The Cluetrain Manifesto made the best statement about customers that I’d ever heard. “We aren’t eyeballs, or clicks — We are people. Live with it.” Yet as I hear the debate resurface about how we commercialize social networks, I wonder if we really learned from our earlier experiences? It’s not hype, or numbers — it’s authentic conversations with our customers that build the loyalty and purchasing that we need for profitable growth. That’s the idea I’m exploring this week. Let me know what you think by leaving me a comment at the bottom of this column. Love to hear from you. – Jim”
I’ve lived through at least four major recessions in my adult life. Amazing. But true. That experience has taught me that the economy is indeed cyclical and that corrections are followed by climbs. Booms follow busts. I know this recession will end. Experience is a wonderful thing.
Another thing you learn if you live long enough. The world is full of repeating cycles and patterns. They are there to see — if you watch for them. I’ve written earlier about Shelle Rose Charvet and her work with communications patterns. Another of my favourite works is the Fifth Discipline by Peter Senge. In that pivotal work Senge outlines behaviour patterns that recur in business with such regularity that he calls them archetypes. I could find you many more examples. From the micro to the macro, patterns exist everywhere.
It’s been said somewhere that true genius is the ability to perceive pattern in seemingly unrelated occurrences. In marketing, true genius is not ability to spot patterns, but the ability to spot how these patterns change over time. It’s the wisdom to see through hype. Because real impact often comes not from an abolishment of the old rules but in a subtle change that has far reaching consequences.
Case in point. Sometime in the 1990’s when people were struggling to commercialize the internet, I wrote an article called “The Dot Customer“. In it, I made an observation that most of the efforts at selling products were aimed at the wrong audience. In that article, I pointed out that I found a lot of commercial activities that were aimed at people like me – at that time a young(er) male, fairly technically saavy, early in the adoption curve for new products, yadda yadda. I further argued that pursuit was a mistake.
Why? No question in classic marketing terms, I could be profiled as an early adopter. But there was a new characteristic of my profile. Unlike the classic early adopter of tech products, on the internet, I was not willing to pay a dollar premium to get new things. In fact, I wanted stuff for nothing. Like so many internet pioneers, I was looking for things to download for free. Paying for things on the internet was an anathema. I would go to great lengths to NOT pay for items. Not only was I not a great paying prospect. I don’t think that I would have ever made that transition easily.
This is one of those “nuances” I mentioned earlier. A seemingly minor change to an otherwise stable pattern. Until then, adoption of new and in particular disruptive technology — radio, t.v., stereo, the cassette, the walkman — had all established predictable and well documented patterns. Market adoption inevitably followed a bell curve through a predictable progression from Innovators, Early Adopters, Early Majority, Late Majority and finally, the Laggards. I’m sure you’ve seen this or a similar picture. I borrowed this picture from quickmba.com (I still love free stuff)
Prior to the internet, Innovators and Early Adopters would pay substantial premiums for early stage products. Courting them was a great — and on its own a profitable strategy. Many famous brands like Sony built their name on products that were high quality, high price and highly innovative. As the new product got wider adoption, brands like Sony would continue to innovate, earning new premiums on new and improved offerings. So profitable was this strategy that companies often left the back end of the cycle to a other companies who produced the much cheaper versions of these products for the late majority and on.
Why would innovators and early adopters pay these premiums? Status. Yup. For some of us, it has incredible value. To be first, to have the latest, to have the new stuff — that is something some of us will pay for. Big time.
The internet didn’t change the overall adoption pattern — but it changed one key factor. Now, Innovators and Early Adopters were not paying a premium to the provider. In fact, they were demanding free products. This new behaviour didn’t go unnoticed. In fact, it gave us a new push for rapid market share. Strategies were still aimed at Innovators and Early Adopters. But now they without the early price premium. Remember the phrase – “give it away and grow rich?”
That phrase required a further deviation from the standard pattern. Now the early adopters were getting a free ride.
That was when the great wailing and knashing of teeth happened. Would we ever make money?
That’s the time I wrote the dotCustomer. It posed this question. Why is everyone so focused on people like me who want stuff for free, when there is a whole market out there of people who are much better customers and have money to spend?
A case in point, I said, was my wife. I might be an early adopter, but she was an early user. I went looking for articles to download – she bought books. I looked for drivers to download to fix my latest problem caused by my second latest download. She bought groceries. And she bought knitting supplies. She bought catalogue items. And so on. And so on.
She buys. I look. Yet the whole world of internet commerce seemed driven to people like me. In fact, many times, it seemed that the demographic of the “real paying customer” was ignored. The complexity, the language – our focus was all aimed at the early adopter. Long on hype, low on usability.
Twitter is a case in point. The other day we were in a session to discuss some of this emerging technology, when one of the people in our think tank (an exceptional internet researcher) admitted, quite sheepishly, that she didn’t know how to get started sending a tweet (a twitter message). It was all too fast and too confusing for her. I wasn’t going to wonder why she hadn’t asked before. Come on – let’s be honest. I’ve sat through stuff that I didn’t understand before because I was too afraid to look dumb in front of everyone else. We’ve all done it.
Facility with technology is cool. Stumbling with it is not.
In fact, we’ve created a new creature, the “newbie” – who must endure the electronic equivalent of a frat initiation to join the ranks of the new knowledge elite. If you think I’m kidding, just go on to some of the forums where the attitude practically drips off the screen. It’s pitiful, and pathetic to read the posts that say, “can anyone explain this to someone who is new?” It’s even worse to see these lonely posts dead sitting there, with no answer.
Back to Catherine. Left to the standard devices, I think Catherine wouldn’t have said anything if two things hadn’t happened. First, our group insisted that everyone try the things that we are asking others to do. Second, we made it easy to ask questions.
How? We asked them ourselves.
I’d started out by asking some fairly obvious questions. I expect that that empowered Catherine to ask her own. When it became obvious that she didn’t know how to get started, we were all quick to jump in and walk her through it until she felt comfortable. We even celebrated here first tweet and the title of this blog was born.
And I wondered if what I’d written so long ago in the dotCustomer was still a factor. In our rush to hype a new technology, to get those new free-riders on board, are we actually building barriers to adoption by those who might be real paying customers? When you see the stats that say that 60% of twitter users quit within the first month, it makes you think. Contrast that with the pilot I wrote about two weeks ago where we converted 60% of a target group by engaging them.
J. P. Morgan was reputed to have said, “I’d rather have a customer than a factory.” I’ve said, I’d rather have one paying customer than a factory that generates free riders. I realize that not everyone agrees with this.
But our insatiable focus on share of market and not share of wallet costs us. Twice.
First we miss the opportunity to capture (and even keep) customers. Second — and this is most important – while we are yabbering with the techno-savvy, we are missing the real conversations that would help us adapt our services to make them easier, more relevant and to really meet needs and solve problems so that people would pay money for them. Value over hype.
I recognize that this “real opportunity” may not be as sexy. It may even be harder work. Making yourself clear is tough. Making yourself clear to someone who doesn’t know what you are talking about is tougher. But I’m convinced more than ever that it would pay off.
Funny, some bricks and mortar institutions have gotten this message. Banks got senior citizens to use instant tellers by posting people who would give them personal and patient help. The models are there. So why is it so hard for the new enterprises to get it?
Need further proof of the learning disability of web based enterprises? While everyone is having a grand time tweeting away about the latest trend, somebody out there is working on a Twitter for Dummies book. It’s might even be on the stands right now. Funny, huh? The people who write those books actually take pride in speaking to those who aren’t the techno-elite. And they make a pile of money doing it.
It’s not that complex. And the “for dummies” people have proven that you can make money have real conversations with real customers about what they really need. Hard work perhaps. But not a hard concept. So why do we make it so complex? It’s not.
It’s as simple as getting Catherine to try a tweet. Sound like the title to a kids book? That would be good. Seuss sold a lot of books with simple titles and simple concepts. There will never be a “Dr. Seuss for Dummies” – he spoke directly to his paying audience in a voice they could understand.