social media: how to engage consumers and build brands

SOCIAL MEDIA: HOW TO ENGAGE CONSUMERS AND BUILD BRANDS Case Study, Concepts, and Debatable Ideas

Kenny Ong

Takaful IKHLAS Sdn Bhd

Business Today…

13th April 2009

•Two Domino’s employees

•YouTube

•Apology from Domino’s after

48 hours

•1 million hits

•Twitter: questions on silence

•LinkedIn: suggestions by users

in forum

BusinessWeek, May 4, 2009

Guess Who?

• Shareholder : MNRB Holdings Berhad (100%)

• Established Date : 18 September 2002

• Operational since : 2 July 2003

• Takaful Model : Al-Wakalah

• Business Portfolio : General and Family Takaful

• Number Products : More than 90

• Number of Participants : More than 1,800,000

• Number of Agents : More than 6,000

• Number of Staff : 490

• Regional Offices : 11

• Paid Up Capital : RM295 million

TAKAFUL IKHLAS CORPORATE PROFILE

IKHLAS Customized Healthcare Solutions

Smart Partnerships

Wellness Program

Cost Management

Flexible

Medical Advisory

1. Business Model and Strategy

2. Social and Consumer Psychology

3. Facebook

4. What’s Next?

Technical Details – I’ll leave it to the

Specialists in the next 2 days

Business Model and Strategy

And what this means to businesses

“…in the past 18 months, we have heard

that profit is more important than revenue,

quality is more important that profit,

people are more important than profit,

customers are more important than our

people, big customers are more important

than small customers, and that growth is

the key to our success. No wonder our

performance is inconsistent"

CEO, Anonymous

What is the purpose of

Marketing & Branding?

Ultimate Objective of Marketing:

“Get more people, to buy more

things, more frequently, at higher

prices.”

Sergio Zyman

“Retention and Loyalty are useless if

No Conversion is happening.”

“Communication is useless if No

Conversion is happening.”

What is the Objective?

1.Comm = Relationship (something

like Dating)

2.Comm ≠ Media glitz

3.Comm ≠ ATL/BTL/BwTL/ArTL/FTL

4.Comm ≠ CSR

5.Comm = Get more people, to buy

more, more frequently, at higher

prices

Alignment: 4-Wheels Model

Culture

Business

Model Strategy

Structure Person

Leadership

Resources

The McPlaybook*

Make it easy to eat

• 50% drive-thru

• Meals held in one

Make it easy to prepare

• High Turnover

• Tasks simple to learn

& repeat

Make it quick

• “Fast Food”

• Tests new products

for Cooking Times

Make what customers want

• Prowls market for new

products

• Monitored field tests

*Adapted from: Businessweek , Februrary 5th 2007

What is the Business Model?

Market

Discipline Profit Model

•Google

•Tata Nano

Business Model: USP

“The Product is Not the Product”

• What is the customer really buying?

• What is the “Core Buying Purpose”?

Business Model: USP

Unique Selling Proposition (USP)

Targeted Customer

Core Buying Purpose/ Customer Value

Proposition/ Job To Be Done (JBTD)

Business Model: Profit Model

Revenue

Margin Cash

Assets

What is the Business Model?

Market

Market Discipline

"They are the most innovative"

"Constantly renewing and creative"

"Always on the leading edge"

"A great deal!"

Excellent/attractive price

Minimal acquisition cost and hassle

Lowest overall cost of ownership

"A no-hassles firm"

Convenience and speed

Reliable product and service

"Exactly what I need"

Customized products

Personalized communications

"They're very responsive"

Preferential service and

flexibility

Recommends what I need

"I'm very loyal to them"

Helps us to be a success

Product Leadership

Operational Excellence

Customer Intimacy

• Cost

• Convenience

• TCO

• Features,

Benefits

• Limited

• Solutions

• Customization

• Breadth &

Market Discipline

"They are the most innovative"

"Constantly renewing and creative"

"Always on the leading edge"

"A great deal!"

Excellent/attractive price

Minimal acquisition cost and hassle

Lowest overall cost of ownership

"A no-hassles firm"

Convenience and speed

Reliable product and service

"Exactly what I need"

Customized products

Personalized communications

"They're very responsive"

Preferential service and

flexibility

Recommends what I need

"I'm very loyal to them"

Helps us to be a success

Product Leadership

Customer Intimacy •Air Asia

•Ramly

(low cost producer)

Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995

Product Leadership

(best product)

Customer Intimacy

(best total solution)

Alignment & Consistency:

Market Disciplines

(low cost producer)

Product Leadership

(best product)

Customer Intimacy

Market Disciplines

(low cost producer)

Product Leadership

(best product)

Customer Intimacy

Market Disciplines

Operational

Excellence

• Competitive price

• Error free, reliable

• Fast (on demand)

• Simple

• Responsive

• Consistent

information for all

• Transactional

• 'Once and Done'

Customer Intimacy

• Management by

• Easy to do

business with

• Have it your way

(customization)

• Market segments

of one

• Proactive, flexible

• Relationship and

consultative

selling

• Cross selling

Product Leadership

• New, state of the

art products or

services

• Risk takers

• Meet volatile

customer needs

• Fast concept-to-

counter

• Never satisfied -

obsolete own and

competitors'

products

• Learning

organization

Disciplines, Priorities, and KPIs

(low cost producer)

Product Leadership

(best product)

Customer Intimacy

Alignment & Consistency

(low cost producer)

Product Leadership

(best product)

Customer Intimacy

Alignment & Consistency

HP well-balanced

portfolio, mass

customization

Acer super lean

cost structure,

aggressive pricing

Apple powerful

products, premium

pricing, limited range

Still Doing

well in

2009/2011

Business Model

Market

Social and Consumer

Psychology

prices.”

Sergio Zyman

Philosophy

Loyalty is Useless…

• Virtual Consumption vs.

Real Consumption

Philosophy

Loyalty is misleading…

• Heavy Consumption ≠ Loyalty

• Loyalty ≠ Heavy Consumption

*Today’s focus is on Loyalty, not Consumption.

*To increase consumption, refer Marketing

What is the Objective?

1.Comm = Relationship (something

like Dating)

2.Comm ≠ Media glitz

3.Comm ≠ ATL/BTL/BwTL/ArTL/FTL

4.Comm ≠ CSR

5.Comm = Get more people, to buy

more, more frequently, at higher

prices

www.myCNI.com.my www.OOBEY.com

Men vs. Women

Recession Generation

Color Psychology

remind us of something

familiar

e.g. blue = calm

Children = Bright

Primary Colors e.g.

toys, clothes and

children's books

Cultural Variations; white

= marriage (western) =

death (China). Purple =

death (Brazil) Yellow =

sacred (Chinese) =

sadness (Greece) =

jealousy (France)

Young = bold colors;

older = subtle palettes.

Red , Orange =

to eat quickly and

carpeting to influence

patterns of travel

Market Penetration Overview

• “Crossing the Chasm”

Resistant to taking up new product (prefer ‘safe’ route)

1. Need to attract the Early Adopter (willing to try) group first via neutral and niche products

2. The Mass market will follow once they see early adopters joining

3. If company does not innovate or has weak retention plans, customers will leave

Target: Decision Chain

Influencer

Again: different type,

different strategy

Target: Customer Types

Buy From you

Value Swing Former

Opposition

What does the Customer

* Treacy & Wiersema, The Discipline of Market Leaders, 1995

Product/Service Attributes Relationship Image

Product/Service Attributes

Quality

Selection

Smart Shopper

Relationship Image

Operational Excellence: Quality and selection in key categories with unbeatable prices

Function

Best Product

Relationship Image

Product Leadership: Unique products and services that push the standards

Service Trusted Brand

Relationship Image

Customer Intimacy: Personal service tailored to produce results for customer and build long-term relationships

Relations

Operational

Excellence

Customer

Intimacy

Product

Leadership

Organization, jobs, skills

Management systems

Information and systems

Culture, values, norms

Each Discipline Requires

Different Priorities & Resources

•Central authority, low level of empowerment

•High skills at the core of the organization

•Disciplined Teamwork

•Process, product- driven

•Conformance, 'one size fits all' mindset

• Integrated, low cost transaction systems

•The system is the process

•Command and control

•Quality management

Management systems

Product Leadership •Ad hoc, organic and cellular •High skills abound in loose-knit structures •Concept, future-driven •Experimentation and 'out of the box' mindset •Person-to-person communications systems •Technologies enabling cooperation •Rewarding individuals' innovative capacity •Risk and exposure management •Product Life Cycle profitability

Management systems

Customer Intimacy

•Empowerment close to point of customer contact

•High skills in the field and front-line

•Customer-driven

•Variation and 'have it your way' mindset

•Strong customer databases, linking internal and

external information

•Strong analytical tools

•Customer equity measures like life time value

•Satisfaction and share management

•Focus on ‘Share of Wallet’

Target: Customer Types

Buy From you

Value Swing Former

Opposition

Loyalty 2: Swing

Loyalty = Best alternative at the current

moment until I find another alternative

Solution Strategy: Base Retention

Loyalty 2: Swing

Swing Customers are “loyal” because:

• Individual Relationships

• Convenience (at that point in time)

• Tied-up

• Product Uniqueness

• Promotions

• No better alternative

• Downlines

• No known alternative

• Psychologically lazy

Sample Strategies for ‘Swing’

• Increase switching

• Mega packages

• Community

• Reward programs

(Points)

• Membership

Subscription

• Email communication

• Newsletters

• Personalized alerts

• Survey

• Suggestion Box

• Switching Techniques

(e.g. Balance

Transfer of credit

cards)

SOCIAL PSYCHOLOGY

The often overlooked, but more

important part of Social Media:

Law of Human Nature # 1

The most powerful

emotion – “FEAR”

•The prospect of a loss has a greater impact on

decision making than does the prospect of an

equivalent gain – “Prospect Theory”

The greatest desire of

humans – the

“Desire to be Important" •The interesting topic in the world – themselves

•criticism = “lose face” = defense

There is no such thing

as No Motivation

•Everyone is motivated.

•It is a matter of Positive or Negative Motivation

ALL our decisions are

emotional first, logical

second

Law of Human Nature # 4 (a)

We use ‘logic’ to defend

our emotional decisions

Attitudes drive

Behavior

•Attitudes model attitudes

•It is easier to change the attitude than behavior

•Change the attitude, change the behavior

Humans have only two

types of Thinking

•Careful or Lazy – “Dual Process Theory”

•Most people,most of the time, are in Lazy mode

•Lazy Mode Influence: Cues

•Careful Mode changes are more persistent

•Careful Mode Influence: Relevance & Comprehension

Influence Weapons

1. Comparison. When Others Are Doing It, You Should, Too. 1. We view a behavior as correct in a given situation to the

degree we see others performing it

2. The greater number of people who find any idea correct, the more a given individual will perceive the idea to be correct.

3. We will use the action of others to decide proper behavior for ourselves, especially when we view those others to be similar to ourselves.

4. Examples: restaurants, looking in air, tv comedy, donation plate

Influence Weapons

2. Liking. When You Like the Source, Do What Is Requested. 1. We prefer to say yes to the requests of people we know

and like.

2. We automatically assign to good-looking individuals favorable traits as talent, kindness, honesty, and intelligence.

3. We like people who are similar to us. We tend to believe praise and to like those who provide it, often when it is probably untrue.

4. An association with either bad things or good things will influence how people feel about us.

Influence Weapons

3. Authority. When the Source Is An Authority, You Can Believe It.

1. Humans by nature have a sense of duty to authority.

1. We are often vulnerable even to the symbols of authority as opposed to real authority e.g. titles, clothes, jewelry, cars.

Influence Weapons

4. Reciprocity. When Someone Gives You Something, You Should Give Something Back. 1. We should try to repay, in kind, what another person

has provided for us.

2. For those who owe a favor, it makes no difference whether they like the person or not.

3. This rule becomes less powerful as time becomes longer.

4. A person can trigger this effect even if it was an uninvited favor.

Influence Weapons

4. Reciprocity. When Someone Gives You Something, You Should Give Something Back. 1. There is a strong cultural pressure to return a gift,

even an unwanted one, but there is no such pressure to purchase an unwanted commercial product.

2. A small initial favor can produce a sense of obligation to agree to a substantially larger return favor – Unequal Exchange

Influence Weapons

5. Commitment/Consistency. When You Take A Stand, You Should Be Consistent. – Salesperson: "Excuse me, but do you think that a

good education is important for your kids?"

– You: "Yes, of course."

– S: "And do you think that kids who do their homework will get better grades."

– You: "Yes, I'm sure of that."

– S: "And reference books would help kids do better on their homework, don't you think?"

– You: "I'd have to say yes to that."

– S: "Well, I sell reference books. May I come in and help improve your child's educations?"

– You: "Ahhh, wait a minute . . ."

Influence Weapons

5. Commitment/Consistency. When You Take A Stand, You Should Be Consistent. 1. Once we make a choice or take a stand

(commitment), we will encounter personal and interpersonal pressures to behave consistently with that commitment (consistency).

2. The more effort that goes into a commitment, the greater is its ability to influence the attitudes of the person who made it.

3. The commitments most effective in changing a person’s self-image and future behavior are those that are active, public, and effortful.

Influence Weapons

5. Commitment/Consistency. When You Take A Stand, You Should Be Consistent. 1. A person will create his/her own new reasons to

support and justify their choice even when the original reasons are taken away.

2. Involvement and Buy-in

3. E.g. Advertisement (Promotion) – Out of Stock

Influence Weapons

6. Scarcity. When It Is Rare, It Is Good 1. Opportunities seem more valuable to us when they

are less available.

2. People seem to be more motivated by the thought of losing something than by the thought of gaining something of equal value.

3. The more we are denied the freedom to have something, we more we want it – Psychological Reactance Theory by Dr. Jack Brehm.

4. We will find a piece of information more persuasive if we think we can’t get it elsewhere – Power of Secrets

Influence Weapons

6. Scarcity. When It Is Rare, It Is Good 1. Things that can be scare: time, money, opportunity,

physical

7. Self perception. We learn about ourselves by observing our own behavior. 1. If we observe ourselves doing some thing then we

reason that we must like the thing.

• SOCIAL MEDIA

The Unfortunate World of Social Media

#1: By the time you master the

technology, it’s already irrelevant

The Unfortunate World of Social Media

#2: By the time your Social Media

strategy is approved, it’s already

irrelevant

The Right Tools for the Job

Reach of Communication

Qualit

nsity o

Personal

(info)

Impersonal

(info)

Individual Mass

Mass Traditional, In-

home, Out-Of-Home

Mass Unconventional

Mass Online

Qualit

nsity o

Personal

(info)

Impersonal

(info)

Individual Mass

Mass Targeted

Conventional

Mass Targeted Online

E.g. Annual Reports,

Analyst Briefings, IR

Roadshows, IR Website

Qualit

nsity o

Personal

(info)

Impersonal

(info)

Individual Mass

Individual Targeted

Conventional

Individual Targeted

Online

Contests

One-on-One

Qualit

nsity o

Personal

(info)

Impersonal

(info)

Individual Mass

Things to note about Social Media

• Social Media is not a Sales Weapon

• Social Media is not a Media Weapon

• Social Media is not an evolution of Direct

Marketing

• There is no Silver Bullet

So What’s the Use of Social Media?

Localizing Platform

The 36 Rules of Social Media

• FACEBOOK

Facebook: What Do You Want?

• Share Of Voice (SOV)

• Click-through?

• Engagement?

• Comments?

• Followers?

• Share?

• Like?

• Sales? Brand? Market Share?

Facebook for Business

1. Simple Starts (for those starting out)

2. A/B Testing on Facebook

3. Edge Rank

4. Facebook Ads

Facebook: Simple Starts

Gen Y Alphabet

Facebook: Simple Starts

• Keep Your Updates Short

– Blame it on Twitter

– Sweet Spot: 100 characters

• Let a photo do the talking

– Photo Album - 180%

– Photo - 120%

– Video - 100%

engagement

Nice Photos, Short Sentences

• Don’t Use URL Shorteners (e.g. bit.ly)

– URLs are not counted in the 100-140 character rule

– A shortened URL does not indicate what type of

website you’re taking them to

– use a brand-specific URL shortener e.g. Victoria

Secret: http://i.victoria.com/wSl

Simple Starts

• Time your Posts

– optimal time to post is between 1:00 pm and 3:00 pm

– Links posted between 1 and 4 pm get the highest

click-through rates

– Links posted before 8:00 am and after 8:00 pm are

less likely to get shared.

– Engagement rates are 18% higher on Thursday and

Friday

– Engagement rates fall 3.5% below average for posts

Monday through Wednesday

– Saturday and Sunday posts get the most likes Stats from bit.ly and Hubspot

Simple Starts

• Use the Right Words for Higher Engagement

– “post,” “comment,” “take,” “submit,” “like” or “tell us”

are the most effective

– “winner,” “win,” “winning” and “events” will make fans

excited

– contest,” “promotion,” “sweepstakes” and “coupon”

will turn them off.

Simple Starts

• Ask Questions

– “Where,” “when” and “should” –> highest engagement

– “would” –> most likes

– “why” -> lowest engagement, lowest likes

– Yes/no: most responses; just seconds to answer.

– Feedback

– Emotional/provocative

– Fun and fast: "Quick: ‘Batman' or 'Avengers'?"

Simple Starts

• Video Teasers

– Short -> one to three minutes at most

– Ask a question.

– Offer a quick tip

– Upcoming event

– Share a funny story

Testing

Early A/B Testing: Website Designs

A/B Testing: Simple

A/B Testing: More Advanced

A/B Testing: Advanced

A/B Testing: Simple & Practical

A/B Testing:

Facebook

Edge Rank

Page Rank

Edge Rank

• "Edgerank" algorithm - decides what

content appears in News Feeds

• On average, only 16% of company brand

page posts are actually seen by its fans

Edge Rank Algorithm: How it Works

• The closeness of the user to the brand -- or

person,

• The more your audience interacts with you, the higher

their affinity score for you will be.

• The weight of the content.

• Ranks Comments and Sharing higher than "likes"

because they require more action on the user's part.

• The time decay factor.

• Measures the age of your content. If it's older than

other content, it doesn't get as high a score.

Edge Rank Algorithm: How To

1. The more engagement the better:

– Instruction or call-to-action

– ask fans to share or "like" the content.

– pose questions to spur comments

2. 'Heavy-lifting' interactions help a lot:

– Drive fans to upload pictures, videos and engage in

lengthy discussions

– Video and photo contests can spark more interaction,

as can simple calls for content.

Edge Rank Algorithm: How To

3. Consistency is imperative:

– Post content that drives the audience to react on a

daily basis -- maybe even several times each day.

4. Content is king:

– Write and publish great content.

– Content so good fans have to share it

What’s FB Useful For?

Closing Quote on Facebook

• What’s Next?

• What other stuff are more important to notice

besides Social Media?

What’s Next?

• Mobile

• NFC

• GeoMarketing (including LBT)

• Gamification

• Virtual Goods

Mobile

NFC: Financial Product Innovation from

Non-Traditional Financial Players

• M&A: bar code readers, inventory

tracking, location-based deals

• App: loyalty card, coupon, NFC, mobile

payment at restaurants and cafés

• eWallet (soon)

• eWallet – in collaboration with Citibank,

MasterCard, Sprint Nexus 4G

Find You…

Technology

Self Targeting

Location +

Incentive +

Call to Action

Location-based Social Media

Case Study: Placecast & Geo-Fencing

• Geo-fencing —

the act of

drawing an

invisible

boundary

around a given

location and

serving an opt-

in SMS

message when

users enter

boundary

Case Study: O2, Starbucks, L’Oreal

• Six-month trial

• Placecast’s geo-

fencing

technology

• 1,500 areas

offering deals.

• Opt-in

• Gender, age and

general interests.

• Receive Special

Case Study: McDonald’s, Facebook

• Starting June

• Check in while

featuring one of

the products,

such as a Big

Mac, in their

activity feed

• Geo-couponing

Case Study: Google, iPhone, Android

• Location-aware mobile

display ads

• Incorporate maps for

click-to-call

• Ad-unit: expands into a

full ad that includes a

map overlay with the

business pinned on a

Google Map

• Calls-to-action: “get

directions” and “click-to-

call.”

Gamification SPARX

Developer: University of Auckland

http://www.springwise.com/health_wellbeing/virtual-roleplaying-game-helps-teenagers-deal-depression/

Gamification

Gamification: Market Size

Gamification

Activities

Leader Board

(Ego/ Achievement)

Rewards (Satisfaction)

Community (Belonging)

Virtual Goods…

$19.90

End Notes

Which Company?

American Customer Satisfaction Index (ACSI)

• 64 out of100-point scale: lower than IRS (Tax)

• 2nd last among 30 companies surveyed

• Lowest 5% among 223 companies surveyed

• Bottom 5% of all measured private sector

companies

• 500 million customers

2010 American Customer Satisfaction Index

(ACSI) E-Business Report

Which Company?

American Customer Satisfaction Index (ACSI)

• 64 out of100-point scale: lower than IRS (Tax)

• 2nd last among 30 companies surveyed

• Lowest 5% among 223 companies surveyed

• Bottom 5% of all measured private sector

companies

• 500 million customers

2010 American Customer Satisfaction Index

(ACSI) E-Business Report

Popularly Unpopular

Popularity

Affection

prices.”

Sergio Zyman

The Business of Business is

Business, not Social Media

Thank You.

soft copy of slides: http://totallyunrelatedrandomanddebatable.

blogspot.com/

social media: how to engage consumers and build brands

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