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The End of Business as Usual
Rewire the Way You Work to Succeed in the
Consumer Revolution
Brian Solis
Wiley © 2011
320 pages
[@]
Rating
8 Applicability
7 Innovation
8 Style
8
Focus
Leadership & Management
Strategy
Sales & Marketing
Finance
Human Resources
IT, Production & Logistics
Career & Self-Development
Small Business
Economics & Politics
Industries
Global Business
Concepts & Trends
Take-Aways
• The digital revolution is radically transformative for businesses.
• These changes are not just technological. They directly affect consumer behavior.
• Companies that cannot adapt to these changes face obsolescence.
• Businesses used to define their brands. Today, “connected consumers” define them.
• Companies must connect with consumers on a personal basis. They must treat
consumers as valued partners, not just as sales targets.
• To build relationships and win sales, companies need to create satisfying experiences
for their connected consumers.
• The way people connect online activates distribution chains that rival any
broadcast network.
• To earn the trust of connected customers, businesses must engage them online in a
positive way.
• You must appeal to customers’ emotions.
• Through such engagement, businesses stay relevant and build a robust future.
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What You Will Learn
In this summary, you will learn:r1) What strategies will help you exploit the nature, extent and impact of the digital
revolution; 2) What influence “connected consumers” wield; and 3) How organizations can engage them effectively.
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Review
Before the Internet and social media, consumers who didn’t like a store told a few friends, sent an angry letter
or just never bought there again. Businesses had the power. Today, unhappy shoppers complain on social media
and potentially can do great harm. Companies must wake up to the power of connected consumers. One top US
airline describes itself as “customer-centric,” but a word cloud depicting its customers’ online conversations in a
graphic shows the most popular terms include: “worst, fail, hate, delay, waiting, awful, cancelled and nightmare.” That
can be ruinous. Companies must engage proactively with their online audiences, and their audience’s audiences, to
protect their reputations. Best-selling author, digital analyst and futurist Brian Solis explains how. His comprehensive
report helps new and veteran corporate leaders understand the digital revolution, and suggests tactics for exploiting
this radical transformation. getAbstract recommends Solis’s far-reaching overview to executives and entrepreneurs
looking to leverage social media and the web.
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Summarygetabstract
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“News no longer
breaks, it tweets –
demonstrating the
efficiency, momentum
and influence of the
human network.”
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“The medium is no
longer just the message.
Now, the medium is the
platform, and people
now represent both
the medium and the
message.”
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“Digital Darwinism”
The telephone company’s local business directory, the “Yellow Pages,” was once essential
for local companies. But Craigslist, Fourscore, Angie’s List and Yelp took most of its
business. Blockbuster, Tower Records, Borders and Circuit City dominated their markets
but lost the digital war. Each succumbed to digital Darwinism – the radical evolution of
consumer preferences and performance. The tools are ubiquitous: computers, smartphones,
webcams and tablets. More than five billion people now connect via cellphones. Two billion
people utilize the Internet. Power has shifted from brands to “connected consumers,” who
have become an information network.
Facebook
Facebook, the popular social network, has a huge presence on the Internet. In 2010,
Facebook was the “top-visited website” and its name was the top Internet search term. Each
month, Facebook users spend more than 700 billion minutes connecting with other people.
“Checking Facebook has become an indispensable ritual for the social and connected.”
Facebook is ubiquitous online. More than 2.5 million websites integrate with its social
network. Companies must engage with consumers on Facebook, Twitter, LinkedIn, and
other popular social networks.
Millennials
The “Golden Triangle of technology” – “mobile, social and real-time” – now defines daily
life. Millennials – people born “between the mid-1970s and the late 1990s” – are the
vanguard of this sweeping digital change. Millennials live online, develop fierce brand
loyalties and connect constantly with their peers. More relevantly, 86% “share their brand
preference online.”
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“In social media, we
are the stars of our
own reality show and
our audience, like any
audience, must be
cultivated. As such,
your ‘15 minutes’ are
yours to define.”
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“Controlling the
moment is so last
decade. It’s now up
to the host – or in the
world of business,
the brand, leader
or champion – to
create moments that
are nothing short of
engaging.”
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“You can’t be customer-
centric if you don’t
know who your
customers are and what
it is they value.”
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“Whether consumers
are online or offline,
technology is evolving
faster than the majority
of businesses or
consumers can adapt or
assimilate.”
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Meeting this challenge requires profound, deep-seated internal change. The change in your
organization may be adaptive, innovative, or both, but probably won’t be easy. Embracing
this change is more than necessary: Evolution demands it.
Price Comparisons
To demonstrate the digital revolution’s radical commercial implications, consider
price-comparison apps and their dramatic impact on the retail marketplace and
individual retailers.
The Wall Street Journal recently ran a story it headlined “Phone-Wielding Shoppers Strike
Fear Into Retailers.” It reported on a young man, Tri Tang – a marketer and connected
consumer – who was shopping at Best Buy for a gift for his girlfriend. He found something
he liked for $184.85. Tang scanned the product’s bar code into his Android phone’s price-
comparison app, TheFind. He quickly found the same item available through Amazon for
$106.75, with no tax and no charge for shipping. He did what anyone would do.
Thanks to the edge that digital technology provides, millions of consumers like Tang
make such easy choices all the time. As a millennial, Tang represents the new wave of
connected consumers. IDC Retail Insights reports that nearly 45% of connected consumers
use smartphones to compare prices. As Tang demonstrates, “mobile is the new point of
purchase” in “m-commerce.”
Retailers can’t watch passively as connected consumers rely on smartphones – often while
standing in their stores – to find better prices online and order the same goods for less
money. Many stores recently jumped on the social media bandwagon. Research shows that
more than 50% of retailers now use social media, which is increasingly important in the
shopping cycle.
Connected Consumers Influence Other Connected Consumers
The way shoppers connect via the Internet extends their influence over other consumers’
planned purchases. To become part of this process, companies must engage customers and
enhance their shopping and purchasing experiences.
Classically, companies focus on “boosting sales, reducing costs, increasing margins,
operationalizing around efficiencies,” and so on. But these activities are immaterial to
consumers, online and offline. What they are interested in – and demand – is that companies
concretely demonstrate that they care about their customers. This must become every
company’s primary orientation. Failure to engage with your consumers in the digital age
threatens your organization with commercial obsolescence and eventual extinction.
Zappos
Zappos, the famous shoe e-tailer and online commercial powerhouse, exemplifies what
it means to really care about customers. Zappos has proven to be an estimable change
agent. The company adapted brilliantly to radical technical changes and transformative
consumer behavior.
In 2003, Zappos remade itself from a mere Internet shoe company to an exemplar of online
service. At the time, Zappos depended on drop shipping and, therefore, it seldom stocked
many of the shoes and brands its website offered. This policy put Zappos at the mercy of
shoe manufacturers’ and distributors’ whims and scheduling.
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“The essence of
evolution and the
ability to outpace
digital Darwinism lie in
the ability to embrace
change.”
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“Businesses have long
known that a happy
customer tells a few
people, but an unhappy
customer tells many,
many more.”
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“The human network
reveals new touchpoints
that when unlocked,
allow for deeper, more
personal connections
that inspire sharing and
interaction.”
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“Any organization
that focuses on
operations, margins
and efficiencies over
customer experiences
will hasten the erosion
of market relevance.”
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These companies often shipped Zappos’s shoe orders late. Due to numerous customer
complaints, Zappos stopped drop shipping and began to stock every single shoe it sold
online. That shift gave Zappos full control over its inventory and when it shipped shoes
out to its customers.
This move also enabled Zappos to deliver on its foundational promise of “exceptional
customer service.” To illustrate the bravery of Zappos’s new policy and the effectiveness
of its customer outreach: Drop shipping once represented 25% of all Zappos sales. In 2003
– the year it gave up drop shipping – Zappos’s sales doubled.
By the end of 2004, Zappos’s increased emphasis on customer service led to a 600%
expansion in sales. By 2008, Zappos’s sales reached $1 billion. In 2009, Zappos upped the
ante on its customer-service efforts, focusing on an unprecedented concept for the business
world: happiness.
“Customer service is about making customers happy, company culture is about making
employees happy, so let’s just simplify it and at the same time, amplify our vision for
our customers, employees, vendors and peers,” said Zappos CEO Tony Hsieh. Zappos’s
happiness orientation – which means engaging positively with people inside the company
and outside of it – turned out to be a brilliant business strategy: In 2009, Amazon paid a
whopping $928 million for the company.
Ben & Jerry’s
The renowned ice cream company Ben & Jerry’s is adapting its operations and activities to
the new digital realities and exploiting them to enhance its brand.
Ben & Jerry’s recently developed the Moo Vision iPhone app. When customers place their
phones next to the lids of Ben & Jerry’s ice cream containers, they immediately see virtual
3D dioramas that depict the family farms which supply the company with the ingredients
for its ice cream. Once customers view four dioramas, Ben & Jerry’s rewards them with
free wallpaper – an innovative and successful engagement strategy.
Audiences of Audiences
Consumer experiences define the success of companies. As social media become
increasingly popular, consumers share their experiences with their social networks or
“graphs.” These networks connect with other networks, forming audiences that each have
their own separate audiences of connected customers. Connected consumers organize their
social networks into “nicheworks” – “networks within networks.” Along with interest
graphs – online representations of peoples’ interests – nicheworks “represent the future of
social networking and business relevance.”
Connected consumers control the information that moves across online and mobile
networks. “The brand or its clever messaging, attractive promotions or creative gimmicks”
don’t determine the intrinsic value of the brand’s information. The way companies
characterize information about themselves and their products or services isn’t what matters
most. Instead, what matters most is how connected consumers characterize that information
and what they share with others.
Engagement
Companies must learn about their connected consumers: what they care about, what they
want and don’t want, and how to engage them. The success of adaptive companies’
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“We are at the
convergence of
platforms and
people and this
democratization of
information is about
to undergo incredible
advancement.”
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“The mission of
adaptive business is
to design experiences
that deliver tangible
value in return for the
attention, endorsement
and resulting activity
data of the connected
customer.”
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“Do I know you? Oh
yes, you’re friends with
their friends who are
friends with those who
are friends of mine.”
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online interactions – or touchpoints – with customers depends on creating magical
moments. Engagement is where and when companies and customers encounter and
experience each other – and the more enchanting the experience, the better. This involves
online conversations, comments, Internet replies, phone messages and email responses to
customers’ questions and concerns.
Engagement calls for learning consumers’ needs and meeting them by moving from
consideration of customers’ problems to taking action to fix them. Engagement takes place
before the company sells a product or service, during the sale and long after the transaction.
Engagement involves creating compelling online content and delivering it with a human
touch. Coupons and other triggers that promote sales create engagement. Engagement
requires tangible and intangible value, and demands continual improvement of your
products and services. Engagement means unlocking “customer touchpoints” – answering
connected customers’ all-important question: “What’s in it for me?”
Engagement starts with proactive online listening. Put a senior executive in charge of this
crucial function. Besides online listening, this leader will have three primary functions:
1. Enable the company to learn from the new level of business intelligence that it can derive
from listening to connected consumers online.
2. Communicate “consumer recognition and empathy.”
3. Collaborate to achieve innovation.
Engagement involves emotion; appeal to audience emotions based on “right brain-directed
involvement, validation and empowerment.” Make your audience like they are involved
with you and that their involvement is rewarding. Engagement also depends on “digital
sociology and psychology” expertise. It requires the online delivery of value and useful
information that fits the context of your company’s interaction with its consumers. To make
this work, you must banish silos from your organization and unify your departments to
work as a single entity both inside your doors and in your interactions with consumers.
Change, Then Change Some More
Evolution has no end game. Your company must adapt and change according to the latest
digital realities, which always are a moving target.
Agile transformation depends on understanding where your company stands now and where
it needs to be in the future. This depends on your vision and abilities as a change catalyst,
to inspire and motivate others, shape consumer experiences, and continually design and
update your business’s digital relevance.
Your organization cannot “brand, market or message” its “way to relevance.” That’s
not the way things work anymore. You must establish a trusted relationship with
connected consumers.
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About the Authorgetabstract
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Digital analyst and futurist Brian Solis reports on disruptive technology and its impact on business and society. His
bestsellers include What’s the Future of Business?