Articulate Your Business Case or Lose Customers To Competitors

We Are Out of The Hype Cycle: Digital and Social Applications Must Solve Business Issues: I know when I first started to learn about social media and digital applications, I could see how they could change business. It made sense to me. I think because I am an early adopter. I’m referring to Geoffrey Moore’s technology adoption curve. There’s the innovators, who create all this cool new software. And then there’s early adopters like me, that look at those innovator’s inventions and realize the impact they can make.

Having been in this business for a long time, one of the things that I realized was that not everyone can see the value of social and digital. It’s not an intuitive thing for them. And there’s nothing wrong with that. It just is what it is. And that’s why businesses (vendors) who are in the business of selling products and services really need to take a look at their product management and product sales teams. Are they organized to sell to those that “already” get the value? That’s like selling ice to eskimos. The people who get it, already bought your product.

MY POV: Where the rubber is now meeting the road is learning how to articulate the business value that digital and social applications, products and services provide. I am lucky to hear a lot of briefings on new things. However, what I am finding is that some companies need to really look at where the marketplace is in adoption of the new technology and perhaps shift some of their marketing messaging, but even more important to look at who are the persona(s) that they are developing products and services for? Are they for the early adopters? It’s a small part of the marketplace. Or is is for the early / late majority? That’s a much larger part of the marketplace.

Early Majority Want Your Help to Say Yes: And that part of that part of the marketplace (early majority) requires something different to convince them that they need this “new” product. They want to know what business challenges does it solve? They want to be shown how someone else had a “burning issue” and this product or service solved it and what the outcomes were.

If your sales pitch is not lined up that way, you maybe missing the market on the largest part of the marketplace. Don’t take it from me; reread  Geoffrey Moore’s Crossing the Chasm— it’s all about changing how you market and sell as the marketplace matures. Those who do, will find prosperity and those that don’t, won’t.

Digital Disruption Transformation ChasmWhat Do You Need To Do Now? The key is to be able to articulate the business value. What is the business issue that your product or service solves? To know that, a business has to be really clear on who they are selling to. That means they need to define various personas and know what those personas face as daily challenges. They need to map out the-day-in-the-life of that professional. And they need to do this by going and talking to 10 or 20 or 100 of them. Don’t assume anything. Then align the challenges those professionals face with the solution you offer and can show an early majority person how your new “product or service” can solve their issue better than anyone else.

References, References, References: And having customer references is key, especially early majority customer references. Why? Because early majority folks convince other early majority people to take a chance at these new technology, processes and services. They believe each other more than they believe the vendor or even sometimes an analyst.

Watch Your Language: There’s lot’s of languaging issues in the current marketing of software and products / services. Almost everyone can claim to be influencing some aspect of customer experience. And by not articulating the business case of how that product or service clearly affects the bottomline, the buyer is confused and that slows the sales cycle down.

Understand Buying Signals: Your potential customers probably won’t say anything; they might say things like, “Hmmm looks interesting. Call me in a few months.” or “Send me a brochure.” NOTE TO SELF: Those are NOT buying signals. They are polite ways of saying, “I don’t have time for this; I don’t see how this applies to why my hair is on fire; I am not sure how I would apply this to what is happening in my department or company and I certainly have no idea how I am going to explain this in a business case to get my boss to say yes.

Do The Work: Don’t make your customer do the hard work. Create those business use cases. Create scenarios that the early majority can see themselves in. Articulate, even if it’s a back of the envelope calculation, the return on their investment. If you do this, it will make all the difference in your sales cycles, in your revenue and profits and your market position. If you don’t, someone else will.

Time to relook at where the marketplace is in the maturity of the digital disruption and stop all the fanatical “speak” and get down to business. At least that’s my take. What’s yours?

@DrNatalie, VP and Principal Analyst, Constellation Research

 

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Could Social Media Monitoring Have Saved Netflix & Blockbuster from Themselves?

Word Cloud On Netflix from Social Media Monitoring

I teamed up with my friend Jennifer Tyler, @JenHowell4, at Sysomos and we did a little social media monitoring on the Netflix situation. One of the goals of this blog post is to show that data can be used to tell a story. When you tell a story, the audience listens.

A Cause for Pause I hope that this case study gives every CEO, CMO… a cause for pause — to consider social media as well as social media monitoring –to give it a real, hard consideration. Not just because you want to avoid risk, but because you can begin to see that there is mission critical, real-time data that you can use in your business. And so now to our story, aided by the social media monitoring data.

Blockbuster’s Customers Didn’t Like the Delivery System Because It Involved Late Fees If we examine what was being said about Blockbuster in social media prior to bankruptcy, the negative conversation was around late fees. Clearly there was something not working about the delivery of movies. Customers had to come in, rent the DVD and remember to return them on time. Or else the “evil” late fees would consume their positivity around the brand.

But was Blockbuster listening? It doesn’t appear that they were “hearing” the feedback, at least not enough to shift their business model. Here’s a word cloud that can be generated via social media monitoring. It tells you what was being said about Blockbuster in social media. You can clearly see- in the word cloud- that the main jist of the conversation was about late fees. (In word clouds, the larger the words, the more times they are mentioned in social media.)

Social Media Monitoring Word Cloud on Blockbuster

If Blockbuster was using social media monitoring, they could have seen that their customer sentiment was not positive. They could have clicked on the red part of the pie chart to understand what customer’s were upset about. By clicking on the graph they could choose to look at tweets, at blog posts, etc… that pertain to that negative sentiment.

Blockbuster Sentiment Chart in 2010

But Blockbuster didn’t listen — or at least they didn’t hear and shift their business and had to file bankruptcy on Sept 23, 2010. You can see in the word cloud about Blockbuster’s bankruptcy, that Netflix is showing up in the conversation. Clearly something to pay attention to — when the word cloud is supposed to be about your business and your competitor is showing up in the same cloud! YIKES!

Blockbuster Word Cloud Sept 23 1010 Bankruptcy

Social media monitoring can show you what is being said about your company. Below are clips that represent blog posts in social media about Blockbuster’s bankruptcy.

Conversations on the web about Blockbuster's Bankruptcy

And here’s customer sentiment around Blockbuster’s bankruptcy in tweets:

Blockbuster Twitter Conversations About the Bankruptcy

July 12, 2011 Flash Forward to July 12, 2011. Was Netflix listening to their customers? If you look at the graph at the top left hand side, you see a yellow-ish curve. It is pretty much the same height until July 12, 2011.

What you can do in social media monitoring is to click on the peak and then see what that is attributed to. In the upper, right hand corner, you can see the blog post by Netflix’s CEO Reed Hastings is what gave rise to the spike in social media and online conversations. The screenshot is of the Facebook post with a link to the CEO’s blog post. There are 81,789 comments. Out of those comments, there are 1,429 Likes. That’s about 1.7% positive responses.

If we do a word cloud on the same peak, we can see what the main topics are. That’s the group of words to the lower right. The key words are: Netflix, price, hike, streaming, dear…. It’s clear what the crowd is upset about. If we look at the lower left screen grab, you can see a buzz graph. The buzz graph tells you what words are being used in association with other words and the thicker the line, the more prominent is the use of the word. Those words are: increase, stream and redbox…

Social Media Monitoring Data on Netflix July 12 2011 Price Hike/ Change

Here’s the actual blog post by Hastings— note that he ends the post with telling customers that they can cancel their services at any time.

Netflix CEO Reed Hastings Blog Post July 12 2011, With Invitation To Cancel Customer Subscriptions

Here’s some of the thousands of comments to the CEO’s posts, most all negative, about the changes to the Netflix services:

Customers Reaction to Netflix CEO Reed Hastings Blog Post July 12 2011

Despite the >23,000 negative comments on the blog on July 12, 2011, Netflix sent out a notice on the price hike on Sept 19th, 2011. What happens when you don’t listen or hear & you act without considering what customers think, feel and know? Customers were outraged… and the press picked up the coverage… If for no other reason than the press looks to social media for stories, companies MUST start taking social media seriously.

Press That Covered Netflix Price Change and Splitting Up the Company

And here’s some of the titles of the articles below. Companies work very hard to get coverage like this. Unfortunately, it wasn’t positive coverage.

Titles of Articles About Netflix

Here’s a sample of the tweets about Qwikster (Netflix’s new offering) – Sept 19th, 2011.

Sample of Tweets About Netflix Qwikster

And the three top words in the Buzz Graph?

Reed
• Hastings
• Apologize
 

Buzz Graph on Netflix CEO Reed Hastings

Here’s Doug Gross’s article, from CNN Tech and The Daily Dog’s Report on Netflix:

 

Daily Dog's Story on Reed Hastings and Netflix

And Tom Loftus’s Wall Street Journal story on Netflix and Reed Hastings:

 

Wall Street Journal's Story on Netflix's CEO Reed Hastings

 

And more stories from some great journalists:  

, Mashable: Netflix’s @Qwikster Problem: Twitter Account Controlled by Weed-Smoking Elmo  

Ben Fritz, LATimes: Netflix CEO admits ‘arrogance,’ renames disc business Qwikster  NPR: Netflix’ News: Signal Of DVD’s Demise?

Scott Cleland, Forbes: Netflix Crushes Its Own Momentum

Matt Burns, TechCrunch: Netflix Stock Erases 12 Months Of Massive Growth, Crashes Through 52 Week Low

Mike Issac, WIRED: Meet Qwikster: Netflix Spins Off Discs-By-Mail from Streaming Video

Austin Carr, FastCompany: Netflix: What We’ve Got Here Is A Failure To Communicate

What was interesting is that I checked Blockbuster’s twitter handle… and guess what I saw? Blockbuster is NOW listening! They are offering 1 year subscription to the people who provide the best reason for leaving NetFlix:

 

 

Blockbuster is listening now!!!

What makes this whole situation even worse, like Stan at Mashable said… Netflix didn’t even check the twitter handle– @Qwikster. Someone else has it. Here is one of his typical tweets. It’s not “on brand” with Netflix and Netflix doesn’t own the twitter handle. (Note to companies- before you pick the name of a new company, go to Twitter and check to see if the name is available!!)

 

Qwikster Tweets

Deming On Steroids Maybe its good to listen to your customers. Deming said it years ago. Listen to your customers and employees. Take the feedback and integrate it into your company. What we have in social media is Deming on steroids. We have feedback that is honest, genuine, and transparent. What’s worse is that, like cave paintings, it is something that will last forever for whomever is searching to find it.

Did Blockbuster cross the chasm of it’s time? No. It’s customers were saying, “We want a different delivery system where we don’t get dinged for late fees.” It didn’t shift with the changes in the marketplace. Did Netflix take their spot. You bet. Did Netflix get arrogant? One would think that after >87,000 comments or 24,000 comments, that if the customer’s weren’t good with what was being proposed, and Netflix went ahead anyways, yes, it appears so.

What could Netflix have done better? Ask the customers what they think before making a declaration. Explain that to keep the company profitable and to keep delivering the streaming services, that there might need to be some changes. Ask, don’t tell is the VERY FIRST things good leaders learn in and out of business school. Asking vs telling would be a paradigm shift for most CEOs.

Netflix announced the deal with Facebook and Michael Drobac, director of Government Relations at Netflix is asking customers to help bring Facebook Sharing to the US. Has Hastings done so much damage that fans and customers will not rise to help? Did the apologies and explanations by Hastings help or hurt the company? Do you think Hastings understands what he did wrong?  Todd Wasserman of Mashable.com reported rumors of Blockbuster to launch a Netflix rival. Is it too late for Netflix?

A Social Media Teaching Moment What can we learn from this? Call it a “teaching moment.” We can conclude that’s its important to listen to our customers. It’s important that executives listen to customers and use that feedback to make good decisions. The information about a company that is contained in social media is real-time and real relevant. It’s your customers, your advocates, your influencers, your ambassadors, the press and your nay-sayers giving you their point of view. And it lives forever, it can go viral and change not only what customer’s think but also what investors think, as well as stock prices. Social media is clearly a medium, that if you don’t understand it, it can get you!

So where is your company in the adoption of social media? If it’s stuck, then perhaps consider social media monitoring. It will give you:

  • A benchmark on where your sentiment and share of voice is- especially compared to your competitors
  • Assurances that what you are doing is working; fair warning when it isn’t
  • Mission critical data to adjust your products and service
  • Data to help create a business case for the decisions you are making
  • And give you data that can be used to calculate social media ROI.

Where is Social Media Going? Many people are asking me what’s the next phase in social media? They’ve got their Facebook and Twitter handle and they are posting. They have somewhat of a content strategy and interaction plan. And they are trying to drive customers through a marketing funnel and help customers with their customer service issues.

The Third WAVE of Social Media Adoption The next phase, and maybe it should be one of the first phases, is to do social media monitoring. Why? A good case study in this is re: Netflix and Blockbuster situation. Where we are in the social media lifecycle is the Third Wave. Wave One was lead by the Innnovators. Wave Two was championed by the Early Adopters.

The Social Media Adoption Curve by Dr Natalie Petouhoff

For social media to become the business-changing paradigm shift that it can be, it must win over the Early Majority. If that happens, then the business world would be entering WAVE Three, in the Social Media Adoption Curve. (I adopted Geoffrey Moore’s and Roger’s Diffusion Theory thought leadership around this concept.)

So what will it take to get the majority of the business world to buy into social media? The Early Majority are pragmatists. They want assurances that what they are going to do, is gonna work. They want business cases and they’d love to see ROI. One of the ways to show companies that social media matters is all of the above. And one of the best ways to create a business case is to do a little social media monitoring. At least that’s my take!

Don't do the Ostrich

Take your head out of the sand and cross the chasm

What’s your take on where business is in the social media adoption process?
Does this type of social media monitoring data make it easier to understand why someone should invest in social media? Love to hear your thoughts!

The Social Media Adoption Chasm - Don't Fall Into The Gap

@drnatalie Learn. Share. Grow!

Here’s more information to that might help you:
A link to the powerpoint presentation on slideshare: http://www.slideshare.net/doctornatalie/social-media-breakfast-club-and-sysomos-presentation-sept-22-drnatalie

Link to my Social Media ROI videos: http://www.drnatalienews.com/blog/did-u-see-the-videos-on-the-roi-of-social-media

Link to my white papers on the ROI of Social Media: http://www.drnatalienews.com/blog/roi-of-social-media-white-papers-by-dr-natalie-petouhoff

 


 

 

 

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