Respect the Mob: How To Manage Customers?

As customers get increasingly connected, brands will have to treat them with greater care

    Companies have often grappled with the 'ownership' of their brands. Ultimately, the brand is simply what it represents in the minds of consumers. Strong brands generate strong emotions and consumers can have a real sense of ownership — and an equal willingness to criticise decisions that affect that brand in ways that they do not like. When The Coca-Cola Company tinkered with its formula and introduced New Coke in the mid-80s, the subsequent uproar from consumers forced a u-turn.

    It used to be said that consumers having a negative experience with a brand might tell as many as ten people whereas those with positive experiences might tell only as few as three. In other words, negative word of mouth spread faster than the positive. The advent of the internet and various social media facilitates opinionated consumers to exchange ideas and influence others. Word of mouth has been turbo charged. Opinions reach billions. Consumers have formed a collective. They have unionised.
    

The free-flowing exchange of information, the inter-connectedness of consumers, has changed the marketplace. Now, the market bears many of the characteristics of an organisation, albeit a loosely-formed one. The famous u-turn imposed on Coke by its consumers stands out as a rare, iconic moment in marketing history, when consumers exerted control over the legal brand owner. It will be less rare in the future.

    To avoid the wrath of the aligned masses, it now makes more sense to treat customers as one might employees — with Facebook replacing the watercooler — who need to be prepared for and supported through major changes, rather than as wallets with demographic data attached.
 

    Like employees, consumers now need to be managed, nurtured; change must be introduced carefully and with great tact. Springing changes on our connected consumers of the 21st century can go spectacularly wrong, as Gap learned at a great expense last year. On October 4th, out of the blue and with little explanation, it launched a new logo. Two days later, it was energetically defending its new look against criticism from designers ('a shockingly poor attempt at a rebrand') and customers ('cheap and nasty'; 'it sucks'; 'boring, just like their clothes').
    

On October 11th, it dropped the new logo and went back to its old marquee. Now compare this with the way in which Starbucks changed its logo. It started the year before with an announcement that explained what it planned to do and why. It explained it wanted to be more than a coffee company, hence the second word in its name, Starbucks Coffee, would be dropped. By reassuring customers that its core values were not changing, that coffee would always be important, its change has, by and large, been accepted.
 

    Thinking of how we manage employees might help us as we grapple with the new phenomenon of the connected consumer.
 

MANAGING CUSTOMERS
1. Communication: To employees' eyes, their employers can always improve communication — there should be more, or there should be less; communication should be timely and/or more regular etc. The connected consumer similarly places high demands on the brands he buys. And, he is not afraid to ridicule communications that are inconsistent or poorly thought through. A brief scan of YouTube illustrates the point — countless user-generated parodies of advertisements are available, with many viewed much more than the original.
 

2. Motivation: What motivates consumers to buy or to be loyal to a brand is even more important nowadays. As the number of touch-points between the brand and the consumer proliferate, it is important that the messaging from the brand is consistent with the motivations of the consumer.
 

3. Delegation: Many companies are already involving the connected consumer in a variety of interesting ways. Companies are co-creating products and solutions with consumers. The key issue, as with the case of managing employees, is what does one delegate to consumers and what does one keep for determination by management. Involving consumers in even the most simple of decisions can have unintended consequences as Next, the UK-based clothing chain, learned when it put the determination of its models for 2011 to popular vote and customers selected a model that did not reflect the Next brand 'image.'
 

4. Accessibility: Employees like employers to have an 'open door' policy, whether it is to HR, or their boss. Similarly, brands should have an open invitation to consumers, whether it is to complain or compliment. Many companies now go beyond passively waiting for consumers to contact them to complain and operate a sort of outreach programme, where blogs, chat rooms etc. are scanned to address issues being discussed among consumers.
 

5. Learn from mistakes, openly: Good managers learn from their mistakes and the same is true when dealing with connected consumers. Marketing-savvy companies have grappled with the impact of Facebook, Twitter etc., where opinion, whether ill-informed or ill-intentioned, can flow freely. Even Procter & Gamble has misfired, having struggled to quell (incorrect) suspicions that a change to its Pampers product caused diaper rash. However, after much time simply denying the problem and quoting statistics, P&G admitted that it could have handled the situation better and that it needs to consider the impact of public internet forums.
 

6. Fairness: Nobody likes to be treated 'unfairly' and the connected consumer can be quite vocal if he perceives an injustice. However, fair need not necessarily mean equal. Consumers can be valuable to companies because they buy large volumes and perhaps those who buy more should receive a lower per unit price. However, even consumers who do not purchase much might be of great value because they can, for example, refer other customers to a brand, provide suggestions for improvements etc.
    The connected consumer is here to stay. Firms should accept that relationships between consumers play a greater role in consumer decision-making than before, with a consequent diminution of the relationship of the consumer with the brand. Dialogue, not monologue, represents the future. Truly engaging with the community of connected consumers asks a great deal of today's marketing organisations. And, the target is moving as the ways and means that that community interconnects evolves with time. 

ET

How This Worked Di?

How This Worked Di?

Facebook and K o l a v e r i D i have one big thing in common — no one knows why they succeeded

So here is a little thought experiment. The year is 1999, and the world around you is going mad about this thing they call a ‘dotcom’. You have started emailing around a year ago, and love the experience. A friend of yours is sitting somewhere in Silicon Valley, and he suddenly realises that he has this brilliant idea to launch his own website. Before he approaches venture capitalists — who are ready to fund almost anything which sounds a little different — he thinks it's wise to run the idea by you. You have always given him good advice.
    "So I had this idea about a website," he tells you while chatting on Yahoo Messenger.
    "Oh yeah," you reply, suddenly feeling all important. "Tell me about it."
    "Basically I plan to launch a social networking website."
    "A social what?" you ask.
    "In real life you meet people and become friends, and then share things with them. Similarly, the website will allow you to make friends online, share your thoughts with them and even upload your photographs online."
    "Hmm. But I am already doing that in real life. Why would I want to make friends online?" you question.
    He doesn't have an answer to that. He agrees it's a dumb idea, and that's where the conversation ends.
    Now twelve years later, the kind of website your friend had in mind is making the world go round. It allows you to make friends online, put up status messages of your innermost thoughts and even lets people you hadn't invited for your wedding see your honeymoon pictures.
    It's called Facebook. And it now has 800 million users. The website was launched in 2004, and back then no one really knew it would be such a huge hit. As Duncan J Watt explains in Everything is Obvious - Once You Know the Answer, "If you'd asked...people who currently belong to Facebook back in 2004 whether or
not they wanted to post profiles of themselves online and share updates with hundreds of friends and acquaintances about their everyday goings-on, many of them would have likely said no, and they probably would have meant it. The world, in other words, wasn't sitting around waiting for someone to invent Facebook so that we could all join in."
    What this example tells us is that it is very difficult to know in advance what will work and why it will work. Also, Facebook worked, but some other websites with very similar concepts like Orkut, MySpace etc did not go anywhere. But once something succeeds, everybody and anybody will have an explanation for its success.
    Take the case of the mega hit Kolaveri Di from the Tamil movie '3', which even has my mother dancing to it, since she first saw it on Youtube. A rather nondescript video of the song was put up on Youtube
    and it was trending within days. On the last count, the song had had 30 million hits (which Aishwarya R Dhanush, director of the movie, has as her status message as I write this).
    So the question everyone is asking how did this Tamil-English number capture the imagination of all of India? The Indian Institute of Management at Ranchi has even organised a seminar on it. Articles appearing across a section of media have come up with their own reasons. One article has attributed the success to the KISS (Keep it simple, silly!) strategy. Another said it is an outcome of out of the box thinking. ‘Hummability’ counts, not meaning, pointed out another.
    All valid points. But points, which could be applied equally to a lot of other songs and
    music floating around on Youtube which no one has ever heard. The basic lesson from both these examples is that things like Facebook and Kolaveri Di just happen, you can't make them happen even though you might have an explanation for why they happened, once they have happened.
    In the cultural markets this has been proven time and again. As Watts writes "The history of cultural markets is crowded with examples of future blockbusters - Elvis, Star Wars, Seinfeld . Harry Potter, American Idol —that publishers and movie studios left for read while simultaneously betting big on total failures."
    Closer to home a brilliant example is that of the film Sholay. The film was massacred by critics when it released. As Anupama Chopra writes in Sholay: The Making of a Classic, "Taking off on the title of the film, K.L.Almadi writing in the India Today called it a 'dead ember'… Filmfare's Bikram Singh wrote: 'The major trouble with the film is the unsuccessful transplantation it attempts — grafting a western on the Indian milieu. "The film went onto become the biggest blockbuster in Hindi cinema. Hum Aapke Hain Kaun, the second biggest blockbuster of Hindi cinema (adjusted for inflation) was referred to as an extended wedding video by the film critics.
Joanne ‘Jo’ Rowling, better known as J K Rowling, finished the first Harry Potter book, Harry Potter and the Philosopher's Stone in 1995. The publishers weren't interested. It got rejected twelve times before Bloomsbury, a London-based publishing house agreed to publish it. The initial print run was 1000 copies and the advance Rowling got for the book was£1500.
The book and its sequels were a smashing success and according to Forbes magazine, Rowling was the first person become to dollar billionaire by writing books.
What rings true about books and movies also rings true new businesses. The spectacular success of home-grown IT giant Infosys is a case in point. The initial public offering (IPO) of the company in 1993 was undersubscribed and the company was bailed out by the investment banker Morgan Stanley, which picked up 13% stake in the company.
When Bharti Televentures (now Bharti Airtel Ltd) went in for an IPO in January 2002, it set the floor price at Rs 45. Several analysts back then found this price to be expensive. The stock fell to a low of Rs 20.75 within a year of listing on January 10, 2003.
If people had seen the potential of the stock, when it listed on February 18, 2002, at a price of around Rs 45, they would have multiplied their money by 7.6 times (At the time of writing this, Bharti quotes at Rs 344) by now. And this after the stock price has taken a tremendous beating over the last couple of years.
The same stands true for Google, whose founders Sergey Brin and Larry Page tried to sell the company for $1.6million in the late 1990s. Google currently has a market capitalisation of around $216.5billion.
The moral of the story is that it is next to impossible to predict what will work when it comes to complex systems like culture and business. Given these reasons the explanations people come up with to explain the success of these things is largely irrelevant. On most occasions we don't know. Watt puts it best when he says, "Ultimately, in fact, it may simply not be possible to say why...the Harry Potter books sold more than 350 million copies within 10 years, or why Facebook has attracted more than 500 million users. In the end, the only honest explanation may be the one given by the publisher of Lynne Truss's surprise bestseller, Eats, Shoots and Leaves, who, when asked to explain its success, replied that "it sold because lots of people bought it." Similarly Kolaveri Di succeeded because a lot of people heard it.
 

Source :ET

12 most likely and crucial science & technology breakthroughs for 2012

Phones that can be rolled up. Computers that boot instantly. Ultra-cheap gene sequencing. Health care mobile apps...and more.

1) Cloud computing goes viral

Cloud computing has been one of the most discussed subjects in recent years. But it has so far remained just that: a widely discussed tech with few adoptions. This year will be an inflection point, as CIOs find the Cloud irresistible and start using it slowly. Many real benefits will accrue when the technology and business models start maturing soon.

So far, scientists and internet companies have been the main users of big data. Now, traditional firms will find uses for it. Consumers too will begin to use the cloud in a big way and integrate the multiple devices they use. You could take a picture using your smartphone and view it on your computer, or TV, instantly through the cloud. Consumer journey on the cloud has just begun.

2) Hybrid Supercomputers

Big data does not drive cloud computing trends, but it does push supercomputing hard. New supercomputers are being developed rapidly, and their progress is not determined by computing needs alone. Economics and power consumption are vital components too. This year would see the birth of several supercomputers that are lightning fast and others that are low-cost and energy-efficient, but much faster than desktops.

The so-called hybrid supercomputers, which use a combination of mainstream processors and graphics processors, should become popular. But the proliferation of supercomps could pose new problems in software development. By the year end, it could set off a completely new approach towards high performance computing software.

3) Flexible displays

Won't it be wonderful if your phone or tablet could be rolled up and put away in your pocket? Or the newspaper could be read in an e-format yet rolled up like a traditional paper. The first steps towards this goal will be taken this year when Samsung, Nokia and others launch the first phones with flexible displays.

More devices will follow soon. Fully flexible devices are still a few years away, as they also require new kinds of batteries, processors, etc. But we will get there quickly as several new inventions are waiting to be commercialised. On the cards are electronic shelf labels in stores, electronic writing paper, windows that double up as displays, and so on. 

 

4) Memristor
This newly discovered circuit element needs some luck to enter the market this year-end, but if will herald a big change in many industries. Memristor's first use will be as a cheaper and faster alternative to flash memory.
Later, it will also be used in place of solid state drives and transistors. All of them will lead to a big improvement in computing performance Memristor chips will result in computers that can be booted instantly.

Memristor was discovered in 2007 by Hewlett Packard (HP), and is the fourth circuit element after resistor, inductor and capacitor. The first three are indispensible to the electronics industry, and the memristor will be equally important. HP is reported to have progressed rapidly towards commercialising its invention. A launch by the year end is difficult but possible. Get ready to say goodbye to flash memory.

5) Algal biofuel

Last year was bad for biofuel firms, as several of them shut down. Many question the viability of the technology itself, as algal farms need plenty of nutrient and energy inputs that make them expensive. Yet industry observers believe oil prices and other factors might make algae biofuel viable.

This year is significant because algae biofuel would go from labs to commercial plants. Several algae-based oil plants are coming up in Chile, Sri Lanka, Australia and the US. The technology will work in places that have salt water, lots of sunlight and empty non-arable land. An Indian company is experimenting with seaweed, a form of macroalgae, and it will also start work at a pilot facility this year.

6) Low-cost gene sequencing

It took $3 billion to first sequence the human genome. In 2009, the cost was $100,000. Now it is under $10,000. By this year-end, it could touch $1,000 a genome.

The drop in gene sequencing costs has even outstripped that of computing as described by Moore's Law. Sequencing data analysis is becoming a problem, but it will soon be solved by increasing computing power.

There is a good chance that sequencing prices will soon drop to a tipping point where it becomes a part of routine health care.

It will become part of clinical trials, letting us understand diseases and drug responses at a level the industry has only dreamed of. It will take at least five years before patients begin to feel the benefits, but 2012 could be the year that started it all. 

 

7) Green Chemistry

Technology advances mentioned so far can be felt by a large number of people directly. Green chemistry happens below the surface but makes the world a safer place.

Many big companies are switching to benign processes, taking inspiration from nature. This trend will accelerate this year. Pike Research estimates that the green chemistry market will grow to $98.5 billion by 2020 from $2.8 billion.

A large number of safer products and processes are being developed in labs and will be commercialised over the years. For example, chemical polyurethane is made using isocyanates (methyl isocyanate caused the Bhopal gas tragedy in 1984). Now a safe alternative is under development, which will make polyurethane biodegradable.


8) New Solar cells

It will be inappropriate if this list did not include solar energy, although we are not identifying any single development. A large number of breakthroughs are waiting to be commercialised over the next few years.

Some of them will be in the market this year. This list includes 3D solar cells, high-powered organic solar cells, efficient printable solar cells, simple manufacturing processes, new methods of storage at night, and so on.

Solar energy will achieve grid parity in many more markets this year, observers claim that it will prove a game changer over the next decade in spite of hurdles like trade wars.

For example, 3D solar cells developed recently by MIT could change the economics of solar energy by making it possible to generate sufficient electricity on cloudy days. A 30,000-cycle battery from Stanford could make solar energy available at night.


9) Hybrid Electric Cars

Like solar energy, electric cars have long been considered a technology of the future. But they have not yet had a big impact on the transport sector because their sales have been restricted to a small group of environment-conscious people. This will begin to change from this year, as technology improvements and new product launches give them wider acceptance.

IDC calls 2012 the "true year of the electric vehicle". This year will see several product launches in the category called the plug-in-hybrid.

These include the Volvo v60, Toyota Prius plug-in-hybrid, Ford C-Max and several others. The price of lithium ion batteries has dropped enough for them to be the primary choice in vehicles, but several alternatives are in research labs, and some of them could break through into the market.

10) Smart Grids

When the electric car market picks up, smart grids have to follow suit. But smart grids have much wider applications. Without them, a big switch to alternative energy is not possible.

Smart grids also make homes, buildings and cities more energy efficient and let utilities manage their loads. Several new cities are being developed with smart grids as a unifying concept. Smart grids also allow advanced services like emergency response.

The switch to smart grids will help utilities save hundreds of billions of dollars. Globally, 2012 is a key year for smart grids with three distinct kinds of activities.

Early movers like Italy, Sweden and parts of the US and Canada go to the next level and deploy data applications. Singapore, parts of Europe and Brazil would see a big push towards building the infrastructure. Late movers like India would have some initial projects on a small scale.


11) Metamaterials

We have deliberately chosen a field that is expected to make significant advances but not likely to create headlines. Metamaterials are artificial materials with properties not found in nature.

These properties depend on the structure of the material rather than its chemical composition. Light goes around certain metamaterials as if they do not exist and have become famous as a means of building an invisibility cloak.

Such a cloak is far away in time, but engineers are exploring a large number of potential applications. Last year showed glimpses of possibilities for wireless power transmission, improved antennas and space and military applications. We expect several advances this year, particularly in the photonic metamaterials. Watch out for new sensors and nano-antennas.


12) Healthcare Mobile Apps

We end this list with an obvious choice. Mobile apps are now all-pervasive but they are yet to reach even a fraction of their potential.

In spite of quadcore phones and other hardware developments, it is applications that will truly transform the mobile landscape. The number of applications recently crossed the one million mark, and they will touch and change many industries. Health care is one such key sector.

Companies like Philips, GE and Siemens are developing mobile applications that are already being used in clinics and hospitals. For example, it is possible for doctors to see images of scans immediately on their mobile device now. This will change the speed and reliability of health care.

 

Source :ET 

12 WHIMSICAL NEW YEAR WISHES

We want cross-border infiltration, we don’t want ‘B’, we want Anna back at his home, we have a wish on petrol/beer relative price…

Dr Singh Turns Dr Talk The PM talks and talks and talks this year. Pundits want him to act on big things. But we are just being irresponsible mediapersons. We want some buzz (“India loves you, George Bush”), some excitement (“a quarter of Bangladesh is in the clutches of ISI”), easy headlines…So, two pressers a month, and one-on-one interviews every quarter, starting with ET of course.

Rahul Comes of Age Rahul stops being called a youth leader finally. He will be 40-something this year. Just what does young mean? Note that even the film press doesn’t call SRK or Salman or Saif — all 40-somethings — young. And if Rahul’s going to be the Congress PM candidate, or, as excited whispers suggest, even a mid-term PM, all the more reason to drop the “youth” tag.

M&M Turn Friends Mayawati wins UP and tears down all her statues. Or, she loses, quits politics and turns sculptor. Or it’s a coalition government in UP and she and Mulayam join hands and govern peacefully, spreading development all round. Yes…really fantastical wishes. It’s nice to dream.

Veena Malik Beats LeT O Pakistan, our dear neighbour, send us more of your Veena Maliks and less of your LeT-types. Obviously, Ms Malik does less damage than your average LeT chap. The more Pakistan’s Ms Maliks do ‘un-Pakistan’-like things in India, the more Pakistani moral arbiters, who also happen to be close to LeT-types, get agitated. Result? Less attention to LeT-types.

Economists Get it Right What’s common between the weatherman and the Indian economist? Both get their predictions wrong. The Indian economist’s forecasts on just about every economic indicator — inflation, interest rates and growth — were wide off the mark in 2011. Hope they get something right this year. Perhaps, the rain forecast. 

Suhel Writes New Book In 2011, Suhel Seth told us how important it is to have an opinion. Soon after, ITC sued him for his opinion on YC Deveshwar. Here is wishing Seth writes a book in 2012 on ‘how to have an opinion and not get sued’. Ah, the possibilities of what happens next…

Bachchans Protest ‘B’ Tag Big B, Small B, Lady B, Momma B…now, Baby B. Too much, we say. Here’s hoping it gets too much for the Bachchans also. The Bachchan family protests, via a joint family Twitter account, at being tagged ‘B’. There are newspaper headlines, TV news goes crazy…then we, and they, drop ‘B’.

New Anti-Terror Squad This one is different. The Angry Young and Old Men of Delhi, who kill over parking and parathas, man a special squad. That should teach them a lesson. By ‘them’, we are of course referring to the terrorists. We can hear their teeth chattering already. Again, we are talking about the terrorists. 

India Ends Chindia Realisation sinks in that we are years behind. The Chinese are not bothered. Let’s not give them a reason to laugh at us. Instead, let’s tell ourselves that they build a city in the same time we take to build a road.

Anna Goes Home Let’s hope corruption is wiped out in India this year, just so that Anna Hazare can return to Ralegan Siddhi and never ever has a reason to venture out. One year of him was enough. Maharashtrians have had him for years. They are clearly tougher than Indians elsewhere.

Bolly-Holly Act Stops Can we stop toasting Anil Kapoor and Freida Pinto as Hollywood stars? Kapoor’s toothy grin during the Mission Impossible promos eclipsed even the Taj. Both should stop looking back at Slumdog Millionaire. Even the kids in the movie have moved on. 

King Parties Vijay Mallya spent 2011 carping, with reason, about jet fuel prices. But did he notice that in 2011, petrol became costlier than beer? Here’s wishing petrol remains costlier than beer this year, too. Before you reach for the gun, spare a thought for him. Costly jet fuel is bad for Mallya. But costlier beer? That would make the Kingfisher crisis look like a Mallya New Year party. 

Source ET