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Death by Tweet by Don Peppers @SMiCS2011 in Monte Carlo.
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COPYRIGHT © 2011. ALL RIGHTS PROTECTED AND RESERVED. 1
@DonPeppers
#SMiCS2011
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Big data: 1 billion+ Google searches every day
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Big Data: Amount of information doubles every two years. By 2015 it will be doubling every 72 hours
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By 2015, game credits will make Facebook the
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Generation Y already considers
email old-fashioned
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In the U.S., 1 out of every 8 couples getting married
met each other online
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AccelerateNatural Dietary Supplement
ENERGY BOOST
Impact Guaranteed
Technological progress is accelerating
No, it is not your imagination
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driving faster and faster economic growth
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growth started, at about 0.75% p.a.
By 1900, the rate of growth had climbed to 1.5% p.a.
By 1960, growth had increased again, to about 2.3% p.a.
For 100,000 years, the average human being lived on the equivalent of $400 to $600 p.a.
COPYRIGHT © 2011PEPPERS & ROGERS GROUP|ALL RIGHTS PROTECTED AND RESERVED | 10
Organizations compete to survive in
Over time, as in life, business models evolve into more complex
Business innovation takes an evolutionary path
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comes to those who
Apple Macintosh succeeded
But remember the Lisa?
iPhone is a big success
But an earlier phone failed
iPod succeeded magnificently
But who remembers Newton?
Like evolution, innovation proceeds by trial and
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...so progress is collectively predictable but locally random
Strategy. Execution. Results.
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Product CentricityMarket share
Customer Needs
Satisfied
Customers Reached
Share of customer
Cus
tom
er C
entri
city
Technology now gives business a new dimension for competition
Creating the most possible value from each customer
Creating the most possible value from each product
Strategy. Execution. Results.
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Product CentricityMarket share
Customer Needs
Satisfied
Customers Reached
Share of customer
Cus
tom
er C
entri
city
CRM: Treating different customers differently
Technology now gives business a new dimension for competition
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Customers remember you, whether you remember them or not
How you treat products today will have no effect on their price tomorrow
But how you treat customers today has everything to do with their value tomorrow
Strategy. Execution. Results.
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What does a relationship involve?Interaction occurs, both ways between two parties
Relationships are iterative by natureA context develops over time
Every relationship is different
Successful relationships generate trust
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Customer ExperienceCustomer Insight
unique addressable individuals
behavior and needs
-efficiently and
effectively behavior, offerings, or communications
Identify Differentiate Interact Customize
Managing customer relationships
Strategy. Execution. Results.
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Two requirements for earning a
Good intentions
Competence
Strategy. Execution. Results.
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Good intentions require you to
would want to be treated if you
best indicator -
Firms that score considered the most for future
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Incompetence also destroys trust
Making the customer tell you personal details over and over
Customer calls the IVR, punches in his account number,
Giving customer reps no authority
Treating all customers the same
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Gen
erat
ion
Gap
?96% of Gen Y consumers
belong to a social network
Average time spent per day: >1 hour
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Or t
echn
olog
y ga
p?increases 1000 X every decade
will exchange 1000 X as much information with each other
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William Gibson
Strategy. Execution. Results.
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Trust gains importance as interactions increase in speed and volume
1. Interaction generates transparency
3. Proliferation of messages leads everyone to screen information for its trustworthiness
2. Trust makes interactions more efficient
Strategy. Execution. Results.
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Extreme Trust
Proactive trustworthiness
TrustabilityA new, more demanding set of expectations:
Our standards for what constitutes trustworthy behavior are going up
Strategy. Execution. Results.
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Trustworthiness
Trustability compared to
Strategy. Execution. Results.
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TrustabilityMany previously acceptable marketing
x Profiting from customer errorx Benefiting from asymmetric information x Failing to notifyx All
Strategy. Execution. Results.
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Product CentricityMarket share
Customer Needs
Satisfied
Customers Reached
Product centric business models are often inherently untrustable!
Strategy. Execution. Results.
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Linda Kaplan Thaler, CEO, Kaplan Thaler Group
Screw up today, and the
un-Google
Strategy. Execution. Results.
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Grant Robertson, blog post, May 1, 2007
Screw up today, and the
Strategy. Execution. Results.
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Box office receipts down 40% the day after release!
Strategy. Execution. Results.
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83% of consumers trust the recommendations of their friends
>50% trust online recommendations from complete strangers
Just 14% of consumers trust advertising
Welcome to The Age of Transparency
Strategy. Execution. Results.
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Radical idea: Everyone here should allow customers to review products and services
The technology is inevitable
Do you allow reviews on your site?
Strategy. Execution. Results.
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Sockpuppets beware!
Social media: Everyone
Internet chat: No one knows
Strategy. Execution. Results.
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Actual note, handed to a Qantas flight
attendant
Strategy. Execution. Results.
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Cnotxet alolws evreynoe to raed lgnehtystrigns of scarmlbed wrods prefcelty wlel
with others, giving strength to relationships
Human beings are creatures of context
Strategy. Execution. Results.
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You tailor your product, service, or elements associated with it
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Customer tells you what he wants, or how he wants it
Save metime
The more effort the customer invests, the greatertheir stake in making the relationship work.
Now the customer finds it more convenient to remain loyal, rather than re-teach a competitor
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Some of the guests initiate most discussion
Still others just listen
Social media is like a cocktail party
-9-
90%
9%
1%
still enjoy the party!
Strategy. Execution. Results.
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Social networks evolve, by
Preferential attachment can create a
Strategy. Execution. Results.
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Cascading is Unpredictable
Strategy. Execution. Results.
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Cascading is Unpredictable
Netscape had a million collaborating
members
postings were done by a single user
Strategy. Execution. Results.
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Cascading is Unpredictable
Netscape had a million collaborating
members
postings were done by a single user
900,000 registered users on Digg, but
one third of all home-page
postings come from just 30 users
Strategy. Execution. Results.
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Cascading is Unpredictable
900,000 registered users on Digg, but
one third of all home-page
postings come from just 30 users most
widely read user, Adam Fuhrer, had
millions of page views, including MS
Vista reviews
Strategy. Execution. Results.
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Cascading is Unpredictable
most widely read user,
Adam Fuhrer, had millions of page
views, including MS Vista reviews
Adam Fuhrer was
12 years old!
Strategy. Execution. Results.
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Cascading is Unpredictable
Adam Fuhrer is 12 years old!
Strategy. Execution. Results.
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Path dependent local randomness
NETWORKS
Collectively predictable emergent behavior
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Just 15% of viral initiatives show positive results!
Therefore: Word of mouth is also inherently unpredictable
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So be careful with
Despite its customer-friendly architecture, the press portrayed Speak Easy as sneaky and manipulative
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Control is Not an Option
2010: Greenpeace campaigns on
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They tried to get You Tube to take the video down because of trademark violations
They deleted critical comments on their Facebook fan page
They corrected the spelling errors in their
Control is Not an Option
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Network analysis: To identify and quantify the influencers and the influenced
Sentiment analysis: To understand conversations, attitudes and dominant opinions in social media
Tools for making sense of social network communications
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DoubleClickidentified network influencers
1,000 influencers with certain traits
Quantitative survey of 6,000
Web users
Use the Web more than twice as much
Pay more attention to online ads, and want more relevance
But also more likely to clear their cookies regularly, as well as fast forwarding through video commercials
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Build and maintain a
reputation for trustability
The only way to succeed in a
networked world
influencers and connectors are curious and inquisitive people.
Within Social N
etworks
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Sentiment analysis: Making sense of written and spoken language
Analyzing attitudinal information requires
versus
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Gross National Happiness Index
Heath Ledger diesMichael Jackson dies
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Why the sudden surge of negative blog sentiment after rain-delayed game?
Stadium officials mistakenly told hundreds of fans the game had been canceled
But StubHub denied requests for refunds, because the game had actually been played
Sentiment analysis tool spotted trouble brewing online. Soon the company offered discounts and credits to affected fans
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How to choose new products
Large consumer products company monitors product reviews, social media, and other unstructured data
Information is clustered to facilitate identification of problems, needs and new product opportunities
Consumer sentiment drives product development as well as providing real-time feedback on new products
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Different social networks or search terms can generate highly different outcomes
will affect the feedback you detect
Tweeps are from Mars
And the commercial domain is different from the social domain
Fans are from Venus
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2006: Introduced News Feed
2007: Launched Beacon shopping updates
Learning their lessons the hard way
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Recruit high-influence customers to help design the Speak Easy program
But did Staples enjoy enough trustability?
What should Staples have done differently?
What could they have learned from
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Office supply management guidance and tips
Incentivized customer reviews of competitive products in all categories
Discussion groups for small businesses, large enterprise office managers, government, non-profits
Office supply inventory management tools and other applications designed to reduce costs
Building trustability in advance
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Was there a better policy for Nestle?
What would USAA or Amazon have done?
What Nestle could have done:1. Temporary moratorium on palm oil2. Reach out to the most involved customers 3. Solicit opinions and viewpoints, publicize
But again: Did Nestle have enough trustability?
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Calorie and diet guidelines, objectively comparing Nestle products with other brands as well
Recipes, cooking guides, how-to pages, with customer contributions incentivized
Chocolate stories and videos, with contests for most creative or entertaining
Social responsibility discussion groups, emphasizing environmental issues in advance
Building trustability in advance
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Recognize the inherent unpredictability of social networks and cascades of opinion
Avoid the impulse to try to control social media
Forgive mistakes and ask forgiveness
Avoiding death by tweet
WARNING:Build your TRUSTABILITY in advance!
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Trustability works both ways
First Persian Gulf War (1991)
USAA sent unsolicited refunds for time spent abroad by members
2500+ members mailed their
refunds back!
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Integrity is not elastic
If your company is designed for trustability with customers, then
Trustability is more likely to characterize other relationships as well
Workers trusting each other
Vendors, stakeholders, investors
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profitable company,
It will make you a better company
Trustability
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Peppers & Rogers Group
Management consultants in customer strategy issues
Magazines, newsletters,research white papers
Offices and clients around the world
@DonPeppers