Social Media Maturity Model

We have been working closely with PRTM (now a part of PwC) to analyze our experience in working with clients on Social Media implementations and combining them with the results of a survey we recently completed on global enterprise adoption of a wide array of social technologies. Attached is a presentation providing a quick overview of our results:

Social Media Maturity Model

View more presentations from Ted Shelton

All About Gemz Loyalty Program

One of the most exciting projects we have undertaken during my time as a consultant with Open-First was to work with Bryan Pearson, CEO of Loyalty One, on thinking through the future of loyalty programs. For 30 years Loyalty One has run a program in Canada called Air Miles Rewards. The question we began to wrestle with was whether the coalition model that Loyalty One had pioneered could be applied to local neighborhoods.

To try and answer this question we have launched the Gemz Loyalty Program. Focusing on locally owned businesses in neighborhood shopping districts, we have designed the program to be easy for shoppers and merchants to connect in a mutually beneficial relationship that encourages people to spend more money in their own local neighborhood.

Put simply -- every neighborhood wants main street to be successful. And yet, every day we find ourselves spending money online or at a chain store where we might get a slightly better price or more convenience, but we lose the benefits inherent in supporting local merchants. What are these benefits you ask? Civic Economics is one organization that has studied this question extensively and has conclusive evidence from multiple cities that shows the enormous economic impact that locally owned businesses have on local communities.

If our local merchants are more successful, we will have more vibrant cities, with higher sales tax revenues, leading to more city services and thus higher property values. The perceived savings of buying online or at a chain comes at a huge local cost.

Gemz aims to change all this by giving local neighborhoods a tangible benefit from shopping at local merchants on their own main street. By using the Gemz Application on a mobile phone (currently only Apple's iPhone) while shopping, customers of local stores can accumulate loyalty points (or Gemz) each time they shop at participating merchants. Think of it just like the airlines where every mile you fly earns points -- in a Gemz neighborhood every dollar you spend earns points. Shoppers save up for rewards, that are also offered in the local neighborhood.

For a merchant interested in offering the Gemz Loyalty Program, signing up is very easy. Any merchant can offer points to local shoppers through a printed coupon or from a mobile device.



Merchants can also elect to offer rewards to Gemz shoppers which can be in the form of free or discounted products or services. When local merchants accept Gemz from a customer though, they can redeem the points for cash -- making this a sale for the merchant even though it may be a free offer to the shopper.

In the months ahead we expect to launch dozens of neighborhoods but we have started in the Elmwood shopping district of Berkeley CA. Our second neighborhood is Menlo Park and we are expanding every few weeks. We know there is a lot for us to learn still about the loyalty business and how to help local merchants succeed, but what started out as a small experiment is now thriving and producing exciting results for everyone involved.

Zero Labor

Back in January I wrote of the difference between "silicon valley" and Detroit and compared two different visions of a resurgent US economy -- one in which we "get back" the manufacturing jobs we have lost and the other where we recognize that the real driver of 21st century economies is innovation. This morning I saw two articles from Seth Godin (care of my friend Brett Bullington via Facebook) that made me want to revisit this conversation.

In the first, The realization is Now Seth writes:

...we're realizing that the industrial revolution is fading. The 80 year long run that brought ever-increasing productivity (and along with it, well-paying jobs for an ever-expanding middle class) is ending.

In part 2 Seth talks about how The opportunity is here:

The exchange of information creates ever more value, while commodity products are ever cheaper. It takes fewer employees to generate more value, make more noise and impact more people.

This is of little consolation to someone hoping to have a good job using their muscles to create value. But we can understand what is happening to the industrial economy by examining what has happened in the agricultural economy over the past 100 years. In these graphs (from this site) the decline of employment in agriculture in the US can be seen in the context of the simultaneous increase in farm productivity:
At the same time that employment was plummeting, farm productivity was exploding, resulting in enormous growth in output from US farms.

The underlying transition was a technological one -- from the physical labor of man and beast to the technical "labor" of tractors and chemicals (fertilizers, insecticides, etc). And fortunately for the health of the human species these advances continue and are being replicated throughout the world -- without this productivity improvement we would not have the means to support our global population of 7 billion people.

The same productivity enhancements that have transformed agriculture have also, for the past 100 years, been transforming manufacturing. Machines are increasingly more sophisticated and are informed by computation, not just mechanization. While the trend in the last few decades of the 20th century was to move manufacturing to economies with low labor costs, the trend in the next few decades will be to eliminate labor altogether.

An example of the sophistication of computation applied to tasks traditionally requiring human labor can be seen in this IEEE Sprectrum video on warehouse automation:

Kiva's robotic warehouse pushes human labor to the edges, and isolates their contribution to just that portion which requires the most intellect -- visually confirming that the selected objects are correct and match the customer's order.

In this same way we will increasingly see manufacturing coming BACK to the US, but with ZERO LABOR as the core model for making things profitably. We have exhausted the "cheap labor force" model - mechanization, automation, computation, and robotics are the chain that progresses manufacturing productivity into the next few decades. And where does that leave human beings in the new economy? Back to Seth Godin:

Right before your eyes, a fundamentally different economy, with different players and different ways to add value is being built. What used to be an essential asset (for a person or for a company) is worth far less, while new attributes are both scarce and valuable.

What are these new attributes? "Art and novelty and innovation." Seth writes. That is going to require education, engaged thinkers, and a new set of disciplines (and structures) for our society. This is the world we need to be investing in and the US can be a leader once again if we seize the opportunity provided to us by the computation economy.

Silicon Valley Vs. Detroit

There are two very different ideas in the USA about where value is created in our economy. I frequently hear what I will call the "Detroit" perspective that we need manufacturing jobs in the US because, gosh darn it, everything is being "made" in China (or some other country). When Barack Obama was running for his current job I attended a fundraising dinner (in Silicon Valley) for him and he defended Detroit, the auto industry, and all of the jobs there when a question came up about his commitment to the environment (and anticipated policies toward electric cars). So it was nice late last year to hear Barack Obama say that "Steve Jobs is living the American Dream."

Which is somewhat short of understanding that the driving factor for the US economy (and job creation, Mr. President) is NOT manufacturing jobs, but instead is intellectual property.

First lets take manufacturing. Atoms. What differentiated value is there in the labor component of manufacturing?

Virtually nothing.

Therefore labor will first move to the lowest cost provider and second be eliminated (eventually altogether).

What you say? Eliminated?

Yes - the history of the industrial revolution (and the agricultural revolution) has been to replace the need for human beings by automating and mechanizing production. Produce more with fewer hours of human labor. Eventually robotics will eliminate 100% of human labor and routine and repetitive tasks will be done by machines so much more cheaply than humans can perform them that our children's children will wonder what we were thinking when we talked about manufacturing jobs (just as our generation has no idea what people on farms do anymore).



Furthermore, and now let us switch to intellectual property (bits), the majority of the value in the goods we consume in the developed world comes from the BITS and not the ATOMS. We pay a lot to Apple for the DESIGN of the iPhone, not for the physical atoms used to construct the phone. We pay more for blueberries prepared in a smoothie than in a bag from the freezer aisle. We pay to see Sandra Bullock win an oscar for her performance in Blind Side and not for some physical medium delivering the movie.

We need to understand how to build an economy that does a better job of promoting the creation of (and appropriate protection for) intellectual property. This is the 21st century imperative -- not manufacturing jobs. We need more products DESIGNED in the United States -- wherever they may be manufactured.

If you really want more things MADE in the US (as opposed to designed here) then one of the things we should be designing (and investing in as a country) is the fully automated manufacturing technology that brings production back to local markets - with zero labor.

But Detroit is not going to lift our economy to the next level. Silicon Valley will.

Silicon Valley comes to the UK (SVc2UK)

Folks following me on twitter (@tshelton) know that for the past week I have been sporadically commenting on #svc2uk or sometimes #svc2c (Silicon Valley comes to Cambridge). Last week was my third time joining this trip, organized again by the fabulous Sherry Coutu (@scoutu) and Reid Hoffman (@quixotic). 4 days and series of events that puts us in touch with 2200 people in London and Cambridge from government to industry to education... it is truly an amazing experience. As Teamly founder and CEO Scott Allison (@scott_allison) tweeted:

What makes #svc2c special: the accessibility and willingness to help of the experts. Quite unlike other conferences!

I think that is a key to what makes this event so special for both the folks from Silicon Valley and the UK attendees. When you look at the amazing group of people that came over (speakers list) you can understand something about how special this event is -- sitting at a table with the head of engineering for Facebook, the head of engineering for LinkedIn, senior folks from Google, the executive director of Mozilla, CEO of creative commons... and the list goes on.

A few things I learned about my follow SVc2UK attendees:

August Capital venture capitalist David Hornik (@davidhornik) has a degree in criminology from Cambridge University (and is happy he has never had to use it as an investor!)

Nancy Lublin's (@nancylublin) organization dosomething.org has motivated over 1 million kids to become active toward some social good this year.

Creative Commons CEO, investor, and all around amazing guy Joi Ito (@joi) went to the University of Chicago during the exact years I was there (he was in the physics department and I was over in philosophy...) and also didn't graduate! I told him about how I successfully completed my degree 25 years late (class of 2009, yeah!) and he is now going to try as well...

Google's Megan Smith told us that Google is spending $140 million this year alone on socially relevant activities through their non-profit arm google.org

Other funny moments and quotes:

Megan Smith at NESTA's "Big Data" discussion "Get your data online and don't get caught in the PDF ghetto!"

UK Minister Willetts supporting more open immigration policy: "More than half of new tech from Silicon Valley were built by people not born in US"

Reid Hoffman: "Trust relationships between people are key to how business is done"

Also Reid: "'A startup is like throwing yourself off a cliff & build a plane on the way down"

And one last one from Reid: "Work fast to solve the hardest problem first. Because if you can't solve it, you need to pivot"



Other great links:

Mozilla Exec Director (and now Greylock VC John Lilly's Talk at the House of Commons

Mark Littlewood of BLN blogged the panel about what the world will look like "If my company is massively successful..."

NESTA put up videos of a bunch of the speakers...

The Telegraph's Milo Yiannopoulis (@nero) "Cambridge starts taking the internet seriously"

Looking forward to next year!!

Five Modalities Model of Community Development

When considering community development as a part of marketing activities, corporations often forget the most basic requirements of inter-dependency and value creation. In 1986, researchers McMillan and Chavis wrote about defining a sense of community that it must have the following elements:

1) membership, 2) influence, 3) integration and fulfillment of needs, and 4) shared emotional connection.

Too often companies simply believe that a "community" is a cluster of people who expressed interest in their products or services, and that this can constitute a sufficient connection to continue to communicate AT these people.

Instead, companies must consider how they can bring value to the people of a community, not just expect value from those people. We have identified five core ways that companies can bring value to people and can develop this sense of membership, influence, integration, and sharing that is crucial in community formation. The first two, the easiest and most common, only allow a company to earn attention, even when they are accomplished in a context of "co-creation." But the other three modalities are much more powerful and can form the basis of a long-lasting relationship for a company with its customers and prospects.

These five approaches can be used both when a company elects to create its own community and when it engages with existing communities. While we have developed the use of these approaches in online environments, they are as valuable to consider when engaging in the physical world.



ATTENTION
There are two modalities useful in earning the attention of an audience, we call them "entertain" and "inform" although often (as with all five) they can be used in concert. The better the content, the more valuable it will be to an audience member, and the more likely it will be to result in some sort of response -- whether it is through sharing (passing the company's message to one's social graph) or through co-creation. A "better" content will be one that is in itself more entertaining or more informative, but also one that is more tuned to the needs of the people consuming the content as opposed to the desires of the company to achieve some transaction.

• INFORM -- In its most basic sense, informing communications are ones that help educate people about something whether it be a product, service, or the problem that such product or service addresses. For example, a company that sells do-it-yourself home repair supplies might simply advertise the low price of lumber available at their store. While this would be a form of "information" it is of transitive value and only relevant to those immediately in need of the particular goods on sale. Instead such a company could construct a website answering questions about how best to do various repair or construction projects. How, for example, to use that lumber to build a treehouse.

• ENTERTAIN -- Getting people to laugh has been a mainstay of advertising since virtually the first commercial messages were distributed. Whether as humor, spectacle, or narrative the notion that an advertising message can be coupled with some kind of entertaining content is well worn and works in the social space as readily as in other mediums. Finding those opportunities to create an entertaining envelope for your ad message which is also adopted by a community is somewhat more difficult than the onanistic pleasure we get from a good commercial on primetime TV. But a number of simple mechanisms are evolving.

ENGAGEMENT

But far more interesting than merely using this new social "channel" to recapitulate the attention models of old marketing, social technologies provide the opportunity to shift the model -- from one in which you as the marketer are seeking an audience, to one in which interested parties find you. This reversal is truly the core of understanding the current marketing revolution and why the old mechanisms will continue to decline in effectiveness while a new science of market engagement is needed.

The new engagement modalities provide a circumstance for a relationship to develop between a company and its customers (or prospects). Broadly speaking there are three possibilities:

• SUPPORT -- Facilitating the customer's experience of a product or service, typically by hosting an open collaborative space for customers to interact with each other. This can be moderated, mediated, or merely contributed to by the company with the objective in any such participation being to enhance the quality and credibility of the discussions. So for example, providing more accurate information is good, deleting an accurate (though negative) comments is bad...

• CONNECT -- Helping members of your market connect with one another hopefully toward some purpose that is related to the company's product or service. This can be as simple as hosting content and community on related topics or as sophisticated as providing a matching system that allows participants to identify themselves to others with compatible interests or objectives.

• COLLABORATE -- Truly the most powerful of the engagement modalities, when you can collaborate with your market, or at least help them to collaborate with one another, you provide the greatest (and most lasting value). As with any of these approaches, it is more powerful when directly related to the company's products or services, but this is also a place where "corporate social responsibility" elements often can appear.

These five approaches to building community should be used in combination, and the "devil is in the details" in getting the right strategy and execution. But this brief outline is at least a useful filter to apply to your organization's social activities and a useful starting point to ask questions about whether your current strategy is right or whether it is time for some new thinking. If the latter, let us know as we'd love to help -- Open-First.

The More You Give The More You Get

Last week I had an opportunity to present one of our client projects at the Social Fresh conference in Charlotte, N.C. (Slides below). One particular item that came out of this project (slide 17 if you want to jump ahead) is worth exploring in more detail because I think that it illustrates a general principle of networked systems, what I'll call "The More You Give The More You Get."

For this project we needed to contact a large number of food bloggers and explain this crazy idea we had to publish a cookbook filled with appetizers, entrees, deserts, and snacks that use "brain healthy" foods. The result by the way is beautiful, the ThinkFood Cookbook. In the course of talking to hundreds of food bloggers we contacted some who had an enormous number of regular readers all the way to bloggers who had virtually no readers but we liked their style and recipes.

In communicating with all of these different bloggers we started to see this fascinating corollary which ran contrary to our expectations. We had thought that the bigger the blogger (in terms of readers) the less likely they would be to want to participate in our project. Whereas we thought that small bloggers would jump at the chance to participate in a high profile project which might bring them new readers.

The opposite was true.

The larger the readership, the more likely the response was positive! And even when the answer wasn't a "YES" the response was always positive and supportive. By contrast the most vitriolic "NO" emails that we got were from bloggers with the smallest readerships. Like this one (no need to give the person's name)

"You want us to provide you with free content in exchange for exposure? Do *you* work for free? No thanks."

Well yes, unnamed blogger, I do often work for "free" if by "free" you mean without compensation in the form of sovereign currency immediately exchanged for my labor. But I also recognize that when I work for "free" that the exposure IS a form of compensation. And that through the exposure I am likely to trigger a variety of network effects that will pay dividends in the future.

And so I put this question to you to research -- is it the lack of relative success in blogging that makes these people who don't want to give so unfriendly? Or is it their unwillingness to give (and unfriendliness) that makes them unsuccessful?

My guess is that there is a connection between being willing to freely give in a networked economy, and the success one achieves through that network -- that the more you give, the more you get.

Here are my slides:

Community Engagement Fundamentals

View more presentations from Ted Shelton.