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Answer's to Josh Bernoff's Questions

My friend and former Forrester colleague posted thoughts from a discussion we had to kick off his research for his upcoming book, with the working title Groundswell. He posted 3 good questions (and one somewhat gratuitous one!). Here are answers...

His big question is "what should companies do about what they learn from companies like Cymfony?"

This is a common question we hear, and there are two dimensions that make it difficult to give an easy answer. First, there isn't one narrow application, but many which cross functional areas. There are online discussions that brand and product managers should analyze for new ideas; there are discussions on stock boards that investor relations should monitor for rumors that could impact the stock price; PR needs to monitor bloggers and can also use reactions to stories about the company to track whether their messages are being accepted in the market; competitive intelligence can pick up interesting insights; employee relations can often find employees griping. The second dimension is that these topics ebb and flow -- there may be more product discussion one day, the next day there are stock discussions, etc.

So often what underlies the above question is the organizational question: who in the company should have responsibility for this? And the ultimate organizational question: whose budget does it come out of?

Given today's corporate structure, there is no easy answer to this question. For example, we may find a robust discussion of customer services issues, but brand management is looking for reaction to a new marketing campaign. The finding may never cross the organizational chasms which Forrester's Peter Kim has recommended need to change in this report. Elana Anderson has also noted that marketing and customer service don't work together well.

Those darn consumers -- if they'd only talk about what WE want them to talk about we wouldn't have these problems. And that is also the point -- companies should use social media analysis to learn about the topics they don't know they should ask about. No other research or market tracking data holds up such an undistorted mirror to a company's blemishes and beauty marks.  This data -- in context with other data -- fills gaps in companies' knowledge of the market.

Which brings me to a couple of other questions Josh had:

1. How important is this chatter? How can you tell when it's a bunch of highly verbal geeks and when it's about to explode in your face like a coke bottle full of mentos?

Several question packed in here. First is importance, which is really about relevancy. True, there is a lot of teenage angst on MySpace or disgruntled loners with a grudge. In order to determine what is important, you need market influence analytics, which uses the large volumes of comments available and all the cues available in it to identify when an issue is the rising, collective voice of  a company's customers.

The second question is the predictive ability of the data. Some great work has been done already, such as this paper that correlates changes in the sales ranking of books on Amazon to waves of online chatter. I'm looking forward to more research across more product categories (Researchers: contact me at Cymfony if you have project ideas).

But do you get sufficient warning of an impending crisis that you can avert it? News cycles today are so fast that a story can go nuclear on you in about the length of time between dropping the Mentos and the geyser erupting. In this environment, even brand monitoring may not give you weeks or days or even hours of advance notice. But equally importantly, our services can keep you up-to-the-minute on how your response is being accepted or rejected by the audience, allowing you to adjust and react quickly if it isn't going well.

But there are more applications for these findings than crisis detection and monitoring, which takes me to the next question:

2. How should you use the information you get from a Cymfony or BuzzMetrics?

The first application is greater, more accurate consumer insight. Traditional market research methodologies are having a tougher and tougher time getting adequate response rates, reaching the right consumers, and getting at the real issues that are on consumers' minds. Comments in social media are the top-of-mind thoughts of consumers, untainted by the way a survey is conducted or the group dynamics of a focus group. In fact, the anonymity of the Internet frees people to say what they really think, instead of what they think the interviewer wants to hear. As I said above, this fills in gaps that a company's other research and data sources can't fill.

Second is understanding communication effectiveness. In the Blu-ray study Josh talks about in his post, he notes the "marketing disconnect" here between what the manufacturers are saying and what consumers are talking about. This should give these manufacturers pause to rethink their strategies. But beyond simply telling you that a message isn't getting through, a more careful reading also helps you diagnose why the message isn't effective and what your customers are actually interested in.

For example, Sony touts the 50GB capacity of the Blu-ray disc, but these technically savvy early adopters weren't convinced that any movie would ever need that much disc capacity, so HD DVD's 30GB seemed to be plenty. In a traditional research approach, your brand tracking study might tell you that the 50GB claim didn't have high recall, but then you'd have to go field another study to understand why -- losing irreplaceable time while the ineffective message continued to run.

3. Will this eventually change companies and media plans, or not? And does it vary depending on whether you're Tostitos or Dentu-Grip?

Feedback from consumers is already changing products at Intuit. Go to the Quickbooks "We Hear You" section where they list 28 changes they have already made to Quickbooks 2007 based on comments on their blogs, boards and other feedback channels.

No question some product categories have more discussion than others, and some brands have more discussion than others. But it is very rare that a company doesn't find some valuable insight. But here is where companies must be ready to hear what consumers are telling them. You may begin the analysis hoping to inform your brand positioning. But those darn consumers may not be talking about your brand -- they may be talking about the product category in more general terms. There's still valuable learning that may lead to changes in product, distribution or service that drives value in a different way than you expect.

Back to Blu-ray: The study provides an important insight that Sony should use to change their strategy: A significant segment of early adopter consumers are specifically not buying Blu-ray because of Sony’s past failures with formats like Betamax, mini-disc etc.  Sony should revise strategies, take a back seat and let a lot of the other 170 companies that have endorsed the format take the message of the format's superiority to the market. They should probably even provide co-op ad dollars to encourage their partners.

4. What were they thinking when they named it Cymfony? I keep forgetting how to spell it!

Now, Josh, C and F are the hot letters these days. Try these:

GFC: George Forrester Colony, for one

Compact Fluorescent: Wal-mart is going to sell billions of them, and they're going to save your house from being swamped under the rising sea level as the polar ice caps melt!

Besides, we get extra branding when Spell Check highlights our company name....  ;-)

Posted by Jim Nail on January 23, 2007 at 07:19 AM | Email this post Permalink
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