As the site was getting more modest traffic before the free book, I’d say that the launch was a success. The new “low” is also higher as a result than the previous low, suggesting the continued tweets and posts are helping. However, the book has only been borrowed once in the time since the free period, suggesting perhaps that in a category like marketing, reviews and ratings may be even more important. From experiments with other categories, ebook sales can be expected in action, adventure, thriller and other categories as a given, with a low price point, after a free test such as this one with the marketing book.

The next phase of the book will take longer, as the goal is to envision a place far into the future, where many of these macro trends have played out to their logical extreme. The overaching goal of the second half is to give us a bird’s eye view of the some of the technology innovations which will disrupt and impact our shifting media landscape.

Thanks for reading; there’s more to come.

What next?

For Pinterest, the key strategies are a few extrapolations beyond the popular module. First, they need to figure out how to leverage more rich, descriptive meta data about the pins they are collecting. To ensure the data is correct, implement some game mechanics and incentivize with points or a loyalty program, etc so pins get better labels. As an output of that, you have the rich tapestry of information to start creating a better global popular list of the things that’s most interesting for you to look at. Flickr has probably done the best job in history of an innovative user experience around photos, however, in the last few years Instragram has done an incredible job and now Pinterest could eventually take the crown as the most interesting way to browse photos as a direct result of the monetization integration within the core product itself. Another way to put it, if when using your product, the part that makes you money is also the part that the person using the product loves the most, you’re way ahead of the game. What’s the point of browsing and getting recommendations from people you trust if you can’t easily purchase the item that grabs your attention?

Of course, the key with this meta data based gamification engine on Pinterest is to create browseable taxonomy like Flickr, also with tags but skewed towards more advanced personalization and segmentation. Combined with a series of widgets and integration points into all the various platforms, as they already have with the core product, they could distribute and become a push and pull mechanism for any publisher with visual content. After a fashion, this would be, “Image search done right” and a highly entertaining way to both consume content and share content as a publisher. The link integration ensures that publishers get instant value, unlike Facebook, Twitter or Google plus. All of these block your site from receiving any, “search juice,” as some might call it. Pinterest stands out as one which has a much more pro publisher strategy than any of the other products their visual model could disrupt.

A more broad based, generic taxonomy would also give Pinterest tremendous distribution leverage with all the social and search channels, which would eventually disrupt the larger players to a degree, as their margins eroded and Pinterest takes over with a lower cost product, at least from a user’s perspective. As long as their user interface prioritizes and includes value for the publisher or owner of the image, the person viewing the image and the company hosting the thumbnail. It’s a great business model and one that works best when all three major stakeholders get maximum value. It remains to be seen whether or not Pinterest will be able to morph along these axes or not and what their ultimate audience size might be.

According to comScore, they surpassed ten million visitors a month already and their core demo is similar to a Kaboodle, CafeMom or even Facebook for that matter, in terms of usage and demographic. Granted, there are a lot of people on the platform and more than enough to make the experience engaging. However, with just a few twists which I’m sure are coming, the product could replace my usage of things like Flickr and others, which is ideal for me. Personally, I love web products that provide maximum utility and minimal cost, like Google search, where it’s the fastest to return results and the relevance is on par with or better than Yahoo or Bing.

One of my biggest disappointments with mobile interest was the difficulty in pinning third party images. I do most of my browsing when on my iPad or iPhone so this makes it very difficult to pin the things I like and I don’t like the extra step of switching to another app. If the functionality of their product was carried across all screens they would be growing at a faster rate.

I’m looking forward to seeing how their product evolves.

This guy was not afraid of me at all. Next time I have to get a better underwater camera that I can take further down. I broke the Olympus digital camera that took this by diving too deep with it.

With beginnings, it’s important to start at the beginning. Build a foundation, whether you plan on doing something for a medium term or long term. Without the proper foundation or rhythm to a project, you will never make meaningful progress. So when kicking something off and getting started for the first time, you want to prepare as much as you can. This preparation will enable you to outlast, out execute and outmanuever any competitor over time, given a similar quality product and strategy. Staring right makes all the difference in testing ideas, concepts, business models and more. In any sufficiently large company, roles vary where the expecations at the executive level are so vastly different from the lowest level, it would seem to the casual observer that the executive does not deliver the same volume of work. The metric in the case of a leader is their impact on the strategy, the vision and direction of the team overall, be it a leadership team, a middle management team or a group of the lowest level of workers. The first step then is to calibrate around the altitude of your organization or team.

From Business  Foundation

If you manage people, you need to figure out what the right time frame for planning should be, then setup the rhythm with which you can have maximal impact on the tempo and progress of work towards longer term, perhaps three to twelve, month out projects. Similarly, you should have a rolling three to five year vision of what the company might look like, operate or function, so that you plan for things which could create rifts, cracks or other damage to your foundation. Thus it’s important to set the right expectation on the team about milestones, goals and reporting overall and progress towards those goals. With this rubric in hand, it’s easy to analyze and disect processes and throughput to try to maximize the amount of knowledge work being created, disseminated and considered among the team. As they say, a rising tide lifts all boats, so if you can take the time to retrain or educate based on process optimization, it’s far easier for the organization to react fast to market changes or dynamic shifts in the category where they operate. Not only will your organization be more nimble, but your staff will also be more loyal, as long term, their own worth overall increases. In addition, the more you operate in this fashion, the larger the impact your work will have, which should naturally include a larger economic value for the individual team member.

Routine communication of the process improvements, the milestones and scheduling, should also include routine modeling and benchmarking of third party data, where and when it makes the most sense. This third party data will enable your team to ensure that you’re operating at the upper echelon of your class. Unfortunately, most companies start aiming at the top subset, when the real aim should be at the top of their own category. Creating this mindset of aiming at the largest quadrant of a category ensures that you can maximize the value from your team before moving into the next adjacent market. This way, your team maximizes word of mouth as well, because social flows the easiest for the category leader. The virtuous cycle of being the dominant brand, and synonymous with a category, can be seen most easily when you consider some examples. Instead of asking for Coke, some people ask for soda, when they really mean Coke. It happens the other way too, when they ask for Coke and really mean any old brown cola beverage that might be on the menu. There are loyalists of course who won’t drink Pepsi, but you can see more people search online for the term, Google, than they do for search engine. Likewise for Facebook over social network, and Amazon over online shopping.

It all starts with that communication and foundational framework. What kind of race are you running, how fast can your team go and what are the priorities that you’re going after. I’d like to get it all done yesterday but the reality is, I’m building a process which can function at a specific pace. With that in mind, if I keep increasing the throughput, the speed and the recirculation of my team’s output, we’ll win. Keep in mind though, the quality meter has to be set to high, otherwise, no matter how fast and furious you might shout, it will not achieve that word of mouth recirculation which moves products from being good to incredible in sales and adoption rates. Weekly, monthly, quarterly and yearly are the minimum required reporting periods, even if you are a small business of one, there are tools, software and services that will enable you to start tracking these critical key performance indicators to get your hands around the health of your business. There is an expression I have heard where people say that you can have a plan to fail, which is silly, because nobody would really do that, at least, I hope not. However, some people do fail to plan and therein lies missed opportunity which could change the tide.

What are the types of fan created content that you can leverage?

Blog posts, reviews, social network interactions, photos, videos and sometimes, entire sites may be built around your product or brand. As it’s impossible to eradicate all forms of speech about a brand, it’s better to nurture and encourage the kinds of content that will drive the highest return on investment, rather than simply ignoring the rich tapestry of information that fans will create. Thinking positively about, “user generated content,” let’s consider a few businesses that dominate in digital:

1. Apple – anybody can publish a song to their itunes catalog or app store, and their payouts in the most recent quarter were $400 million for publishers. Ratings, reviews are a crucial component to delivering trust for many publishers in these programs, as a result, an entire industry has evolved to support, nurture and grow the amount of positive reviews in Apple, Amazon and other marketplaces.
2. Google – anybody can add their profile, which then adds enormous value to the search engine in their ability to target, track and optimize advertisements that are custom tailored to you, personally. Without that, “user generated content,” including things like date of birth, gender, marital status, it’s harder to increase the value of their ads and provide extra services to advertisers.
3. Amazon – several Harvard Business School studies have attempted to quantify the impact of Amazon reviews to customer purchase behavior. Always, the correlation is strong between a lot of highly positive reviews from fans and high volume of sales.
4. YouTube – everybody is now a superstar. Fred, one such star, has made not one but two movies with Paramount, the parent studio of Nickelodeon. He might not be a multimillionaire, but he may never have gone Hollywood without YouTube and his huge fan base. Fans who share, discuss, comment and video reply to Fred’s short videos.

There are a few standard use cases for fan created content:

• Increase in awareness – to move people from, “Un-aware,” to, “Aware,” of your product or service, you would leverage fan created content in a social networking context or similar communication environment to enable a conversation. The conversation would include product name and a brand or service oriented message. The primary target of the campaign would be to simply spread the message and create awareness. This fan content strategy is the step that is the furthest from the conversion event.
  
• Social proof – by showcasing content created by people who have a perceptual  affinity with the visitor, you can measurably move them from, “Awareness,” to, “Interest.” This can be done by leveraging advertising, profiles, related links and similar. Amazon’s collaborative filtering is one way to approach this, as is Facebook StoryAds, which showcase names and likes with brand advertisements. A successful social proof strategy will move the right percentage of the population from the awareness stage to the interest stage.
• Search engine optimization – sometimes fan created content, when leveraged on an e-commerce site, will contain descriptions and verbiage not found in the original product description, but still highly relevant to the product for sale. As a result, some people will find the product detail page from a search engine in part because of the fan created content. In this context, fan created content can be directly correlated to increase in traffic and revenue, moving people from, “Interest,” to, “Action Completed,” whether that was a purchase, white paper download, registration and referral of friends, etc. An interested prospect is likely to seek out information via a search engine. In the US, more than 90% of adults use a search engine, where a smaller percentage use Facebook or another social network. Thus the highest reach of interested prospects can most easily be reached via search, as a last step in a long process of moving a population from un-aware to action completed.

An example of the value of fan created content:

Is there a correlation between market cap and the number of videos on youtube? Let’s examine a few random companies:

1. Apple – 1,520,000 video results, Iphone – 1,770,000 Market Cap 415.71 Billion
2. Google – 4,190,000 video results, Android – 1,470,000 Market Cap 188.03 Billion
3. Salesforce – 25,900 video results, Market Cap 15.86 Billion
4. Netsuite – 732 video results, Market Cap 2.88 Billion
5. Citibank – 37,800, Market Cap 90.26 Billion
6. Chase – 682,000, Market Cap 141.47 Billion
7. Yahoo – 2,780,000 video results, Market Cap 19.52 Billion

Sure, the search for, “Chase,” on Youtube won’t turn up everything related to JP Morgan, nor will the search for Citibank return everything related to Citigroup. However, in broad terms, it’s very easy to see that the larger brands have a much, much larger footprint of fan created content. In the case of financial companies, for what should be obvious reasons, some of the user created content is detractor created content, with a message to stop or discontinue.

Without knowing anything else, from the numbers, you can easily see that the larger, more successful companies have more fan created content. Every time somebody creates a piece of content image, movie, picture or other media in celebration, enjoyment or satisfaction with your product or service, it should be shared, promoted, encouraged and showcased. The larger and more successful you can make the virtuous cycle around aggregation of fan content, sharing and promoting, the more successful your company will be in the long run.

• Extreme enjoyment is one major reason, along with it’s ugly twin, extreme disappointment.
• Wow factor!  The iPhone, lends itself to cultist adoration and mass fanaticism, to convince me to use another phone someone would really have to wow me.
• Commitment to a brand. For example: I love Nikon cameras and lenses.
• Length of relationship with the brand, company or product is another dimension. You know those anniversary events for customers, loyalty programs, etc? Those are all geared towards generating positive, spontaneous reactions which stick with people over the long term and foster positive feelings and hopefully creating the desire to share their pleasure with others.

When you think about how you can start with social marketing, assessing the role of these four factors is very important. We are in the business of acquiring customers, influence at the critical moment of acquisition, inspiring such enjoyment that the person shares the passion elsewhere, results in positive WOM spreading. Anywhere in the post purchase process inspiring people to share something elsewhere as a result of their direct, hands on product experience is a guaranteed driver of positive WOM. To do this the product whether it’s a website, a phone or anything else must be useful, easy to use, original, surprise me once in a while. Which will lead me to engage with it more often and build memories around it creating attachment.

For a new product, if you can find an angle which generates that kind of childish glee, you can spread positive WOM. Apple and Pixar both frequently are cited as companies with products that have inspired people to spread news about them. Given this list of reasons for sharing, there are really only two ways to drive new user acquisition from WOM; extreme enjoyment and wow factor (in a good way).

So, what do both of these buckets have in common with each other?

1. Expectation setting and delivering at or above known product alternatives
2. For digital products, integrating with major social platforms to help customers express joy at key moments – such as Amazon’s Facebook Like button that shows on the, “Thank you,” page.

Enjoyment and memories, according to one study, are the only ways to impact product attachment in a positive way.

As we’ll see from a research paper that’s highly influential on this topic, we can synonimize the term enjoyment with product attachment. With that in mind, the study concluded there are three characteristics of product attachment. These characteristics include product irreplaceability, indispensability, and self-extension.

• “When a product is judged to be irreplaceable, it has a symbolic meaning to its owner that is not present in other products, even when they are physically identical.”
• “In cases where a product is judged to be indispensable, it is often so for practical reasons, not for emotional reasons.”
• Self extension refers to when people feel that a particular product is part of them in some fashion, for example, a blogger may feel that their iPhone is a part of them, suffering real feelings of withdrawal, confusion and depression when parted from it overlong (this happens to me).

Give me joy consistently and entwine yourself in my memories.

Source used: http://www.ijdesign.org/ojs/index.php/IJDesign/article/view/325/218

What is niche marketing?

I’d define it as thinking of a subset of a subset of something – people who like, “Apples,” are one group. Then the subset of those who like green apples only could be labeled, “Green apple lovers,” and those who only like a specific brand of green apple could be labeled the, “Golden delicious apple lovers,” then the people who only like apples from a specific farmer named Jim in Washington state who specializes in growing Golden delicious apples would be labeled, “Jim’s Golden delicious apple lovers,” which is yet a smaller subset, still. At each one of these stopping points, we’ve gone more and more narrow, into an easier and easier to define, smaller set of potential customers.

Once you have broken down the task of identifying groups you could target for your marketing strategy, you have to understand them. Get to know them, inside and out. What are their needs? How are those different from other people and how are they unique? Are market centric needs being unmet today? What would provide the maximum value for apple lovers in a specific region of the country, with a specific set of criteria for determining their quantifiable adoration of such a specific product?

Generic entry points for the smallest possible niche:

1. Price
2. Functionality
3. Service and lifetime value
4. Change perception (create need where there isn’t a perceived need today)

These are listed in order of least to most difficult for initial entry. Selling on price is an easier lever to pull changing perception, which requires a longer term commitment.

For any given market entry point, there will be a corresponding tactic and a message that ladders up to the overall strategy. So you would incorporate and measure the effectiveness of the marketing done as it related to emphasizing the specific entry point chosen. If the measurement of the marketing does not include attributes or characteristics around the core position, then it would be impossible to say if one set of attributes was better or worse than another in driving results.

The tag line and or message should be crafted on a per campaign basis to gauge effectiveness. Then based on those campaign results, rules should be extracted that capture what works, what doesn’t and most importantly how to improve the throughput of future programs.

Suppose that in our example, our unfortunate farmer Jim farm is using pesticides. Enter Bob, who decides to go with tactic #4 and compete with an all organic message. As the product is organic, he charges a premium, it offers the exact same perceived functionality (as they’re still apples) and the jury is out on claims from Bob that somehow specifically eating organic Golden delicious apples is linked to longer term health benefits. With this as backdrop, Bob tries to change the mind of all the local shoppers in this small town so he can take share from the incumbent, Jim, for his disruptive business approach. Personally I’m on the organic band wagon so Bob’s my man.

What kinds of programs would Bob attempt to change perception?

Changing perception for Bob is very specific: how can he make the people believe his products are important enough to buy when there is a clear substitute product available at a lower price? In this case, his campaign becomes centered around the, “why charge more,” which is what you get with any premium product. Given the organic feature of his product, you turn the liability, a feature that creates a higher base cost per unit, into the core of the campaign to change people’s perception about your apples. Linking the two concepts, better apples with higher price, will ultimately yield a specific sub-market of consumers like me who absolutely believe that Bob’s organic apples are better.

What about service and lifetime value?

To compete along these axes, the position would be that you have more staff, shorter lines, easier checkout, handier shipping returns, longer call center hours and similar tactics. One study I read about said that Amazon used eleven years in the modeling of how much a customer is worth to them, if that is true, then how much would you be willing to pay to acquire that customer? You would have to figure out how much you make per purchase, how many purchases, what the average commission was per purchase, etc for a given customer over that time period. If you do this calculation, the number may surprise you if you have not already been operating on an LTV basis. The great thing about competing on service and lifetime value can be group behavior analysis and how that impacts goal completion rates over time. With discipline, you can test and iterate towards success by identifying scientifically what features, functionality and experiences in your site cater to the highest, longest lasting relationships with customers.
How would a functional strategy work for a new market?I read about Amazon acquiring Zappos and the fanatical customer service belief that they have. It makes sense for Amazon to purchase Zappos because Zappos core is to have loyal customers (to provide amazing service), so that group of customers would never have any reason to switch. This built in switching cost due to careful selection and optimization for higher lifetime value produced incredible returns for the Zappos team.

A functionality oriented entry point would have a campaign centered around the, “missing ingredient,” which in the case of our friend Bob and his apples would be to leverage the concept of the idea that the apple is just one part of what you get from Bob. You would sell the drive through or walk up experience, the free durable shopping bags and similar aspects of the customer journey. Essentially, the customer would start to believe and feel like they’re paying for not just apples, but an apple centered experience, which might include content for apple insiders, exclusive member’s only discounts, recipe ideas and more. Anything and everything should be considered that would switch people from the incumbent brand to the upstart brand as long as the emphasis was on the larger message of, “getting more,” or something being missing from the more alternative brands. The result would be a firm position from the start as the brand in a category which is being redefined, with the incumbent immediately repositioned as the laggard based on this new definition of a whole product in that category.

Thoughts on price as a strategy and the movement towards freemium?

Recurring revenue businesses are the, “holy grail,” of business as they tend to have predictable and high lifetime value, they also typically have a free subscription component. The two may be disjointed, in the case of search engines, where the consumers use one aspect of the service where advertisers leverage another aspect of the service. If you consider the measurable, predictable number of clicks in the search engines, you could view the auctions as variable rate subscriptions, with the normal variance being only up and to the right. To apply this subscription concept to Bob and his wonderful but expensive apples, he might start a subscription freebie that features his apples prominently and start offering free apple related content, community and gamification elements to drive adoption of his freebie offerings.

As a result of the movement towards becoming a starting point for apple lovers, even if they weren’t buying his apples specifically but aiming at, “apple meta data,” Bob could start to acquire customers despite the price premium by virtue of being first in the prospects mind, as a result of the free subscription add-ons. The value of being there, all the time, in front of the apple community would come with a certain intrinsic value. Based on the old direct marketing theory of, “two percent of anything converts,” Bob could build a substantial business given the highly qualified nature of his followers. Poor Jim will be left in the dust unless he learns to adapt.

When taking marketing from micro to macro, what else changes?

To really dominate the category, it might become necessary to offer both a premium (organic) and a commodity (non organic) apple so that you can sell as many apples as possible. Or it might make sense to extend another way, into growing more varieties of apples, or other organic fruit. If I were Bob I would go with the second option since being “organic” is a core belief he is trying to instill in his followers. Eventually, you own the apples business. What comes next? Why, you go after pears of course or maybe mangoes (love mangoes)! Then you tackle other fruits and eventually make the leap into a whole new super set, vegetables, as it’s still within the larger super-duper  set of, “fruits and vegetables” and on the same level in the food pyramid.

In any growing business, the concept of the, “adjacent possible,” should be the first place you look for ways to grow revenue. Anytime you want to change perception, you have to be able to turn points of differentiation into perceived value. Maintaining that central consistent message will yield higher average lifetime value on a per customer basis. By leveraging adjacent opportunities to the core business, it should be possible to gain some economies of scale after a given number of niches have been rolled up to a higher than average market share.

Transitioning from a series of niches to a smaller number of larger groups

Amazon went from the, “A-Z of books,” to the, “A-Z of shopping,” since they first started. Facebook went from the, “A-Z of Harvard Students,” to the, “A-Z of past, present and future college students,” to, “anybody thirteen years of age or older.” Google went from the, “A-Z of a sample of webpages,” to the, “A-Z of the entire html web and it’s parts,” to something even bigger, each time. When a company grows from one series of niches and starts to move into larger groups, it is moving along different axes of value. As a result, there have been a few books discussing just this one aspect of marketing, such as, “Chrossing the Chasm” by Geoffrey Moore and “The Dip,” by Seth Godin. Taking the leap from a series of niches to a larger super-set is risky, a big challenge and fraught with more issues than this short chapter will address. While I recommend reading more on the subject, from my perspective, the process is essentially as follows.

1. Be deliberate in the key, central message about why the shift
2. Communicate with all stakeholders and dialogue publicly, where appropriate
3. Leverage strategies that are based on maximizing the lifetime value as the primary driver of a shift in strategy from smaller markets to larger markets with a new clearly defined core customer.

When you stick to these principles, your marketing efforts will pay far larger and longer lasting dividends than without. With large businesses or smaller ones, adjacent opportunities will always exist. To deal with change, you can either adapt or bury your head in the sand and wait for the inevitable. Companies that plan for change, adapt accordingly and act instead of reacting leverage adjacent, niche markets to the core area they are in to grow and profit.

How Google targeted webmasters as their primary niche market

For those who have not heard of him, “GoogleGuy,” was a member of WebmasterWorld, an online forum for web professionals, representing a voice from the Google team back in 2001.

http://www.webmasterworld.com/profilev4.cgi?action=view&member=GoogleGuy

By leveraging an active forum for web professionals, Google was able to figure out how to best cater to their needs in a way that other search engines could not match. A few innovations that set Google apart more than a decade ago, back when Yahoo had the upper hand in search, despite not owning a web search technology.

History shows us Google was right to focus on webmasters as a first successful niche market to identify. Facebook aimed at college students in Harvard; again, history shows us that this was a solid niche to begin with.