Charlene Li is an Analyst at Forrester Research and co-author of the new book, Groundswell: Winning in a World Transformed by Social Technologies, which she wrote with Josh Bernoff. Charlene is one of the leading voices in the area of Social Computing and Web 2.0.

I briefly caught up with Charlene Li after hearing her speak at Forrester Research’s Marketing Forum 2008 in Los Angeles.

In this podcast, Charlene talks about getting the book written, and her and Josh’s goals of helping marketers understand the wild world of social media and engage with consumers in the groundswell.

Charlene also describes how marketing is evolving from highly controlled one-way messaging to a much less controlled process of creating relationships with consumers. In particular, she outlines how one of the best-known and most successful consumer tech brands, Apple, breaks the rules for engaging the groundswell, and the risks that other brands face if they follow Apple’s lead.

 

 Digital Podcast 48 [7:12m]: Play Now | Play in Popup | Download

[tags]Forrester 2008 Marketing Forum, Forrester Research, Charlene Li, Groundswell, Apple[/tags]

Andrew and Alex joined Forrester for its 2008 Marketing Forum, which focused on the challenge of customer engagement in a digital media world.  This second series of articles focuses on case studies of companies using interactive applications as the hook for building communities of superfans.

Creating Brand Advocates at Nike’s Jordan Brand
Emmanuel Brown, Director of Digital and Content, Nike’s Jordan Brand

Nike’s Jordan Brand has developed a couple of immersive experiences for highly engaged fans.  The experiences start with deep insight into these “superfan” needs, and build intense community engagement for these hardcore fans, but are small scale communities relative to the scope of the Jordan Brand.  Which raises the question, are these high ROI applications for engaging and activating superfans, or are they so focused on the hard core that they are failing to engage the brand’s mass market?  Read on and share your opinion…

Emmanuel began by sharing background on Nike, whose headquarters in Beaverton, Oregon is like a Disneyland for adults, and its Jordan Brand division, where Michael Jordan (MJ) still deeply interacts with the brand, the same way that he was engaged with the game of basketball.

Mentally, or digitally, cut to a stirring, inspiring Michael Jordan video (videos can be found at Nike’s site for the Jordan Brand, Jumpman23).

The Jordan Brand.  Nike approached Michael Jordan in 1984 to have a signature shoe built around him, a completely novel concept at the time.  In 1996, the Jordan Brand was born as a division within Nike.  The brand has 110 people versus the Tiger Woods Brand’s 400 people, and both brands support the same amount of revenue.  Nine out of ten people own (or have owned) Air Jordans, and the Jordan Brand is the second in the market behind Nike itself.

The Jordan Brand’s primary consumer is the core urban male 15-20 year old, highly competitive, a leader of the team.  These guys often know what the brand is doing before the news is made public.  The secondary consumer is 12-24 year old males and females, urban and suburban, not necessarily competitive.  Their consumers’ mind space includes social media, television, and the video game space.  The Jordan Brand does a lot of marketing through video games – with them, kids can see the entire line-up.  Most kids know what products they want before they get to the store.

The engagement philosophy for the brand is (1) to engage with consumers where and when they want (online!); (2) product and service together are critical to delivering a greater experience and engagement; and finally (3) the consumer decides.

The Jordan Breakfast Club.  A key platform for engagement is the Jordan Breakfast Club.  The challenge was to establish an authentic position for Jordan in the training marketplace.  Every morning, MJ and his teammates used to wake up and complete a workout regiment before he got to eat his four course breakfast.  So the Jordan Brand went after an unmet need of the target customer around training – everyone says that training is important, but no one tells kids how to train.  The Breakfast Club includes a simple peer-based assessment and a custom designed workout program that can be printed out or downloaded onto an iPod as videos for a huge number of possible workouts.  The Jordan Breakfast Club has 20,000 plus engaged users, and tens of thousands additional views on YouTube.  The Club also did a 10-city summer tour to reach thousands more at day long training camps.  The program won a 2007 Forrester Groundswell Award.

The Jordan Flight Club.  After building the Breakfast Club, the brand started getting more information about its consumers, and next started the Flight Club.  The Jordan brand has a huge “sneaker-head” following, and the Flight Club is about limited edition, one-at-a-time, high demand products for fiercely loyal customers who are willing to pay a very high price and avoid the disappointment of trying to get limited products through retail.  The brand got a lot of feedback from consumers in designing how the Breakfast Club would work.  Members of jumpman23.com got membership offers and the opportunity to invite two more friends – in others words, an “insider” offer for loyal customers only.  Demand went through the roof, with people selling their free invitations on eBay, and over 40,000 members joining in the first 45 days.

Emmanuel’s summary:  (1) create relevant experiences beyond the product, (2) service complementary needs of the consumer, (3) empower engaged consumers to be brand advocates, and (3) create and own communities where they are relevant and authentic.  The Jordan Brand’s next big challenge is to take these opportunities in the digital space and migrate them to the physical space, like the Jordan Breakfast Club tour.

Q&A Discussion

How do you share learning from the Jordan Brand throughout Nike?  We do case studies.  Things may work differently for us versus golf, and we use best practices.

The 15-20 year old market is refreshed every 5 years, so how do you target for the future, and specifically do you market to even younger (under 15) generations?  We try to communicate in a simplified format, keep MJ’s story relevant, and make great products.  We don’t market to the younger kids, but do try to emphasize success through working hard.

What do you mean that you’ve learned the hard way about ignoring customers?  We created a website where consumers could buy one-off products, and only created 6,000 units of a product that 1.6 million consumers tried to buy, crashing the site and generating hate mail.  We use sales data and forecasting to ensure that problem is not repeated going forward.  We’d rather overstock and deal with excess inventory than to have too little product and anger consumers.

For limited editions, doesn’t it help the brand to sell out so fast?  You have to appreciate the global effect of our brand.  Kids in Australia were getting their hands on US-only products; we responded to make the products available there.   We’re pushing to think more globally and satisfy demand, offering limited products in all parts of the world.

The Breakfast Club concept sounds great, but how are you measuring the true impact?  We’re not measuring the financials, but we do track the ongoing activities of the kids who sign up.  One of the Pro teams we visited adopted the philosophy as their primary means of training!

Andrew and Alex joined Forrester Research for its 2008 Marketing Forum. This article is the second in our series from the forum focused on customer engagement in a digital media world.

Realizing Your Return on Empathy (ROE)

Steve Kerho, VP Analytics, Organic
Mark Kingdon, CEO, Organic
Creating effective online (and offline) marketing solutions starts with a deep, emotional understanding of your customer segments and their needs – in other words, “empathy” for your customer “personas”. This empathy serves as a critical guide in designing online and other touchpoints, and the personas also support breaking down how you measure and respond to online performance.

Mark led off the sessions with the observation that as marketers, we have a lot of data about customers, but we need to get beyond the data to “touch” our customers.

He then solicited audience feedback on the importance of understanding customers in marketing through a uniquely engaging technique. When we sat down in the conference room, a pad and a branded pen were keeping each of our seats warm. The pens were laser pointers, and Mark gave us a brief tutorial on turning them on and aiming them without blinding our neighbors.

Mark walked us through a series of slides filled with questions and multiple choice “answer” targets; the volume of laser points bouncing around each target quickly illuminated audience response. The survey responses told us that collectively, we thought it important to find an edge in our marketing and to develop and understand customer personas to refine marketing approaches, but that we had a way to go in implementing these techniques.

Organic believes that getting to personas is so fundamental to their work that each year they send staff down to Vegas for “persona work”. The group breaks down into seven teams that are each assigned one of seven sins. Each team is tasked with observing people indulging in their target sin, and then developing a campaign for that persona. The exercise is all about getting to empathy, getting everyone on the same song sheet around what’s driving the consumer, their behavior and their needs.

Organic sees four steps in order to take advantage of empathy:

(1) Know your consumers well enough to develop detailed personas,
(2) Design web experiences around those personas,
(3) Tailor all media and touchpoints to these personas, and
(4) Know and optimize against “Return on Empathy”.

To get to step 4, marketing needs to secure management commitment to overcoming the challenges of siloed organizations, to develop a process for optimizing efforts, and to connect campaign objectives to metrics.

Why go through all this effort? Because empathy pays off, as Steve demonstrated with three case studies:

Jeep Patriot. The business objectives were to create familiarity and purchase intent for this all new vehicle in a crowded segment, targeting younger, internet saavy buyers. The solution was a very interactive online experience, where they shot 40 or so minute-long video segments for about the cost of a traditional 30 second spot. These segments comprise an interactive film, which viewers could enter and then steer their experience and outcome. Consumers were introduced to the story starting with a TV broadcast spot, then rich online ads, targeted emails, and theatrical trailers. In total their was about an hour of content, and the vehicle and its features appear in every scene. Their campaign had great results – Jeep more than doubled its target for unique visitors, with 80% of them new to the Jeep brand, enjoying an average viewing time of 5 minutes with 40% of visitors staying for over 10 minutes.

Bank of America’s No Fee Mortgage Plus product. The business objectives were to create familiarity, awareness and sell-through. They identified one persona familiar with the mortgage process, and another unfamiliar with it, and customized the site experience accordingly after three very simple multiple choice pre-qualifying questions.

Coach. The business objective was to increase the sales of bags online. The empathy process highlighted a key “persona” issue around women’s discomfort buying bags unless they are sure that they fit. The solution was to create an online bag “sizer” that drove a substantial increase in sales and reduction in returns.

After the case studies, Steve walked us through an example of metrics supporting “ROE” on site design. The example showed how the measures were built up, and demonstrated the differential impact on return against identified personas versus non-personas.

The session was running late so there wasn’t much time to discuss the ROI calculations, below.  Deeper reflection reveals a number of interesting questions, for example, why calculate ROI based on revenue rather than contribution margin, why only amortize the redesign over one quarter, and whether the redesign impacted other drivers of value such as new customer acquisition and retention rates.  You might choose a different set of assumptions for your business, but in any case, the persona-level analysis of differential site performance provides an important basis for objectively evaluating ROI.

The bottom line: executed well, empathy pays.

Q&A Discussion

You mentioned that the Jeep example exceeded traffic goals, but how does one go about establishing those goals? You end up in the forecasting business, and need to use historical performance offline and online as the baseline that you are trying to meet or exceed, for example CPM through traditional media (even though may be lower engagement, more eyeballs) You can also look at search traffic and value as another baseline for the value of the consumers you bring in.

How difficult is it to sell-in the work of building personas to clients? Actually, doing so in increasingly easy, and we have had some clients asking only for personas, not the follow-on work.

What is the role of customers in participating in site design? Customers are an increasingly important part of the process. In fact, we are working with a client now to involve customers in their core product development process.

How are you developing personas beyond traditional observations? We have deliberately selected low-tech workshops versus high tech means to develop personas, which surprises many because so much of what we do is high tech. That approach may evolve over time.

Does all this work to actually increase sales? Our clients have realized a high correlation between engagement, purchase intent, and buying behavior.

Digital Podcast joined Forrester for its 2008 Marketing Forum, which focused heavily on the challenge of customer engagement in a digital media world. We’ll be writing about the conference over the next two weeks. Our first series of articles, like the conference, is focused on the topic of engagement. This article covers the first two presentations of the conference.

Setting the Stage
Harley Manning, Vice President, Research Director, Forrester

Harley introduces the conference’s theme by emphasizing that the imperative for marketing success going forward is customer engagement, and previews three case studies on the subject.

Traditional channels are shrinking – the 30 second spot is declining in reach and importance – yet the new channels, like YouTube, hold risk for marketers. The challenge and opportunity is to engage with customers and in return they’ll engage with your brand.

Harley shared three quick case studies of engagement:

Jordan’s Furniture: Is it a furniture store or an amusement park? Complete with a trapeze school, water display, café, IMAX theatre, and the backing of Berkshire Hathaway, Jordan’s engaged customers stroll past “finished room” furniture displays to get to lots of the good stuff. Along the way, they seem to buy a lot of furniture

Nike Running website: Articles, splashy photos, and aspirational content motivated Harley to drop a wad of cash on Nike’s best running shoes, begin running again after a lengthy hiatus, and then drop more cash on Nike apparel. Is Harley buying shoes or buying into a lifestyle?

LeapFrog: Toys that engage Harley’s son’s brain while he’s too busy having fun to notice that he is learning too. No wonder these toys sell like hotcakes.

Engagement: A New Approach To Understanding Your Customers
Brian Haven, Senior Analyst, Forrester

Two brands, two superfans, two very different reactions – one shove, and one embrace. If you want your fans to keep loving your brand, try hugging them back!

The Ikea Superfan

Brian starts by sharing a story of true engagement, and how gazing into the eyes of superfan love be hard for some corporations. Jen is an Ikea superfan from Ohio, and she singlehandedly started a movement to bring Ikea to her corner of Ohio. She started a website, scouted retail locations, and worked tirelessly to drum up support for Ikea to move in. How did Ikea management react? They warned her to stop using their trademark, were concerned when her Google rank approached that of the brand, and after actually building a store in her neck of the woods, Ikea didn’t even respond to her job application. While Ikea is a great brand that does many things right, they could have handled this superfan in a more enlightened manner.

What can we learn from Jen’s story? The traditional marketing funnel and message control is a thing of the past. Consumers can now chase down a spaghetti maze of paths to your brand, and marketers risk drowning in a sea of metrics – too often we don’t know which matter, what to do with them, and even if we did, how to track them technologically and across channels.

Even overcoming all these hurdles, the next challenge is how to make “engagement” actionable. What does engagement mean?

In simple terms, engagement is a person’s participation with a brand, regardless of channel, where they call the shots. Brian defines engagement as the 4 I’s, the level of Involvement, Interaction, Intimacy and Influence that a person has with a brand over time:

• Involvement: A person’s presence at brand touchpoints
• Interactions: A person’s actions while at the touchpoints
• Intimacy: A person’s affection for a brand
• Influence: A person’s advocacy for a brand

The Alli Superfan

Brian shares a contrasting example – Laura, who tries out GlaxoSmithKline’s “alli” weight loss system and community website. The system and site effectively engage Laura:

• Involvement through community tracking, forum tracking, registration data
• Interaction through product purchases, diet diaries, fridge photos, food journals
• Intimacy through product feedback, online ad opinions and shopping experience
• Influence through tools for advocacy.

As Laura worked with the system and the website (and lost a lot of weight!), GlaxoSmithKline decided to feature Laura, one of their most engaged customers, on the web site. This highly engaging system realized a very successful launch – in just the first six weeks, 1 million people tried product, and they rang up $155 million in sales on a $150 million ad budget.

Brian then discussed some of the steps for defining and measuring engagement (understand existing and outside data and metrics) and encouraging engagement (provide content, facilitate conversations, give customers a reason for sharing information). Engagement involves a fundamentally different relationship with customers.

And he reminded marketers to engage, embrace, and encourage the Jen’s of the world.

Q & A Discussion with Brian

How to address the fact that companies have many different departments involved in “engagement” and many different metrics are used? The marketing team needs to take lead with other parts of the company to share the vision of engagement, provide value to those groups, and bring the company together on goals and associated metrics.

How to identify and scale Superfans like Jen? Online is a great place to start. There are brand monitoring services, even Google search can be used to find the bloggers. To scale this group, first nail the customer insight, who the customers are, what they care about. Then the best way to attract, encourage and track them will depend on the answer to those questions.

How can companies engage around intangible, infrequent purchases such as insurance or other financial services? The purchase may be infrequent, but there is ongoing usage data that you can track and monitor. These customers may not be engaged Superfans like Jen, but the same principles apply.

How should Ikea have treated Jen? Not to pick on Ikea, but Jen wasn’t doing anything bad, everything she communicated about Ikea was positive. Ikea should have leaked her information about the store in advance, given her access to better technology to support the blog, talked about her on their own website. Reach out, embrace, and help your superfans! Very simple things would have meant the world to Jen, and would encourage others like her.

Are there examples where pursuing engagement has backfired? There is nothing negative about understanding who your customers are and what they care about. Overall there are negative things that can happen, but remember we’re in a different world now, and we don’t have the same control. We have to stop being scared of our customers.

What do you do about people who are negatively engaged with the brand? We call this disengagement, and it will happen whether you like it or not. The question is do you want it to happen where you can see and influence it, or spread out beyond your reach. Ultimately, brands need to pay attention to the reasons for disengagement and make their products better!