28 September 2012

The social media formula for a successful investment management business


In my first blog for Visible Banking, freshly back from a productive week and a successful event in Australia- I share with investment management firms my formula for achieving success in social media.  Click here

21 September 2012

My 3 tips for successful innovation


There are lots of blogs, articles, academic papers, seminars and conventions dedicated to explaining how enterprises should innovate. 

There are even experts, consultancy firms and people like me that have innovation in their job specification.

In fact, a whole industry has been built on the topic. Yet still it eludes most managers and their firms. So just to add to the noise, here are my top three, yes, just three tips on how to innovate in your department.

Innovate when everyone is at his or her cleverest.

We all know, without any shadow of a doubt that ‘we are all clever after the fact.’ So can there possible be any better time to innovate. When something isn’t working or has gone wrong, put your thinking caps on. I know this may sound obvious, but there is a subtle difference in thinking innovatively in this situation and just working out what the heck are we going to do to sort this mess out:

The milk has been spilt, so there is no point crying about it and it can’t get any worse. So let’s get creative, let’s ask whether we should be using milk in the first place.

Ask the people that know best what we should do.

I recently found an amazing piece of insight about a product my firm supplies through analysing unstructured social media data. I validated what I found with the last two years complaints records and found a correlation to inform a business case to change the product feature that caused all of the negative sentiment. Proud of myself I was telling a couple of colleagues in the contact centre about it, and instead of telling me how clever I was, they said ‘oh yeah, we knew that.’

We spend lots of management time and resources trying to figure out how what our customers are thinking, when those people that interact with them every day know. They understand how they feel about us and what their perceptions of us are – but do we ever ask them? Do we spend as much time asking our front line colleagues what they think our customers would think is pretty amazing instead of trying to figure out 40,000 feet from the front line?

It doesn’t matter how many ideas you have.

Successful innovation is not in having the ideas, the insight or data to support the ideas, the business case or the ROI models – it’s in the delivery.

Give the innovation task to the people that deliver. The best innovations in the world are the ones that get delivered; the ones that weren’t delivered are probably all OTE, overtaken by events.

They don’t have to be huge innovations; incremental change is the way of things. It works for Apple and Dell, 3M and GE, some of the greatest innovators in the world. Great leaps like landing a man on the moon relied on hundreds of small incremental innovations, like a pen that works in space (a pencil of you’re a Russian astronaut).

So innovation is simple:
Do it when it’s all gone tits up, ask the people closest to the most important people in the business, customers, and ask someone you know can deliver to do it.

16 September 2012

Making investment decisions from Twitter insight – Part Two

The next study in my review builds on using social media data to inform investment decisions. It is based on the assumption that sentiment towards certain brands and goods affect a firm’s earnings and therefore inform investment decisions.

A Dynamic Model of the Effect of Online Communications on Firm Sales. (Garrett Sonnier, Leigh McAlister and Oliver Rutz)

The McAlister Study found a strong connection between online chatter and a firm’s daily sales. Making social media chatter a valuable resource for investors open to making investment decisions using customer insight to make money in the stock market.

Now as a marketing practitioner, this paper really resonates with me.

Firstly, it speaks right to the principles for Value Based Marketing that the late Peter Doyle set out in his book of the same title. The book incidentally that motivated me to want to study an MBA.

The governing objective of management in all of today's leading companies is to maximise long-term returns to shareholders. Value Based Marketing defines marketing's role as contributing to the task of shareholder value creation.

Secondly, it quantifies what marketing professionals have always known, word of mouth is powerful.

If customers are saying good things about your brand to their network (friends, family, colleagues etc), more people will buy that brand’s products. If customers dislike your price, product, promotion, people, processes or place of business, they will not only not buy from you, but tell everyone too.

Thirdly, it puts customer experience of a brand at the top of the leadership team’s agenda.

McAllister et al found that there is a significant effect of positive, negative, and neutral online communications on daily sales performance. They make the case for executives to listen to customer insight and to act on it. However, one caveat on this final point, from my own experience - combine social media insight with all the other data you have collected into a single view of those topics.

Conclusions
Listening to what is being said in social media and twitter in particular is still a relatively new development. What we are finding out about an organisation’s performance from it is not.

The single biggest take away for the C-Suite is – there is no longer anywhere to hide. Your customers and stakeholders have a collective voice and they are learning how to use it.

Your investors will recognise poor customer experience in your share price.

Click here for supporting slide deck



13 September 2012

Making investment decisions based on insight from Twitter

Predicting individual shares and stock market movements is one of the oldest professions and there are people far better qualified than me to assess the validity of the models used. Automating this process is also not new.

Tech-savvy traders have been sourcing data from reports, press releases and corporate Web sites for years. Genuine advocates of automated predictive models use powerful computers to speed-read content and then letting the machines decide what it all means for the markets.

However, using Twitter is still a relatively new phenomena. In this and my next blog, I will explore how two studies I have come across can inform our thinking on social media and share price.

Twitter mood predicts the stock market. (Johan Bollen, Huina Mao, Xiao-Jun Zeng)

The Bollen et al study results indicated that the accuracy of DJIA predictions from Twitter can be significantly improved by the inclusion of specific public mood dimensions. They claimed an accuracy of 87.6% in predicting the daily up and down changes in the closing values of the DJIA and a reduction of the Mean Average Percentage Error by more than 6%.


The study investigated whether measurements of collective mood states derived from large-scale Twitter feeds are correlated to the value of the Dow Jones Industrial Average (DJIA) over time.  They analysed text content of daily Twitter feeds with tracking tools that measure positive vs. negative mood and mood in terms of 6 dimensions (Calm, Alert, Sure, Vital, Kind, and Happy).

Now I’m not convinced by this study.

It seems to me, if the mood is being reflected in the Twittersphere, everyone probably already knows how it will move markets, so there isn’t a whole lot of competitive advantage. Unless of course, it’s insider information, in which case and putting aside the regulatory and moral minefield that comes with this hypotheses; Investors would need a high risk tolerance to act on it without verification and the opportunity cost of seeking verification would render the Twitter news obsolete.

If that isn’t enough to be wary of, as a researcher posted on Quora “There's also a paradox: once there are enough tweets about the inside information it's no longer really inside information. Twitter is probably best used for assessing the herd mentality. One strategy might be to look at all the dumb stuff people are saying and then bet the opposite.”

In my next blog, I will look at the sales effect of the volume of positive, negative, and neutral online communications captured by social media monitoring technology and classified by automated sentiment analysis.

10 September 2012

Social business, not social media

A conversation that seems to repeat itself with my colleagues from our industry is: How many corporate twitter feeds or Facebook pages are the right number? It suggests a certain amount of indecision that it keeps boomeranging, which is never a good thing


More importantly that it comes up at all. The principle of marketing engagement, and indeed social is quite simple. It’s niche. Social is all about communities that share an interest, no matter how fleeting, coming together to discuss it. Successful marketing is based on focusing propositions to as specific customer group as possible. So the principle is simple, you need as many channels/feeds as there are identifiable, substantial and genuine interest groups.

The harder question then becomes: Should everyone be engaging with customers through social?

Well, probably not. Not everyone at my cable company answers my calls – that’s obvious by how long I have to wait on hold. However, we will all need to be able to engage with our colleagues, suppliers and other stakeholders using social media platforms.

Not everything is needed right here, right now, but as demand increases it will need to be.

A looming demand is increasing in our enterprises that mean that the whole business needs to be social. That is, have access and be adept as using the different tools and platforms. That means a single interface for managing multiple platforms, at the desk and on the go. With a single view of the customer, a simple robust access system with all the knowledge of the business at the user’s finger tips.

Now that’s what I call a really hard question: How do you build a digital business like that?

05 September 2012

Delivering a fast customer experience isn’t everything.


Earlier in the week I headed to Vision Express for my bi-annual eye test. Having just come back from fabulous family holiday and dropped my daughter at her new ‘big’ school I was in a pretty buoyant mood.

The quality of the eye test, the price charged and the speed at which it was executed were exemplary. It should have been, the optician’s was empty and I was the only customer. My issue is not with the service, but with how it left me feeling.

Now my wife accuses me of being a demanding customer and expecting too much. You may agree, but before you do, let me explain why I don’t think I am.

During the whole time I was there, none of the staff I interacted with smiled at me. When I was asked how I was, the inquisitor wasn’t really interested in the reply. Beyond the factual questions about my spectacles, no one asked how I felt about them or how I chose them. No one asked me what I liked or disliked about them. I was treated like I was on a conveyor belt to be processed as quickly as possible. I was left feeling like an inconvenience, someone to tick off the list.

Treating customers quickly and efficiently is important, and I would guess that most customers would value it. I know some people that would value it above all else. However, I was looking for a little more. Some small talk, a little chat about my holiday, the weather - the whole back to school phenomena.

Customers are not just units to be processed quickly. They have feelings and if they didn’t branding wouldn’t work. Taking a little time to connect with me would have transformed how I had felt about my relationship with Vision Express and I would have considered them for my new sunglasses.

Consider how differently this blog would have turned out and the value of the order they have missed out on.