Business Thought and Practice Met at Combi2010

The October 7-10 conference in Vantaa, Finland, hosted by Laurea University of Applied Sciences was successful and enjoyable. The official theme was “Partnering for the Future.” The emphasis was on innovation of all kinds; in economic development and environmental sustainability partnerships, in business models of all kinds, and in distance teaching and learning. The audience was diverse and fulfilled the promise of extensive participation of both practitioners and academics.

The emphasis on innovation was timely as evidenced by an editorial I read in the Financial Times enroute. Discussing the global economic malaise, it argued that monetary policy has used up many of its available tools. Fiscal policy is moribund; consider the strikes and protests in Europe as governments try to impose structural changes and the fact that the political system in the US doesn’t have a coherent thought about fiscal policy. The point was that we have to innovate ourselves out of the economic mess we’re in. A talk by Dr. Toshiyasu Ichioka of the EU-Japan Centre for Industrial Cooperation illustrated some of the possibilities.

Referred papers were presented in concurrent sessions, so it wasn’t possible to hear them all, but you can see the entire schedule here. I was particularly impressed with a paper entitled “Environmental Strategy and Organizational Capabilities: An Exploration of the Natural-Resource-Based View with a Focus on Columbian Firms” by Professors Mantilla and Rodriguez. It had a sound research design and good data that suggested a real difference between firms that include environmental sustainability as part of their strategy and those who do not. Innovative communication models were discussed in a session on “Multisensory Cultural Experiences” and another that featured faculty and doctoral students from the host institution, Laurea University of Applied Sciences. Read these and other papers in the Conference Proceedings.

It was a pleasure to hear an invited talk on customer co-creation of value by Professor Evert Gummesson, one of the originators of the services marketing discipline. I also particularly enjoyed a rousing call for “Stimulating Entrepreneurship and Creativity” from Professor Alan Barrell of Cambridge University.

As these few examples suggest, the conference was truly global in its scope. That is a major achievement and one that future conferences will hopefully be able to emulate. Next year’s conference will be hosted by HAMK University of Applied Sciences. Keep your eyes open; this conference is worth the time and effort!

Social Media Business Model - Lead Generation?

Every once in awhile I have an ‘ahha’ moment. That’s one of the fun aspects of working in an emerging discipline where we are still figuring things out. A few months ago it was the realization that we don’t need to use awareness—in the traditional media sense—as a social media objective. Why spend money on marketing research to measure creation of awareness when we can offer people reasons to act? Is it possible for a person to take action, even a simple click-through, without having some minimal level of awareness? I don’t see how. We can manage the results of behavior to take them a step further, perhaps following the steps of the traditional hierarchy of awareness, but we can use behavior to measure each step, not marketing research. Here’s one related post.

That line of thinking probably led to the ‘ah ha’ I had last week. Almost all social media marketing is the first step in a conversion process. There are several possible scenarios:
• Most marketers are not going to sell things directly on social networks, at least for some time to come. Threadless is one of the few successful businesses doing so. Others like Zappos use social media as an integral part of their online communications but sell from their website. That’s the typical model today.
• Whether you are using social media to drive people to websites or to retail stores, there is clearly a ‘next step’ behavior you want them to take. It is possible that you link to a product page on your website or to a retail coupon, and the ‘next step’ is taken immediately. If so, you have metrics, and you can track the referral back to the social media site. However, research shows this is often not the case; purchases are often not made as a result of a first visit to a website. That requires the marketer to build a complex tracking process to match a later purchase with first exposure. That is part of conversion marketing metrics.
• Social media is often part of a relationship building strategy. Getting people to friend our Facebook page or getting them to register for our enewsletter represent two good examples. There are all sorts of reasons why people may not purchase right away. There are an equal number of good reasons why marketers should be in touch while they move through the purchase cycle.

All except the immediate click-through and purchase represent the need for formal conversion marketing strategies. I don’t have any data, but my guess is that the second and third bullets represent the bulk of social media-initiated contacts with customers. The second scenario requires creating a conversion path through the website. The third requires a conversion strategy that’s based in a set of communications steps. Both are conversion marketing!

That begs a simple definition of conversion. Consider the possibilities. For the social marketer, “conversion” can be a referral from the social network to the website. For the online marketer it can be registering for brand communications. For the brand marketer it is likely to be the purchase. It’s a process, the traditional conversion funnel. Today there are even more marketing actors involved in the process. That’s complex from the perspective of the marketing organization. It has to be seamless from the perspective of the customer.

So does this statement make sense? Most social media marketing is the first step in converting someone from a spectator to a customer.

Social Shopping--Another Trend for 2010?

If I had added one more trend to Monday’s list, it would have been social shopping, so I decided to end the week with a summary. I’ve written a lot during the holiday shopping season about good uses of social media by retailers and results from the season confirm the importance of social media to ecommerce. According to Internet Retailer:

Another trend that emerged from the holiday season is the growing importance of online social networks, blogs and forums. Among consumers researching and buying holiday gifts online, 28% said social media influenced a purchase decision, compared with 11% who said they were guided by a customer-generated product review, 7% by an expert review and 6% by a Facebook message, comScore says. Observed comScore’s (chairman Gian) Fulgoni, “We are getting our first real glimpse at the impact social media will play on commerce as we enter the next decade.”


Earlier in the fall the site SheSpeaks asked about brand-related activities and found a lot of it on both social networks and Twitter. Other 2009 data from SheSpeaks found 55% of women they interviewed logging into social networks multiple times each day; 72% log in at least once a day. That’s huge!

The strategic use of social media by retailers is important, but the precise definition (if there is one!) of social shopping (or social commerce) is more narrow. It is an attempt to allow shoppers to bring onto the web some of the “social event” feeling of shopping in the mall with a friend. That may be an important part of the physical retail shopping experience that Internet retailers can provide on the web going forward.

As I’ve looked at the space, there are two basic ways to do that:

• Join one of the shopping sites that supports social experience. There are a lot of them and more being added. ThisNext is a good example of a site where a merchant can get a free tool that allows visitors to post a product to the site, where it joins the pool for online discussion. They have an application called Shopcast that encourages consumers to add ThisNext content widgets to their own personal pages. The common thread in this type of site is that retailers must encourage shoppers to list products on the site. Another set of sites appear to feature the products of partners; Couture Society is one of those.

Actually, it’s rather hard to find out precisely how retailers get products included; maybe that’s intentional, maybe it’s because the space is still new.

• Add social shopping functionality to your site. Clearly, this would be the more expensive option, but it gives retailers control. I wrote about Decision Step earlier in the year. BazaarVoice is another firm that offers a robust set of social applications. These, obviously, work on your own site and the merchant doesn’t have to rely on a third party site.

Be it social media in general, or social shopping in particular, interaction between shoppers seems to be the direction in which ecommerce is moving. Does it create a new type of business model, or is it just value-added to the existing ecommerce model? For now, I think it’s the latter, but that could change. It certainly is a part of Web 3.0 – the open ecosystem that is gradually replacing the walled-garden sites of the early Internet.

Internet marketers should keep an eye on what is going on in this space. It seems to offer merchants a way to reach out—often to the friends of friends (“birds of a feather”) who might also find the offering attractive. That’s cost-effective customer acquisition!

Are Lawyers Going Social?

I was aware of the website LegalZoom through its TV ads featuring celebrity attorney Robert Shapiro. That was all until a student pointed out their other online activities, which I found quite unusual for a legal firm—thanks, Fiesal!

The current centerpiece of the online strategy is a contest, just concluded, that allows customers to upload videos about their experience with LegalZoom. Here’s their YouTube video. The embed looks like nothing special, but play it all the way through—the 40 seconds is worth what you find at the end. When the video finishes you get thumbnails of customer videos that have been submitted. I don’t know how to do that, but it’s very cool and it makes the point that people are entering the contest.

That brings me to my favorite question: how did they let customers know about it. I’ll bet there were outbound communications, through their corporate newsletter probably. I have visited the site several times recently, and I didn’t see a notice about the contest. It has its own separate website, which links back to the corporate site, but I don’t find anything on the corporate site that links to the contest site, although entries to the contest have been closed for five days now, giving them enough time to remove a notice. Given the care with which they do other things, and the fact they are lawyers, I doubt that is an accident. That guess is supported by the fact that the winners are not scheduled to be announced until December 20—5 days from now. CPG sites would be hyping the winner announcement.

Ok, there is a separate website; you still have to get customers to that website. They have a very active Facebook page; I’d recommend it as a “best practices” business Facebook page. It’s active; there are a lot of informative links. They have only 1,197 fans at this point, but they used the Facebook page aggressively to promote the contest. The screen capture shows 2 posts announcing the contest. There were others throughout the contest. The last entry I saw was on December 7, promoting the last chance to vote on the contest.

They do something else I love. Each week they welcome “New Zoomers;” new fans, presumably. How nice is that??? They also had Halloween picture contests. Perhaps most important, their strategy jumps out of the Facebook page at you; you can see it on the website, but it’s not as evident. Their primary segment is small businesses and they are providing all sorts of content and encouragement to them. Definitely best practices! They are also active on Twitter; I’m guessing there’s a feed between the two, but I didn’t take time to trace the posts/Tweets. In addition, a search turns up a lot of PR activity surrounding the contest.

Finally, I can guess how they got the idea for the contest. According to the website of their interactive agency, they have been using client testimonials in their advertising for at least a year. That shows a clear, sensible evolution of online strategy.

It would be a great integrated program for any large corporation. For what’s essentially a website-only business model for services, it is striking. For a group of lawyers it is simply mind-blowing!

Inventing A Successful "New" Business Model

Do you have any idea how hard it is to keep a business going year-round in a resort area? I remember reading several years ago that the summer population of the town where I live is 20,000; it goes down to 5,000 for the winter months. If you consider that the peak season is no more than 10 weeks long, with “shoulders” on either side, you begin to understand the problem. Add to that the difficulty of finding housing for seasonal workers, and you have a prescription for small business woes.

Having emphasized with the businesses where I trade for a long time, I was intrigued with one I ran across recently. Two young women have invented a business model that allows them to solve the seasonality problem. The video is about two years old, so the statistics are out of date, but the energy and charm of these two entrepreneurs is much in evidence.



Megan Murphy and Catherine Bean have a single retail location in downtown Hyannis. That’s a high-visibility tourist destination and their store obviously does well in the spring, summer and fall months. Their website supports the retail store, but it does more. They close the shop from December to March, but they don’t cease operations; they just shift to the Internet. They stay fully occupied running online parties and fundraisers. When I
talked to Megan a few weeks ago, they were booked through Christmas. I checked the site and they are now booking for February and March 2010, so they continue to move right along.

How did they invent this business model—one which is different from the usual Bricks & Mortar? As stay at home Moms, they gave product parties in their homes, so moving parties online didn’t seem like too much of a stretch. They found a supportive marketing services supplier, and they were off. From a few email addresses collected in the store, they now have a list of over 20,000 that grows with every party.

What is the moral of this story? Give eparties? While I think virtual events have a great future, it’s more than that.

These two women used their own experience, their own background; they just moved their offline activities online. Think about your last online retail experience. Did the site “suggest” other items to you the minute you put something in your shopping cart? That’s what a good retail salesperson does, just moved online. That’s the moral—move successful offline marketing activities online.

There was a blog post last week by Mack Collier that got a lot of mileage on Twitter. I don’t disagree that we need fewer social media stars and more great social media ideas. My reaction was, “How do you know it’s really a great idea?” And then I thought about Megan and Catherine. Product parties had already worked for them in one context. They moved the same winning idea into another context, one where they could achieve even greater reach.

It’s a great example of not having to reinvent the wheel to develop a winning business model!

More Digital Oldies--This Time Kindle!

I had the conversation again yesterday. “I’m not really up on this stuff; isn’t it for younger people?” It reminded me of a recent article in Time magazine about the age of Kindle users. Guess what? They are on the older side! There are probably two reasons. The Kindle is expensive; $359 for the Kindle 2 and $489 for the larger screen Kindle DX. Second, they are used to read print content like books, newspapers, and magazines. Ad Age recently pointed out that “print is not aging well.” Ouch!

According to eMarketer (May 20, 2009), The device, first introduced in late 2007, accounted for approximately 10% of total North American book units sold in Q1 2009—or about 4 million out of the 38 million books sold. You can also subscribe to electronic content like blogs on the Kindle, all of which should make for happy reading.

But that’s not all. Amazon recently announced a Kindle app for the iPhone. It’s gotten mixed reviews, mostly because the screen of the iPhone is so much smaller than that of the Kindle. However, for those of those who don’t want to carry something larger, reading on the iPhone may present an attractive alternative.

In addition, there is also buzz about Amazon making a college version available with preloaded textbooks. As a textbook author (talk about a broken business model!), that’s long overdue. My Internet Marketing text is available with an e-book option bundled with the print text or as e-book alone. I don’t know what the sales breakdown is, but every time I ask a class I find that few, if any, of the students have activated the e-version. Why they prefer to carry around a print copy is beyond me. “Comfort level” is the best explanation I can think of because most of the things you can do with a print copy (highlighting, for example) is available on e-books. The other issue for college students has been the price of readers. Still, I’ve long felt that colleges had to make book readers the default distribution method for text books.

The iPhone app and the college version both suggest that the age of the readers of e-books could trend down over time. For all of us who believe in reading, that’s good news.

What does it mean about the future of “print” media? Will we consume traditional print content on our electronic readers? Probably. Will there be a way to monetize it? We haven’t found an effective way to do that on the web; why should it happen for electronic readers?

All this bodes well for content on the go, whatever your age. It doesn’t seem to offer strong hope for traditional print media, though. That’s still an industry in search of a savior—and I don’t think it’s a Kindle!

New Business Models for Local News

Many New Englanders were distressed to see the Boston Globe on the list of most endangered newspapers a couple of weeks ago. It’s a proud local institution, although it hasn’t been locally owned for a number of years. Other major urban areas share the angst of Bostonians, as their newspapers fail or are on the verge of failure. In an excellent article yesterday discussing issues across media types, Bob Garfield revised his “Chaos Scenario” description of the situation of mass media to “Apocalypse Now.” The mass media downturn of the past several years has been accelerated by the recession and has spurred the search for other models. Newspapers, in spite of their successful online operations, are especially threatened.

I wrote about one interesting experiment about a year and a half ago. BostonNow offered a hybrid print and online model that seemed to have promise. Unfortunately, its venture funding came from Iceland and it was one of the first casualties of the looming recession. Earlier this month Michael Learmonth described a number of local news experiments. All of those have one journalist assigned to the project but draw much of their news from local bloggers and journalism students. According to Learmonth’s article in Ad Age (subscription required) the New York Times has this type of local blog in suburbs including Fort Greene and Clinton Hill, New Jersey. Patch is a startup that has a series of local news blogs, also in New Jersey.

I've been watching the growth of online local news on Cape Cod. The traditional newspaper that covers the Cape is suffering along with its larger brethren. Gatehouse Media owns many of the local newspapers across Massachusetts. Their Wicked Local websites report on local news and have a heavy component of blogger content. Wicked Local Cape Cod Twitters each of its news items. I get the one from the Provincetown Banner on my Tweet Stream.

There’s another model here, one that is independent of print media. eCape is a series of online properties , with Cape Cod Today its local news site. CCT actively encourages people to create their own blogs on the site. I counted about thirty blogs on the active list (have posted in the last 7 days) and there are probably a hundred more that haven’t posted so recently. The editors do their Op-Ed columns on their own blog. Additional news items are submitted by local agencies and organizations.

My experience has been that it’s easy to start a blog on these sites. It’s less easy to integrate an existing blog into this type of site. BostonNow was trying to write a feed that would automate posting from outside blogs to their site, but to the best of my knowledge that never happened. Cape Cod Today makes it more straightforward, and maybe a little more controllable. If your blog lives on another platform, you have to repost to CCT.

Our wildlife center blog is celebrating its second-week anniversary on CCT today and we’re delighted with the visibility. They seem to like our content because we’re regularly making the home page, which is an editorial call, and being on the home page certainly affects visibility. (We're Wellfleet Audubon, down near the bottom. Posts move down and eventually drop the home page off as other posts are made. Each has it's own page where all its posts are displayed.) Our blog is a little over a year old and the content comes from naturalists, both staff and volunteer. Its primary aim is to keep in touch with our members. It has an average of just over 22 visitors per day although we can have spikes to 150+ when it is mentioned in our other publications or those of related organizations. On CCT our posts are generally getting 2-300 views, a total of 1.140 over the two weeks. For us, that’s a huge increase in visibility.

We also get comments on the CCT posts at a rate astronomically higher than we get on our own blog, so it’s an engaged audience. It’s local news, after all. These are things that affect us on a daily basis—we should be engaged! From the standpoint of the wildlife sanctuary it clearly says that we are reaching a new audience.

Does this represent the direction of local news? It seems to me that it is. Does that mean that the quality of local news is going to decline? Not necessarily. I see teachers, musicians, even a journalism professor in Boston writing blogs on CCT. Some people write about their area of professional expertise, some about their personal passions. Many of them write with skill and insight. And they are certainly close to their subject matter!

“Citizen journalism” has already changed the news forever; if you don’t believe me, watch a couple of hours of CNN or spend some time on their site. I hope that doesn’t mean that the profession of journalism will go into decline. We need the professionals. One future opportunity for them may be leading the march of the citizen journalists.

New business models like that of eCape are going to point the way!

A Brand-Driven, Viral Fundraising Business Model

One of my students introduced me to SocialVibe—thanks, Tao! It is another interesting business model—a combination of fundraising for non-profits and cause-related marketing for brands. As Tao pointed out, the focus on social networks also makes the efforts viral.

Leading brands have signed up as sponsors. Consumers who want to raise money for a cause (members) select their cause and create a widget (they call it a badge) using graphics supplied by the non-profit and the sponsor. The member then posts the badge on a social networking page and earns sponsor points by getting donations there. As the site points out, it’s a chance to do good without the member committing a lot of his or her own funds. For the brand, it’s impressions on the social networking sites that are probably a lot more effective than paid advertising impressions.

Some causes are seeing it as an especially effective way to reach certain target audiences. To Write Love on Her Arms is a teen suicide-prevention advocacy that is actively using the viral power of the site. But others are going beyond just the obvious teenage target audience. A Canadian publication talks about using sites like SocialVibe to get out messages that attempt to stem the tide of obesity and the related problem of Type 2 diabetes.

Another active user is Charity:Water, a non-profit with another “new media” business model of its own.

It is impressive and heartening to see non-profits making effective use of the Internet in their fundraising efforts. It is also impressive to see corporations and brands joining in these efforts in a way that is beneficial all the way around.

It’s a good thought for the holiday season!

Big Portals Open Up

While financial dominoes were falling over the weekend, two of the big portals announced major changes in the way they offer services to consumers, advertisers and developers. Neither is totally new news, but events over the weekend represented major steps in making the new strategies reality.

As early as October 2007, Chief Yahoo Jerry Yang made a post on the corporate blog that gave the broad objectives of his strategic review. He said Yahoo! intended to:

1. Become the starting point for the most consumers

2. Become the must-buy for advertisers

3. Deliver open, industry-leading platforms that attract the most publishers and developers

In April they announced Y!Open as the implementation of these strategic goals. According to PC Magazine, “YOS is a bold initiative to open all Yahoo sites, online services and Web applications to outside developers, and give users a "social profile" dashboard to unify and manage their Yahoo services.” This past weekend the project became very public when Yahoo invited 300 developers to Open Hack Day. According to Yahoo a “hack” is a little program, easily put together, that does something useful and fun. For example, one developer has developed an app that allows users to combine Flickr photos with the My Trips section of the Yahoo! Travel page. Since I had to look to find what My Trips actually was, it immediately occurs to me that this can be promotional for Yahoo’s lesser-known services. For more complex apps developers can use APIs like Yahoo’s BOSS, which lets sites construct their own specialized search services.

This graphic representation of the Y!Open concept comes from a video made at last week’s conference. Yahoo CTO Ari Balogh would like for you to think of the new Yahoo as an open, social, and very sticky platform. It looks quite comprehensive, including search, dynamic pages, mail, mobile and other. You can access the video from this page.

AOL’s strategy seems less comprehensive than Yahoo’s. They are allowing users to check other mail from their AOL page, and they explain how it works on their corporate blog. This is a step for the once-walled garden, but it’s not a major change in strategic direction. AOL does have APIs for developers. Some, like the one for MapQuest, are widely used, but they seem to be individual services, not a major opening of the AOL platform.

Both these strategic moves, especially coming so close together, are indicative of evolutionary growth in the Internet, all in the direction of Web 2.0. On one hand, it clearly indicates the continuing desire of the large portals to be the oft-visited gateways to the Internet for their users at the same time they offer an array of increasingly-social services that keep users on their own sites longer.

On the other hand, it offers huge opportunities to smaller sites and less technology-focused businesses to take advantage of leading-edge user services. Using the APIs of the tech powerhouses, they can develop their customized services at relatively low cost and have them hosted on the powerhouse site.

Google, Amazon and eBay are all major originators of this open platform strategy, making it a key part of their business model. Yahoo is making what appears to be a bold move to join them; AOL is moving although perhaps less boldly.

This all suggests a new type of business consolidation. It’s one that is not represented by mergers and acquisitions, but by shared services. Interesting and worth watching!

Cloud Computing - A New Model?

Cloud computing is one of those concepts that’s either very simple or very complex. Until you know which, it’s hard to understand the concept. I’ve been wrestling with that for several months and I’ve come up with a few nuggets of understanding that I’d like to share. Last week the AlwaysOn network posted a video from one of their conferences that’s helpful. The “chief geeks” of both NASDAQ and HP give their perspectives. Russ Daniels of HP points out that cloud computing can reduce operational costs, which his IT-manager customers obviously care deeply about. As a marketer I cared more about his follow-on statement that IT could then put more effort into creating value for customers. Think about that as you watch the video!

So cloud computing is a potentially valuable concept. What IS it? Irving Wladawsky-Berger is a retired IBMer who writes a tech blog that’s comprehensible to laypeople on the Always On Network. He’s a proponent of the cloud computing concept, seeming to see it as a logical extension of his work at IBM eservices. In a July 14 post he says:

I prefer to think of what is happening as the long-needed evolution of application software to something that is far more usable by humans. When virtualizing applications to be used by people who care nothing about computers or technology - as is mostly the case with Clouds - the key thing we want to virtualize or hide from the user is complexity.

In a more recent post he links to a page with 20 different—and all useful—definitions of the concept. That’s a strong indicator that the field is still evolving.

According to Gartner, the evolution is in its early stages. Actually, the interpretation of being near the top is their “hype cycle” is that sanity will soon return and the field will mature. Cloud computing is nearing the peak; note that Green IT is even closer. Translated, does that mean it’s a maturing, but not yet mature field? A field for IT managers to watch closely, but not necessarily ready for major investment.
Wladawsky-Berger likens cloud computing to other major management initiatives like Six Sigma and Lean Production. He says:

If cloud computing implies delivering high quality consumer and business services to your customers around the world over a variety of channels, as well as operating well engineered, efficient data centers - how can you stay in business and ignore this major marketplace strategy? It would be like an industrial company saying that all the advances in manufacturing and production over the last 25 years are not for them. It would be nearly impossible for a business to stay competitive with such an attitude. In fact, a number of enterprises have already been embracing cloud-like methodologies for delivering services to their customer, even if they don’t call it that.

The take-away? Cloud computing is a new model—an IT model, not a marketing one. Is it a new business model, allowing companies to outsource technical infrastructure (where have we heard that before?) and concentrate on their core business competencies? Maybe. It bears close tracking.

Applications like Amazon Web Services and Google Maps are examples of “computing in the clouds.” The Amazon cloud and the Google cloud, to be precise. They maintain the infrastructure, users take advantage of the functionality--as explained in yesterday’s post. Another example would be Facebook APIs. There are plenty of places to experiment without much risk or investment. Shouldn’t marketers be pushing those experiments—and doing so with the understanding there’s a greater implication than just a single application, important though it may be to their current marketing tactics?