Upcoming Book Preview - MacroWikinomics by Don Tapscott & Anthony Williams

It is astonishing how many historical/religious accounts relate to a stone tower. Not just any tower - but a tower built because of a collaboration of men and women. According to biblical accounts, this tower was built after Noah's crew of land-sick folk finally docked and well after the after-party. They built a tower so tall, it could almost tickle the toes of heaven! What happened next, is sort of unclear - like all parables are. But the tower was destroyed and all men and women were given different languages. The logic was simple - if you can't understand each other, you can't collaborate! If you can't collaborate - you can't really build very big parable-ic towers. Apparently, when the tower was destroyed, no one had yet dreamt up Google Translate!

This is as good a juncture as any to consider the European venture Plastic Logic which has developed a high-end e-reader meant for businesses to replace paper. While the company is based out of Cambridge, the marketing is done in Silicon Valley, the software is developed in India and the manufacturing is done out of Dresden and China (Refer this week's Economist for a great article on the state of European tech start-ups). This structure very simply allows the company to tap into the best specialties around the world and drastically reduce costs (accounting for inflation, the Egyptians almost definitely spent more money and time developing papyrus).

Mr. Tapscott and Mr. Williams talk about the rising importance of collaboration in their 2006 best-seller Wikinomics. On June 11th, I had the pleasure of attending Mr. Tapscott's presentation at the Toronto Mars Discovery Center about the September 2010 sequel MacroWikinomics.

The upcoming book seems to pick up perfectly where Wikinomics ends. Businesses have been amongst the first to embrace collaboration on a massive scale because it increases efficiency and reduces costs i.e. it creates massive and quantifiable value. That's how Plastic Logic is able to tap into a huge base of early-adopters in Silicon Valley, the technology expertise in India and the manufacturing efficiency and craftsmanship of Dresden and China.

MacroWikinomics argues that structures that govern our everyday lives will now need to embrace collaboration to create such value and the authors give great examples of how and where these trends are beginning to shape up.

Health-care, for example, is going to be a massive data set of information about you. You are going to change your role as a passive recipient of health-care and instead take an active role in creating your life and health package with your personal physician. If you were to, god forbid, contract an impossible disease, the best medicinal minds in the world can collaborate on finding you a cure. This is a world where types of diseases and medicinal expertise is dispersed by geography, high-costs and diagnostic-time - 3 dimensions that are set to considerably shorten.

Governments will begin to distribute more power to the people driving up accountability and down political agendas. Democracy is set to take a huge leap forward by engaging the previously disengaged youth from many nations (The Obama campaign being an excellent example of the change). This doesn't mean that the loudest voice wins - rather that minority voice also counts!

Structures will be re-written! To whet your appetite - here are the structures whose re-engineering the book chronicles : (1) Industrial Age Corporations (2) The Financial System (3) Newspaper (4) Government (5) Democracy (6) The state of global problem solving (7) Work (8) Media & Entertainment (9) The Energy Platform (10) Science (11) Health-care (12) Military (13) The Cities (14) Transportation (15) Food & Water

The internet and the evolving nature of collaboration provide a strong foundation for reaching new heights in all the aspects that are important today and in the future. But, the structures that we create must be able to hold weight. From the presentation, I get the impression that the MacroWikinomics provides an important framework for those towers to be built.


Net Change Week 2010 -The Provocation of Don Tapscott from MaRS Discovery District on Vimeo.

How to use Social Media Monitoring (SMM) tools: Illustrated using a fake event involving really good coffee

Running a well-measured product-launch is a bit like the Coyote hunting the Road-runner. However, instead of blowing the Road-Runner up, the Coyote carves out new roads for the Road-Runner to run on. The Coyote then sets up to monetize on the Road-Runner’s obvious skill. Maybe he finds a way to convert the Road-Runner’s massive kinetic energy to electricity by constructing an elaborate acme treadmill under the runner. Or maybe the Coyote simply bets wallops of acme money on the Road-Runner’s odds of winning against prized race horses. And then finally, the Coyote retires to a beach in Florida watching the sunset while sipping margaritas.

The Road-Runner is akin to a brand and the Coyote is simply ensuring that the brand runs a course defined by consumer needs, macro trends in consumer behaviour and the tangible or intangible value that the brand may have to the Coyote!

And how do the Coyotes i.e. the corporations of the world monitor this data? There are a variety of methods. But over the last 18- 20 months, a new set of tools have emerged that have the potential to significantly add to the amount of data or reduce the cost of acquiring this data assuming a relatively small up-front investment – Social Media Monitoring (SMM) tools.

The problem is that there aren’t yet any standard best practices on using SMM tools. So many times, the need for SMM tools and their many potential benefits are downplayed as just being another thing no one really knows how to use.

As an advocate of SMM tools, I will try to illustrate how much can be gained through its effective use. To do this, I will make some assumptions about Starbucks’ new product – VIA. Please note that I have no idea how Starbucks actually measured the VIA product launch. I simply used it because I think they have done a great job of investing in web media.

So if you were Starbucks looking to make an entrance into the multi-billion dollar instant coffee market, you would be staring a conundrum in its face! Starbucks coffee is known for its great taste and quality coffee while instant coffee traditionally is not! Yet, instant coffee is too big a market to pass over and Starbucks desperately needs to widen its product portfolio in face of competition from the likes of McDonald’s.

So VIA is born. True, its instant Coffee, but it’s the best Instant Coffee there is. But, while it would have many of the benefits of the Starbucks brand, how much more would consumers be willing to pay for better instant coffee? How much would VIA cannibalize the sales of Starbucks’ regular coffee? And how will this product foray affect the Starbucks brand?

At this point it’s prudent to note that Starbucks has a vast investment in digital media. From a swanky myStarbucks website, where Starbucks co-creates products with its consumers to multiple smartphone apps. So social media is not the only source of data. Instead any data gathering strategy must include Starbucks’ entire media – from the store level at important geographical sites to its websites and apps to social media such as facebook and twitter. SMM tools only help with the last bit.

Once the strategy is laid out, Starbucks can aim at answering the most compelling questions it has. Let’s assume the four questions that Starbucks needs to immediately answer are below. We will use some metrics (Reference: Web Analytics Demystified) to garner insights from social media using SMM tools.

1. How should VIA be positioned under the Starbucks product portfolio? How will the brand perception of Starbucks change for existing consumers? Should the primary goal of VIA be to get existing consumers to spend more money at Starbucks rather than on competing products or gain access to a bigger market? What is the point of no-return i.e. what consumer trends or opinions should precede a decision of discontinuing VIA?  
2. How much should it be priced at? How much are consumers willing to pay for better instant coffee? Where does this price-point intersect cannibalisation over Starbucks’ existing coffee products?
3. Innovation: How should the product be designed or what accessories can augment the product? 
4. What are the locations where VIA can build advocacy? I.e. where will VIA be an instant success?

Starbucks might begin by doing a sentiment analysis on all their media. On social media, sentiment analysis generally uses studies in natural language processing, computational linguistics and text mining to gauge the ‘pulse’ of conversations. I.e. it rates a conversation on a degree of Positive, Negative or Neutral. The same methods can be used on web-media that aren’t social tools such as on the myStarbucks website user suggestions and comments. In-store data collection is a little more expensive, but not limiting. 

If as a part of their go-to-market strategy, Starbucks gives out free samples of VIA at their outlets to allow consumers to see how good instant coffee gets, it may be prudent to gauge sentiment both before and after they try out the sample. Measuring the degree of sentiment at these two time periods will provide a lot of information.

• If Disparity is High and Pulse is Positive – This is a good sign for VIA, but higher the positive numbers, greater the chances of cannibalization from regular Starbucks coffee.  [After all, most of the people who will try the free samples would be regular Starbucks customers]
• If Disparity is High and Pulse is Negative – This is not only a bad sign for VIA, but the Starbucks brand equity may also suffer. This may be a good time to think about plan B!

Once Starbucks gauges brand sentiment, it needs to know the characteristics of the consumer base that is taking part in conversations about VIA. Starbucks can:

• Measure Share of Voice: 
• [Number of mentions of VIA OR Starbucks Instant Coffee] / [Total Mentions of (Starbucks + Competitors like Second Cup)] 
• [Number of mentions of VIA OR Starbucks Instant Coffee] / [Total Mentions of (VIA + Instant Coffee Competitors like Nestle)] 

This metric is measured as a percentage over a given time-period. A good baseline that can be used is the market share of the brand against competitors as determined by a source such as revenue.

• Measure Audience Engagement: Audience engagement provides a snapshot of how many people are engaging in conversations about Starbucks and VIA. This metric needs to be continuously monitored through the lifetime of the campaign
• [Total number of Comments + Shares + Trackbacks on various web media] / [Total number of conversation views]

Audience Engagement allows Starbucks to answer question 1 and also question 4 – since it ties specific events / conversations to specific locations (within reason). For example, if a musician’s event sponsored by Starbucks in Kingston, Ontario results in a spike in conversation about VIA, Starbucks knows that there’s something worth looking into over there. This also helps answer a part of question 3 by allowing to view the main participants in important conversations. 

• Measure Conversation Reach: Conversation reach is the number of unique visitors who participate in a specific brand/issue/topic conversation across all the media being measured (this includes the myStarbucks website).
• [Total People Participating]/[Total Audience Exposure]

Conversation Reach helps answer Question 4, but also, if gives snapshots of how conversation about VIA is growing as tied to a specific marcom event.

Equally important to understanding what people are saying about VIA is knowing who is saying things about VIA. For a new product launch, it helps to have strong advocates on your side. But choosing the right advocate is a little difficult. SMM tools may offer some reprieve.

Starbucks should, well before the VIA launch,

1. Create an advocacy program where advocates are motivated / incentivized to truthfully advocate their position on the new Starbucks VIA (Note the adverb truthfully. While ethically important, these advocates may also become the consumer’s representatives, giving Starbucks massive potential to co-create innovative, new or complimentary products/ services)
2. Measure influence of each advocate – on all media
3. Measure the effects of the advocacy program – Some baseline is required to measure ROI

The metrics that will help measure advocacy are:

• Measure Percent Active Advocates:
• [Number of Active advocates in past x days]/[Total Advocates]

This metric measures the number of active advocates creating positive sentiments for VIA. This is important as it gives Starbucks information about how much they may need to step up their incentive programs during critical stages of product launch.

• Measure Advocate Influence:
• [Unique Advocate Influence]/[Total Advocate Influence]

This metric measures each advocate’s influence thereby helping Starbucks structure an incentive plan. This is a measure relative to the other advocates in the program which allows Starbucks to rate their advocates in order of importance.

• Measure Advocacy Impact:
• [Number of advocacy driven conversions]/[Total Volume of Advocacy traffic]

This metric, while difficult to measure, provides a strong case for all the marketing incentives and promotions the product launch team at Starbucks conjures up. Starbucks, as mentioned earlier, has very strong infrastructure in place already. And given that many retail outlets are now going ‘social’ i.e. allowing consumers to connect to their social networks on the likes of facebook from the retail stores or from their cellphones, web-based media is a great place to monitor for mentions of recommendations.

Of course, Starbucks needs to establish some further criteria to tell if advocacy is working. This could be by using focus groups or loyalty cards or the usage of location-based tools such as Foursquare to count the number of visits to starbucks per week. Such data could then be correlated to a breakdown of the products purchased or the amount of advocacy that a frequent visitor engages in on social media.

Finally, metrics for innovation can be generated with the help of SMM tools. Sentiment Analysis to see what consumers think of a product / service , Topic Trends to see what consumers would like to see and outright suggestions for new products on services like myStarbucks would allow Starbucks to co-create value with the consumer thereby building up on its already strong consumer base.