Posts filed under 'Yahoo'
(from our Bangalore desk)
This week I attended a seminar organized by TIE Bangalore on the topic of Mobile App Monetization. This is a vexing problem which has bedeviled most Mobile Apps developers around the world. Problems of app discovery, app marketing, too many apps, app development fatigue are well known.
This was an interesting panel discussion sponsored by Qualcomm Ventures. The speaker lineup was top-notch and included the following speakers :
- Karthee Madasamy, Sr. Director, India and Israel, Qualcomm Ventures
- Manik Arora, Founder & Managing Director, IDG Ventures India
- B. Vamshi Reddy, Co-Founder & CEO, Apalya Technologies
- Rahul Chowdhri, Director, Helion Venture Capital
- Suresh Narasimha, Founder & CEO, TELiBrahma Convergent Communications
- V. V. Ravindra, Managing Director, Idea Brahma
The discussion was riveting and inspiring with this star speaker lineup. Below are the key points of discussion from this seminar :
Karthee’s keynote :
- Globally, there exist 6 billion wireless connections now out of which 1.6 billion are 3G connections. This number is expected to swell to 3.1 billion 3G connections by 2015. Also, by 2015, emerging markets will contribute 50% of smartphone market share.
- A smartphone is now a full blown computing device. A smartphone now embeds more and more electronic functions like camera, GPS, watch etc. Tight silicon integration is driving this trend. Mobile processors now offering full windows experience Eg Windows 8 may run on the same processor has as the Windows 8 phone.
- As to India, in 2012, 200 million phones are expected to be sold in India. By 2015, 300 million phones will be sold in India. Smartphone sales will multiply by 4 times in India by 2015, compared to now. At the same time, the costs of high-end smartphones keep falling.
- Another great trend is that of the rise of mobile broadband users in India. Today, there are 52 million active users in India. 42% Facebook users in India are mobile users. India has 37 million 3G HSPA users today.
- India is very interesting in that, here, a phone is the first computer for a user, it is often the first camera as well as it is the first gaming device a person might have.
- India has a huge amount of mobile opportunity. In fact, for India, mobile may be the only primary computing device which a huge amount of users might have.
- 3G tariffs have dropped drastically in India. India is one of the cheapest 3G markets now, anywhere.
- There was a time when there were hardly any Indian-brand devices. Now India has seen several homegrown device brands - who have increased market share using innovative strategies like dual SIM or Tier 2 market penetration. Indian brands like Micromax and Lava now own 20-30% of the market in India.
- There are too many apps now and app fatigue exists, however good apps can still see a bright future.
Karthee also mentioned about the Qualcomm program to find successful startup models – this program is called the QPrize and it has total 1 million USD available in prize finding. One of the previous QPrize winner has been Capillary Tech.
Question : Is mobile apps just extension of VAS ?
Vamshi – Apps are to engage and entertain customers as far as Service Provider is concerned. Monetization of Apps, however, does have a VAS feel in India.
Suresh – TeliBrahma had decided early on not to work with operators and focus on domestic markets, however it is now trying to work with operators and is also marketing abroad. Advertising is a tough market. Need a billion impressions to make 1 million dollars.
Rahul - Their firm is concious that VAS market is challenging. As to working with carriers, it is a country specific issue and mostly an Indian problem. Mobile payments is a tough business to crack (but one of Helion investments ngpay has succeeded after some efforts). App monetization is generally difficult, somehow apps have to go local to add value. B2B2C seems to be a monetization model so far.
Question : How to make money on apps ?
Ravindra – To make money, need persistence. Positioning is important. For mHealth, doctors have to be targeted. App Store is not a good model – need to go through B2B channel eg via clinics or other healthcare firms. Selling via B2B2C seems only viable option in India to make money so far.
Vamshi – Apalya is selling via operators and direct to consumers also now. Collecting money today is via operators – that is one of rare ways to collect money. Apart from that, app monetization is very hard. Sheer persistence is key to get to inflection point in environment. Collection agent today is service provider. Another model – Vodafone is trying to act as change agent and willing to take only 30% app revenue share
similar to the app stores. Discovery thru app stores etc is hard.
Manik – with app stores, mobile social networking or mobile travel firms are hot again. Mobile is anytime anywhere location-based experience. Internet penetration is low but mobile penetrations is high. Especially, targeting tier two cities and local language support can help.
Social networks in India and search are in India are not promising as global guys do this. Mobile Commerce or m-Commerce requires local people, and hence is promising.
Angry bird started with a Finnish operator first, and then reached scale. And then Apple accepted them.
Rahul – ngpay – primary monetization is via payments. It has been difficult for ngpay in the beginning. Making money directly from end users is hard but possible.
Question : Paid apps vs ad-based apps?
Suresh – brand advertising is interesting but it is not easy. Eg Angry Birds became success after Rovio had tried many other apps. Mobile CPMs are too low compared to web CPMs. Mobile ad based revenue is not a viable model. White label apps do not work as IP gets transferred to the customer.
Manik – has a mobile advertising firm-vserv – in app advertising. It is early days for sure. if a firm has a little bit success, need to promote that. Eg Angry Birds. Long tail for mobile advertising in India is quite long. Only two media agencies in India have a dedicated mobile guy. Digital ad budgets will double at least in the next few years. But next growth has to come from mobile. Clearly there is a shift in positioning.
India has 900 million subscribers. So critical mass is there. Vserv has 60 million addressable users.
Vamshi – Angry birds focused on viral marketing.
Ravindra – India is about sheer size. Just smartphones are 15 million.
Rahul – invested in Dhingana. If one has a single app firm, need to have a deep app. Stay in low burn mode. Show engagement. Dhingana is radio ad market as radio has 100s of crores in ad revenue
Predictions :-
Manik – IDG is bottom up firm. Sees app opportunities in :
1) Infrastructure and enablers – eg advertising , security, discovery
2) enterprise mobility – still very new in India
3) cool movie movie hits type approach
Rahul -
1) B2B2C model is promising, that is hwere mobile and tablets are interchangeably used.
2) LBS services can be interesting
3) Global markets are promising
Karthee – Tablets are interesting – have a larger screen.
Vamshi – tablets market is still very small.
Suresh – tablets are promising. Eg winstores on tablets. Tablet will be bigger than PC at some point.
Ravindra – very bullish on tablet growth. Everybody knows tablets now and people understand their use now. People see PC replacement to a large extent. Clinics are good use cases for tablets. As doctors and radiologists are small compared to population, healthcare sector needs productivity improvements using mobile devices.
August 16th, 2012
excerpted from Harvard Business Review (Jul-Aug 2012 edition) article on Social Selling titled “Tweet Me, Friend Me, Make Me Buy”
Social Networks are important to sales people, that’s where the customers are.. Social Media selling has risks, but the biggest risk is sitting on the sidelines while your competitors grab customers on social networks. It makes sense for businesses today, of all kinds, to explore selling on social media. This can be achieved via structured training the sales team. Interestingly, there is scant training programs catering to Social Media selling. This activity, so far, remains in the perview of a smattering of a few leading Social Media consultants who are trying to creat awareness in this area.
The world is moving from push to pull marketing tactics. Subject matter expertise delivered via white papers and tweets is part of sales strategy now. The coorelation between such high quality SME content to actual sales achieved is difficult to measure, but the fact remains that customer engagement, brand recognition and buying decisions are dependent on content posted on such social networks. The sales executives from Online Teleconference services provider PGi use their company blog to broadcast useful content to their audience and followers, helping create a brand recognition and awareness of PGi portfolio.
It’s where the customers are
Studies conducted by Experian Marketing Services indicate that social networking now accounts for 15% of internet visits in the USA. LinkedIn, the professional networking site, now boasts 100 million users, most corporate folks who are at various levels of potential customer firms.Twitter has more than 100 million active users and Facebook has almost close to 1 billion users, 14% of global population.
How Social selling helps
a) Prospecting : Cold Calling and email blasts are being fast replaced by prospecting potential customers on social networks. It seems the customers are more responsive to short messages sent via social networks from friends and contacts. Often the sales reps do not have to start the conversation, but rather can insert into an existing problem or situation being discussed on Social networks. Eg a client executive could be complaining about phone services, phone company sales reps can pick up such conversation and approach that customers with telco solutions and offerings. “A lead today can be a complaint on Twitter, a question on LinkedIn, or a discussion on a Facebook page.” Social monitoring tools like HootSuite allow such lead generation to be automated and integrated into a firm’s CRM system.
b) Qualifying leads : Using data intelligence tools like InsideView, salespeople can gain relevant, real-time insights about the companies and buyers they’ve targeted. “Follow”, trigger alerts, direct messaging are compelling tools on social networks which allow sales reps to research their prospects and be prepared for the sales presentations or sales calls. The key decision makers can be researched and targeted as direct contacts on social networks.
(CellStrat experience : LinkedIn is surprisingly powerful to make contacts and penetrate firms at senior level as per our experience)
c) Managing relationships : Sales remains a relationship-driven activity, but “who you know” is now trumped by “what you know about who you know”. Social networks are being used by sales reps to “know their customers” and what their customers are discussion online or in tweets. This helps empower the sales reps with valuable knowledge about prospects when making contact with them.
As to governance and credential risks associated with using social networks, firms can have in place policies and training for sales teams, to ensure that the employees do not end up causing trouble for their firm via inappropriate or questionable activities online.
It would not be a stretch to say that not participating in social selling puts a firm at a competitive disadvantage compared to it’s competitors, as the latter are certainly leveraging the social selling paradigm already.
August 5th, 2012
Reports say that spending of social media has gone up, currently it accounts for 7.4% of their total marketing budget, it has also been predicted that the share will rise to 46% i.e to 10.8% in the upcoming 12 months. The research conducted in February 2012 by the “Fuqua School of Business” also gave details of the CMO report. According to this research report, the spending will undergo even more drastic upswing in the next 5 years, thereby accounting to 19.5 % of their total marketing budgets, almost tripling the current budget.
The same trend was noticed in December 2011, a study was conducted by Strong mail in conjunction with Zoomerang where 55% of the business leaders responded thoroughly in the survey and also shared that they are planning to increase their social media budgets to a greater extent by the end of this year, thereby increasing the spend behind email marketing that is 60%. This increase also reflects the passion for a channel on marketer’s part; data from an Econsultancy and Adobe survey released in February 2012, directly indicated that 54% of social media engagement was amongst one of the most exciting digital opportunities, but at the same time company marketers were also passionate about 38% of Mobile optimization, 37% of content optimization, 31% of conversion rate optimization, 27% of brand building/viral marketing and 24% of video marketing.
B2C Product- Firm’s “HIGHEST SPENDING LEVEL”
The CMO survey also revealed that B2C product companies lead all industry sector in terms of spending allocated to social media, which makes it around 9.6% of their current marketing budgets, that was very clearly ahead of 8.4% of B2C services companies, 7.4% of B@B service companies and 6.2% of B2B product firms.
Now,taking a look at the next 12 months, the same trend applies with B2C product companies again forecasting that the largest share of marketing budgets to be spent in 23% of social media, though B2B service companies and B2C service companies are expected to be on par in terms of the share of spending which is dedicated to their channel ( 19.1% and 19%) respectively.
Social Media Integration “A CHALLENGE”
Though CMO’s expect to increase their spending on social media,yet still the channel remains poorly integrated with the firm’s overall marketing strategy.In fact, most of the respondents rated the extent of their integration with social media a “1” on a ”7” point scale, where “1” represents no integration at all.Whereas only 21.1% of the CMO’s rated their firm’s integration with social media a top “2” box score.Thus , concluding that the mean score was of 3.8 which was the highest among B2C service ( 4.5 ) and product ( 4.4 ) companies , and lowest among B2B product and services firm( both at 3.6).
Rise in Social Media Employment Y-O-Y
The data from the CMO also indicated that respondents have an average of 9 people employed in-house in order to do social media for the company which marked a rise from an average of 5.3 since the previous year. At the same time the average number of individuals from outside vendors provided a social media support for the company, increased from 1.8 to 4 during that timeframe.
(Source : Marketing Charts)
March 12th, 2012
Google, India, Rajan, Anandan, Google India Managing Director Rajan Anandan gave a fascinating talk to a Geeks on a Plane India group this week, giving a snap shot of the data that is driving the consumers, entrepreneurs, trends and investors in the rapidly growing Indian web and mobile markets.
Anandan says: “We’re probably in 1996 in the U.S. in terms of the Internet market in India.” Here’s the stats from Anandan’s deck accompanied with some comments from me in brackets. India has:
- 1.2 billion people
- The 9th largest economy in the world, with $1.7 trillion GDP
- 600 million people below the age of 25
- 22 languages
- 250 million in the consuming class — these are the folks that buy e-commerce
- 900 million mobile accounts, with 600 million unique mobile subscribers (many people have more than one account)
- 30 million PCs — it’ll be a mobile broadband world
- Average revenue per user (ARPU) is $3
- 100 million Internet users, and 120 million Internet users by the end of 2011 that’s about 10% population right now.
- By 2015 there will be 300 million to 400 million Internet users that would still be about 10% of population then.
- 37 percent of Internet users access the web from home, 27 percent from an Internet cafe, 22 percent from an office, 3 percent from school
- There are 50 million mobile data subscribers
- 5 million access Internet only on the phone but still most of them don”t buy through m-commerce
- In 2010/2011 e-commerce emerged as a $7 billion market, with $6 billion of that going to online travel
- By 2015 the e-commerce market is expected to be $40 billion (how will 47 e-commerce companies present in India right now survive until 2015? )
- 67 percent of e-commerce customers buy electronics and cell phones. 18 percent buy apparel.
- 15 million 3G mobile subscribers
- Broadband is 250 kbps to 500 kpbs fixed line
- The use of smart phones will grow 52 percent CAGR
- There are 37 million Facebook users
- Google Plus use is bigger than Twitter use
- 23 million unique users on YouTube India
- There will be $1.3 trillion in online ad spend in 2011
- The English Internet will not scale beyond 200 million, says Anandan
- 159 million read Hindi newspapers and 31 million read English newspapers
- There will be a massive tsunami toward vernacular content on the web, says Anandan
- 70 percent of non-travel e-commerce is “cash on delivery” (no online payments, buyers pay cash when goods are delivered)
- This cash on delivery market has a 30 percent return rate
- Web 1.0 and 2.0 are happening at the same time in India, says Anandan.
Some Internet sites that have found success in India:
Considering numbers above, anybody feeling that e-commerce is here and now and they will miss the boat if they don’t enter now can re-think as even if they start 1-2 yrs. down the line, they would be good as internet penetration is still low and more purchase is happening in COD mode than online mode. But, if people feel it would be good to have presence now online so that they are ready when actually penetration rises, then my personal suggestion would be to have enough cash to be able to sustain until then.
For some time, people willing to enter e-commerce have been asking us if they should have wapsite or an app, we have been advising them to have wapsite now and apps soon as in long run leaving either will be a wrong decision.
What do you think about e-commerce state in India? I would love to see your comments…
(via GigaOm)
December 15th, 2011
Everybody and their grandma in India now knows that Indian e-commerce market is set to explode – it is expected to go from current 7 billion dollar (of which 6 billion is online travel alone) to 40 billion by 2015 – ie in 3-4 years.
In view of this, dozens of new ecommerce startups have launched in India and some of them are increasing market share at a breakneck speed. Some of these include Flipkart, Snapdeal, Exclusively.in, yebhi.com, babyoye.com, myntra.com and several others from large brands as well as startups.
But Indian ecommerce is not like that in the West – where online credit card payment and cheap shipping are the order of the day. India has presented these online commerce vendors with its own unique challenges – eg. :
- COD : customers are reticent to use credit cards online. COD or Cash on Delivery is the preferred method for payment for most online sales.
- Free Shipping : Indian online customers do not want to pay for shipping – as a result, Indian ecommerce vendors have to bite the bullet on shipping as well.
- Categories for online shopping : Indian customers so far are mostly interested in online travel purchases – but when it comes to other products like toys, baby products, household items, books, music CDs and such, physical stores still take more than 99% of the customer pie. Of course, now electronics, books and apparel are some products gaining traction in online sales.
- Where are the profits ? : Of course, it is well known that most India ecommerce startups are taking a loss on online sales – just to grow market share. One expects a market shakeout on this sooner or later and only the strongest (and well funded) ones will survive this fight to the top. We feel that the shakeout will begin to happen over the course of next year with several pulling the plug on their ventures or being bought out by other stronger ones.
Above list highlights some major challenges for the Indian ecommerce players. Enter Indian Jugaad – or Indian version of “make it work somehow“. New services like Gharpay and chottu.in have been launched to tackle the COD cash collection challenges, as well as product delivery in some cases. These services are building networks of collection agents in various circles or cities and provide Cash on delivery collection services as well as product delivery for the major vendors like Redbus.in, Myntra and Flipkart. Within months of launch, these services have signed up many leading online vendors as customers.
Well – one has to admit – when it comes to India, it is all about “Jugaad Karo“. In India, if there is a problem, there is always a “Jugaad solution” lurking somewhere – it is upto creative entrepreneurs to find such gaps and exploit them to make new ventures.
December 14th, 2011
(excerpted from GigaOm Pro article at http://t.co/20B9JVyo)
Katie Fehrenbacher with Gigaom is traveling with Geeks on a Plane in India. She writes following stats provided by Google CEO Rajan Anandan to the Geeks on a Plane group :
Rajan Anandan on Indian internet scene : “We’re probably in 1996 in the U.S. in terms of the Internet market in India.”
Here’s the stats from Anandan’s deck. India has:
- 1.2 billion people
- The 9th largest economy in the world, with $1.7 trillion GDP
- 600 million people below the age of 25
- 22 languages
- 250 million in the consuming class — these are the folks that buy e-commerce
- 900 million mobile accounts, with 600 million unique mobile subscribers (many people have more than one account)
- 30 million PCs — it’ll be a mobile broadband world
- Average revenue per user (ARPU) is $3
- 100 million Internet users, and 120 million Internet users by the end of 2011
- By 2015 there will be 300 million to 400 million Internet users
- 37 percent of Internet users access the web from home, 27 percent from an Internet cafe, 22 percent from an office, 3 percent from school
- There are 50 million mobile data subscribers
- 5 million access Internet only on the phone
- In 2010/2011 e-commerce emerged as a $7 billion market, with $6 billion of that going to online travel
- By 2015 the e-commerce market is expected to be $40 billion
- 67 percent of e-commerce customers by electronics and cell phones. 18 percent buy apparel.
- 15 million 3G mobile subscribers
- Broadband is 250 kbps to 500 kpbs fixed line
- The use of smart phones will grow 52 percent CAGR
- There are 37 million Facebook users
- Google Plus use is bigger than Twitter use
- 23 million unique users on YouTube India
- There will be $1.3 trillion in online ad spend in 2011
- The English Internet will not scale beyond 200 million, says Anandan
- 159 million read Hindi newspapers and 31 million read English newspapers
- There will be a massive tsunami toward vernacular content on the web, says Anandan
- 70 percent of non-travel e-commerce is “cash on delivery” (no online payments, buyers pay cash when goods are delivered)
- This cash on delivery market has a 30 percent return rate
- Web 1.0 and 2.0 are happening at the same time in India, says Anandan.
Some Internet sites that have found success in India:
Thanks to Gigaom for the above post.
December 14th, 2011
The best way for brands to attract followers on social sites is to offer giveaways and discounts, according to data from Nielsen/McKinsey’s NM Incite. Almost 60% of users say they use social tools to find discounts, and almost a quarter say they do so on at least a weekly basis. “While some may argue that consumers’ interest in discounts has faded, Nielsen data shows the desire for deals is still strong worldwide,” the researchers say.
Above is also proved by the fact that ventures like Snapdeal, a 1.5 yr. young Indian but hugely funded start-up has grown from just 10 employees to 600 strong and continue to grow at a fast pace. Their top management team is continuously hiring at a fast pace and are going to add another 400 people in next two months. They say market is too big for even all existing players including likes of Groupon and thus they need huge man power to be able to capture further market share fast.
Another Indian company Geitit yellow pages has started their own hot deals site by the name of getithotdeals.in they may be at an advantage as they are yellow pages directory publishers and already have all the necessary data across major cities on India. Thus, they would be able to use their existing manpower and resources to collect deals and discounts and populate the site with 1000s of deals from across India.
November 10th, 2011
Consumer electronics in general, and the smartphone in particular, are becoming an indispensable part of family life.
According to some recent studies, 71% of moms do not go more than one day without using the Internet, with 40% saying they can go only a few hours without using a mobile phone and the Internet. (Comparatively, only 18% say the same about television.) In fact, 79% said that cell phones are a necessity, compared with 42% saying the same about a typical landline.
“While the penetration of smartphones is significant, moms use [them] in so many different ways. “These things have essentially become a tool for modern families.” Moms have embraced mobile — email, apps, SMS, voice, and the mobile web — in a big way. This isn’t a burgeoning trend. It’s the reality right now.
According to another study where more than five thousand moms were surveyed, moms are 18 percent more likely than the general public to have a smartphone. And they are using them all day, every day.
From researching family health questions to scheduling and documenting her kids’ lives to diffusing her child’s meltdown in the checkout line, mom’s smartphone is her constant companion. It helps her save time, money, and her sense of humor.
For marketers, mobile represents fertile, new area. But to reap the benefits of this new channel, you have to keep a few things in mind.
She loves her smartphone
Mom has an emotional connection to her smartphone. It delivers a sense of confidence and accomplishment that decreases her stress. She is absolutely (and unabashedly) addicted, spending 37 percent of her media time on her smartphone, more than twice what she spends on TV. Mobile is the first thing she checks in the morning, the last thing she looks at before bed, and the media source she visits most frequently throughout her day. Mobile also enables her to easily fit guilty pleasures like music, entertainment, and gaming back into her media diet, by allowing her to “snack” on bits and pieces as she commutes to work, waits in the bus/ metro line or relaxes after bedtime.
Takeaway for Marketers: The mobile media channel has a 24/7 prime time and mom is always tuned in. Creating multiple mobile touch points is not only viable, but advisable.
She demands utility
Utility is her new luxury. Motherhood adds 10.7 daily hours of parenting time into mom’s already busy schedule. She needs to get more done in less time so she can spend more time with her family. Smart mobile solutions help her do both.
Takeaway for Marketers: Mom loves mobile because it helps her solve problems faster, better, and more efficiently than ever before. Help mom be better at her job and you win.
At the same time, families are still heavily reliant on face-to-face for intra-family communications. While 81% of moms use Facebook and 57% use blogs on a daily basis to communicate with each other, only 2% use Facebook to communicate with their kids.
Moms respond well to mobile ads. 46%+ moms have taken an action after seeing an ad on their smartphone whether it’s an online purchase after seeing the ad on the phone or followed up with more research later or clicked a banner ad to go to a mobile wap site or purchase the product later in store or clicked to call…
Share your views on how you have harnessed the mobile mom’s power…we would love to see your comments and case studies in this area…
August 9th, 2011
Small and large companies alike in India and abroad should realize that they can become a victim at any time. Not a day goes by when we don’t hear about a new hack. With 55,000 new pieces of malware a day, security never sleeps.
Some tips as below, if remembered can be beneficial in the long term:
- Think before you post. Status updates, photos, and comments can reveal more about you than you intended to disclose. You could end up feeling like some silly politician as you struggle to explain yourself.
- Nothing good comes from filling out a “25 Most Amazing Things About You” survey. Avoid publicly answering questionnaires with details like your middle name, as this is the type of information financial institutions may use to verify your identity.
- Think twice about applications that request permission to access your data. You would be allowing an unknown party to send you email, post to your wall, and access your information at any time, regardless of whether you’re using the application.
- Don’t click on short links that don’t clearly show the link location. Criminals often post phony links that claim to show who has been viewing your profile. Test unknown links at Siteadvisor.com by pasting the link into the “View a Site Report” form on the right-hand side of the page.
- Beware of posts with subjects along the lines of, “LOL! Look at the video I found of you!” When you click the link, you get a message saying that you need to upgrade your video player in order to see the clip, but when you attempt to download the “upgrade,” the malicious page will instead install malware that tracks and steals your data.
- Be suspicious of anything that sounds unusual or feels odd. If one of your friends posts, “We’re stuck in Cambodia and need money,” it’s most likely a scam.
- Understand your privacy settings. Select the most secure options and check periodically for changes that can openup your profile to the public.
- Geolocation apps such as Foursquare share your exact location, which also lets criminals know that you aren’t home, so reconsider broadcasting that information.
- Use an updated browser. Older browsers tend to have more security flaws.
- Choose unique logins and passwords for each of the websites you use.
- Check the domain to be sure that you’re logging into a legitimate website. So if you’re visiting a Facebook page, look for the www.facebook.com address.
(Ref: Excerpt from article by Robert Siciliano)
August 3rd, 2011
Attended a webinar by Charlene Li of Altimeter Group. Charlene is one of world’s foremost experts on Social Media and Opening up Corporate environments to discussion, feedback and engagement.
Charlene Li is Founder of Altimeter Group and a former Researcher from Forrester Research. She has authored two of the leading books in Social space – Groundswell and Open Leadership.
Here are Charlene’s thoughts on Open Leadership, Social Media and Employee Empowerment :
The Dell case study is the subject of lot of Social Media books. A Dell laptop caught fire in a Japanese fire many years back and a video of it circulates till date on YouTube and other media portals. Dell, at the time, was not equipped to respond to the PR nightmare that followed. After that Dell engaged in extensive introspection and created a powerful Social empowerment strategy for it’s employees.
Charlene talks about three key aspects to developing an Open Leadership enviroment : Strategy, Leadership and Preparedness.
Strategy :
Today’s leaders need to “Learn” about what is happening in employee circles and customer spheres. This requires “Dialog”. Best Buy has created twelpforce – a twitter support group about 2500 strong to provide support to customers.
The Social Strategy involves an Engagement Pyramid :
The Engagement Pyramid indicates various levels of Open Leadership possible in a firm.
DellOutlet drives sales with Dialog on twitter – this channel is used to announce promotions. Web announcements and brochures are other ways to promote new products but they do not engender any user feedback whereas the same promotions on twitter drive user feedback and sharing. Similarly, Kohl’s retail chain encourages its customers to share their purchase experiences on its user portal.
This is all about enabling Dialog.
The next idea is “Integrate” support in your business. One firm has 85% of its employees engaged in customer support forums. This leads to good customer satisfaction. Starbucks invites ideas on www.mystarbucksidea.com. Almost 100 customer ideas from this portal have been implemented.
Leadership :
This means that top leadership needs to have the confidence and humility to give up Control and empower it’s people. This also requires authenticity and transparency. Sunguard CEO said that it would be arrogant for a CEO to think that he or she can make better decisions than the thousands of people below him/her. Sunguard CEO implemented Yammer in his firm – the intranet equivalent of twitter.
Premier Farnell (a manufacturing firm) runs the “OurTube” portal for its employees and engineers – this portal allows the engineers to share ideas and best practices. Salesforce.com – the premier online CRM firm, uses its own Chatter platform for internal communication and sharing.
Preparedness :
The question is how to get started on the path of Open Leadership. Charlene lays out a five step process :
#1 Align Social with key strategy goals for current and next year
Take some risks with Social technology if you have to
#2 Create a culture of sharing
Exercise sharing muscles. Often times, CEO and other leaders must lead by example by sharing themselves. Eg Edelman CEO blogs every single week since 2004.
How to encourage sharing :
- Give sharing a purpose eg. goal, project or event
- Build trust : Limit people you share with, at least initially
- Use video : eg one can use cellphone to record yourself and put it out there
Send it out by email for sharing – email works also – in addition to social networks.
#3 Discipline is needed to succeed
Formalize the Open Leadership process – without definition, people do not know the boundaries and may not be comfortable with this media. rules of atticate, rules of behavior, rules of culture.
#4 Ask the right questions about value
Some orgs use brand metrics or net promoter score – but these are tough and laborious to measure. Whereas social technology is infinitely measurable – metrics is not the key, but relationships are.
#5 Prepare for failure
No relationships are perfect. Google’s mantra is – “Fail fast, Fail Smart“.
It’s about RELATIONSHIPs at the end of day – relationships with customers, relationships with employees and relationships with partners.
Baby boomers – some are active on Social Media even though common perception is that they don’t get it. Millennials – they are new in orgs and hence least secure to brand as Empowered employees.
For a firm, the best people to put out there acting as ambassadors are – folks who are passionate about this stuff – these are often baby boomers.
Q & A :
- How do management set personal and professional boundaries for Social empowerment ? depends on what relationships a firm wants – that will determine the boundaries.
- Another question is to check “Readiness” of firms for Open Leadership. How ready is it to engage ? many departments like legal, investor relations, marketing and others need to provide the clearance for this.
- Why does Apple succeed in spite of being so closed ? Charlene mentioned that although Apple is a very closed organization and is keep its operations and new products very secret, but they still succeed due to their fantastic product quality. But another way to look at it is that Apple has so many passionate fans that act as their ambassadors and advocates. That said, Apple has it’s share of problems etc the Antenna issue in the iPhone 4 caused so much PR problems for Apple.
Open Strategy must focus on RELATIONSHIPs and not on tech platform eg Facebook or twitter or email etc
Companies try to start with content creation – blogs, youtube (90% push, 10% feedback) before they go onto other steps in Openness.
Sometimes firms find that people are not participating in an Open environment – this is a training and prority issue. Charlene says that leaders have to look for passionate staff who thrive on feedback.
- Why Openness can fail : often times when it is not structured. Business requires context and structure to be successful
- Which departments use Social Tech ? 40% of it is in Marketing dept. Increasingly, Corporate Communication and HR depts are using it. As well, HR, Investor Relations, Corporate Social Responsibility depts are beginning to use it.
- Cultural nuances ? Charlene found that cultural nuances effect Social and Open in different countries. Eg in Korea and Brazil – producing content is twice as popular than in USA – people want to create content as there is little of it so far.
China – people are transparent about their salaries, not so in USA. Different cultures share different things but the point is that they do share.
Eventually, Social Technology will be like air – anywhere and everywhere.
Over time : When one locks into grocery store, they will know who I am and what I typically want
If consumers are adopting Social technology, companies need to be there too.
You HAVE TO GO where your customers are, firms cannot just focus on their websites etc.
- What about privacy issues ? Charlene said that there is clear distinction between PRIVACY and PERMISSION. But, society’s norms change quickly about privacy. Eg Caller id was resisted by people before as it was considered invasive of privacy. But now it is mandatory before people answer calls.
One has to constantly test where the public boundary is for privacy.
- What about failures when trying out Openness ? Charlene’s book has one complete chapter on Failure of Openness.
Most CEOs feel their stomach churning when they enter this arena. It takes some time and experimentation for management to develop a comfort zone with Open Leadership.
If one is in job market today, potential candidates are demanding open firms. On the flip side, some people want more structure around Openness. It is the Younger generation that has a preference to continue to be social.
- How about loss of employee productivity using social networks ? Charlene says this is a management problem and not a productivity problem. If a firm blocks people from using social media, people do it anyway on their phones and take long breaks.
Learning about Open Leadership is the MOST IMPORTANT OBJECTIVE as all firms today want to become people-oriented.
Focus Groups and Surveys are hard to do and get responses. It is much easier to search Social Networks and one knows the participants’ profiles and biases.
June 16th, 2011
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