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Jean-Marie Bonthous, Seamless Social

In a recent article called “The Coming Wave of Social Apponomics,” Matt Anderson, Henning Hagen, and Gregor Harter, three very senior consultants with global consulting firm Booz & Company, present an approach to profitability on the internet which they call “Social Apponomics.” This approach will be of interest mainly to consumer goods companies and retailers.
 
I would like to offer a slightly different take on their approach and also use a somewhat more accessible name: “COMIAP” which stands for “Community + Mining + e-commerce Applications.” And by e-Commerce applications, I mean creative apps that have spread potential. There is nothing fundamentally new in the individual pieces of the “CO-MI-AP” model. What is new is the emphasis on integrating the three “CO-MI-AP” elements into a cohesive, seamlessly integrated whole. When the proper integration is achieved, and when the right value proposition is in place, the model delivers business results.
 
It all starts with community
People gather online in communities of shared affinities and interests. This is where they come back again and again, and where they spend focused time, finding out from each other about new products and services. Some of these communities happen on their own, and some can be created by the brand. Community is where the brand can engage, get valuable feedback, and even enroll people to participate in developing innovative offerings that meet under-met or unmet consumer needs. Retailers can energize and mobilize people in communities using geocentric platforms, like Foursquare or Gowalla, by offering coupons or special treats for recommending products and promotions for purchase. And they can reward the brand advocates in the community with special treats or access to exclusive offers. These local campaigns can be monetized through the sale of local ads like Zinga’s Cityville offers or through the same type of add-ons that enhance the quality of experience of people participating in the game or promotion.
 
Marketing needs to be driven by insights from community mining
Whether communities of customers reside in sites created for this purpose by the brand or in independent sites, they can be mined. Of course a resident community is easier to mine. With the use of tools like Brandwatch, Cymfony, eCairn, or Sysomos, a great deal can be learned about what people in the community say or don’t say and what they want or don’t want. It is possible to analyze the reaction of consumers to messages and offers sent to them, but also, and possibly more importantly, what they say about the brand, the products, competitors, and a lot more.
 
The analytics provided by customer relationship systems (CRM) offer valuable data about how the targets react to ads, messages, promotional offers, and pages of the site.
 
Each of the touch points, from the first contact through awareness building, engagement, lead nurturing, sales, and customer support, is an opportunity for the retailer to build engagement and trust. The requirements of the increasingly social customer are evolving rapidly and it’s important to keep up with them. According to a recent study by Socialware, 42% of those that contact the brand for support expect an answer within the same day and 20% of those who do it through Twitter or Facebook expect a reply within the hour.
 
Hopefully the mining goes beyond focusing on the key influencers, and maps the dynamics of influence of the entire community.
 
Armed with these insights, the brand is then able to engage in a well-paced, harmonious flow of valuable exchange with each consumer contributes recommendations for new products, and the brand gets real-time data like browsing patterns, reactions to cross and upsell offers, predictive insights from the community and a lot more.
 
Custom applications educate the customer and make the purchase easy
The online environment has to be easy to use, attractive, and personalized, and the path to purchase has to be easy. Attractive and user-friendly environments will more and more be provided on many platforms (like the iPad now being widely used for its technical abilities including pinch-to-zoom, HD display, 3D rotation, as well as social sharing capabilities). Amazon excels are catering to individual tastes through their prime membership, which provides free unlimited two-day shipping for a basic yearly fee, and through their wish list feature which allows users to list products found in any other location on the web. Amazon also makes the purchasing experience easy with its on-click checkout feature available through BlackBerry and iPhone apps and their Kindle book reader.
 
It’s all about trust
The retailer needs to walk into the footsteps value system within the community of social customers. Trust comes first, it is the gateway to becoming customer-centric. The consumer wants to be able to trust the brand. But they also want to be listened to and engaged with and empowered to impact the brand, through feedback, to make it fit their needs better. Intuit mines its community to develop information tailored to the needs of accountants, educators, and women, and they reward the top contributors. The social consumers also want their individual preferences to be known—a tall order. They want the brand to operate in a transparent manner, and they want to be able to dialogue with them informally and candidly. Last but not least, they want the brand to hold itself accountable for the good and bad in its performance.
 
Most importantly, consumers are inclined to reward through purchase decisions those brands that project a perception of putting the common good ahead of profits.
Community mining will need to reveal where the brand stands in the consumers’ minds along these dimensions. Good intentions are not enough. Consumers want truth in advertising, ethical practices in production, generous return policies, and good faith in disputes.
 
The advantage of the COMIAP environment is an acceleration of the feedback loop between producer and consumer and a smoother path to monetization.
 
Seven factors for making the COMIAP model work
Anderson, Hagen, and Harter have identified seven factors for success when combining community, data mining and creative apps for e-commerce. Here are my views about these success factors.
 
If you can’t beat them, join them
Don’t try to compete with Facebook or Twitter. Leverage these platforms instead.
 
Leverage local
There is great potential in thinking local, attracting customers who are near the stores where you sell your products, or offering deals located near where the people reside.
 
Connect with each customer across multiple segments
The rich data available from the web will enable you to know people’s identities, their preferences purchasing histories, and their social data. Use this to match multiple consumer personas.
 
Use dynamic pricing to enliven the conversation
Whether it’s Groupon assigning a minimum number of participants to a deal or Priceline offering people deals based on how much they are willing to pay, the consumer is getting used to a dynamic relationship with pricing. The Groupon model also gives companies information that was not available until now: what minimum sales volume you can count on and still make money.
 
Leverage customers to perfect the app and the pricing
Brands can now engage customers to figure out how to improve the apps and even to design the products and set the price point right. 25% of Procter and Gamble’s products are now designed in collaboration with consumers, and the price point is set in advance in agreement with them. This is a great way to strike a customer-inspired balanced between functionality and pricing.
 
Showcase the good people behind your brand
The real products are no substitutes for faces. People want to connect with people. Hugo Boss has “Miss Hugo” tweeting from Germany. But instead of one spokesperson, have hundreds or thousands of employees communicating with the public, each with their own authentic voice.
 
Find ways to showcase your customers’ voices
Reviews written by customers are deemed 12 times more credible than those written by the brands. That is a huge difference. Make sure that visitors get exposed to the voices of those that are delighted with what you offer.
 
What has been your experience integrating community, mining, and custom apps?
I would love to hear from you.
 

Photo courtesy of Keamysparadise, via Flickr’s Creative Commons
 

Jean-Marie Bonthous is Principal of Seamless Social. He consults and speaks about social CRM, influence marketing, social media strategy, social media analytics, and how to grow a social business. He has been a trusted advisor to Fortune 500 companies for more than 30 years and has led many successful, high-impact consulting projects, including IT-enabled business transformation initiatives in the $50-100 million range, strategy maps and balanced scorecard-driven strategic planning initiatives and strategic marketing projects.