The current era of the consumer social web requires a different model of market development according to Geoffrey Moore, storied Silicon Valley business advisor and author of Crossing the Chasm, the iconic book on high tech market development. The notion that you have to go across the chasm doesn't register for B2C social marketing, he says, and what you have to do is generate a tornado...and fast.
Moore spoke to a packed auditorium at EMC on August 2 in an event sponsored by the local Business Marketing Association (BMA) chapter.
Instead of the chasm for B2B, the apt model for B2C is of four gears, that when synchronized and moving at optimum speed generate a tornado of market success.
These gears are 1) acquisition (traffic, hits, eyeballs), 2) engagement (likes, time on site, plays in a game), 3) monetization (advertising model, retail model), and 4) enlistment (referrals, contributions, sharing).
The gears, however, also have a pairing relationship that's important, performance and power - with acquisition (how many, how fast) and monetization (how much, profitability) joined as the performance pair.
The power pair of gears are engagement (how often, how wide) and enlistment (your influencers and adopters are here). The power resides in the connection, commitment and goodwill of your constituency or community. Moore cautioned any time you extract performance out of your community, you are extracting goodwill. It's a careful balance -- while performance does drive revenue and growth, driving only the performance gear can liquidate good will (and this can happen very quickly on the web). Moore noted that this is what happened to Myspace and what troubles Groupon right now. And while engagement fosters the good will that can drive monetization, focusing only on engagement and enlistment can defer performance.
A less than optimum moving gear will affect the overall performance - and Moore looked at four examples of companies with the laggard gear issue - Facebook, he said, is quite challenged with effective mobile (monetizaton gear), Yahoo, arguably the largest media property (700m), is suffering from negative churn (RIM and Nokia in this category as well), and so their enlistment gear needs tuning. LinkedIn is spending time sprucing up the social interactivity aspects to their offer to activate more engagement, and finally, Moore mentioned Kiva with challenges to entreprenueur and donor acquisition in Africa.
Moore's recipe - Identify the slowest gear, focus everyone on speeding it up, while maintaining attention on the three other gears. Repeat every quarter.
There's lots tools to use to shift the gears into higher motion -- and Moore reviewed his own lists and invited thoughts from the audience. Here's a sampling:
- Acquisition - Advertising, coupons, direct (e)mail, tweeting, bloggings, SEM/SEO, compensated referrals, OEM embedding
- Engagement -Great content, rich media with fast response time, fast-cycle-time to support issues, mobile device access, community forums and reviews
- Monetization-Fee for service or product, distributor, subscription, demand aggregators, fee for referral, open source curation, freemium
- Enlistment-Reviewing, rating, alpha/beta release access, community moderating, special invites, retweets, blog spots, reputation ranking
The future of B2C marketing, according to Moore, is on the power gears of engagement and enlistment - most of marketing time will be spent there. It will be important to get smarter about engagement that works at scale without lots of human intervention.
In the closing Q&A, the conversation ranged from thoughts on creating monetization gears for education (bake sales on the web won't work), the importance of authenticity at scale (think of the inherent authenticity of founder led companies or efforts like Apple, Facebook, Oracle and Wikipedia), the iconic innovation values of HP or Yahoo, and the imperative of user experience (Moore pointed out that user experience focus drove the iPod to change the music industry, the iPhone the telco/mobile industry and iPad now driving shifts in the IT and publishing industries).
Thanks to Niti Agrawal who chaired the session and the BMA for bringing this Geoffrey Moore forum together.