Before buying anything these days, customers are able to find out all kinds of things about your products and your company- with a simple Google search. For many, the first place they may look is a review site- Amazon for general merchandise, B & H Photo and Video for photography gear, or user forums- either run by your company or by your fans.
There are also review sites that are independent, offering testing and evaluation of your product that will tell you more about your product than you probably ever want to know. In photography- you can go to:
Where you can find information from people “just like you” who have the same questions.
All those searches, all those clicks, all those links- which could help the BMW brand grow its brand reach, are on sites where BMW doesn’t have any control.
You know the old adage, a happy customer tells a few people, an unhappy customer tells everyone? Well, it’s your job as the Chief Marketing Officer of your company to make a decision- do I spend more money on ads talking about how great we are, or do I spend that money making sure our existing customers are super happy and only telling a few?
Even though we’re in the business of making ads- we’re going to tell you that great customer service stories out perform any ad. Making ads about customer service stories only resonate if every customer gets that kind of level of satisfaction when they have a complaint/problem/issue with your product.
Tom Peters was into Wow! A long time before the Internet made it so easy to share experiences
Some businesses have distinguished themselves with outstanding customer service. Zappo’s is one example. They focus on creating “Wow” experiences. Don’t believe me- google it: zappos customer service stories. But don’t think they were the first to come up with this, Tom Peters wrote “The Pursuit of Wow!” back in 1994.
We’ve run into clients who don’t want to run a forum on their site to respond to customer issues. “We don’t have time for that” is what they say, yet, when they get call after call about the same issue- they may put up a lame-o FAQ or write a blog post, but only after the 10th call.
Forums are easier to manage than ever, as well as running great help desk type software. The difference between the two is who is answering the questions- on a forum, your fans and customers can work with other customers, while a help desk means you will be running it. We strongly believe that the investment in a well moderated forum is as critical as any large ad campaign. Customers will find out about your arcane policy on battery replacement, or that your manual has a problem on page 37 a lot faster than your staff will.
Smart companies don’t implement “social listening” without having a well supported customer service department to work through the problems. We often find the people involved in social monitoring to be more responsive than those in traditional “customer service” positions. The social media amplification factor of dissatisfaction is and can be deadly. Dell Computer learned this early on in the age of the web when Jeff Jarvis blogged about his customer service nightmare- which he called “Dell Hell” and it blew up online.
Here’s some advertising advice- go Google your products, and problems, and see where you end up? If it’s not on your own site that you manage, get to work. If you need help, you can call us.
Facebook stock is being hammered. Wall Street and even Facebook itself, doesn’t understand the value of the business. It’s not an ad platform- it’s a social site, a private party. When advertisers stop thinking they have the right to interject themselves in everything, they may start having some real success. The key for businesses on Facebook is to be invited to the party. The secret to that is better market research- and that’s where Facebook is the holy grail of consumer data. We know who your friends are, where they are, what they are doing- all from the aimless chatter.
Facebook needs to monetize data, not users.
Reading in the New York Times:
For its stock price to go up, Facebook has to convince Wall Street analysts and investors that the personal data its 955 million users share about themselves can be better used to make money. Despite the fact that Facebook has information about a user’s friends, habits and photos, advertisers are not convinced that Facebook ads are more effective than online ads appearing elsewhere.
So far, its revenue comes largely from advertising and from proceeds of virtual games that people pay to play on the Facebook platform. On both counts, Facebook has struggled, as the company reported slower sales in its earnings report in late July. Its users are increasingly logging in to their accounts on mobile devices, where Facebook has only recently — and cautiously — started selling advertisements.
Facebook has to be careful about intruding with ads in the limited screen environment. With customers facing data caps on mobile devices, the only way advertising will be welcome is if those advertisers subsidize their data plans, or offer real services or additional value in return for their interruption. If you need a case study of an internet behemoth failing because they refused to respect their users and community, just study the fall of AOL.
While advertisers still believe they should have the right to engage for supporting “free content” they have to realize that now, more than ever, you can only earn that right by offering a premium service in return. Look what the iPod did to CD sales, or what online music services have now done to the iTunes store. Is it becoming clear?
Facebook is social media- stop trying to turn it into commercial media.
In the Internet radio wars we have newcomer, the Swedish Spotify vs. the US based Pandora. Usually, the first mover has the advantage, but in the incredibly fickle world of music powered by technology, being the new kid on the block may give you an advantage to roll out a different flavor faster.
If you are a Spotify Free user, you have probably heard the ads about how the company rolled out free mobile radio similar to Pandora where users create stations based on artists and/or songs.
Our latest app features free radio - the only radio where you can save the songs you love. Now you can discover, save and enjoy an unlimited amount of music on the go.
Here’s how it works
Create stations based on any song, artist, album or playlist, and let Spotify bring you one great song after another.
When you like a song, give it a thumbs up and it’ll be saved to a Spotify playlist on your desktop. So you can listen whenever you like.
Get busy with your thumbs
By liking songs, you’ll help to personalize your stations – meaning they’ll play more of the music you want to hear.
Premium users can enjoy a premium radio experience that’s ad-free. Free users, you’ll hear occasional ad-breaks just like you do on your desktop.
So get the free app now to enjoy mobile radio - Spotify-style!
Free radio in all its glory
Free radio is powered by the entire Spotify catalog, the biggest of its kind.
Unlimited songs and stations - listen forever!
Like a song? Save it to your Spotify playlists with a thumbs up.
Great music choices from our shiny new recommendation engine.
Taking a quick look at both of them, they have a few more differences than similarities. Spotify has the ability for users to pick and choose the artists and songs they want to listen to on demand for free on computers ($9.99/month on mobile devices), whereas Pandora does not. With Spotify’s new radio function, which works similar to Pandora, users can “star” or “thumbs up” songs to save to them on the Spotify app and listen to them whenever they want. It’s likely that this will make Spotify reign supreme in the world of internet radio. Where Pandora users are used to constantly giving thumbs up or down to songs, Spotify users can simply thumbs up a song then listen to it whenever they want.
Beyond features, Spotify appears to have much better social media integration than Pandora, especially with Facebook. In fact, Facebook integration was an obvious focus for the Swedish company; users with the Spotify app enabled have their activity displayed on the timeline and can share songs and playlists. It should be noted that Spotify forces users to sign up through their Facebook account whereas Pandora does not, but this quirk is made up for by the flawless social media integration.
From our standpoint Spotify has got everything that Pandora has and more, even at the free level. The only thing that Pandora had over Spotify was their mastery of internet radio. Now that Spotify Radio launched on mobile, it’s going to force Pandora to react.
Considering the ultimate goal is to be able to deliver highly targeted ads or get paid to be the end users only music source, none of this is good for old fashioned terrestrial radio which failed in every way to react and adjust to the changes the Internet has forced on them. It will be interesting if at some point, Pandora and Spotify will find a standard for selling ads so that local businesses can target their most likely customers.
The word “viral” is a term that gets used a lot these days. People want their content to “go viral”. But “going viral” and creating something that will make your target audience engage with your brand are two different things. If you watched the video above, you’ve heard all you need to know about how to grow your brand the right way; by caring passionately about your audience and giving them everything you have to offer, every time, and expecting nothing in return but their trust.
Twenty One Pilots is a duo from Columbus, Ohio. They have under 14,000 likes on their Facebook page. They also only have close to 3,500 followers* on Twitter. These numbers aren’t small, but they aren’t the huge numbers to really be considered “viral”. So how did they manage to get the attention of some of the hottest national record companies and sign a deal?
They did things right.
How so? First, they teamed up with the right people to generate buzz. The most important connection was with Mark C. Eshleman at Reel Bear Media, a Columbus-based video production company. The team started off with a hit - the first video that they released on their Youtube page was a live live cover of Christina Perri’s “Jar of Hearts”, which gained thousands of views within days of being posted. The original song was at the top of the charts at the time, so the band was able to generate a huge amount of exposure with their timely video post. They were able to catch people’s attention at the right time, and more importantly they gained a large Youtube audience from the start.
While they had a fan base before, they now had a bigger audience - the internet.
Twenty One Pilots - Tyler Joseph and Josh Dunn. Image from twentyonepilots.com
When it came time to promote their album Regional At Best, the group created a web series (which bears the same name) that lead up to a rock star performance of the first track from the CD - Guns for Hands, which gained thousands of views within a short period of time. The fans responded; when the band played their next big performance at The Newport in Columbus, Ohio a few months later, it’s no surprised that the show was completely sold out. This was the first time the venue had ever sold out with a local act. According to the above video, that night was the most important night in the history of the band up to that point. So how do you follow up a sold out stellar performance like this? With not one but four videos, of course. Record companies started to notice the band, and were able to track the number of views generated from the show. Almost every video gained over 30k views in a matter of a few months. It gave Twenty One Pilots more than enough leverage to be in the position to choose between a handful of record labels. They eventually chose Fueled by Ramen, which is the home to such bands as Paramore, Gym Class Heroes, and Panic! At The Disco. And how did they announce the news? With a video, of course.
While Twenty One Pilots is far from being a viral Youtube sensation like bands such as Ok Go, the band’s awareness of the benefits of online video content was a huge factor in their ability to gain exposure. Beyond Youtube, the band was successful in creating an engaging brand. Not just through the occasional tweet or Facebook status update - they let you into their world. They reward their fans’ loyalty with intimatevideos and exclusive news. They create a ever-growing relationship with their fans. Every brand needs to do this in order to be successful - does your brand accomplish this? Maybe then you’ll be able to say “It wasn’t always like this.” before diving into a crowd of 2000 of your screaming fans.
*These numbers have been growing since this post was first written.
This isn’t tested research- just a gut feeling, but after watching several open source software projects grow or go bust- I believe there are some key factors in successful open source software projects- and they parallel marketing issues for other projects.
There are an overwhelming number of tasks for a software project to succeed, typically requiring a dedicated core team. This is the basis of open source- in that the core team can be as large as there is interest. A lot of people use or have need for your project- a lot of different people get involved. However- depending on the type of project you are working on- you may not get a good cross pollination of talent. Coding geeks often have narrow skill sets- that can leave some critical parts of the development process lagging.
I’m going to try to outline some key areas for you to consider:
After having struggled with installers for several open source projects, I can’t stress enough the need for a stress free install. One of the key WordPress early bragging lines was a 5 minute install process. Even after doing many installs of the early versions manually- I wouldn’t call it a five minute install process for the non-geek.
The inclusion of your open source project in a software installation script wizard early is key. This improves the likelihood of sampling, adoption and even awareness.
Including data import tools from your main competition was also a brilliant strategy employed by WordPress - making it easy to import from other major platforms like TypePad and Blogger.
I’m also going to venture to say that worrying about installing on Windows or Mac servers should be a non-worry for open source projects- if you don’t run on Linux Apache MySQL PHP (LAMP) you aren’t an open source project.
It wasn’t until WordPress turned 2.5 or so that a User Experience design professional (or User Interface) was engaged by the core team- with usability being a key factor in the early success of WordPress- the dev team probably felt they had it covered. They didn’t.
The success of open source projects requires easy adoption- which means intuitive interfaces should probably be a key focus.
Too often, it’s code first- and worry about documentation later. Or let the users write the documentation for you in true open source fashion (FLOSS manuals come to mind) after you code and release. This may be the biggest failure point- unless your user community is so large- all answers are just a google search away.
Instead- consider the documentation the true road map of the project- starting with a manual outline may save your project a lot of problems because if it’s too hard to explain- it’s probably too hard to use. Clear goals and directives on where the project is going can make the going that much easier.
Think of Stephen Covey- “Start with where do you want to end up” and the path will seem that much clearer to all.
There are two schools of thought to release cycles- fast and furious, as soon as a new feature is ready- ship, and a more ordered process. While the fast and the furious may keep the geeks happy- it plays havoc with those involved in implementing and maintaining it in a business environment. Explaining to your boss why you had to update the software 6 times in one month can be a bit difficult. Only release serious bug/security patches like this.
Set a release schedule, with milestones and stick to it. Mature packages do this.
Adhering to industry standards is critical. If you don’t, you risk being marginalized. Take accessibility, microformats W3C standards seriously- and don’t mix open source with proprietary code (ever). Standards are the way to gain a solid foundation of functionality- no matter how dumb you think they are- they were set by a whole bunch of people and that’s what you need to be successful.
There are three areas where WordPress got it right- and then perfected it- and they got is by studying Mozilla.
Updating- a one-click internal updating process will guarantee the largest number of updates and less compatibility issues. If it’s hard to update- you’ll be fighting a versioning compatibility hell. Mozilla doesn’t even give a choice anymore- the updates within a major release are mandatory.
Extending- again, WordPress is a model of success. Both themes and plugins are maintained in a central repository with ratings, reviews, bug trackers, FAQs. If you hope to have a large community, you have to grant easy access to your user base.
Customization of interface: While plugins and themes are great- and allow for infinite tweaking- the fine control of an interface using AJAX may be the ultimate brilliance. Users like easy- and reordering a UI via AJAX is the true WYSIWYG experience. I can’t think of any technology that makes me as a user happier in using software.
Of course, you’ve separated content from presentation, built in search functions, RSS feeds and paid heed to what makes Web 2.0 what it is.
The size of your installed base will only grow if you make it easy for them to connect and work together. If you don’t have a well moderated and managed forum you are doomed. Unanswered questions, spammers, and the same question asked over and over are good indications that your project isn’t on track for greatness.
It’s also impossible to move forward if you don’t have a good handle on what your user base wants.
None of this is done in a vacuum, and there is nothing wrong with empowering people to make a living with your product- enable some kind of rating system for your contributors as well as a donation system, reminding people that even small donations are key to keeping the project going.
Even if you don’t agree with an approach taken by a plugin developer- don’t ostracize them or their methodology- build bridges not walls, and look at the communities acceptance of their project. WordPress alienated a coder named Dr. Dave who had developed an open source Spam solution that competed with their own Akismet- eventually forcing his Spam Karma II plugin into deprecation.
While the project may be open source- and the software is free- you still need to make an effort to get your product name out and to let people evaluate it.
If you have created your product to replace something you feel is inferior- make sure you find some bloggers to do some comparison reviews. If you are in a brand new space- get some press coverage- and ask thought leaders to evaluate your business model. Google started out with a great service- but had no clue of how to make money until Bill Gross came along with his idea of sponsored search. Who will give you the impetus to get your strategy on track?
In most cases there are people already evaluating options in your field- make sure to reach out to them and get some press and ask for assistance to get the project seeded.
Your project website
I’ve been evaluating Customer Relationship Software (CRM) packages for a while- in fact, it’s what got me to write this post. The difference between packages- and what they do, is key to your business model and where the user first decides on if your project will be a viable option.
There are some critical things you must have in order to put your project on par with your competition:
A feature list- even a comparison to your competition. There are no secrets- if you don’t do it- someone else will. As a developer you should know who your competition is better than the others- and in Open Source- the idea is to create the best version possible- not ownership. Cooperation and integration with other projects should be the goal.
The SugarCRM vs vTigerCRM split is interesting- and why the two forks can’t work together more is embarrassing. One is targeted toward enterprise the other toward small business- there should be no need for acrimony.
The real competition are the closed source companies - that develop slick products that might lock a user experiencing great growth out of needed features. This is where we have to decide which platform makes sense as users- do we go with Salesforce because it’s a leader- or do we invest in an open source project because it will give us ownership of our business model?
Look at the closed source/proprietary software sites- you see an intro video on the home page, a clear feature set, support options, cost of ownership information, user testimonials and case studies, user forums, tutorials, documentation and even a blog- if you don’t have a site that answers questions about your project- you will end up relying on someone else who may not fully understand why your project exists.
If you want to see a comparison- look at the open source Ruby on Rails project- FatFreeCRM site- and then compare it to Highrise a commercial product based on the same technology. Of the open source sites- Feng Office may be one of the better front ends- simple, clean - not confusing. Compare it with the Magento site- which you’d almost not know was Open Source.
While Open Source software is free- there doesn’t seem to be any reason not to build a way to get paid into your model. Google makes a lot of money with a free service- there is no reason why your code expertise shouldn’t be able to support you. The current model seems to be offer a free unsupported code base and have a hosted, supported version in parallel.
While this may support a small core team- what about the rest of the contributors? Think about your project as an ecosystem that requires both user and developers and build a community support tool that will give your experts the ability to generate revenue from their work. After all- maintaining the pace of progress can have a toll.
I’ve yet to find a project that has built a system- for instance, WordPress has been through several rounds of venture capital and Automattic now owns a bunch of other properties- there should be some kind of revenue share for the most popular plugin package developers. They’ve done a good job of allowing premium theme and plugin developers into their hub- but, there are still people working for love on what has become a decent sized business.
Google and Amazon have both built in opportunities for the small guy with affiliate systems- this model should be integrated into any open source development project.
The structure of cooperative software design sites
While the developers can talk endlessly about the advantages of codebases like SVN, GitHub, SourceForge, Google Code etc as repositories for code in development, the real problem may be that what is needed is a CMS designed for software collaborative construction and deployment.
I’ve seen software communities use all kinds of tools for their own hawking of wares - Drupal, Joomla, are the ones I notice first- yet it seems there is still room for a dedicated package to handle all parts of a successful open source software project.
Learning how to do it right
One of the things I’ve been searching unsuccessfully for over the last 2 years is an institution of higher learning that is actively teaching how to build and manage open source business models. I’ve found lots of places willing to share their courses- led by MIT opencourseware there are more and more universities offering classes you can audit classes from your home- but, I’ve not found a collegiate program focused on this growing business model.
The University of Advancing Technologies has an “Open Source Technologies” program- but it doesn’t mention the business side of the equation in the description.
With Google about to spend $6 billion to buy Groupon it looks like validation of this business model. But, as a local business person, why would you choose to use Groupon in the first place- and will it be a good investment for you?
To understand how Groupon works- it’s a no upfront cost advertising tool. And while that sounds great, The stinger is you are going to get 25% of what you would normally make on a sale. That’s a VERY high cost of advertising. No one would jump into a deal and say spend 75% of your gross price on advertising- in fact, much over 10% and you better be selling things that have crazy markups like booze, diamonds or some professional service (I haven’t hear of a brothel using Groupon yet- but, that’s the kind of business that would do best with this marketing ploy).
The beauty of Groupon is it’s the ultimate sampling/awareness tool. The cost is the killer. Take the local Ben & Jerry’s franchise that offered $8 of ice cream for $4. I give Groupon $4, they give Ben & Jerry’s $2, and Ben & Jerry hope I don’t redeem the coupon (which is the only way they make money- unless they convert the Grouponee into a regular customer). There is also a transaction fee- which further cuts into their margins. So- since we already go to Ben & Jerry’s they just treated us to 1/2 price ice cream. We live nearby. They haven’t grown their market at all. It cost them $6 dollars to sell us $8 of ice cream- and this is a recipe for going out of business.
Now, if B&J had religiously collected emails, sms, and addresses from customers- and built a customer loyalty program- even using tools like Foursquare, they could have made us very happy with a Buy One Get One offer- and only spent 50% of their margins. Or rewarded all frequent customers with 20% off- and been ahead. No payment to Groupon, no mad rush- followed by a lull, and targeting a much more relevant demographic. Because unless you have a lot of locations- Groupon probably over delivers your market as well. While you and I live in an internet connected world, there are a lot of Americans who still by ice cream that don’t live and die by the browser. In fact, 1 in 12 can’t even get access to high speed internet in this country even if they want it.
Groupon doesn’t change one fundamental rule of business- it always costs more to acquire a new customer than to retain an existing one. Remember that.
So, when does Groupon make sense? If you have an innovative product that no one else has and you need people to sample it- this works well for professional services, hair, nails- where one fantastic job can convert a customer. It also works to introduce people to your new lasagna pizza (the “Pizzagna” - don’t say it fast) that no one else has.
Launching a brand new company- may also be a great way to minimize your initial customer acquisition time, but at a very low price. Remember, it’s always easier to drop prices than raise them- and your $4 deal on an $8 garbage burger may just end up being the most you can ever expect to charge again.
Doing a little searching- here are some recommendations from another site:
* Do the math and make sure the discount you’re offering won’t damage you financially. Don’t be bullied into offering a steeper discount than you’re comfortable with.
* Are prepared to serve a large influx of new customers; you may even need to hire more staff temporarily. If quality and/or service might suffer with more business, think twice.
* Come up with incentives for those new customers to come back at full price, or offer a more modest discount.
* Understand that many companies use companies like Groupon simply to acquire new customers and are willing to break even or even lose a little money on their offerings.
There are many people who think Google has lost their mind offering $6 billion for Groupon- this writer included. Yes, they gain 3,100 sales people- which Google is desperately in need of, but, almost anyone can build the Groupon model into their business with minimal effort. This type of deal brokering has been done by others - here’s a link to 50 Groupon like sites.
There are a lot of out of work radio, TV and newspaper account executives that Google could hire and train for a lot less than $6 billion. As it is, Google is already the leader in directing customers to business online- but, does an absolutely horrible job of teaching people how to use it’s tools effectively. Sometimes technology still doesn’t beat personal, face-to-face sales. Every city should have a Google office- just like Apple has rolled out their Apple stores- where Google can show off it’s technology, train people to use it properly- and build real relationships based on trust. Somehow, with Groupon’s huge windfall- along with their high costs, I can’t see this model staying viable for more than a flash in a pan.
If you need to devise better ways to reach new customers, look into CRM, talk to a company like The Next Wave (us) on how to market in the digital world, but, be very careful before committing to Groupon.
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