Frost & Sullivan User-Generated Content

Douglas White of MindComet invited me to be part of the un-panel for this session that he’s moderating. I’m with Kevin Hoffberg, Rick Short and Chris Curtin from Disney, VP of Global New Media.

This was a highly participative session, which is only appropriate given the topic. Having a session on UGC without having substantial discussion would be odd.

The project from Mayo Clinic that I highlighted is Care Pages, a service we provide to our patients to enable them to provide updates to family and friends.

When Kevin was writing a book about customer experience, and ran into Yours is a Very Bad Hotel he started to see the potential. And because the most powerful customer experience can be fixing a bad experience, tapping into complaints and fixing them can be a great win for your company.

Chris and Disney are mostly reacting to UGC vs. creating it. It’s really happening without their involvement. People already go to Disney theme parks and upload pictures to Flickr, Facebook or MySpace. He mentioned how Procter & Gamble has a contest open to engineers throughout the world to help design or improve P & G products. Disney is planning to find ways

Disney has a Moms panel/forum that lets expert Moms answer questions in real time on their web site.

Earthlink had to pull back from hosting UGC because they found out there aren’t a lot of enthusiastic users about internet connections. The only people commenting were those who had a gripe, because Internet connection is viewed as a utility. It’s only news when it doesn’t work.

That caused Rick to bring up the video showing the Comcast service guy sleeping on his couch because he was on hold so long.

[youtube=http://www.youtube.com/watch?v=CvVp7b5gzqU]

Rick’s team at Indium has a Public Discourse policy as opposed to a blogging policy. They started by having service techs who help customers by phone every day go on the Internet and type their communications instead. It was a no-brainer.

For me, the “aha” moment was when we saw that we already had more than 1,000 Mayo Clinic employees and students in Facebook.

Kevin says the data for involvement in social media are overwhelming, but for most people an anecdotal story makes the difference.

The Economist has a story this week on the music industry. A record company had a focus group with kids, offered a “take as many as you want” pile of CDs, and nobody took any! Talk about an AHA moment!

About half of the participants in our session have Facebook profiles. More are on LinkedIn. Fewer are on MySpace. I said for people in PR, or Sales or Marketing, it should be a basic level of knowledge.

Here’s the group I created for the Frost & Sullivan conference, where today’s conversation can continue. I hope lots of the participants from today will join.

Kevin mentioned Flock as a way to incorporate all of your social networking presence.

Action point: Join Facebook now and friend me.

Frost & Sullivan Keynote II: Martyn Etherington, Tektronix

Martyn presented on “Maximizing & Measuring Your Return on Consumer and Marketing Investment: How to avoid Marketing’s Growing Relevancy Crisis.”

A recent Journal of Marketing study of 167 companies found that “CMOs don’t have any measurable effect on a company’s financial performance.”

Why do marketers spend such a large percentage of their time justifying their position and their budgets? They lack relevancy in three constituencies: The customer, the channel, the business.

Martyn told his personal story with Tektronix, a 60-year old company from Portland, Ore. and how he’s been transforming the marketing function.

What problems were they trying to solve? When he came in, Marketing was spread across the organization, with over 100 “strategic objectives” and 4,000 activities that weren’t well linked. Couldn’t measure anything except dollars spent. No success criteria and no accountability. Marketers had no idea of the business situation, order targets. Little or no discussion about the customer, and a wall between Sales & Marketing.

Martyn’s Get Well Plan

  • Strategy Alignment – distilling 100+ objectives to 20, and defined success criteria
  • Organization Alignment – Centralized organization and responsibility – “One throat to choke”
  • Operational Alignment – Measurement & accountability became a mantra

Changing Philosophy to think like a customer. Begin with an understanding of how people buy, and their decision stages. When does it switch from a Marketing conversation to a Sales conversation?

Changed from Activity Based to Outcome Based marketing, based on four questions:

  1. What outcome are you trying to achieve?
  2. What strategic objective does it support?
  3. How will you know when you’ve achieved it?
  4. How can you make it better?

Sales Alignment Challenge: “What will it take for us to get an A on our year-end report card?”

How many leads should marketing provide? Assumed business source ration of sales:marketing is 80:20, which implies about 5 leads per account manager per month

How much should a marketing lead cost? Set a target of $400 cost per lead. Changed marketing mix to reach that target.

Results:

  • Marketing costs have declined both in absolute and relative terms
  • Productivity has increased
    • 50 percent more efficient and effective
    • Now responsible for repositioning/segmentation
    • Now started to track customer SOW (share of wallet) and NPS (net promoter score) – growth metrics
  • Measure their business contribution

Lessons learned:

  • Building an accountable marketing function frequires a philosphical change, not jsut a tool set
  • Change is hard and will take time. Two-thirds of the employees who were there at the outset have been replaced.
  • What you measure gets better; don’t measure it if it isn’t actionable
  • Fact-based decision makeing empowers people
  • Always focus on wher eyou are going, you can never go back
  • Review and adjust

Audience Q&A

Q: Did they measure lead quality as well as lead volume?

A: 80 percent of all leads go untouched by sales. That’s a national figure, and it was roughly the same for Tektronix. He had to work with sales leadership to get sales follow-up.

Q: Why did you have to replace 85 percent of team? Skill set mismatch or attitudes?

A: Both. Some “cancers” needed to be removed, and Marketing had been a “dumping ground” for people who didn’t measure up in other parts of the business. Others voluntarily left because they didn’t like the new accountability culture.

Observation: Not having worked in the for-profit sector, it’s interesting that there seems to be a hierarchy in many companies:

  • Operations
  • Sales
  • Marketing
  • PR

I’m sure that’s not a revelation to many, but it just struck me anew listening to Martyn. PR typically doesn’t get respect from Marketing, Sales blames Marketing for poor-quality leads, Operations blames Sales for not making targets. It’s much healthier if the groups are working together as a team to meet organizational goals. It seems it really does come down to numbers, and if you can prove contribution you get more respect. Thus, Katie Paine’s work on measurement for social media as well as PR is important.

I still think the social media ROI won’t be hard to show, particularly because the “I” is so ridiculously low. It also will provide valuable customer insights, hearing exactly what they are thinking about your company. This whole presentation and discussion does emphasize for me, though, that we need to look at ways to track social media benefits. If you can document that the benefit is at least x, and that x is significantly greater than the investment, then you can make a good argument that the real value is much higher.

For example, one idea I got from a fellow attendee yesterday was on how to measure podcast listenership. When you subscribe to a podcast, those episodes are automatically pushed out to the subscribers. But you don’t know whether the segments actually got played on the iPods or computers. Did the subscribers really listen?

The suggestion from Douglas White of MindComet is to have a “highlights” list as a PDF that accompanies each segment. When people go to the sited to download that take-away, that tells you a rock-bottom minimum number of people who actually listened, because they took that next step. And if you have links within that PDF to the ordering function on your site, you can prove contribution to sales or lead generation.

Doug asked me last night to serve on his panel on user-generated content, which will be later this morning. I’m also on a panel about blogging this afternoon. Should be a busy and fun day. I’ll be blogging about both sessions.

Update: Kevin’s notes on Martyn’s keynote are here.

Frost & Sullivan: 1to1 Impact Awards

Dr. Martha Rogers, the Founding Partner of Peppers & Rogers, presented the winners of these awards. She started by asking:

  • What if a European consumer package goods company could swab your mouth and tell you which toothpaste to use?
  • What if you could have a car custom built for you in two weeks? (Toyota can. You can’t get a sofa in 12 weeks, but a whole car can be built for you in two weeks, and more profitably.)
  • What if Apple and Nike teamed up to count your steps?
  • What if the fundamental assumptions we hold about business are wrong?

Among the cherished assumptions that may not serve us:

  • If people in Sales & Marketing will just do their jobs, we can always get more customers. That can be a deadly game. Need to understand that customers are even scarcer than other resources.
  • Our customers are not the thing that builds our business. Wrong. The only source of revenue is our customers. Customers are most valuable to us at the moment we are most valuable to them. We need to understand them and their needs.

Here’s her main point:

Taking the customer’s point of view may upend a traditional business model.

For example, most extended warranties are a rip-off. The guy who sells you the appliance is required to try to sell you this thing that has 100 percent mark-up. He can’t do it in good conscience, but is evaluated based on how many of these he sells. That makes him wonder, when the company says the customer is valued but pushes rip-off products, whether he can trust when the company says it cares about employees.

Likewise, Blockbuster had late fees as its big money maker, until Netflix came up with its no-late-fees model. When Blockbuster dropped the late fees, they did it two million customers too late. No one wanted to leave Neflix. Blockbuster would have had to seriously undercut the Netflix price to get customers back.

Martha’s new book (with Don Peppers) is Rules to Break & Laws to Follow. It answers the question: What do empowered customers, networked employees, innovation, culture and trust mean to the future of your business? I’m looking forward to reading it.

Award Winners were:

Customer Strategy: Travelocity, Watercolor Inn & Spa, Big River Telephone

Full-Suite CRM: Westpac Banking Corp, Voices.com, ESET Software

Marketing Optimization: AT&T, TD Bank Financial Services, Sylvan Learning

Sales Optimization: US Bank, DirecTV, The Berry Company

Customer Service Optimization: A.O. Smith Water Products, Virgin Atlantic, Earthlink

New Media: Procter & Gamble, Subway Buffalo SFAFT, La Redoute – For instance, Subway uses text messaging to send coupons to the 5,000 customers who have opted in. On a snowy day with light traffic, they can blast an SMS message to create some traffic. P&G has improved its organic search engine results.

Organizational Transformation: Honeywell Aerospace, Canada Post

Several of the award winners were then part of a panel with Dr. Rogers.

  • Brian Davis, VP Customer and Product Support, Honeywell Aerospace – Consolidated into client-focused teams, with units assigned to particular customers, to make it easier for customers to deal with them.
  • Ginny Mahl, VP, Sales and Customer Service, Travelocity – Customer Champion Program. Launched most comprehensive guarantee in 2005. Example: Alerting to amenities at hotel destination that may be out of commission, or airport problems. For example, if the pool is going to be closed, ruining a vacation with the kids, they alert the customer and give them alternatives.
  • Rich Martino, Senior VP, U.S. Bank – BLAST system
  • Bob Sloan, VP of Business Marketing, AT&T

These companies will be featured in the January/February issue of 1to1. A preview article was distributed at the meeting, and I look forward to reading it. You can probably read the stories on the 1to1 site fairly soon.

I’ll probably revise this post in a bit with some more links, but then again you can just Google the companies involved and see what they’re doing. I’m going out to dinner with Rick Short, who’s going to be part of the panel on blogging with me tomorrow.

Frost & Sullivan: Using Social Media to Drive Demand

Michael Masnick, President and CEO of Techdirt, is leading this session exploring:

  1. Blogs
  2. Social Networks
  3. User Generated Content (YouTube, Flickr, etc.)
  4. Twitter
  5. Wikis
  6. Virtual Worlds (Second Life)
  7. User Reviews
  8. Employee Communities

Our key take-aways will be:

  1. A framework for understanding blogs & social media in terms of how they can be used to drive demand
  2. Case studies on a few different ways to engage with new media audiences
  3. Examples and insight into what works and what doesn’t in the social media space

There was a significant discussion over whether or not to respond to negative comments. One participant said his company’s blog is to provide a forum for customers, and that they don’t respond on the blog. Someone else raised a question: If an issue surfaces through the blog and you address it, why wouldn’t you go back and do a blog post to let everyone know that you had resolved it?One of our participants mentioned that his employer, TD Bank has a Facebook group or application. I’m not sure whether I’m seeing the one he’s mentioned, because it may be limited to Canada. Its competitor RBC has a sponsored group, too.

There was a lot of discussion about ROI and metrics. From my perspective, the key is making the “I” part of the ROI equation as small as possible. Train employees to engage as volunteers. Get customers involved. Provide the platform for them to have discussions. With little expense, it makes the return (much of which may be hard to quantify) easier to demonstrate.

When we broke into roundtables to work on case studies, I was with three consultants so my employer, Mayo Clinic, was the only organization left. So I had the benefit of Kevin Hoffberg, Ginger Conlon and Anne Smith Rainey (from Publicis Modem) giving their advice based on what we’re doing. Kevin is blogging their recommendations for Mayo Clinic, as well as those from the other groups for U.S. Bank, Pfizer and Armstrong.

Frost & Sullivan Breakout: Online Marketing

In an era in which overall marketing spend is projected to be flat, this Peer Counseling breakout session moderated by Kevin Hoffberg gave us a chance to share ideas on how online marketing will claim an increasing share of that slowly growing pie.

Here are my notes from the session. I’d welcome others who participated in the conversation to jump in with additional clarifications or comments.

Rick Short mentioned CIC Data as a way to monitor and measure word-of-mouth in China.

Intuit uses Bazaar Voice to see what customers are out there saying about their products, and incorporating that user-generated content into the Intuit site.

Cara Shockley from HP.com says linking to support groups (supporting the support groups) has been an important strategy. User communities can be a huge marketing advantage. Jim from Eloqua calls it a source of strength. You’re not just buying a product, you’re joining a community. This is Wikinomics…letting people who are your users add value.

Financial services company have had a fear of transparency because they are worried about getting flamed. There’s a big difference between an official corporate blog and understanding what people are already saying about you. The conversation is happening, so you need to at least monitor. The representative from Union Bank says they are informally getting into commenting on some other blogs, but not ready to jump in yet. Advanta, another financial services company, has started a social site called ideablob.

For a software company, half the revenue is from support. So having communities could cut revenue. They don’t want to aid these non-paying communities. Why not create an on-line knowledge base by subscription? If you don’t support customers with an online community, those communities will spring up, and your support team will lose. This is a lack of vision that could lead to a Wikipedia-esque alternative replacing the software company’s World Book.

Check out Quicken online , and their Facebook page.

One of the keys in blogging and liability for companies is that if you don’t moderate comments, you don’t bear the responsibility for what’s posted.

Jumpup.com is a QuickBooks product, and now they went with a free version of their entry level QuickBooks product. They developed a Just Start contest for would-be entrepreneurs encouraging people to quit their jobs and start small businesses. This could have tie-ins for financial services companies, so making some of those connections could build.

Peter from Intuit mentioned Genesis measurement services as a possible integrated service.

Please do add your comments, and continue the great conversation we had this morning. Feel free to add links to helpful resources in your comments, and particularly any case studies of things your organization is doing.