New Innovations Can Change Old Habits

This week I read/listened to:
- The next chapter from Business Model Generation
- Business Models on the Web
- Taking Eyewear to the Web
- Bonobos: From Clicks to Bricks blurb
- The article about Warby from the editor of the Economist
- Hoiter a new way to shop
(I did not read the Dollar Shave Club piece because it would not load on the NYT page for me)

If I have to choose a theme or lesson for this week’s reading it would be: Get used to it. The readings were all informative, but since there is a lot of content to choose from I want to focus on the main points that resonated with me and seem to exemplify the points we have learned so far in this course. The readings, though talking about different companies or models, all point to the fact there is a new niche need out there that these online venders are finding a solution for. While the idea of “click to brick” is definitely unique, I think it will quickly become the norm. Currently, the opposite is true. One goes online to see what clothes or goods are available, reads reviews to make their purchasing decision, then goes to the physical store to buy the good. The new model flips this on its head- and it has been wildly successful with this new model with potential to significantly expand.

Three questions kept buzzing around my head as I read these pieces:

-          Why does this new model work so well?

-          Why is there no significant push back from customers who are not willing to change such a  fundamental shopping habit?

-          Why are investors willing to take such risk in a market that is so new?

I gave this some thought and realized the answer is quite simple. This revolution of sorts could not have happened 15 or perhaps even 10 years ago. The reason these different stores, from Warby Parker (which, by the way, my 62 year old father who lives in Roswell GA bought his glasses from that company and he loves his glasses and the entire concept, so the demographic appeal is quite wide) to Bonobos to The Hoiter, succeed is because they aren’t forcing customers to change their shopping habits. The target demographic for these companies are the people who already feel very comfortable making online purchases and who feel more comfortable using technology in these decisions than not. There is no pushback because the customers were looking for these solutions, even before the need was truly articulated.

Risk takers, like Shouraboura who invested 5 million dollars of her own money in The Hoiter, are taking a calculated risk, perhaps with the understanding that this is a novel concept now but it can ultimately become the norm. These investors have seen a market opportunity that is brimming with potential and their innovations may become more of the rule than the exception.

So, the lesson to learn is worth repeating- we better get used to it. Though in this case, I honestly believe this shopping concept is something a lot of people, including myself, would happily get used to.

 

 

 

Business Models- I thought I knew what they were!

I really enjoyed reading about business models this week because I, I am embarrassed to admit, fall into the category of people who often speak about business models and inherently understands how important they are, yet when reading what they truly entail I realized I never really understood their complexity. As I read through the list of the various models (there are almost ten to choose from, which just serves to highlight the many complexities and nuances of this topic) I was particularly intrigued by the models that try to use customer information to create a sense of loyalty through an online format. As I mentioned in a previous post, I recently moved and have found a renewed interest in anything having to do with online shopping. Not to say that I am one to happily spend hours shopping- quite the opposite in fact. I am in the quagmire where I need to buy a lot of new things, from furniture to kitchen goods, and I do not have the time to do it. Add to that the added challenge of not knowing my way around yet or understanding where the best stores are, so online shopping has been a god send.

With this in mind, the advertising model particularly interested me. I have been honing the skills of finding goods on craigslist, and I have tried other sites that fall into the advertising model category, such as searching Google for recommended sites and even going to Monster.com when searching for jobs in my new city. The part of the reading that caught my eye though was the idea of content-targeted advertising.  In my experience, this can be both a useful tool and a nuance that won’t go away.

It is beneficial when it actually provides value. When searching for couches on Google, I do find it very helpful that now I receive targeted ads for couches and furniture stores. That is when the targeted advertising is working. However, once the need is met the targeted advertisement becomes annoying. Right before I got engaged, which was over a year ago, I perused a jewelry stores website. After just one visit I was hit with ad after ad for their newest diamonds. Not only is it embarrassing when my then boyfriend saw these ads on my computer, which was a dead giveaway that I had been looking at rings (I was really not trying to give the proverbial hint, hint) but I still get those ads today even though I certainly will not be going back to get another engagement ring anytime soon. I think the biggest challenge for advertisers is to distinguish between what can be useful and what can become a nuisance. Your product suffers when there is a negative association with it, even if that negative association is just with the marketing tactics.

 

I often think about what classes in school are option that I believe should be mandatory (such as personal finance for high school and college students) and I think having a class solely devoted to learning the various business models would be beneficial for all business school students. It may seem like there may not be enough material for an entire course, but each model not only has marketing implications, but it also has financial, economic and perhaps even legal implications depending on the model.  This reading has certainly peaked my interest and this will be something I will continue to read about and learn more about as I continue through business school.

Take Aways from Week Three

This week I read/watched:

- The Origins of Social Media

- The Death of Segmentation

-The Ted Talk on How to Get Your Ideas Spread

- Breeze Session

- Podcast on the Long Tail

This week was my first week at my new job, so unfortunately I wasn’t able to read any of the suggested readings as I like to do. But I still think this week presented a lot of good information that has given me a lot to think about. The reason I really enjoyed this week’s videos and reading were because they are particularly applicable to my life. I just started a new job that is primarily focused on fundraising. The concepts about how to spread one’s message and get buy in were exactly what I needed to be focusing on in this new position!

There were several overall themes I took away from this week’s materials. The first was the concept of product vs. publicity. I always believed that creating the right product is the hard part- if you have a great product it should be able to sell itself. This week I learned that is not the case. The fact that the invention of sliced bread did not take off due to lack of marketing is just incredible to me. This makes me question all the products I buy because I simply “need” them. Do I really need them or has the marketing for these products become so sophisticated that I simply buy into the idea that I need it. If Coke Japan comes out with a new product every three weeks with the hope that one of them hits it big with consumers, then I imagine not every product is of equal quality or worth.

The Ted Talk says that finding the innovators and early adopters is the key to being successful. If we all think carefully, I’m sure we can think of examples in our lives were we did this without knowing we were following an particular marketing rule. In college, for example, I was involved in a political advocacy organization. When recruiting for members we never spend money or time with fliers for the campus. Rather we would find the people who have self-selected as caring about the issues we cared about. Getting those people involved was key because then they would spread the word for us and involve their like-minded friends. This same mindset must be present with marketing.

The Podcast made an interesting point that I’d like to discuss. The professors discussed the motion that companies are selling less of more. Interesting thought, especially if we think of that in terms of the other reading materials for this week. I’d like to go back to the Coke Japan example. If customers are more informed than ever and can be more selective than ever, then companies must keep providing options that will eventually be what the customers want. But for every product that is a hit, there are countless products that never make it. How can a start-up company possibly be successful if these are the standards? How can a well-established company maintain its edge when we expect more but actually buy less? I think the only choice these companies have is to create quality products with their niche target customer in mind so they do not have to keep reinventing products for different customer groups.

I’d like to end this post with a personal story that touches on a point mentioned in the Breeze session. Several years ago I was tasked with choosing our summer intern. We had a sizable stack of well qualified resumes. We narrowed it down to two applicants. Out of curiosity I facebooked both applicants to see what would come up. Both pages popped up. The first page I checked out was totally innocuous. The second page I checked out had a sexist and offensive status that was posted just that day. That applicant’s lack of discretion made it a lot easier to narrow down who would be a good fit for our office. This is just one small example about why the warning to be careful about what you put out there on social media should be taken seriously.

Good Bye Segmentation- Hello Individuals

The article “IBM’s CEO on data, the death of segmentation and the 18-month deadline” makes points that I think are critical for us to understand in order to predict challenges for marketing in the future. The main premise of the article points out the velocity, volume, and veracity of information means that we cannot group customers into neat segments; rather we must begin to look at them each as individuals. There were a few points in this article I had to read over twice to really sink in. Think about the points below and how their meaning changes our assumptions about marketing and communications:

- “Every two days the world creates as much data as it did through all of time until 2003. We’re used to data that fits nicely into rows and columns… but 80% of what is collected today is unstructured.”

- "By 2015, 80% of all data will be uncertain. CIOs can’t write enough programs to get through this data. Just in time a new generation of computers are coming out."

- "Today there are two xenobytes of data [created every day]… By 2015, it will be 40 times that amount."

It is difficult to comprehend how rapidly these changes will take place, but they are happening all around us. As the article points out, the clever marketers will try to be ahead of this curve and begin treating their customers the way they need to be treated in the near future.

While this is easy to say, I anticipate changing from the segmentation to the individual model will be very difficult. There will be challenges related to resources and well established mindsets. Customer segmentation allows for one employee to be able to manage a large amount of customers. If an employee is an expert on that one segment, then he or she can easily work with the dynamics within that segment and be effective. However, if that model of customer segmentation is no longer relevant and companies must look at customers as individuals, it begs the questions: how on earth can any company with limited resources and a large customer base be effective? Large corporations with millions of customers will likely have a harder time adjusting to this changing model. I believe these companies must expediently work to institute the infrastructure to allow for this marketing today so they can successfully implement it in the future.

Origins of Social Media

I just finished reading chapter one of "Origins of Social Media" and one point about the global reach unhappy customers have particularly stuck a chord with me. The chapter tells the rather humorous story of a consumer who posts a recording on his blog that quickly goes viral. The consumer, Vincent Ferrari, wants to cancel his service with AOL and the sales representative is almost a parody of what someone in customer service should not do. It's bad enough the conversation actually took place, but it is even worse that the conversation where the AOL employee asks to speak with Ferrari's dad (which would be an outrageous request of anyone, but Ferrari was a full fledged adult) is online for potentially millions of people to view.

The problem for AOL was that this recording was not altered or exaggerated in any way. It became an instant hit because people either couldn't believe how crazy this conversation was, or on the other end of the spectrum they could identify with the recording because of their own experience. Now disgruntled customers know others have had the same experience, and they have a community to talk and share their terrible stories.

The article explains that before the internet an angry customer would tell ten people about the experience. But today that angry customer has a megaphone to potentially tell millions of customers. That shows that customer power has grown exponentially at a very quick rate. I personally feel like this is a good advancement because it should lead to more thoughtful customer care. When people complain on social media about delayed or cancelled flights, for example, that likley wont really hurt the airline they are talking about because the general customer base understands these delays happen. However, if someone posts a video of a verbally abusive airline attendant on the other hand, then it will likely gain traction because that is something customers do not expect or tolerate. I honestly think companies should make this chapter mandatory reading for all employees because it teaches a valuable lesson: Don't say something unless you want your words quoted in the New York Times.

Creating Community: The Key to Success

This week I read/watched:

- The Dawn of the Human Network
- How to Build Your Start Up Without Building Code
- Information Liquidity Podcast
- Why the Groundswell and Why Now
- The Internet Before Search Engines
- Star Search

I moved from D.C to Chicago this weekend. As anyone who has moved knows, you tend to need to get rid of a bunch of stuff when moving, only to replace it when you arrive at your new location. We needed to get rid of unnecessary furniture and clothes to make our condo look good when we put it on the market...but now we are in a new apartment and looking to replace what we needed to get rid of before. Because of these recent life developments, this week's readings particularly interested me. As I am doing a lot of online shopping I have become very attuned to the power of crowdsourcing and the online community of consumer participation with online reviews…

The reading “The Dawn of the Human Network” made several points that resonated the wider themes of this week’s readings. As so many of us can attest to in our personal lives, word of mouth advertising affects our purchasing habits more than print ads or commercials we may see. I trust my friends and family more than I trust an ad executive who is trying to entice me to purchase a product. The main difference between my friend and that ad executive is that my friend knows me and understands the type of community I want to belong to. That is what the Jakes understood so well with their company. You must create a community for your product, and make sure it is a community that your target customers actively want to be a part of. I thought it was interesting in the reading when they described Ross Zeitz. The reading described him as running the community, rather than running a certain division of the company. That shows this mindset has been internalized by the company, and that can explain their remarkable success. The “prosumers” are certainly out in force for this company!

The video, The Internet Before Search Engines, made an important point on this topic. It noted that people are often slow to adapt change, even if that change will benefit their lives. Though once online communities were established and once people understood the benefits to the internet, then its usage quickly picked up. The Information Liquidity video pointed out that today the internet is evolving constantly. People and businesses are evolving with it, which is amazing to think how quickly society has picked up on this technology.

Though none of those points are necessarily shocking, there was information in the Star Search podcast that really surprised me. I tend to think that people can be their harshest when they write anonymous posts or reviews. But the point that consumers’ reviews say more about the consumer and their need to feel like an expert, rather than about the actual product, was surprising. But as I read through reviews of particularly mundane products that were mentioned in the podcast, such as paper products, that does seem to be the prevailing trend.

The main take away for me from this week’s reading assignments focused on the importance of community. Even the article “How to Build Your Start Up Without Learning Code” mentioned the importance of letting people tap into your site- which creates community. Once you have created this online presence and consumers want to be a part of the community, then they will advertise for you and you won’t need to spend those resources on traditional forms of marketing.

These readings brought up several questions for me. Since we can now transmit and receive information at the speed of light, how can we improve on this technology? Would the technology change, or would the actual users have to adapt in order to better utilize the technology? I also wondered how far we can use crowd sourcing before it loses its credibility. Right now there is a certain form of legitimacy to it because the hype and reviews are driven by the consumers. But if this community ever feels manipulated by the company, how can this positive force quickly turn into a negative? These will all be interesting developments to look out for as this technology continues to evolve and become more sophisticated.

Thoughts on Week One

The last time blogged was probably in the mid 1990's when Xanga was all the rage. By all the rage I mean it was maybe popular for a few weeks until we all became bored with it and went back to chatting on AOL messenger, so I am really excited to try this again. With that said, there were a few reading from this week that really stood out to me.


I thought Chapter One from “Made to Engage” was really interesting because as I kept thinking about conversations I have had at work about utilizing the internet to get our message out. Since the internet is so prevalent in all areas of our life, from all aspects of your work life to many aspects of our social life, it is difficult to think of this innovation as something new. But looking at this issue from the perspective of a company or industry, the internet is relatively new and the rules for navigating how to use it best seem to be evolving and changing. The most interesting point for me from this reading was the conversation about how to use this technology with a smart strategy. Far too many companies were left behind because they didn’t jump on the internet bandwagon and refused to see that this was the future of marketing. Instead they basically buried their heads in the sand and kept doing what had worked previously, only to find that the rules had changed and they needed to adapt.


When speaking about adaptation to new technology, the author said that these changes may seem obvious, but it is groundbreaking for previously insular organizations. This was something I can relate to. In 2009 I tried to convince our communications team to start a Facebook group for our organization. If it was 2005 this would have been an innovative idea, but four years later it was more the norm than the exception. At the time though there was pushback because it had never been done before, and what seemed like a completely obvious idea took time to be adapted by those in the organization who were accustomed to a different marketing platform.

I also read the opposing articles which explored if the internet makes us dumb or if it makes us smarter. I think both articles made good points, but I tend to agree with the article that says the internet makes us smarter. However, I would replace the word ‘smart’ with the word ‘innovative’. Just like every other significant technological innovation, there are benefits and drawbacks.  But there are also new possibilities for human advancement. I agree using the internet more prominently means we skim more instead of actually reading, and I have no doubt our attention span is affected. However, imagine all the amazing innovations the internet has allowed and what will come as it becomes more advanced. If anyone feels very strongly that the internet is in fact detrimentally affecting our intellectual capacity, then they should work within the system to change it, because the internet clearly is not going anywhere.

Lastly, I just want to make a quick comment on the video where the team from The Today Show asked ‘what is the internet’. At first I thought it was hilarious because it just seemed like a skit from SNL or any other comedy show. But then I thought I probably sound like that to younger people (and I’m not even 30 yet!) when I don’t get new technology that everyone else seems to know about. But still, that clip was hilarious.

So as my title says, the one big lesson I learned is that the internet means change. Whether that change is good, such as innovation, or not as good, such as making the job for marketers much harder, the one thing we can all count on is that change is here to stay.