Co-Marketing: Customers as Strategic Allies

One of the important contributions of the Internet and especially of the Web 2.0 to modern management is without doubt the fact that these technologies gave voice to the previously passive customer/consumer. This sound like a curse in disguise: While this form of customer empowerment is sometimes seen by marketers as a threat, it has in fact created new opportunities and new ways to establish competitive advantages and enhance customer loyalty. One of these ways is to create "Customer Strategic Alliances" making the customer part of the Marketing process.
Although the term Co-Marketing is not new I use this term to describe something different namely the active cooperation between a firm and its final customer utilizing the best of the collective wisdom in different ways: Co-creation of new products and services or Co-creation of advertising concepts. In all cases involving the motivated and eager customer is the key. I am collecting at the moment literature on the issue as the first step for a review article about this new form of strategic alliances. I will keep my blog followers updated (about the article and the findings).

New Marketing and a new generation of Marketers

While this use to be quite an exception until 2 years ago more and more often I supervise BA and MSc graduation assignments of Business Administration Students in our faculty related to the role of the New Media (and recently increasingly of the Social Media / Web 2.0). More and more business realize that marketing is changing and this is reflected in assignments they offer to marketing students. The development is very positive indicating that businesses begin to take the Internet and E-Marketing seriously. One example of such a MSc graduation thesis was the one written by my student Rene Borggreve (left in the photo with me in the middle and my colleague Dr. Mehmet Aydin right in the lobby of Harvard Business School in Boston during the faculty study trip to the US in 2005) who recently graduated on a thesis dealing with the subject of using Web 2.0 as marketing tool in launching a product of a big multinational (where Rene already works). It was en excellent piece of work that made me proud for the quality of students our faculty delivers. Rene and an increasing number of his colleagues represent a new generation of marketers that understand the role of the New Media as part of the marketing strategy and will shape the way marketing is applied in practice.

Crowdsourcing: utilize the customer's creativity

Taping the Customer Creativity (also known as Crowdsourcing) is one of the elements of my model outlining the main ways that marketers can engage the Social Media as Marketing tools.

Many examples of such initiatives are already known to those who follow what happens in the Social Media space. Most applications ( RedisignMe, Dell, Nokia, Samsung, TomTom, HP, Talpa, Google Android KLM, Starbucks, P&G, Robeco, threadless, LEGO, SAP, Kodak and many others) are focused on utilizing the customer wisdom in order to innovate. Another way to utilize the customer creativity is to ask customers to design advertisements for you or even commercials. A pioneer in this area is Current where amateur videos that appear on TV win money. Here in Holland we have also some interesting examples. A few months ago Nespresso tested two commercials as to the viewers' opinions before one of them appeared on TV (Source: MarketingFacts.nl)

Another nice example of using customer creativity is the Battle of Concepts , a Dutch (at least till this moment) platform allowing companies to organize competitions (mostly among creative business students) for solving real business problems. The site is getting very popular among students who can win up to 5.000 Euro but also among lecturers who can find there real case studies for their students! (I think to try this next year). Last but not least a new site called Creatad offers creative amateurs the possibility to make money by designing advertisements (printed or videos). I wonder if the American Marketing Association will be obliged to come soon with a new Marketing Definition taking into consideration the interactive nature of Marketing today as well as the way the New Marketing is creating value for the customer who becomes slowly marketer himself!

Web 2.0 definition

With so much talk about Social Media / Web 2.0 I would like to give the readers of this blog my personal view on what Web 2.0 is. This is summarized in the Web 2.0 definition that appears in the article I published together with Stephan Fountain titled
Web 2.0: Conceptual foundations and Marketing Issues, in the Journal of Direct, Data and Digital Marketing Practice, vol 9, nr 3, pp. 231 – 244

The definition is the following:
Web 2.0 is a collection of open-source, interactive and user-controlled online applications expanding the experiences, knowledge and market power of the users as participants in business and social processes. Web 2.0 applications support the creation of informal users' networks facilitating the flow of ideas and knowledge by allowing the efficient generation, dissemination, sharing and editing/refining of informational content.


Comments are welcome

Detroit Blues

General Motors surprised the Internet world when some years ago became a forerunner on Customer Advocacy by sponsoring the Auto Choice Advisor web site (that evolved in the mean time to the MyProductAdvisor.com).
The Auto Choice Advisor (see the original web site above) was an exceptionally advanced for the time (2003) online tool (coming close to the Web 2.0 domain) meant to help customers obtain the best possible information needed in order to make the right choice when buying a new car.
The Auto Choice Advisor in its original and also present form is supposed to be a very powerful marketing tool. According to Harvey Bell Executive Director, Global Advanced Vehicle Development at GM. “The system provides the Advanced Vehicle Development group at GM with an unprecedented and timely view of consumer preferences as well as accurate market performance simulations for projected new products. It has guided many major product design and development decisions by allowing us to move directly from consumer research to product design. It is now widely used throughout the corporation". I use this online advisor as an example of how a corporation can help its customers to become successful and at the same time improve its image. The system is a very valuable source of customer voice that if properly used can provide marketers with very valuable information on consumer preferences and trends.

Despite the availability of such an advanced customer acquisition, retention and market research tool GM, together with the rest of the Detroit Automakers, are fighting for survival at the moment. And while the Auto Choice Advisor was supposed to give GM a clear competitive advantage it seems that no one there bothered to look to what customers were looking for when considering buying a new car. And not only this: despite the use of advanced tools meant to win the customer trust GM recently acknowledged that in fact it has violated the customer trust!!!
All the discussion at this moment is focused on the problems of GM and the other two American car manufacturers and on whether the US government will bail them out. With the discussion still going on today I was glad to read the post of John Quelch on the Harvard Business Review blog of 11 December explaining the background of the GM demise. Interesting for marketers as a case of anti-marketing!
Conclusion: Even the best Internet concepts can not compensate for bad marketing!

When the Old Media Meet the New

It is encouraging to see that slowly the old media, one of the main victims of the Web, learn to turn the Web and more specifically the Social Media threat into a strategic opportunity by endorsing them as part of their marketing toolbox. Those who follow my publications and blog posts know that this is what my recent research is all about. I am glad to say that talking to either colleagues or practitioners I see that this issue is steadily gaining interest.
The New York Times is good example of an old media business that uses the Social Media very successfully as part of its campaign to increase brand awareness and customers. Their recent Facebook venture is a big success according to the Nieman Journalism Lab. I found very interesting that the NYT concluded that the campaign netted “4,3 times the value of the spend” while it quadrupled the NYT fan figures.

Hopefully those still skeptical about the New Marketing will think again

Ex student and co-author turns the theory into practice

I was glad to find out that my old student and co-author of my paper Web 2.0: Conceptual foundations and Marketing Issues Stefan Fountain is progressing in the cyberspace.
Stefan is the brain behind soocial.com an online content management tool enabling users to synchronize contacts between computers mobile phones and web applications. He seems to be lately very busy giving keynote speeches and as a good Web 2.0-era marketer puts the theory to practice by promoting his company via heavyweight online influencers like TechCrunch who writes quite nice words about it.
Stefan, lots of success, keep up with the good work

Internet and the Red Queen Effect: Google Insights

In my article titled "Strategies for Surviving the Internet meltdown: The Case of Two Internet Incumbents" published in 2004 in the Management Decision * I studied the secret of survival and success of two top online firms of the first web generation: Amazon and ETrade. These firms not only outlived the 2000 Internet meltdown but are still thriving online. My conclusion was that the strategy of these firms was quite similar and inspired by the Red Queen Principle: continuous transformation and expansion in new markets, new products or both.
It seems that the same principle is still the basis of the strategy of many successful new web firms and firms of the Web 2.0 era. A good example is Google: a recent development of Google (in beta) called Insights helps tracing the number of searches performed for any term, phrase or name worldwide or in any countries and in different time periods (up to 4 years). Very useful for those who want to optimize the findability of their site or simply want to know whether more or less users are searching for their brand or product than last year or if their brand / product is more popular search term than the brand / product of their competitors.

* Constantinides E., 2004, Strategies for Surviving the Internet meltdown: The Case of Two Internet Incumbents, Management Decision Journal, vol 42, nr 1, pp 89-107

An airline's digital transformation

As an old KLM employee myself I am always interested in developments in the airline industry and this company. While KLM was by no means not one of the pioneers of E-Commerce in the airline world they have shown a remarkable progress in this field during the recent years. An interesting article about the digital transformation of this company that expects now to earn 40% of its revenues online published by Accenture recently. The term of co-sourcing is introduced and explained also in this article; interesting for those allergic to rampant outsourcing.

Social Media as Marketing Tools

The nominations for the 2008 Forrester Groundswell Awards is a very good collection of interesting and innovative ways of engaging Social Media as marketing tools. The admissions in the contest were classified according to the Groundswell methodology in 7 categories depending on the objective pursued: Listening, Talking, Energizing, Supporting, Embracing, Managing, Social Impact