Chapter 10

Sense Change to Compete in the Present

Institute for the Future forecaster Bob Johansen characterizes today's business environment as a “VUCA” world, one marked by volatility, uncertainty, chaos, and ambiguity. Few, if any, of us would argue this point. According to Johansen, the key to succeeding requires that we [sense] “the future to compete in the present,” a theme that runs throughout this book and gives us part of this chapter's title. Businesses that are able to sense and compete can “turn the VUCA world around with a combination of vision, understanding, clarity, and agility” (Johansen 2007).

Listening's near-real-time conversation harvesting and analysis provides companies with exceptional sensing capabilities. Listening is about today and tomorrow, not yesterday and the past. This chapter details the ways in which companies anticipate or quickly detect change among consumers by listening and then responding in ways valued by their customers and prospects. Skillful and adroit execution enables companies to build and grow while staying tuned into a changing, challenging environment.

Winning Plays to Sense Change and Compete in the Present

From the cases we reviewed for this chapter, we distilled four winning plays:

• Listen for the pivotal insight that can serve as a platform for growth over time. Develop and exploit the insights that are capable of transforming your business. Old Spice Body Wash, for example, reversed share losses and built a new path for itself by reconceptualizing its target from men to the women who buy grooming products for men, and understanding their motivations for doing so (described in the section “Build on Consumer Excitement”). Camping supplier Trek Light started reinventing itself after grasping that customers viewed it not as a one-product company selling great hammocks, but as a lifestyle company from which they wanted to buy a variety of products (read “Expand Business Line”). Similarly, Lion Brand Yarn created a community for deepening relationships and identifying emerging interests. Business-building insights are not merely observations; they are conclusions that fundamentally influence the company's forward momentum (see “Increase Loyalty”).
• Build marketing, advertising, and promotion programs on listening findings. Let listening supply the details for your efforts. One food brand looking to drive usage by promoting its product as an ingredient listened to learn about the ways consumers used it. The brand picked up on specific types of dishes cooks prepared and leveraged that information for recipe development and sharing, creating Web site content, and blogger outreach. The result was a number of resonant and relevant recipes that cooks wanted to learn about and prepare, and the discovery of new, unexpected uses for products and services. Provo Craft, a manufacturer and global distributor of craft, hobby, and education products, used listening techniques that signaled product uses of which they were completely unaware. It responded by creating line extensions, which prompted the company to meet new needs and realize significant gains in sales (see “Create Line Extensions”).
• Choose between the two Cs: campaign tactic or continuous program. Companies face a crucial choice: to engage in tactical listening to boost short-term performance, or to adopt strategic listening for longer-term engagement, relationships, and results. Old Spice's wildly successful listening and engagement program appears to serve a tactical purpose, whereas Kraft's “Real Women of Philadelphia,” and Lion Brand Yarn—both winners in their own right—appear to be strategic efforts enabling the companies to compete through time and produce growth over time while stimulating near-term sales. Factors such as goals, budgets, resources, and company commitment to listening are a few factors that can influence listening choices.

  Short-term listening may have immediate benefits, but companies run the risk that its impact will merely support traditional campaign-oriented command-and-control marketing tactics—still the comfort zone for most businesses today. If you engage in project-oriented listening, try to achieve some of the benefits of continuous listening, as well. One method that is available to every company is to aggregate and synthesize findings and customer insights across all listening projects. This knowledge sharing and transfer, especially among departments and throughout companies, is not a substitute for an ongoing program tuned to business needs; however, this practical and workable approach can pay dividends.

• Evaluate the importance of engagement to building your business. Rigorously analyze the impact that this engagement has on your business. While current hype surrounding social media marketing sings the praises of participation, companies need to determine whether this kind of involvement is valuable to customers—and, in particular, which customers or segments. Some customers are content just to use a product, while others may want a full-on immersive experience (as seen in the ESPN example, described later in the chapter). For that reason, it's critical to listen to all customers, and implement an engagement strategy that is relevant and consequential to those who truly want to become involved with a specific company, product, or service.

  The Old Spice Body Wash example raises a related point: the need to understand the contribution that various elements of the marketing mix make toward achieving business results. Although its social media campaign leveraged listening to generate lots of real-time online interactivity, Old Spice also advertised and promoted heavily at the same time, doubling its television advertising budget and couponing aggressively, which effectively lowered the brand's price. Marketers and advertisers need to answer the question: What is the business value of high levels of interaction with a company or its products in categories where advertising and promotional activities strongly influence sales?

The tactics these organizations use for growing business are proven and forward-looking. Our review uncovered six listening-led tactics:

• Build on consumer excitement.
• Champion new uses.
• Selectively include new product features.
• Create product line extensions.
• Expand business line.
• Create a vibrant community to increase loyalty.

Build on Consumer Excitement

A breakthrough creative advertising and marketing strategy sparked a sensation for Procter & Gamble's Old Spice Body Wash. While the brand's target has traditionally been its male users, P&G's research revealed that women, in fact, buy the bulk of men's toiletries. Pivoting on what was truly an insight—a conclusion that makes a significant difference to the business and becomes a platform for growth—Old Spice and its agency, Wieden + Kennedy, launched a campaign geared toward women's pleasure. The resulting commercial, “The Man Your Man Could Smell Like,” became an overnight classic and bona fide social media phenomenon.

P&G truly listened to the findings, in the same spirit embraced by two other cases we reviewed: the Suzuki Hayabusa and Hennessy Cognac, both in Chapter 5. P&G could have gone along with legacy category advertising and appealed to men in various ways; instead, like Suzuki and Hennessy, the company had the guts to reject convention, sense opportunity, and blaze a new path. The key principle: Go where the customers and sales are, not where you think they should be or where they were.

To drive growth of Old Spice, P&G sought to capitalize on the nearly ear-splitting buzz generated by the TV spot and ensuing consumer interest. The plan: Have the “man,” former NFL wide receiver Isaiah Mustafa, answer the most interesting comments, questions, and videos from across social networks and YouTube. The agency set up a social media monitoring center to collect, sift through, and select the best candidates for video replies. It engaged with and responded to everyday bloggers and Twitter users, as well as a raft of celebrities, to help increase chatter and newsworthiness. Old Spice produced and uploaded 186 videos, with most of the responses completed within an hour after selection. That near-real time engagement fostered a sense that consumers and Old Spice were in it together, and that it was fun, immediate, and honest—not your typical corporate response.

Social media numbers were staggering: Within a week of airing the response videos, Old Spice generated 34 million views, a billion PR impressions, a multiplying of Twitter followers by 27 times, and Facebook fan interaction rates increasing by 800 percent (Neff 2010; Morrissey 2010). As of September 2010, Old Spice's total video views on YouTube stood at more than 143 million, and the Old Spice channel was second only to The Twilight Saga for subscribers in the sponsor's category. In terms of the top line, Old Spice Body Wash sales increased 57 percent after the first commercial, and then another 107 percent overall, in conjunction with the airing of subsequent advertising and the YouTube blitz. Old Spice's market share increased nearly 5 percent in a category that grew about 18 percent overall.

Social media listening was absolutely essential to the success of Old Spice Body Wash's social media campaign, which in turn creatively supported the brand's overall marketing program and helped generate its results. However, as pointed out above in the winning play, “Evaluate the importance of listening and engagement to building your business,” make sure that the engagement is meaningful and its contribution related to achieving agreed-upon goals, otherwise it's merely entertainment.

Champion New Uses

Companies occasionally face the situation where one of their successful, highly regarded products is falling flat or barely keeping pace with market growth. To bump sales, companies may resort to lowering price through coupons and trade deals, or increasing volume through programs such as buy-one/get-one promotions and special package sizes for limited times (“now 15% more!”). These tested and valid tactics benefit companies, and make it easier for their heavier users to buy and consume more. However, promotional activities and their benefits tend to be short term, to help companies meet quarterly or annual targets. Marketers and advertisers seeking long-term growth look instead to new or complementary uses for a particular product, and applications to increase sales and volume from core and less frequent customers over time.

Arm & Hammer may be the prototypical example of one company's ability to find new and different uses for a single product: its baking soda. It changed the image of the product from a baking ingredient measured out by the teaspoon to a multipurpose miracle product used by the box for cleaning, deodorizing, and personal care. Nowadays, Arm & Hammer baking soda is racking up sales in many different categories by itself or licensed to third-party brands for use in their products.

Food and beverage marketers, especially those that make basic items, know how valuable it is to encourage use of their products in recipes. How many people enjoy Campbell's Cream of Mushroom soup from the bowl, versus those who prepare meals with the soup as an ingredient? Recipe development and sharing are vital to the growth of many food products.

If recipes are going to serve up sales, then their content must be contemporary and pertinent to cooks’ interests, preferences, tastes, and benefits. No matter how wonderful a product may be in a dish, if the dish isn't suitable (for whatever reason), the recipe won't do its marketing job. This is why some food marketers have turned to social media listening for guidance in finding and promoting recipes. We will take a close look at two that did: Kraft, which listened in their backyard, and an unnamed condiment manufacturer, which listened in the consumer backyard.

Listening in a Brand's Backyard

Although Kraft's Philadelphia Cream Cheese (Philly), a roughly $700 million brand, perennially enjoyed a top sales rank, it experienced low year-over-year growth. In an attempt to put the brand on a stronger growth path, the company looked to counter the consumer mind-set that limited Philly primarily to topping bagels and making tasty cheesecakes. Kraft opted to popularize new uses and reignite interest by emphasizing Philly's versatility in cooking and baking.

The company started simply, by uploading short instructional videos on activities such as making Alfredo sauce and dips to its Web site—videos that eventually garnered about 250,000 downloads. After seeing such an “overwhelming” level of interest, Kraft created a social network and launched an engaging reality-style promotion—a contest—called “Real Women of Philadelphia,” introduced and hosted by Food Network star Paula Deen. To call her video popular would be to completely understate its impact: The Paula Deen feature received over 10 million views. For the contest, home cooks prepared and submitted videos of their best Philly-inflected recipes for a chance to become a regularly featured cook on the Real Women of Philadelphia social network. Returns from the first two months showed that the content strategy was working and leading to sales. Video viewings on both YouTube and the official Web site generated more than 100 million gross campaign impressions, 3,600 uploads, and 550,000 unique visitors. The most valuable result, however, was that Philadelphia Cream Cheese sales increased by 8 percent, a substantial gain in a big money market (York 2010).

Kraft remains committed to growing Philly sales through Real Women of Philadelphia. Phase 2 of the initiative, underway in late 2010, centered on weekly competitions that showcased the Philly brand, and focused on solving specific problems or developing dishes for particular occasions, such as “side dish—time crunch” (Kraft 2010). Kraft listens constantly and pays attention to the conversation threads, recipe submissions, comments, and site search trends in order to sense change and stay on top of consumer mood, tailor features, select contest topics, and optimize content for Real Women of Philadelphia visitors and members. Kraft could have simply run a single, very successful contest by any measure; but by making it a marketing program rather than a promotional stunt, it put Philly in a position to reap long-term gains.

Listening in the Consumer's Backyard

Let's turn to another food example: a case where a company is attempting to grow by letting consumers know that its product—a condiment—is a great choice to include in food preparation, as well as to use as a topping. Where Kraft centered its listening and program on a brand-controlled Web site, this case covered a variety of environments, including social networks, forums, blogs, and Twitter. We will focus on the ways social media listening guided the company's social media marketing program, which had a recipe contest as a core element. The condiment company retained full-service vendor 360i for its project (Bird 2010). Their research effort closely follows the principles of effective listening research outlined and discussed in Part I:

Listening research enabled the condiment manufacturer to sense where the strategic opportunities lay:

• Recipes factored strongly in conversations, whereas product names were seldom mentioned. This created an opportunity to make the brand's name more central to the conversation, emphasize recipes, and leverage the contest as a launching pad.
• It was vital to narrow down the recipes to the most popular foods discussed. Conversation analysis showed that condiment-as-ingredient uses were frequently mentioned in chicken, salad dressings, seafood, and pasta dishes.
• The brand needed to select where to influence and engage online. Conversations occurred across a range of social media types, but blogs and Facebook accounted for the majority.

Listening insights furnished the basis for the social media marketing program:

• Create a presence in the most relevant media; be where your customers are. To do this, the condiment company focused on blogs and Facebook. On Facebook, for example, it created a page for sharing recipes, contest information, and special live chat sessions with the head chef of the company's test kitchen, which focused on the most popular recipes.
• Engage influencers to multiply the message and stimulate interest. The company reached out to popular mom bloggers, encouraging them to enter and post about contests. By doing so, they engaged a network that created both long-form recipes, to post on their own sites, and short 140-character recipes to post on Twitter.
• Reach customers in their communities. The agency created branded profiles on five different user-generated recipe communities. A branded profile is similar to a personal profile, except that it is a company or product profile that people follow, “friend,” or look up. These profiles posted recipes and used optimized search tags and language to increase findability in those communities and in search engines.

Available social media metrics from agency 360i tell us that the listening-led program succeeded in the social realm in the following ways:

• Referrals increased. Traffic referrals from Facebook more than doubled during the campaign's run.
• Awareness and visibility increased. The company secured hundreds of permanent placements across user-generated recipe sites, appeared in the first results page for numerous relevant recipe searches on those sites, and elicited dozens of positive comments.
• Influencer programs extended reach and generated favorable messages. Numerous placements on mom blogs and twitter feeds, all with branded recipes, performed above benchmarks for reach and positive sentiment toward the product.

The social media numbers suggest a favorable impact on sales. Unfortunately, sales results were not available at the time of this writing, but the contribution of listening to the success of the social media strategy is firmly established.

Selectively Add Product Features

Because it's the new “new” thing, many brands want to get some social media action going. However, after creating a fan page, opening a Twitter account, or adding social networking to their Web sites, many soon discover they lack a business-building strategy. They really don't know whether their customers want these features, and, if they do, how they want to use them. Yet there are companies further along the social media adoption curve, like ESPN, that have learned to listen and plan accordingly.

Founded by Bill Rasmussen in 1978, ESPN started out as a single brand on a single cable channel. In the early days of using satellites to distribute cable programming, the industry was far less sophisticated than it is today. In fact, Rasmussen paid for his leased satellite time from RCA with a credit card. Programming was novel, too; ESPN's first televised event was a slow-pitch World Series softball game between the Milwaukee Schlitz's and the Kentucky Bourbons. At launch, ESPN reached about 1 million homes and had ad revenues in the single-digit millions.

Today's picture is considerably sharper. ESPN is a diversified media company that is received in millions of homes in the US and abroad, has an array of brands, and enjoys billions in revenue from advertising and fees (Wikipedia 2009). Apart from its success as a company, sports media is a brutally competitive category, so keeping viewers, building their audience, and improving fan experience are keys to growth and profitability.

ESPN, therefore, regularly scrutinizes its properties for opportunities and improvements. For example, ESPN looked at its online SportsNation brand in an attempt to answer a few basic questions about its future business potential: Would SportsNation fans like it extended to TV? Which community features, such as Twitter, live chats, or polls, did they desire? In which ways would fans want to participate, by doing things like incorporate their own live game experiences? The answers to these questions would guide ESPN's decisions about going to TV, improving the branded experience, and generating new revenue.

ESPN listens to its fans through a private community and panels. For this particular research, it used a mix of listening and asking (survey) methods to develop insights and estimates that eventually shaped the company's decisions. ESPN's Director of Advertising Analytics, Julie Propper, told us that there was interest in the TV show, and that fans enjoyed sharing their voices with ESPN and others. However, further probing sensed a big “but”: Fans wanted participation “as a complement to the experts, not as a replacement.” Acting on these insights, ESPN green-lighted the TV show SportsNation, which now airs on ESPN2, and balances the voices of ESPN talent with those of fans (Propper 2009).

Create Line Extensions

Companies looking for growth often consider providing extensions of product lines they already have. Among the very sound reasons for doing so are to: gain more customers, increase product variety, achieve greater marketing efficiency, pay lower promotional costs, and enjoy increased profits. It's no surprise that over 50 percent of all new products introduced are line extensions. It's also no surprise that a number of line extensions fail or drastically underperform. Marketers and advertisers can increase their chances for success in extending product lines by utilizing social media listening; doing so will allow them to see whether consumers have substantial enough interest in the extensions to warrant their launch.

Craft and hobby manufacturer and global distributor Provo Craft provides a telling example. The brand's leading product, Cricut, is a personal electronic paper cutter that slices paper and vinyl into all sorts of shapes and letters for scrapbooking, school projects, card making, and so on. Cricut expands the variety of shapes available by offering cartridges that owners can swap in and out of the machine. Growth comes from sales of Cricut machines and, afterward, the purchase of cartridges. It a “razor and blades” business.

Since innovative cartridge ideas for new crafting purposes are critical to the company's growth, it's essential that Provo Craft tune into the right signals from customers. The brand's product development typically started with consumer interviews, primarily through focus group research. However, like many companies, Provo Craft was intrigued by the social network-based conversations people were having around crafts, and wanted to listen in to take advantage of those discussions. Market Research Director Denise Rolfe explained why the company didn't use the more traditional focus groups: “While focus groups can provide valuable insights, they leave you vulnerable to early information leaks about your products, and don't always represent participants’ true opinions” (quoted in Crimson Hexagon 2010).

Provo Craft's listening effort followed along the lines of the listening research prinicples outlined in Part I. It recognized that figuring out where to listen was a crucial first step and major concern. The company's initial thought was to start listening to the customer conversations taking place in its support forum; however, it ran into a very typical problem: organizational silos. Provo Craft's technical team managed the forum and “owned” the data, and refused to provide it to the marketing and product groups. “It was as if we were unable to hear valuable conversations that were occurring in our own backyard,” Rolfe explained. So, instead, the company listened to customers and crafters on forums, blogs, and social networks.

Provo Craft set out to understand how its marketing approach—infomercials—resonated with customers and prospects. Its analysis confirmed that the approach, infomercial content, and key messages were appropriate—important information to know, since it demonstrated the tight fit between the company's communications strategy and its customers.

Like most of the discussions people have, social media conversations are not strictly limited to a specific topic. People conversing about marketing are also talking about their experiences, innovations they've made or want, new solutions, or problems they'd like solved. For this reason, companies analyzing listening data need to keep their minds wide open, dispose of preconceived notions, and incorporate the perspectives of different departments or responsibilities. Doing so ensures that the company extracts the sharpest insights from the data collected (see Chapter 3 for a related discussion on analytic strategy).

By approaching its data openly, Provo Craft sensed that its customers used Cricut in novel ways that the company had never considered before. Upon looking more deeply, its analysis identified new applications; Provo Craft responded by extending its product line with new application-specific cartridges for kitchen, bath, and home decorating, and by updating its messaging to inform customers about them.

Additionally, Provo Craft's experience with social media listening increased its confidence in using social media for marketing, advertising, and promotion. For example, the company launched Gypsy, a handheld cutter tool, through social-media networks, and ran a 24-hour challenge across Facebook, Twitter, blogs, and even e-mail to generate awareness and purchase interest (Crimson Hexagon 2010; Provo Craft 2009).

In a sense, social media listening became a Trojan horse for teaching the value of social media marketing, and maximizing its value, to Provo Craft. While many companies display genuine interest in social media marketing and run pilots or toe-dip, they're often stymied by how to make it a true business process part of everyday operations. One reason for this is measurement. Social media metrics are typically activity-based, tracking such behaviors as time spent, visiting patterns, or posting. They do not usually provide insight into what people are thinking, doing, or feeling about life, interests, categories, or individual products or services—which is where social media listening makes its contributions. Sharing listening data and insights with colleagues and across business functions can help companies move their social media marketing from the experimental stage to become a sustainable, long-term business contribution. (For more on this idea of gaining adoption, see Manila Austin and Britta C. Ware's essay in Chapter 21, and the vitaminwater case in Chapter 6.)

Expand Business Line

Single-product companies face a conundrum: Be known and respected for one go-to product, or expand outward to capture more sales and build business. Companies with only one product that has many potential uses can also be very successful. Lubricant WD-40 is an excellent example of this. The product line consists of different-sized aerosol spray cans, straws for squirting, and a pen format—just three items. Yet the company promotes more than 2,000 uses for its products, everything from lubricating to removing gum from hair, and stays fresh by actively soliciting new recommendations from its customers, all of which make it a versatile product that just about anyone can use.

Some companies, however, have a single product with just one or a very limited number of uses. Those firms often need to expand their business lines, and to do it in ways that their consumers track with and find valuable. Case in point: Trek Light Hammocks.

In 2010, this small Colorado-based company decided to explore new product categories for its camping supply line, which featured lightweight hammocks and related accessories. To help with the decision, Trek Light wanted to gauge what consumers thought of the brand and what they wanted from the camping industry, so it turned to a crowdsourcing agency called Napkin Labs. Crowdsourcing involves speaking with and garnering information from communities in a series of exercises that eventually generate, rate, and recommend ideas for development. Napkin Labs consulted a community of campers to learn about the camping gear industry in general, and explored specific areas like personal camping experiences and potential unmet needs for equipment.

Lively discussion ensued from these interactions, and led to two critical findings: Trek Light was not merely a “one-trick pony” hammock company so much as a lifestyle company with which people identified. For that reason, the community felt that Trek Light Hammocks should expand its business and introduce new products. Trek Light Hammocks decided to rebrand itself as Trek Light Gear to convey these notions, and reflected these changes on its Web site. As this book went to press, the company was in the final stages of selecting which new product areas it should offer (Richard 2010; Gibson 2010).

Social media listening can effectively “outsource” some of a company's business planning to its customers. This brings customers’ voices into the company as partners, and enables them to tell you how you and your products or services can best serve them. Companies should take the listening findings as essential input, but under advisement: The business must evaluate, select, and prioritize requests, and figure out how to respond, market, advertise, and sell profitably. There's a line between reacting to customer requests and applying your resources wisely to chart and then stay on a course of business growth.

Increase Loyalty

Knitting and crafting are often social activities wherein people gather to work on a single project or enjoy one another's company while working on individual projects. Established in 1878, Lion Brand Yarn, a venerable manufacturer of yarns and crafting supplies, wanted to attract and connect with passionate needlers and hookers, and, like Ladies' Home Journal, sought to bring younger people into the fold (see Chapter 11).

Working with social media listening partner Converseon, Lion Brand identified and mapped key topics, themes, and activities of interest, and located authoritative individuals. Their analysis enabled them to create “an authentic and relevant online voice and identify engagement opportunities” (Young 2009). Lion Brand Yarn acted on these insights to create its podcast series, “Yarncraft” (also available through iTunes and as a CD) and “Lion Brand Notebook,” its blog with community and social networking features (see Figure 10.1). To stay authentic, Lion Brand had company employees run the podcasts and site content.

Figure 10.1 Lion Brand Yarns created a social media strategy based on insights generated through its social media listening program. Lion Brand Network offers community and social networking features.

Site-led “knit-alongs” and “crochet-alongs” engage community members in a virtual club. Each of these events focuses on a single project with its own required yarns and materials. These have not only proved to be popular; they also measurably drive sales of project-related items, as correlations show.

By creating a community and introducing topics and activities based on social media listening insights, Lion Brand enjoyed benefits well beyond a few additional yarn and supply sales. Lion Brand's VP of Marketing, Ilana Rabinowitz, advises that listening to those passionate about crafts allowed the company to meet both measurable and soft goals, namely: customer-guided marketing and product development; image management; bringing younger crafters into the fold; employee satisfaction increases; promotion on other blogs and podcasts; and becoming a meaningful part of crafters’ lives.

Media patterns, customer impacts, and financial results bear out these points. Lion Brand Yarn was listed as “one of the 2009 Internet Retailer's ‘Hot 100 Retail Web sites,’ gathering more than 2 million visits a month. Podcast downloads number about 15,000 to 20,000 monthly.” Its blogs enjoy readership in the tens of thousands per month, and customers participating with the brand through social media are 83 percent more likely to describe themselves as “very brand loyal.” They're advocates and promoters, being several times more likely to recommend the brand to others (Rabinowitz and Young 2009).

Site traffic generated from social media converts at higher rates than other sources, such as e-mail and banner ads, and average order value is higher. Looking at the month from June 16–July 16, 2009, traffic from Lion Brand's blog to its e-commerce site converted at a rate 41 percent greater than the brand's average traffic, and the order size was roughly 40 percent greater than the average ticket.

Summary

Social media listening helps companies grow business by sensing change, and then developing and acting on forward-looking consumer insights. When applied to proven tactics—which include capitalizing on consumer excitement, championing new product uses, creating line extensions, expanding business lines, and creating communities—companies are better able to compete in the present and create advantage.