(This is a summary of an article called People are Talking)
 
According to recent research by Lakshman Krishnamurthi (Montgomery Ward Professor of Marketing at the Kellogg School), their research shows a direct correlation between online word-of-mouth and actual market performance (sales).

It turns out that there is a measurable connection between online product discussions and buyer behavior. That’s something many of our clients have been hoping to hear. Now they can better justify their social media investments. So, how does this work?

First, we need to agree that potential buyers are influenced by existing users. I won’t review the substantial data that supports this supposition, we’ll just agree that it’s true.

Second, we need to agree that a relatively small group of influencers can have significant influence on the majority. (As it turns out, this holds true both online and offline).

Third, we should agree that this small group of influencers consists of the active participants in online discussions, whereas the “influenced” are more often than not those who read but don’t participate.

We can reach several significant conclusions from this research:

• Influencing online word-of-mouth (conversations) can have an impact on sales (everyone seems to be looking for proof – here is some proof!)
• Monitoring conversations also enables companies to:
  • Participate in the conversations to create influence
  • Quickly modify positioning language for the product to more quickly impact sales
  • Greatly increase the speed of response to customer and prospect comments and concerns
  • Gain greater insight into competitors’ issues

The value of monitoring and participating in conversations has been viewed by many as obvious. However, there are many more (maybe even the majority) that have been waiting for data to help prove the value. This work is a great start in that direction.

What do you think?

We conduct all types of research for our clients. You name it and we help them with it. One type of research is emerging as more valuable (and less expensive) than others, and we call it “Deep Qualitative Research”.

This consists of having an expert sit down with a small number of customers / prospects to gain a deep understanding of their experiences. Conducting this type of research isn’t necessarily easy, but done well, it can be extremely effective. Here’s how you can do it.

1. Know your target market (see more in What Market Segment?). If you’re going to make decisions based on a small number of inputs, you need to ensure the input is absolutely from the right type of person. I can’t emphasize this point enough. Make sure the input you receive is representative of the target market to which you want to sell.
2. Develop a small number of open-ended questions with which the interviewer can probe. The idea is to get the interviewee to talk – a lot.
3. Have an expert do the research. This is not a check-box questionnaire approach – the interviewer needs to be able to ask additional questions that were not thought of when the original set of questions were written. Again, this is about probing deeply.
4. Use reflective listening techniques to further engage the interviewee and get them to express even more about how they feel.
5. Keep asking if there was anything else they felt or would like to say. I call this conversational probing. Some interviewees will go deeper and deeper with you and this is when the most valuable information comes out.
6. Write up your findings in language all your stakeholders can understand and use. Make sure your stakeholders get the “Aha”s that you got from your interview process.
7. Change the way you market and sell based on what you’ve learned.
8. Rinse. Repeat.

What qualitative research approach have you used effectively?

I recently interviewed Karen O’Brien, Partner in charge of Web Strategy & Social Media at Crimson. The topic was Social Media Analytics. Here is the “one minute” highlight from our conversation:
 
In general the kind of data you can expect to get in a social media report includes:

• Top topics of conversation
• Topic trends
• Sentiment around a topic, product, program, etc
• River of News (being able to drill down into spikes in activity around a specific topic)
• Identify top influencers
• Share of voice (overall how much “buzz” did a company or a product have vs. others)
• Examples / quotes that exemplify conversation trends / opinions

Social Media analytics data is about conversations and therefore is by nature qualitative. I find it is most useful when applied to very specific KPIs or objectives - for example you can do a monitoring of top conversations around a specific product and then do a comparison against messaging and see where the gaps are.  (e.g. compare what we want people to be talking about vs. what they are actually saying.) It is also useful to layer other analytics data to validate and exemplify a trend (layer with regular web analytics or sales data for example).

What are you looking for from Social Media Analytics?

Microsoft just launched a new campaign called Talking About Windows focused on IT Pro’s where they are opening up the conversation about Windows 7. It includes interviews with Microsoft’s top Windows 7 Engineers including Jon DeVaan, Mark Russinovich, Gabe Aul and others as well as some great Windows 7 early adoption companies.

TalkingaboutWindows.com offers IT professionals genuine insight on Windows 7 from the Microsoft engineers who helped build the product. Featured are video’s and discussions about why product decisions and feature trade-offs were made. Also, IT Pro’s can get real-world commentary from IT professionals as they share their Windows deployment and adoption experiences. If you are an IT Pro, check out this forum to express your opinions, discuss Windows and share adoption stories.

As a marketer, I am very interested to see the conversation around Windows 7 and the IT Pro customer is a great place to start.

What’s the best way to get started?  How does one decide where and with whom to work?  The most important starting point is understanding your key customer care-abouts.  That ensures that any joint selling initiative has the greatest relevance in the mind of the customer and also ensures increased partner credibility.  Ultimately any collaboration effort can be broken down into 3 major components:

1. Solution Selection - Prioritization of customer care abouts and alignment of solutions to those care abouts
2. Partner Selection - Select the most appropriate Route to Market partners from the partner ecosystem
3. Go to Market Planning with Partners - Determine the joint partner value proposition with the partner targeting the end customer

The following diagram illustrates some of the key steps:

In the spirit of “if you get it, share it” we’ve decided to start publishing some of the approaches, methodologies and marketing strategies that we are doing in the Crimson Consulting Interactive Services group, for which I am the lead Partner. We’ve worked hard over the past few years at creating and refining some approaches we have used across both F500 clients and some startups - particularly around Social Media Marketing.

In many ways this goes against the traditional management consulting and agency practice of treating everything as proprietary, but if there is one thing I have learned in the new modern marketing environment, its that sharing your approaches has a lot of advantages. The feedback, recognition and collaboration we have received when we have done this is invaluable and I am hoping that as I publish some of our approaches that other people will share theirs also. As a result we can all learn from each other, what is working, what isn’t and what is still experimental.

Here is the first framework - its the basic approach that we use for planning Social Media Marketing initiatives:

Why Collaborate?
 
In the past few years, our research has shown a marked spike in the interest of partners in working with their peers.  Recent studies have shown that partners see a significant value in partnering, both from an economic perspective and from a capabilities perspective.  More than 74% of resellers saw collaboration with other partners as a significant factor in sourcing new customers, generating revenue, and winning larger projects.  Most partners regularly work with an average of 8 other partners, and 31% of their revenue comes via partnering (growing at 15% annually).  This feedback is even stronger as it relates to the recent economic challenges.  Our research also shows that one of the key hurdles in making collaboration happen is the lack of trust that exists between partners.  Partially for that reason IBM has created and IBM sponsored forum that ensures that you are working with some of the best companies in the business. 

The key to ROI is finding someone else you can work with to sell in new geographies, or sell a new solution.  The first step is picking someone with complementary skill sets.

(A summary from a recent WSJ article by Martin Roth and Richard Ettenson)
 
Advanced economies have a particular way of dealing with downturns, which often include hunkering down and waiting it out. However, lessons can be had from emerging markets where economic uncertainty is the only certainty. So, what can we learn? Here are some quick lessons.

• An office products company in South America offers good service in good markets, and great service when the economy sours. For example, they might make more follow-up calls after servicing a product. And, they might make calls on customers without trying to sell them anything, but rather focus on issues of importance to the customer that might be helpful in solving customer problems at a later date. Imagine that — a sales call without an attempt at a sale. I can see how that customer might engage in more conversations with that vendor than with other vendors. If they have conversations that truly benefit the customer and not just themselves, they will build customer loyalty.
• Two telecom companies (one in South Africa, the other in India), are beating Western companies by offering tremendously flexible mobile phone usage plans. For example, they allow people to buy minutes over their handsets, on the Internet, through ATMs, and through specialized kiosks. The point here is that companies have to be willing to change their offerings quickly and often (see Responding Competitively during a Recession) to address market changes. And these companies are winning business with these flexible approaches.
• Another suggestion comes from the mobile phone industry. A telecom provider in the Dominican Republic outsmarted its competitors by looking beyond typical measurements of success such as ARPU and churn rate. They conducted scenario planning including key macroeconomic factors such as inflation, unemployment, exchange rate fluctuations and others. This scenario planning process enabled them to move quickly with new offerings when the market moved in a particular direction – and win new business from their competitors.

What are you doing to learn from companies that have thrived in turbulent economies?

(McKinsey writes a good article, I write a better – and more entertaining — summary for you (subscription required, so I can’t link to the article).
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Of course, we have to do more with less. That’s the new world we’re living in.  But what is really new about this world besides lower expectations across the board?

Segmentation plans made in 2008 are probably outdated. Re-examine the market opportunity of different market segments depending on how those key segments have been affected by the downturn. Furthermore, examine microsegments as differences may be significant. For example, affluent young professionals in the financial services sector have been impacted differently than other microsegments and will act differently today than they did a short time ago.

B2B marketers should look even more closely, by drilling down to the account level. For example, an account that may have been highly profitable, and that rated preferential treatment may now require renegotiated discounts, closer adherence to standardized orders, etc.

Amazingly, McKinsey agrees with me by saying across the board cuts may not make sense in this environment (see How can you control your marketing spend if you don’t know what your marketing spend is?). They go on to state that understanding reach and cost enables marketers to make better informed decisions as to where to invest marketing dollars.

As it relates to sales, one should examine your sales coverage model to establish the optimal mix of sales and sales support for the given markets and accounts you’re pursuing. In addition, it may be even more important now to conduct win-loss analysis to understand the changes that are happening in the sales process.

This downturn requires constant analysis on the changes happening in your markets and your accounts. What do you think?

As I continue to work with companies, discussion business plans and strategies, I have realized I have an aversion to the word “could”. I am hearing it more and more, especially as economic times get tougher and and more companies are rethinking their business strategy.
 
The problem is that I am hearing it at the point in the discussion when executives need to define their path forward. Strategy is all about making clear choices, then executing well on them. The strategy is the strategy until there is new information that require a change in direction and a new strategy.

There is no room for the word “could” in the definition of strategy. In fact, the use of the word signals to me a lack of strategy, a failure to make clear choices, because it leaves many pathways open for consideration. It is difficult for a company to execute effectively and efficiently on a strategy that has multiple pathways. Just because a product “could do this function” or a company “could go in this direction” does not mean it should.

With that said, there are still good applications for the use of “could” in the strategy process:

• It is necessary to open up new options and possibilities in the brainstorming or idea phase. What could the company build? What go-to-market approaches could they follow? But once the brainstorming is done, it is time to close down the number of possibilities.
• It is often helpful to consider what external events could happen over the next few years - in the areas of competitive moves, economy, customer tastes, or technology developments - to ensure the company has a response to these events. But each of these are external factors, rather than undecided choices for the company.
• It is fine within limits to keep some options open for further down the road in the strategy. For example, it is fine to use “could” to define several exit options for the company 3-5 years down the road. Lots can happen in that time, and it is less necessary to nail down the specifics right up front. But watch out for applying this logic to choices in the next 6 months or a year, because every option left open has a cost in execution.

Listen to the discussions in your business planning sessions. Are you comfortable with how the word “could” is used? Or do you need to put a ban on the word to force some important choices about your direction?