Give Brands nothing, but take from them EVERY THING!

Battle: The Great War of Digital Consumerism
Strategy: Use Digital to connect, engage, and destroy brands, one interaction at a time!
Weaponry: Digital media or media enabled by the converging forces of social, mobile, cloud and internet of things
Incumbent: Brand
Challenger: Consumer

Who will win this war - consumers or brands?

Consumers push Brands forward...
If today brands are feeling that customers change loyalties at the flip of a coin, they have absolutely no idea about the Great War that is only beginning to take shape. This War will be started by the Digital Consumer and will inspire the entire consumer base to rise and win the war of consumerism if brands don't act now!

The Digital Epicenter: Convergence of Forces to drive Innovation

Three years after I wrote the article on the new facets of Innovation, we are seeing forces come together to redefine how business will be conducted by keeping the consumer in the center of all decisions. 

Multimedia, social media, and the Internet of Things is fueling exponential growth in data for the foreseeable future. To enable the next frontier for innovation, competition and productivity, companies will need to fish where the fish is (on social networks), allow consumers to access information in anywhere, anytime (via mobile devices), and derive customer intelligence from big data. This can only be possible using scalable yet cost-effective cloud infrastructure. 

The digital epicenter, as show in the figure above, is the point of convergence of digital forces - social (behavior), mobile (access), cloud (delivery), big data (context)*. This is the target state that companies should aim for, where true customer-centricity can be realized. 

4 Tactics to influence the new, SOCIAL consumer!

Traditionally the value of a customer was measured by his ability to purchase a company's products and services or CLV (customer lifetime value). But now with consumers recommending products and sharing experiences on social networks, the purchase cycle has changed. It is becoming increasingly necessary for companies to measure their social influence. Therefore, as shown below, value of a customer increases with customer revenue as well as social influence, also known as social CLV or CLV 2.0.

So what tactics can Marketing deploy to influence the social consumer?
There are 4 tactics that can be deployed depending on level of customer's revenue and social influence.

4 tactics to influence the social consumer

CLV 3.0: Measuring Co-Creation Value of a Customer

credits: redheadedfrog

While social media finds a way into the enterprise, it is imperative for companies to take a look at an essential metric that measures how much each customer is worth in monetary terms - CLV or customer lifetime value (you may also refer to HBS' CLV Calculator).

However with social CRM's capability to centrally store data that measures and reports on social media activities, there comes a need to revisit how we measure the value of our customers on the basis of two primary actions that they are actively performing -

• Referring actions - Like, share, recommend existing products and services resulting in Customer Referral Value
• Innovation actions - Co-create new products and services  resulting in Customer Innovation Value

Customer Referral Value:

With customers liking, sharing, recommending, influencing our products and services, we need to add the customer's referral value (CRV) to the current CLV metric. (sources: definition by Daniel, Oracle's Tara Robert) 

So CLV 2.0 or social CLV looks something like this: 

CLV 2.0 = CLV + CRV, 

where CRV is Customer Referral Value.

Customer Innovation Value (new metric):

While a very large percentage of users recommending our products and services, there is also a small yet relevant base of customers willing to co-create our next product or service (ref: Starbucks, Dell). These are truly high value, high potential customers. Companies that are able to strengthen relationships with such customers will gain sustainable competitive advantage. And this is the future of competition!

So CLV 3.0 would look something like this:

CLV 3.0 = CLV + CRV + CIV, 

where CIV is Customer Innovation Value.

So how do you think companies can measure CIV? Is there a science to it yet?

And should companies tweak their loyalty programs to reward customers who have made contributions of outstanding significance to a company's profitability, measured in terms of monetary, social, and innovation value? Maybe call it "Customer Lifetime Value Rewards" :) ?... what do you think? (Pardon the analogy to Grammy's Lifetime Achievement Awards!)

(Check out my next posting on how companies can leverage the purchasing power and social influence of their consumers.)

Social media's big push within the enterprise (finally!)

Six years after the term Web 2.0 was defined, it's extremely heartening to know that social media is finally entering the enterprise in a big way with the blessings of Oracle and Salesforce.com!

With Oracle's acquisition of Virtue and Collective Intellect, and Salesforce.com's acquisition of Buddy Media, social media and the new facets of customer engagement and innovation will finally begin to see the light of day within the enterprise in the form of social CRM - a key customer relationship management offering that will plug into social media platforms such as Facebook, Twitter, etc and provide the missing piece of the 360 degree view of the customer.

Through these acquisitions — and the eye-opening price tags behind them — Oracle and Salesforce.com show that the business world is getting ready for social media. It’s no longer considered a fad, definitely not just hype, and not going away any time soon. Businesses must care about social media because it’s clear that consumers already do. - Forbes

What does this mean for Marketing and IT teams?

Marketing will now be able to centrally create, publish, moderate, manage, measure and report on social marketing campaigns and activities on social media platforms such as Facebook, Twitter, YouTube and Google+.

So suit up, IT... and get ready to shake hands with Marketing and drive the social CRM story forward...  what say?

Digital Pandey: Rise of the underdog from your IT backyard

When Bollywood star - Salman Khan - decided to take on the role of Chulbul Pandey in the blockbuster – Dabangg, little did anyone foresee the impact of social media and customer segmentation in the film industry. While many corporations still stayed resistant to tweet or create a fan page, here was a fantasy hero breaking records with more than 19,000 followers in one day and tweeting his experience live during the shooting of this movie. The positioning of the brand – Chulbul – was strategic, and marketing of ‘Munni Badnam Hui’ was extravagant. Touching the hearts and minds of a target audience, this movie set out to become a lesson for businesses to learn, consume, and act upon.

Can the real Chulbul please stand up? Let's be honest. The PC age, Y2K phase, and Dot com era have come and gone; each of them highlighting the relevance of effectively managing Information Technology (IT) in the business environment. Despite multiple attempts to prove its worth, the IT department in many organizations is still undermined and under-funded. It continues to struggle to change its perception of being merely a support function for the business.

So what is it going to take for IT to prove its worth and come in the limelight? When will companies truly believe in IT as a strategic driver for the business?

Well, the time has come!

Today there is a lot of pressure for IT to innovate in support of their businesses and help drive new product development, increase operational efficiencies, and improve customer satisfaction. Similar to social media, other disruptive trends such as cloud and mobility have also emerged. IT is now on the forefront of business. It seems as if it’s now or never.

While the time to rise and shine has come for IT, the expectations to drive business strategies have also increased dramatically. IT will need to continue to act as a support function for the business. But now with the expectation to drive technology-driven strategic changes in the enterprise, IT seems to officially have an added responsibility of playing the role of Chulbul Pandey in today’s business context.

Here are three ways to Dabangg-ify your IT department to meet new business expectations:

1. Get business-savvy. If IT wants to lead fearlessly, then it will need to develop its business acumen as well as understand the business well. Going forward, IT will increasingly be invited to present their innovation plans at board meetings. Skills such as financial forecasting and budgeting will become imperative to justifying large investments. These new IT investments are bound to face resistance from CFOs if IT is unable to demonstrate their value in a clear and measurable way. IT will need to develop business cases and explain how new technology investments will make the company more profitable and competitive in the marketplace.

2. Effectively align IT with business. IT will not only need to talk business but also closely work with business to understand their goals and effectively apply new technologies to meet their goals. However, in order to work closely work with business, IT leaders will firstly need to build strong relationships with key business stakeholders and patiently listen to their current concerns and future needs. In doing so, IT will be able to become a trusted partner on the journey to innovation.

For instance, it is not uncommon to find companies these days adopting customer centricity as the means to sustainable business growth. As consumers spend increasing proportion of their time connecting and expressing themselves on the internet today, companies are looking for ways to leverage these social behaviors to understand, acquire, and retain their customers across digital channels. These intensive data collection and analysis efforts can only be successful if IT effectively partners with business teams – Marketing, Sales, and Customer Service. IT should not just provide technology services and tools but use the opportunity to effectively apply these consumer-facing platforms and technologies to meet the goals of the business. To ensure effectiveness, reduce risk, and justify cost of a radically new technology investment, a detailed technology assessment (including a proof of concept) should be collaboratively conducted and reviewed with business. Once the project is approved, releases should be incrementally rolled out. To build further credibility for such efforts, tying technology metrics to business metrics is also strongly recommended.


3. Sustain innovation capabilities. Social media, cloud computing, mobility, analytics, and Green IT are some of the emerging zones of technology heroism. This is only the beginning of an age of enterprise innovation. Tomorrow there will be a new wave of technologies and trends coming our way that companies will want to leverage in order to refine their business processes or even redefine their business models. 

To drive the business with IT-enabled innovation, IT leaders will need to embody creative leadership and inspire others to walk the path of innovation. 

They will need to develop the right long term strategy and supporting structure, such as creating a nimble, high performance team of business-savvy IT resources and dedicating time to assessing emerging technologies on a regular basis.

To summarize, if you are a part of the IT department in your organization and are excited about innovation, chances are that there is a Digital Pandey in you. So why not take this opportunity to transform yourself, put measurable value from innovation on the enterprise table, and change the perception for IT in your organization!

Your company's Facebook makeover: A social face with skin deep value

Two years back when I wrote a point of view on the business value of social media and what it could mean for business, I pointed out 4 underlying concepts - social networking, collaboration, broadcasting, and rich user experience. With Facebook becoming a clear leader on the web today] that leverages all these concepts, CEOs, please be advised that "Facebook is not going anywhere!".

Many wise digital marketing experts will tell you that Facebook is NOT a strategy but merely a platform for effective consumer engagement, brand management, and marketing efforts. While this is quite true (technically speaking), Facebook is no more a matter of choice but a necessity for companies today.

CIOs need to seriously take a look at leveraging Facebook as an initiative to enhance consumer engagement and viral outreach. In today's web where the network is your customer, the power of 'Like' and other social plugins must not be underestimated.

Before jumping on to the Facebook bandwagon, it is advisable to first understand your consumers and build your presence around them with a 360 degree marketing strategy that connects both online and offline worlds.

In one way, it actually a good thing that the web is dead! With users spending more time on Facebook than other websites, it makes it easier for CIOs to develop an integrated online strategy. You should nevertheless take a look at your company's online ecosystem more holistically and build the right structure and processes to continuously refine it for sustainable benefits.