Today, Kodak filed for bankruptcy and Facebook announced a new feature–Action Buttons– in preparation for their upcoming IPO. For me, this is like Alpha and Omega. Why do I put the two together? Here are my thoughts:
In 1975, Kodak invented the digital camera based on patents filed as early at 2000. <I know this is painful.> Internally, the organization fought using them. It was a risk to their film business. The rest is history, even after restructuring and efforts to build new businesses, Kodak has reported only one full-year profit—in 2007—since 2004. It has been such a LONG, painful slide….
Today, Facebook posted a list of companies using their new functionality. There were sixty of them (reference http://www.theverge.com/2012/1/18/2717453/facebook-open-graph-launches-mark-zuckerberg-new-partners.) When consumer goods manufacturers and retailers read this list, they will probably recognize less than 1% of the companies. The partners are not the normal list that most of you will find signing in and out of your company.
Additionally, information on digital technologies is silo’d. In these organizations, Facebook and digital marketing intiatives are currently managed by the marketing department. Unfortunately, it is marketing for the sake of marketing. Very few are thinking about the use of the functionality to become market-driven. I keep hoping. I do interview after interview looking for the change, but so far it has not happened. What is the difference between market-driven and marketing-driven? Three things:
§ It is not about YOU. It is about THEM. When you are marketing driven, the message is all about you. Your products. Your company. The brand managers try to own a closely-held message. The goal is to YELL the message and get it everywhere. When you are market-driven, the goal is about consumer relevance and creating a relationships with the shopper, the customer and the greater market. It is no longer about you the brand company; instead it is about them. The power has shifted….
§ Open. Orchestrated Cross-functionally. Marketing-driven initiatives are tightly controlled within marketing. The applicability to other organizations within the firm lacks amplification.In market-driven companies, they are part of strong outside-in horizontal processes. <I know, I am consistent.>
§ Market-driven companies listen. Market-driven companies also test and learn in real-time. They use data analytics to sense answers the questions that they do not know to ask. <One of the reasons why Amazon is gaining market share from Wal-Mart and Target). Marketing-driven companies construct campaigns, analyze data and try it again. They are usually based on history. <It is hard to listen when you are so busy filling social media sound waves with your message.>
So why is Alpha and Omega relevant? Why should it be a Button for You?
Kodak was a marketing-driven company that failed. The lifeblood of a corporation is new products. The lack of good demand insights is the number one issue in new product launch. So, I appeal to all of my friends in manufacturing and retail to learn how to unlock the potential of the “action button.” Why?
In just two years, Facebook’s “Like” button has grown in popularity. It is deployed in over 2.5 million websites, but now it can be different. It can be the combination of a noun and a verb. Examples could go on an on…. I want it. I own it. I bought it. I hate it. I love it. I cook with it. I use it. Anyone that uses Facebook knows just how inadequate the “like” button is when a friend breaks up with a longterm boyfriend, your sweater developed a hole in the sleeve when it was washed, a friend of a friend’s house burns down,or your daughter’s friend loses her mother. The “action button” allows us to improve relevance quickly.
A good place to check out this feature is at Payvment. This company is a social commerce “mall” on Facebook. Go there. The page has 1.1 million users and sells items from more than 150,000 brands and merchants. It lets customers to click a “Want”, “Hate”. “Love” or “Own” button for a particular item. But now, when Facebook members who have integrated the Payvment application click those buttons, the fact that they “Want” a BMW, ”Hate” a Cadillac and ”Own” a Cannondale bike will show up to all their friends. Each visitorgets a unique assortment of vendor store fronts based on the social and interest graphs and their” Action Buttons.” Check it out.
My challenge to all my consumer products manufacturing and retail friends is: What is your strategy for the use of the “Action Button”? I would like to see companies think about it in three ways:
-Use Action Buttons in New Product Launch Planning. When you launch your next new product, sense market reaction. Combine analytics to look at the intersection of the interest and social graph with the response from the “Action Buttons”. Use this data to daily sense the market response to your new product launch.
Use this data to build forecasting models. If fans in your loyal demographic “want” your new product, it is probably a powerful causal factor to put into your next demand forecast. If they “hate” the product, it is probably time to rethink the product build. This can only be modeled if you are forecasting what you are going to sell (versus what you are going to manufacturer or ship), there is sufficient level of granularity to see the pattern (forecasting in days or weeks) and the software has causal factor modeling. Only 10% of companies that I follow have this level of sophistication. This is already in process at Amazon and Wal-Mart. And, while it is still a new concept for the consumer products supplier, my bet is on the Frito Lay or General Mills teams to do this first. <Please be bold. Prove me wrong.>
-Use Action Buttons as an Input in Demand Sensing. As the product is shipped to the market, follow the social sentiment closely. The action buttons are a great way to target information. This in combination with sensing technologies helps companies to get a quick read of the market.
Use the information in cross-functional launch meetings to be more effective. Dell, Newell Rubbermaid, and Whirlpool do this weekly. Consider the use of Bazaarvoice sentiment analysis on user generated content (cool interface) for ratings and reviews and a pre-build data model (appliance) from IBM, NetBase, SAS Institute, or Teradata to quickly understand the market dynamics. (Conventional processes use syndicated data feeds from IRI or Nielsen to analyze market lift. This is two tothree weeks longer to read the market than the new sensing capabilities). I believe that time is of the essence. It might be something that you can fix–placement, information, message– and quick sensing allows you to get it right before the product fails.
-Follow Others’ Action Buttons for Competitive Intelligence. Train your merchandisers and sales teams on how to read the “Action Buttons” of competitors and trading partners. Implement analytics to allow them to quickly process the signal. This should be a daily activity. Be opportunistic. Be Bold. If product X is failing at Store Y, read the sentiment and offer a new alternative. If the placement is wrong, the coupon does not work, or the product is out of stock, fix it. You can see it with a 24 hour latency. Roll out training for your merchandisers (if a retailer) and sales teams (if a consumer products company) this month.
In summary, social should not be about social for the sake of social. It is not about “fans.” It is not about the number of “likes.” It should not be contained in marketing. It should not be outsourced to a PR firm. It should not be based on first generation analytics. Instead it should be seen as a way to have a relationship with the customer. This can only happen if there is an understanding of the basics. It is about story telling, building excitement and delivering relevance. If you have these elements on your site, move aggressively to leverage this new functionality.
My wish for you is that you never fall into the trap of Kodak. Avoid it by using technology to innovate, sense market trends, and be the first to market with customers where you have relevance. This is the essence of being market-driven. Put “Take Action on your Action Buttons” on your “To-Do” list for next week. Let it be a button that you push to drive innovation excellence…
What do you think? Are you ready to take the plunge?