Most companies today have come to realize that some sort of presence on the World Wide Web is necessary for them to survive. With instantaneous communication and inter-connectivity becoming an important part of everyday life for many, companies are turning to social media. Social media is a great opportunity for companies to connect with their customers and gain valuable insights about the uses, perceptions, and opinions of the products and services they provide. One particularly quick and simple way for companies to utilize social media is to "google" themselves: search their brand names and products online and see what results they get. Many outlets of user generated content have ways to search for topics and keywords. Twitter, in particular, allows users to tag buzz words in their tweets by putting a hash mark (#) in front of the word. Twitter then keeps track of these buzz words and compiles them to determine trending topics among users. Companies can use this information to find out which of their products/services are being discussed and how often.
One amazing tool marketer and companies can use to gauge their internet presence and see how much they are being discussed is Google's Zeitgeist. Zeitgeist allows users to view search patterns, trend website traffic data, and even filter search queries by the location from which it was searched. This information can become important data for marketers trying to determine regions and locations of interest. To try it out, I used the "Insights for Search" function, which allows you to view data for terms searched on Google and filter them by category, location, and time period. As a test, I used this function to view the most rising search trends in Austin, TX over the past 7 days, with the results being:
1. Fort Hood (for the shooting that occurred November 5th)
2. Sesame Street (which celebrated its 40th anniversary November 10th)
3. Modern Warfare 2 (a popular video game released midnight November 10th)
Another way for companies to use social media to gain insights is create mediums for interactions between themselves and their consumers. Something as simple as setting up a Twitter account allows a company to contact and interact with their customers. While several celebrities have taken to Twitter to interact with their fans and news medias such as CNN using it to relay breaking news updates, few companies have used Twitter to connect with their customers. The first big company I've seen do this is Best Buy with their "TwelpForce" ("twelp" being a mash-up of tweet and help). Basically, a customer can tweet a tech related question to TwelpForce, and within minutes a Best Buy employee will answer it. This question and answer interaction not only helps creates an individualized connection with each customer but also helps Best Buy understand what their customers want to know the most about; in the long run, this could influence customer service relations, decisions on product assortments in stores, and other business related functions.
All that said, as we mentioned in class, just because a company creates the medium doesn't mean that customers will use it or that they even have an incentive to use it. The biggest example I see of this is the relatively new Fan Pages on Facebook, where a company or celebrity can create a page for users to become a fan of. The problem is that the only benefit to being a fan is for users to meet other fans. It, in a sense, functions the same way as fan websites people could create back in 2001 and doesn't offer the company any additional interaction.
Taking into account how popular as social media has become in just the past few years and how much its popularity and use will undoubtedly continue to grow, a lot of companies are missing out on these numerous and relatively easy ways to gain insights about their valued consumers. I think it is only a matter of time before most major companies make the jump.
Wednesday, November 11, 2009
Wednesday, November 4, 2009
Wal-Mart - How Much Data Is Too Much?
After reading the article about Wal-Mart’s vast collection of customer data and the ways they utilize it, it is easy to see how Wal-Mart has become so widely respected in the retail industry. It is pretty safe to say that when the size of your data storage is twice that of the entire Internet, you know quite a bit about your customers.
Techniques such as shopping cart analysis have given Wal-Mart get insights not only as to what individual items customers purchase, but what other items they buy along with it. The example of flu season products (cold medicine and chicken soup) can easily be expanded to other yearly events such as the Thanksgiving holidays, the Back to School season, Super Bowl Sunday, and many others, giving Wal-Mart valuable data for implementing the four P's of marketing (Product, Price, Place, Promotion); now that they know what products are being bought, they can strategize on what prices to offer them, where to place them in their stores, and how to promote them. This also gives Wal-Mart a distinct advantage when it comes to procuring stock from their suppliers and distribution centers. I honestly cannot remember the last time I went to Wal-Mart and something I wanted was out of stock. Having the products the customer wants when they want it is an experience not many companies can offer on a consistent basis.
All that being said about the great benefits of Wal-Mart’s vast collection of customer data, initial reactions of amazement quickly change to concern when I think of what other information they can obtain. I personally find it a bit unnerving that someone in Wal-Mart’s headquarters in Bentonville, AK can easily obtain my home address, driving record, creditworthiness, or any other pieces of personal information without my knowledge simply by using the debit card information connected to my purchase. Although it can not be said for sure whether or not Wal-Mart actually collects such data (and those spoken to in the article do not seem to believe so), the fact that they have that ability is unsettling in itself.
Thoughts of concern quickly change to fear when I think of what could happen if the security of such a large amount of personal information was compromised. While Wal-Mart has clearly stated on numerous occasions that they take all necessary steps to protect our data - they go as far as to state on their website: "We take reasonable steps to protect your personal information. We maintain reasonable physical, technical and procedural measures to limit access to personal information to authorized individuals with appropriate purposes." - I still think of instances of stolen information, like when McCombs accounts and other personally identifiable data was stole here at the Business School just a few years ago. With the McCombs incident, hundreds of people's data was at risk; a security hick-up with Wal-Mart could place millions of customers at risk for identity fraud.
Through the good and bad of having over 460 terabytes of customer data, there is always room for improvement. One thing that annoys me about Wal-Mart is the lack of integration between their physical stores and Walmart.com. Many times I've browsed products on their website only to find that they are a different price at the store. Wal-Mart even has a disclaimer on their website: "In our effort to be the lowest price provider in your particular geographic region, store pricing will sometimes differ from online prices. Our stores do not honor Internet pricing...” With the ability to track purchases and inventory levels, one would think Wal-Mart could just as easily monitor prices or at the very least guarantee them.
Techniques such as shopping cart analysis have given Wal-Mart get insights not only as to what individual items customers purchase, but what other items they buy along with it. The example of flu season products (cold medicine and chicken soup) can easily be expanded to other yearly events such as the Thanksgiving holidays, the Back to School season, Super Bowl Sunday, and many others, giving Wal-Mart valuable data for implementing the four P's of marketing (Product, Price, Place, Promotion); now that they know what products are being bought, they can strategize on what prices to offer them, where to place them in their stores, and how to promote them. This also gives Wal-Mart a distinct advantage when it comes to procuring stock from their suppliers and distribution centers. I honestly cannot remember the last time I went to Wal-Mart and something I wanted was out of stock. Having the products the customer wants when they want it is an experience not many companies can offer on a consistent basis.
All that being said about the great benefits of Wal-Mart’s vast collection of customer data, initial reactions of amazement quickly change to concern when I think of what other information they can obtain. I personally find it a bit unnerving that someone in Wal-Mart’s headquarters in Bentonville, AK can easily obtain my home address, driving record, creditworthiness, or any other pieces of personal information without my knowledge simply by using the debit card information connected to my purchase. Although it can not be said for sure whether or not Wal-Mart actually collects such data (and those spoken to in the article do not seem to believe so), the fact that they have that ability is unsettling in itself.
Thoughts of concern quickly change to fear when I think of what could happen if the security of such a large amount of personal information was compromised. While Wal-Mart has clearly stated on numerous occasions that they take all necessary steps to protect our data - they go as far as to state on their website: "We take reasonable steps to protect your personal information. We maintain reasonable physical, technical and procedural measures to limit access to personal information to authorized individuals with appropriate purposes." - I still think of instances of stolen information, like when McCombs accounts and other personally identifiable data was stole here at the Business School just a few years ago. With the McCombs incident, hundreds of people's data was at risk; a security hick-up with Wal-Mart could place millions of customers at risk for identity fraud.
Through the good and bad of having over 460 terabytes of customer data, there is always room for improvement. One thing that annoys me about Wal-Mart is the lack of integration between their physical stores and Walmart.com. Many times I've browsed products on their website only to find that they are a different price at the store. Wal-Mart even has a disclaimer on their website: "In our effort to be the lowest price provider in your particular geographic region, store pricing will sometimes differ from online prices. Our stores do not honor Internet pricing...” With the ability to track purchases and inventory levels, one would think Wal-Mart could just as easily monitor prices or at the very least guarantee them.
Wednesday, October 14, 2009
"What are you doing?" - A Creative & Innovation Question
What makes a product or service creative and innovative? Being the first of its kind like Tivo? Being a household name like Coca-cola? Becoming synonymous with an entire product category like the iPod? I don't think there is one defining feature that makes something creative or innovative; I think it is a combination of these and many other things. One thing to note, however, is that technology and innovation seem to go hand in hand these days. As stated in 'The New, Faster Face of Innovation', technology is allowing innovation to occur in a faction of the time it took even a decade ago. Social networking and inter-connectivity make test marketing and gaining consumer insights so easy, products that would make years to hit the market in the past are introduced in months.
Speaking of social networking, one of the most creative and innovative services I have seen in recent times is Twitter. Who would have thought that a service where users talk about what they are doing at any given moment (despite how mundane or unimportant it may be) would have 6 million users by the end of 2008 in just 2 years of existence. I think it's safe to say that you have to be pretty creative and innovative to capture that large an audience in such a short time span.
I think what makes Twitter so appealing is its easy accessibility. Literally anyone with a computer and internet connection can use Twitter. You don't have to be young. You don't have to be computer savvy. You don't have to have a lot of friends. You don't even have to have anything important to say. All you have to do is be able to answer one simple question in 140 characters or less: "What are you doing?” That's all it takes to be a Twitter user. That's all it takes to have your voice to be heard through the far reaches of cyberspace. (By the way, you can follow me on Twitter @rlove_06.)
Another thing that makes Twitter so innovative is despite its humble beginning of friends communicating with friends, it has become a useful communication tool over a wide spectrum of disciplines. Friends use Twitter to keep us with each others happens. Business professionals use Twitter to update colleagues on the status of important projects and meetings. News stations use Twitter to inform viewers of breaking news stories. President Barack Obama used Twitter during the 2008 Presidential Election to inform voters on political issues and give updates of his location on the campaign trail. With internet capable phones and Twitter applications for the iPhone and other smart phones, the possibilities for Twitter's usefulness outside of simple social interaction are endless.
One of the most innovative use for Twitter is not even of there own doing! Recently, broadcasters from local affiliates like FOX and CBS to national networks like CNN have started "tell us what you think" initiatives for their stories, using Twitter as a medium of interaction between themselves and their viewers. Even though I say you don't have to have anything important to say to use Twitter, many individuals see opportunities such as this to voice their opinions topics and issues that are important to them. Just like that, Twitter can change from a social networking service to a political soapbox.
Going back to the first few questions I posed, Twitter is the first service of it's kind, quickly becoming a household name, and while it is far from synonymous with the social networking category (Myspace's continued popularity and Facebook's 200 million-and-growing users are leading that category) it is definitely making an impact. So to say that Twitter is creative and innovative doesn't even begin to describe how this service, started in 2006, is on its way to having an estimated 18 million users by the end of 2009.
Speaking of social networking, one of the most creative and innovative services I have seen in recent times is Twitter. Who would have thought that a service where users talk about what they are doing at any given moment (despite how mundane or unimportant it may be) would have 6 million users by the end of 2008 in just 2 years of existence. I think it's safe to say that you have to be pretty creative and innovative to capture that large an audience in such a short time span.
I think what makes Twitter so appealing is its easy accessibility. Literally anyone with a computer and internet connection can use Twitter. You don't have to be young. You don't have to be computer savvy. You don't have to have a lot of friends. You don't even have to have anything important to say. All you have to do is be able to answer one simple question in 140 characters or less: "What are you doing?” That's all it takes to be a Twitter user. That's all it takes to have your voice to be heard through the far reaches of cyberspace. (By the way, you can follow me on Twitter @rlove_06.)
Another thing that makes Twitter so innovative is despite its humble beginning of friends communicating with friends, it has become a useful communication tool over a wide spectrum of disciplines. Friends use Twitter to keep us with each others happens. Business professionals use Twitter to update colleagues on the status of important projects and meetings. News stations use Twitter to inform viewers of breaking news stories. President Barack Obama used Twitter during the 2008 Presidential Election to inform voters on political issues and give updates of his location on the campaign trail. With internet capable phones and Twitter applications for the iPhone and other smart phones, the possibilities for Twitter's usefulness outside of simple social interaction are endless.
One of the most innovative use for Twitter is not even of there own doing! Recently, broadcasters from local affiliates like FOX and CBS to national networks like CNN have started "tell us what you think" initiatives for their stories, using Twitter as a medium of interaction between themselves and their viewers. Even though I say you don't have to have anything important to say to use Twitter, many individuals see opportunities such as this to voice their opinions topics and issues that are important to them. Just like that, Twitter can change from a social networking service to a political soapbox.
Going back to the first few questions I posed, Twitter is the first service of it's kind, quickly becoming a household name, and while it is far from synonymous with the social networking category (Myspace's continued popularity and Facebook's 200 million-and-growing users are leading that category) it is definitely making an impact. So to say that Twitter is creative and innovative doesn't even begin to describe how this service, started in 2006, is on its way to having an estimated 18 million users by the end of 2009.
Monday, September 28, 2009
The Effect of Expectations
The main idea of this chapter of Predictably Irrational, The Effect of Expectations, is that expectations, previous experiences, and prior knowledge about a product or service can affect the way we perceive it, both physically and psychologically. In short, having positive feelings about a product can make it seem “better” upon trial, while having a negative attitude toward it prior to trial can make it “worse”. I find it amazing how such a simple and seemingly obvious observation can tell us so much about the ways customers behave.
One expectation mentioned in the chapter was presentation; coffees presented on stainless steel platters with condiments in nice containers were perceived and rated better than the same coffee in styrofoam cups. This insight about presentation and its effect on perceived value has helped Starbucks become the company it is today. Another expectation discussed was prior experiences; neuroscientists measured brain activity during blind and sighted taste tests of Coke vs. Pepsi. Blind taste tests show similar brain activity when trying each brand of cola, but in sighted tests Coke evoked higher activity in sections of the brain responsible for memory and associations. Having prior experiences and memories of Coke caused the person in the taste test to perceive greater taste. This insight shows us as marketers the power and value of branding.
The main example discussed in the chapter was a study performed at a pub on the MIT campus. Patrons were asked to sample two beers: Budweiser and “MIT Brew”, which was Budweiser with drops of balsamic vinegar added. The experiment was to see if knowledge of the “secret ingredient” changed the patron’s expectations, and thus perception, of the beer before or after they drank it. It’s funny that just a week prior to reading this chapter, my friend and I had a similar discussion about the effect of product knowledge on perception and evaluation.
Last week, my friend’s family was in town and she decided to show them how well she had learned to cook while away from home. The look on her parent’s face obviously showed that they weren’t at all confident with her cooking abilities, with due justice. When I met my friend over 3 years ago, she was terrible at cooking, but through trial and error, experimenting, and a few pounds of wasted food, she learned how to make a few dishes pretty well. Before she started, she asked me not to mention to her family that she had been practicing cooking so they would be surprised. Similar to the MIT beer experiment, knowledge of my friend’s cooking skills (or in this case the lack of knowledge) helped shape her parent’s expectations toward the food. In the end, they agreed that her cooking had gotten considerably better.
After reading this chapter, however, I think back to that meal. I wonder if the parent’s perception of the food would have been greater if I had raved about how great a cook she had become before they ate the meal. If the results of the MIT experiment are accurate, the knowledge of her improved cooking skills would lead to greater expectations of the meal and in turn a higher perception of its taste.
One expectation mentioned in the chapter was presentation; coffees presented on stainless steel platters with condiments in nice containers were perceived and rated better than the same coffee in styrofoam cups. This insight about presentation and its effect on perceived value has helped Starbucks become the company it is today. Another expectation discussed was prior experiences; neuroscientists measured brain activity during blind and sighted taste tests of Coke vs. Pepsi. Blind taste tests show similar brain activity when trying each brand of cola, but in sighted tests Coke evoked higher activity in sections of the brain responsible for memory and associations. Having prior experiences and memories of Coke caused the person in the taste test to perceive greater taste. This insight shows us as marketers the power and value of branding.
The main example discussed in the chapter was a study performed at a pub on the MIT campus. Patrons were asked to sample two beers: Budweiser and “MIT Brew”, which was Budweiser with drops of balsamic vinegar added. The experiment was to see if knowledge of the “secret ingredient” changed the patron’s expectations, and thus perception, of the beer before or after they drank it. It’s funny that just a week prior to reading this chapter, my friend and I had a similar discussion about the effect of product knowledge on perception and evaluation.
Last week, my friend’s family was in town and she decided to show them how well she had learned to cook while away from home. The look on her parent’s face obviously showed that they weren’t at all confident with her cooking abilities, with due justice. When I met my friend over 3 years ago, she was terrible at cooking, but through trial and error, experimenting, and a few pounds of wasted food, she learned how to make a few dishes pretty well. Before she started, she asked me not to mention to her family that she had been practicing cooking so they would be surprised. Similar to the MIT beer experiment, knowledge of my friend’s cooking skills (or in this case the lack of knowledge) helped shape her parent’s expectations toward the food. In the end, they agreed that her cooking had gotten considerably better.
After reading this chapter, however, I think back to that meal. I wonder if the parent’s perception of the food would have been greater if I had raved about how great a cook she had become before they ate the meal. If the results of the MIT experiment are accurate, the knowledge of her improved cooking skills would lead to greater expectations of the meal and in turn a higher perception of its taste.
Wednesday, September 9, 2009
10 Things Marketers Should Know About Me...
Sitting down and actually thinking about how and why I purchase certain products and how I use them gives me a better understanding of what marketers look for when trying to gain customer insights. The ten behaviors and characteristics that marketers should know about me include:
1.“Being a fashionably late adopter” – I am always skeptical of new products when they hit the market, especially electronics. I always join in eventually, and I call my adoption speed being “fashionably late”; I’m usually the first person in line when a product hits mainstream, sometime following the first price drop, after the innovators and early adopters have validated the product’s value.
2. “Jumping bandwagons for hot trends” – I’m not the type of consumer to jump for any and all new products put out on the market just because it’s the hottest trend. For example, I’m an avid video gamer. When the PlayStation3 was released, I felt like I still had a lot of life left in my PlayStation2 and still haven’t seen a reason to upgrade. I have the same rational for not upgrading to Blu-ray over DVDs.
3. “Being brand loyal” – While I am not decidedly against change, I try to avoid to whenever possible. Once I find a brand that meets my needs (both physically and psychologically), it is very difficult to get me to switch. One simple example would be my choice of gum: Winterfresh. I started chewing Winterfresh in middle school and wouldn’t substitute it for any other gum unless absolutely necessary. However, last year, I was forced to try 5 Gum (Wrigley’s newest cool-mint gum at the time) when the store I visited didn’t have Winterfresh. 5 Gum met my needs so well that I switched for the 1st first in over 8 years.
4. “More is better” – I like to buy large quantities of products so I don’t have to purchase them as often. For example, when I made the switch to 5 Gum, I went to Sam’s Club and bought a whole box of them (like the containers you see them in at the checkout counter in grocery stores).
5. “Valuing good customer service” – Thinking about companies and brands at a store level, I place a large emphasis on the “experience”. It doesn’t take much to please me though; a warm welcome and a genuine appreciation of my business is enough to make me a regular customer. One thing that will make me turn and leave a store is not being acknowledged when I walk in; a simple “hello” or a head nod is all I need.
6. “Simplifying my life” – Multifunctional products are my best friends. In an attempt to get as much as I can in as small a space as possible, I like to consolidate many products into one multifunctional one. Some examples include my PlayStation2 (doubles as a DVD player), cell phone (works as an alarm clock, camera, date book, etc.), 2 in 1 hair products (Shampoo and Conditioner in one step?!?), and my laptop computer (an all-around entertainment center).
7. “Simplicity” – Although I do love multifunctional products, usability it still key. If a product is complicated to use, I’ll get tired of it. I consider myself to be pretty tech savvy, so I know there’s a serious problem with a product’s simplicity if I have to pull out its user manual.
8. “Function over fashion (most of the time)” – Most of the time, I value the functionality of a product over its cosmetic appearance. If there were two products of the same price side by side and the only differences were the key features and the color, I would pick the one with more features about 80% of the time. The exceptions to this characteristic, however, are clothes and shoes.
9. “The price is right” – Price is a huge factor for any product I buy. There are very few items that I am not extremely price sensitive toward. I am much more likely to go without than to pay more than what I expect.
10. “Variety” – I don’t like being in the same place for too long or doing to same task repeatedly. Marketers should know that variety in uses (multifunctional) and places of use (portability) spark my interest. A great example for me is my laptop: I use my laptop everywhere for everything. I could live with just my laptop if I had to.
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