Category Archives: business model

Ethnography and its uses in business

As we are becoming more of a mass customization and transformation-based economy, more and more business are looking to use ethnography in designing better customer experiences. In this article, Procter and Gamble, Google, and others are doing it.

For Google, it involves observing and videotaping how people search online.  A success story was when they observed how difficult it was to search for keywords for Chinese consumers.  A tool called “Google Suggest” was created, when a user types a few characters, the search engine suggests alternate or possible completed key terms.

For Procter & Gamble, Managers and even Senior Managers engage in “immersion research,” in order to spend time with consumers in their natural habitat – their home.  They try to understand what their customers’ aspirations, desires and needs are, as well as what the role of their products are in the consumers’ daily lives.  An example was when P&G launched a laundry detergent and it failed because of a lack of empathy for its Mexican consumers.  Using ethnography, a key insight was derived when they discovered the importance of seeing the laundry detergent’s foam to Mexican consumers, which their product lacked.

The case for developing empathy for customers is clear.  What are some methods of developing empathy for them?  According to this article, using ethnography to better understand the consumer is key.

In conducting an ethnography, watch their behavior around their natural habitat. What artifacts do they use?  How do they go about their daily chores? Why would the customers engage with a particular experience? How they go about engaging in this?

Pay close attention to the language they use.  People speak in metaphors.  Metaphors reveal much about the person’s attitudes and mood.  For example, some customers may view retirement as the beginning of a journey, and viewing everyday is living life to the fullest versus viewing retirement as the ending of a journey.  When conducting ethnography, try to videotape, voice record or even take photos.

When conducting these studies, there will be multiple personas that can be classified demographically and psychographically.  These can be utilized by two purposes.  One is to present these to the client or marketing department, so that the client and the marketing department understand who their target consumers are.  The other is to humanize the customers.  Give these personas names, behaviors and motivations, demographic information, identification of what keeps the consumer up at night, and statement about the person’s personality in their voice (e.g. “I’m a detail-oriented person, who appreciates and loves intricate designs”)

Currently, I’m involved in an ethnographic study.  Because of the economic downturn, many people are being laid-off.  My study is about what motivates and inspires people that are unemployed or under-employed while job searching.

How can Twitter be a viable marketing tool?

Is Twitter a viable marketing tool? Some argue in favor of it, and some argue against it.  I think it boils down to whether an interesting conversation can occur as a result of this. Are there interesting anecdotes that can be utilized to explain the brand story? Are businesses simply using social media for the sake of it? Upon further examination, the pluses and minuses of this approach will be discussed.

Some of the advantages of Twitter would be the design of the platform.  It is simple, scalable, and easy to develop APIs for Twitter.  These APIs are modular and can exist cross-platform.  This is also a “cloud” application, where storage of the information is not placed in the users’ computer, but on Twitter’s servers.  Mostly, the advantage is that people are able to organize around topics, events, companies and causes offline and online with real-time conversations surrounding these.  It is human nature to be curious to know what others are doing and thinking.  Twitter is also a viral platform for everyone’s content, and it provides context to people’s conversations.

On the other hand, some challenges for Twitter can include finding content that would be of interest to potential customers.  For example, if one’s client sold table salt, what content can be tweeted?  The target demographic, busy moms, probably do not have the time or the interest to follow a table salt company’s tweets.  It takes much time and energy for twitter campaigns, and in the end is it really worth it?  What meaningful conversations can come from 140 or less characters messages? With so many people tweeting, isn’t burdensome to read all of those tweets?

I think despite some of the challenges, twitter can be useful if the brand has a compelling story to tell.  Reaping rewards of Twitter for more mundane products/services (e.g. table salt or housecleaning) becomes a greater challenge for marketers.  If there is an exciting narrative that surrounds the brand, Twitter becomes an easier tool to utilize.

Using Twitter searchTinker and other search tools are very important to ascertain what people are saying about one’s brand; one’s industry; competitor products/services; brand’s product/services and the topics of conversations of one’s target market.  These could be complaints, compliments, uses of the product or service.  Also joining in the conversation between one’s company and the customer is very important.  A success story from this was when a customer was complaining about their Comcast Internet service.  This customer tweeted their complaint, and instantly, a Comcast customer care representative responded.   This built up relational capital between Comcast, that particular customer, current customers and any potential customers.  This example of quick customer service became viral across the internet.

Can Twitter’s business model be monetized?

twitter users.001

Twitter’s online growth has exploded last year. It is becoming more popularized with news organizations, celebrities, businesses and users. With the increase of users can Twitter’s existing business model be sustainable? Can it be monetized? This article from Wharton explained how the Twitter website increased its user base from 475,000 in February 2008 to over 7 million in February 2009.

Has this venture been monetizable?  It has not been so far.  Some of Wharton’s professors have argued that the service can be replicated by rivals such as Facebook, and question whether it is simply a fad (e.g. ICQ, Friendster and MySpace).

Part of its draw for marketers and celebrities is the ability to tap into conversations real-time, providing instant online commentary for an offline event and to join in conversations with consumers.  From a user standpoint, it is easy to track like-minded people, friends and celebrities.  Can data mining be used as a revenue model?  The social networks on twitter tend to be less meaningful than on Facebook or even MySpace, and thus, the information would be less value to marketers.  Facebook is a platform that contains more personal information about the user such as the conversations that surround the user’s offline and online activities (e.g. photo albums, interactive quizzes, etc.).

With the large increase in users, could Twitter charge for premium services such as being able to input more than 140 characters or even charging for advanced search options for twitter search?  There needs to be a balance between growth and earning profits.  Currently, the demographics for twitter are mostly with Generation X (people born between 1964 and 1979).  Compare that to Facebook, where much of the growth was with Generation Y (people born between 1980 to 1995), and it expanded to other age groups.  This clearly illustrates that Twitter’s growth maybe stunted.

I think there is money to be made with the development of the APIs.  As Twitter’s base expands, more developers will want to develop more applications for it.  As this occurs, the additional features will attract more users.  Once a critical mass is reached, Twitter can start to charge developers for making APIs on their platform.

What do you think?  Can you think of possible areas that Twitter can be monetizable?  Or do you think it is simply a fad?

Behavioral effects of Social Media Networking websites

Ever wonder why people post on the wall on Facebook rather than sending direct e-mail?  It is because people want to be visible and to be  recognized.  This is an example of online social grooming behavior.  Social grooming offline consists of exchanging pleasantries and small talk with people.  Social grooming amongst friends consists of checking-in (e.g. what’s up? what’s going on?, etc.)

On Facebook, there are applications such as online quizzes that reveal people’s interests to others, these are interactive, in which friends can comment and share the results to others.  These activities are mostly used by Generation Y as a way of self-expression.  The “about me” sections on Facebook and MySpace as well as the decoration of their profiles on MySpace are other examples of individuality and self-expression.  Generation X is the fastest growing demographic on Facebook, because of the need to reconnect to old acquaintances, and is driven by the curiosity about the status of former high school and college friends.  Gen Xers tend to use it as a social utility to communicate with the past versus Gen Yers who use it to strengthen with their current friends and acquaintances.

Ever wonder how some people on Facebook have over 500 friends? Is it even possible they have too many of them? It takes much mental computation to keep track of all of them.   There is a number called the Dunbar number, which states that most people cannot keep track more than 150 friends.  Even though we are more connected more than ever, it does not necessarily mean we have better connections with them. We continue to keep in contact with a select few number of friends.  According to this article in the Economist, the statistical breakdown for men versus women in the number of friends are the following:

Thus an average man—one with 120 friends—generally responds to the postings of only seven of those friends by leaving comments on the posting individual’s photos, status messages or “wall”. An average woman is slightly more sociable, responding to ten. When it comes to two-way communication such as e-mails or chats, the average man interacts with only four people and the average woman with six. Among those Facebook users with 500 friends, these numbers are somewhat higher, but not hugely so. Men leave comments for 17 friends, women for 26. Men communicate with ten, women with 16.

An issue that may arise is if one does not want to continue to communicate with some acquaintances  online on Facebook, MySpace and other social media networks or offline.  The difference between online and offline friend behavior, is that offline, meeting people occurs in a short period of time, afterwards, you may not see them again.   Online once you add a friend, “unfriending” them becomes politically onerous.

If you had $60M, what would you do?

News of the AIG bonuses and other financial institution bonuses and perks have received populist angst. While companies that received bailout money continue to pay out extravagant bonuses and parties, this one did the opposite of that, in this interview a man named Leonard Abess, sold his bank for $60 million dollars and rather than lining his own pockets, he shared it with his employees.  Why would he do that?

He believed that people are the center and the core of any business.  He felt his employees contribute to much of his banks’ success and felt that they acted and worked like owners, and he wanted to acknowledge that.  In his annual report, he acknowledged and thanked his employees first before talking about the various metrics as so many companies are apt to do.

With regards to laying people off:

“….I tell young CEOs, that before you cut anybody’s compensation, before you fire anybody for economic reasons, you deal with yourself. Your perks go, your bonus goes, your salary goes. I am very surprised when I see huge amounts of money that go to the people at the top [even] as there are massive layoffs, especially when they accept government money.

One of the greatest traits that any leader has, according to Mr. Abess, is the ability to listen.  Mr. Abess knows his employees names’, spouses names’ and even their parents and children.  He added that leaders lead by example such as: motivate people, being human and being real and talking to people.  They should also have a clear moral compass and clear ethics and be examples in their communities.

It is too bad in the news, we hear too much about the greedy and morally corrupt leaders and not the ones that influence and inspire positive change like Mr. Abess.  He truly exemplifies a positive force in leadership.

How has the recession affected brand strategy?

Many advertisers and marketers position their brand message to Maslow’s higher order needs (e.g. the need for belonging, esteem, self-actualization) on the pyramid.   Has the message changed as a result of the recession?

Mr. John Gerzema, author of Brand Bubble argued that because of the recession we need to embrace the lower order needs (e.g. the needs for safety and physiological protection) on Maslow’s hierarchy.  Fear and uncertainty are on the rise.  The marketers that will have a competitive advantage from this recession will replace passion with compassion.  Evidence of this includes Hyundai’s current campaign called Hyundai Assurance, which lets any Hyundai owner walk away from their lease or loan on a new Hyundai vehicle, if they lose their job within 12 months of the purchase.  In the first quarter of this year, the entire automotive industry in the US was down 38.4% between March 2009 YTD versus March 2008 YTD.  While Hyundai’s sales were up 0.7% during that same period.

There are a few businesses that have succeeded in the recession. Evidence is apparent with the Match.com, The Economist Magazine, LoveFilm and MTV.  In these four case studies, all are able to adapt to people’s interests as a result of people cutting back in their budgets.  The most compelling case study is with The Economist.  Its rich content about the recession and the banking crisis certainly appeal to people, but in my opinion,  it is its creativity in leveraging different media such as its podcasting, online content, magazine content and its educational guides on various subjects such as advertising that help differentiate this magazine with others.

Magazines on-demand

If you have been following this blog, I had been stressing about the importance of content on demand.

The first example, is at Heathrow Airport in London, where HSBC is promoting their Premier Card.  Travelers go to a kiosk, where they are able to customize their own magazines for free by selecting their own content.  These custom magazines will be branded by HSBC.  The Premier card’s target demographic group are travelers.  Based on the success of this campaign, this program could be a perk for HSBC Premier members.

Second example, is with Time Magazine  in conjunction with Lexus are pursuing a made to order magazine. Lexus will have editorial content and exclusive ad space, while the readers get aggregated content from Time and its subsidiaries all for free.  This campaign ties the customizable nature of this new aggregated magazine to the new Lexus RX sport utility vehicle and its customizable features.   The magazine will be available as a hard copy to the first 31,000 respondents, and then it will be available online as well as on mobile.

I think this is definitely how content will be viewed in the future.  The internet as a disruptive technology, changed how people view media.  Offering customized content that appeals to what, when, where and how the customer wants to look at the media is imperative.  Online advertising has not generated enough revenue to offset the decline in print.  Offering this customizable content is probably the best alternative.  What do you all think?