Can big brands learn from Uber, Kickstarter, Airbnb and the Maker Movement? Yes, they can. They’re using the same strategies as those startups to connect to their markets and they are doing it at a rapid pace.
The Collaborative Economy is a movement. People are empowered to fund and build their own bespoke goods in the Maker Movement, and people are using new technologies to share what they already have in the Sharing Economy. In both cases, people are empowered to get what they need from each other – rather than buying through traditional channels.
A bit about the data and methods: An ongoing list of efforts has been collected from industry leaders, readers, and the brands themselves. We then tagged each of the deployments into specific categories. Most case examples are tagged in more than one instance, as they have overlapping deployments. Data was collected up until April 2014, yet even more examples are emerging. We defined a corporation as “a company with characteristics of companies usually over 1000 employees or over a billion dollars gross revenue.”
Three Graphs: Corporations in the Collaborative Economy
Chart 1, above: Across the nearly 77 case examples up until April 2014, the greatest number of the deployments were from the retail industry, followed by the auto industry, then the technology space, then hospitality. In some cases we included consumer product goods and durable goods which impact the retail space in the frequency count.
Key findings: Companies closely related to consumer-type business models are most impacted and, therefore, have done the most deployments.
Chart 2, above: Across the broad spectrum of the collaborative economy (e.g., maker movement, crowd funding, sharing economy) corporations are employing tactics that are related to the sharing economy. The one isolated instance of a co-op, where the company is owned by the customers and employees, is REI. The second most common strategy was tapping the Maker Movement, often in the form of co-innovation, also known as outside-in innovation or other variations of that phraseology.
Key findings: Corporations gravitated towards sharing economy business models, often through sponsorships and partnerships with leading players like Uber, but this doesn’t guarantee business model resiliency beyond the media pickup.
Chart 3, above: This chart is a subset of the preceding “Strategy” breakdown, shown directly above. We found that most companies are employing “brands as a service” tactics, which means products are sent on-demand or are available as rental business models, instead of through ownership models. In particular, BMW, Peugeot and Daimler rent cars directly to drivers, and hotels like Westin and Cosmo rent workout gear and dresses on Rent The Runway, respectively.
Key findings: Brands deployed “Brand as a service” which often equates to a rental model, or on-demand model, to meet new market demands of “access over ownership.” Much of this was achieved through partnerships with players like Uber or other on-demand entities. A few companies have launched their own marketplaces or partnered with other companies that offered similar services.
Conclusion: Brands must adopt Peer to Peer Commerce Models Large corporations continue to adopt disruptive technologies. Twenty years ago they adopted the internet. Ten years ago they adopted social media. Now, in 2014, they’re adopting the methods of the Collaborative Economy. The internet phase required an online B2C model. Social media shifted to peer-to-peer communication. In this next phase, brands must offer their own peer-with-peer-to-commerce models. In each of these phases, business model shifts and mindset changes were required, letting go of some control in order to gain more business. To learn more, find my body of work on the collaborative economy which includes research, frameworks, graphics, data, and case examples.
Brands Focused on Managing Social Proliferation
For those that like to be where they money be, this data is for you. Altimeter’s research continues to survey buyers of disruptive technologies, and continues our coverage on social technologies. In our recent Q4 survey to enterprise buyers, focused on marketing business decision makers, which are global national corporations with over 1000 employees, we posed a series of questions in our survey battery. In particular, we wanted to find out where decision makers are bullish on investing and found the following trends on marketers with intent to increase spending:
To manage proliferation in enterprise, marketers purchase social media management systems. Altimeter has been covering this software category since March 2010 (see all posts), and has published reports on how companies are managing social using software. These social media management system tools, which allow brands to manage marketing, support, and employee interaction of social continue to spread throughout the enterprise (data). We’ve also seen deal size for this specific market on the increase over the past few years, some deals crossing over the six figure dollar range. We’ve also found that companies are straddled with a number of social accounts (on average, 178 social media accounts) as social strategists struggle to avoid being constantly reactive in a role of social sanitation.
Insufficient tools means investments in education programs key for employee masses. A solution requires a strategy, education, business processes, then with software to facilitate. While most marketers realize that technology is a key method to achieving their goals, they know that education within an enterprise is required for social business success. Marketers invest in educating various business units (departments, regions, and product groups) to ensure they properly know how to use these technologies and avoid risk. Yet, in our previous research, we’ve seen that brands are eager to educate, they don’t put large dollars against this investment. To help corporations solve this need, we’ve launched our own Academy offering, and are working with large brands, agencies, and consulting firms to roll-out.
Surprise! Marketers “volun-told” as system integrators of fragmented software. The opposite of volunteering is being volun-told (credit: Zena Weist). Marketers have been VolunTold that they are unwilling system integrators in the era of VC funded startups who’ve created clones serving similar use cases. As a result, brand side marketers and their agency and consulting partners are investing in integration disparate software together to commonly share data, in order to manage a single customer journey, or obtain data on one persona or customer type. While Oracle, Adobe, Salesforce, IBM, and others offer suites, don’t expect this trend to go away anytime soon, as the proliferation of new web tools means that brands will forever be rushing to catch up.
Summary: Companies seeking to scale social in their enterprise.
So there you have it, today’s buyers are investing their resources and time on scaling social within their organization before it spirals out of control. They’re deploying software, coupled with internal training, and then trying to glue together many pieces into one system. While I’m not going to provide insights to each one of bullets, here are a number of other trends from this data that we can discuss in the comments.
Altimeter Data Above: Social spreads further to the edges in Hub and Spoke, and Distributes to Multiple Hub and Spoke, aka “Dandelion”
Social Business Evolution Spreads In Corporations
Altimeter’s most recent social business buyers survey of global national corporations with over 1000 employees has yielded interesting results. One data set that we’ve carefully watched over the years, and perhaps I’m most known for, is how companies organize their internal structure for social business. Over a year ago, we conducted this same study, to glean where the market is; we’re back with additional benchmarking data, and you can read the full report of Social Business Evolution (embedded below) This most recent data resonates the trends that we’re hearing and seeing in many of our brand side clients, here’s my take:
Decentralized gains no growth. Companies in this model are afflicted with unchecked proliferation and will have to eventually undergo considerable investments to clean up mis-managed or worse, un-managed efforts. This unscalable model leaves companies fragmented in an uncoordinated method. We predict this structure will eventually dissipate as companies must formalize their programs.
Centralized remains stagnant, holds at under one third. This model, in which a single business unit (often corp comms) manages the program on behest the corporation is a short term fix. While many regulated companies can easily make the business case for a single group, it cannot scale –and this group will eventually become overwhelmed with requests from business units.
Hub and Spoke loses 6 points, yet still dominant. This popular model, in the previous year, sinks 6 points. Why this drop? Companies are seeing that social is spreading beyond a coordinated team (often referred to as a center of excellence) to a broad set of business units including regional, departmental, and product lines. Despite the dip, this continues to be the dominant model most corporations are in now.
Dandelion model shows growth. In this model, decision making and management for social spreads to various business units –beyond the centralized team. This sign of maturity often means there’s coordination in the center, but freedom for local groups to manage within guidelines. We expect this model to continue to rise year over year.
Holistic remains elusive. This very challenging formation, where a majority of all employees use social for business in a safe and consistent manner continues to remain miniscule. Why? This requires a cultural mindset of trust from leaders, and a workforce that is trained and ready to accept social into every fabric of employee and customer relationships. Don’t expect this model to grow anytime soon.
This latest Altimeter Report, by my colleague Industry Analyst Chris Silva, focuses on how companies must develop a mobile marketing strategy. It sources research from 26 ecosystem contributors including brands, agencies, and technology providers. To learn more about this report, please register for the webinar in which Chris will provide deeper knowledge from the report.
This report is powerful in a few ways, it indicates the growth the in space, referencing that 45% of all mobile phone users are carrying a smart phone, and the growth rate for tablets is 23% annually.
The report also indicates how some marketers are missing the market to reach to the connected consumer, citing examples how retailers and restaurant companies created apps that didn’t direct them to their stores, a missed opportunity.
Above Graphic: Mobile App Maturity in Three Phases
Yet beyond the mis-steps of retail marketers, this report provides a maturity framework segmented into three major steps, and a point based system that brands can use to self-assess their quality. Lastly, you’ll find a breakdown in roll out steps from plotting the impact of strategy, choose business impact, choose application type, add features, extend platform support, then finally globalize.
This is Open Research: Use it, share it, and we’ll publish more, the full report is embedded below, which you can download, use and share with attribution. I’ll be working closely with Chris in future research projects, so I recommend you follow Chris on Twitter, and contact him at chris at altimetergroup dot com if you’ve further questions on the mobile landscape.
Research reveals corporations to focus on integration, staffing, advertising, and measurement in 2011.
I’m sharing these slides as I take the stage for one of the few business focused tracks at the largest European internet conference, LeWeb (pic). The following slides are based on the survey data collected in our latest research report on the Career Path of the Social Strategist which has been downloaded at least 3000 times and viewed over 21,000 times and been discussed on Marketing Profs, RWW, Mashable, Fast Company, and many other blogs. In the deck you’ll recognize some of the data in 2010, but we’ve also segmented it by business maturity.
In the predictions section in 2011, we’ll find data on where companies are going to focus, as well as spending changes based on maturity of corporations –notice how advanced companies shift to customization and social media boutiques.
Above: Here’s a video from the front row (Thanks Erno), apologies, I’m fighting a cold and a bit stuffed up. I added this video later.
Above, here’s the official LeWeb video, thanks Loic
How You Should Invest in 2011: Scalable Programs
1:1 dialog with customers does not scale –you can not hire enough community managers to keep up with the growing number of customer voices, as a result, we recommend that corporations focus on the following six areas of investment for 2011
Hire correctly (Gurus/Ninjas/Samurai need not apply) and properly train for scale
Integrate social media on the corporate website, then aggregate and curate
Invest in advertising that leverages social graph
Build an unpaid army of advocates –get your customers to do the work for you
Invest in scalable systems like SCRM and SMMS
Learn to measure using the ROI Pyramid
Open Research: Share it Widely
This data, which we make available for the industry is under the premise of Open Research rather than charging for it. It’s intended for you to use, cite, and share as long as you provide attribution to Altimeter Group. The more you share, the easier it is for us to create more. Some of the select figures are available here on Flickr, embedded below, expect I’ll discuss these in greater detail in coming weeks.
Special thanks to the research team involved in this project lead by Christine Tran, Andrew Jones, and guidance from Charlene Li, all of Altimeter Group, where I’m a partner.
This is part 2/2, yesterday, I released research discussing the priorities companies have for external also known as ‘go to market’. To balance out the data, Altimeter Group has posed similar questions to Corporate Social Strategists to find out their internal ambitions inside their company. This is a subset of a larger Altimeter report, sign up here to receive the upcoming report. These corporate social strategists (which I’ve segmented as companies with over 1000 employees) the respondents were asked to select three top internal objectives. We found that they will focus on the following:
Facing Internal Resistance, Corporate Social Strategists Seek to Measure, then Shift Culture
Confused by Disparate Data and Inability to Tie to Transactions, Strategists Seek to Prove Their Efforts. While the disruption that social media has caused is evident, 48% of Corporate Social Strategists struggle to measure the value for the following reasons: Disparate set of data, a plethora of engagement metrics –yet no tie back to transactions, and vast array of data growing at an exponential rate. To combat this, Social Strategists must learn the difference between: Business Metrics (revenue or cost savings), Social Marketing Analytics (CSat, share of voice, advocate influence), and Engagement Metrics (fans, likes, friends). Most immature strategists focus on delivering engagement metrics, which doesn’t fulfill the needs of upper management. Solution Set: Read Altimeter and Web Analytics Demystified Social Marketing Analytics Framework and apply these formulas to your program now. Secondly, develop an executive dashboard (with business metrics –not engagement metrics) and provide to your executive management on a frequent basis
Leading an Culture Revolution, The Social Strategist Focuses on Change Management. Make no mistake, social media has impacted a company to it’s core; there’s a complete cultural change happening. Yet despite the sea change occurring as companies try to catch up with customers, there’s immense internal resistance. As such, 35% of Corporate Social Strategist is trying to change the organizational flow of the company and 37% intend to provide ongoing internal training and education to explain how people’s jobs are forever changed. Our research has exposed there are five distinct models on how companies organize for social media, and we will reveal industry wide stats soon. Why the struggle? Customers don’t care which department an employee is in, they just want their problems solved, forcing a corporation to be holistic in their approach. Solution Set: Work with education programs such as Marketing Profs, WOMMA, New Communications Forum, eMarketer, and Forrester. Also join peer to peer groups such as Gaspedal’s Social Media Business Council, and Marketing Profs to connect with peers.
To Fix Root Problems, Social Strategists Try to Infuse Customer Voices to Fix Products. Social Strategists are mainly marketing to customers using social channels, (43%) and even fewer are focused on supporting customers (16% for direct customer support) according to our latest research. Yet despite the goals to “sell more product” in social channels, they are sacked by customers who are complaining about sub par customer experiences. Knowing they must fix the root problem of improving the actual product, strategists must try to infuse the customer voice directly into the product roadmap. Yet despite their aspirations, don’t expect most to be successful as we’ve only seen a handful of companies that have been enable to improve their products with direct customer voices such as Dell, Starbucks, BaconSalt, Lego, and Microsoft. Don’t expect this lofty goal to succeed in 2011, as it requires a complete cultural change that starts with convincing the product team, and even executives they are no longer in the drivers seat. Vendor Set: Uservoice, Salesforce Ideas, BrightIdea, and Get Satisfaction all offer innovation and request prioritization tools.
Special Section: Vendors and Service Providers. If you offer services or software to corporations in the social media space, it’s key you align to their internal and external efforts. Every social software vendor must have a reporting ability and quickly develop analytics abilities –or partner with vendors that do. If budget cuts come around, expect systems that can’t measure to quickly be replaced by others that do. While many vendors currently offer education for free as a ‘lead in’ don’t be afraid to charge for workshops and immersion sessions –you can rebate the education if the client buys the services. Lastly, it’s key that you ask your buyer which formation they are in, as it gives clues to who has the purchasing strings –and where other buckets of money can be found.