Saturday, October 10, 2009
I had written about the power of one liners on my previous blog and had ended it with how it someday will start benefiting B2B marketing as much as it would B2C today. But I thought that it certainly is worthwhile discussing how this power has been utilized currently, and will gradually be advanced in the B2C space. For product vendors as well as service providers launch of new services or products happen every other day in some region or the other and hence the need to create awareness and gather feedback is vital! Consumer goods manufacturers and retailers can easily gather feedback through the increase in footfalls and through reviews at the malls directly and they do it, but think of the reach and efforts and investments they have to put in to gather this data, with the global tastes and choices of the end consumers as much as the increase in changing expectations from the customers it's important to transmit different forms of communication in different region. Also look at those retailers or vendors who rely completely on the online channel for e.g brands like Dell, Southwest airlines, best-buy etc. These companies have already taken the power of twitter seriously. They have not just started promoting the launch of new products and services to the consumers through tweets, but also started gathering the feedback and providing customer support through Twitter. Some of them have even taken technical support to a different new dimension altogether where they are making the "collective intelligence" of the people solve problems of each other by being able to tweet on the forums and take solutions from others to solve the problem they could be facing with there computers.
Take this hypothetical scenario of a Dell user facing starting problem with his laptop and instead of calling technical support they reach out to the "Tweet force" - this word is coined by me! Tweet force in return would have a set of experts from the Dell end user itself who have by virtue of there knowledge solved Technical problems like these for many other end users of Dell applications and have been made beneficiaries of Dell rewards - and they help this user solve the problem. This scenario sounds familiar when you look at reviews for purchasing so that the end user buys exactly what others have bought and experienced, but this aspect of crowd-sourcing is taken to a different level altogether since here the beneficiary is not just the end user who has managed to sort his trouble but also the company itself-in this case Dell. I believe a solid Tweet force like this might help a company like Dell reduce so much of its customer support cost directly impacting the bottom-line.
While the above example is hypothetical and it involves a superior (Business Intelligence)BI tool to analyze this "Tweet-force" performance and the reliance on this non-committed force could certainly be challenging. Hence it would really mean putting in serious heads together to come up with the working model, but I see the entire B2C business headed towards this model. I would repeat that if a company especially in the online business does not start thinking towards making the most of this crowd-sourcing they would suffer a big setback in times to come.
Before I end this blog, I want to highlight an amazing platform that has been put together for businesses to solve complicated problems through crowd-sourcing. Innocentive- while this forum has been in existence only for last few years I have seen several multinationals trying their luck (many successfully) towards getting their most challenging problems solved and innovations kick-started by virtue of this collective intelligence! Would talk about this platform in one of the subsequent blogs.
Saturday, September 12, 2009
Friday, September 11, 2009
While "Apple" the big computer and i-tune giant has never really shunned away from innovation and coming up with some of the most coveted products in last few years, it's becoming more and more difficult to call it's name as just one product wonder. Starting from Mac they have come a long way where the i-phones and i-tunes are doing wonder in the cellular phone market. They lead and the rest of the world follow in any new technology they decide to incorporate into their products.
I would have loved to write more about the range of apple products and how each and every of those products in their own way have really changed the market outlook towards that product segment altogether, but to do justice to the Title I would rather shift to the core. While Apple has never really entered into price wars and most of their home and business laptops and PCs are sold at the same price in the retail market or online, but the innovation that they have really brought is by not relying entirely on the online channel and also by not relying on retailers to sell there products along with those of several other competitors. And this innovation was that of the "Apple store" which they decided to launch in 2001. Though slowly but gradually "Apple Stores" have become the talk of most of the tinsel towns - where people if they don't go for shopping at these stores they at least are told to pay a visit to these stores for the sheer craftsmanship that has been put to create these stores. But the financial figures really have a much more positive story to tell. From reporting losses in 2002 and 03 the store profits have grown exponentially YOY, startling from a profit of $39 m in 2004 to $1.33 b in 2008 - four years has been a great turnaround. Although this number is still just 1/4th of the total profits through all the channels (pls note that these are profits figures and not sales or revenue), but it's a lot higher than any other player in this market. Also it's certainly worthy to note here that this also is accentuated by the fact that over last 8 years Apple has built assets worth $1.69b because of these stores, which plays a big role always in improvising their equity stance to the investors always.
Now what led to this success - Forward thinking, Innovation, Solving the complexities approach or just being different to keep your brand identity. I would sum them all and give it one word "Adaptability". While Apple always wanted to be positioned different because their product was a lot different than any of the nearest competitors viz. IBM or Dell, but their products were certainly complex too, because of a unique blend of combo offer of hardware and the OS together. And that was the reason online channels or normal retailers were not able to tackle the questions by the consumers and this was leading to a lot of dissatisfaction. And though the product itself was it's strength the simple complexities were being a bane and that brought the need of the self managed stores - a need to adapt to several situations.
Today's Apple stores have come a long way, starting a new roadmap in the journey of computer manufacturers and marketers- the stores have become a lab, a training centre and people are willing to go there and talk to the learned salesman come trainers and learn about several new products, solutions that they all want to incorporate into their lives! Kudos to Apple for being where they are and it's leadership in the form of the founder and CEO Steve jobs, their marketing leader Phillip Schiller and the Retail channel expert Ron Johnson and many others who have really changed the outlook of the retail industry by formulating this idea.
To mark an end to this conversation I would say Microsoft's hiring of Apple's Ex VP of Retail is a testament of what Apple has done and how others are vying to emulate the same model!
The intention of this blog was certainly not to get one company centric but there was so much to talk about Apple that I could not get into some other examples at all. I would want to expand this further in some of the subsequent blogs, where I would be talking about the Restaurant and Catering business and the Entertainment business which are 2 biggest industries which though having tried several gimmicks have still not gone "e"way and probability of that happening in the near future still lays low, because of the nature of industry and the basic human nature!
Sunday, August 23, 2009
Acquisitions are very easy to look at and talk about especially if one talks and hears about the success stories. Though it's not easy to decide until at least 4-5 years of an acquisition about the true outcome - before either it starts showing some continuous benefits(revenues) or it collapses after a quick growth, and the third and desired option is that it becomes a visionary fitment into the organization and it doesn't just grow because of the acquisition but also gains market value and respect.
There are certain parameters for an acquisition to be successful, these parameters not necessarily are ingredients of a magic potion, but they certainly are worth looking into while I do a necropsy of some of the acquisitions that have happened in the last 10 years I'll try to highlight some of those points and map them with what went wrong and what were the success factors:
- Fitment into the business for improvising the business model - "e-bay's purchase of bill-me-later" : Payment mechanism has been one of the most important factors driving success of the online sellers. In today's world even though credit reliance has taken a toll on the economy - it's never been more important to gauge whom to give credit and whom not to. (Bill me Later)BML's model is interesting - it offers transaction-based credit to online shoppers at the time of checkout. Consumers provide BML with their date of birth and last four digits of their social security number. BML's engine decides whether to approve and extend credit for the transaction. Though this acquisition has come in at slightly a wrong time when a seller would hesitate to offer a sale at credit to any individual however excellent the past credit history of an individual be, but this acquisition for $820 mn comes in 6 years after e-bay had done another strategic acquisition to bolster their online payment model - Paypal! e-bay being the gorilla in the online auction market in 2002 they wanted a best of breed online payment mechanism. Even after acquisition of Bill point in 1999 they could not match the trust that pay pal had developed in the minds of the people. And it was for this mindshare that e-bay decided to acquire paypal in 2002 for around $1.5bn. The moved did work wonder very well for e-bay and they managed to maintain their status of market leaders in the online auction world. It would take another couple of years to gauge the true benefit of BML acquisition but I think very few of e-bays decisions have gone wrong in terms of acquisitions or purchase of stakes that they have done. (I would certainly want to talk about they taking 25% stake in craigslist in one of my subsequent blogs)
- Common vision - "Google's purchase of Youtube": This was termed as "CRAZY" by strategists when Google decided to do the acquisition in 2006 for a gargantuan sum of $1.65 bn. All google had to do was to fit in the 65 odd employees that youtube then had into their 10,000 + employees. But google had one clear intention that they wanted to continue and enhance their ability of delivering content in all forms to users. Today, 3 years from the deal though am not sure of the financial figures but it's obvious that Youtube seems to be the choice of viewers on any of the social networking sites apart from the demand that youtube has generated and the coverage it gets to all possible TV shows, movie clippings, sports world et al. And google has come a long way since then knowing how to best capitalize with youtube by using various mash up techniques to integrate youtube not just into google acquired platforms but also on outside networks. What's important here is to also understnad that it's not just the common vision that drives this but also a technological fitment in terms of strategy and platform.
- Increase the market coverage and penetration - "New York Times's (NYT) acquisition of about.com": New York Times has been one of the oldest and most read newspapers in the United States and currently is the larget metropolitan newspaper in the United States. It was one of the early adopters of the web and it has been available online since 1995 and today it boasts of around 160 mn readers. But in 2005 a need was felt to grow the readers and they had to find a perfect mix of a similar entity that had the web presence for it content in varied fields. This is when they decided to acquire about.com to get the 22 mn users of about.com compared to 13 mn users of NYT to aggregate the users and increase the readership, and this deal came in for $ 410 mn. The deal has certainly worked wonders for NYT and it has been a continuous growth since then for NYT in terms of market presence.
These are some of the acqusitions that according to me have really worked well for the parent company but there have been several other's worth a mention and although they have been much bigger in size in terms of the dollar value of transaction like AOL or Hotmal acqusitions by Time Warner and Microsoft, but they are contentious deals and need a different level of discussion on whether they were success or failures!
Who could have imagined in 2006 that the 140 characters that twitter assumes are just sufficient to build an ecosystem will become talk of the town today and it will not just influence social behavior, but also various business initiatives! Today with millions of registered users on platforms like Twitter, myspace and other social networks emulating the model to not let go the immediate connect and impact which sites like Twitter have created. Facebook, Orkut, gmail chat, linkedin and all other social network sites today let people quote what's in their mind and this one development according to me was the next best advancement in networking. Being able to be in a community and chat, write on wall and scrap was started by social networking sites but being able to interact on every moment of life or at times on just a teatime session, walk round the street with Ralph (the dog) or a trip to Smokey's creates so much buzz around you in the community that with these status messages one cannot contain themselves from commenting on these status leading to discussions which would lasted over several snail mails 20 years back.
I am not a very strong advocate of making myself so open to the outside world, that the whole world can do an autopsy of my life. But today the trends are changing & people have been geographically dispersed and hence there is a continuous need for people to know about family and friends! Also there's a lot happening these days in everybody's personal, family, social and sociological lives which has made people try to open themselves to those who are in their network(circle) to share and seek from.
This is one side of the story where companies are creating networks and each and every of the networks have a different region for dominance in the social behavior of people. It's another story worth discussing on how these social networks are led by different factors which in turn had given varied coverage to these in geographies globally. But today corporates worldwide are moving to using these network and leverage the social behaviour of people, and some of the networks like facebook, twiter and Linkedin are gradually establishing leadership status in social, professional and micro-blogging sectors of business. Companies today are working on their web presence to create an impact by having their presence across all the social networking sites and through blogging and various microblogging techniques. It's a way of of not just increasing awareness of various initiatives that corporates are taking but also to get maximum mileage out of the growing acceptance of web 2.0 models. One should not be surprised if very soon corporates would have their own social network platforms to aggregate the various partners, prospects and alliances and use this platform for increasing market presence and transform their organizations.
Might sound overbearing but imagine a status message from a CEO of a Fortune 100 company -" Completed a board room meeting to decide the initiative in the LTAM region towards legacy system consolidation" or a CFO of a multinational trying to discuss -" Latest trends in outsourcing of AP and AR" with his peers! But for now it's just living with reality and predictions by various research research firms on getting the maximum out of the social networking platforms and performing innovative marketing techniques as quoted by Forrester.
Tuesday, July 28, 2009
Ever evolving, changing and adapting world - keeping away from blogging hasn't stopped the thought process. While I was keeping myself busy into work it was exciting one day when I got a facebook invitation from my father; it was very interesting to watch this and how the Baby boomers too are gradually trying to get into the Gen V world and the late entry into the online space is not stopping them from taking a plunge in it.
I had a series of blogs on some of those most famous web spaces and how they will be evolving their business models. One of them was on where Linked in could be headed to, and am sure it wasn't just me who had foreseen that - but recession has really made some of my expectations (I don't want to be called a braggart by calling them predictions) come true:
- Increased the presence of Social networking and making them the 4th most popular online activity ahead of personal mail
- The entire world except for most of the countries in Africa have presence from Social Networking
- Linked in has become the No.1 site for job seekers in the current market for IT, Finance and Business professionals
Also I used to ponder on the next steps of Google for their google maps and on how they can really evolve to be a very effective Transportation Management tool, though far from it from a real time commercial transportation management system I think they certainly have managed to get a real solution to the public voes (Also so as not to get sucked into technical gibberish I would rather call it a Route management/optimization system than a Transportation management system). They have grown from being able to provide the shortest route to also being able to give options and leave it to the user to pick and choose. In fact their applicability is recognized by a lot of city transit authorities across the America's on the trip planners!
Lack of time has made some of my latest developments on the e-bizz side a bit rusty but am looking forward to getting charged up again to write on this area of interest to me. By the way before I end, just to let everybody know I am still contemplating whether to accept the invitation from my father on Facebook or not!