This week, Altimeter hosted a pilot event at our San Mateo office. We were sold out and enjoyed the discussion with 80 thought leaders on the evolution of social listening. I had the pleasure, at the event, to interview Susan Etlinger, Analyst, Altimeter (blog http://susanetlinger.wordpress.com/) on her insights from the research that she completed on the topic on her soon to be released report. Here I share my insights.
Can you hear me?
Data types are proliferating. Data volumes are exploding. The certain path for Business Intelligence (BI) excellence is less certain. In the words of one of my clients last week, “We have a vision for structured data. We buy more hardware, staff more Database Administrators and focus on higher speed processing. We have met the challenge of 5X more transactional data in the last two years. However, the world of unstructured data is a new frontier. While we have scrambled to meet the structured data challenge, we are uncertain how to go about developing vision for unstructured data." I think that this is our new world.
There are five elements:
Technology Worlds are Colliding. The path to use unstructured data to listen to the customer and use it by the organization is evolving. In the words of Susan Etlinger, “social analytics is aspirational.” The interest is high, and the most frequent use cases are for brand sentiment listening, market program effectiveness evaluation and customer service. Most of the interest is in marketing. At Altimeter, the evolution of listening platforms is one of the disruptive technologies that we are following. The race for a solution is a collision course between two types of technologies: enterprise expansionists and social reformers. Enterprise expansionists include companies like Clarabridge, SAS and IBM and social reformers include companies like Adobe/Ormniture, IBM/Coremetrics, Salesforce/Radian6, and Visible Technologies. We do not think that this space will be defined by what is often termed “social customer relationship management(SCRM).” (The CRM approaches tend to be sales-driven focused on sales efficiency. The focus is inside-out.) We feel the greatest opportunity is market-driven mining unstructured text to power outside-in processes. The key to maximize the effectiveness is outside-in processes to listen and learn.
The social reformers are further along on the development of data models and offer an easier to use solution. The most common deployments are in marketing or public relations. The enterprise expansionists solutions are deeper, more scalable and are a better fit into an enterprise BI strategy. For the supply chain leader, these three differences boil down to:
- One piece of the pie. Market-driven processes are outside-in. Sensing market changes to reduce the latency and improve the response. Social is only one of many signals that offer promise in the design of market-driven processes. Unstructured data in the supply chain is proliferating in many ways, not just in social networks. This includes call-center data, distributor feedback, service and warranty claims, aggregated review data, B2b networks, etc.
- Do you know the questions to ask? The less sophisticated social analytics platforms force the user to pre-build the questions to ask. This assumes that the user is knowledgable in the market to predict what is important. If there is a market shift, the social analytic platforms are not flexible. They cannot shift with the market. they lack natural language processing capabilities to listen and learn and interpret market shifts. In many ways, it is a lower level, less intelligent response. However, technologies from the social reformers are 2-5X lower cost and much easier to use.
- Data model. Buy with the goal in mind. The data models for the listening platforms are built for very different goals. Get very clear on the intent.
Who will Win? It is too early to tell, but we project a steep hype cycle with a long trough. We also see convergence with large companies investing in the smaller social reformers. The technology winner is too uncertain to predict. We feel that it will not be the traditional BI vendors or the CRM technologies. As a result, buy the technologies with a focus on less than a two year return on investment and prepare to go through several evolutions as the market changes. However, we feel that the real winner will be those that use the technologies to define unique differentiation.
Bottom line: The first generation of technologies should be seen as an investment (in the words of one customer “throw away.”
Why Should Supply Chain Leaders Care? In 90% of supply chain strategy documents that I read, companies state that they want to build a value network that extends from the customer’s customer to the supplier’s supplier. However, the ability to listen to the customer in near real-time is new and EXCITING. We believe that it will be a building block of outside-in processes. It will help answer questions like:
- How do customers really like my new product? The technologies can reduce latency to sense true market sentiment by 80%. With demand error of new products at 80% error, the building of outside-in processes to sense and respond could dramatically change the ability of a company to launch a new product successfully. And, since new product obsolescence is the largest issue with product write-offs the impact could be substantial to many balance sheets.
- Early warning. If there is a problem with my product in the market, how do I keep it from becoming headline news? Today, product failures all too often become headline news. And, often history. How many of these companies wish that they did not have this association? Toyota and brakes. Jeep and tire failure. Conagra and peanut butter recalls. Nestle and cookie dough cookie dough illness. It is taking companies too long to determine that there is a problem and drive correction.
- New market opportunities. Harvesting demand insights. The largest issue in the new product launch surveys that I have conducted for the past ten years is harnessing demand insights. The building of intelligent listening posts can help companies gain a competitive edge.
Bottom line: Listening posts and the building of listen and learn processes is fundamental to any supply chain focused on a growth strategy.
Who does it best? We continue to be impressed by companies like Best Buy, Dell, Newell Rubbermaid, and Whirlpool. Check out the pictures of the Dell listening center in Susan’s report. I love the picture!
Bottom line: The companies that are doing it best have the strongest investments in social communities and commerce. For leaders, it is an integral component of the strategy.
Barriers to Listening: It is new and evolving. Like any new technology there is a risk. However, the largest barrier is not the risk of the technology, it is change management. Fundamentally, organizations are incented to respond. They are not motivated to listen. As a result, the processes to listen, learn and drive an intelligent response are aspirational at best.
Bottom line: How can you build demand-driven value networks without thinking about listening posts and listen & learn strategies.
Do you want to hear me?
Without investments in these technologies, if we are honest with ourselves, the answer to customer requests is “I CANNOT HEAR YOU!” And, while historically, companies wanted to listen and to learn, today if they are not investing in the technology, it is largely because they either do not care about their customer or they are unaware. What do you think? Have you thought about investments to mine unstructured text to tie your supply chain to the voice of the customer?