A New Technology that should Push Your Buttons

By January 19, 2012Demand driven

Today, Kodak filed for bankruptcy and Facebook announced a new feature–Action Buttons– in preparation for their upcoming IPO.  For me, this is like Alpha and Omega. Why do I put the two together?  Here are my thoughts:

In 1975, Kodak invented the digital camera based on patents filed 15 years earlier. <I know this is painful.> Internally, the organization fought using them. It was a risk to their film business.  The rest is history. Even after restructuring and efforts to build new businesses, Kodak reported only one full-year profit—in 2007—in the last eight years. It has been such a LONG, painful slide….

Today, Facebook posted a list of companies using their new functionality.  There were sixty of them (reference http://www.theverge.com/2012/1/18/2717453/facebook-open-graph-launches-mark-zuckerberg-new-partners.)  When consumer goods manufacturers and retailers read this list, they will probably recognize less than 1% of the companies.  The partners are not the normal list that most of you will find signing in and out of your company’s security log.

Additionally, information on digital technologies is silo’d.  In these organizations, Facebook and digital marketing intiatives are currently managed by the marketing department.  Unfortunately, it is marketing for the sake of marketing.  Very few are thinking about the use of the functionality to become market-driven.  I keep hoping.  I do interview after interview looking for the change, but so far it has not happened.  What is the difference between market-driven and marketing-driven?  Three things:

  • It is not about YOU. It is about THEM.  When you are marketing driven, the message is all about you. Your products. Your company.  The brand managers try to own a closely-held message.  The goal is to YELL the message and get it everywhere.   When you are market-driven, the goal is about consumer relevance and creating relationships with the shopper, the customer and the greater market.  It is no longer about you the brand company; instead it is about them.  The power has shifted….
  • Open.  Orchestrated Cross-functionally.  Marketing-driven initiatives are tightly controlled within marketing.  The applicability to other organizations within the firm lacks amplification. In market-driven companies, they are part of strong outside-in horizontal processes.  <I know, I am consistent.>
  • Market-driven companies listen.  Market-driven companies also test and learn in real-time.  They use data analytics to sense answers to the questions that they do not know to ask.  <This is one of the reasons why Amazon is gaining market share from Wal-Mart and Target).  Marketing-driven companies construct campaigns, analyze data and try it again.  They are usually based on history. They are static.  <It is hard to listen when you are so busy filling social media sound waves with your message.>

So why is Alpha and Omega relevant? Why should it be a Button for You?

Kodak was a marketing-driven company that failed.  The lifeblood of a corporation is new products.  The lack of good demand insights is the number one issue in new product launch.  So, I appeal to all of my friends in manufacturing and retail to learn how to unlock the potential of the “action button.”  Why?

In just two years, Facebook’s “Like” button has grown in popularity.  It is deployed in over 2.5 million websites, but now it can be different.  It can be the combination of a noun and a verb. Examples could go on an on…. I want it. I own it.  I bought it. I hate it. I love it. I cook with it. I use it. Anyone that uses Facebook knows just how inadequate the “like” button is when a friend breaks up with a longterm boyfriend, your sweater developed a hole in the sleeve when it was washed, a friend of a friend’s house burns down, or your daughter’s friend loses her mother.  The “action button” allows us to improve relevance quickly.

A good place to check out this feature is at Payvment.  This company is a social commerce “mall” on Facebook.  G o there. The page has 1.1 million users and sells items from more than 150,000 brands and merchants.  It lets customers click a “Want”, “Hate”, “Love” or “Own” button for a particular item. But now, when Facebook members who have integrated the Payvment application click those buttons, the fact that they “Want” a BMW, “Hate” a Cadillac and  “Own” a Cannondale bike will show up to all their friends.  Each visitor gets a unique assortment of vendor store fronts based on the social and interest graphs and their “Action Buttons.”  Check it out.

My challenge to all my consumer products manufacturing and retail friends is: What is your strategy for the use of the “Action Button”?  I would like to see companies think about it in three ways:

-Use Action Buttons in New Product Launch Planning.  When you launch your next new product, sense market reaction. Combine analytics to look at the intersection of the interest and social graph with the response from the “Action Buttons”. Use this data to daily sense the market response to your new product launch.

Use this data to build forecasting models.  If fans in your loyal demographic “want” your new product, it is probably a powerful causal factor to put into your next demand forecast.  If they “hate” the product, it is probably time to rethink the product build plan.  This can only be modeled if you are forecasting what you are going to sell (versus what you are going to manufacturer or ship), there is sufficient level of granularity to see the pattern (forecasting in days or weeks) and the software has causal factor modeling.  Only 10% of companies that I follow have this level of sophistication.  This is already in process at Amazon and Wal-Mart.  And, while it is still a new concept for the consumer products supplier, my bet is on the Frito Lay  or General Mills teams to do this first.  <Please be bold.  Prove me wrong. Let me write your case study.>

-Use Action Buttons as an Input in Demand Sensing.  As the product is shipped to the market, follow the social sentiment closely.  The action buttons are a great way to target information. This in combination with sensing technologies helps companies to get a quick read of the market.

Use the information in cross-functional launch meetings to be more effective.  Dell, Newell Rubbermaid, and Whirlpool do this weekly.  Consider the use of Bazaarvoice sentiment analysis on user generated content (cool interface) for ratings and reviews and a pre-build data model (appliance) from IBM, NetBase, SAS Institute, or Teradata to quickly understand the market dynamics. (Conventional processes use syndicated data feeds from IRI or Nielsen to analyze market lift.  This is two to three weeks longer to read the market than the new sensing capabilities. I think this is two-three weeks TOO long.)  I believe that time is of the essence.  It might be something that you can fix–placement, information, message– and quick sensing allows you to get it right before the product fails.

-Follow Others’ Action Buttons for Competitive Intelligence.  Train your merchandisers and sales teams on how to read the “Action Buttons” of competitors and trading partners.  Implement analytics to allow them to quickly process the signal. This should be a daily activity.  Be opportunistic.  Be Bold. If product X is failing at Store Y, read the sentiment and offer a new alternative.  If the placement is wrong, the coupon does not work, or the product is out of stock, fix it.  You can identify issues and opportunities with a 24 hour latency.  Roll out training for your merchandisers (if a retailer) and sales teams (if a consumer products company) this month.

In summary, social should not be about social for the sake of social. It is not about “fans.”  It is not about the number of “likes.”  It should not be contained in marketing.  It should not be outsourced to a PR firm.  It should not be based on first generation analytics.  Instead it should be seen as a way to have a relationship with the customer.  This can only happen if there is an understanding of the basics.  It is about story telling, building excitement and delivering relevance.  If you have these elements on your site, move aggressively to leverage this new functionality.

My wish for you is that you never fall into the trap of Kodak.  Avoid it by using technology to innovate, sense market trends, and be the first to market with customers where you have relevance.  This is the essence of being market-driven.  Put “Take Action on your Action Buttons” on your “To-Do” list for next week.  Let it be a button that you push to drive innovation excellence….

What do you think?  Are you ready to take the plunge?


Lora Cecere

Author Lora Cecere

Lora Cecere is the Supply Chain Shaman. A shaman interprets and connects an evolving world to a group of followers. Lora does this for supply chain. As the founder of Supply Chain Insights and the author of Supply Chain Shaman, Lora travels the world to chart the course of supply chain practices and disruptive technologies. Her blog focuses on the use of enterprise applications to drive supply chain excellence.

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Join the discussion 9 Comments

  • Subbarao Medicharla says:

    Hi Lora,

    Excellent interpretation.

    I totally agree with you. That gives most reliable and realistic data to analyze and come up with forecast which is more closer to realistic numbers. Though there may be some roadblocks to establish process on collecting data and using it to generate statistical methods to generate forecast.


  • Abby Mayer says:

    Hi Lora!

    Another insightful article, so thank you. To me this represents a dramatic shift in thinking, especially what you focus on in the penultimate paragraph-don’t be social just to be social and join the crowd. I think that’s where a lot of companies and managers are stuck right now- we don’t yet understand how to capitalize and really prosper from that relationship. I think as a member of the young generation of supply chain managers, this is something I should be more comfortable with than I actually am-for whatever that counts for…

    This is completely unrelated to your post, but I was wondering if you could provide any reflections on the role, trends, and future possibilities of improved supply chain finance risk management and counterparty risk especially in the post Lehman world. It seems that a lot of large corporations have been forced to enter into stronger and more cooperative (less competitive) partnerships with their suppliers when credit lines dried up to provide liquidity and keep their suppliers solvent. Is this a trend that is growing -closer cooperation with supplier and understanding of even 2nd and 3rd tier suppliers and their individual risks- (I sure hope so!). Just hoping to get your real business perspective!

    Always enjoy learning from your blog!


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  • Great post. The marketing-monopoly on social is indeed an inhibitor to not only leveraging the power of social business models but also to customer loyalty. I am seeing a rising tide of voices (and some companies) that recognize that the power of social really bears fruit in customer service BUT it requires the active partnership with marketing to work. Consistency in experience, accuracy, responsiveness, value, etc. builds trust during the buyers’ journey. The only way companies can build trust and deliver on users’ expectation is by Marketing and Customer Service jointly understanding the buyers’ journey, crafting an end-to-end experience, and showing the rest of the organization how aligning outward to the buyer will drive growth, in the top and bottom line. Fortunately, there are an increasing number of companies that are doing this. They realize if they don’t they will go the way of Kodak, only faster.

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