(By Mark Fidelman)
“Businesses are increasingly finding that the old traditional model of advertising becomes less effective every year. Paid TV commercials, print ads, radio spots are not as effective as they once were in and the efficacy continues to dwindle. While ad spend has shifted to Google and billions are spent on SEO services, in the future winning organizations will partner with industry influencers, company advocates, subject matter experts and use data analytics to intelligently target customers at each stage of their buying cycle.“
When asked by CXOs about the future of business in the next few years — mobile technologies, social business networks, social data analytics, artificial intelligence, smart ecommerce — I find myself referring to innovations emerging within IBM.
We can’t predict with any certainty what the future of business holds, but we do know that adaptive businesses have a much higher likelihood of survival. We also know that in order to be more adaptive businesses need to have a complete picture of their employees, partners and customers. “Siloed data results in a siloed customer experience. The best brands are using data to build a single, integrated view of their customers <partners and employees> and building highly segmented campaigns geared to a unique individual brand experience,” IBM’s Tami Cannizaro told me. And from my point of view, that’s the foundation for a winning strategy for the next 10 years.
Most of the business leaders I speak with feel apprehensive about the huge technology shifts that have enabled their customers’ unprecedented power and most executives feel unprepared to handle it. But after investigating all of the new solutions coming out of IBM, I am convinced they are well ahead of the curve and the company to watch for insights into how to prepare for a complex future.
1. Serve Your Customers in Context
You walk into a large department store and head over to the women’s area, and suddenly a message pops up from your phone from an influential fashion blogger you follow who recommends a new pair of shoes to go with a dress you bought two weeks ago. And if you buy it within 30 minutes, you’ll receive 10% off. Incredibly, scenarios like these are not too far off, and you’ll be stunned by the technology behind it.
Today, as IBM’s GM John Mesberg described, IBM is developing tools that connect employees, suppliers and partners, business processes to study and engage customers at the right place, time and situation. Think of it as a type of offline and online behavioral and predictive targeting for current and potential customers.
2. Effective Collaboration between Partners and Supplier brings Huge Competitive Advantages
Sticking with our future department store example, let’s go behind the scenes to a social network of the department store’s employees, suppliers, partners and fashion influencers that are using procurement and sales data to collaborate on new sales opportunities. In this simplified example, let’s suppose that the data show that a certain black dress was selling well but tended to be sold individually and without accessories. On seeing this, a fashion influencer popular with the store’s customers, recommends a pair of shoes she’s seen recently – will go well with the dress. Grasping that connection, the store’s procurement team sources the shoes from one of its suppliers, cuts a deal with the influencer to help promote it, then delivers it in store and in context.
Today, according to a recent IBM study of 1128 Chief Procurement Officers across 22 countries, the top performing procurement organizations have very strong collaborative relationships with key suppliers and partners. Most also report the use of procurement analytics for systematic identification of savings opportunities and more favorable long term contracts with suppliers because of increased demand forecasting efficacy. In the near future, those are the companies that will be benefiting from examples like above.
3. CrowdSourcing Innovation Will Dramatically Increase Profits
So let’s return one last time to our department store example. And while we’re at it, let’s invite the crowd into a secure area of the store’s social network to source ideas. There, the crowd is asked to create their own fashion designs, or suggest outfits not currently found in the store, or suggest entirely new product lines that match the store’s brand promise. The winners, with crowd input, will be selected by the store and potentially developed for sale at the store. That can all be done today – albeit most of the programs have had limited success because of a lack of supply chain integration and internal bureaucracy.
But tomorrow, partners and suppliers will be organized to act on the winning designs and products and quickly bring them to market. In fact, most organizations will offer winners the chance to participate in a profit sharing program based on how well the products sell. The days where the store’s buyers are the sole source for purchasing products to be sold in-store are coming to an end.
4. The Fight for Talent is Key
I agree with Say Lim, Vice President of IT at Fluor when he expressed to me, “To build a company for the next 100 years you need to have talent. To attract this talent you need to have the social tools that will attract and keep younger talent, position the organization as innovative and progressive to clients and allows the organization to think globally and act locally.”
Indeed the fight to keep the most talented and resourceful people will become even more challenging in the future as these people will be presented with myriad opportunities as a result of being well known online. If you don’t offer these people the means to be successful and to build on their careers and experience, expect them to leave your organization quickly. Furthermore, in order to retain talented employees, IBM is developing its Retention Analytics solution which provides a data-driven approach to understanding employee attrition patterns within a business. For example, if an organization is seeing employee turnover rates that are above average, it can quickly investigate and correct the issue.
Clearly, we’re entering a new phase in the employer/employee dynamic, and the most successful companies will prepare for it.
5. Companies Will Need To Focus On Building Relationships Not Just Transactions.
Businesses are increasingly finding that the old traditional model of advertising becomes less effective every year. Paid TV commercials, print ads, radio spots are not as effective as they once were in and the efficacy continues to dwindle. While ad spend has shifted to Google and billions are spent on SEO services, in the future winning organizations will partner with industry influencers, company advocates, subject matter experts and use data analytics to intelligently target customers at each stage of their buying cycle.
So when an organization wants to launch a new product or promote an existing one, they will first identify the right prospects using data analytics, then turn to people that influence and have formed bonds with their target prospects to help persuade them to purchase. For an example of how this will work in the future of business, read my article on the Obama reelection campaign.
6. Salespeople Will Sell Less and Engage More
According to recent research, 78% of social salespeople are outselling their peers, which is just a leading indicator of what’s to come. In the future, salespeople will use social analytics to identify communities where their prospects are hanging out and use intelligent content to cultivate meaningful relationships with them. The best salespeople will develop their own followings by being engaging and educational. Think of a Robert Scoble meets Zig Ziglar combination.
7. Mobile Business Isn’t Just For Technology Companies
There are companies today like Qualcomm’s Gimbal and Factual that are enabling mobile app developers to understand not only the user’s location, but what they are probably doing at the time. Businesses will use this sensory information to predict what you are planning to do, then deliver the information most suited to your lifestyle or commercial needs.
For example, let’s picture a situation where a prospect has just walked into a party. Since the phone knows where you are, can listen into to its surroundings, knows the time and understands who in your social networks are at the party (it may even double check it against a calendar entry); it can suggest connecting with party goers that are a prospective customer match, a discount coupon for future party supplies, a chance to download all of the music played at the party, and hire an Uber towncar for the drive home – when it senses things are wrapping up.
How? Well imagine instead of Apple’s Siri, you get the mobile version of IBM’s Watson instead. Think it can’t happen? Think again.
8. You Need To Become Proficient At Social Campaigns
Most of us have seen or heard about Kraft Food’s Oreo’s Superbowl NewsJacking, but I bet you haven’t heard about their campaign in China to get Chinese consumers to embrace the cookie. After struggling for years with a traditional marketing approach, Kraft decided to reintroduce the cookie using a series of social campaigns. Most effectively, Kraft hired NBA Basketball star Yao Ming as a brand ambassador. Then using online gaming, Kraft encouraged Chinese consumers to compete online with Ming in Oreo “Twist, Lick and Dunk” contests. . Mothers were then asked to share their “Oreo Moments” in an online diary on China’s popular QZone social network.
According to Kraft and IBM, the results blew them away. Total number of clicks on the online gaming site has topped 1.2 billion, with nearly 5 million page views and 1.5 million unique visitors. The first six months of the social media campaign on QZone saw 38 million unique visitors and more than 40 million user-generated “Oreo Moments.” Since the inception of the first digital campaign, Kraft representatives report that sales of Oreos in China have increased by more than 80
percent and in-store sales in some regions have tripled.
As I’ve stated before, traditional marketing methods are becoming less effective while social campaigns are typically less expensive and far more effective. Sure, they don’t all succeed, but by measuring and analyzing the results, companies can rapidly adapt their social campaigns to be more effective over time.
9. Social Media Command Centers Will Help the Organization Become More Responsive and Adaptive
The adage, “you can’t manage what you don’t measure” applies to some social conversations but I’d like to expand it to, “you can’t manage what you can’t see”. Everyone understands that they must be listening and participating in social channels, but few are strategically monitoring social conversations to learn how to be a more effective organization. Even fewer require individual departments to monitor social channels to gain their own understandings of the data without filters from the social team (that typically monitors the social conversations).
To illustrate the importance of having every department monitor social channels, let’s examine a typical product launch scenario. But in this scenario, the launch doesn’t go well because customers do not like the product for a variety of reasons. At worse, there may be a lot of finger pointing between R&D and Sales and everyone in between. At best, the company doesn’t discover the reasons for the failed product launch for weeks and even then it is unable to properly address the issues because it’s having trouble gathering the right intelligence.
In the future, social media command centers will become a ubiquitous fixture within organizations to provide instant feedback on organizational performance. So in our example, when a new product is launched, the company has an instant feedback loop and can monitor reactions to it.
10. True Artificial Intelligence (AI) Won’t Happen In The Next 10 Years, But We’ll Still Use Primitive AI To Help Us Make Decisions
I’ve long argued that we are a long way off from true artificial intelligence and passing the Turing test, but as IBM’s Watson has shown, there are solid use cases for people to supplement their work with primitive AI. Let’s use healthcare as an example.
Accoding to an IBM report, “A physician can use Watson to assist in diagnosing and treating patients by querying the system. The doctor will enter in symptoms and other related factors then Watson mines the patient data to find relevant facts about family history, current medications and other existing conditions. It combines this information with current findings from tests and instruments and then examines all available data sources to form hypotheses and test them. Watson can incorporate treatment guidelines, electronic medical record data, doctor’s and nurse’s notes, research, clinical studies, journal articles, and patient information into the data available for analysis.”
Watson will then provide a list of potential diagnoses along with a score that indicates the level of confidence for each hypothesis. This is the type of AI that can help any decision maker in business – not just physicians in healthcare.
Because of the technology advances in just the past 5 years, there’s no question the business world is shifting faster than any other time in history. Mobile technologies, social networks, and social data are providing the foundation for a Cambrian-like explosion in business opportunity. There will be a lot of failures in this new era, but there will be a lot of successes too. Not having a plan to adapt in this new era is no longer an option.
So for your business it’s best to heed the advice of Bosch’s Gerd Friedrich, CIO of information systems and services: “We look at costs, functionality, how it fits into our long term plan, and how we believe it will work in the Bosch environment in the next 5-10 years. The technology that fits with that, and the accompanying use cases, is the technology that we like to invest in.”
Do you know what technology advances will impact your business? Do your competitors?
Clearly, IBM isn’t waiting for the world to pass them by. They’re not only building solutions to keep themselves viable, they are building them for everyone else too.
“Opinion pieces of this sort published on RISE Networks are those of the original authors and do not in anyway represent the thoughts, beliefs and ideas of RISE Networks.”