Michael J. Spendolini, Ph.D. President MJS Associates 700 Lido Park Drive, #33 Newport Beach, CA Tel

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1 Effectively Managing Customer 2.0+ Michael J. Spendolini, Ph.D. MJS Associates Newport Beach, CA ASQ 21 st Quality Management Conference March 5-6, 2009

2 Michael J. Spendolini, Ph.D. President MJS Associates 700 Lido Park Drive, #33 Newport Beach, CA Tel

3 Define 2.0 Popular term for advanced Internet technology and applications Powered by technological advances and User empowerment

4 Tim O Reilly s original 2.0 Principles Users adding value Aggregating user data is a default of participation Reduce effects of intellectual property rights Loosely coupled systems (e.g., syndication, use of data by others) Software that is above the level of a single device

5 Why Does 2.0 Matter? It is the key driver of Today s Web technology It will effect almost every organizational function Marketing/Sales All things Customer (service, support, communications, measurement, education.) IT I.T. For many, it has become a customer requirement It represents an opportunity to gain competitive advantage (for early adapters and the early majority)

6 Web10to

10 Creative

11 What are the Enablers of 2.0? Software-as-a-Service SaaS Applications are hosted as a service to customers across the Internet Alleviates the burdens of software maintenance, ongoing operations, and support Advantages: All have access, low cost, ease-of of-use Key players:

12 The Second Key Enabler The Cloud Cloud Computing Metaphor for the Internet SaaS S Applications (Apps) Apps are purchased, licensed, and run over the Internet Allows users to access supercomputer power

13 Over 52,000 Apps in the Cloud

14 ... the Third Enabler

6/08 to 1/09 Twitter: 5 million tweets/day MySpace:

15 Social Media Stats: growth and more growth (stats as of 1/09) Facebook: 50 million active users 59% growth from 6/08 to 1/09 Twitter: 5 million tweets/day MySpace: 50million/month LinkedIn: 33 million members Stats up 10-15% 15% since 11/08

And the fourth Enabler RSS (Real Simple Syndication) Web feed formats to publish frequently updated work Ajax (Asynchronous Javascript and XML) Allow content on Web to update immediately Tags

16 And the fourth Enabler RSS (Real Simple Syndication) Web feed formats to publish frequently updated work Ajax (Asynchronous Javascript and XML) Allow content on Web to update immediately Tags Metadata keywords to bookmark data africa animals architecture art Tag Clouds nd barcelona beach berlin bird cago china christmas church c owers food football france frien Describes other data Used by search engines to bookmark OpenSocial (Google) Makes it easier for developers to build apps ue boston bw california camera nce day de dog england euro ny girl graffiti green

17 Analytics: aytcs Tools oosto help epyousott sort through the edata

18 Digital Dashboards: more data display and analysis tools

19 What Does this mean for You? The ability to participate in the 2.0 world at greatly reduced cost and infrastructure Supercomputing p power at your disposal Opportunities to use 000s of Apps for little $$ Powerful, inexpensive Analytical tools that anyone can use Take advantage of the power of Social Networking Virtually no external barriers to entry

20 A little bit about customer demographics Boomers: (23% of pop) Fastest growing segment of Social Media users GenX: (15%) NetGen: (27%) GenNext: 11- (14%)

22 Changes in Values also define 2.0 Freedom of Choice Freedom of Expression Love of Customization High premium on Openness and Transparency Integrate play and fun into work, social, and home life Desire/need for Collaboration and Community Desire to Innovate and Create Distrust of Traditional Marketing Sources

27 Do You Want to Friend a Detergent?

35 The Value Shift Effect As the NetGeneration grows in Influence, the trend will be toward networks, not hierarchies; toward open collaboration rather than command; toward consensus rather than arbitrary rule, and toward enablement rather than control. As students, children, and consumers they are pressuring schools, families, and markets to change. As knowledge workers, educators, government leaders, entrepreneurs, and customers, they will be an unstoppable force for transformation Don Tapscott, Grown Up Digital

36 Who Manages 2.0? A Team activity Key Roles Part-time time and/or full time members depending on organization size, stage of implementation, and level of commitment 4-6 Core Team members Social Computing Specialist/Manager Community Moderators Web Developer/Specialist/Administrator p

37 Personal Traits of an Effective 2.0 Team Member Networking skills and interest Communications skills Technical skills Self-motivated / high energy Well-organized

38 Sourcing 2.0 Specialists

42 2.0 Legal & Ethical Issues Most organizations take a liberal attitude toward legal oversight (i.e., minimal) Few cases involving 2.0 activities have reached litigation, but conservative organizations and legal counsel are fearful Likely that increased legal oversight will significantly slow progress and dampen enthusiasm for all involved. Legal remedies/precautions could represent significant cost increases

43 Several Legal Issues of Importance How to handle negative information Courts have upheld 1 st Amendment Rights of Users Recommendation: Avoid over-pursuit of negative users New Industry: Reputation Management How to treat data supplied by users/customers Be careful of distribution of customer s s names and data Practice having transparency regarding how data is used FTC prefers having customer/users opt-in instead of opt-out out e-discovery concerns Increased pressure regarding digital record-keeping and organization

47 2.0 Return on Investment

48 2.0 Return on Investment (4 categories) I. Social Media Activity Levels Number of page views Number of unique visitors % of poster vs. lurkers Rates of community growth II. Engagement and Media Loyalty Indicators Number/% of users who join your community Number/% of users who provide feedback Number/% of users who link you to their networks Number of repeat visits Visits and referrals vs. your competitors

49 ROI III. Cost Reduction Indicators Customer measurement, relations, communication Market research and product development I.T. costs Call Centers Traditional channel advertising IV. Revenue-Generating Indicators Value of members vs. non-members Subscription or ad revenue Customer retention of users vs. non-users Market share indicators Growth in direct sales over Web Value of customer/user recommendations (revenue+ and cost-)

52 ROI Advice: Relax! Understand that progress in Category I and II Indicators precedes Category III and IV Focus on Community building as an outcome Don t let category IV be the driving motive

53 Often, companies want to know what they will get for $xxx,000 of social media engagement. What s the ROI?!?!? And we play the game because we have to justify corporate expenditures in this era. But somewhere the soul of social media gets lost in these discussions. Geoff Livingston, LivingstonCommunications, LivingstonBuzz, 2008 Blogs aren t about selling things that s neither the purpose or promise of the medium. The value of social networks isn t measured in dollars. The value is in the knowledge you share, in the lessons you learn, and in the viewpoints you help to influence. Christopher Barger, IBM Blogger-In-Chief

54 2.0 Trends to watch in 2009 Growth in SaaS and Cloud (so many new Apps!) Mobile platforms will be focus of App attention (iphone, Blackberry) Increased levels of legal scrutiny Addition of more customization Apps Greater focus on vertical markets, niche group focus Increased use of Social News Aggregators (Buzz, Digg, Reddit)

10 Digital Resources. inbound sales results

10 Digital Resources. inbound sales results 10 Digital Resources Every Small Business Needs to Know About 10 Digital Resources Every Small Business Needs to Know About Business Owners Rejoice No one ever said that starting or managing a small or