Tag Archives: marketing

Convergence Forces – The Coming Ethics Debate on Predictive Analytics and Location Based Services

One of the big news stories in strategy, innovation and tech circles is the growth and convergence of four key trends from the past two years. These trends – social networking, mobile computing, cloud applications and big data – are not new.  In fact our firm covered these extensively in 2012 and continue to advise clients on how to leverage these trends strategically, both  individually and collectively. What is occurring now as we move into 2014 is the cumulative effect of these trends into force directions of their own.  These so-called convergence forces – or what Gartner Group calls nexus of forces (NOF) – have a tendency to amplify and extend innovation in new and more powerful directions, much like strong winds, lunar position, and seismic disturbances can affect the behavior of ocean tides.

Photo credit, Cisco Systems.

One of the areas where we are seeing this play out is in the business to consumer pricing strategies of in-store retail.  Location based services – either by way of opt-in applications or mobile browsing cookies – allow known customers to log-in to store applications and view special VIP promotions, to quickly locate where items may be found in the store, and to recommend products which based on sentiment analysis and buying pattern might be of interest to the customer.  Location based predictive analytics can also help retailers determine the best location in a particular store to position items based on customer traffic (using big data to monitor your path via GPS as you actually browse the store or predict where you will go based on history and profile) as well as to dynamically create promotions based on your position and buying status.

Creating special offers and promotions based on an existing relationship is not new in the business to business world.  Suppliers and customers alike receive special treatment and extended services and bundle pricing based on volume of sales, excellent quality, and other relationship management KPIs.  In fact in the world of wealth management and retail banking, customers may find that with particularly large financial institutions the first question they are asked after pleasantries may be “what is your current relationship with us?” While this is hardly endearing to the uninformed, it does grant status to those who may, have for example, several accounts, a loan, a trust and other financial products all aggregated under the same customer portfolio with a particular financial institution.

Where things may run amok in the future is when customers (a) receive deferential pricing based on relationship without permission and (b) when a relationship is implied based on socio-demographic profiling or  when facial recognition technologies are employed.  Let me give two very possible scenarios.  I have an account at a sports and recreation retailer and I walk into the store. As a member I have given them permission to my specific profile information (where I live, what I purchase via history, my demographics) in exchange for an annual dividend at no fee.  The retailer has the ability while I am in-store to make me aware of specific items I might want and key promotions going on at that store on that day.  What the retailer can do is also annotate the base price while I walk through the store.  Meaning that what price I may see before logging in and what price I see after I log-in may be different.  Imagine digital price tags changing and updating dynamically as I walk through the store.  Now in this scenario I am going to assume that the incentive I have to purchase items is a benefit versus a cost so I assume that the store is truly giving me a deal even if they don’t.

Another scenario gets more futuristic but again the convergence forces suggest all plausibility.  I walk into a store that I don’t actively have a relationship with nor have I given permission to share my profile and demographic information.  However due to advances in facial recognition technology (such as what is available in Facebook and other applications commercially), the store can tap into vast image databases and make a best estimate at who I am based on my movements in the store and camera images obtained while I move throughout the store.  This correlation of implied relationship and implied demographics can, under the proper scenario, suggest promotions and product recommendations not aligned to my actual relationship nor my actual demographic and in extreme cases improperly tweak dynamic pricing levels.

While this extreme case is just that, convergence forces already have the attention of retail strategists, ethics experts, media tech publications and even sparked political debate. Earlier this year, U.S. Senator Charles Schumer (D-NY) suggested that analytics companies engaging in such practices without customer knowledge would be “intrusive and unsettling.” prompting the Senator to issue a statement with eight of the key location analytics companies in this space to a new code of conduct which would discourage such practices. Other industry segments have also begun to weigh in on the legitimate and ethical use of predictive analytics including higher education, which can use the technology as a early warning system for right-tracking student performance through degree programs.

Convergence forces in this area have already begun and the debate is reaching the mainstream.  What are your thoughts? And – outside of leaving your phone in the car or forgoing permission to give your profile information to any customer loyalty system or social media site – how do we as consumers protect ourselves from retail profiling when we don’t want it?

Leave a comment

Filed under Big Data, Business Analytics, Cloud Computing, Cloud Readiness, Financial Management, Information Technology, Innovation, Marketing and Social Business, Mobile Society, Operations, Strategy, Technology

A New Study Examines Engagement of the Entire C-suite in Sustainability Strategy

As a follow-on to my recent article “Why Sustainability isn’t Sticking with the CXO,” Newport Consulting Group colleague Cindy Jennings challenges us to open up to the honest challenge that there is an “engagement gap” with the CXO.  Rather than to simply state the obvious, Cindy calls upon us to ask the brutally honest questions as to why this is so and what can we as both colleagues in the C-suite and as staff members and stakeholders do to change direction.

Many surveys studying the attitudes and leadership of various C-level executives have been conducted over the years. A new CXO Engagement Study conducted by the University of Oregon and Newport Consulting will examine the leadership engagement and influence, motivations and engagement tools of the entire C-suite.  Cindy provides some additional context in her open letter on Sustainable Industries Magazine:

What is driving the CXO “Engagement Gap?” (photo credit: jeffreyholmes.photoshelter.com)

For years I’ve been reading and quoting surveys about CEOs and chief marketing officers (CMOs) to various clients and those interested enough to listen. More recently, stories and studies about the need for higher-level engagement of chief information officer (CIO) or chief technology officer (CTO) and the chief human resources officer (CHO) are also giving sound reasoning. The Wall Street Journal covered the Deloitte “ReSources 2012” study that outlined opportunities for CIO leadership in energy management systems – one of the most consistently measured performance indicators. Andy Savitz, author of “Talent, Transformation and the Triple Bottom Line: How Companies Can Leverage Human Resources to Achieve Sustainable Growth,” makes the connection for companies on how to leverage their employees — and their HR departments — to achieve their sustainability goals.

There is also speculation that we have reached “peak sustainability” in that chief sustainability officer position creation is on the decline. Within that speculation is whether or not sustainability is starting to be adopted as a standard business strategy that no longer needs a specific champion, or if it is being absorbed by the existing c-Suite. Read the “State of Green Business 2013” for more on that subject.

I agree with my colleague William Newman in his article “3 reasons sustainability isn’t sticking” when he writes “Many [CXOs] are able to ‘talk the talk’ but only a minority are able to ‘walk the walk.’ The survey seeks to help leaders better walk the walk by determining which C-level executive or mix of executives are able to effectively lead and influence triple bottom line strategy for their company, and how they do it.

Visit Sustainable Industries Magazine to read Cindy’s full article.  The survey is live and will run through April 26, 2013. The findings will be shared complimentary with those sharing their own viewpoints on the topic.  You may participate in the study by visiting the University of Oregon survey site.

Leave a comment

Filed under Audit and Oversight, Change Management and Leadership, Communication Planning, Community and Municipal Outreach, Compliance, Financial Management, Marketing and Social Business, Operations, Procurement, Risk Management, Strategy, Sustainability

The Jury is Still Out on Digital Media Across Industries

Earlier this month I teamed up with former Booz Allen Hamilton colleague Scott Golas and staff writer Nancy Hala for a three-part interview on Dig-it-all media on the effectiveness of digital media and the need for social business outsourcing to build high growth companies and manage brands.  Based on some of the recent stories on effectiveness of Google Ads and Facebook advertising, some markets respond and others don’t regarding social media advertising for business.

“For products like consumer and durable goods, there are still a lot of questions about the effectiveness of buying ad space on Facebook. Some think it could be the right approach, particularly to attract younger buyers. The leader in this arena is clearly Apple, who focuses its brand and product line on digital media. But for businesses in other industries, for example those not specializing in technology or knowledge, the true power of digital remains to be seen.”

In working with high growth companies, the marketing function is often starved in terms of funding and resources.  This is self-defeating as in this digital age the adage “if you can’t link to it, it doesn’t exist” applies particularly to the new demographic of online  buyers and purchasing agents who build their bid lists by first checking Google in many cases.

“While there may be a marketing director providing overall management of activities, you still need people to develop content and place it appropriately in given markets. Since these skills are not typically found within a company – particularly in global companies operating in many different national markets – outsourcing can be an effective solution.”

Finally I look at the on-ramps to new industries, markets, segments and target customers where focused brand management can create a high-touch social experience.  In these cases, classical brick and mortar “hard” approaches may be by-passed altogether for an online user experience to education and build trust with the customer.

“Over the past two or three years, cooperation among third-party platforms and plug-ins has made it easier to coordinate messaging across multiple platforms,” Newman says. “Face-tweeting and in-tweeting – these bridges expand communication, and for businesses that means that social campaigns can be integrated with email marketing. Will we get to a place where there is one platform to rule them all? I don’t know, but that would be cool.”

Thanks again to Scott and Nancy for their work to publish the interview series which can be viewed on its entirety on Dig-it-all here.  To follow other Dig-it-all postings and interviews search on hashtag #digitallco or follow Scott on Twitter (@scott_golas).

Leave a comment

Filed under Cloud Readiness, Digital Content Strategy, Information Technology, Marketing and Social Business, Mobile Society, Operations, Technology

Strategic Intent for Green Marketing and Disclosure Using Social Media

In part 2 of my exclusive series on social media use for sustainability programs for Sustainable Business Forum, we look at the strategic outbound communications mode of the information life cycle presented in part 1.  In this mode, organizations “declare to the world” their findings and intent regarding their sustainability program in an attempt to engage stakeholders (citizens, investors, partners, customers, and other external actors to the organization).  I offer examples from City of Beaverton, County of Oakland (Michigan), IKEA, SAP, and Starbucks Coffee.

Disclosure forms can range from simple to very complex

In my work with the Michigan Association of Certified Public Accounts (MACPA, www.michcpa.org) I have briefed hundreds of accountants and financial managers on the two purposes of sustainability reporting.  The first is a strategic intent to communicate to the public at large – shareholders, customers, and other stakeholders – the good things that the organization is pursuing across a triple bottom-line (3BL) scorecard. The second is a responsive measure based on the need to report on business performance to this same audience. These differences suggest as well the nature of the information to be presented as well as the different social media approaches – called channels – that would best be used to reach the target audience to best accomplish communications objectives in sustainability programs.

What a company or organization decides to promote is just as if not more important than how a company or organization decides to communicate the message across social media.  There are a number of basic to very complex reporting disclosures, each ranging from very formal to informal basis.  Simple disclosures might involve sharing information – from statements of direction, to activities and accomplishments – across simple social media such as websites, podcasts, and YouTube channels.  More complex disclosures, such as the Dow Jones Sustainability IndexIntegrated Reporting with financial statements, or Global Reporting Initiative (G3) filings can be demanding and elaborate, with multiple interactive layers of drill-down click-through metrics, requiring dedicated sites or pages.

Read the full article here.  In the next article in our series we will look at how companies translate the strategic messaging from outward to the public audience now inward to the enterprise in order to motivate, engage and excite employees and executives to execute sustainability program activities. This is a process deeply rooted in organization change management techniques, where messaging channel and content is an important key ingredient to change personal behavior.

2 Comments

Filed under Change Management and Leadership, Community and Municipal Outreach, Compliance, Mobile Society, Operations, Program Management, Risk Management, Strategy, Sustainability, Technology

A Framework for Social Media in Sustainability Programs

Over the next several months I will be contributing to the Sustainable Business Forum and Social Media Today on the topic of social business (aka “SocBiz”) and how these tools, methods and approaches can be used to address sustainability programs.  The first article in the series outlines a framework – a cycle – of how private and public sector organizations typically adopt these approaches through four phases of the information life cycle of sustainability efforts.

In my work with companies looking to promote their outbound market and internal communications messages, I have looked at a number of “socialbiz” tools and methods that seem to be resonating in the workplace particularly with those that are members of the Millennial Generation who find messaging platforms are more preferable than corporate or personal email systems. In addition there has been an explosion over the past three years in the use of business analytic platforms and how these platforms render real-time information related to business performance against key targets and metrics. Combine this with the need for greater and more detailed communication regarding sustainability initiatives – including the bounce that mobility and social tools bring to program funding - and you find the convergence point.

Use of Social Media tools during sustainability effort should support the information life cycle.

As I pointed out recently in an Institute of Management Consulting webinar series on the topic, using social business tools is not child’s play. In fact one of the key success factors in using socialbiz platforms is to keep it relevant, timely and focused. I use the expression SAFTK (“stay away from the kids”) for business leaders and IT managers to know that there is a deep well of lost productivity if the tools are used for the wrong purposes across the wrong channels of communication. For example while news and media streams are helpful to keep general knowledge current and to see what the marketplace is communicating about your products and services, the use of socialbiz tools should be business-driven. For sustainability efforts, this means driving market objectives, internal consensus, and developing the requisite information to show the world you really are doing what you say you are.

In the framework I have developed to illustrate this life-cycle for sustainability programs, the axes are based on both the outbound and inbound direction of the communication as well as the strategic or operational context of the messaging. Based on this framework, organizations typically begin in the northeast (upper-right hand) quadrant and work counter-clockwise in their use of social media and socialbiz tools to address the activities of each stage of the life cycle.

For more information on this approach, including a discussion on the four phases of information use in sustainability programs, please read the entire post on Sustainable Business Forum.  Many thanks to editor Carissa Wodehouse  (twitter @CWhoa and Google+ Carissa Wodehouse) for her work on bringing this article series to light.

2 Comments

Filed under Change Management and Leadership, Community and Municipal Outreach, Compliance, Operations, Supply Chain Management, Sustainability