This is an excerpt from the recent DishyMix interview with Garrick Schmitt of Razorfish where we have a disagreement on what fans expect from brands in the social space and why I think the research is not good enough yet to tell us what fans truly want.

Susan Bratton: Garrick, tell us some of the most sophisticated insights from your Facebook Marketing Breakfast and remember, DishyMix listeners know about Facebook, so tell us the good stuff.

Garrick Schmitt: Yeah. I mean I think there are two big findings. One is just, I say first and foremost it’s about what does a brand mean online. And I think, you know, the history of it is, you know, big brand marketers have never really believed that digital was a great place to build a brand. It was seen as an extension of a place to sort of amplify a brand. And what we’re really finding is that the culture has shifted dramatically.

Susan Bratton: Yeah, that is really changing now, isn’t it?

Garrick Schmitt: Yes. I mean it’s first, digital has become first and – we call it digital primacy – but digital really has become first and foremost for the majority of consumers, at least in North America. And what we’re finding is that we have some very simple questions. A lot of what we’ve tried to get at is just what’s the notion, if digital has become central how does that change a relationship between a consumer and a brand, and what we found is pretty interesting. 65 percent of consumers actually have, say that digital experience has changed their opinion about a brand, which is tremendous.

So if you think about that, you can think about it in a couple ways. One is if I’m a consumer and I have a certain expectation, say around a Target or a Nike, and if I go and do my research online and suddenly that experience I’m having in some way doesn’t meet my expectations, that’s a disconnect…

Susan Bratton: Or exceeds their expectations, right?

Garrick Schmitt: On the other hand, it can exceed it exponentially, and therefore reinforce the notion of purchasing. So that to me is huge. And then of those people who say that they were influenced by digital experience, almost all of them, 97 percent report that it actually went on to influence whether or not they actually purchased that product.

So what I, the way I track it is digital has become such an important part of our culture, and that is really where, that has the cultural sway at the moment and that is where people are really thinking and engaging with brands, and then that’s driving all their activities out of that.

Susan Bratton: Well you did another report – I don’t think you specifically did this – but Razorfish has another report called Fluent, and in that particular report – I read these reports very closely, they’re so well done. I love the Digital Outlook report; that’ll probably come out in first quarter as well of 2010, and that’s my favorite one that you guys do.

One of the things that was kind of a myth buster from Fluent was, the myth was you couldn’t correlate consumer perceptions of a brand in the online and offline world, and your organization created this thing called the SIM Score – the Social Influence Marketing Score – where you were able to pull online and offline to compare share of voice. And you found that they’re aligned. It’s all one big thing now.

Garrick Schmitt: It is one big thing. It definitely is, and the other big thing that we found out of all this is, you know, all of our clients have questions still about social media and how they can actually monetize that. And one of the things that we wanted to look at this year is how people were actually engaging with brands on social networks.

Last year we asked just simply did consumers believe that there was a role for brands on social networks, and the overwhelming response was yes, it was something 70-odd percent. And now this year, what we wanted to do this year is we wanted to go a bit deeper, and what we ended up finding is we asked, you know, “Why do you engage with a brand? If you follow a brand on Twitter, why do you do it? If you, you know, quote, “friend” a brand on MySpace or Facebook, why do you do it?”

And the majority, which we were really surprised by quite honestly at first, was 44 percent of consumers who follow a brand on Twitter do so for deals. They want deals; it’s all about exclusives. And a similar number, 37 percent, who friended a brand on Facebook or Myspace, also did so for deals.  “Other people I know are friends” or, you know, “I’m looking for entertaining value” or things of that nature.

And that to me is sort of a game changer because it’s almost as if that’s what they’ve come to expect, that the notion of a conversation between a consumer and a brand isn’t always about brand values, and I, you know, I love our brands and, you know, and I wish every conversation was about what a brand is trying to do in the world, but the reality is that the product in many ways is a conduit and if people can get that product cheaper, if they can be aware of exclusives, if they can be aware of things that are upcoming, that really creates that strong bond, and that to me was sort of a game changer in terms of the way that I think about it and I think the industry as well.

Susan Bratton: See I completely disagree with what you just said. I have an entirely different perspective on it. I think there was a fundamental flaw in the research that was conducted there. And I don’t know whether it was your research or whatever we’re talking about here, but I keep hearing over and over again that the number one thing that people want from friending or fanning or following a brand in the social space is this deals and discounts, and I don’t think that’s true.

What I think is that we didn’t ask the right level of nuance of questions to the consumer to find out what their true motivations are. I think it’s the way the question’s being asked that’s not done well enough. I think the categories are too big. If you’re going to have five things you can get and one of them is a deal, of course it’s going to be the number one thing. I’d say take out deal, don’t even offer that as a question.

Come up with all of the different things, like, “I feel good when I’m associated with this brand and I care what they’re doing in the world and I want to know about them.” “I want to keep up on the latest, you know, product offerings.” “I want to know what’s happening with the organization.” If you had more nuance – not you specifically again – but if there was more nuance in the way the questions were asked and there were more opportunities for people to say, “Yes, I want that.” “Yes, I’d like that too.” “Yes, I’d like that too.”

And you could almost score them that way. I think that there’s just a little bit of incremental sophistication that needs to come in the question asking of consumers there.

Garrick Schmitt: Oh I think you could, I definitely agree you could go deeper on that, and I think next year we definitely will probe on that. But I also, you know, it’s interesting is I think about my own behavior and not as a marketer but just purely as a consumer and the brands that I follow.

You know, one of them is Amazon MP3, which is, you know, sends out a daily deal where they offer an album download for $2.99 or $3.99 or whatever it is. And, you know, eight out of those ten I have no interest in or I may not even know who they are. But what’s interesting is that Amazon, by doing it, maybe they’re – you know, one comes along that peaks my interest and I purchase it. But what interesting is that Amazon, with their MP3 offer, stays top of mind, and as they do that when I think about actually making a purchase – say for a holiday or whatever or just for my own personal usage – they still stay top of mind, and in fact I almost think about it before I think of iTunes, which is impressive to me.

So I do think there is something there, and as I’ve sort of talked about these findings with people. When they think about it, I talked to someone who’s actually one of the lead people at Interbrand and he was sort of, you know, equally as taken aback by the finding, but then when he thought about his own personal use, what’s he following? He’s following Whole Foods because it’s telling him what the deals are for the week or what the menu items are. And I think that there’s a very sort of basic information exchange that we sort of can’t gloss over, ‘cause I do think…

Susan Bratton: Oh yeah.

Garrick Schmitt: …at some level that cements that relationship.

Susan Bratton: I don’t disagree that everybody loves a deal. I don’t disagree that Twitter’s becoming the new Sunday circular. I’m in complete agreement with all those things. What I want is a broader panoply of options for brand than just offering deals because I think that ultimately erodes a relationship that could be enhanced by a wider opportunity to have conversations.

But I want to move on. I have a couple more things I want to have a conversation about. The first one is there are two companies out, right here in the Bay area, that are – we’re both here, we’re both in the San Francisco Bay area, you and I – two small companies that I am keeping a keen eye on, quite interested in, I want to know if you’ve heard of either of them and what you think about the basic concept. The first is a company called Unbound Technologies. I talk about them a lot on the show. I’ve got no interest in them, you know, as far as money or anything. But I think it’s interesting because what they do – do you know about them?

Garrick Schmitt: I don’t.

Susan Bratton: Okay. So what they do – and probably they do 53 more things than this and I need an update, but this was the interesting crux for me. They will, lets just say you’re Best Buy, ‘cause I just had a fantastic experience buying a washer and dryer with Best Buy, and so I’m not a fan of their brand, but lets just say that you and I are fans of the Best Buy brand on Facebook.

What Unbound will do is they will take all of the fans, not only from Facebook but also from Twitter and LinkedIn, and they will take your customer database – maybe your purchaser list or your prospect list or whatever it might be – and they’ll do a data match, and they’ll come up with a ranking order of the people who are your fans in one place, multiple places and who also are having conversation about you, mentioning you, you know, sentiment, positive and negative sentiment, and they’ll give you a rank order listing of who your biggest brand advocates are.

So earlier when I said “What do you think the value of a Facebook fan is”, and you were like, “It’s priceless”, what if I could give you the rank order of your most priceless customers based on how often they talked about you with positive sentimentality and how many followers they had, ‘cause one of the things you guys are doing at Razorfish, which I figured our reading the digital outlook report, is that some of the people in your research team are doing like focus groups where they’ll take a person and their friends who have a lot of followers and bring them all into a focus group. So, like you already get that if there’s a fan and they have followers, those followers are likely to be really good targets to be fans. So what do you make out of everything I just said to you? Where did opportunity pop up in your mind?

Garrick Schmitt: I think it’s interesting. I mean I love the notion of it. I think what, where it becomes really interesting if, you know, – and I’m very unfamiliar with Unbound…

Susan Bratton: That’s okay.

Garrick Schmitt: I’m glad I’m sitting in front of a computer so I can look it up.

Susan Bratton: Their site doesn’t tell you anything.

Garrick Schmitt: What I do think is interesting is when you get to the notion of scale though, and when you’re looking… You know, Best Buy’s a great example….

Susan Bratton: They are.

Garrick Schmitt: You know, they’ve got hundreds of thousands, what that actually means, you know, how you’d actually start to make sense of that data, and then what you’d do with it.

Susan Bratton: What would you do with it? What would you do if Best Buy was your client and Unbound told you “Here are the top five hundred most influential people who have a positive sentiment and tons of followers for Best Buy”, what might you do?

Garrick Schmitt: Well I mean for that clearly you look at some type of über customer loyalty program or…

Susan Bratton: Yeah, “insiders club.”

Garrick Schmitt: Yes, exactly. And then you create, they become your sort of defacto panel where you’re providing them with, you know, the latest and greatest and you’re giving the sneak peeks and, you know, you’re basically turning them into advocates or evangelists for the brand, which they probably already are so it’s just cementing that relationship…

Susan Bratton: Yeah.

Garrick Schmitt: For sure, I could see that happening. But to me it’s almost interesting what happens if you go beyond five hundred?

Susan Bratton: Sure, right.

Garrick Schmitt: When you’re looking at five thousand or when you’re looking at ten thousand…

Susan Bratton: Or fifty thousand or a hundred and fifty thousand, yeah, which there could be.

Garrick Schmitt: And then it becomes how do you actually create a loyalty program or some type of VIP program that really matters.

Episode 131: Garrick Schmitt, Razorfish on Priceless Facebook Fans, The Agile Agency and Location-Aware Branding

“Here’s The Easy Way To Have The Relationship You Want With A Facebook Fan By Knowing What He Wants, And Knowing How to Have Him Begging To Give You More Of What You Want”

with Garrick Schmitt, Razorfish

OK, so the subtitle of this episode is just for fun – I wrote it like an info product headline.
But truly, we DO want our customers to fan us on Facebook. And we want them utterly besotted.

As Garrick says, “a fan is worth EVERYTHING to a brand.”

Listen in as Suz and Garrick talk about what to do with your best brand advocates in a world where Facebook Fans are becoming legal tender.

We chat about:

• Interaction Design
• The agile agency
• Razorfish – from MSFT to Publicis
• Facebook marketing sophistication
• Digital Primacy
• Geo-tagging and augmented reality for marketers
• Location-aware browsing
• Crashing Foursquare servers at SXSW

more.

Rich Horwath, Author, Deep Dive and Founder, Strategy Skills

Is your company strategically aligned for success? Do you know HOW to approach your business strategically? Or are you caught in a cycle of tactics and forecasting that ensures failure?

Listen to this week’s interview with the author of Deep Dive: The Proven Method For Building Strategy, Focusing Your Resources and Taking Smart Action. And yes, yes, yes, Rich has two personally autographed copies of Deep Dive available for you, DishyMix listeners. Just post your desire at http://dishymixfan.com to be a winner.

Here’s an excerpt from the show:

Rich Horwath: Really what we’re talking about is competitive advantage, and,  if you go around your office and you ask ten people, “What is competitive advantage?”, you’re most likely to get ten different answers. It tends to be that Holy Grail in business, but very few people have a concrete understanding of what that means to their business.

So what I try to do is break competitive advantage down into simply three things: capabilities, activities and offering.

Capabilities are our resources or assets.

Activities then are what we do with the resources and assets.

And offerings then are the things that emerge from our activities that customers actually see, hear, touch, feel, the products and services that we bring to the market, and the reality is that stepping stone of competitive advantage, going from capabilities to activities to offerings, is really how we differentiate ourselves from the marketplace.

Rich Horwath: It is ruinous for us to try and focus on all three — the reality is, we cannot be all things to all things, especially today. You look at companies like United Airlines whose gone bankrupt trying to be all things to all people, trying to come up with a low cost airline called TED to serve the cost conscious travelers, while still trying to do a really high-end job with business and international travelers. The reality is that’s going to lead you to bankruptcy. We’ve got to have a laser like focus today, and the value disciplines really help us think about where that focus does lie.

The triad – product leadership, customer intimacy and operational excellence are the options. You must choose one to lead with for competitive excellence.

What I’ve found in most companies is that they’re doing a little bit of each, and what that’s going to get you is a mediocre return on your business. You know, it’s like investing. If you spread your investments across the boards from bonds to gold to stocks to mutual funds, you’re going to probably get a fairly mediocre return, and it’s the same way in business. We’ve got to choose which one of those best fits our core competency and hone in on that.

Susan Bratton: What if, for example, you’ve been focused on all three – because you didn’t know that you have to focus on one of three value disciplines, and you’ve worked on having a really good product, you’ve worked it having operational excellence, you’ve worked at customer intimacy – but what if you say, “Boy, I actually think that the thing I’m doing the least well (customer intimacy) is the area where I can actually WIN in the competitive environment.”

Lets just say you have a reasonable product and your customers can get it from you and they’re reasonably satisfied, but you’ve never really focused on something like customer intimacy, and you decide that is actually the opportunity for your company. You realize that the real market opportunity is in customer intimacy, yet you’ve put no time there. What would you recommend on a strategic level that a company do? How would they go about implementing a change? And if it’s the worst thing you do as a business in this moment, but you see it as the market opportunity, should you go after it?

Rich Horwath: Susan, you hit on a really key point. You know, one of the things that we need to remember at the end of the day, strategy is always about serving customers.

Sitting in a conference room and saying, “Well, this is what we do best, so we’re just going to put the blinders on and go do it”, without really understanding where’s the customer value in the marketplace and can we serve that above and beyond our competitors. That’s the real thing people miss, is they put blinders on, they don’t focus on what’s the customer value.

So if you find in your research that customer intimacy is the real key to driving customer and brand loyalty, then absolutely what needs to happen is you need to get your people together, not just the senior ones, but mid-level, as well as some up and comers, and you need to sit down and have a strategic thinking session, two hours, three hours, where you really talk about what would it take internally to get our organization to be a customer intimate organization and what does that start to look like.

Susan Bratton: How do we do the research to find out what our customers want?  Assume we’re a small-medium business, because if you have money you can always do more, so assume we don’t have much budget…

Rich Horwath: Okay, yeah. If you don’t have much money, the first place to start is with your current customers. We tend to say, “Well, we know our customers.” But the reality is we don’t talk to customers, especially if we’re at a senior level, as much as we probably should. So the first place to start is to actually go on some customer calls, talk with customers, find out what they’re doing. Social media is another important area as well. You know, you can glean a lot of good insights from Twitter, from Facebook if you have a presence there, so understanding what are people saying about our industry, about our market, and then maybe even about us, relative to our products and services. And then the other thing – and this is more painful, but it’s an important piece – is you’ve got to contact, in some way, shape or form, former customers, people who no longer are working with you and find out why that is. What is the reason that they’ve moved to another offering or to another company? And if we do those three things that starts to help us better understand if this is truly an area of value.

To listen to the whole interview, especially understanding how to tell the difference between strategy and tactics, click here.

Rich Horwath on New Growth from New Thinking, Setting Your Strategy and Contextual Radar

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