there is no economic value.
In classical economics, the value of an object or condition is the amount of discomfort/labor saved through the consumption or use of an object or condition (Labor Theory of Value). Though exchange value is recognized, economic value is not dependent on the existence of a market and price and value are not seen as equal.
In this tradition, to Steve Keen “value” refers to “the innate worth of a commodity, which determines the normal (’equilibrium’) ratio at which two commodities exchange.” To Keen and the tradition of David Ricardo, this corresponds to the classical concept of long-run cost-determined prices, what Adam Smith called “natural prices” and Karl Marx called “prices of production.” It is part of a cost-of-production theory of value and price. Ricardo, but not Keen, used a “labor theory of price” in which a commodity’s “innate worth” was the amount of labor needed to produce it.
In another classical tradition, Marx distinguished between the “value in use” (use-value, what a commodity provides to its buyer), “value” (the socially-necessary labour time it embodies), and “exchange value” (how much labor-time the sale of the commodity can claim, Smith’s “labor commanded” value). By most interpretations of his labor theory of value, Marx, like Ricardo, developed a “labor theory of price” where the point of analyzing value was to allow the calculation of relative prices. …
Value in the most basic sense can be referred to as “Real Value” or “Actual Value.” This is the measure of worth that is based purely on the utility derived from the consumption of a product or service. Utility derived value allows products or services to be measure on outcome instead of demand or supply theories that have the inherent ability to be manipulated.
Alas, value is subjective and may or may not have any relationship to production effort (cost plus) or value in use. The ever changing marketplace makes understanding your products value an ongoing and continuous thread of activity.
Sounds like this value thing is a continuous loop caused by an if-then-goto statement in the business plan.
Technorati Tags: share of wallet, neoclassical economics, economic value, Steve Keen, natural prices, Karl Marx, prices of production, Marx, value in use, labor commanded, labor theory of price, cost plus
Relevant Quips: Technology Product Management
Sunday, November 25th, 2007So I challenged myself to come up with a new slide theme and I unreasonably constrained myself to the “RQ” which I had already created as a category for my slideshare quote project.
I just get a little nervous when I convert a category to a tag in wordpress.
Technorati Tags: slideshare, project, wordpress
Marketing 3.0 isn’t about throwing away the basics
Wednesday, October 31st, 2007This is more of a think about it post. Was reading a blog on Marketing 3.0 that new marketing is on many levels not related to “old marketing”. Excerpt:
We need to somewhat abandon traditional methods of marketing and look for inventive ways to build brand, awareness and of course leads for the sales folks. Marketing 3.0 is knowing the marketplace, the technologies available: harnessing and executing on all of the above to win the end game.
It’s still about the basics - the 4 P’s. Promotion and placement have significantly changed, but it’s always about the product. A great example is Xobni, an outlook plug-in - GREAT online marketing, GREAT word of mouth and they have the social network thing working. Cool product, interesting concept, but not actionable and no productivity lift - still cool though. I just might not be the target users - try it.
Utterz on the other hand - GREAT moblog product, good concept and mastery of using a network for growth. So Marketing 3.0 is still about the basics.
Technorati Tags: Marketing 3.0, marketing, product, moblog
B-Travel - 3PM a new low in hotel internet fees
Saturday, October 13th, 2007So there are 2 things I think are really horrible about hotels - room service fees (food quality too) and Internet fees. I’ve seen some really crazy fees for both, but internet fees are just illogical. I paid ₤22,00 once for a day and a couple of weeks ago, I paid for €88 for 5 days. I paid for five days because I could get 2 devices and share the connection.
So types of things I have seen in the marketplace:
Swisscom: multiple plans, but the most interesting was a time AND bandwidth limited account with overage fee (what?!?!), as i noted above I opted for the multi-day and multiple device plan
Four Seasons: I don’t remember the location but it was like $24.95 or almost the 50% of my monthly bandwidth fees from my cable provider.
t-Mobile: I like t-mobile’s hotspots, but I normally only use a connection for 2-3 hours, since its typically a airport stop. I have been lucky enough to stay at a hotel which had t-Mobile, but only like twice. In that case it was well worth the $9.99 fee for the day pass.
But the winner on weird configurations for the week was Wayport, a session until 3PM. The session is static and I only got like 1 hour in my session for like $9.99, apparently these folks cannot program the logic to manage dynamic sessions or maybe they are just greedy. The art of effectively pricing a captive audience.
Optimistic Prediction: Cell phone wireless cards will more or less obsolete paid wireless connections just like pay phones. I don’t remember the last time I used a pay phone and I long for the day I can’t remember typing in my credit card number for an abusive rate to rent a commodity pipe from a hotel. Although, the real irony is that low end hotels offer FREE wireless - why is that?
Technorati Tags: Swisscom, Four Seasons, t-Mobile, Wayport
