marketing chaos
DESCRIPTION
by Don Peppers http://www.1to1media.com/speakingservices.aspxTRANSCRIPT
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 1
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 2
20 million+ Google searches
every hour, 24/7
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 3
New technical information now doubles every two years. By 2015 it
will be doubling every 72 hours
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 4
80% of companies use Linked In to recruit
employees
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 5
Generation Y considers email
old-fashioned
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 6
1 out of every 8 US couples
married in 2008
met online
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 7
No matter how
innovative your
product is today...
…tomorrow it
will still be a
commodity.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 8
And
…tomorrow it
will still be a
commodity.
And tomorrow
comes faster
now than it
used to
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 9
AccelerateNatural Dietary Supplement
ENERGY BOOST
Impact Guaranteed
Technological Progress is Accelerating
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 10
driving faster and faster economic growth
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 11
Around 1700, steady economic
growth started, at about 0.75% p.a.
By 1900, the rate of growth
had climbed to 1.5% p.a.
By 1960, growth 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 © 2009. ALL RIGHTS PROTECTED AND RESERVED. 12
Question:
Of the 100 entities in the world generating
the most revenue, how many are nation-
states, and how many are businesses?
76 businesses
24 nations
Strategy. Execution. Results.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 13
Competing now in a different dimension
Product Centricity
Market share
Customer
Needs
Satisfied
Customers Reached
Share of customer
Cu
sto
me
r C
en
tric
ity
Relationships are required
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 14
Customer ExperienceCustomer Insight
…customers as
unique addressable
individuals
…by value,
behavior and
needs
…more cost -
efficiently and
effectively
…some aspect of
the company’s
behavior, offerings,
or communications
Identify Differentiate Interact Customize
Managing customer relationships
Strategy. Execution. Results.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 15
Competing now in a different dimension
Product Centricity
Market share
Customer
Needs
Satisfied
Customers Reached
Share of customer
Cu
sto
me
r C
en
tric
ity
Maximizing the value
created by each product
Maximizing the value
created by each customer
Strategy. Execution. Results.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 16
The Goldfish Principle
Wow! Look at that!
Hey! Look at that!
Strategy. Execution. Results.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 17
Optimizing by customer
Strategy. Execution. Results.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 18
Two
Requirements
For Earning
Customer Trust
Intentionto act in the
customer’s interest
Competenceto carry out that
intention
Strategy. Execution. Results.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 19
Acting in the Customer’s Interest
Strategy. Execution. Results.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 20
The Need for More Trust Has Boosted Business
Lack of trust slows transactions
down and imposes frictional costs
When more trust is required, business
thrives, as obstacles are reduced
Strategy. Execution. Results.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 21
works because customers
are social animals
Bees and ants communicate new
discoveries to benefit the group
Strategy. Execution. Results.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 22
Now suppose you were a food
source for bees…
In the absence of communication
among your customers, advertising rules
But when customers talk to each other,
it’s the customer experience that counts
Strategy. Execution. Results.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 23
Why do groups make
better decisions?
Em
erg
en
t B
eh
av
ior
Diverse Perspectives
Strategy. Execution. Results.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 24
Ja
n 2
8,
19
86
–11
:39a
m
“No clues” on the day of the event, and the actual investigation required
six months to complete
Rockwell
built the
Challenger
and its
engines
Lockheed
managed
ground
support
Martin
Marietta
built the
external fuel
tank
Morton
Thiokol built
the solid fuel
boosters
Four key space shuttle contractors
But by 11:50 am, Thiokol’s stock was down the most and remained lowest
throughout the investigation
Strategy. Execution. Results.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 25
Ja
n 2
8,
19
86
–11
:39a
m Rockwell
built
Challenger
and its
engines
Lockheed
managed
ground
support
Martin
Marietta
built the
external fuel
tank
Morton
Thiokol built
the solid fuel
boosters
Four key space shuttle contractors
How did the
market know?
Strategy. Execution. Results.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 26
De
ath
by w
ord
of
mo
uth
…
Box office receipts down 40% the day after release!
Strategy. Execution. Results.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 27
Linda Kaplan Thaler, CEO, Kaplan Thaler Group
Screw up today, and the
“news” will be permanent
“You
can’t
un-GoogleYourself”
Strategy. Execution. Results.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 28
Grant Robertson, blog post, May 1, 2007
Screw up today, and the
“news” will be permanent
“You can't take something bad off the Internet. That's
like trying to take pee out of a swimming pool.”
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 29
What are brand advocates worth?
Source: “How Valuable is Word of Mouth?” Harvard Business Review, October 2007
One academic study of customers
compared “spending” to “referral” value
LTV = CLV + CRV (i.e., spending plus referrals)
Surprise: Highest spenders aren’t
always the best references!
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 30
A telecom company
$-
$500
$1,000
$1,500
$2,000
$2,500
1 2 3 4 5 6 7 8 9 10
Valu
e
Customer Decile
CLV vs. CRV - Telecom Company
CLV
CRV
Most valuable spenders
Most valuable referrers
Source: “How Valuable is Word of Mouth?” Harvard Business Review, October 2007
Strategy. Execution. Results.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 31
Networks evolve,
using “preferential
attachment”
Preferential attachment
can create a
“cascading” effect
Strategy. Execution. Results.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 32
Cascading is
Unpredictable
Strategy. Execution. Results.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 33
Cascading is
Unpredictable
Netscape has a
million collaborating
members
But 13% of Netscape’s
“most popular”
postings were done
by a single user
Strategy. Execution. Results.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 34
Cascading is
Unpredictable
Netscape has a
million collaborating
members
But 13% of Netscape’s
“most popular”
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.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 35
Cascading is
Unpredictable
900,000 registered
users on Digg, but
one third of all
home-page
postings come from
just 30 users Reddit’s most
widely read user,
Adam Fuhrer, has
millions of page
views, including MS
Vista reviews
Strategy. Execution. Results.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 36
Cascading is
Unpredictable
Reddit’s most
widely read user,
Adam Fuhrer, has
millions of page
views, including MS
Vista reviews
Adam
Fuhrer is 12
years old!
Strategy. Execution. Results.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 37
Cascading is
Unpredictable
Adam
Fuhrer is 12
years old!
Strategy. Execution. Results.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 38
Path dependent local randomness
NETWORKS
have
Collectively predictable emergent behavior
Strategy. Execution. Results.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 39
In 2005, a blogger wrote about bad service with Dell
This “Dell Hell” story cascaded online, until BusinessWeek and The New York Times picked it up
Dell’s reputation suffered terribly, and its financial results declined, as well
One year later, a UK consulting firm analyzed the incident and
concluded it was not Dell’s fault at all
Most of the controversy was generated by misinformation that
cascaded through the online network of bloggers
and sometimes networks get it completely wrong
Strategy. Execution. Results.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 40
Evolution operates as a network also
A total of 35 completely new body plans emerged
during the Cambrian Explosion, 570 million years ago.
No new body plans have evolved since that time!
Complex
Interactions
Multi-cellularity
Discovered
Bacteria
Insects
Invertebrates
VertebratesCollectively predictable
emergent behavior
Path dependent
local randomness
Strategy. Execution. Results.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 41
Evolution operates as a network also
Collectively predictable
emergent behavior
Path dependent
local randomness
Strategy. Execution. Results.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 42
Evolution operates as a network also
Collectively predictable
emergent behaviorPath dependent
local randomness
COPYRIGHT © 2009 PEPPERS & ROGERS GROUP|ALL RIGHTS PROTECTED AND RESERVED | 43
Organizations compete to survive in
an “evolutionary” economic system
Over time, as in life, business models
evolve into more complex and
highly ordered “species”
Business innovation takes an evolutionary path
COPYRIGHT © 2009 PEPPERS & ROGERS GROUP|ALL RIGHTS PROTECTED AND RESERVED | 44
Because innovation proceeds by trial and error
…success
comes to
those who
“fail wisely”
Lisa computer failed
Apple Macintosh succeeded
First phone (with Motorola) failed
iPhone succeeded
Newton PDA failed
iPod succeeded
COPYRIGHT © 2009 PEPPERS & ROGERS GROUP|ALL RIGHTS PROTECTED AND RESERVED | 45
Fa
ilin
g W
ise
lyThe Wright brothers tested 200 wing
designs and crashed seven times
before their first successful flight
Why is WD-40 called “WD-40”?
James Dyson built 5,127 vacuum
cleaner prototypes
COPYRIGHT © 2009 PEPPERS & ROGERS GROUP|ALL RIGHTS PROTECTED AND RESERVED | 46
Fa
ilin
g W
ise
ly
Because the first 39 “water displacement” formulas
designed by the Rocket Chemical Company in 1953 failedWhy is WD-40 called “WD-40”?
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 47
Collectively predictable,
locally random
“If we mapped 3M’s portfolio of business units
on a strategic planning matrix…the matrix
would utterly fail to capture how this portfolio came to be in the first place.”
Jim Collins and Jerry Porras Built to Last, 1994
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 48
World’s largest camera company?
Collectively predictable,
locally random
World’s largest music retailer?
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 49
Scary thought:
By 2010, Gen Y consumers will
outnumber Baby BoomersG
en
era
tio
n G
ap
?
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 50
96% of Gen Y consumers
belong to a social network
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 51
Ask a Gen Y about privacy…
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 52
“The future is already
here. It’s just not evenly
distributed yet.”
William Gibson
COPYRIGHT © 2009 PEPPERS & ROGERS GROUP|ALL RIGHTS PROTECTED AND RESERVED | 53
SocialNetwork
Analysis
Leader: High number of
contacts in his/her
community and reciprocity
among them.
Follower: Person with a
similar profile to leader but in
less grade. He/She has
direct communication with
the leader.
Outlier: Person with a high number of
contacts both ways, but with low reciprocity.
1st Grade Marginal: Person with a profile similar to
the follower, but he/she is not near the leader.
2nd Grade Marginal: Profile not similar to the rest of the
roles. He/She has few or no bidirectional relationships.
Source: “SAS for Social Marketing,” 2009
COPYRIGHT © 2009 PEPPERS & ROGERS GROUP|ALL RIGHTS PROTECTED AND RESERVED | 54
DoubleClick
identified
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
“People often ask my
advice about…”
“I am an expert in
certain areas…”
COPYRIGHT © 2009 PEPPERS & ROGERS GROUP|ALL RIGHTS PROTECTED AND RESERVED | 55
Build and
maintain a
reputation for
trustability
The only way to
succeed in a
networked world
With
in S
oc
ial N
etw
ork
s
influencers
and
connectors
are curious
and
inquisitive
people.
Strategy. Execution. Results.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 56
Computers will never do everything
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 57
The real secret to a great brand…
The
“Mechanical Turk”
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 58
There has to be a person in there
What you want:
Self-organization
Your employees need to be
Engaged in their work and
Enabled to accomplish their mission
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 59
Strategies for succeeding
in a random world
Identify emergent behavior early, and make plans for dealing with it
The direction of innovation is predictable, so
plan for the capability, not the technology
Word of mouth is random, but can be
maximized with transparency and straight talk
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 60
Strategies for succeeding
in a random world
Recognize that inputs are more
important than outputs
Measure performance not just by outcomes, but by effort, creativity, and preparation
Celebrate “wise failures,” and promote
experimentation
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 61
Strategies for succeeding
in a random world
Focus on your company’s culture,
and encourage self-organization
Do a network analysis of your own employees
to identify key influencers
Develop a philosophy of business
based on customer trust
Strategy. Execution. Results.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 62
Come face to face with a real
customer at least once a week…
Facilitate networked, moderated
product reviews, including your own
Some things you can do now
Strategy. Execution. Results.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 63
In B2B: Help advocates within prospects
by providing ready-to-use PPT decks
Provide location-based information to fit
personal mobile technologies
Let customers sign up “buddy lists” for
checking their friends’ opinions
Strategy. Execution. Results.
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 64
Mix up your business groups – juniors,
seniors, male, female, trends and tattoos
Assign a 20-something to monitor your
brand mentions on social media sites
Above all, have fun! People like to
connect with other people. Help them!
COPYRIGHT © 2009. ALL RIGHTS PROTECTED AND RESERVED. 65
Peppers & Rogers Group
Management consultants in
customer strategy issues
Magazines, newsletters,
research white papers
Offices and clients around the world
@DonPeppers
To subscribe to the “1to1 Weekly” email newsletter: [email protected]