October 4, 2007

12 steps to the interactive future - you decide

1. Change Your Marketing Mindset

Marketing's role has not changed. It's still about defining target markets, communicating with prospective customers, building loyalty and so on. But the techniques that were successful in the past will be less and less effective in the future. This is where your new marketing mindset comes in.

Clear your mind of all those one-way, one-sided communication techniques, all those ways of spouting only your side of the story. Marketing to the Social Web is not about you getting your story out, it's about your customers. It's about being more transparent, earning trust, building credibility. It's about nurturing relationships and dialogue among customers, prospects, your company and whoever else is active in the community.

2. Make Your Brand Come Alive

To win the branding war, you have to recognize that brand equity is shifting away from brand essence and brand recall. Those were key elements in the old marketing and resulted in what I call the stationary brands, like Gillette, Kodak, Disney and Kellogg's.

But a brand is actually a living, changing thing, especially in the new marketing. It is difficult for many marketing people and C-level executives to admit that their brand is a living thing. Yet, in the new marketing reality, the brand is based on the dialogue you have with your customers and prospects: the stronger the dialogue, the stronger the brand; the weaker the dialogue, the weaker the brand.

What makes the Social Web so important is that it permits companies to have these kinds of dialogues more efficiently and less expensively than ever in the past. Google is a good example of a living brand that fosters dialogue. Its features, in fact, actually enable dialogue between users—features like Google Talk, Google Groups and Blogger. The brand has become iconic because it's an indispensable part of everyday life for anyone who uses a computer. Google is always developing new features, asking for feedback on "beta" elements and checking to see what people do with Google.

In the new marketing, companies gauge brand equity not by static measures such as brand recall but by dynamic measures such as customer word-of-mouth.

3. Out with the Old Segmentation

Companies have traditionally segmented their markets according to easily identifiable demographics like age or gender. In the second period of marketing, they added lifestyle factors such as diet or medical concerns. With the advent of the Social Web, the new marketing means segmenting by what people do and feel—their behavior as well as their attitudes and interests. Your goal is to identify groups of customers within the larger market that you can reach and affect through your marketing.

Segmenting by behavior, attitudes and interests doesn't depend on faceless numbers (how old customers are or how wealthy they are, for instance). Instead, it groups people by what's important to them, as indicated by what they do, think, like, and dislike. Once you know what moves your customers, you can target them with marketing activities that are meaningful to them. (It's all about them, after all.)

4. Target by Behavior

The old way of targeting was by demographics. This has probably been beaten into marketers' heads because it tends to be the way to buy media. Not in the new marketing. Now the Web helps us map behavior (on the Web itself) very closely. Age, sex, educational level, income and other demographic indicators do not even register online (with the exception of a Web site for children or for products like liquor, where age is very important for legal reasons). As the famous New Yorker cartoon pointed out, on the Web, nobody knows if you're a dog. Software can track behavior, however, through the sites customers have been visiting, how long they linger on each page and many other details. This opens the door to precise targeting opportunities.

Ultimately, the Social Web will lead to targeting customers who say, "Here are the things I like. Make me an offer, instead of my having to do all the work." Customers will be more open to targeting based on behavior because they've made the choice, they have the control. Marketing is not an irritation or an interruption if it relates to something customers want. The ideal is to get your brand in front of just the people who are interested in your product or service at this time.

One of the big changes happening with the Social Web is a swing away from one-to-one targeting. I think marketers went too far in that direction, to a point of diminishing returns. We don't need to know every little thing about an individual. We do need to know that an individual participates in three or four online communities of interest on any given day.

5. Communicate Interactively

The new marketing creates the platform of true interactivity. Add more dimensions to the communication, rather than having most of the communication flowing from the organization. So you might add the ability to search and query, which is similar to search; add dialogue; add comments; add personal reviews of products, services, experiences.

Communication is less about creating contained and controlled messages (as in the old marketing) and more about creating compelling environments to which people are attracted. Remember, the marketer's primary job is to be the aggregator of customers and potential customers. The marketer's secondary job now and in the future is to create compelling environments that attract people.

How do you create an environment that is a shared, powerful experience? Starbucks is a great example of environmental marketing because it is a physical place that people want to visit and stay a long time. Amazon is a great example of early environmental marketing because people actually hung out at the Amazon Web site. They wrote about the books they liked and didn't like, and made lists for other visitors. Oracle and IBM are two business-to-business examples of how to create digital environments that are thoughtful, attractive and foster interactive communication.

6. Embrace Consumer Content

In the new marketing, the best Web site will combine professional and user-generated content (contributed by customers and potential customers). You're asking for this—encouraging it—when you create an environment where it's easy to talk about your products or services. Even when you pay for and develop professional content, user-generated content continues the dialogue.

Here's what I mean about balancing professional and customer-generated content. You have every right as, say, a leading energy company to post your thoughts about the future of electricity. Customers will let you know whether they agree or disagree. You can offer podcasts from an expert on energy from the University of California, who talks about the future of renewable energy. Again, customers will react to this professional content with their own content. It's almost embarrassingly easy to create a video with a video camera, digital camera, cell phone or computer. Of course, the video may not be very slick, but that is often the point.

Let me point out, at the risk of sounding profound in a clichéd way, that everybody has become media. So as you get into the Social Web, you are media. Individuals are media, organizations are media. They are writers, editors and publishers, sorting, prioritizing and presenting compelling content in an interesting way makes it important.

For example, a local dry cleaner can hand a camera to an assistant and produce a show called, "Here's how we take care of the spots on your dresses. We don't use harsh chemicals. We are environmentally friendly." The chef at an Italian restaurant can produce a show called, "How we put together today's special from my grandmother's recipe." Or, even more basic, "Going to the market with Chef Umberto," following the chef as he picks out tomatoes or cuts of meat. Be sure to allow questions for interactivity. "Gee, Chef Umberto, my zucchini soufflé didn't turn out. What did I do wrong?"

7. Spread the Right Virus

Viral marketing is interesting because it is word-of-mouth over which you have no control. Before I go on, a word about silly virals such as the "Subservient Chicken." At www.subservientchicken.com, a camera reveals a person in a chicken costume standing in a dingy living room. The chicken responds to typed commands, such as "tap dance," "take a bow" or "do push-ups." In the 17 months after it appeared, the site was visited more than 422 million times.

The site won a Grand Clio in the Internet ad category for Crispin Porter + Bogusky in Miami. Although the site barely mentioned Burger King and I've never seen anything to indicate what it did for the company, the Subservient Chicken's popularity prompted the entire advertising industry to look for viral ads that were funny, charming, sexy or controversial, then e-mail them to friends or post them on a Web site. My 10-year-old son, who is interested in Google video now, thought it was a howl when he found an animated hippopotamus singing a song, and he kept e-mailing it to his friends. So even at a 10-year-old's level, we can see the effect of virality.

Yet silly virality, for all its popularity, is not really word-of-mouth. The concept we should be talking about is content-based virality. How do companies get solid viral content, something that does more than simply attract attention to itself? In healthcare, the content could be about lowering cholesterol or improving quality of life. People talking to other people about these topics will create a viral dialogue with content.

8. Accept Customer Reviews

In the old marketing, customers turned to professional book, theater, movie and restaurant reviewers for knowledgeable opinions. Once Zagat and Amazon invited ordinary people to give their opinions, there was no stopping the trend, the "Zagatization" of everything. Consumer Reports and the experts will always have their place, but in the new marketing, expect customers to vote on everything from cruise lines to cookware.

Customer reviews become particularly important for things that people don't do very often—such as rafting down the Grand Canyon or buying an ultralight airplane. Reviews include big-ticket items, drugs, cosmetics and many other things that affect the body. They also will be important for local and small businesses to enhance the experience of being part of a family of customers. If you add local search—the ability to find an Indian restaurant in San Diego or a bed-and-breakfast in Asheville, N.C.—the reviews become exceptionally powerful. You may keep your ad in the Yellow Pages, but why not spend a little time, effort and money to build your social media site?

In short, don't try to control your customers. The difficulty in the movement toward the Social Web is the natural instinct of marketers and corporate culture to control the message and the customer. It's difficult to give up control completely, but realize that reviews, as user-generated content, serve to demonstrate your company's transparency.

9. Leave Paper Behind

We have fewer reasons to kill trees because advertising and publishing for the Social Web requires no physical objects. Many of us simply throw away the instruction manuals that accompany our products, anyway. In fact, let's put all manuals on the Web. If I threw the manual away when I bought my microwave four years ago, invite me to download another copy from the Web site or click to watch a brief video.

The new marketing will be collateral-free, with material that is more compelling, customized, visual and up-to-date. Information can be a powerful customer relationship tool, but it doesn't have to be printed in an ad or booklet.

Ideally, you want to make content available at the exact moment customers need it. Let people choose what they want to see and when they want to see it, in effect making customers co-publishers. The same holds true for advertising. Give up control, give customers real choices (and real content), and their collaboration will make the dialogue more meaningful. You can sponsor a site or community and associate your brand with it, but don't expect to control the dialogue.

10. Invert Your Strategy

Strategy has traditionally been imposed from the top down. Now it has to be bottom up. As marketers, we have to learn from the people who are really paying attention to our products. Companies should test ideas and products, and let the strategy bubble up from there, instead of trickling down from top management. Through the Social Web you can quickly test, say, 2,000 versions of a new yogurt container and build on the winning version. Suppose you develop a new diet pill. Where should it be displayed in chain drugstores? Where would a prospective customer look for this kind of product? Test that and use the results to drive your strategy.

Clearly, there are other dimensions to strategy. Market leaders must have an overall strategy to stay on top in the automotive industry, soft-drink industry, computer industry. But in a Social Web world, you have to segment your strategies to the various communities in which you want to participate and sell. If you're an automotive company, how do you communicate to the group that is interested in environment and energy conservation or the group that cares about speed and sexy looking cars?

11. Let Users Decide

In the old marketing, information was arranged into channels, folders and categories to suit advertisers. In other words, the sponsors practically dictated the hierarchy of organization. Not any more. With the Social Web, information has to be available on demand by keyword, when and how users want it. So when I need to change the cartridge in my ink-jet printer, I have to be able to find that information quickly and easily. Similarly, Samsung should have its information link immediately available to prospects who enter an appropriate keyword ("flat-panel TV").

Customers want what they want when they want it, and in a way that makes sense to them. This may not necessarily be the hierarchical organization that makes sense to the advertiser or its information technology department.

Companies have traditionally used cost per thousand (CPM) to gauge advertising costs. How much will it cost to reach one million people at prime time in the Boston metro area? How much will it cost for an ad in a magazine with a circulation of 600,000? Notice that CPM puts the focus on the cost that the company must pay.

The new marketing has an entirely different emphasis. Instead of thinking about cost, you'll be thinking about return on investment. Your marketing payment will be based on a measurable return. For example, you might pay according to customer lifetime value (how much a customer is likely to spend with your company during the "life" of your relationship with that customer). In a highly sophisticated situation, the calculation would include the value of that customer's word-of-mouth and referrals.

From this perspective, marketing to the Social Web is truly an investment in your brand's future growth and profitability. You're paying for that growth, but you have a better idea of what you'll get for your money because the technology allows for more precise monitoring and measurement.

12. Let the People Pay

In the new marketing, customers want to be in charge of their own payment options. Whether they use a credit card, give you a bank account number for debit or choose PayPal, payment options must be fast and easy. From your end, payments via the Web are easy to track and help you analyze where the company's revenue is actually coming from—down to specific customers and offers. That's a big payoff.

Excerpted from Marketing to the Social Web: How Digital Customer Communities Build Your Business by Larry Weber. Available at Amazon. A recent review appears in BrandWeek.

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