Social Business Summit Keynote Continues Disruption Theme—Don Peppers, Peppers & Rogers Group

Social Business Engagement Summit Keynote Disruption Theme—Don Peppers keynoted the second day of Alterian’s 2010 User Conference, Engaging Times Summit with a talk entitled, “Death by word of Mouth.” Encouraging ,^)

• Technology and interactivity are now. 96% of Gen Y are members of social networks. They are self-oriented and have no trust in adverts.
• He cited the film Bruno, which people panned in social networks and Twitter on its opening day; the box office fell 40% the next day (and never recovered). Before Web 2.0, the studio could have built momentum through adverts. No more.
• You can’t ungoogle yourself.

• The lack of trust slows down business because people have to do more due diligence before buying. eBay addresses this.. and Amazon.com.
• He cited bees and ants as examples of social, collaborative creatures, the point being that humans are, too. Bees have an intricate dance that shows the others exactly where food sources are. It uses the sun as a major point of reference; bees can see the infrared spectrum, so they can “see” the sun whenever it’s cloudy. [Update: BTW, if you like the bees example, check out: Inside Human OS—The Roots of Facebook Behavior Revealed by Primate Professor; it reveals the roots of human group behavior]
• Marketers need to ask themselves where their brand communities are. Social media is a cocktail party to which you’re invited, but don’t try to dominate.
• He cited Forrester: on average, 1% of a community will generate content, 9% will interact more passively and 90% will observe; people participate at their comfort level. But everyone’s watching. Cited Altimeter’s Engagement Pyramid: Watching, Sharing, Commenting, Producing, Curating (from bottom to top). It has similar participation rates to Forrester.
• Verizon customers help each other in customer support areas.
• Economic ideas are changing: socialism failed, and capitalism will, too. Social production is the emerging model [think “open source”].
• Two types of tools are SNA (social network analysis) and sentiment analysis.
• Social networks evolve via “preferred attachment.” The cascading effect is very powerful and unpredictable. It holds that small groups of users can come to control whole spaces if they become prominent when a new meme is emerging. Examples: Netscape had one million members, but 13% of its most popular posts were by a single user. Our of 900,000 registered Digg users, 30 users select one third of all home page postings. Reddit’s most widely read user is Adam Fuhrer who has millions of page views on Microsoft Vista; he is 12 years old.
• Word of mouth is unpredictable. Just 15% of WOM programs show positive results. Staples’ “Speak Easy” campaign served as a word of warning. They sent free products to special customers, but they included “talking points” to try to get them to “sell” to their friends.
• Remember, the people who talk the most aren’t necessarily the people who buy the most.
• Influencers share some traits: they use the Web twice as much, pay more attention to online ads, clear their cookies regularly and fast-forward through video commercials. They don’t want to be sold to.
• He discussed Alterian’s “Social Engagement Index,” which shows how brands performed during the Superbowl. Included “valence” (positive/negative).
• He advised not to do social media unless you can respond to people (sometimes companies can’t act on people’s suggestions or frustrations).
• Monitor your brand, individuals and sentiment, and pay attention to what kind of information is being shared.
• Negative blog posts fester and can explode, so get to them fast; use Twitter to listen and transition to a private platform to resolve.
• He polled the 250-member audience, how many people allow comments on their web presences. Only eight of us raised our hands! Huge surprise given the audience!

Thoughts

• Don’s assertion that 15% of word of mouth programs show positive results spoke volumes. I recall live tweeting that “marketing” as traditionally practiced is not very compatible with word of mouth. Marketing often tries to cajole, influence or promote itself into sales while word of mouth is an act of service in which one person tries to help another. It’s an act of sharing. Sure, WOM between people can cajole or influence, but its reason for being is service and sharing, not sales.
• In this context, WOM and marketing are mutually exclusive: the latter’s purpose is to serve the company by moving product; the former serves the person first. It’s a conflict of interest.
• Don didn’t put it this way, but he did say that you can’t buy WOM.
• This also explains why people don’t want to be “sold to.” Selling puts the company’s needs ahead of the customer.
• Of course, needs of company and customer are often aligned, so it’s not a zero sum situation; if the service or product serves the customer, both parties benefit; my point here is the emphasis.
• I’ve never seen it so simply: I can imagine that marketers will evolve to using their creativity to serve people in unusual ways that inspire them. Prior to social networks, the focus on the person rather than the company wasn’t feasible very often. It is feasible now because the company’s selfless act of service is observed by many more people—dozens or hundreds or more—in the social network.
• This will require a leap of faith, but I believe it’s where marketers will go.
• I experienced this recently at Apple, when my MacBook’s hard drive died about a week before AppleCare expired. The Mac Genius told me, elatedly, that AppleCare would expire at the end of the month, I was still covered. He also said that they would extend the plan another 3 months because there was a repair so close to the policy’s expiration.
• What does this tell me? Apple values my relationship more than their incremental support cost (they did a bunch of other stuff to the machine, too).
• Contrast this with my experiences with health insurance over the years, where it seems like they look for opportunities to not cover things. That’s an industry that does things TO people ,^(

This is part of a series of my notes and thoughts on Alterian’s Social Business Summit 2010. To see all of them, hit the Alterian tag (also in the gray box under  any post in the series). Next up: panel discussion on social media measurement.