I presented this topic during the ‘Jaarcongres voor informatie management professionals’. Since the slides require a voice over I have added this voice over below the slides:
If you are talking about Business intelligence in most organisations, it is about organisational data, data that is a result of business processes of organisations. It is the organisation taking another look at themselves in order to, based on historic data, to predict the future and make decisions that might influence the future of the organisation positively. However as every mirror this only reflects one side of the picture of the organisation. Let me explain you how can go through this mirror, the looking glass, to get your organisation into a better world instead of being Red Queened.
There is a whole world outside of the organisation, such as social media, that can provide you with valuable information. This data is superfluous, instead of well-defined and limited based on your business processes, it is information created outside your organisations by people not part of your organisation. It can help you by creating a more complete picture than the just the one you see in the mirror, the looking glass, it can provide you with a 360 degrees view of yourself, your organisation and your stakeholders. However if all you see is just additional data, then it is most likely you are suffering from the Red Queen effect. You are just competing in an arms race with data, a race you are bound to lose as soon as there will be a another player that not only uses the social media data, but also changes the rules of the game.
Red Queen Effect
“Well, in our country,” said Alice, still panting a little, “you’d generally get to somewhere else — if you run very fast for a long time, as we’ve been doing.” “A slow sort of country!” said the Queen. “Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to go somewhere else, you must run at least twice as fast as that!”
The basic premise of the Red Queen Effect is: do nothing and fall behind, or run hard to stay where you are. It is just playing a catch up game with the competition and trying to be one step of ahead of them in the same way they try to be a step ahead of you. However you could use the data and the insights derived from it to transform the circumstances and the ecosystem to really move forward, instead of just running to stay in the same place.
Escaping the Red Queen using the Social graph
There is so much information available in Social Media and that information is already so well-connected to one another it can create a very valuable sets of insights in what you could do next. There is information available on what is being shared by people, people check-in on certain locations to let their friends know where they are. Items online are being recommended via Facebook or other services to other people. Everybody seems to be connected to everybody and something like six degrees of separation has been brought back to 3.74 degrees of separation. And as in every network there are super nodes, individuals that are having a deep impact ont he network itself, not only by being connected with a lot of people, but especially by being able to mobilize people in order to take action.
How Social Media Data can help you
If you are using Social Media data just for history based predictions you are doing yourself a disservice. You now can know what your customer is thinking since they share their thoughts on social media. What your customer is doing, since they share their activities on social media. And you can know what your customer wants, since he is also sharing this on social media. It is beyond just Facebook and Twitter, there are numerous platforms that provides people with the ability of creating wish lists, diaries, activity streams and all other sort of sharing mechanisms to share things about themselves or about their friends. It is becoming possible that you can know more about an individual himself than the individuals knows or at least has realised you could know.
This is instantly the difficult part: how not be creepy. If you know everything, or at least a lot it can be very attractive to use all the information. Target didn’t even use the Social Media Data that was available to cross the creepy line. They use the information from the consumption patterns of their customers to discover pregnancies, even before their customers knew. Now that is scary and that is something you don’t want to do.
Four Examples on what you can do know with Social Media Data
If you shouldn’t be using Social Media Data just as yet another data source, what is the thing you should do with it now? Let me provide you with four tangible solutions you can start implementing right now.
Stop Discounting, Get Social, Sell More
Every retailer has a certain set of customers who buy a lot of most of their products but refuse to buy a certain set of products. For example the grocery shopper who buys a lot of delicious high-end food, however he refuses to buy wine at the supermarket since his perception is that it is a low quality product not living up to his standards. What retailers normally would do is to coupon this person to death. It seems that price is the blocking issue to try things out, at least in their perception. However discounting items to make sure somebody is buying them, is not a sustainable behaviour. Not only are you losing money (or not making as much as you could), you are also conditioning your customer in that if something is cheap he should buy it, otherwise he should way.
Stop couponing, start using social proof. If the individual is reluctant to buy something because his perception is that it is a poor product, why not show him friends who like this product. Friends who already have bought this product and have a positive perception about it. This scenario takes some time to implement, however you can start tomorrow by collecting feedback from your customers on your products. That is the first step: collecting feedback.
Stop Doing Web care, use the data to make a difference
A lot of organisations are doing something they call web care, which is in fact hate care. You can read more about this in one of my previous articles on this matter. It is often a wasteful activity since it is both costing money and still not really solving an issue. However it might be a great marketing show case, though in the end even marketing is a wasteful activity. Web care is typical result of the Red Queen effect: everybody is doing it, so now are your.
In the end you don’t want to do web care, you want your customers help you in helping other customers. Since if people really care about your organisation, they care about their fellow customers as well. However this is a long-term scenario which might you take more than a year or even two years to make it happen. Though you can start eliminating wasteful activities right now. You can use the data on social media to fix the issues that are being reported by your customers. That is something your customers really want: something that works and is not broken. They appreciate the free money you give them and the attention you provide them, however a seamless user experience might get them even more excited.
Tear down the Ivory Tower of Product development
Often new products and services are thought up by a R&D department or an innovation department and if you are looking there has been a customer panel involved to validate assumptions. The downside of the departments and the panel is that it is just a limited group of people who most often share the same opinion. Plus validate assumptions with only very little people only leads to potential disaster, you only know when something will be successful if everybody can get his hands on it.
Stop trying to innovate in this way. Of course it is good to have a customer panel as part of a constant feedback loop, it is good to have people thinking up the next big thing since most customers still cannot predict something they want to have that not already exists in a form or shape. However customers already have a very clear view on what they want and especially what issues they are facing. In the end you want to do probably full co-creation in perhaps even a kickstarter.com way with your customers. However now you can already tap in their stream of thoughts on social media and use that input to think up the next big thing that will solve a common issue.
Sampling, stop analysing behaviour, start using connections
The easiest way to get a customer to buy something new, whether it is a product or a service, is to let the customer try it out. We currently decide which group of customers is most likely to convert in buying the product or service afterwards based on their current consumption behaviours. Which is a very limited view, since you have at best the behaviour of these people based on interactions with your organisations combined with some data how they behave in general. However you don’t have insights in what they think, want or do with other organisations.
So buying behaviour might definitely give you something, however it is not the complete view you need to increase conversions and increase customer satisfaction. Now Facebook has released their Open Graph Search, there are endless possibilities, which you can read in my previous articles here. However there is a first step you have to take before you can harness this information in a good way and that is by making sure there is a connection between you and your customer. As soon as the connection is there, you can get more insights. If the customers allow you to do so.
Don’t be Red Queened, become a Social Business
Instead of running to keep in the same place and just using Social Media Data as yet another data source. You now have the opportunity to escape the data arms race and to become a fundamentally different type of business: a Social Business. You can use Social Media Data to create a different and new connection with your customers. You can serve them better, you can empower them to help other customers and you can involve them in your product development processes.
Instead of being a business with just some more data that is still doing the same, you have to opportunity to become a better business, a social business. However will you take the time to stop running and choose a different direction? I truly hope so, since Red Queen organisations are doomed to lose their business to new players that decide do it differently, whether is has been the music industry, the photo industry or any other industry. The ones not participating in the arms race win, that can be new competitors that do not already exists, or it can be you.
Stop running, start transforming your business.