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Purple Carrots

The SARS-Cov virus with all its mutations is wreaking havoc on planet Earth. The economic impact for some countries and industries is enormous. Italy spends billions of Euros a month on help for all industries, other countries are helping airlines and hotels. The travel industry is of course most affected with all the lockdowns. Some smaller nations might never fully recover.

I lost my job twice in 2020 and most teaching engagements were cancelled. The I had major surgery from which I won’t fully recover for another 6-8 months. I spend a lost of time in bed resting and writing.

I am writing a book about the effects of colonialism on Asian languages and one on marketing in the food industry which allows me to do a lot of research not just into products but also recipes, traditions and the history of food.

You can find the results for now on Instagram. http://www.Instagram.com/worldfoodunique.

I try to answer questions such as why are carrots orange (The Dutch!), who really invented Pan de Jamón, where do doughnuts come from, but also how industrial processes and products have changed the way we cook (cue Heinz ketchup).

You are welcome to follow me on my journey on all my channels.

Why Human Translators Have a Future

Around fifteen years ago I sold my last batch of share in my translation company. I sincerely believed that machine translation was around the corner and my company had limited earnings potential.

While I was right on some ways I was wrong in others. The standard documents, business correspondence, and software manuals dried up for sure. But other things came along. Prices for translation actua lly went up in some areas.

Literary translation was always the exception. It requires years; of skills and writing talent, familiarity with the author and his genre, not to mention the ability to tread a fine line to make a book commercially viable. It also pays very little.

Other areas that will never be replaced are scientific or medical documents and most certainly political content. As a translator for some very important figures in politics I was sometimes old that “ the minister doesn’t like that word “. A machine will never catch those nuances.

But it is in my food blog I started http://instagram.com/worldfooduniquethat I found a much more mundane reason not to rely on Google translate and other systems.

Take pepper for example. In German or French, Pfeffer; or poivre are always black pepper corns, which are Scotch bonnet in the Caribbean, where peppers and chilis, like in English (the plural) and bell peppers are dried paprika in German or Hungarian, and so on.

Some meat products have entirely different names in different regions. A tortilla in Mexico is a different food than in Spain. How would an artificial intelligence ever know what you mean, given the fact that most people are not aware of denominations outside their local traditions?

We have a long way to go before machines will replace humans in most areas. Some are obvious, others less so.

How To Name The World

I am writing a blog about global food marketing http://www.instagram.com/worldfoodunique and find myself troubled how to refer to regions of the world. Almost any terminology is biased, racist, egocentric and just plain wrong.

We speak of a first world but Europe was hardly the first. What’s first then? The economy? Research? Technology? Hardly.

We talk about East Asia but when you are in “The East” everything important is westwards. Towards east is but a huge ocean and a few forlorn islands.

Asians in the UK are Indians. Asians in California are people from East Asia. Inhabitants of “East Asia” hardly think of Indians when they use the term “Asian”. In Latin America, we have a similar situation with “Asiaticos”.

Ah, Latin America. What’s Latin about it? Because their official languages are related to Latin? So are English, German, and many others. Aztec and Mayan are definitely. What’s a “Latino” then?

When the inhabitants of the southern American continent say “America” they mean everything from Tierra del Fuego to Alaska. When Americans say “America” they mean the home of the free, the United States.

We think of “Chinese” as one cultural and racial entity. It is most certainly not. The Han Chinese are the most populous but China has more than 100 other tribes, languages, races and ancestries, from Mongol, Yi, to Manchuria and Viet.

So yes, I have difficulties describing regions in my blogs, not to mention races. If find this problem more pressng than gender issues like He/She/They Cis/Trans etc. Those arejust personal issues. The country and race terminology affects journalism world-wide, disenfranchises minorities, perpetuates stereotype and Euro-American centrism.

I believe we need a new terminology and I a^m trying to come up with one that is less harmful than what we are using now. It’ll be along way.

How a world-class airline missed the bus

Amidst the Coronavirus crisis, when huge airlines like Lufthansa are struggling and others are already close to bankruptcy. Airline and airport rankings are reshuffling.

The local competition for Eva Air are weak; Cathay Pacific whose survival is also in question is struggling. At least with Hong Kong’s identity destroyed by the Chinese Communists, it has lost its former shine.

China Airlines suffers from association with Taiwan’s neighbor and is often confused with Air China. Thai and Singapore Airlines operate from expensive and touristy hubs.

As of the time of this writing, the only hub carriers active are Turkish and Emirates, both Islamic and with ridiculous transit times in Dubai and Istanbul.

Eva Air had an excellent safety record, first class onboard cuisine — see my food blog Instagram.com/worldfoodunique — and locked in cheap oil prices. New planes offer great flexibility short and long haul and it has a neutral name not associated with any country or religion.

And yet, the airline as axing flights and seemingly retreating from profitable routes as well as loss making ones.

Eva Air would be a fantastic hub carrier for East Asia with great connections to US, Europe and Australia. It serves all major cities in Southeast Asia, Japan and China. Due to the time zone, connecting times are short. Cross Pacific routes are profitable due to the big Taiwanese diaspora in cities like Los Angeles, San Francisco and New York.

The tech industry employs thousands of Taiwanese and Taiwanese companies like TSMC or Foxconn are setting up new production sites.

Eva has a profitable cargo network in high demand, integrated maritime connection and a new and partly refurbished airport at its disposal.

So, why is it not expanding like mad and dominating the market like the Middle East carriers do?

The reasons are not entirely obvious but they have to do with Taiwanese risk-avoidance, a conservative management style, lack of government guarantees and most of all a certain lack of confidence in cones own abilities — a core element of Taiwanese business culture and not surprising in a country that has lived under the shadow of its huge neighbor and internal political strive for decades.

Tacos everywhere

Seldom has a food item conquered the world like #tacos. Most food makes it around the world due to the efforts of marketers, emigrants, multinationals, specific products, and more than often it is altered gravely.

The meatballs in Azerbaijan are different from Swedish ones which taste differently than American meatballs or Chinese lion heads.

Sushi have been adopted to local tastes. In California you find avocados in them, in Central Asia lamb and yoghurt, and in Europe sausages.

The taco however remained largely unchanged and apart form a choice of meat or fish and the preferred sauce exists in its country of origin exactly the same as in the rest of the world.

Every effort to industrialize it had failed. Taco sauce from the supermarket is disgusting, taco shells and tortillas easy to make at home, guacamole is fun to make and so most of the associated products and their marketing remain American.

For more visit Instagram.com/worldfoodunique

Changing Habits

Our eating habits are all different. From country to country, region to region, city to city, but also person to person and from decade to decade it seems.

Much of the advice and recipes given on the internet are unsuitable for a large portion of readers. Many ingredients are only available in certain places. Young people在 can eat much spicer than older folks. Caucasians moving to Asia often have trouble digesting the round corn rice, and Asians moving to Europe tend to miss it. Bread in Germany is dark and hard; in Asia its soft and sweet, and so on.

Then there is age. My habits certainly have changed. I used to wake up hungry and have massive breakfasts. Now at 50+ I need a few hours before I feel well enough to eat. Simple breakfasts or just coffee will do.

Oddly enough my selection of foods changed too. I used to travel the world and enjoy local cuisine, as you can see on http://www.instagram.com/worldfoodunique

Now I tend to take much greater care in selecting ingredients, I have gone vegetarian almost and tend to make the same dishes all over again.

How have your habits changed over time?

Simple Pleasures

In the times of a pandemic I am daily discovering the simple pleasures of life. Many come from my garden.

Ever since I studied in England, I’ve developed a taste for the simplest sandwiches 🥪 in the world. When returning to Austria 🇦🇹 I showed my mom and she was amazed. Although we grow red #radishes #radieschen #onions 🧅 and #cucumber 🥒 in the garden and use them in various recipes, my family never thought of putting them on toast. So here is how I make them.

A) Radish sandwich

Use toast or rye bread #ryebread #pumpernickelbread #vollkornbrot and smother it in #ricottacheese #frischkäse

Salt one side of the radish slices and lay them. Garnish with any herb 🌿 you like.

B) Cucumber sandwich

I use soft toast here in handy strips and put #mango 🥭 #chutney followed by cucumber thinly sliced.

C) Onion Sandwich

This one is the loveliest

Try to find an onion 🧅 the size of the glass will use to #stencil the #toastbread. Cut out a round shape and smother in home-made mayo.

Slice the onion, salt lightly, and top with a second round toast also brushed generously with #mayonnaise. Cover the sides like a cake with mayo and roll in herbs 🌿- or cayenne pepper 🌶: paprika powder or beetroot powder for visual effect

#sandwiches #easyrecipes #homemade #healthyfood #healthyeating #vegetarian

How experience trumps brand

The illusion of brand value in hospitality

In the old days, when travelling to foreign lands, with languages one did not speak and food one could not eat, transportation systems one could not navigate and people one could not trust, it was generally safer to stay at a hotel chain property. A name one knew and a brand one could trust.

Unsurprisingly, it was the Americans who invented the concept. Their salespeople and executives now could go anywhere in the vast United States, even the world, and trust the hotel they stayed in would offer the same facilities and quality they already knew.

How times have changed.

Staying at a hotel is no longer about minimum standards and basic expectations, but about one word: experience.

The Internet in particular has changed what is possible. We now have hundreds of pictures and opinions available to guide us. In a world of increasingly differentiated hotel concepts and the tyranny of customer reviews, we can safely select a different property and take the risk of being disappointed. Because we now have a voice: one review on Tripadvisor and the property may be tarnished, even ruined.

Why I Never Use TripAdvisor – Or: The Curse of Reviews

It was the cursed millennials who have created these new rules, booking.com and ubiquitous smartphones which enabled them, Instagram and Tripadvisor which enforced them

Influencers are now more important than brand value. A good brand must be able to influence, inspire, innovate, and tell a story; it should be charismatic and absolutely unique.

Hotel chains began to snap up iconic properties and integrate them into their offering while fully preserving their unique character. All which, as a designer of luxury hotels and designation F&B suits us just fine.

The erosion of brand value also means a redefinition of what a brand is. A motley collection of luxury properties can now be a “brand”. A bar, a restaurant, a spa can now be the reason why someone chooses a particular property.

That is why unique luxurious interiors are now more important than ever. Customers crave novelty, and overall, uniqueness, and only good architecture and design can offer that.

Read more: My Journey Into Interior Design

The author is director of global business development for luxury interior design house AB Concept in Hong Kong, Milan and Taipei. Follow the author on LinkedIn

 

Silent Earthquakes in Hospitality

This is a guest blog written by Richard Adam, Chief Executive OPTIMIST, NED Board Member, Strategist, Developer, High-End Experience Incubator and Digital Advocate. You can connect with him on LinkedIn here.

Since I can remember, there exist these “The future of …..” type of thing conferences, publications and panel discussions. What is the future of hospitality? I don´t know. I am sure there is one, although the commercial forms may be very different. Predictions are generally difficult, especially the ones concerning the future :). I am certain, however, the landscape of hospitality as a business will be different and we will see this happening in big blows. I am bold enough to say, the changes in the next 10 years will be more radical as they were in the last 30 years. This is in regards to the fragmented forms and offerings, we will see on the horizon, and this is regarding the players in the market, some of them sticking to their habits and business as usual for far too long already.

In the history of business and economics, as we know, nothing is for granted and nothing works forever the same way, not even the simple idea of providing shelter for people away from home. Imagine, you were given potatoes to eat all your life and your parents told you, there is not much alternative.

Grown-up, out of the house, when living in the privileged parts of the world, you suddenly discover the markets full of food, you have never seen or tasted. Will you still go for potatoes? That´s what we have in the world of travel and hospitality: more and more people are not happy with just potatoes anymore. We call them mature travelers. Research, reviews, comparisons and options at their fingertips, eyes wide open, an explorer by heart, even questioning where the profits of their purchase might go to or which booking decision rewards the lower carbon footprint.

Read also: My Journey Into Interior Design

Over recent years we have seen a big appetite of some global hotel system providers (HSPs – originally known as hotel chains) dumping their real estate and their own hotel operations for the sake of growth of their brands and services to hotel owners and operators, also swallowing similar competitors to clean the market, the Starwood takeover by Marriott being one of the bigger transactions, but Hilton, IHC, Accor and others also have significant appetite for growth. It is astonishing to see these companies persuading real estate owners, their services are the best that could happen to a hotel property while they have sold most of their own. Today the hotel system providers´ stock price depends on growth rates. Increasing individual expectations and fragmented markets have led to more segmented hotel brands with specific brand promises, run by the same big hotel system giants who see their business model in providing labels called brands, booking technology, loyalty programs and management services.

Yet, I wonder whether any long-standing Ritz-Carlton guest has seen this as a progress in his or her guest experience, whether any Westin guest has seen benefits during the stay since it is under the Marriott umbrella and whether any Waldorf-Astoria or St. Regis is coming close to the original, just to name a few examples. Paste and copy of legendary originals is nothing else than selling an illusion. It is to find out, whether the illusion is meant to be sold to guests, to the hotel owners and investors or to all of them. Now, let´s explore that further.

1. The illusion of brand value

In the old days, when traveling to unknown territory with a less experimental mindset, it seemed to be safer to book a hotel from a known hotel chain. Especially frequent travelers are more concerned about minimum standards than getting the kick out of an overwhelmingly surprising hotel experience. Booking hotel brands are a reasonably safe bet and hotel chains were positioning their respective brands in the relevant segments from 1 to 5 stars and sold these concepts to hotel operators, owners and investors because it was safer for them not to deal with property investment or operational risks and gives more opportunity for growth. This was working well for all stakeholders for many years.

When big heritage brands were first established, they set themselves apart by capitalizing on an area of expertise, like a uniquely refined production method or an unparalleled sense of design. In the global world of multiplying hotel concepts according to standards, these competitive advantages got lost. Social currency is what rules brand choices today. The millennials have created their own rules and preferences. A real brand must be able to influence, inspire, innovate, tell a story, often linked to charismatic and visionary leadership.

I do not know a “sexy” brand with opportunistic streamlined technocratic executives in the lead and most companies hire CVs and “buzz words” instead of personality. A label concept is not an alive brand. A brand is a spirit.

When brands are too stuck in their past heritage, they often lose their influencing role. Tradition also means to keep the fire burning and not protecting the ash. Some iconic hotel legacies became a part of hotel group brands: The Erawan in Bangkok, The Mount Nelson in South Africa, The Carlton in Cannes, The Georges V in Paris, which was already a legend before Four Seasons existed, or The Raffles in Singapore now being part of Accor.

In the automotive sector, the Daimler-Benz corporation merged with Chrysler for a while and Mercedes-Benz cars suddenly had Chrysler parts built-in. The worst decline in sales for Mercedes-Benz cars was the consequence. These traditional legends may hope to have more distribution power in the market, but from a brand perception perspective, it lifts the HSPs brand more than it does for these traditional iconic properties. Some of them, like The Palace in St. Moritz, pulled out again after a few years not materializing the expected benefits. If I would be the owner of these famous properties, I would ask for royalties instead of paying them. Although hotel companies hire from the same source markets everyone else does, there can be some hypothetical benefits for these hotels, in management know-how, yield optimization, and digitalization, etc., but not when it comes to the glory of brands. The market leaders of the future will not necessarily be the bigger brands — they’ll be the ones that have the cultural sensitivity to understand what consumers want at any moment and what they can well do without. They need to center themselves around the customer, provide them with value, and redefine themselves as providers of experiences (not just products).

As I consider my background in strategy and marketing, I am a supporter of brand building. There is a promise, there is value, there are trust and delivery, in a perfect scenario there is even some magic and inspiration to it. It is certainly more than a label and corporate design standards.

Some hotel groups are good brands, they have a soul, a common spirit of doing things and serving their guests. The fame of The Mandarin Hong Kong and The Oriental Bangkok was blended and leveraged well for the Mandarin Oriental Group maintaining credibility. Other companies, mutated to selling trademark labels in the sense of commodity as their core business model with an emphasis on growth, have ceased being a brand in the true sense. Whoever believes money can buy everything also admits to being prepared to do anything for money.

The hotel owners and investors have paid their dues for what we now call the consolidation in hotel system providers, which has led to an inflation of hotel labels with a focus on growth but it seems, these concepts have increasingly overlooked to entertain or positively surprise their end-consumer, named hotel guests. Not surprisingly, Minor Inc. in Thailand has recently launched a court case against Marriott for getting too little in return for their royalties.

I remember when I once checked into a hotel in Orlando, belonging to the brand with the claim “ladies and gentlemen serving ladies and gentlemen” at that time. It was late, I had been traveling for over 20 hours due to some delays, I was also jetlagged and tired. But the receptionist took some time for his scripted greeting formula, he had to get across according to the procedure standards. It just wasn’t what I needed or wanted to hear at that time. Good intentions, unreasonably applied.

Several years ago, I was booked into an Aloft Hotel in South East Asia, still under the Starwood umbrella at that time. I am not a “high maintenance” hotel guest but I was very disappointed when I could not link my smartphone to the sound system in the room because the room’s connection device was outdated. Considering the brand promise of Aloft is to cater to the digital natives, that was an embarrassing delivery. For fairness sake, I grew up in a hotel and later have worked in hotels many years myself. There is no such thing as the perfect world. But these were experiences I still remember, completely contrary to the brand promise.

As a matter of fact, some hotel properties change their branding so swiftly, regular guests don’t even notice, which is not surprising: apart from labeling there is not much difference anyway. I dare to raise the question of whether brand promise in hospitality has become a big soap bubble and whether this brand inflation will come to the same saturation and decline like McDonald’s.

Why? Their marketing power is able to raise brand promise stronger than actual delivery. But when your customers are no longer hotel guests but hotel operators, owners and investors, consequently, your focus and competencies make a shift. You pamper your cash cows but feed hotel guests with potatoes. In good independent boutique hotels with passionate hoteliers, it is the other way around and people still get this special surprise and individual touch which makes the difference, assuming they are decently operated.

Global uniformed hotel branding systems tend to lose the focus on guest experience, especially when facing growth ambitions or fear of takeover or whatever is relating to the stock exchange rate, while traditional hoteliers have that by heart. Frequent travelers are finding this out increasingly.

What was once called “brand loyalty” may still work with running shoes, cars, and smartphones, seeing the immediate value of stringent product definition. In hospitality it has become a synonym for boredom.

All the loyalty programs and CRM technology are trying to compensate for this. I am a member of some of these programs. Not the big spender, but I do have my frequencies and none of these programs ever got me excited. It also becomes obvious, many hands involved squeeze room rates for little in exchange and fair-trade expectations will also play a role. Therefore, the global asset-light hotel system business model might become a dated dinosaur business model soon. Even when getting more and more segmented in their branding concepts, it is most likely rolled out with little substance for individual expectations and hospitality experience. Marriott currently holds 30 labels they call brands in the portfolio, Accor even 32. Can they really reinvent the wheel of hospitality in 30 different areas and roll it out globally as a profiled experience? The big players seem to have spotted this trend against them and are increasingly trying to offer independent boutique hotels a place under their portfolio of brands, not to mention it is another sort of income in terms of royalties for loyalty programs and distribution platforms etc.

Again, they are missing the point in guest expectations and experience. As Albert Einstein once said: “No problem can be solved from the same level of consciousness that created it”.

Smaller, innovative, more individual guest-centric and disruptive hospitality concepts are taking over the word of mouth “must-see” awareness. It is always about the destination experience, the special property and hardly ever about a label. Due to social networks and the power of advocacy, no marketing budget or paid (faked) influencer campaign can compensate when the word-of-mouth isn’t working for you.

2. The illusion of distribution power

In the year 2000, I learned from a McKinsey study, which stated that in about 15 years on from 2000, the majority of booking or shopping transactions in retail and travel will happen online. At that time, I was at the helm of a tourism development authority for a destination with 45 million registered annual visitors creating 50 billion USD in annual revenue and 8% of GDP. So, this was a statement of great relevance calling for action.

Ever since, I kept embracing digital technology and have my track record of success and failure, endless learning and continuous experience, which has helped me sharpening my senses to distinguish between what is technically doable, what is the “flavor of the months”, and what will generate real sustainable value of future relevance.

Today, in retail we have Amazon, Ebay, Alibaba etc. and in travel, we have Priceline (incl. their subbrands Booking, Agoda), Expedia, Trip Advisor, CTrip and so on. Hotel Groups may have their armadas of sales representatives for B2B and they invest in technology as well, but in terms of volume, they rely on the so-called OTAs (Online Travel Agencies).

Their contracting conditions forcing hoteliers to offer the best price options via OTAs played a big role in their growth. In many countries, this practice or contract terms are no longer allowed, but OTAs have their ways of bypassing that.

Booking.com pays 850 million USD per annum to secure a top ranking in Google searches and within the offers for a particular destination, it is about price or tangible added value, less about brands. Apart from making efforts in improving conversion rates, revenue and channel management, HSPs don’t have many competitive advantages in these systems. That’s why they run massive advertising campaigns to book directly to save commission or create some sticky alliance at the cost of the end consumer. In times of intelligent digital marketing automatization, these brand advertising campaigns are needed to keep glossy travel and general interest magazines alive and to boost executives’ egos, less and less for leveraging business. In OTA search listings, individual independent hotels stand next to hotel group branches, with the advantage of not having to pay additional royalties to the hotel system provider. That increases price flexibility or the opportunity to add value and service. Basically, any hotel can build competencies and set up self-sufficient revenue and channel management. It is not rocket science but requires commitment and the alignment of resources.

For the hoteliers of independent hotels, who are interested in improving their online distribution strategy, take advantage of OTAs without getting fatally dependent, you may check out my SlideShare contribution on that issue.

Read also: Salone, Instagram, and AR – the future of hospitality marketing

When companies of all industries (including their executives) start to think they are the best there is, then they become most vulnerable. If you stop improving, you have stopped being good. History shows, every time companies get too much control and dominate markets, some people think of solutions to outsmart them. OTAs also have become dinosaurs to a certain extent and are feeling the heat. New technologies may make them obsolete again or at least make their business model less aggressively dominant. Blockchain technology concepts on flat fee connection may become a better alternative for the hotelier. Companies working on this, like Winding Tree, are not short of investors.

Read also: How Blockchain Will Save the World

In the “old economy”, companies controlling supply (e. g. oil, steel etc.) were called “Aggregators” and made people like Carnegie or Rockefeller very rich. In the “new economy”, aggregators are called Amazon or Alibaba in retail and Expedia, Priceline, TripAdvisor or CTrip in travel. The difference is, they do not control supply, they control demand. Hotel chains or in particular HSPs may have significant market share, but they do control neither demand nor supply, not even their “own” product delivery when the hotel guest is seen as the customer. As we know, their customers are hotel owners, so the focus may be accordingly. In a business model based on economies of scale, that is not an endlessly stable position. All they have is the promise, their brands and services are worth the royalty fees, in a business environment with relatively small margins for hotel operators, increasingly massive fragmented diversification and saturation of their labels as their excitement factor wears out. It may be applicable, that in certain circumstances, a prestigious hotel brand may increase the real estate value. Fair enough, but the owner has paid for that as well.

3. The illusion of economy of scale

Since Adam Smith intellectually introduced the concept of economy of scale, it has changed the world of production, supply chain and doing business. Needless to mention the series of products, which would not exist or would not be affordable. HSPs also benefit from this thinking and adopted the strategy in focussing on selling standardized labels, concepts, distribution technology, and management service to hotel owners and investors. That has led to tremendous global growth and worked well and comfortable for decades. The limits of a sustainable strategy based on an economy of scale are new developments, alternative offerings or change in customer behavior. In the hospitality industry, the assumption of segmented yet standardized target groups of hotel guests expecting standardized hotel experiences all over the world becomes obsolete.

Read also: How the Internet of Things will change the Supply Chain

From a strategy perspective, except the traditional thinking in either focus on price or value-added, there are two directions: a feasible, “safe” strategy aiming for sustainable growth or a disruptive strategy attacking gaps of common business models and doing things with a new approach. As we know from Uber or WeWork, disruptors shake up the market in creating demand or solutions, nobody has seen or tackled before. But it is risky, and immediate profits or ROI better not be the first thing on the agenda. Then again, disruptive strategies can be a promise for the future. Should the vision of shared driverless cars ever become reality, the digital infrastructure of Uber is the plug-and-play operational backbone globally.

The former President and CEO of Starwood, Frits van Paasschen, wrote the book “The Disruptors’ Feast” after his tenure with Starwood. Whether this was coincidence or foresight, the business model of the HSP might become obsolete or needed a strategic shift, is answered in the book only subliminally. I assume he might agree to some of the thesis laid out here.

4. The illusion of guest experience

There is the old William E. Deming formula.

Quality is when delivery is equal to expectancy.

I guess that is still the philosophy of HSPs policy and procedure standards. But isn’t it the “wow” factor that makes guests share their experience in social networks or back home? Isn’t it the repeat customer or the advocate which every hotel needs to have a sustainable business? When delivery equals expectancy you do not create the “wow” factor. People don’t take pillows or stationary back home from a hotel stay (oh well, some do), they take away an experience and that’s what is left to rate the hotel for advocacy or potential return. Experience has to do with individual profile, character, and uniqueness. This requires intellectual property in design and conception, not copy and paste. It is an economy of scope rather than an economy of scale.

I am not talking about the frequent business traveler, who checks in late and leaves early with the only expectation of smooth-running processes and no negative surprises. For them hospitality is a commodity. I talk about the target groups who select hotels or hospitality for having a pleasant experience, those who are tired of “déjà vu”. Customers who compare and make a choice of preference. In a digital world, comparison has never been as effective.

Read also: How to Make Better Marketing Decisions

In less mature countries in terms of tourism, without the learnings of life cycle pattern history and effects, there is still misperception about the business model of HSPs. For ambitious Saudi Arabia, Accor has just announced to have “11.000 rooms” in the pipeline. One of the few remaining gold rush spots on earth for HSPs.

No doubt, Accor is a provider of valuable hospitality concepts and will help for further establishing the industry in the country to have more capacity of the usual and commonly known standards, but it is interesting to see in the feeds, that people think Accor is investing and taking the financial or operational risk. They are just selling their standardized services to Saudi investors. Investors better critically reflect whether today’s inflated concepts will be past glory in a decade, or even not be around any longer. Maybe, the entrepreneurial Saudi or international community (including the mindset of investors) with an ability, drive and dedication to set up hospitality in the country with a real innovative profile and character as a real driving force to visit, still needs time, education, investment and experience to emerge and to mature by learning instead of falling for copycats..

Global market research clearly indicates, authentic yet contemporary hospitality experience are key drivers to visit a country. People go to the supermarket because they know what to get, not because they wanted this specific experience in their shopping, not because they always wanted to be there. The driving force for selecting a destination among other options is a completely different case. Even young people, more often than not, have already traveled the world.

I remember when my kids were little, they often wanted the “same” as their friends, now they are grown and matured, they look for “different” things and experience. Similar to the matured traveler, they “grow up” and change preferences, documented in consumer behavioral shifts and consequences regarding millennials. Doing and having “the same” isn´t the explorer´s mindset of desire. In the world’s biggest and extremely competitive industry, HSPs can help to build trust and establish fundamental structures in the early development stage. However, for gaining international competitive edge beyond the mainstream, beyond satisfying common needs in “me too” fashion, beyond being and having “the same”, you have to think and create ahead. In consumer behavior, people go for the cheapest or for the best, little space for the mainstream.

Currently, Marriott is producing continuous press releases about growth and new properties in Japan. At the same time, an investor has initiated to bring the Ryokan concept, the traditional Japanese guest house experience, to other places internationally. Also, Muji, the Japanese retail and design company, is launching hotels. I leave it to the readers, which seems to be more interesting to explore from an experience perspective.

Apart from the revival of personally operated, individual boutique hotel concepts with charming storytelling, we see plenty of new attempts and concepts interpreting hospitality in a new way. My capacity for reading, observing or traveling is too little, to provide a complete listing of the most international initiatives. There are plenty and there are new competitors coming to the market every week. Although not everyone will survive, they are there because the demand for true out of the box hospitality experience is growing and the approach of HSPs is increasingly saturated. The “standard” is dead, no risk no fun.

I do not have the ultimate proof for that, but the rise of AirBnB and the increasingly different forms of products they offer is a strong indicator. The search for an individual alternative experience was a driving force for the rapid growth of AirBnB or emerging similar platforms, maybe not the intended strategy, but look how they are gaining profile by increasingly providing fancy individual, out of the box hospitality experiences. It is simply because there is demand. There are people not looking for potatoes only. A premium potato is still a potato. While HSPs are fighting to roll out, implement and control their standards, AirBnB (with all the critical issues of quality control) has outsourced creativity and provides the platform for disruptors.

Luxury consumer goods specialist and therefore well-tuned in luxury experience provision, the French LVMH Group has moved into the hospitality market as well. After establishing a small number of Maison Cheval Blanc, they have recently acquired Belmond. One of the few remaining true hotelier companies that still own and operate hotels and other upscale services, real rare iconic beauties among them, instead of another mutated vendor of labels. Belmond’s reputation for providing high-end hospitality experience is one of the best in the market. However, their business model encapsulates capital, is cumbersome and their pipeline of new properties in the making is close to empty. It will be interesting to see, whether they move ahead of the crowd in terms of providing superior experience under the LVMH umbrella and therefore become the luxury provider of choice or they move in the same direction of consolidated asset-light copy and paste for the sake of pure growth and become a “mee too” hotel system provider.

Read also: From Darkness to Light – how city planners are shaping neighborhoods

For the younger, budget-minded and activity-oriented community of digital nomads, Selina is pushing into the market with their own promising version of experiencing the Latin American lifestyle or what will be left of it once “standardized” and exported.

For twenty years by now, different professional assignments in development missions bring me to China on a regular base. I have stayed in numerous hotels, most of so-called international standard. Since I found the Eclat Hotel in Beijing, this is the place for me (of course, people have different tastes, that´s why this article exists). No mainstream developer thinking in terms and standards of the established HSPs could have come up with a property like this. The place is so individual that no hotel brand standard would be adequate. It´s an art and design place equipped with beds and excellent service.

There is a big difference in development between city hotels, which is pure property development, or recreational hotels in remote areas, where the surroundings and environment play a more important role and the experience value is based on other criteria. This is more to be addressed as destination development as it is far more complex. Every contemporary hospitality development is “themed” as they say, more or less successfully. A destination development strategy aims to leverage a carefully curated story to generate a sharp and (almost) unique profile with a competitive edge. It is not about assembling branches and copycats. In my professional assignments in destination development in recreational or vacation areas, I am frequently confronted with the thinking in properties only. You come across satellite properties or “development zones”, but when guests want to leave hotels to get an experience of the place in general, they stand in the middle of nowhere in a dull atmosphere, confronted with views and impressions definitely not suitable for making them advocates or repeat visitors.

Even looking out of the guest room’s window needs to be curated. In recreational destinations thinking, planning and operating in ghettos is a brittle and susceptible approach. Visitors will always assess their entire experience of a geographic place and do not differentiate between the property of their stay and a neglected area when they go in front of the house. Both need care, attention and eventually action keeping the “visitor journey” in mind. Scientific research and findings in destination development are established a little more than 50 years looking into destinations with a long tradition, while science, know-how, and experience in building infrastructure and construction goes back much longer. That’s why in destination development, thinking in bricks and mortar is still dominant, creating so-called “white elephants” still today, leaving even attractive properties empty and investors, planners, architects wondering why?

Experience design requires either talented passionate hoteliers (and I like to point out, they can be found at branded hotels just as well, but might not have the opportunity to live up to the full potential). It can be the one lucky moment to have the idea that turns around your business or it can be systematic structured experience design along the visitor journey and its three dimensions: hardware, social and service, digital. For readers interested in more details, please check out this SlideShare.

It is the investor’s or hotel owner’s decision, whether they want to become a provider of a commodity for a good night’s sleep or an experience provider, which depends on various issues (location, business model, potential, market, investment, operational capabilities etc.).

But it will be the individual unique experience that separates the competitive edge from the commodity.

Finally, it all comes down to return on capital investment and EBIDTA. It is about business. However, the ability and desire of creating outstanding customer experience are restricted, when the pressure of shareholder value generation is haunting you. Consequently, so is the leading edge and trendsetter potential. The visionary creative counterpart of the accountant has to be in the strategic lead to successfully surf with the market and to avoid drowning.

Individual High-End Experience requires intellectual property first of all, service quality and other costly ingredients second, but can leverage sharp profile, competitive advantage, positioning and sustainability with an adequate price tag to it. Someone —  hopefully a regular flow of visitors —  has to pay for that in a price-sensitive environment. But talking about experience, as Benjamin Franklin once said,

"The bitterness of poor quality remains long after the sweetness of low price is forgotten."

© Richard Adam

email: contact@trendtransfer.asia

website: www.trendtransfer.asia

Social Media is Killing Us

No this is not an attention-grabbing headline. This is the result of what I have observed over the past 24 months. Social media is killing our social abilities, our social interaction, our human existence itself.

Last week I dined at a fairly normal restaurant in the heart of Hong Kong, a city fighting at the moment for its survival and basic human rights. Never mind the political kerfuffle, I found myself sitting at the bar, ordering a calamari salad, and watching every single table around me occupied by couples or groups, with every single member on their smartphones, chatting, scrolling, reading, watching, but in no case interacting which each other, except for the occasional “look at this” moment.

I went to the National Library of Taiwan — one of the best resources for pre-revolution literature and Chinese scholarship in the world, and saw banks and banks of presumably students glued to their smartphones rather than perusing the ancient tomes in front of them.

I went to my own class, the one I am teaching on international marketing and branding, and found a roomful of students scrolling through posts of I-don’t-know-what in search of I-don’t-care.  Whether it is at work or in school, at home or in church, public and private spaces alike are now filled with smartphone-addicted adults who have lost all interest in their immediate surroundings.

In short, smartphones have taken over our world, our minds, and especially the minds of younger citizens. Liking, disliking, clicking, and sharing, have become the currency of human lives. Greta Thunberg in her speech at the Vienna Climate Summit said: climate change is an emergency, you can’t just like that on Facebook. She was wrong. One of the replies to her recent posts read: “I’m going to like that on Facebook!

This is the problem with social media: we have a stake (because we have created an account), we have a voice (because we can post, and we feel somewhat entitled (because other people like or even share our posts.) Social media makes us feel important, no matter how irrelevant our opinions may be.

Meanwhile, the number of real friends people regularly see continues to shrink. I myself feel so connected to a handful of people with whom I chat all the number of our real-life meetings continue to decline.

It’s the fault of app designers

Designers of apps have studied for a long time how to get people hooked on their apps. The auto-play of the next episodes on Netflix, the amplification of certain posts on Facebook by randomly showing them to strangers, the limited reaction options on Twitter and the cruel fight for eyeballs on Instagram all contribute to our addiction.

On many apps, it is now impossible to avoid advertising, and unscrupulous companies are raking in millions selling worthless products whose only virtues are the cool video or images produced to sell them.

Social media amplifies marginal, extremist voices and drowns out rational, measured posts and opinions.  The mobile devices we now carry around are so addictive we forget the task at hand and the people around us.

Back in 2018 the Telegraph’s Tim Stanley pointed that out from a slightly different angle. Many researchers have warned against the overuse of social media. Yet our economy already depends on the use of social media. Even the interior design company I work for relies increasingly on social media to source products and get the new out about our own creations. Read more here.

Read also: Word of the Year: Instagrammable

Social media is also killing creativity. I used to sit in endless meetings at advertising agencies where all we had was a piece of paper, a pencil, and our brains. Now, when I look at writers and creators of anything imaginable, they first look at Facebook and Instagram or any other online resource to “get ideas”. People are creating stuff that’s merely a regurgitation of what is already “out there.” Real creativity is dying.

A painter I am acquainted with has a massive following on Instagram and Facebook but hasn’t sold a single painting online. It’s at offline shows, away from social media, that people really make a purchase.

There is no good solution to this dilemma. I take regular digital detox days and weeks where I don’t even carry my phone around. At the firm I have instituted design meetings where no one is allowed to bring a mobile device or show any existing examples. In my marketing classes at uni I regularly ask students to put away their phones and come up with their own creative ideas for a marketing campaign.

There is no other marketing than digital

But it is hard. Ten years ago, I taught digital marketing as something new you had to learn and study. Now, there is no other marketing. In a way it is empowering smaller firms and individuals, but it equally amplifies the power of big companies. You will never compete with a company or individual that has the wherewithal to gain millions of followers. Attractive young people gain a meaningless following for millions with lesser abs or breasts. They make thousands of dollars thinking that their posts, their online presence, their exposure to the digital world has some kind of meaning beyond the immediate click.

A model in Germany with over 400k followers told me that he built that audience through hard work at the gym and frequent posts, made a lot of money from sponsorship, and then, as he approached a certain age, no longer got any gigs because the sponsors he relied on were looking for younger guys. He is no a barista, his “career” in tatters.

Finally, for those lesser fortunate in the looks department, social media can be a curse. They don’t have the self-esteem to post selfies, and no other marketable skills. Youtube stars come and go as quickly as you press Like. Behind the race for approval, meaning for an entire life is lost, the bonds that anchor us in society are broken, self-worth is hard to find, and we ourselves are filled with rage and anger and many even driven to suicide.

Online shaming and bullying has become such a problem that governments and schools are looking into solutions using machine learning, AI and human monitors. Facebook is increasingly in trouble for hate speech cyberbullying, and the posting for offensive content that can destroy someone’s life.

An increasing number of researchers and experts thing that ultimately, cyber health has to become the responsibility of governments. China, which already monitors and censors most online content, may offer a look into our future. The dream of the free and democratic Internet has already naive, but now lies in its dying throws.

From Darkness to Light

How hotels change neighbourhoods and write history

This article was written with Ed Ng and published on his blog earlier.

Hong Kong Island smoulders in the tropical sun: A beautiful, vibrant place, rich and prosperous — the envy of the world, and the cosmopolitan heart of Asia.

Central, the Peak, the Lan Kwai Fong and Soho districts, the southern coast — sprinkled with the villas of the rich and famous throughout the island.

Right across the beautiful Victoria harbour, where the peninsula of Kowloon connects to the mainland, you’ll find the working-class neighbourhoods of Yau Ma Tei, Tsim Sha Tsai and, further north, Mong Kok, known collectively in Cantonese as Yau Tsim Mong, one of the 18 districts of the territory.

For decades, Hong Kong island was the stage where the spotlight was, and Kowloon just a piece of land from where to regard its shining sister with admiration.

Real estate agents say that ”location” is everything, but thankfully, locations too can change and sometimes evolve very dramatically.

Hong Kong’s waterfront  has arguably the highest concentration of wealth per square meter in the world. The redevelopment of Kowloon has turned the peninsula from a gloomy working-class neighbourhood  into a bright spark of culture and luxury, ready to welcome the world.

The area has been turned by visionary city planners and courageous investors into a new and modern center of art, creativity, business and hospitality. When the Festival de Cannes selected a venue for their first Asia event, they chose Kowloon over Hong Kong. They crossed over to the Dark Side.

For AB Concept principal Ed Ng personally, buildings like the Victoria Dockside with the K11 Atelier and ultra-luxurious Rosewood Hotel inside have a special meaning.

It forms a milestone in the revitalisation of southern Kowloon.

“Seeing this vibrant change the we felt it a natural move for us to join this revitalisation by moving our studio into this vibration location. If facts, Terence and I were both born and grew up on the Kowloon side. My mother used to go to the office right by the Star Ferry pier, while I attended design schools just a stone throw away.”

“We founded our company on the Hong Kong side in Star Street 20 years ago, it was a neighbourhood right on the edge of the prosperous Central district. Star Street was a startup hub, where you could enjoy the lifestyle of the budding entrepreneur. As the company grew, we moved into a proper office building with a more corporate setting.

“Yet over time, we learned that creative talent, quality of life, and a beautiful work environment, are not just a matter of interior design, but also about the outside world and your immediate surroundings.

“That’s when I began to think of location as something more than a physical address. It is also a spiritual place, filled with history and emotions. And this is why in June 2019, we became a part of the Victoria Dockside family .

The changes that came with it were at once dramatic and unexpected.

“Our team became proud of the new office. When I walked in through the doors, all my colleagues were there, smiling, even amongst the chaos of moving and hundreds of boxes still unpacked. There was an energy here, a spirit, a new eagerness to be part of something great.

The third generation of the visionary developer got it right. This is not just about business returns and stock market valuations, but about building a cultural hub, enabling artists and creators, and building a platform for others to prosper.

Victoria Dockside quickly became a magnet, attracting just the right crowd with the right energy.  Its clientele, and the beautiful Rosewood Hotel, elevate not just its visitors to a new level of experiential luxury, they change the entire atmosphere of southern Kowloon. They turn the Dark Side into a shining beacon, ready for the future

The author is director of global business development for luxury interior design house AB Concept in Hong Kong, Milan and Taipei. Follow the author on LinkedIn

 

The 7 Deadly Sins of Influencer Marketing

Influencer marketing is on the rise. People believe messages from experts in various fields from blockchain, IoT, to marketing and automation, especially if these experts are not directly affiliated with a particular brand.

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Influencer marketing is growing on all platforms, be it Twitter, LinkedIn, Medium, Reddit, Facebook, or even through individual blogs. Yet brands are stumped how to choose a good influencer. Choose an influencer with no follower engagement and you waste your money; choose a micro-influencer with no significant following and you may be overpaying.

Some have hundreds of thousands of followers yet virtually no engagement; the suspicion is that their followers are fake, or simply regard the content as unimportant. Those may not be the right choice for your brand.

Influencers are not synonymous with celebrities. In fact, influencers in a particular industry, or even micro-influencers with the right following, can produce better results than big celebrities.

Read also: Micro-Influencer Marketing: The Ins and Outs

But there are many pitfalls. Self-proclaimed influencers don’t just inform, they often mislead. Just because someone has a large following doesn’t mean he or she can propel your brand forward. Too many influencers can make the message seem spammy. Reputation is more important than reach in many industries, and so on.

We have identified the seven most common mistakes brands make when embarking on active influencer marketing campaigns.

1) Choosing the wrong influencer

What you are looking for in an influencer are the 4Rs: Reach, Replies, Relevance and Reputation.

  • Reach refers to the number of real people an influencer reaches.
  • Replies refers to the level of engagement between followers and influencer.
  • Relevance is the influence of the person hired for your particular purpose
  • Reputation is just what it says: is this someone with a good reputation amongst your potential clients? Is he or she an industry insider with years of experience? Checking the reputation of an influencer is probably the most important task in evaluating the right partners.

There are no automated tools that can identify the right influencer perfectly. Watch an account carefully before hiring an influencer. Look at the number of replies, shares, retweets, but also if the influencer is actively engaging with others. Are their posts relevant to your business? Do they report from live events?

Cross-check the influencer’s profile across platforms. Someone with a huge Twitter following but an unremarkable LinkedIn profile without career details or very few connections is highly suspicious. Watch out for live videos where you can witness the influencer in the company of others, at big public events, and so on. If in doubt, ask around. Never base your decision on follower numbers alone! And remember: sometimes the best influencers are to be found within your own ranks. Engaged employees are often the best representatives of your particular brand.

Read also: Employee Advocacy: The Key to Digital Marketing Success

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2) Choosing too many influencers

This is a common mistake made by corporations with a somewhat larger marketing budget and risk-averse individuals, yet it is invariably the wrong decision. You do not want to dilute your message by spreading it over too many individually unimportant influencers.

This is a bit like the stock market: you shouldn’t put all your eggs in one basket, but if you buy each stock in the index you haven’t really made a decision at all. It’s not wrong to work with different influencers in different markets or market segments, but don’t lose focus.

For some brands, in technology especially, it may be better to limit themselves to just one influential representative who then actively engages with the rest of the field, rather than managing many small influencers of little or no significance.

Read also: Word-of-Mouth Marketing: The Land that Strategy Forgot

3) Short-term collaboration

This should be an obvious one, but in this fast-paced world, it is not always what brands do. Every time a new CMO comes on board, the whole battalion of influencers gets replaced just for the heck of it. This is not good.

Influencers must be nourished and in turn nourish their followers. They should be able to follow trends, technologies, and transitions over time, and not be abused merely to peddle one particular product.

Influencing consumer opinion is not the same as being a spokesperson for a product. True influencers do not parrot the brand’s marketing message but bring in their own content, experience, and know-how.

Read also: How to Become a Smarter Marketer

4) Treating influencers like an advertising channel

Let me repeat the last sentence in bold: true influencers do not parrot the brand’s marketing message but bring in their own content, experience, and know-how. 

It doesn’t matter if it’s 5G smartphones or fashion accessories: what you want from an influencer as a brand is not just a cold repetition of your marketing message, but an opinion based on facts. The best influencers are those that actually believe in the brand, for whatever reason.

Some of the best influencer examples are users who discover a new product with enthusiasm, recommend it full-heartedly, and continuously discover new features and applications. It does not matter if we are talking food supplements for bodybuilders (“It works!”) or the latest table or notebook. The personal, informed, and convincing opinion of the influencer matters.

Read also: Don’t Build Your House on Rented Land: 6 Basic Content Marketing Rules

5) Not monitoring the campaign

An all-too-common mistake! Just like an advertising campaign, specific influencer campaigns should be monitored, data analyzed, and conclusions drawn for future campaigns.

I’ve worked on hundreds of campaigns, and I can loosely group them in two categories: those where the influencer fails, and those where the message fails. The data will show the difference.

How much engagement vs. actual actions taken, for example, is an easy metric. If the influencer has a lot of engagement but very few people actually download the white paper or join the chat, this is usually indicative of a lack of interest in the product, not a failure by the influencer … and vice-versa.

Read also: KPIs are for losers. Get rid of them!

6) Not having a clear call-to-action

Every social media campaign, be it ads, blog posts, Facebook AMAs, or what have you, should come with a clear call-to-action that is easy to access, free of charge, and meaningful.

Easy to access means don’t lead people to a two-age from with 100 fields to fill in. That campaign will fail not because of the influencer, but because people can’t be bothered to fill in your form.

It should be free-of-charge because as soon as the financial aspect comes into play, the metrics get distorted. You can always make a financial offer in the final document delivered.

Lastly, meaningful because whatever message you are trying to convey, it should have some link to your mission, your bottom line, or your sales target. Influencing just to gain a following is a nice goal, but should not be the main focus of any campaign.

Read also: Inbound Marketing Explained

7) Spamming

Well. I won’t mince word’s here. Do not abuse the power of an influencer to then spam people on e-mail or social media. E-mail is still great, but seeing the same influencer message too many times is a real turn-off. The same goes for ad campaigns based on influencer messages. The more spammy they appear, the less credibility the influencer is left with.

Read also: Why E-Mail Marketing Is Still A Thing

The author is director of global business development for luxury interior design house AB Concept in Hong Kong, Milan and Taipei. Follow the author on LinkedIn

Sense and Sensibility: Bringing Asian Design Sensitivity To A Global Audience

You haven’t seen nothing yet.

Forgive the double negative but that’s what a tourism consultant from Singapore told me the other day referring to the number of Chinese tourists the world can expect to welcome in the coming decades. Apparently, fewer than 1% of Chinese citizens are currently travelling, and some Western destinations are already panicking. There is no question that in the next two decades we will see a massive increase in hotels, restaurants, and retail facilities catering increasingly to Chinese tastes. 

There is no need to panic. We have been here before: when the Arab world discovered the West, and again when Japan got onto JAL and ANA flights and visited the capitals of Europe and the US. 

Despite the racial stereotypes, Chinese travellers do not necessarily expect traditional Chinese-style restaurants and a Tang dynasty hotel ambience when they go abroad. Many of them are extremely sophisticated and purposely seek out contemporary interpretations of architectural styles and design elements. It is modern China they want to see reflected, a China of international clout and technological prowess.

So, faced with this rapid rise in demand, how do we as designers respond? Do we abandon Western minimalism or any specific style we believed in for so long, and return to classic Chinese elements?

My answer is a resounding no. 

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In fact, we get asked these questions at every press conference: Where does your inspiration come from? What style do you adhere to? Why have you done this design in this specific way? 

The problem is that design is not about the designer. It is not about our vision or our design philosophy. It is about the spirit of the locale, the message we want to send here and now, in this particular location. We are but interpreters of something that is already inherent in the site. We do not force our own vision on a hotel, restaurant, spa, or private residence: we absorb what is there – the character of the place, the city, the country, even the owner or the guests who will patronise a particular establishment. 

Ed and Terence and the entire team at AB Concept believe that the age of nationalistic, style-bound design is well and truly over. Good design should always reflect the spirit of the location, rather than any hypothetical cultural sensibility or personal bias. As designers we do not simply transplant a specific style regardless of the local history or tradition – we aim to create something unique and precious that does more than just please a specific segment of the world population. 

In other words, we will not design for the next wave of Chinese tourists. We will design for a global audience, with a local flair, in a style that reflects our commitment to understated luxury with a universal appeal.   

AB Concept Trinity Square Four Seasons-63.jpg

Let me give you three concrete examples. When we took on the project of Mei Ume, an Asian restaurant at the Four Seasons Ten Trinity Square, London, we tried to take full account of Asian sensibilities in a location that has a long and rich Asian tradition: it was here, in the former home of Her Majesty’s Revenue and Customs that for centuries traders from the Far East unloaded their wares like silk and tea. The style of the restaurant is therefore not just a nod to modern design influenced by Asian elements, but also a reflection of the building’s history. You can see this in the details of the decoration, a mixture of various Asian cultures (the very name “Mei Ume” is Chinese and Japanese for “plum) while the architectural features of the building were left intact. 

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The same is true of our work at the Four Seasons Kuala Lumpur, where we mixed traditional colonial elements with Malaysia’s rich tradition of luxurious outdoor dining in the design of award-winning Yun House and the Bar Trigona — understated elegance that does not only appeal to Chinese tourists, but to locals and visitors from around the world alike. 

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These are but a few examples of the type of culturally sensitive design philosophy we have embraced in the past decade.  We no longer speak of “East meets West” because the time of “meeting” each other is long gone. We are now merging different cultural elements into a global design sensibility that surpasses the boundaries of local concepts of beauty or aesthetics. I truly believe that this form of design is the future: the amalgam of styles into a universal aesthetic of luxury you can feel in every detail. 

In that sense, the future wave of Chinese tourists, by increasing demand for more Asian-style venues, will only underline the appeal of a modern hotel and restaurant design concepts. We are moving away from national ideas and a segmented, exclusive and restrictive realm, onto a global stage where everyone, regardless of their aesthetic background, can experience the subtle beauty of true luxury. 

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Salone, Instagram, and AR

The silent revolution in interior design marketing and the role of AR/VR

Something curious has happened over the last (almost) decade. We call it social media marketing and think of all the platforms that come with it, from Twitter and Reddit to Facebook and LinkedIn. We think of long-form content, e-mail marketing, blog posts and user-generated content. We debate the length of videos and the right composition of headlines to gain more clicks, views, and retweets. We talk about influencers and word-of-mouth and the role of millennials in B2B. Our biggest worry is the customer journey and the role of marketing itself.

All these are valid concerns for most businesses and products.

In one industry however, one platform absolutely dominates the marketing scene and the conversation with end consumers and between firms alike: interior design and Instagram are a match made in heaven.

Leather tube shelf by Giorgetti

I have just returned from the greatest spectacle on Earth, the Salone del Mobile furniture and design show in Milan, Italy. Even if you are not a designer or just about to furnish your multi-million-dollar home, the massive exhibition of everything from lights to living rooms is an experience. If you have the budget for exorbitant hotel prices during the show of course. And patience to wait for a taxi. And have the stamina to walk an average of 15 km a day from booth to booth.

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I digress. What I wanted to write about is the power of Instagram and visual marketing. The platform, owned by Facebook, has eclipsed its parent in terms of engagement and absolute numbers.

Instagram growth. Source: statista

I’ve touched on this phenomenon in my recent blog post Word of the Year, but my visit to Milan really brought home the power and influence of this platform not just for fans, influencers and end consumers, but also in a commercial B2B setting.

We think of Instagram as a platform to share your holiday photos and your food porn, and the place to follow celebrities. But since its humble beginnings and throughout its acquisition by Facebook (for far too much money, people thought back then), Instagram has had a profound impact on how certain industries market themselves, nowhere more so than in interior design.

Since I became head of global business development at AB Concept, one of the world’s leading interior design firms, my outlook on marketing, in particular social media marketing has shifted. I have always been aware of the power of images, but not before this visit to Milan and handshakes with over a hundred of my company’s suppliers and partners did I realize what an important productivity and marketing tool Instagram has become.

It happened at the Poltrona Frau exhibit at Rho Fiera when one of my firm’s designers asked a question about a new bed and the sales representative didn’t answer by fetching a catalogue or showing her an image on the website, but referred to an Instagram post, adding, “of course I can e-mail you the specs”.A bed by Poltrona Frau

The IG Account of Poltrona Frau, with its beautiful and inspiring images of the firm’s stunning designs, has over 151k followers at the time of writing. Designers and architects, furniture enthusiasts and FF&E managers from around the world peruse it to get the latest news about the company’s products.

The same is true for almost every design firm, architect, furniture manufacturer or visual artist in the world. Some don’t even bother with Facebook any longer, not to mention Twitter or LinkedIn or Reddit. While these platforms are strong in other industries (Twitter for technology, social issues, AI and finance for example, see my feed at twitter.com/mhiesboeck), in the world of fashion and design there is no way around Instagram.

My boss likes to speak of instagrammable moments and instagrammable designs. It’s not just about getting images to end customers however, it is also about B2B marketing on a grand scale. Our designers turn to Instagram for inspiration, but also use it like a catalogue to select products and get specs even. For this industry, IG isn’t just a marketing tool – it has become a business tool.

I then checked my own Instagram account. In the two short months since I joined ABConcept, my followers had grown from a few hundred during my time as a tech influencer to over 4K since I began my career in the hospitality and interior design industry.

Read: My Journey into Interior Design

Fabric selection cupboard at the Promemoria showroom

All the big brands use it, from Hermès (8m+ followers) to Gucci (33m+ followers). But also smaller, bespoke forms like Baxter (85k) or Gessi (21k+) for bathroom fixtures can no longer do marketing without the visual power and global reach of Instagram.

Faucet and basin design by Gessi

The fact is, due to the highly visual nature of interior design, what better way than to market yourself on a platform specifically created for images? It’s a no-brainer.

As the platform expands it may even add more functionality for B2B such as the uploading of catalogues, easier use of links in posts, pricing and ordering etc.

Instagrammable moments from Ceccotti Collezioni

The future of design marketing: AR and VR

But this blog is called Futurist and the future is my passion, so it is my duty to look towards the future of marketing – in this case of design marketing.

I see the greatest impact here not from 5G, AI or IoT, or any other of the many emerging technologies, but from virtual reality, in particular Augmented Reality or AR.

Imagine not having to queue or battle the masses to enter a showroom. Imagine saving the cost of air travel and hotels and experiencing the latest designs in a lifelike, interactive VR environments. Such as the Gucci Decor house for example.Gucci Decor showroom

Could it be that in a few years the masses visiting Milan for Salone del Mobile could dwindle due to the realistic representation of spaces in AR and VR? Certainly.

For a large number of designers, FF&E designers, architects, and especially for end customers, the promise of AR offers vast opportunities to engage with brands and experience their creations as if you were there, with product specs, product variants and perhaps pricing information incorporated into the virtual experience. In AR, customization is easy and the cost negligible. Try doing that with your tile samples!

Selecting fabrics and materials may change completely: rather than having cluttered shelves and unwieldy racks of product samples, designers will be able to select from a much larger quantity in virtual reality. Manufacturers will save costs by having to produce fewer samples, and through a virtual presence reach far more customers. (Although there is the problem of feel and touch when it comes to, e.g. textiles.)

End consumers will be able to match products better to existing spaces by selecting them from virtual shelves and placing them into VR representations of their own living room or hotel lobby, created by uploading drawings or photographs which will then be automatically turned into 360′ virtual environments by sophisticated software.

Architects will be able to visualize spaces, and real estate developers showcase more flexible variants of places without having to make physical changes.

Finally, platforms like Instagram will embrace AR on a grand scale, allowing you to create virtual showrooms and whole museums in the form of what is now clumsily called “stories“.

Through remote access to VR visualizations, the market for all things beautiful will further expand and even small businesses in remote locations will be able to reach customers and suppliers.

Lamps made from handblown glass by Lasvit

Collaborative tools will allow designers in different parts of the world to work together seamlessly – not through a videoconference as we do now, but by standing in a virtual room together and discussing changes which are then applied in real-time to the VR simulation.

Perhaps even the top managers of design firms will take advantage of AR-powered design marketing to decluttered their busy schedules.

But they will be missing out on three important things!

Firstly, a personal visit will always be preferable to industry insiders who need to network, visit suppliers, reinforce the personal relationships at the heart of doing business (especially in Italy!); to see and feel real things, and pay homage to the truly great designers and artists who make our homes, our hotels, and our lives more beautiful.

And then, you will also not be able to experience the fantastic food (e.g. at Paper Moon Giardino, a fabulous restaurant not entirely coincidentally designed by my company AB Concept) and the unique flair of this magnificent metropolis, Milan.

The Duomo at sunrise, shot on my way to work at AB Concept Milan. (C) Martin Hiesboeck

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Dining room at the Paper Moon Giardino, designed by ABConcept

The writer is director of business development at ABConcept and a global hospitality and technology influencer.

Follow me on LinkedIn or Twitter and of course Instagram.

My Journey Into Interior Design

Drastic career changes can be very rewarding

Through my 25-year long career, I have worked for tech companies, internet companies, startups, even diplomatic missions, trade offices, two marketing agencies and, for a few exciting months, as a university lecturer. 

In one way or another, all of these positions had to do with marketing: getting the word out, whether it is about a brand, a new enterprise, a country, or teaching the very same to eager students. From storytelling to digital marketing, from branding to brand management – somehow it was always connected. 

I worked primarily in the industrial sector: machinery, semiconductors, nanotechnology, and later on moved into IT, software, artificial intelligence and machine learning. Again, it seem to me like a gradual, organic progression.

When I left my last position at a leading tech marketing agency in Taipei, I was thus for a while looking for a similar job in a related industry. Something hands-on, something technical, something B2B, something in my comfort zone. It was not to be. Earlier this year I received a phone call from a headhunter asking me if I new anything about luxury interior design. 

Not to put too fine a point on it, but I have no clue about design. I don’t know my Gap from my Gucci. I may be able to recognise egregiously bad taste, but that’s about it. And yet, there and then, on the phone I said. “Not really, but I’m interested.” Long story short, I went for an interview. 

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Changing careers is risky but rewarding

And for another interview. And another one. First the HR Director, then the Managing Director, and finally the founder and principal designer of the company. I passed all the tests, completed a writing assignment, and had a long Zoom meeting. And then I thought: what am I doing? I am out of my depth here. I know nothing about this industry. 

Nothing, absolutely nothing, had prepared me for this stint in one of the world’s leading interior design companies.  I am not talking about any designer. We are talking about one of the very big names in luxury design – hospitality, residences, spas, and so on. We are talking – drumroll – about the masters of experiential luxury, the Hong Kong based designer duo Ed Ng and Terence Ngan. If you know anything about luxury design, your jaw has dropped by now. 

You may not have heard of them if you are not a member of the glitterati or a designer yourself, but I can guarantee you will be impressed by their work. In March 2019, they won the prestigious Ahead Award for their work at the Four Seasons Kuala Lumpur: the Yun House restaurant and the even more spectacular Bar Trigona. (https://www.fourseasons.com/kualalumpur/)

ab-concept-four-seasons-kl-yun-house

ab-concept-four-seasons-kl-bar-trigona-1

They also did the absolutely fantastic Mei Ume at the Four Seasons Ten Trinity Square in London (https://www.meiume.com), a spectacular Michelin restaurant. Their design draws on the rich history of the place: the Port of London Authority is a heritage building where traders from the Far East used to unload their wares such as silk and tea.

ab-concept-four-seasons-london-mei-ume-3

ab-concept-four-seasons-london-mei-ume-1

Now, I haven’t suddenly become a designer; I am in charge of global business development, which in the case of such an accomplished design firm means mostly evaluating whether a project is worth pursuing. It’s a lot of work keeping up with a global elite of luxury developers and private clients. 

But whereas before I dealt with purchasing managers, salespeople, the C-suite of humdrum B2B companies, and the odd F&B manager or hotel director, I now suddenly find myself thrown into a world of subtle beauty and fine nuances, of understated elegance and a global world of luxury design. I am talking about experiential luxury and ceiling heights, about rattan and marble textures, about spaces and locality. One of the most inspiring projects AB Concept has completed must be the Paper Moon Giardino in Milan:

ab-concept-paper-moon-giardino-6

The AB Concept (Instagram: https://www.instagram.com/ab_concept, Website: abconcept.net ) teams in Hong Kong, Taipei and Bangkok design luxury hotels, restaurants, residences and commercial properties world-wide. It is an amazing company. It lives and breathes good design. Even the office space looks like straight out of Architectural Digest: spacious, elegant, beautiful. Some evenings I don’t really feel like going home to my own apartment because our office is so beautiful.

Yet at the same time, the people working here are down-to-earth, friendly, and truly passionate about what they are doing. 

Changing industries is a luxury and a privilege 

The new job is a break with my career as a B2B influencer in the machinery, healthcare, and semiconductor markets. My interests in AI, machine learning, blockchain, and the future of work are suddenly taking a backseat to things like resort hotels, 5-star restaurants, and Salone di Milano and Montenapoleone. A new Instagram account (https://www.instagram.com/mhiesboeck) is replacing my 60k+ strong Twitter presence (http://www.twitter.com/mhiesboeck); I no longer teach digital marketing but have become a student of shapes, forms, patterns, and the art of understated elegance.  

If you are ever in Hong Kong, you must stop by the former Central Police Station, now a cultural hub with three stunning restaurants designed by my firm.

ab-concept_tai-kwun-central-police-station_the-dispensary

Few people have the opportunity, nay the luxury, to change industries during their careers. I found the change easy, perhaps because working for my new employer is such a joy – aesthetically, visually, and personally. It took me several weeks to make up my mind and take the plunge, but I don’t regret it. In fact, I highly recommend it. Life is short. Varied experiences over a lifetime can bring a profound sense of accomplishment. 

The reason I ended up taking the job is the profound insight the company founder Ed Ng had during my final video conference with him. “I don’t need another designer – I’ve got enough of those. What I need is a different perspective on the company. Someone who can write, and sell, and negotiate in different languages.”

It was this statement that made it clear to me that I had indeed something to offer in an industry entirely alien to me. It didn’t take me long to acclimatise, and within a few short weeks, I had learned all the lingo interior designers use to describe their design philosophy.

But my life did change.

I dress differently, I eat differently, I work differently. I use British spelling now instead of American (blame the Hong Kong connection). I switched from PCs and Windows to iPads and iMacs. I have a whole bunch of new apps on my phone, and I even changed airlines and loyalty programmes due to different travel patterns. No more ties and dark colours. Out of the Old Navy store and straight into Boggi’s. Almost everything about my life is new and exciting.

And I am hugely excited about the changes. In life, only change can keep us on our toes, only change can keep our brains fit, only change is constant. 

I you are at all inspired by great design, beauty, and luxury, follow me on my journey. I guarantee you will be as excited as I am about my new position. You also find me on LinkedIn. And if you have a design project you want to discuss, you can mail AB Concept here

IoT, Cybersecurity and Manufacturing: War is Coming

The Internet of Things or IoT is being hailed as the next big thing changing our world: our daily lives, the way we shop and consume information, and, finally, manufacturing.

Increasingly however, issues with data security, privacy, and hacking of connected systems, are making it clear that the rollout of a globally interconnected Internet of Things is anything but assured.

Cyber criminals are increasingly focusing on connected devices, hacking anything from Wi-Fi routers to coffee machines. If it is connected to the Internet in any way, it can be hacked. Cloud computing does not offer any consolation: blackouts at cloud service providers due to, say, DDoS attacks, affect millions of customers, supply chains, and production lines. Even edge computing, hailed as the antidote to cloud troubles, does not offer a convincing solution.

Read also: The Future of the Internet of Things

 

The Problem is Asian Manufacturing

From the perspective of manufacturing, there are a few obvious, and some less obvious reasons, why the deployment of IoT may be delayed, or perhaps never happen at all. That is because the vast majority of devices – an estimated 90% or more – are manufactured in Asia, namely in the mega hubs of Shenzhen and Kunshan, and of course in Taiwan. Yet both China and Taiwan are not prepared to offer the cyber security needed to make IoT a success.

Taiwan

Taiwan is suffering from a massive shortage of talent in cyber security, data science, and engineering in general. Falling birth rates and low wages are to blame: many talented young people try their fortunes abroad, where opportunities abound and pay is better. (Just to give you an idea: data scientists earn about 1/10 of American salaries in Taiwan, security specialists even less. And then there is quality of live and overall career prospects.)

Secondly, companies in Taiwan have a tradition of churning out products efficiently and competitively priced, focussing on “cost-down” strategies rather than innovation. That leaves little room for expensive testing or the consultation of experts who could make sure products are really hacker-safe.

After all they get paid to make products primarily. Increasingly they also feel that whether those products can be hacked or not is something out of their control. “It doesn’t matter how safe you build it, hackers will always find a way,” an engineer from one of Taiwan’s leading electronics manufacturers told me.

He may be right, but undoubtedly there is also a culture of laissez-faire, a lack of organizational excellence and oversight that prevents majorly flawed products hitting the shelves.

A few years ago, one of the largest and most successful electronics manufacturers delivered millions of routers with the password “password” hardcoded to US consumers and was promptly fined by the FCC.

Finally, Taiwan has a cultural tradition of engineers leaving jobs around age 40 to start their own business. Thousands of startups making IoT devices are thus underfunded and understaffed; all the money goes to product development, none to marketing or making sure the product meets international standards of safety and cyber security.

So, both large incumbent manufacturers and startups lack the means, the willingness, or even the awareness of the product flaws that endanger the development of the Internet of Things.

China

Taiwanese companies manufacture in China, and China itself is increasingly creating companies that make products for the Internet of Things. Just like in Taiwan, there are excellent and talented engineers at work, inventive and dedicated to their job – yet they do not have the right safety mindset, lack access to international norms and standards, or cyber security training.

Apart from all the problems it shares with manufacturers in Taiwan (including talent shortage, bad organizational oversight, lack of responsibility for plant managers, insufficient testing etc.) China has a trust problem.

Party officials oversee every major company; products are supposedly engineered to send back data without the knowledge of users; intellectual property protection is weak. China has nothing in the way of data protection laws or penalties for products and services that fail to adhere to such regulations; fake products fill the markets and shelves, and when something goes wrong, managers and company owners simply disappear due to lack of legal protection.

Korea and Japan

Korea and Japan may be someone better in terms of guaranteeing safe products for the IoT due to better organizational structures and more rigid SOPs, but many of their companies are manufacturing in China anyway and are thus exposed to the same risks. Even there, manufacturers hardly suffer the consequences of providing consumers with unsafe products – the legal systems and judicial process are simply not prepared for that.

Even those who don’t outsource to China are far behind in terms of digitalization. Only about 5% have a Chief Data Officer; over 40% of CEOs have never even heard the term CDO.

Compared to Europe’s and America’s leading corporations, Asian enterprises are about a decade behind in creating intelligent digital processes, deploy machine learning and artificial intelligence, data science and predictive analytics, and all the other necessary tools to detect fraud, negligence, and deficient products, predict security issues, and improve product safety and quality.

Read also: Digital Transformation: How to Create an Intelligent Company

All in all, Asian manufacturers are not in position to deliver safe products for the IoT.

IIoT is the Exception

There are exceptions, in particular companies producing for the Industrial Internet of Things. These companies cannot afford to ignore cybersecurity issues because potential losses from data breaches or cyber attacks are monumental. A single factory hacked could lead to bankruptcy, the affects could trickle down the supply chain and affect hundreds of suppliers and customers.

Yet the Industrial Internet of Things is not immune to hacking, mostly because the products are usually installed, connected, and maintained by service providers or “integrator” which suffer from the same organizational problems of inadequate SOPs, lack of oversight and accountability.

What’s more, Asian manufacturers have a tradition of skimping on maintenance contracts and try to do upgrades, repairs, and modifications to existing installations in-house by engineers who often lack awareness of cybersecurity and data privacy issues. They may know how to install an extra sensor or modify parameters on an existing machine, but they usually don’t see the big picture. A major hacking accident at local manufacturer is only waiting to happen. The smaller incidents – and there are over 1000 each year, according to industry sources – are usually hushed up.

Trade Wars, Industry 4.0 and Lawyers

I have outlined the major effects of the technologies surrounding Industry 4.0 in this article: The True Meaning of Industry 4.0 for Manufacturers

From a security perspective, the lack of awareness, talent, and trust outlined in this article means that many brands who buy products manufactured in Asia will sooner or later  opt for repatriation of their operations. As penalties for delivering unsafe products or violating data protection laws get stiffer in Europe and America, the risks involved with buying from Asian companies will only increase.

There is of course political will behind that too. Made in America, Made in Germany – everyone from electronics to car parts and shoe manufacturers – are trying to bring back manufacturing to their own countries and their own jurisdictions.

Thanks to automation, robotics, 3D printing etc. that is now possible. Labor cost is no longer a major factor. Supply chain issues will resolve themselves over time.

Why risk security issues, copycats, insufficient IPR protection, allegations of child labor or horrid working conditions in Asia, when you can bring everything back to almost completely automated high-tech plants fully under the brands control; with no cultural or language barriers. Why did Tesla build the Gigafactory in America, and why is Adidas building robotic sneaker factories back in Germany? Why is Foxconn starting manufacturing in Wisconsin? (hint: it’s not just the perks and tax cuts)

Because as of now, outsourcing to Asia is no longer advantageous in the long term. Companies do it mainly because old supply chains are still too rigid, and talent pools in certain locations too shallow. Automation, ad-hoc manufacturing, robotic processes etc. will overcome these hurdles.

The risks involved with creating defective IoT products, the threat of law suits or protests by customer over work practices of environmental protection issues, far outweigh the advantages Taiwan and China have in terms of lower labor costs. So don’t be surprised if Apple starts building its own Gigafactory in America soon.

The end of the trend is in sight. Sophisticated manufacturing, smart manufacturing, robots and additive manufacturing – and whatever comes next – mean that brands no longer have to take the risk of having a third-party in control of the quality and safety of their products.

For only if everyone is on board with the same level of safety and cybersecurity concerns, the same SOPs and preventative measures, can we rollout a globally interconnected Internet of Things. Otherwise there will be war.

 

How the Internet of Things will change the Supply Chain

Despite advances in manufacturing that will move the bulk of product production away from mega-factories in developing countries back to Europe and America, logistics will always play a big role in a world of global trade.

Read also: The True Meaning of Industry 4.0 for Manufacturers

The industry employs millions of people worldwide, and even robots will struggle to make a big impact in the short-term. That is because logistics is inherently a complicated industry, with hundreds and thousands of variables, complex system, interconnectivity problems and standards varying from country to country, even port to port.

If you have ever tracked a parcel through a delivery service, you know that at present we only have information when a package transit from one system to another, from one data point to another. We know very little about what happens to shipments in transit.

That is important. Drugs, food, livestock, and many other things should be constantly monitored to ensure quality and product safety. Most of these items should be tracked from the source all the way to the receiver, 24/7.

(This is where blockchain may come in: How Blockchain Will Save the World

The Advent of 5G and IoT

5G networks with their big throughput rates, safety features, and low latency will not only enable industry 4.0 and better automation, they are also the key to a successful deployment of the Internet of Things. We will finally have information systems and bandwidth that allow us to track anything we like from source to end-user.

This will not be an immediate transition, due to the complexity of systems. It will take the better part of the next decade to make the transition meaningful. Some companies will go ahead and build their own proprietary systems, but interconnectivity and cybersecurity will delay adoption in the short term.

Real-time insights will allow for greater efficiency in tracking not just the physical route of a package, but also its condition, e.g. temperature, humidity, etc. Integration with traffic information systems will allow flexible re-routing; data analysis and machine-learning algorithms will allow new and existing logistics providers to offer far more flexibility, and thus cost and energy savings.

What Supply Chain Managers Are Looking For

Delays and problems during shipment account for the majority of complaints in international business. What CIOs and supply chain managers really want for their business is customer satisfaction.

  • Enhancing customer satisfaction
  • Increasing efficiency and faster shipments
  • Cost savings (including human resources)
  • Compliance with international rules
  • New delivery and distribution methods

All of these are components of Customer Success, the key to successful value propositions for customers.

Read more: How to Design Value Propositions in B2B Marketing

Once the proper systems are in place, companies will be able to offer just-in-time deliveries with speed and flexibility, unlike anything we have now. Combined with robots and drones, these new logistics systems will be completely unrecognizable.

New IoT devices will have far better connectivity. Visual positioning systems (VPS) will replace or augment GPS, allowing for tracking in enclosed spaces like warehouses, basements, or remote areas.

The key technologies to make IoT devices efficient are energy conservation or independence from traditional energy sources like batteries, and interconnectivity with sophisticated control systems in factories and logistics control centers.

Read also: The Future of the Internet of Things

AI is the final ingredient

The transportation systems described will be incredibly complex, perhaps too complex for humans to control. Integration with sophisticated artificial intelligence and machine learning system is the final ingredient to make them successful.

There is a clear connection between AI and IoT: it’s called data. IoT devices will produce so much data, it can only be leveraged by machines.

The use of 5G and IoT will speed up transportation of goods air, waterways, rail, and road. Vehicles, conveyor belts, drones, and storage systems have to be linked with open,  interconnective protocols on a global scale. Only AI will be able to manage larger systems.

Read also: The Difference Between Artificial Intelligence, Machine Learning, and Deep Learning

Regulation Must Catch Up

One of the biggest obstacles to 5G and IoT adoption in supply chain management is regulation. Even if some countries are keeping ahead of the curve, in the majority of trading nations custom clearance and regulatory approval of shipments (like food or drugs for example) are still years behind.

Companies may end up with fantastically advanced internal systems that have to interface with government agencies through antiquated paper records. Every time such an interface opens, you have a problem with data entry and human interference: the latter being the biggest source of error and wrong data. Machine learning and AI can only be accurate and useful if the data they work with is accurate.

The Security Issue

Interconnectivity is alright, but it also opens these complex systems to hackers and criminals with nefarious intent. The more interconnected, the greater the danger of major damage to global IoT systems, in particular in logistics. One hacker could paralyze the supply chain of a single company or an entire country.

5G promises the implementation of security problems that will tackle these issues. But as a cybersecurity expert and friend keeps telling: everything that can be hacked will be hacked. In particular, DDoS or denial of service attacks may become far more powerful than ever, as they block access not to PCs but actual integrated systems. And in an integrated supply chain, if one part fails, the entire process may collapse.

Because they are connected, hackers have a million opportunities to enter the system. There will always be weak points. If, for example, in a factory, someone hooks up ancillary systems like air conditioning to the main node, there is a way to hack into the system. WiFi routers, robots, access control, and anything else connected that is not under the direct control of the supply chain security team, are especially dangerous.

Neither cloud services by large companies like Amazon, Google, Microsoft or SAP, nor proprietary systems by individual suppliers are immune from such attacks. Startups like Cloud Logistics will offer new challenges: as they experiment with new approaches, things could go terribly wrong.

The biggest threat does not come from the security threats we are aware of, but from new developments. Every time we change systems on a large scale, we cannot be sure that we have covered all the bases.

Is Blockchain the Solution?

Some experts predict that the security features of the distributed ledger or blockchain technology are the key to making these supply chains safe. Others bet on quantum computing. One thing is sure: a lot of it will happen in the cloud, controlled by a handful of large technology companies that implement and manage cloud and edge computing solutions. And as I said, those are vulnerable too.

What 5G and IoT promise to do, however, is far more important and beneficial than the danger of cyber attacks. Not only could the IoT make supply chains make more efficient; it will also solve problems like pollution, recycling, fighting corruption, food and drug safety, and help developing countries catch up with the rest of the world far more quickly. And that is why nothing will stop the IoT, no matter how serious the security issues.

Read: How Blockchain Will Save the World

How to Design Value Propositions in B2B Marketing

This article has been adapted from a two-part post by @claudiomkd which you can find here:  Part1 and here: Part2  

Reducing the sales cycle with laser-focused value propositions

If one thing I learned about B2B markets during my career is that business-to-business models, although very monetarily rewarding, can pose two huge challenges for sales & marketing organizations:

  1. Sales cycles can be very long, taking months or even years to close a deal
  2. Typically, the customer lifetime value (LTV) is relatively short due to high competition and pricing wars

There is a conflict here between the sales cycle and LTV, which can only be mitigated by minimizing the sales cycle and establishing a long-term customer lifetime value.

Beyond all product features and benefits, you always have to design your value proposition in a way that minimizes the sales cycle and establishes a long-term customer LTV.

Designing value propositions is one of the most interesting and rewarding tasks that are rarely performed within marketing organizations. Using the Business Model Canvas (BMC), you can lay out a simple business plan without having to write a lot.

The BMC focuses on the nine key components of a business model, including the two most important ones of all: what is your offering (Value Proposition), and for whom (Customer Segments).

Here is  the Business Model Canvas by Alex Osterwalder:

BMC

When filling in a BMC, you always start from the target customer: Customer Segments, or “for whom it is”. Then you move onto the Value Proposition and explain what you offer to your target customers.

For example, you could formulate your value proposition like this: we provide small businesses with an HR management tool to reduce job application processing times.

2Value Proposition Design — Mapping value to customer problems and goals

The job of your value proposition is to present a benefit to your customers so appealing, that they will pay as much as possible, as soon as possible.

When designing your value proposition, you will typically do root-cause analysis (RCA) in numerous iterations until you find the biggest pain point of your target customer and, based on that, build a product or service to palliate that pain.

Therefore, when in B2B, your question before designing a value proposition should always be: what’s the biggest pain point for businesses so that they pay me as much as possible, as soon as possible?

There happens to be a very common “problem” among every business organization, which is to maximize the shareholder value. That means all businesses, with no distinction, see everything in the light of return on investment (ROI). Every hire, every decision, every tool they purchase, is measured in terms of how much will it maximize the gross margin.

This is great news for you as a value proposition designer, because it simplifies your job to just presenting your value proposition in terms of ROI for your customer, which to them it means either:

  • They are going to make more money thanks to your product
  • They are going to save costs thanks to your product

Example #1

A virtual reality (VR) company is developing a new headset to be launched at the next CES, in Las Vegas. They need to develop a software component that will make the VR headset secure before they release it to the market. However, they would need to hire 10 highly paid engineers to develop (and test) the component in time. On the other hand, your company offers a similar component which would need just a few modifications before it can be integrated into their headset.

In this example, your value proposition would be worked around cost difference. So, you can calculate how much would the VR company spend in building the software internally, and then offer them your component for a lower price. Let’s suppose the total cost for your customer is 10 engineers X $10k/month X 8 months of development = $800K. Therefore, your pricing strategy has to allow to sell that software component way under $800K, in order to justify their investment.

Example #2

Google will launch a new phone that has built-in functionality for backing up the user data onto Google Drive, Google’s paid cloud service. On the other hand, your company has backup software for Android phones that is way more capable than Google’s built-in one. It can backup high-resolution photos, videos, and even social media content, which is a great deal for users.In this case, instead of focusing your value proposition around “features”, which is basically telling Google “your product sucks, ours is better, please replace it”, you will focus on how much more money Google is going to make.

Let’s say your backup tool will generate, e.g., 3.5 times more data which will be stored in the cloud. At the same time, Google Drive prices go in tiers ($1,99/month for 100GB, $9,99/month for 1TB, and $99,99/month for 10TB) and they only make growth when they get new users or existing users to exceed their capacity and need to buy the next tier.

Here, your technology can make Google convert users to the next tier 3.5x faster than they currently do. So, let’s say Google was making $3.4 billion with the current strategy and grows $560 million every year from Google Drive conversions. If you can make Google grow e.g., $780 million per year, that’s a $220 million difference. You can now use that calculation to base your pricing, be it a one-time license, a year license or a shared-revenue business model.

Using ROI to Justify Shorter Sales Cycles

Using return on investment (ROI) as a justification, it is possible to shorten the sales cycle and ensure decisions come faster from within the buying organization.

ROI is the #1 thing that matters for B2B customers when making a purchasing decision. This means that, after they have signed the contract with you, they’ll keep exploring future alternative solutions that are cheaper. Remember: their goal is to increase ROI, which in turn means they won’t settle with your solution if they can find something that is more cost-efficient. In other words:

ROI as a sales justification (a.k.a. “value for money”) will work when closing a new customer, but it won’t cut it in the long term.

Once the closing is done, the next challenge begins: how do you keep your customers buying from you, year after year? Enter Customer Lifetime Value.

What is Customer Lifetime Value?

Customer Lifetime Value is the total amount of revenue that a customer can bring during the whole history of the company. It is often shortened as CLV, CLTV or just LTV. It is extremely important to know how much money a customer will generate to the company, in order to plan your customer acquisition strategy. This will help you calculate how much investment you can put into customer acquisition and customer retention.

Customer Lifetime Value distribution — Neil Patel

The main math behind the Customer Lifetime Value is that, typically, the closing itself is not the biggest source of revenue from a customer. Instead, a customer will generate the majority of the total LTV revenue for the company through retention.

That is why customer retention is extremely important for the company’s long-term revenue. When talking about B2B models, the two main reasons why customers typically leave are (in order of frequency):

  • They find a similar solution that is cheaper
  • The customer satisfaction is very low

Obviously, the long-term revenue and net profit from customers is not coming from the closing itself, but rather from fruitful customer relationships that last many years. And the only way to assure this is through a customer retention program.

It’s All About Customer Success

Although Wikipedia often has a very traditional way of defining things, I personally think the one for Customer Success is quite spot on:

“Customer Success is the function at a company responsible for managing the relationship between the vendor and its customers. The goal of customer success is to make the customer as successful as possible, which in turn, improves customer lifetime value (LTV) for the company.”

In other words, Customer Success’ purpose is to make sure your customers will get the necessary help from you to grow their own business. The assumption here is that, if your customers succeed and grow their business, they will have more reasons to keep investing in your solutions. That is, if you help your customers grow, they’ll help you grow with them. Sounds easy, right?

However…

Customer Success (CS) is still very poorly implemented in the majority of companies today. Most of the CS teams in the tech industry are actually working on “customer support”, which is a reactive way of doing customer success by fixing stuff that is already broken. Instead, true customer success should focus on being proactive and making sure the customer is constantly elevated with great service, new features, and even unexpected good news.

The secret to great Customer Success is to have a strategy that will help you grow your customers’ business and strengthen your existing relationship. Here’s my suggestion for creating your first simplified Customer Success strategy:

1 — Have a team dedicated to Customer Success

First and foremost, you must have a dedicated team to help your customer. This implies you will have to separate customer support from customer success, preferably into different teams.

The job of the customer success team is to represent the voice of your customers’ shareholders within your company. That will make sure that your customers are always heard and taken into account within your organization’s priorities. Moreover, this will enable your customers to continue growing and improving their market position thanks to your organization’s unconditional support.

2 — Build a feedback loop

Feedback loops are simply bi-directional communication channels to ensure mutual understanding:

Choose a channel that your customer loves, to communicate with you. Some customers prefer face-to-face meetings, some prefer WhatsApp and some may prefer email. Use what feels the easiest for each customer.

Establish a 2-way feedback loop: don’t use the channel to push news to your customer. Instead, use it for asking questions and listening to their problems.

Document every message, request or complaint your customer is communicating over the feedback loop. Bring this information to product planning meetings.

Periodically check that the feedback loop is still working and being used by the customer. If not, then rebuild it so that the communication keeps flowing.

Remember this: no news is bad news. — A silent customer could be a customer looking for an alternative solution.

3 — Understand their business

In order to have a deeper understanding of your customers’ business and what makes them grow, it is vital to understand the entire value chain, all the way down to the end consumer. This will help you design a plan for your product to empower your customer to deliver higher value and, in turn, make more money and grow. Here’s an oversimplified example:

Customer value chain — How does your company deliver value beyond your customers

This figure shows an oversimplified example of the B2B value chain. Your company provides value to the B2B customer which, in turn, delivers value to the end consumers. It is important to notice that, no matter how many B2B layers are in between, in the end, the money paying back to the whole value chain will come from consumers. So it is really important to understand how your product affects the entire chain, in order to improve your value proposition for your direct customers.

4— Make product management embrace Customer Success

Now it’s time to improve your product or service to make sure you can support your customers’ business growth. It is the product manager’s job to make sure the product roadmap is built to enable and support your customers’ growth (= success).

Therefore, make sure your product managers have as a top priority to understand your customers’ business, their main issues reported in the feedback loop, and where their growth comes from. Then, they should use these three inputs to build the next features of your product.

Read also: The Importance of Customer Feedback

Conclusion

When it comes to B2B markets, there is only one thing that sells: money. Either you make your customers make more money or save costs (ROI). However, it is not only about just closing a deal. If you want to keep your customers around and increase their lifetime value (LTV), you’ll need to design your value proposition around Customer Success.

Customer Success helps you plan your product development to enable your customers’ products in new ways that will bring growth. This, in turn, will also make your customer stick around and therefore increase their LTV and your company’s long-term revenue. That’s why true Customer Success is becoming central to modern organizations that seek sustainable growth.

 

How to Make Better Marketing Decisions

For many companies, coming up with a marketing plan is mainly about evaluating past results, tweaking them, and perhaps get inspiration from competitors, i.e. doing exactly what others do and thus ending up with mediocre results at best.

Likewise, many marketing plans revolve purely around deciding on an agency or ad frequency and then wait for others to come up with ideas – ideas constrained by budgets and bad decision-making by top management.

But at the end of the day, marketing is all about creativity, and creativity is in short supply. Bringing creativity into the planning process is difficult, mainly because you probably have exactly the same people as last year sitting around the table, steeped in group-think and stifled by the decades of experience the CMO or CEO, or worse, company owner, use to justify shooting down any idea that is in any way risky or simply different.

Read also: The Right Role for Marketing

The reason most in-house teams are not creative

As a marketing team, you have exactly three choices when planning ahead:

  • (a) beating the same drum and doing what you have done so far
  • (b) making incremental changes (based on random choice or actual data) and
  • (c) trying something completely new

The reasons why 90% of companies end up with (b) is primarily psychological. If you choose (a), the boss will ask “what am I paying you for, that’s what we did last year”; and if you choose (c) the boss will ask “are you out of your mind? how is this going to work?” Hence most companies never advance in their marketing.

The second reason why companies end up with (b), incremental changes, is that budgets are usually decided before any creative marketing session, leaving little wiggle room to come up with radically new concepts. Managerial roles are constrained, meaning that the same people in the same positions expect to go on with their work in more or less the same manner.

Let’s say you have a small graphic design team, a copywriter, and a digital ad specialist, you are most likely to continue in the new year with something that involves text, graphics, and ads on various platforms. Because if you were to opt for (c), say, video production, you would suddenly need a whole bunch of new talent.

Thus we always end up with tactics rather than a solid strategy. And tactics is no way to do marketing.

Read also: The 4 Key Success Factors of Content Marketing

 

We need new ideas!

At every planning meeting, there is a clamor for new ideas which then end up not being implemented.

Let’s take e-mail marketing for example. Do we continue in exactly the same format, do we make small changes (perhaps through A/B testing) to the format of the newsletter, or do we try something radically different, like chatbots?

No matter how long the discussion, the default is always to stick with what we have and try to make incremental changes. Whether they are based on random trial-and-error or actual data analysis, they will probably have a small impact on the bottom line; they will not break the bank, and they won’t jeopardize the job of the e-mail marketing guy. Thus creativity is always left behind.

Read also: Why E-Mail Marketing Is Still A Thing

The key here is the mostly wrong attitude of top management. The CEO-owner wants marketing experts, who can tell him the outcome before we even get started. But marketers are not experts, they cannot predict the outcome of a campaign; they are adventurers and tour guides, storytellers and experimenters.

If top management doesn’t understand this, better marketing decisions are an impossibility.

The New Frontier: Improving Customer Experience through AI

What doesn’t work

There are a number of “tactics” espoused by leading thinkers, marketers, and management consultants that simply do not bring the desired results in this age of information overload and massive competition for eyeballs and wallets. Let’s look at the most egregious mistakes.

Conventional wisdom: in marketing, i.e. “everybody else does it, so we do it” never works. It’s the default option, the group-think option, and thus the weak option.

That’s because “best practice” is never the best practice. Best practice can at most work as a peripheral inspiration, but should never form the core of your strategy. What works for others doesn’t necessarily work for you. Every situation is different, every team different, every execution of a marketing plan different. Following “best practice”examples hardly ever leads to stellar results.

Thinking out of the box: This is another expression that riles me. It’s great to think out of the box but at the end of the day, we have to work inside the box. We cannot suddenly hire a bunch of people with a completely new skill-set, just because we came up with an idea “outside the box.” We are limited by talent, the budget, time, and everything else that makes up “the box”.

The latest trend: This is also a very dangerous option. Just because something became the latest trend in a similar or even the same industry is no guarantee that it will work for your situation, your country, your language, or your corporation. Think of chatbots, for example: they are a great success in some industries, like airlines, and definitely the latest trend, but for many businesses completely irrelevant.

Read also: What Chatbots Can Currently Do For Your Business

A few years back everybody hailed the era of video for Facebook marketers … until Facebook changed their algorithm and penalized video because it didn’t lead to meaningful engagement. Out of the blue, Facebook decided that it didn’t want passive viewing of videos – perhaps as part of the effort to combat fake news. Right now we are in the era of voice … I wonder how long that will last.

Read also: The Era of Voice and Image Cloning: Can You Believe What You Hear and See?

Numbers: Another no-go. Managers love numbers because they sound convincing, but most figures you read about marketing are simply made up. “If you do this or that, you will get x % more traffic” is a phrase beloved of digital advertising gurus, but it is seldom transferable from one industry to another, or from one company to another, e.g. from multinationals to small businesses.

Managers come up with KPIs such as, “15% more followers on Facebook for this year”, as if purely by making more or better posts one could guarantee such a number. That, incidentally is why I hate KPIs.

The growth of followers depends on the ever-changing price of ads, the amount of posts by the competition, the reputation of the brand, the overall economic situation, trends in social media platform popularity, and many more factors. Trying to meet a KPI is simply pointless, as is chasing after ROI data points: these are all marketing tactics rather than strategies.

Read also: KPIs are for losers. Get rid of them!

How to make better decisions, after all

The key to making better decisions is to understand the exact situation of yourself as a brand and your clients. It means throwing overboard all traditional measures of success and starting with the experience users have with the brand, understanding how that experience changes, and how it is related to purchases.

Again, a real-life example: I once took on a client in the machinery industry who wanted 20% more sales in the coming year, in an industry that was declining, a macroeconomic climate that was stagnating, and strong new competition in the form of two foreign multinationals who had just the year before entered the market. A far better plan would have been to take a close look at the competitor’s machines, talking to customers about their preferences, and examining closely the marketing strategies of the new entrants.

Understanding your situation means data, facts, but also anecdotes and wild guesses. Thus instead of starting with the planning meeting, start with an investigation. Go to where the client is, spend time with the customer, and actually use the product you are trying to sell.

Asking the right questions

Instead of blindly following the advice of experts or chasing meaningless numbers, we should ask the right questions. Those involve questions like

  1. Where and how do customers come in touch with our product?
  2. Why do customers show interest in our brand?
  3. How will customers interact with our brand tomorrow?
  4. Where does the customer journey break off, and why?

The answer to these questions depends entirely on your situation and the answer is not always to try something radically new. It can be either a) more of the same b) incremental change or c) a completely new approach.

I consulted for a long time for a manufacturer of veterinary supplies who relied for years on the same strategy: a team of salespeople and some television ads. Every marketing meeting revolved on HR decisions (which salesperson to fire, how many to hire), and the planning of this year’s television ad. Sales continued to slide.

Then we asked the right questions:

  1. Where and how do customers come in touch with the product? Answer: At the vet. They largely ignore the TV ads.
  2. Why do customers show interest in our brand? – Because a pet is sick or the vet recommended preventative measures.
  3. How will customers interact with the brand tomorrow? Turns out that was Instagram, where photos of cute cats and dogs are simply everywhere. Until then, the marketing team of that pharma company had never considered a platform like Instagram.
  4. Why don’t they buy our product? After a number of interviews with pet owners and vets, we found that the buckle on the medical collar was somewhat harder to close than that of a competitor’s product. Since many pet owners are elderly, or children, redesigning the buckle (an easy fix in this case) was far more important than deciding how much money to spend on the TV ad.

This is a very clear example based on hard facts easily deducible from market studies and interviews. During my long career, I invariably found that most marketing teams never bother to ask the right questions, because their bosses are always demanding answers.

What is the customer really after that everyone is overlooking?

This is the most important questions only the most successful companies dare to ask. What it means is looking at your product offering through the eyes of the customer, and not through the narrow vision of your own marketing, R&D or management team.

Which brings us to the most important question we need to ask as marketers: Who truly believes in my brand?

A small number of people who really believe in my product or brand can give the most valuable feedback of all. In other words resonance, not reach, is important. Why do they love the brand with so much passion? Is there a consistent theme why this small group is so supportive? Do they all buy the product because of one particular feature? What is their loyalty based on?

The answers to this question – easily obtained in focus groups or through social media product feedback – will guide you in your marketing planning. If all your key supporters value the design of your products, this is where your marketing has to go. If they rave about a particular feature, then think about how to promote product features over design aspects, and so on.

 

Why do we do what we do?

Ultimately, we also have to ask ourselves why we do something the way we do it. Why do we do marketing the way we do it? Do we have solid reasons for our approach, or are we just emulating other companies or are we blindly following trends?

Is it because that’s the type of people we have at our office and we can’t change that? Do we use print ads because they work, or because our agency partner keeps selling us on ads because they don’t have a film team? Are we doing Facebook ads because they are effective, or because we read somewhere they are the latest fad? Or because our ad manager only knows Facebook and not Google, etc.

Instead of simply setting a KPI like 15% more followers on Facebook, ask the question “what do we need to increase the attractiveness of our account”, “why are people following our page in the first place” etc.

Understanding why customers do what they do, and why we as a marketing team do what we do, is far more important than any other decision making I have outlined above.

And finally, better marketing decisions come from a greater willingness to experiment. Spending a certain amount on small trials will lead to significantly better outcomes than following best practice or copying competitors. Tactics don’t work in marketing; only strategy does; a strategy that allows for curiosity and creativity throughout the process.

Read also:

Inbound Marketing Explained

10 Common Misconceptions About Inbound Marketing

Why E-Mail Marketing Is Still A Thing

Email may be dying a slow death as a communication tool (at least in Asia) but it is still a great marketing tool for brands. Eight out of ten people who sign up for brand emails make a purchase based on the email content, according to the influential podcast Marketing over Coffee. That’s some serious conversion.

I am, please remember, talking about opt-in newsletters, not unsolicited spam. So why is email still a thing?

E-Mail Filters Through the Noise

In a world of constant surfing, swiping, snapping, and liking, e-mail newsletters somehow manage to filter through the social noise. Reading your e-mail is private time, undisturbed by social media. You pay more attention. You are focused.

Unlike Facebook, the inbox might also contain a job offer, a message from a loved one, or instructions from your boss, so your brain is on high alert when you are going over the inbox.

Also, you most likely opted in to receive the newsletter in the first place, therefore you are by definition interested in the content. Psychologically, that primes you to be more receptive to offers. 

Marketers need to remember though that e-mails do vie for attention: some stand out, others are ignored. Some experts insist that e-mails with a personalized subject line such as “Hey John, we’ve got this fantastic new nose hair clipper on sale now!” work better than a standard subject like “Amazon Weekly Newsletter”.

I have found no evidence of that. On the contrary, having a standard boring subject line will keep your mailing list shorter, because you’ll retain the people who are really interested in your brand while getting rid of the click-bait-clickers who never buy anything anyway. And Mailchimp & Co. can get pretty expensive as your list grows.

There are good times and bad times to send an email, for example: don’t do it on the weekend, because come Monday morning your overworked recipient will have to sift through hundreds of other emails.

I discovered that sending a newsletter around 4:30 pm local time, results in the most opens. That’s because there are very likely fewer meetings scheduled, the day’s work is mostly done, and recipients are on there way out. However, because it is the end of the working day, they are much less likely to pick up the phone and call. So sending in the morning may get fewer opens, but more actual leads. You’ll have to figure out what schedule works best for you. A/B testing is a good way to do that.

All in all, consumers are looking for e-mail content that is personalizeddirect, and not too pushy. It should also address clients interests, i.e. be customer-centric, not brand-centric. So not “Siemens Weekly Briefing” but “Transportation Technology News”. You get the drift.

Other things to consider for your e-mail marketing:

  • Make sure the e-mail looks good on mobile. We now get 75% of opens on mobile. Many e-mail marketing tools allow you to preview your newsletter on all kinds of devices.
  • Include mobile action buttons. If someone really wants to click that Buy button, they should reach a mobile-friendly landing page also.
  • E-mails with special offers do convert better. Just announcing a new product doesn’t cut it. You want to offer that 20% discount (only available till Friday).
  • Funny enough, last-minute emails work, especially with men. They do tend to do their shopping at the last minute.
  • Email offers with free shipping are popular.
  • Most conversions are abandoned if users land on a page where they have to fill in more than 3 fields in a form. Make the purchase process as fast and easy as possible or don’t bother at all.
  • Consider retargeting with the Facebook Pixel to reach more relevant audiences and to reach people who didn’t complete a purchase. But remember: don’t be pushy. Five reminders in two days that I didn’t buy your sofa is enough to piss off anyone.
  • Video content, as long as it loads quickly and delivers value. Don’t include it just because; it has to offer valuable information.
  • Use e-mail to communicate with the brand. Allow consumers to vent or reach help desks, for example. Offering that channel of communication makes emails intrinsically more valuable.
  • Finally, we found that e-mails which address problems rather than promote products are more successful. Rather than include a spec sheet, for example, show the product in specific scenarios showcasing its utility. Rethink your newsletter from the recipient’s perspective.

Brands with e-commerce solutions with informative newsletters – i.e. which aren’t just boring product listings – convert up to three times better than brands without newsletters.

B2B brands which use emails to give their brand a human face are remembered longer and more favorably by potential clients.

Even with ever more sophisticated spam filters, e-mail is still an important marketing tool

Read also: Inbound Marketing Explained

KPIs are for losers. Get rid of them!

One of the most misused corporate management inventions ever, KPIs are hurting businesses in many ways. They paralyze cooperation procedures and plant the seeds of mistrust. They are easy to manipulate and hardly ever represent the real interests of either party in a transaction. More importantly, they are often very arbitrary, hardly ever based on data, and chasing them leads to a colossal waste of resources. Therefore, they should go the way of “balanced scorecard” and end up on the scrapheap of consulting.

It’s easy to see why KPIs were invented

Key Performance Indicators make sense from the point of the manager. On first glance, they offer a simplification, a measure of performance, a “handle on things”. In marketing, however, and in particular in digital marketing, they are complete and utter nonsense. They distract from creating what counts. i.e. engaging, original content and tangible results, and they destroy the flexibility advantage digital media offer.

Let me give you an example. Your marketing team or consulting agency is in charge of social media strategy. Your KPI is “number of inquiries received through our website”. You have had this KPI for years because this is where the sales team gets their leads from. An entire marketing team is now busy trying to move prospects from social media to your website just to satisfy your KPI.

While you were busy chasing a meaningless measure, you missed the transition away from website traffic to social media. You missed the opportunity to put the content on new platforms and engage with leads on those platforms. You missed the opportunity to transfer your salespeople into digital media savvy sales-marketers. All your potential customers are now on social media and expect their questions answered there. Perhaps your website inquiry form is so outdated or cumbersome that people don’t like to use it. Yet hampered by your hallowed KPI, you keep staring at your CRM inbox for those pesky “inquiries” from your website. A website fewer and fewer people visit.

By instituting a meaningless KPI, you have kept Sales from evolving and made Marketing fail. Everyone is unhappy with the outcome.

Read also: Busy Like a Bee: 3 Simple Ways to Improve Conversion Rates

Even the best KPIs are dubious

Digital marketing experts work with a plethora of KPIs. Some outright fantastical like ROI – return on investment, virtually impossible to quantify in a real-life business setting, or CLV – customer lifetime value, a highly questionable and mostly made-up number.

Others are more tangible, like YOY or year-on-year growth, CR or conversion rate or CAR cart abandonment rate, but while they can be used to make incremental improvements, they should not be used to guide an overall strategic direction for the marketing team. Real insights come from customer interviews, market studies, A/B testing etc., not from the KPI analysis.

KPIs like VSI – visitor satisfaction index or CSI – customer satisfaction index offer great insights but again should not be used to constrain the team’s marketing efforts or evaluate employees. There are simply too many factors outside the control of marketing influencing the KPI values.

KPIs are the surest way to miss emerging trends and opportunities for change

Marketing managers often insist on KPIs like “number of likes or shares after x months”. There’s no extra budget to create engaging content, no flexibility to react to new trends, just a blind focus on the single KPI.

Because of contract terms or internal evaluation procedures, marketers have to meet that KPI, so they invariably find ways to do so. Unscrupulous marketers always will. You will see the contract terms fulfilled. Managers will be happy: KPI met. Check. Contract terms fulfilled. Check. Shame that nobody bought your product.

You see where I am going with this.

The simplification of KPIs means that they can either be manipulated without offering a real benefit to your bottom line, or they become the holy grail that makes you miss the boat altogether. Like the balanced scorecard of yore, they don’t really solve the real problems of motivation and meaning. In almost all situations connected to marketing activities, KPIs are therefore misplaced.

Read also: 6 Fairy Tales About Digital Marketing

So what do we use instead of KPIs?

One way to get rid of KPIs is to replace them with smart benchmarking. I always try to encourage my team to beat a certain competitor or achieve a benchmark of a similar brand in a similar market. Benchmark doesn’t mean a simplistic number, but a whole subset of criteria, from overall brand image to engagements to actual sales numbers perhaps.

Benchmarking yourself against competitors also means you have to watch what they are doing on a day-to-day basis. It allows you to learn about your own and the competition’s offering, sometimes so much that you can give feedback to R&D and tweak the product, making marketing departments even more valuable to the enterprise.

Benchmarking allows you to keep a focus on emerging trends and new developments, which means you are actually learning as you go, and become inspired. It also creates a competitive atmosphere inside the marketing team which prompts managers to come up with more creative concepts than any KPI ever will.

With your eyes on the competition, you learn about what type of content and strategies get the most traction, what gaps you have in your own marketing concepts, where your competitors’ strength and weaknesses lie, and how to spot the opportunities or threats the broader market offers.

Of course, benchmarking is not for everyone and has its drawbacks. Most companies and organizations don’t have direct competitors they can compare themselves to 1:1. I have covered the broader question of how to make better marketing decisions, with a list of possible substitutes for KPIs, in this article:

Read also: How to Make Better Marketing Decisions

Recouping investment as motivation

Removing KPIs from the equation allows for experimentation and supports the creative process. It creates valuable feedback loops For a new client last year we replaced KPIs with a simple measure of trying to sales that allowed them to recoup their investment in marketing within 8 months. That really put a fire under our marketing team. I’ve never seen them more engaged in a project. Of course, agencies will only do this with clients and products they believe in. Which are the best clients to have in the first place.

So the next time you try to motivate your team, try an integrated benchmarking approach or give them a stake in the overall success. Leave the deadbeat KPIs to the losers.

Web Design: Time to Weed Out The Laggards

The world of websites seems to be split into two groups these days: those which understand what the mobile push means, and those who still use websites designed 15 years ago. With the latest changes in SEO and device adoption, the laggards will finally be weeded out.

I am always surprised by how many companies are reluctant to invest in new web design. I mean, you wouldn’t use the same sales catalog for 15 years. Even logos seem to get updated more often than websites.

We recently did a survey in Asia and found that a staggering 27% of corporate websites were designed before 2005. That’s millennia in digital times.

Companies don’t seem to understand that it matters a great deal whether you use modern, responsive web design or not. For those who still don’t get it, here’s a quick run-down:

 

The age of surfing websites on PCs is over

Over 85% of traffic is now coming from mobile devices. It is no longer enough to have a site, your site must constantly evolve to meet the display options of a mobile marketplace. Exactly how your website is displayed changes with every new iteration of devices.

Right now, responsive web design is an essential part of creating a user-friendly mobile web experience. Search engines are already punishing websites which are not mobile friendly. That means people searching for your products will not find you, period.

Observe your own browsing behavior: most of it is done on phones and tablets, while you are on public transport, waiting at the doctor’s office, or sitting in the park. Having a separate mobile version is no longer feasible and way too costly. Multiple sites mean that you have multiple pages being indexed by Google, and your traffic will likely be split between the two. Crafting your page to be responsive out of the gate lets you contain everything on a single page that is clean, organized, and fully functional for mobile use.

Of course, mobile means that people don’t have a keyboard and are less willing to fill in a lot of information. Making your site mobile-friendly isn’t just technical jargon, it means rethinking the entire user interaction with the site.

 

Better SEO

Speaking of Google indexing… Responsive web design contributes to your SEO value. With only one page to index rather than two, Google has an easier time collecting data about your page. It also reduces the likelihood of on-page SEO errors. Not to mention that responsive websites, which generally offer a streamlined user experience, will receive more page hits and conveys authority and quality to your audience.

Read also: 3 Outdated SEO Tactics You Should Stop Immediately

Device Adaptation

Responsive web design truly shines when you consider the bizarre new Internet browsing options being made available to us. While most of us use smartphones, we also use tablets, game consoles, PCs, smartwatches, TVs, and whatever other display technology will come out tomorrow. There are an estimated 390 different screen sizes in use just for smartphones around the world.

Good luck finding standardized screen sizes across all these different devices. Responsive web design, being based on screen size itself rather than a device, ensures that your site will always display correctly across each unique product. This will pay off now but is also an investment in the future. Our love affair with non-traditional Internet browsing isn’t dying anytime soon.

And yet, only 15% of government websites in Asia and fewer than 30% in Europe use responsive web design. Time to get a facelift!

Simplicity Rules!

Responsive web design and mobile adoption is all about simplicity. It’s designed to make the browsing experience simple for your users, but developers can benefit from the simplicity as well.

Having a single page URL (rather than a primary one with a mobile cousin) lets you focus your marketing on a single campaign. All of your traffic can be directed to a single landing page, regardless of the browsing device. This is also true for social sharing metrics, your online Google reputation, and just about anything else that applies to your page’s domain. Single is simple.

It’s Not Too Late

Although the responsive design push is well underway, it’s not too late to reap the benefits for your own site. Responsive web design is both part of the past and a trend for the future. It won’t be long before we start browsing the Internet through our glasses, our wristbands, our AR and VR headsets, and who knows what’s next. Fostering a culture of constant adaptation is essential for your marketing and also your technical team.

The changes are coming, and your site must be ready for the ride. If you don’t update your website now, don’t be surprised if nobody comes to visit.

Word of the Year: Instagrammable

Every year has its buzzwords and neologisms. May I suggest that for 2018 we choose something that is both. My vote goes to “instagrammable”.

The first time I heard it was from a food blogger friend, who told me that the “instagrammability” of food was one part of how she chose her venues. As in the sentence “no matter how good the food, if it’s not instagrammable, there’s no point going there.

Even clothing, a selfie, your mother and your pet can be more or less instagrammable.

What is certainly changing is the nature of photography. Countless traditional photographers find themselves out of business, while 10-year-olds with the right camera phone suddenly have a million followers.

In fact, Instagram has become the leading platform for the younger generation to develop a following and their own, personal brand. And personal brands are increasingly important in an age of visuals. 

But Instagrammability is not just the question of whether your product is likely to make an impact on Instagram and be liked and shared a lot, nor is it an indicator of the expressiveness or beauty of an image.

It is indicative of a sea change, a massive shift from text-based information transfer to images, videos, holographic images, AR, VR, and whatever comes next.

Read also: 6 Fairy Tales About Digital Marketing

 

Why we are switching to images

The growth of Instagram is truly remarkable. In a few short years, it has reached over 1 billion users worldwide, despite the competition from Facebook, Youtube, Snapchat etc.

Researchers have known for a long time found that drawing pictures of information that needs to be remembered is a strong and reliable strategy to enhance memory. The more you are exposed to images from an early age, the less willing you will be to read through complicated text description, and the quicker you are absorbing image-based information content.

Take food for example. It is no wonder that foodies are one of the mainstays of Instagram. Eating is a very sensory experience, and an image of the food you are going to receive conveys a lot more information than the simple title – or even the recipe – of the dish in writing.

The same is true for fashion, luxury items, and other products with high visual appeal. These types of brands dominate Instagram and the platform has become an integral part of their inbound marketing.

 

Content Marketing Reinvented

But not all brand stories are that simple. Some have managed to reinvent themselves on Instagram with brilliant content strategies. Especially adventure athletic brands are making great use of a mixture of user-generated and professional content

But even B2B brands in the industrial sector have discovered Instagram as a platform for creative visual outputs. Just look at GE, Siemens, or Kuka Robotics as wonderful examples of what can be done with Instagram in this space.

Read more: Marketing for Boring Industries and  The True Meaning of Industry 4.0 for Manufacturers

The initial reaction of managers will be skeptical: how much do such exercises really do for the bottom line of an industrial company? The answer is that it does not matter: millennials, the first generation that really grew up with images and videos more than text are entering the workforce.

Read more: Why B2B Companies Need to Embrace Millennials

And some of these companies use their Instagram accounts more to foster cohesion in a global workforce than to generate business.

Read more: Use Content Marketing to Strengthen Your Brand from Within

We learn easier from images and videos, and the more we are exposed to images and videos from an early age, the faster we can absorb information from them. Thus a younger person taking one look at a motherboard, a robot, or a technical drawing may understand the information content of that image much faster than someone reading a detailed description.

Another reason why we are moving to images is of course purely technical. We have never had more computing power, more gadgets, more touchpoints where still images and videos are so readily available. Uploading content to Instagram is fast and easy – much quicker for example than Facebook, allowing users to document their lives, hobbies, interests or professions almost in real-time.

Read more: So What is Content Marketing Anyway?

 

Images Mean Business

Instagrammable also means marketable. Over 80% of Instagrammers are outside the US, so it is a truly global platform. Over 75% of people under 35 get purchasing ideas from Instagram. While overshadowed by Snapchat for US teens, Instagram is now twice as big as Facebook in terms of content consumption for that age group.

In the general population, Facebook and YouTube are still far bigger, but even on these and other platforms, there is a clear trend towards images and videos. For YouTube this is self-evident, but while Facebook has been a text-based platform for 10 years, it is now increasingly a video consumption platform. Taiwan, for example, shows that over 80% of Facebook users watch television programs on the platform.

The fact that Facebook moved the video button to the center of the control bar in 2018 is indicative of this development.

This trend will continue, as more and more brands and stores discover the power of image content in all industries.

Read also: Why You Should Always Put Your Retail Strategy First

 

The Future of Content

There are, of course, a number of problems with this trend towards more and more immediate, user-generated image and video content:

  • Young, fit, or generally photogenic people are more likely to produce video content, leaving behind one or two generations of business owners who are unwilling to engage visually.
  • In-depth content is still necessary to extol the virtues of products, services, and technologies.
  • A number of studies have now shown that pupils in schools don’t remember information presented purely in image or video form, throwing into question the strategies of certain companies to move the classroom toward much more tech-based solutions that favor images and videos.
  • There will still be a large number of people who simply prefer text.
  • Images can be misleading and tend to oversimplify difficult concepts.
  • Virtual reality hasn’t taken off yet at the scale we initially expected. For one, it involves cumbersome gadgets, and may also cause health problems.
  • Legally binding information, detailed instructions, and any kind for argumentative content will remain text-based. This is why even with the most Instagrammable images, we still have text-based comments, expressing opinions in the simplest form: natural language.
  • Danger lurks in technology, as sophisticated algorithms are being used to manipulate images to disseminate false information.

Finally, the Instagram craze may be temporary. As we develop intricate and powerful voice interfaces, more and more versatile screens, haptic gesture computing and, last but not least, the Internet of Things, the importance of Instagram may yet wane as quickly as it grew.

How to Know When You Are Ready for AI

Everybody knows the enterprise needs to move towards a digital future. We speak of “data-driven organizations“. But in marketing in particular, but eventually in any other part of the modern enterprise, there is one question managers are asking these days: faced with the onslaught of artificial intelligence solutions and all the buzz about it, when are we really ready for AI?

There are lots of reasons to fear AI. Managers used to be completely unsure what AI is, what it is, and – most importantly – how much it costs. Do I have to hire new people for it? How much change is involved in general, from personnel to equipment to internal processes?

Let’s start with the most important question:

Where can this new tool fit into my business?

The first step is to draw up  a list of possible applications for AI in your business. This can be customer service functions, predictive functions (predicting churn rates or conversion rates for example), or functions linked to gathering and evaluating data for the C-suite. Where will the AI impact the customer, and where is it a purely internal consideration?

Once you have this list, choose the easiest use case, where deployment involves the smallest amount of change. 

The key here is to identify those cases which can be managed by the existing staff, perhaps even within the existing budget, and without big staff changes. More importantly, try to identify which use cases would need a data scientist — those can be notoriously hard to find and demand huge salaries.

Read also: How to Estimate an AI Project’s Data Needs

The challenge for the decision maker is to understand all the concepts, from AI to machine learning and deep learning, and everything under those headlines.

Read: Beyond the Hype: The difference between Artificial Intelligence, Machine Learning, and Deep Learning

Start With the Pain

Everybody knows that artificial intelligence is the key to competitiveness. To begin deployment in your enterprise, don’t try to understand big concepts or the ultimate potential of AI, but start with concrete use cases where you think AI might have an immediate impact on the bottom line. In other words, deploy AI where the pain is. 

Good salespeople of AI solutions understand this. They don’t try to sell you big words like deep learning but will help you solve concrete problems in your organization.

Talking about the technology rather than solutions is tantamount to a car salesman explaining the combustion engine rather than extolling the virtues of the car’s features.

It’s All About the Data

Once you have identified the pain point where AI will come in most handy, it’s all about the data.

Raw data is worth nothing if it cannot be manipulated to produce meaningful results and similarly, machine learning and AI cannot happen without sufficient and relevant data.

The data does not only have to be relevant, but it also has to be cleaned up and prepared for whatever use you are envisaging. Questions you are facing are: is there enough data to make the AI deployment feasible? Is the data readily available? Is the data biased? Do you have control over the data source? and many more questions.

I have also written a detailed description of general machine learning deployment which covers many of these issues in detail: Read Machine Learning in Organizations: First Steps

Managing Change at the Top

What it comes down to is the readiness of management to sit down and understand the questions involved.

Some managers may be unwilling or unable to grasp new concepts. Others may be willing to change, learn the new skills, and become change leaders who then spearhead the adoption of AI.

I often compare these to the advent of the PC in companies. Lots of employees were left behind because they did not want to or could not make the switch from the typewriter.

The HR impact of AI cannot be underestimated. AI will involve changes in business processes (streamlining or eliminating them), thus impacting anyone in the organization. But it may also involve output directly directed at top management (think of reporting). Only if top management is ready for AI should you consider a significant deployment.

Impacting the Customer

The final hurdle to adopting AI in the organization is the impact on the customer. Think about the relatively primitive chatbots used by airlines. You can only deploy these if you have a large enough customer base actually willing to use chatbots. If most of them prefer calling by phone, your lovely chatbot will gather spider webs.

This is not a joke: one of my customers thought of introducing an internet chatbot for insurance questions directed at senior citizens. I dissuaded them from the endeavor.

Incidentally, this last point of customer impact is often the most easily overlooked. An AI system making an automated recommendation for customers of a real estate agent, for example, caused utter confusion among customers as they found themselves confronted with choices they themselves would never make.

Read also: What Chatbots Can Currently Do for your Business

In Conclusion

In summary, deployment of AI solutions involves the following four touchpoints:

  • Which applications should come first?
  • Is there enough GOOD data to work with
  • Is management ready for deployment
  • How does the introduction of AI affect our customers?

You may also want to read:

How to Estimate an AI Project’s Data Needs

What Chatbots Can Currently Do for your Business

5 Ways Towards a Data-Driven Business Culture

Martin Hiesboeck is an international business consultant with a focus on companies’ operations in Asia. 

Why I Never Use TripAdvisor – Or: The Curse of Reviews

Reviews, even with the best intentions, seldom help brands and businesses. This sounds heretical, but let me explain.

TripAdvisor is an amazing site. In a sense, together with the reviews on Amazon, and any other site that uses a rating system, it embodies the essence of the digital economy: easy access to other people’s opinions and feelings. 

And yet, I never use it. On purpose.

I recently went to Slovenia and stayed at a spa hotel. It was an amazing experience. Buildings left over from its founding in the times of the Hapsburg Empire; signs in Russian reminding you of the country’s Communist past as part of Yugoslavia, and a German heart specialist offering free consultations for senior guests in his clinic full of Scandinavian furniture. The cake shop sold only traditional Slovene pastries. A grandiose mix of history, culture, cuisine, and brilliant marketing.

Yet on TripAdvisor you would find reviews by the 27-year-old dad of three who was annoyed by the number of old people in the pool, the 42-year-old woman who complained about being charged for her bathrobe, and the 38-year-old businessman who fretted about the bad WiFi. None of which mattered to me: I don’t mind other people in the spa, I do not give a damn about bathrobes, and since I was doing my digital detox, I couldn’t care less about the WiFi.

What I am trying to say is that reviews are mainly useless, even the good ones.

Our experiences with brands are entirely personal and unique. Reviews say more about the reviewer than the brand. If they are bad and biased they are useless. If they are perfectly crafted and insightful, they are probably sponsored in one way or another.

On the other hand, if the review is subjective it is useless because it doesn’t tell me anything about my potential satisfaction with the brand. If the review is ostensibly objective, it is useless because it is probably fake. An author I know wrote 50 reviews of his own book and sent them to his circle of friends to post for him on Amazon. They rate very highly and look entirely genuine. The book sells reasonably well, may I opine.

Read also: Inbound Marketing Explained

Inherent Vice

Even if the review is not fake and really well written, it carries the bias and intent of the reviewer. Some reviewers do it to increase their digital clout, others to show off their expertise in a field.

What’s more, reviews have a time problem, or rather a deterioration problem. Imagine visiting a holiday resort based on a rave review and when you arrive, finding that nothing matches the description.

Should you trust an old review, or only look at the latest ones? Amazon’s (and others’) algorithms display a mix of reviews ranked by relevance and timeliness. If the reviews can be liked (“was this review useful? they ask), certain reviews – with a certain bias – get pushed inexorably to the top, leaving no room for change over time.

The Objective World

Indeed, because of the human condition, our distinct lives, experiences, and motivations, are all so different, that there is no such thing as an objective review of anything. A middle-class Chinese family from Wuhan, an African-American Lesbian from Detroit, a rich Brazilian businessman from Sao Paolo, or a German automotive engineer from Stuttgart with two children, can hardly have the same view of the same hotel, tourist site, product, or service. Not even a book will they read with the same eyes.

People exclusively concerned with content in one language and country hardly notice this. It’s ok if an item in Sweden has only reviews by Swedes. They which match a cultural norm — and thus a heavy cultural bias.

Back to my sojourn in Slovenia: most of the reviews were by Austrian and German tourists, and are thus inherently useless to, say, an American, or a Japanese tourist.

Read also: Word-of-Mouth Marketing: The Land That Strategy Forgot

The Curse of Honesty

And yet, the Internet’s data giants keep telling us that reviews are meaningful, and marketing experts insist that this form of user-generated content is good for exposure and to increase brand loyalty. But there is a big caveat.

Sites like TripAdvisor are so powerful, they can completely destroy a business. It did happen to an acquaintance of mine. He opened a B&B on the East Coast of Taiwan some years ago. In the beginning, he didn’t know much about Western tastes, and when an American couple stayed there, disapproved of the breakfast (not because it was bad, but because it was Taiwanese style and not to their taste), and found the room too hot, they left a scathing review on Google. Because reviews and browser content is often auto-translated, reservations fell dramatically.

Bad reviews don’t have to be malicious, they can be entirely honest. But because of our different cultures, experiences, and expectations, they can have a hugely negative impact on a business or brand.

The Curse of Personal Preference

In an experiment with my students I asked them to rate a particular sports brand, Nike, and then divided the class into three group: those who had a clear affinity to the brand, those who had no affinity, and the broad middle.

I then asked them to write a review of an Adidas product. To no one’s surprise, the group with the Nike fans rated the competitor’s product less favorable than the other two groups.

We already know what we like, or think what we like, and our relationship with brands is very much based on this so-called “confirmation bias”. We are much happier when we see our bias confirmed than when we are confronted with the cold reality of data.

Read also: What is a brand in the digital age?

The Curse of Data

One reason for this enormous power of reviews is the aggregation of data and the bias of previews existing reviews.

In another experiment with book reviews I conducted with some of my students, I divided the class into two groups. One group had to review a book which had an average of 1.4 stars and some very negative reviews on Amazon, the other a book with 4.8 stars. Only it was exactly the same book, and the reviews made up. Group A with the 1.4 stars rated the book 1.8 points lower than Group B.

Data scientists are coming up with ever-smarter ways of deploying, interpreting, and visualizing data, but when it comes to brand loyalty and marketing, data can work very much against the interests of brands, especially when powerful incumbents are using the data to their advantage.

Conclusion

In summary, while in some cases reviews may work in favor of a brand, the motto is buyer beware! Reviews can have a terrible impact on your marketing performance and the overall brand image.

Of course, bad reviews can also be great material for counter-intuitive marketing.

More about that here: The Importance of Customer Feedback and What to Do With It

Read also:

How to Become a Smarter Marketer

Micro-Influencer Marketing: The Ins and Outs

Branding is overrated! Why not all companies need to be brands

 

 

 

 

Micro-Influencer Marketing: The Ins and Outs

Influencer marketing is big these days, but not everyone can afford to pay celebrities and online megastars with millions of followers. For some brands, micro influencers will be much more realistic and even powerful than big names.

The key to influencer marketing is authenticity. I covered this here: Word-of-Mouth Marketing: The Land that Strategy Forgot

This is true for celebrity endorsements but it is even more true for influencers with a smaller following. Marketers usually refer to digital presences of around 50’000 followers and below as “micro influencers”.

While they may not move the needle when it comes to mass-market products, they are hugely influential if their audience is well focused.

Read also: The 7 Deadly Sins of Influencer Marketing

Focus is the Key

That’s because micro influencers usually do not have a following with a very broad interest, but they may have exactly the fanbase you need. In particular, B2B influencers can really make a difference.

One example is healthcare. There are thousands of doctors and medical professionals really engaging with their audience and subject matter. If you have a product that fits in that niche, you will see immediate returns. Make sure that the influencers posts have the right links, and offer a window to engage with potential customers.

Another industry predestined for micro-influencers is machinery and electronic equipment. Brands like Huawei, AT&T, Siemens, Kuka, and many more work with hundreds of industry specialists around the world to get the word out about new products or services. Brands which ignore the power of influencer will be left behind. They already are, as the success of Huawei and Samsung shows.

Another sector where micro-influencers dominate is the financial sector, in particular for innovative services, apps, or SaaS payment solutions.

The reason is simple: we believe people we trust more than we believe brand. If all your marketing is about your product specs, you will not be successful. The key to successful brand marketing is more about your clients’ reaction than your product’s potential.

Events – the Micro-Influencers Paradise

Local events are another perfect application for micro-influencers. Most influencers have a following in a particular country or language. Promoting events like industry conferences, trade shows or an annual congress through micro influencers with regional audiences is both effective and authentic.

Whereas the conference schedule may appeal to real aficionados, and the list of keynote speakers may attract another segment of visitors, micro-influencers in the target market may help you fill the remaining seats by targeting special interests or industries.

What’s more, not everyone has the time or budget to attend every conference. Well-selected influencers can fill this information gap and keep a wider audience up-to-date which what’s going in your industry.

Regional Influencers Rule!

Local businesses, in general, are a great case for micro-influencers. If your brand or product is limited to a specific region, such as a hotel, restaurant, or local shop, regional influencers may be working in your favor. They charge considerably less and actually speak to an audience that is within driving or walking distance of your business. This allows you to focus your marketing efforts and spend money only on that segment of the digital audience that actually has the potential to become customers.

This kind of grass-roots marketing has the advantage of sounding more authentic, and binding potential clients to things, regions, and topics they know and care about. If done right, it can cut down your advertising business significantly.

Special Interest Influencers

People turn to the internet for information and help. When it comes to specialist subjects, nothing beats micro-influencers. In a recent case, I signed on 5 blockchain specialists to promote a startup, and each one of them had fewer than 5000 followers. This tactic got us better results than the press release the client had tried a month earlier.

The reason why press releases are becoming more and more useless is generational. GenZ consumers do not believe anything that looks like advertising

Read also: Why B2B companies need to embrace millennials

The Magic of Youtube

Apart from the obvious Instagram and Twitter, one of the most popular platforms for micro-influencers is YouTube.

As a brand, you want to find an individual with a niche interest and loyal following, someone who offers real value, whether its woodworking tips or the latest developments in artificial intelligence. For almost every subject imaginable, there is an influencer in any region in the world.

Youtube is particularly useful for younger generations and in-depth content, such as broadcasts from conferences, product demonstrations, how-to guides and so on.

The Law of Increasing Returns

One aspect of micro-influencers is that they usually work in an ecosystem of other influencers, people who retweet and share each other’s content, meaning that by paying one influencer, you can get exposure over a whole network of connected individuals.

Some of these individuals may cover the same niche and region but very likely they will come from all over the world, covering different countries, markets, and consumer segments.

Read also: So What is Content Marketing Anyway?

What Not To Do

One of the biggest mistakes brands make is bombarding influencers with demands. If you are paying the minimum, or not paying at all, you have no right to demand that the influencer present your product in a certain way.

This practice by brands is more common than you would believe. Do not annoy the influencers with copyright agreements and a list of demands. Influencers can be very efficient and engaging, but as a brand, do not ruin the relationship with a straight-jacket of do’s and don’ts. Not only does it harm the willingness of other influencers to engage, but it also destroys the authentic appeal influencers have.

Influencers have their own style, their own rules, and their own brand. Don’t let the bureaucracy of brand management destroy their potential.

Read on: The Secret Sauce: Working Effectively With B2B Influencers

B2B influencers on Twitter you may want to check out:

 

influencers

 

 

Word-of-Mouth Marketing: The Land that Strategy Forgot

Word of mouth is by any measure the best form of marketing. Recommendations from friends, colleagues, and even strangers lend credibility and are far more cost-effective than tedious advertising.

This is increasingly true as younger generations or ‘digital natives’ are becoming increasingly impervious to advertising.

In a digital world, word of mouth takes on a new dimension as user opinions can reach thousands of potential customers through likes and shares on social media platforms. Experiences marketers like Tyler Anderson have called word-of-mouth on social the new organic, and they may be right.

What customers say about your product or service is far more important than your ad campaign, whether it’s offline or online.

Surprisingly, very few brands have a word-of-mouth strategy

You have a strategy for Facebook, and overall digital strategy, an advertising strategy, but very few businesses have a word of mouth strategy. Although word-of-mouth is the oldest and most effective form of marketing, I’ve never seen a name card saying “Chief WOM Officer”.

Competency Does Not Equal Conversation

Many brands think that as long as they run a good business, improve customer service and user experience, people will talk about the brand and word-of-mouth marketing will take care of itself.

Sadly it’s not that easy. In a recent interview, Jae Baer put it succinctly: competency does not mean conversation. Just because you had a satisfactory experience with a brand does not mean you will run around telling everyone about it.

Word of mouth marketing means that there must be not a good, not an adequate, not a memorable brand experience, but one that makes people talk about your brand. Marketers call that a “talk trigger” – a specific action you take as a business that makes people come back for more.

Getting people to advocate your business is hard, and most certainly deserves a strategy. Growing your business is all about getting your satisfied customers to talk to new potential customers. If you need to advertise, you are not doing a good job growing your business, because you are paying people to pay attention. True growth and customer retention don’t come from snappy adds, but from customer experiences that become talk triggers. Your happy customer, your fans, are your best asset, so use them.

One way to embrace word-of-mouth marketing is by engaging micro-influencers. Read more here: Micro-Influencer Marketing: The Ins and Outs

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Why Don’t Businesses have WOM Strategies?

One reason is that most businesses believe that it is too hard to get people to talk about your brand, and any desperate effort to do so may backfire. That is in a sense true; according to Jae Baer and other marketers’ research, only about 1/3 of customers are willing to talk a great experience with a brand.

Yet it does depend on the industry or service provided. In the B2C space, a lot of word of mouth is happening online. Younger generations, in particular, are more willing to share a great experience on their Instagram, Facebook, or Twitter accounts.

In the B2B, B2G or even public services space, on the other hand, offline is still dominating. Many industrial brands rely on the testimonial of influencers and satisfied customers to gain market share and new customers

Read Also: It’s Time for B2B Enterprises to Embrace Global Influencers

Word of Mouth is King in B2B

That’s because B2B is all about trust. If you are spending thousands or even millions on a machine or solution, you have to know that it will work for you. B2B customers are worth more than B2C customers. They usually for longer-term, more engaging relationships with a brand (think of service contracts for machinery or other equipment, repeat purchases of materials, etc.) and thus their testimonial is worth far more than that of a casual B2C purchase.

Word-of-mouth is more impactful because most B2B companies are bad at marketing anyway, want to keep the details of their business deals secret, or simply follow the example of their industry leader. They copy the strategies of the GEs and Siemens’ of this world without ever thinking what kind of word-of-mouth strategy would be more suitable for their market niche.

Yet, according to Jae Baer, 91% of purchases in the B2B space are influenced by word-of-mouth. Compare that to the fact no no B2B company I have ever come across has a word-of-mouth strategy or someone in charge of WOM, there seems to be a crass misalignment of priorities here.

Personally, I admire the marketing of Kuka Robotics. The German-Chinese robotics company manages to surprise with creative marketing for their line of otherwise boring orange industrial robots, creating talking points and word-of-mouth strategies that are unique in the industrial space.

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How to Craft Your WOM Strategy

The first thing to remember as you embark on your WOM adventure is that it doesn’t pay to copy other brands and businesses. You need to come up with something memorable and unique as a talk trigger, an experience that offers both excitement and/or value to your potential customer. Baer calls it that “strategic operational differentiator”, I like to call it simply the thing that makes people talk.

Sometimes finding that unique thing means going back to your customers and finding out what they really like about your product. I did this with a server manufacturer and found that installing updates to certain software was the biggest headache for them. Simply by creating a much better update process than the competition, they probably saved millions in advertising, because the hassle-free update created a “talk trigger” – an experience with the brand that made people talk about it. And that’s the key to word-of-mouth marketing.

Restaurants know this well. In the age of Instagram, business success in the food industry is linked to exceptional experiences. You want to have that food presented in a way that makes people reach for their phones and take a picture of their plate, then share it on social media.

Hotels know this. I recently stayed at a spa hotel where instead of having to worry whether I had left my bathrobe in the room so they wouldn’t charge me for it, they presented me with a free bathrobe at check-in. It’s a real talk trigger – I have told every one of my friends about that unique experience and excellent service.

A good word-of-mouth strategy both reflects what you as a brand are good at, and what your customers really value about your brand. It should be consistent across the brand’s touchpoints and easily repeatable.

Encouraging the Creation of User-Generated Content (UGC)

Whereas in the B2B space offline word-of-mouth seems to work better than online, every brand should have a strategy – or at least think about – strategies to encourage UGC.

User-generated content is a testimonial to the success and popularity of your brand. Whether it’s on Instagram or Youtube, younger generations in particular love seeing content generated by their peers and are easily influenced by that content to make actual purchases. Creating talk triggers in B2C should be at the core of every B2C business’ marketing strategy.

 

6 Fairy Tales About Digital Marketing

Thousands upon thousands of digital marketing agencies and talented individuals around the world are offering advice on digital marketing.

Some offer genuine insight about the latest strategies, others are merely repeating stuff they found on the net. Some get paid by companies to promote specific products instead of offering real solutions for your problems. Almost all of them are after your money. Here are some of the most egregious misconceptions about digital marketing touted by experts around the world.

We can make any post go viral

Going viral is not so much a function of technological prowess as of a matter of content. If your content doesn’t appeal to people, if it does not evoke the right emotions, no manner of marketing trick will make it go “viral.” Not even if you pay Oprah to tweet about your gadget.

What’s more, going viral might not even be in your best interest. What if your product video really takes off, while your customer support is overwhelmed or your manufacturing plant can’t keep up? You might destroy your hard-earned reputation at the very same time your marketing team is celebrating their viral success.

Read More: There Is No Such Thing As “Going Viral”

It’s easy to get great results, you just have to know the right tricks

It is not. Success in the digital market is a combination of creativity, cunning, and competence very few people possess. Yes, there are some tricks and growth-hacking is a burgeoning field.

Yet truly great results don’t just bring you a random audience, they bring you the right audience. Building a dedicated and engaged following is not easy. You need authenticity, consistency, and patience.

Read more: Curiosity Marketing: The Ideal Solution for Digital Natives

Digital marketing is cheap

It’s definitely not. Look at the most successful accounts on Facebook, Twitter, or any other platform: those with the most followers and views are people or products which also have a big following OFFLINE. If you start online with a brand-new venture and don’t have a significant offline presence, the road to digital fame can be quite treacherous. And it’s certainly not cheap. As we say, if you offer peanuts, you get monkeys.

We can do this ourselves

Maybe you can. But digital marketing is becoming such a complex affair – from SEO/SMM and profitable PPC to creating the right content, that building up an effective in-house team is an increasingly complex affair. What’s more, many in-house teams tend to be swallowed up by the corporate culture they inherit, making them less effective when it comes to innovative strategies and disruptive marketing techniques.

Once you built a big following, the rest is easy

Again, wrong. Even accounts with a big following make mistakes, lose focus and thus followers, or simply don’t have the right offering to engage customers. Some accounts with 2000 followers have conversion rates of 30 or more percent, while others have millions of followers and negligible engagement. Digital marketing, like everything in life, is not about quantity, it’s about quality. Having a large following can also work against you. One company I know managed to get 180’000 followers who use Facebook mainly to complain about the brand’s shortcomings.

What the leading digital marketing agencies recommend is always true.

It’s not. Many agencies are pushing their own agenda, creating content to serve their clients and driving you to use software solutions from which they themselves profit. Also, a lot of digital marketing wisdom comes from the US, which is a fairly homogeneous market and very different from the rest of the world. Twitter, for example, is used for entirely different purposes in Taiwan than in the US. It’s almost impossible to generate leads on Twitter here. In China, it doesn’t even exist and you’ll have to switch to other platforms like WeChat. In other words: the digital space may be global, but your strategy must still be local.

Read also: So What is Content Marketing Anyway?

Follow the author on Twitter.

SEO or SMM? What Drives More Traffic?

We all know that “once you build it they will come” is a myth. Too many websites are rotting away in cyberspace because companies don’t know how to drive traffic. Yet even among those in the know, there is an ongoing debate which is more important: optimizing your site for search engines (SEO) or your social media marketing efforts (SMM).

So, as you embark on content marketing for real, what should you focus on?

The first truth is that you need both. Even though social media channels don’t really have an impact on site rankings, you can’t do SEO without them.

Social media is essential to drive traffic to your website. As consumers increasingly spend all of their time on Facebook and LinkedIn, the paradigm of web surfing from site to site has disappeared. 85% of traffic is already mobile, and around 2/3 of that is spent on Facebook, at least in some countries. Scrolling on your smartphone is the preferred consumption modus, not mouse-clicking links on the desktop.

Media companies like newspapers and TV stations are gearing their content entirely towards Facebook as they watch website hits fall month after month. New shopping features on Facebook mean that commerce too will be increasingly happening there. Even if Facebook fails, social media sites like Instagram or Medium, or, increasingly, regional or local solutions, will still capture much of the eyeballs – rather than your primary website.

Read also: How to Become a Smarter Marketer

The Key to SEO

Still, websites have their uses. Especially in the B2B business, you want customers to see your company website which is still the best place to showcase your products and services. Customers who need those products and services will search for them. Here’s where your SEO strategy comes in. Without SEO, you will be relegated to the nether regions of the Google pile.

But your best clients aren’t necessarily those searching for you. Companies are increasingly creating products with uses and names consumers are not familiar with. Factory automation companies, for example, use concepts not yet widely known. SMM is the ideal strategy for these companies because they need to create a platform or post on a platform that allows them to reach the right target audience and talk to them about solutions to problems their customers are not yet aware of. In Taiwan for example, FB pages like Taiwan’s Future reach a large audience of people interested in technology. Posting there or similar sites is the right way to reach B2B customers. Thousands of similar Facebook pages exist in every country, and marketers must embrace them in order to remain relevant.

If you absolutely must have both SEO and SMM, the question is how much effort you should put into each? Moz.com offers a few blog posts with excellent insights into the effectiveness of each strategy and the link between them. You also want to use Ahrefs, Rival IQ and SimilarWeb for analysis. Blogs to watch are blog.bufferapp.com, razorsocial.com and searchengineland.com for search and socialmediaexaminer.com and socialmediatoday.com for SMM.

The Key to Optimizing Social Media

Now the key to optimizing your SMM is to understand that the vast amount of users share and like content, but never actually read it, i.e. don’t click through to your website. So likes and shares are not the metrics that bring the best leads. What you really want is to focus on the posts that get the most click-throughs.

Once people click through to your website though, are they just reading that one blog post, or are they clicking through to your other pages? Are they subscribing to the newsletter? Are they buying products? The answer to these questions is in the Pixel. Facebook offers this amazing tool and gives you insight into the behavior of your visitors. Together with Google Analytics it is the nexus between SMM and SEO: comparing the data from Google and Facebook will allow you to make a judgment.

The results may be surprising. We recently implemented an SMM strategy for a company in the factory automation sector who believed that any potential client would come primarily from organic search results. After we set them up with social channels, a blog strategy and then put the Facebook Pixel on their site, we found that within six months they had four times more conversions from social than from organic search results. It seems counter-intuitive, but the truth is, consumers do not always know what they are looking for, and those actively searching for you might not be your best clients.

So the answer to the question of whether you spend more time on SMM or SEO is, unsurprisingly: look at the data!

Read also: 6 Fairy Tales About Digital Marketing

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Curiosity Marketing: The Ideal Solution for Digital Natives

We are drowning in a flood of information, on our desktops, our mobile devices, our televisions; from product videos to long-form written content, from Instagram images to LinkedIn posts.

Every avenue of marketing has been deployed, from aggressive advertising, email, to inbound strategies, podcasts, and webinars. And yet, marketers continue to come up with new (or not so new) concepts to get through to the customer. Or bring back old can trusted ways of attracting business.

One of these is curiosity marketing.

Curiosity as a concept is nothing new. Just think of cliffhangers in TV series, the anticipation created before a commercial break to make sure you stay on the channel, pre-announcements of products, leaking information before a launch, teaser landing pages, and all the other tricks in the toolkit of the scarcity marketers.

Curiosity comes into play everywhere, from podcasts to panel shows. As digital platforms change the way they display content, marketers must adapt. For years we tried to find the perfect still image for our video content; now it is about the first six seconds of an ad shown on Youtube. If you cannot arouse the viewers’ curiosity, they will not watch your ad.

Digitally native users are a particular are a hard nut to crack. Their brains have been conditioned to the myriad of stimuli already present everywhere in the digital world. They recognize icons, colors, and sequences of actions faster than older generations, and are much quicker to dismiss clues set by marketers. But the one thing they have in common with everybody else is curiosity.

I recently advised a luxury car accessory maker on the launch of their digital campaign. Instead of showing the product in detail, with high-resolution images, technical descriptions, and videos of flashy cars on a race track, we made only a simple landing page with a black background and a simple statement highlighting one feature of the flagship product. This that attracted the attention of car fanatics. We then promoted the website on Instagram and within 3 months had over 150’000 people in the target market signing up for a newsletter – an ideal basis for future marketing efforts.

Nothing was revealed about the product publicly, only in the newsletter. The buzz created by this form of curiosity marketing was amazing.

See also: Don’t Build Your House on Rented Land: 6 Basic Content Marketing Rules

Curiosity, FOMO, and Scarcity

Curiosity belongs in the same corner as scarcity marketing and exploiting FOMO – the fear of missing out, and the FOMO is a powerful force indeed.

Curiosity is built into the digital world like nothing else: you have to click on the teaser headline, the blurry image; you have to follow up on that murky statement because you do want to know, otherwise you could miss the latest trend, the big discount, or the change to win the big prize. Our innate human curiosity is the best tool for marketers to exploit – if they do so in an ethical way.

Curiosity and Ethics

The problem with curiosity marketing is the potential for abuse. How often have you clicked on something “interesting” only to find out it led to a spammy website or even a dangerous corner of the web where malware entered your computer, or nefarious elements tried to scam you or get a hold of your credit card data.

Thus, big brands are wary of playing the curiosity game. Gen X consumers have known from earliest childhood how to spot dodgy calls to action. Uusing the tricks of curiosity marketing without having built a reputation for honest, meaningful interaction with the consumer can totally ruin a brand’s image, as we see in scandal after scandal.

Authenticity and Consistency

The key to engaging via curiosity marketing is pure and adulterated authenticity. Don’t use other people’s tricks, don’t copy other people’s strategies. Only by nurturing an authentic dialog with your audience and engaging with them human-to-human, honestly and open, will you be able to use curiosity to increase your fans’ interest in your content, your product, or your service offering.

Another important factor is consistency. Because there is so much content on offer, in so many formats, good digital marketing is all about consistency. Consistency refers to your design, the layout of your pages, but also the steps you take to publish content and the road by which you are leading your potential client to a sales decision.

Just because you have built a loyal following through well-designed videos doesn’t mean that next time you can just spam your audience with a “buy my stuff”‘  CTA. People get used to their content sources, like them or not, and often start disliking them when you change the format or the goal of a campaign.

Focus on the Relationship

Finally, curiosity marketing works when it builds relationships, not just between the brand and the customer, but also between customers and other stakeholders. Using forums and Facebook groups, for example, doesn’t directly translate into sales, but creates relationships, because we are all curious about how other people do it, how other people use a product, or how celebrities discover (or get paid to discover) new products. Hence the mind-boggling success of Instagram.

Relationships can go many ways and include elements like your own employees, user-generated content, and most of all customer feedback. And only in the context of these authentic relationships should you deploy curiosity marketing.

See also: Employee Advocacy: The Key to Digital Marketing Success

Don’t venture into curiosity marketing without first building the foundation of a meaningful relationship to your customers. GenX, like no other generation in history, bombarded by information and constantly on the move, demands this authenticity.

Read also: So What is Content Marketing Anyway?

The Appocalyse: No Bright Future for Apps

Remember a few years ago, when every marketer told you that you needed to augment your brand with new touch points and that you couldn’t possibly do without your own app? The vision was that every store, every dentist and delivery service would have its own app.

While for some use cases such as public transport, food delivery, or management of appointments like in medical or public services apps have proven a great way to streamline transactional processes, many businesses wasted enormous amounts of money on creating apps that were perhaps downloaded once and never used again.

Ingenious and unscrupulous companies jumped on the bandwagon and created software that allowed for the simple and quick creation of apps, without complicated coding and very intuitive drag-and-drop functionality. (Also without much in the way of data security!)

Apps and Marketing

Marketing agencies tried to convince you that you must combine the easy general info of your website with the user-focused functionality of the cool app;  wishful thinking in many cases, lining the pockets of app developers and adding no benefits for customers.

Iterations of such services were copied around the world and localized in all major languages, and the app space exploded. Suddenly our mobile device screens filled with newspaper apps, public transport apps, ride-sharing service apps, restaurant apps, point collecting apps, accommodation apps and the local app to the best tourist attractions in a city we will only visit once in your life.

Point towards the QR code and download yet another app, until your screen is so cluttered it takes you five minutes to find the damn icon you thought was green but turned out to be yellow after the latest update – because you haven’t used the app in six months. Every restaurant and railway thought they needed to lock customers into their own app universe, coming up with ever cleverer ideas to reward loyalty and generate return business.

Apps, apps everywhere – until there were none

For a time the vision was that one day, every brand, business, boutique hotel, and burger joint would have its own mobile app. Apps promised to add “value” to the customer experience, lower labor cost, streamline business processes, increase customer loyalty and protect businesses from downturns.

But there are a few simple reasons why apps are actually on the way out.

Firstly, just like you can only fit so many store loyalty cards in your wallet, your phone will only hold so many apps before it becomes unwieldy. Some people may manage 100 apps, but most of us think 40-50 is more than enough. That’s not counting the bloatware installed by phone manufacturers in the first place. Add to it the apps you really need for business and daily living, and you will find yourself faced with app overload. According to some research, over 95% of new apps are only downloaded once and never used again.

Secondly, apps only work if they are used frequently for a useful, time or money-saving purpose.

My doctor’s app allows me to make appointments without having to speak to anyone, in seconds, and without providing repeat information. My bus service app allows me to see how many minutes the next bus is away. My supermarket app allows me to collect and redeem points just by scanning a barcode at every purchase. That’s useful, saves money, and provides actual value.

Apps that just provide information are faring less well. I won’t install the English-Spanish dictionary app if I can just google a word I don’t know. I won’t install my shoe store’s app, because I only buy a pair of shoes once a year and don’t really have any relationship with the brand anyway. I don’t use the Amazon app, because I prefer to shop via the desktop interface, which provides more information about products in an easier-to-absorb format.

All major brands thought they needed apps – until they realized how much effort it takes to keep them up-to-date, debug them, or else see them buried in app nirvana by bad reviews on the app store. Every time there is an update to the operating system, something goes awry with your app and you have to pay coders insane amounts of money to come up with a new version. If you’ve ever been involved in mobile app development, you know what I am talking about.

Apps are great – for a very small number of applications

In practice, unless you are a major online retailer or publisher of large amounts of content, delivered to thousands or millions of customers, or a public utility, you will probably be better off with a mobile-friendly website (RWD). Anything you can provide on a website should go there. If it can’t be done easier, better, and cheaper via an app, don’t bother with app development.

The app landscape is changing too. As a restaurant, why have your own delivery app if UberEats and FoodPanda can offer far better functionality and reach? How many people are really using newspaper apps, when they get most of their information through Google or content aggregators such as Medium? It takes time and money to promote the use of your own app, whereas joining an existing ecosystem of content can amplify your brand’s reach without spending a dime. For many B2B brands, having an impressive, engaging LinkedIn presence would probably do more for their business than investing in useless apps clients don’t really need and prospective clients don’t value anyway.

In many places, for example, gas (petrol) station chains came up with their own apps thinking that they could retain customers that way – only to be outsmarted by apps that should the cheapest prices in a certain radius.

In China, WeChat is showing the way by integrating thousands of functions into one central app. Although this is driven by government efforts to keep an eye on it citizens and would probably not work as well in more privacy-minded cultures, it is showing a trend toward simplification and centralization of essential functions.

Services like Line and Whatsapp are emulating WeChat and have created APIs that allow 3rd parties to create mini-applications that work in the main chat program. This trend will only continue in the coming years. Facebook and perhaps Twitter too will develop such functionality, hoping to retain eyeballs and keep customers in their ecosystem.

Speed, privacy and safety

With the arrival of 5G (solving the 4G latency problem), and increased use of IoT and cloud services, the industry will consolidate further. Promoting your app will become more and more expensive as applications proliferate and software development costs fall as SaaS solutions take over. More than 80% of SaaS services today are provided through browsers rather than special-purpose apps. Browser functionality will increase, and with privacy and security concerns, the browser will provide a layer of protection from malware or ransomware.

Users will be assured by service providers complying with a browser’s security protocols – whereas, with a standalone app, you never know what it really does with your private information. Every new data breach or leak of private information from a stand-alone app will convince users that they are better off trusting big content providers rather than individual brands. And with legislation like GDPR forcing brands to spend even more on data protection, management, and security, I am sure we are heading towards the day of the appocalypse – when it will be cheaper, faster, safer, and easier for anyone to use browser-dominated SaaS solutions or specialized app ecosystems rather than installing yet another badly designed, unreliable app.

Read also:

How to Know When You Are Ready for AI

The Right Role for Marketing

The 7 Deadly Sins of Digital Marketing

Beating Amazon & Co: Hands-on Marketing Tips for Brands

In the digital age of ubiquitous information, machine learning, and big data dominance, reaching the customer is tough. With online shopping, customers have access to an unlimited number of brands and products, their attention spans are shorter and split between multiple devices, and they are constantly researching, comparing and exploring different options before making their purchase decisions.

Machine learning and artificial intelligence allow savvy companies with deep pockets or government connections to capture huge segments of the market. Brands are challenged with capturing consumers’ divided attention and with growing sales in an extremely crowded e-commerce environment. Global expansion is becoming a challenge as different platforms dominate different countries and regions.

You need a retail partner no matter what

While it is the goal of most manufacturers and startup entrepreneur to have their own website or webshop, in many countries and industries there is simply no way around the dominating retail platform.

Read also: Why you should always put your retail strategy first

To stay competitive, brands must capitalize on the online presence and sizable audiences of their retail partners and the tools offered by them, from AI-powered recommendations to paid advertising.

But rather than standing idly by and hoping for miraculous results, there are a number of strategies brands can employ to build their online presence on an online retailer’s website like Amazon. Being proactive when selling through online retail platforms can lead to many benefits in terms of brand awareness, credibility and customer retention.

Your customer’s voice is a powerful marketing tool

While the exact numbers differ from country to country, including ratings and reviews in the user experience usually means better conversions and more purchases. Even though customers have woken up to the fact that reviews can be abused are not always genuine, they still influencer purchase decisions.

What’s more, companies that collect customer feedback, analyze it, and act up it, are usually showing faster grow and better results in the long and short term.

Read also: The Importance of Customer Feedback

Feedback from your customers, however, is entirely ineffective if others don’t have access to it. By sharing customer reviews with the retail partners that sell your products, brands can extend the reach of their customer ratings and reviews and boost consideration and sales through the retail channel.

Capturing and publishing customer reviews sounds like a lot of hassle, but in most industries, it’s well worth the investment. And I am not just talking about consumer product here – even in the B2B space, the experience one customer has with your product or service can influence hundreds of potential clients.

Showing reviews, testimonials, and especially video clips documenting positive client experiences on your website and that of the retailer can help your brand get discovered and stand out positively, especially if the customer reviewing your product is genuine and believable. That doesn’t always mean massively popular influencers or celebrities or star brands, but an can mean your average, down-to-earth, real consumer with a low number of followers on their social media accounts. In an age of digital noise, genuine experiences and influencers are more believable than the latest AI experiment.

Engage With Your Fans

What’s even more important than publishing positive reviews or linking to them from your retail page is engaging with true fans. Every e-mail celebrating your success that comes from a genuine customer is worth more than any advertising dollar. If people love your brand, their testimony will influence many more people than an unrelatable TV ad.

Additionally, once you’ve kick-started the exchange of your customer reviews, more serendipitous opportunities could follow. Your retailer may be more likely to feature your product more prominently on their e-commerce site and mention your brand in their social media streams.

Using the voice of the customer can influence sales in retailers’ physical stores when people are researching products in a physical location. In some cases, retailers may offer exclusive, in-store displays and deals for popular products favored and liked by real-life customers. Brands that actively engage in this way are preferable partners for a retail website.

Reward loyal fans with great experiences

Reviews are important, but what about brand-new products? How do you create buzz around a new launch if no one has got their hands on the product yet?

One way is to curate a loyal customer database – fans of your product that have previously posted positive reviews or said positive things about your brand on social media.

Before the product launch, reach out to them and send them the new product for free. Managers don’t like giving away samples, but they serve a double purpose: if the new product is great, it creates an excellent buzz around it; if it’s flawed, you can delay the release until you have sorted out the bugs. Authentic, high-quality feedback is the best marketing tool there is.

With the right approach, sampling can lay the foundation for a steady stream of consumer reviews that you can share and distribute to your retail partners. Authentic ratings and reviews for new products will help convince casual visitors and turn browsers into buyers. They also give your retail partners valuable content from the moment they start selling your new product online or in-store.

Also recommended is the use of credible influencers. Read more here:

It’s Time For B2B enterprises to Embrace Influencers

Micro-Influencer Marketing: The Ins and Outs

Word-of-Mouth Marketing: The Land that Strategy Forgot

 

Lend a helping hand!

One of the drawbacks of mixed online retailers is that they can’t know every product in detail or offer support around the product category. You don’t go to Amazon for fashion tips of help on woodworking.

Yet customers will appreciate the help, useful tips, and recommendation on how to use specific products, solve individual problems or improve their skills. You can use the space offered by your online retailer to proffer this help or link to your website or youtube channel for more information.

As a brand, you have an opportunity to be the resident expert about your products and can offer helpful advice or answer specific customer questions about your products and the proper ways to use them. Share your expertise and product knowledge to provide an educational, informative point of view that your retailers can share with their audiences.

There are many more ways to engage and improve your customer retail experience even if you don’t have your own web shop. In particular, if you are expanding into new markets, check out the online behavior of your future customers. Where do they go for reviews? How do they make their purchase decision? Which forums do they trust? Are they swayed by influencers or celebrities?

Read more on How to Influence The Customer Journey

How to Estimate an AI Project’s Data Needs

One of the biggest challenges in today’s business world for mid and top-level executives is to correctly estimate data needs of new AI projects both at inception and over time.

You may also want to read: Machine Learning in the Organization: First Steps

The main questions which arise here are: what kind of data do we need, how do we need to prepare (clean) the data, and how do we teach employees who are not familiar with machine learning concepts and artificial intelligence how to manipulate and curate that data.

Most clients in this field come in two flavors: those with massive amounts of data who do not know what to do with it, and those who have never bothered to collect data and don’t know where to begin their journey.

Data: The Have and the Have Nots

If your goal is the prediction of future outcomes in a project and you do have a large amount of data available already, the key is to clearly understand the nature and quality of that data. A lot of companies are claiming to employ “AI” when they are actually just giving their existing data a once over. AI projects need highly qualified, reliable training data sets, and the people in your organization who have hitherto managed data collection may not be the best qualified to assure the usability of those training sets (especially for voice, computer vision, and natural language processing).

In particular, projects involving localization of large data sets (i.e. rollout in multiple languages), it is important to make sure that the basic data sets and procedures can be reliably employed throughout the entire application space.

For organizations who have not yet collected data, the challenge is to find out exactly which data must be collected and what is the most efficient way to do so. Mission creep in the planning phase, business silos, traditional hierarchical thinking and what I like to call ‘project envy’ between departments often lead to situations where too much data is collected at too many touchpoints, resulting both in dirty data and dissatisfied customers. Medical institutions like hospitals deploying AI solutions are particularly vulnerable, as each specialty and department wants complete control over the data.

Domain Specificity is both Key and Curse

Whereas domain generic projects can be excused for leaving the user with imprecise results, in many instances domain-specificity (currently in particular finance, insurance, and medical) is the absolute key to get good results and define the kind of data needed.

The categories in your domain-specific data may work in one language, but be completely irrelevant in another, causing problems as you try to scale up. Very often you need domain-specialized people (from biologists to comptrollers) to shed a light on the exact data needs. However, every time you add another domain expert the mountain of data that is supposedly needed grows.

Finding expertise is one of the tougher challenges in this area, not just for startups. AI systems analyzing shoulder x-rays should be viewed, classified and analyzed by a large number of orthopedic surgeons, and trying to get medical professionals to participate in any kind of extracurricular activity is either impossible or hugely expensive. In other industries, experts are bound by contracts or NDAs and unavailable to help you improve your project.

Even if your data entry module is perfectly designed, humans have a tendency to mess things up. In a recent project, we identified twelve different ways physicians in one hospital describe exactly the same condition.

Estimating by Comparing

One way for managers to estimate data needs is to look for comparable projects or join existing project pools. It is not necessary to re-invent the wheel every time you launch another AI project. Despite what you and your customers may think, your needs are probably not unique.

In particular, in NLP, someone probably has already done what you are trying to do, cleaned the data and trained the model. Managers must keep their eyes open for news about similar projects in their domain. At this point, many startups are simply translating ideas from one domain, country, or jurisdiction to another, adding little in the value of aggregate AI development, but at least aiming to solve specific programs with toy application type solutions. ROI doesn’t come into it yet.

Executives Need to Understand the Data Needs

Most projects fail because executives simply follow the hype, have the data or the budget to collect new data, and want to add an AI project to the list of their achievements. But just because you have data does not mean you need that data, not to mention an AI use case for it.

Executives must understand that at the core of our current efforts are human-machine interaction and augmentation of human capabilities. The first step in analyzing your data needs should, therefore, be these two questions: does the project make interacting with machines easier, and does it increase the capacity of the human to solve problems or complete workflows. All estimation of data needs should be guided by these two principles, all data collection and data cleaning should help make those goals clearer.

The key decision factor (especially when working with consultants and 3rd party providers) should not be price, but the quality of data. If an executive doesn’t understand the harm bad quality data can do to a project, they should not be in charge of such a project.

Read Also: Beyond the Hype: The difference between Artificial Intelligence, Machine Learning, and Deep Learning

 

What Chatbots Can Currently Do For Your Business

Chatbots are being hyped as the next big thing in marketing. They should, marketers insist, be an integral part not just of customer service, but of your entire content marketing strategy.

In fact, far beyond marketing, they have use cases in every department of your business, every customer touchpoint, and even B2B interfaces of your industry or company internal processes. However, just like any new technology, chatbots are somewhat overhyped and the C-suite has no clear picture of how useful they will be in the end.

Deploying a chatbot requires a lot of preparation not unlike the work involved in prepping a department for machine learning or artificial intelligence.

For a general overview of machine learning deployment, see: Machine Learning in the Organization: First Steps

But let’s get started.

The Low Hanging Fruit

The easiest applications for chatbots are without doubt high-structured, repetitive information such as that contained in standard customer service dialogues. Whether it is information about your opening hours, making simple reservations, finding the location of offices or getting a step-by-step guide through bureaucratic processes, this is information any chatbot can give in a reliable way.

“When will my order arrive”, “can I make an appointment on Thursday at 2 pm”, “is this item available in red”, “what is the balance on my credit card account” should all be easily programmable responses. Experts estimate that over 70% of calls pertaining to information contained in FAQs or customer service manuals can be easily and quickly transferred to a chatbot API. Agents are taking their time to answer questions, while customers with much more pressing requests are made to wait: here the chatbot has a clear use case and offers immediate benefits.

In other words, chatbots should be used to remove large volume questions with standard answers from the queue.

Pitfalls for Basic Chatbots

NLP or natural language processing is the key to even basic chatbots. Different people use different expressions for the same thing. Whether you want “double cheese”, “extra cheese”, “more cheese” should all be understood without having to confirm. There is nothing more annoying than having the chatbot ask you “did you mean…?”

The key here is to build very simple decision trees modeled on existing workflows, avoiding brand-specific lingo the customer may not be familiar with and making use of existing customer data. An airline chatbot is a good example.

If I have booked 20 flights from A to B in the same time slot and class over the last 5 months, the chatbot should be smart enough to look up my past reservation data and thus not offer me choices I have previously rejected, while being flexible enough to make a slightly different reservation this time.

If I have consistently ordered the vegetarian meal, this information should be available to the chatbot also.

Personalization is the Key

This is not personalization per se, because hundreds of customers will have made the same type of reservation. Customization of a flight is not extremely complicated. Other than the date, time, class, window or aisle and perhaps the choice of meal, there is not a lot that goes into a flight reservation.

The same is true for any chatbot handling retail orders – and of course the AI behind voice assistants like Alexa.

But here is where we get a little more nuanced. In the coming years, we will see more elaborate dialogs. Currently, chatbots deliver simple answers to simple questions but are unable to build on those fragmentary interactions to conduct human-like dialogs.

Multi-stage conversations are not yet handled satisfactorily by chatbots and can do more harm than good to your brand’s reputation. An annoyed user is not a happy user.

In the example of the airline reservation, if the customer is a frequent flyer and no seat is available on the flight they are requesting, the chatbot should immediately hand off to a human operator. If a customer consistently ordered the same type of washing powder for months or years, do not bombard them with alternative choices.

It Takes Time and Common Sense

Depend on your industry, deploying chatbots takes time. Estimate at least a year to get to over 70% of requests handled by the bot! In the initial phase, make sure bot interactions are monitored and failures identified early. There should always be a human operator at hand to jump in.

Retailers, airlines, even hospitals, have started to adopt chatbots in that way. The key for customer satisfaction here is the remember that the caller should be in a relaxed state and friendly towards the chatbot service.

Detection systems for natural language processing are now being developed that can tell whether a caller is angry, agitated, confused or in distress — in which case a human interlocutor is preferable than a chatbot.

Finally, there will be situations where are chatbot is not the right technology. The complaints hotline should not be the first place to launch a chatbot, as you can reasonably expect a level of stress or agitation.

Repeat purchases of standard goods are easier handled by a chatbot than complicated orders. In banking, new generations may trust computer-controlled systems more than older generations, but always keep in mind who your customer is and how familiar with the technology they are.

Think Voice For the Long Term

While chatbots on social media platforms or your website are easier to implement because of the prevalence of text parsing, the future belongs to voice.

3-5 years from now voice will be the key enabler of chatting, and your business should be ready for it. In the meantime, take baby steps and pay attention not to annoy your existing customer base.

Read also: CIO 101: How to Estimate an AI Project’s Data Needs

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Writing Your First Chatbot Script

Chatbots are the next big thing, even though current implementation is still sketchy. In some industries – such as airline customer service – they have taken off quickly, others have struggled to come up with the right content, brand voice, and implementation

The best place to start planning your marketing chatbot is yourself. Have you used a chatbot? Do you like using chatbots? What problems have you found using chatbots.

I am sure that you will agree a chatbot has to meet the following criteria to appeal to users:

  • Responses have to be fast
  • Responses have to be accurate
  • Responses have to be natural

Remember the acronym: FAN – fast, accurate, natural.

Fast, because nobody likes to wait, especially on mobile. Make sure you have the right solution in place. Responses don’t have to be timed exactly, that would make the conversation feel unnatural. Anything between 1- 6 seconds is a good response time. The chatbot solution you choose probably has a feature called random or dynamic reply timing; use it.

Accurate because, well, what use is a chatbot that gives wrong answers. That means examining your data for accuracy and relevancy.

Read also: Machine Learning in Organization: First Steps

And finally, natural, because we feel more comfortable talking to real human beings, so the technology has to at least make an effort to sound like a real person. Chatbots are not Google search, they are not meant to deliver stilted answers, but to engage the customer into a real conversation. Or at least something that feels like a conversation.

Bearing in mind the above, the script you write for your chatbot should be based on actual conversations. For that, you need data – recordings of actual interaction with customers. Even without expensive data analysis, you will be able to extract some key elements that can guide you when writing the chatbot script.

Some experts have recommended using slang expressions and abbreviations, even emojis in replies. While this may give a more “authentic” feeling to the chatbot, it may not sit well with your brand voice. When I am making a reservation with a 5-star hotel, I don’t want the chatbot to call me “mate” or answer “yeah man!” Chatbot scripts have to match the brand and application they represent.

Make It Sound Human – For Everyone

If you do not have access to customer details at the time of interaction, remember that you are writing a script for all ages. The chatbot must feel equally professional and natural to a senior citizen as to a teenager. Sophisticated chatbot programs also allow you to program several choices for each response depending on the client persona (e.g. age of the user or type of service requested)

Even though human conversations can guide you when writing the chatbot responses, do not rely on one sample alone. It may be an outlier.

That said, even if you don’t use slang or emojis in your answers, your chatbot program should be able to understand them to a certain degree, especially if your customer profile includes younger generations. Natural language processing is a key feature of most chatbot solutions, but not all of them offer enough flexibility to accommodate the type of customers you are dealing with.

Chatbot scripts must be written from the perspective of the user. Always remember who you are talking to, and in which situation. A chatbot for ordering food or concert tickets is a different animal from a chatbot on a customer complaint website.

And finally, stay away from the canned responses pre-programming with many cloud-based chatbot solutions. Don’t even look at them. At this stage, AI is not general enough to offer solutions across the board, so you will have to program the chatbot with data befitting your organization, your customer profiles, and your use case.

Read also:

How to Know When You Are Ready for AI

CIO 101: How to Estimate an AI Project’s Data Needs

The Importance of Customer Feedback

The Difference Between Artificial Intelligence, Machine Learning, and Deep Learning

Artificial Intelligence (AI) has entered our daily lives with a bang. From marketing to medicine, every business and industry seems to be affected. Technology companies are competing for dominance in the race to lead the market and acquire the most innovative and promising AI businesses.

You may already be using AI in everyday life, with applications such as speech recognition, virtual assistance on your smartphone, the recommendation algorithms of shopping websites and music or video streaming services, or even when you visit the doctor and he compares an X-Ray or other medical images with other medical data. And then there are the terms machine learning and deep learning, which seem to confuse many people. Too often they are used interchangeably, but although they are closely related to each other, they have different meanings. So, what is the difference between AI, machine learning, and deep learning?

Artificial Intelligence

In the broadest sense, according to its founders, AI is the science and engineering of making intelligent machines, in particular, intelligent computer programs. It is a way of making a computer, a computer-controlled robot, or a software think intelligently in a way similar to the way humans think while exploiting the vastly greater speed and power of the computer.

Companies are using massive amounts of data, so much in fact that we need the help of computers to organize and analyze the data. All of this, in the broadest sense, falls under the umbrelle of machine intelligence. 

Knowledge engineering is a core part of AI research. Machines can act like humans only if they have abundant information relating to the world. An autonomous car can only drive safely with sufficient data about its environment. Decision-making algorithms are only as good as the input data.

In other words, artificial intelligence must have access to objects, categories, properties, and relations between all of them to implement knowledge engineering. Initiating common sense, reasoning and problem-solving power in machines is a difficult and tedious approach. We are nowhere near really intelligent machines.

Machine Learning

Whereas Artificial Intelligence covers the entire spectrum of machine learning, the term machine learning has a much narrower meaning, namely “the ability to learn without being explicitly programmed.”

By using algorithms, or mathematical formulas, computers can analyze the data and make predictions based on this analysis. Whereas initially machine learning was limited to algorithms programmed by humans, by now we have computers teaching themselves themselves and set their own rules. That’s machine learning.

Incidentally, this is where the biggest changing are happening right now: feeding massive data sets into computers and waiting for them to come with results.

Machine learning is a type of AI that facilitates a computer’s ability to learn and essentially teach itself to evolve as it becomes exposed to new and ever-changing data. For example, Facebook’s news feed uses machine learning in an effort to personalize each individual’s feed based on what they like. The main elements of traditional machine learning software are statistical analysis and predictive analysis used to spot patterns and find hidden insights based on observed data from previous computations without being programmed on where to look.

Read also: Machine Learning in Organization: First Steps

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Machine learning has truly evolved over the years by its ability to sift through a complex data set. These are often referred to as “big data”. Many may be surprised to know that they encounter machine learning applications in their everyday lives through streaming services like Netflix and social media algorithms that alert to trending topics or hashtags. Feature extraction in machine learning requires a programmer to tell the computer what kinds of things it should be looking for that will be formative in making a decision, which can be a time-consuming process. This also results in machine learning having decreased accuracy due to the element of human error during the programming process.

 

Deep Learning

Deep Learning is the youngest area of machine learning research, which has been introduced with the objective of moving machine learning closer to artificial intelligence.

It relates to study of ‘deep neural networks’ in the human brain and, under this perspective, the deep learning tries to emulate the functions of inner layers of the human brain, creating knowledge from multiple layers of information processing. Since the deep learning technology is modeled after the human brain, each time new data is poured in, its capabilities get better.

Under the deep learning paradigm, essentially the machine is ‘trained’ using large amounts of data and algorithms to give it the ability to learn how to perform the task. This data is fed through neural networks which ask a series of binary true/false questions or numerical values, of every bit of data which pass through them and classify it according to the answers received. Today, image recognition by machines trained via deep learning are used in training autonomous robots and vehicles, in medicine to identify disease markers and all kinds of images.

Some time ago Google’s AlphaGo learned the game in hours by playing against itself over and over and over. This unsupervised, increasingly faster ability to learn is the key to the current hype over deep learning. But the next revolutionary technology is not far away.

Read also: Sayonara, sucker! How digital companies are leaving the rest behind

 

Can Blockchain Technology Solve the Food Chain Crisis?

At blockchain-themed events around the world, bold promises are being made about the ability of blockchain technology to solve the problem of food traceability and supply chains in general. But how realistic is that prospect? Is blockchain really the right tool for supply chain management and traceability? What will happen if deploy it broadly?

Incidents of food fraud are on the rise globally. Multinational conglomerates often intentionally hide the precise location of food sources, while consumers – ever more health conscious – increasingly pay attention to where their food comes from.

No one is immune from the crisis. From e-coli spinach in America to horse meat lasagne in Europe – not to mention plastic-contaminated infant formula in China – food traceability is a global and very serious problem.

Food traceability is complicated

Truth be told, the problems of the food industry are manifold. Tampering with labels and seals, misreporting of fraud numbers, parallel imports, are costing the industry billions of dollars a year. From contaminated milk to re-labelled, expired, Spanish ham; from foul tomatoes ending up in ketchup to horse meat DNA across a variety of frozen food products, to dogs and cats in Indian mutton curry, not a week goes by without another scandal somewhere in the world.

But it doesn’t have to be fraud – consumers also want to know that their food is truly organic, or that animals have been treated properly. The British are afraid of chlorinated chicken and the Germans are obsessed with buying only “made in Germany” jam – even if all the fruit come from Romania and Ukraine.

Shoppers were flabbergasted when it turned out a famous local brand farmed all their shrimp in a polluted region of China. In short, food traceability is a huge issue for manufacturers and consumers alike, from marketing to actual health risks.

Complicated Supply Chains Scream for Blockchain

Supply chains have become so complicated, manufacturers themselves often don’t know where the ingredients really come from and how they reach their destination.

Blockchain promises a solution. The distributed ledger technology of blockchain means that thousands of copies of a ledger prevent alteration of the records. Every ingredient at every step of the manufacturing process can be monitored, the responsible parties held accountable. Hundreds of startups are working on solution promising one thing above all: transparency through blockchain.

Companies like Provenance connect the digital and physical world using natural markers like genetic profiles at the top end of their tech solutions, but at the very least promise to eliminate the most egregious examples of fraud, like copying or falsifying certificates of origin or batch numbers.

Fish are tracked with data including the fishing vessel, the phone number of the captain, date and location of the catch, and other verifiable data entered throughout the journey to market. Vegetables are tracked from farm to supermarket in the same way. Meat is traced from the moment an animal is born to the moment the customer swipes the ham package at the supermarket checkout.

But is blockchain really the solution?

The problem is that the blockchain technology itself doesn’t guarantee the accuracy of the data; you still need to trust the people making the ledger entry. This problem, experts predict, will be overcome with government regulation and machine learning: big data sets will be able to flag implausible and possibly fraudulent entries. Individuals and corporations being flagged repeatedly can be blocked from the supply chain accordingly.

Food fingerprinting – the record of molecular properties of food, recorded with blockchain – is another component of the fight against food fraud. I will allow consumers to verify that a particular product found on a shelf is actually the same product recorded at the source of production.

Sensors will offer another piece of the puzzle. Did irrigation from a neighboring farm contaminate a certified producer? Did refrigeration fail during a sea voyage? Was the shipment repackaged at a port along the way? The more data points we collect on the blockchain, the safer a food product will be.

The question is do we really need blockchain (with its proof-of-work step) or is this only a question of a distributed ledger? Are there solutions that involve safe, traceable data entry without actually requiring proof-of-work and enormous energy consumption?

Expect an Increase in Food Cost

We do not have all the answers. If there is no payment step involved, perhaps blockchain is an overkill. Perhaps there are other distributed solutions on the horizon which do not come with the baggage of long hours of computer processing.

However, all this technology will, at least in the short run, increase the cost of food production. Producers banned from the blockchain tracing system will continue to operate in a gray area, providing cheaper (albeit less safe) alternatives, which will be mostly used by the poor.

Blockchain, in other words, may make food safer for affluent societies while worsening the quality of alimentation in poorer countries.

That is unless a solution provider takes on the problem and offers a viable solution to any player in the market.

 

 

 

 

 

Don’t Build Your House on Rented Land: 6 Basic Content Marketing Rules

I have discussed content marketing in depth on this blog. There is no better way to attract, convert, and retain customers.

Advertising disrupts and annoys, and younger generations are completely impervious to it. Whether you like the term or not, it is the future and the only form of good marketing.

Yet, again and again, I come across companies who try their hand at what they believe is solid content marketing, but still make the mistake of relying too much on a specific social platform and “other people’s properties”, in a way building their marketing house on rented land. Such strategies are nothing more than social media marketing.

 

Don’t Rely on Rented Land Alone

In this analogy, your content is your house, and just like you want to own a house, you want to own your content.

If you make all your blog posts on Facebook and put all your videos on YouTube, you are actually building your content house on other people’s property. Of course, Facebook and YouTube and all the other platforms want you to do that because it makes them more interesting and influential. But at the end of the day, you need to link your customers and potential customers to something other than a Facebook page or a YouTube channel.

Here are some simple and practical steps on how to do that (courtesy of Content Marketing Institute and a number of other experienced marketers).

Content Marketing Done Right

Here are six basic tips on how to put your marketing on a solid foundation, reaching from where to post your content, how to build a following and engage with users, and how to make sure your content is seen first.

1) Don’t just blog on other platforms – have your own website

You own the website, and you can do with it what you want. If Facebook disappears tomorrow, you will still have your content. Of course, you can use WordPress or Squarespace, which are not likely to go under. But don’t rely on social media posts alone! A Facebook page alone is not a solid marketing strategy.

Read also: Web Design: Time to Weed Out The Laggards

2) Build an e-mail communication channel

You should have a way to communicate with clients or fans directly. I recommend e-mail, even though in some countries messaging platforms like Line, WhatsApp, WeChat or Facebook Messenger offer enticing alternatives. But those are, believe it or not, the same kind of rented land. Just think of recent events where Indonesia, Brazil, or Russia banned individual messaging tools.

E-Mail is still the safest way to build a communication channel. You must make every effort to get people onto your mailing list. You want to collect that data and own it. If Facebook disappears tomorrow, and your website suffers an outage, you will still have your e-mail data.

3) Have a backup

Surprisingly enough, few content marketers bother to back up their content. Even the most popular site providers can go bankrupt or be blocked. Even relying on automatic backup services can be a risk. Cloud data archiving like Amazon Glacier seems to be the most popular solution today but beware the small print: if you want your data restored very quickly, you’ll pay through your nose.

At the end of the day, the cheapest way for an efficient content backup is that external hard drive you thought you could do without.

4) Spread the gospel

Only when you have these independent assets you own ready should you go out and spread the news about your awesome content on rented land. Facebook, LinkedIn, Twitter, Medium, or messaging apps … whatever. Spread the good news and get people to visit your website.

Do not start with advertising, but observe how content performs organically first. It is cheaper and more efficient to boost posts that are already doing well, rather than rely on paid views from the beginning.

5) Don’t be lured into Facebook & Co’s next marketing gimmick

Facebook has enough money. It’s time to take back control of your content and engagement. You don’t need a shop or a blog on Facebook. Yes, you can, we are not saying you shouldn’t. But the original content should always in a house you actually own.

Don’t fall for any recent trends. Facebook has repeatedly changed its algorithm, at one time favoring video content over everything else, months later proclaiming that passive video viewing as not in its interest and it preferred posts that promoted engagement.

The algorithms of social media platforms will continue to evolve, and most likely evolve in the (financial) interest of their owners. Facebook’s 2018 changes were not about returning to “values” of engagement with family and friends, but to give a reason why every brand should now pay for promotion of posts.

Lesson learned. Post your content, spend a little on promotion in your like, but don’t believe anything the platforms tell you in their own PR.

6) Originality wins every time

At the time of this writing, and before Google can index massive amounts of audio and video data, originality still means text description, even if combined with video content. This will change over the coming years, and the rules are different for celebrities, gamers, vocal artists and other special groups, but for the average marketer, long-form text content is still the way forward.

As algorithms as the Google search algorithm get smarter by the day, they will recognize content poached from other websites, translated, or slightly edited. This means that at the end of the day, original content will always win, wherever it is posted first. And that should be your website, your house, the land your own.

Read also: Word-of-Mouth Marketing: The Land that Strategy Forgot

 

 

 

 

 

 

 

 

 

The Bounce Rate: When It Matters, and When it Doesn’t

Bounce rate (sometimes confused with exit rate) is an Internet marketing term used in web traffic analysis. It represents the percentage of visitors who enter the site and then leave (“bounce“) rather than continuing on to view other pages within the same site.

Whether you are using ads or inbound marketing strategies, the bounce rate tells you a lot about whether you are doing things right or wrong on your website.

In itself, however, it is pretty meaningless. Despite what various marketing websites report, there is no ideal or average bounce rate for a website. It depends on the industry, the competition, the age group you are addressing, the content itself, and what you are trying to do with the site.

Bounce Rate Scenarios

Consider the following scenarios:

1) You are selling products on your website

If you get traffic from organic search to your website and the landing page has a high bounce rate, that may indicate one of two things. Either your website isn’t really relevant to the search, or your product offering is not attractive to users. The first step then is to check your search terms and make sure they are aligned. If that is not the culprit, we need to find why your product offering isn’t attractive.

Do you have the price listed on the landing page? Try moving it to the following page. If the bounce rate improves, that means visitors are actually interested but are put off by the price. There are multiple combinations, and A/B testing is the way to go here. If you get the traffic from ads, it’s time to check your keywords and make sure the ad is shown to the right people.

Note that the bounce rate also varies by product, age group, and even time of day or the weather. A product with lots of competition, say, sports shoes, will have a higher bounce rate than a fairly unique product. That ice-cream parlor may bounce more on cold days when people just come to a have a look and remember you for the summer.

2) A blog post

A high bounce rate on a blog post is natural. People found the link somewhere on social media or a referrer and then landed on your blog. The bounce rate doesn’t tell you much about the success of the post – you need to look at the time spent on the page.

If you have a bounce rate of 99% but people spend several minutes on the page, that means, people are actually reading what you wrote, but aren’t interested in your other opinions — or you forgot to guide them to further reading. If you want people to stay on the site and read other articles, it makes sense to include links to other posts at the end of the post. However, those articles should be relevant and on a similar topic.

Good navigation is key to lowering bounce rates, but it far from the only factor. In general, there are a few tricks to improve your bounce rate regardless of what you are doing on your website.

You really need to understand your visitors. No, really!

Before even considering the importance of the bounce rate, you need to know why and how visitors come to your website. As shown above, this makes a huge difference.

Visitors who have followed a social media link are much less likely to continue reading other pages of your site because they want to get back to scrolling through Facebook, say, or keep reading other posts from their Twitter feed.

Visitors looking for a specific product or supplier will spend more time learning about your company or product offering.

Sounding “folksy” may cut it in Texas, but in Tokyo, you’d sound like an idiot.

Knowing your visitors is especially important if you are trying to appeal to a global audience. Many American websites, for example, use over-hyped language, content and design formats that Europeans or Asians consider spammy and untrustworthy. Sounding “folksy” may cut it in Texas, but in Tokyo, you’d sound like an idiot. Likewise, many Asian companies use a verbose and impersonal English style (based on the original Chinese or Japanese content, for example) that sounds completely outdated or statist to American or European ears.

Another aspect is technology. Look at Google Analytics and see where bounce rates happen most. Because so many websites out there are still not very mobile friendly, a high bounce rate on mobile my just underline the fact that you’ll have to invest in a new web design soon, rather than a general disinterest in your product. You can do the same analysis for countries, languages, and age groups, and thus tweak and improve your site.

UX is essential. Gee, where have we heard that before?

One of the most common general reasons for a high bounce rate is bad, outdated, or unappealing design. Just like with humans, first impressions go a long way. When visitors go to your site and are immediately put off by terrible design, they will not bother to go on reading content.

Hiding important navigation choices in obscure menus is one of the biggest reason for a high bounce rate.

The user experience is key. If you are offering products in 12 very different categories, make sure the landing page clearly directs users to these. Hiding important navigation choices in obscure menus is one of the biggest reason for a high bounce rate.

So, incidentally, is not having a clear way to go back to the home page. When visitors land on your site through referral links, they often like to know more about the site on which they find themselves perhaps by accident. Not having a clear home button and other essential navigation can raise your bounce rate significantly. The top of the page is essential in this regard.

Be original and stop being greedy

Another big reason for bouncing is derivative design, unoriginal content, or advertisement on the page. If your site looks like someone else’s – and that is not uncommon at all; if you copied the style or content from a competitor, or simply use the exact same terminology, users quickly learn to see you as an unimaginative rip-off of another brand. They learn to distrust you, and will likely never come back.

Users of WordPress and other systems with free templates are particularly prone to this problem. You may save a lot of money upfront by doing your own website with little original design, but you may end up paying dearly for that through the loss of users over the long run.

As for ads, they simply make your site look spammy and untrustworthy. Did you write that article to teach me something, or to earn money through Google ads? Personally, I don’t trust any advice from a site which clearly makes money from advertising and I immediately leave. There, up goes your bounce rate by being too greedy.

The importance of being mobile (and very, very fast)

1/2 the traffic worldwide, and over 85% of web traffic in certain countries (like Taiwan) is now on mobile. If your site doesn’t work on mobile, it is already invisible to a big percentage of your users. Especially large organizations and government agencies, or sites that require data entry of any kind, are a victim of this trend, and a lot of visitors may bounce because they simply cannot use the site from their mobile devices.

Directly related to the mobile trend is speed. At a recent conference about SEO I attended, one of the Google engineers explained that the future of SEO could be summed up in one word: speed.

The same goes for your website. If 85% of your visitors come from mobile, too many large videos or images, or badly designed java scripts and heavy CSS will result in a slow speed. Mobile users tend to abandon connections that don’t load within 3 seconds. Moving your site to a faster or geographically closer server or using CDN services may also help lower the bounce rate. If you are unsure about these terms, talk to your web developer, or an SEO professional. What’s good for the SEO is good for the bounce rate.

Rethink collecting information

Any kind of website requiring user data entry should be constantly monitored by the latest mobile devices. Badly designed data entry options don’t just slow down your site, they may make it perfectly unusable, and thus raise your bounce rate.

Reduce the number of interactions necessary. Many small businesses or outdated online shopping websites still require the user to enter a lot of data (name, address, phone, payment details, shipping address etc.) for each transaction, instead of allowing a “use as a visitor” option and requiring only the bare minimum.

The more data entry you require from your customers, the higher your bounce rate will be, because users on mobile are often not willing, or not in a position to complete lengthy data entry processes. Just think of your own experience: you are on the MRT/subway/bus, found this awesome new headphone, but as soon as you click “Buy” you are presented with a two-page form to fill in data. No thank you, Sir.

If data entry is part of a purchase action, you are leaving your paying customers with a horrible user experience, and they will likely never return.

Original content and consistent identity

Last but not least, one of the simplest explanation for high bounce rate is bad content. “Bad” may mean too complicated or badly written, badly formatted, irrelevant, outdated, or even in the wrong language. If your blog only contains content that can be found everywhere else, lots of users will realize they already read this somewhere, which increases – rather logically – your bounce rate.

Good content and an easily identifiable design around that content will make users linger. Whether it is a certain style of imagery or a uniquely designed text inlay in each header image; consistency and originality leave a lasting impression and raise the authority of your website. The right design varies from country to country.

Content should be well written, not just from your perspective, but from the perspective of your visitors. Speak to the user directly, try to anticipate their thought processes and intents, and keep the content clearly structured to maximize utility. Self-promotional content is a big turn-off; educational, useful pieces, on the other hand, will make users come back for more.

As I hope you will, to this, my blog.

The Right Role for Marketing

Marketers – especially those working in agencies for a variety of clients – tend to have a firm grasp of the terminology of marketing, the lingo, the concepts, and therefore claim to understand what exactly marketing is. But from a corporate perspective, the answer is far from clear.

What is marketing?

Marketing can be done large-scale or minimalist, it can be a very personal activity with a lot of human interaction, or a pure exercise in the deployment of technology. For some people, marketing is the same as sales, and for others, it is little more but a fancy word for advertising. It is all of these things and none of those.

As an inter-cultural marketer, I am keenly aware not just how difficult it is to pin down the true meaning of marketing, but also how different cultures understand the term.

Take Chinese for example. Marketing is either translated as “xing-xiao”, meaning “to go forth and sell”, or as “ying-xiao”, meaning “to execute the selling”. Neither term comes even close to the English meaning of “creating a market”. Maybe it is this bad translation that causes Chinese speakers to see marketing as a very limited and uncreative exercise, and why most companies working in Chinese are unwilling to embrace modern forms of marketing, such as inbound or content marketing.

More important than the linguistic difference is the cultural one. In the West, people are encouraged to be individualistic, outgoing, and develop a personal brand. In the age of social media, marketing has become just that: an exercise in personalization and self-promotion. Companies and products alike need a personal experience, and “authenticity”. Influencer marketing is the pinnacle of this philosophy, even though it is nothing more but an old-fashioned endorsement.

In Asian cultures, on the other hand, the group is more important than the individual, the firm greater than the employee. In Asia, you hardly ever find a star marketer or a personality cult around one outstanding individual. In the age of social media, that creates an obstacle for Asian companies that, as technology and social trends advance hand-in-hand, will become greater and greater.

The third difference isn’t one between Asia and the West, but between marketers and companies, especially companies who make physical products.

Read also: Inbound Marketing Explained and So What is Content Marketing Anyway?

I don’t need to understand your product in order to market it

Every first client meeting I have ever had starts with a lengthy explanation of the client’s product. Sometimes these can go into excruciating detail. One time it was so technical – and irrelevant to marketing – that I nodded off.

The company CEO who had given us a screw-by-screw rundown of the product caught me and said: “if you are not interested in our product, how can you market it?” I replied, “if you can’t tell me in one sentence what the product does for the consumer, why are you bothering to make it?” Proud engineers make very bad marketers.

How we do marketing depends on what we are trying to achieve. Do we want to boost sales of a specific product, or do we want to make the brand better known overall? Are we trying to compete against a market leader or are we setting the standards? We have such a superior product, how come nobody is paying attention? Why is it that our Facebook group has 90’000 likes yet no one is buying our face mask? Should we use Snapchat? How much will it cost to launch our new app? Which logo is better? Do we need a new CIS? What channels are right for us?

All these are marketing questions, but all of them require different expertise. Some are a question of technology, others of artistic expression. Marketing is an amalgam of science and art, but most of all, marketing is not the individual activity someone has in mind, but the strategy and the overall concept behind it.

Read also Word-of-Mouth Marketing: The Land that Strategy Forgot

 

Marketing is not an afterthought to product development

Yes, we can market your product, but if it is badly designed with horrible packaging and a ridiculous logo, what’s the point? My agency will not take cases like this lest our reputation suffer. Yes, we can increase engagement on Facebook, but don’t you want to know the real reason people are not buying your facemask? Why do you let the company owner choose the logo if all he knows is his own limited view of the world and questionable aesthetic sense? Why are you selling in cheap supermarkets yet call yourself a high-end product? In too many enterprises, marketing is called in after all the important decisions have been made by the wrong people.

Marketing is not the execution of an individual campaign. It is not the design of a logo or the naming of a project. Marketing must be at the very core of a company’s strategy. Marketing must be involved in all the crucial business decisions, in product development as much as in financial planning.

Read also: The Importance of Customer Feedback and How to Influence the Customer Journey

 

If management is the brain, marketing is the heart

In the last century, fueled by innovation in management thinking (Drucker etc) the CFO became elevated and almost surpassed the CEO in importance. Those days are long gone.

In the age of social media, of instant gratification, or data-driven enterprises, of online product reviews and personalized marketing, of boundless innovation in marketing technology, it is time to make the Chief Marketing Officer head of the company. For no matter what product or service you offer, the core of your enterprise is not management, finance, or HR. The heart of every firm must always be the marketing team. 

So there is my answer. Marketing is the heart. Let management be the brains, and finance be the lungs, but marketing must the heart: both an efficient pump that keeps the company going, and the (allegorical, admittedly) locus of your feelings and emotions.

Nothing in a company should happen without the marketing team. Whether you acquire a new startup, expand into a new market, develop new products, or hire a new IT specialist: the marketing team must be involved in all the crucial decisions. If it is not, if marketing is kept in a silo, and abused to make shoddy ads and manage a Facebook page, it will never create value: not for the firm, nor for the customer.

Read also: So What is Content Marketing Anyway?

Busy Like a Bee: 3 Simple Ways to Improve Conversion Rates

Not a week goes by that I don’t get a call from an online business asking why their sales are going down, why their site isn’t taking off, why nobody is subscribing to their product demo, what they could do to improve online sales, and so forth.

Sometimes the flaws are obvious, but more often than not finding the reason for low conversion rates can be a challenge.

It is especially frustrating when you have a lot of traffic. Traffic is good, traffic is nice, but just like a bee visiting flowers, it’s not the number of buzzing bees that counts, it is what they do on the flower.

So what can you do if you have all the traffic you need, but visits still aren’t converting?

Of course, there is A/B testing. But before you get busy testing, make sure you lay the groundwork. That means creating landing pages that are actually worth analyzing, looking closely at visitors’ behavior on your site, and, sometimes, asking direct questions.

So, let’s get busy then.

Create simple landing pages

Websites are usually chock full of distractions. There is simply too much information to decide which particular element turns away customers or reduces conversion rates. Often the very design of the navigation tools is a conversion killer.

A landing page should have the bare minimum of information and clear visuals. One or two product images are usually enough, and a short description will do. You can include options to expand text or images to see more or click through to a more thorough description. Technical details, usage in specific cases, or comparisons should be done on separate pages, that way you know who is really interested in your offering. There should be one clear call to action rather than a bewildering selection of what to do next.

If you use landing pages for lead generation, A/B testing is, of course, the logical next step.

Analyzing behavior is fun

Online behavior used to be a bit of a mystery, and a lot had to be inferred from sparse Google Analytics data. Time spent on a page doesn’t really tell you much for most content, while the bounce rate can be terribly misleading.

Happily, for marketers, there are now a number of nifty tools available to get to the bottom of things. Analyzing what people are doing on your site is not just essential, it’s also fun.

There are a lot of things you can learn from the analysis. How much of a blog post do people actually read? The best headlines are useless if the first paragraph makes people lose interest. What are they clicking on first?

Ask a stupid question, get a stupid answer

The more you know about your site visitors, the better you will get at creating content they like, and offering products they actually buy. Analyzing online behavior and segmenting audiences with cleverly designed navigation options are the first steps, followed by A/B testing. Together these “hidden” analysis options can give you insights without actively asking customers.

Sometimes you want to know more of course, and then you need to turn to questions. Google Forms is a great way to design simple questionnaires. In our experience, customers are willing to answer 3-5 questions as long as they don’t have to write out the answers. Just make sure you ask the right questions, however. I recently was asked to reply to the question “Do you think our product price is right, or should it be a) lower or b) higher?” I seriously doubt that large numbers of customers would choose b, so the responses are perfectly meaningless.

Stay in touch and build relationships

If you have analyzed your website traffic and done your A/B testing, and you know your product is great but website visits still aren’t converting, it’s time to look at your funnel.

One reason why I don’t like advertising is that it distorts the funnel too much. You can spend millions on the flashiest ads with the biggest superstars, but what percentage of the people who respond to the creativity of an ad, or the allure of a star, actually end up being your customer? Unless you are a ubiquitous brand like Coke or McDonalds, advertising is probably not the most cost-effective way to promote your product.

There are a lot of content marketing options you can use to engage audiences and increase conversion rates. For shopping websites and B2B business alike, email newsletters are still a fantastic tool to stay in touch with customers. They also help improve conversion rates, sometimes very significantly. We recently started a newsletter for a niche fashion website and doubled their sales in just 3 months. Don’t underestimate the power of good old email!

The more you know about your visitors, the better your relationship will become. Better relationships mean higher trust, and that, in turn, leads to higher conversions. Investing the time in simple analysis or A/B testing is a lot more cost effective than increasing your ad budget, that’s for sure, and finding out about visitor behavior on your site can offer you a lot of valuable insights not just for your digital marketing, but also for your overall business strategy.

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