EDITORIAL The Emerging Social and New Media Landscape... Thanks to technology and the emergence of social media, we now have the ability to connect with a large number of people no matter where they are in the world. The popularity of communicating virtually has grown significantly in recent years. Instant messaging, email, Twitter, LinkedIn and other social media channels have made it especially convenient to talk with anyone at anytime and from anywhere around the world. There is no doubt this trend will continue. For businesses, social media is a great tool to help you get discovered by potential customers through regular engagement and sharing of information. Everyday conversations and interactions lead to the purchase of products and services. According to Jody Nimetz, author of Marketing Jive, there are five major uses for businesses and social media: to create brand awareness, as an online reputation management tool, for recruiting, to learn about new technologies and competitors, and as a lead generation tool to intercept potential prospects. These companies are able to drive traffic to their own online sites while encouraging their consumers and clients to have discussions on how to improve or change products or services. The average consumer mentions brands 90 times/week with family, friends and co-workers. Social media has arrived, but companies still are not sure what to do with it. A recent Harvard Business survey found out that a large percentage of organizations are still hesitant to get serious about social. Two-thirds of users had no formalized social media strategy, and just 7% had integrated social media into their overall marketing strategy. While 69% predict that their use of social media will grow, 61% admit the need to overcome a learning curve before adopting any kind of social media strategy. Just 32% view it as an executive priority – and nearly one in ten of the executives we surveyed dismissed the business use of social media as a passing fad. The study further found that the toughest challenges for executives involve tying social investments back to the bottom line – measuring its effectiveness, linking social media efforts to ROI, and understanding the concrete difference social efforts make to the business. While they understand social media can be a powerful tool, most executives still are not sure how powerful. However, the best users understand that social media is a conversation, not a monologue. Increasingly, social media are also transforming the way businesses relate to workers, allowing them to build flexible relationships with remote talent, to crowd source new ideas, or to engage in micro outsourcing. Within organizations, social media has the potential to transform the exchange of knowledge and expertise and thus accelerate innovation and the development of new products.
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C H A M B E R AT W O R K Conclave on Doing Business with South Africa and One to one Business meet
Thabethe, Deputy Minister of Trade and Industry, Republic of South Africa visited Chennai. The one to one business meetings that were arranged with the business delegation would pave the way for increased trade between the two countries, he added. H.E Ms. Elizabeth Thabethe, Deputy Minister of Trade and Industry, Republic of South Africa in her address, urged Indian businesses to collaborate with them for economic growth. She further pointed out that over 60 plus FDI projects financed by Indian businesses had been committed to in the last 10 years in South Africa. And the current focus in South Africa, and the African continent as a whole, was the fast forwarding of infrastructure development. She also said that another key to fast forwarding the developmental ambitions of South Africa and India was mutually beneficial trade.
SICCI jointly with the Department of Trade and Industry, South Africa organized a conclave on “Doing Business with South Africa� and One-to-One Business Meet on Monday, the 24th February, 2014 at Hotel Grand Chola, Chennai. H.E. Ms. Elizabeth Thabethe, Dy. Minister of Trade and Industry, Republic of South Africa was the guest of honour and interacted with the participants. Mr. Jawahar Vadivelu, President, SICCI while delivering the welcome address said that bilateral trade with South Africa which stood at 5 billion USD in 2007, was expected to touch 18 billion USD in a couple of years. He also said that this was the third time a business delegation under the leadership of Elizabeth
Mr. Jawahar Vadivelu, President, SICCI, presenting a bouquet to H.E. Ms. Elizabeth Thabethe, Dy. Minister of Trade and Industry, Republic of South Africa.
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Mr. Jawahar Vadivelu, President, SICCI, delivering the welcome address.
H.E. Ms. Elizabeth Thabethe, Dy. Minister of Trade and Industry, Republic of South Africa, addressing the seminar.
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H.E. Ms. Elizabeth Thabethe, inaugurating the Exhibition.
A view of the participants.
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About 27 businesses from South Africa has accompanied the minister to Chennai to engage in partnership and to collaborate with the Indian companies. Over 180 one to one business meetings were conducted which resulted in the signing of 4 MoUs between the visiting South African Companies and Indian companies.
View of the one-to-one Business Meet.
Interactive session on Organizational Development Through CrowdSourcing Strategies The SICCI organized an Interactive session on Organizational Development Through Crowd Sourcing Strategies on Saturday, the 22nd March, 2014 at Hotel My Fortune, No.10, Cathedral Road, Chennai - 86. Mr. Jawahar Vadivelu, President while addressing the participant said that even in the midst of uncertain economic growth and cost competition, businesses had embraced CrowdSourcing to evolve, transform and reach out to their customers and stakeholders effectively.He added that India, which was an outsourcing hotspot, was also benefiting more from crowdsourcing from an economic perspective than any other country in the world. He further said that the crowd can reinvent customer experience, create new innovation or even reshape competitive landscape in our business world. Mr. Varadharajan Krishnamurthy, a noted social media consultant and Partner at CloudsDirect was the facilitator of the event. Mr. Krishnamurthy shared his insights on devising a strategy for crowd sourcing, best practices for its implementation and steps for measuring the returns.
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Mr. Jawahar Vadivelu, President, SICCI, addressing the participants.
Mr. Jawahar Vadivelu, President, SICCI, presenting a memento to Mr. Varadharajan Krishnamurthy, social media consultant and partner at CloudsDirect.
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A view of the participants.
Merchants Cup The race for the Merchants cup was held on 25th January, 2014. The cup of the value of Rs.20,000/- was presented by Mr. S.K. Hazari, Executive Committee Member, SICCI to the owner of the winning horse.
Mr. S.K. Hazari, Executive Committee Member, SICCI, presenting the Trophy to the owner of the winning horse.
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Interactive session on Empathetic Innovations for Frugal Engineering: Emerging Heuristics for Circular Economy
scene. He further recommended that India learn from the Swiss R&D model and ensure a greater involvement of the private sector.
SICCI jointly with Sri Venkateswara College of
Dr. Anil K Gupta, Executive Vice Chair, National
Engineering organized an 'Interactive session on Empathetic Innovations for Frugal Engineering:
Innovation Foundation and Professor at the Indian Institute of Management, Ahmedabad addressed the
Emerging Heuristics for Circular Economy' on Wednesday, the 9th April, 2014 at the Auditorium, Sri
gathering. He called for a greater linkages between the industry and academia as he felt that the students could
Venkateswara College of Engineering, Pennalur, Irungattukottai 602 117.
help resolve various problems faced by the SMEs. He felt that more patents needed to be filed and it would happen
Mr. Jawahar Vadivelu, President, SICCI delivered the inaugural address and said that excellence in research
only when Innovation meets Enterprise and Investment. Earlier, Dr. Anil Gupta and Mr. Jawahar Vadivelu visited
and education, particularly at the graduate level, sound entrepreneurial orientation, effective technology transfer
the projects display arranged by the students of Sri Venkateswara College of Engineering to showcase their
from public research to the private sector, constitute the less well known characteristics of the Swiss innovation
innovation.
Mr. Jawahar Vadivelu, President, SICCI, welcoming Dr. Anil K Gupta, Executive Vice Chair, National Innovation Foundation and Professor at the Indian Institute of Management, Ahmedabad
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Mr. Jawahar Vadivelu and Dr. Anil K Gupta visiting the projects display arranged by the students of Sri Venkateswara College of Engineering.
A view of the audience.
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A RT R TI C L E Building trust on your brands using Social Media Tools VARADHARAJAN KRISHNAMOORTHY*, Social Business Advisor
Abstract:
communications but also makes it easy to collaborate with team members, partners and clients in a more productive way. In short, Social Media is a necessary component to any business’ winning strategy.
Social media and the adoption of social media tools are grabbing significant mainstream attention as brands realize the importance of harnessing the ideas and conversations with their customers. Every organization can achieve this by adopting a right social media strategy. One of the important ingredient of this strategy is the use of right set of tools that will protect the brand as well as open up new vistas. In this whitepaper, we will explore the importance of selecting the right set of tools and see how app stores/directories play an important role in providing neutral and honest recommendations so that organizations can select the best tools for their social media strategy.
Businesses have always harnessed the power of word of mouth. Social Media both accelerates and eases the utilization of word of mouth communication. Since Social Media involves two-way conversations, a mere presence in Social Media does not guarantee success. Hence the need for a better understanding of the concept and a better strategy to leverage this new phenomenon. It is crucial for businesses to have a proper Social Media strategy as it has already impacted results in the market place. To achieve varied objectives through social media strategy, it is important to select the Introduction: right set of social media tools as a part of the strategy. Social Media is a generic term for tools designed to aid For example, if your strategy is to monitor mentions online social interactions. To be specific, it refers to about you, you should pick a right tool which can tools that help people have conversations online, on monitor what is being said about you all over the web topics that matters to them. These conversations can be and all at once. Another example could be an application through Blogs, Wikis, Social Networks and many other that can aggregate and publish with all social networks tools. Social media tools help businesses establish their becoming an all round news source. App Stores are presence on the web, optimize their market places for such tools and business processes and interact with applications. Hence, for such a their customers. Businesses have always selection of tools, the social media Even though critics and traditionalists app stores could be of great help harnessed the power of dismiss Social Media as hype, this is making it possible to design a viable word of mouth. Social not the case. Social Media is firmly Social Media strategy. In this Media both accelerates and whitepaper, we will answer some of established as an important weapon in the toolkit for businesses in an eases the utilization of word the questions in the minds of small increasingly competitive marketplace. business owners and top executives in of mouth communication. Recent reports point out that visits to the enterprise, and show how Social Social Media sites has overtaken Since Social Media involves Media app stores can help them with accessing personal email in the daily their strategy. two-way conversations, activities of internet users and these Understanding Social Media and a mere presence in numbers are growing fast. Social building trust on your brand: Media not only helps achieve better Social Media does not Social Media evokes curiosity and *A marketing strategist with special focus on using social concerns in the minds of business guarantee success. media strategy. Connecting the Social dots of social, mobile, cloud and bigdata. Social Business. owners and executives. It is quite
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and customers from the outside world in a gradual manner.
understandable because of the conflicting information they receive from the media. On one hand we have Social Media evangelists promoting the tools as miracle pills that could bring in overnight success while on the other side, we have traditionalists using fear tactics to avoid losing their existing business. This has led to serious confusion among businesses and this whitepaper tries to clear some of this confusion through a set of questions and answers. The questions are selected based on our interaction with various organisations interested in tapping the potential of social media. We have tried to address these questions based on our experience in the traditional marketing world and in the world of social media. 1) Having decided to adopt a social media strategy in our organization, where do we start?
Before deciding on a Social Media strategy, it is important to monitor how different businesses are using Social Media tools, especially direct competitors of the business. Such an exercise will give a peek into the cultural changes the business needs to adopt. It is also important to study worst-case scenarios to mitigate risks. Since it may impact upon the brand, it is important to ensure due diligence when planning the Social Media strategy.
As a part of your Social Media planning, it is important to identify a unique name and use it across all the social media sites. Like Before deciding on a Social the gold rush for domain names in the Web 1.0 era, there is a rush to grab Media strategy, it is names that suit various brands. As important to monitor how soon as a name is identified that will be used for the business, it is different businesses are imperative to register it across all using Social Media tools, social networking sites to avoid any especially direct competitors disappointment later. It is wise to claim the identity of the brand in all of the business. Such an these sites with a suitable name and a logo while creating a profile. Profiles exercise will give a peek within social networks helps into the cultural changes businesses to position their brands by the business needs to adopt. adding suitable information, pictures and videos.
The two way conversation between a business and its customers, enabled by Social Media, is changing the way we do business including having impact on management practices, business practices and, indeed, organizational structures itself. Such changes are cultural and the biggest challenge for the business is in adjusting to this new culture. The traditional hierarchy collapses due to these two-way conversations. Hence understanding these new ways and training employees to adopt to these changes is of prime importance. One good practice is to start using Social Media internally in the beginning. This has a two-fold effect. Firstly, this helps businesses decide how these tools will fit within the business objectives and strategies. Secondly it also helps in training employees and makes them accustomed to these tools before using them externally to an organization. The initial internal strategy will help the organization adopt these tools without disrupting the existing workflow. In order to encourage internal adoption, a reward system can also be created with rolemodels taking more responsibility. After a successful internal implementation, it can be expanded to partners
2) Of the vast myriad of tools available, how do I choose the right tool for our needs? There is no single prescription for selecting Social Media tools. It depends on the business objectives and other factors such as where the target customers are, geography, etc.. Part of the Social Media strategy is to identify the networks where target customers flock, the nature of the social networks, geography, etc.. The Social Media strategy should maximize the impact on these networks at a lower cost. For example, there is no point in targeting a social network for gaming teens if the business is selling products aimed at retired people. Even in general purpose networks, it is important to
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buy applications to be used as a part of the organization’s social media strategy. These app stores have applications and services listed around categories with information about the product, the developer behind the application or service, ratings and reviews by the users, etc.. Such a categorization and rating system allows users to select the tools appropriate for their social media strategy.
ensure that there is significant target audience for the amount of human resources the business is going to commit. Once a business identifies the networks to target, it is important to select the correct set of applications and services that will maximize the impact of the brand. Unlike the traditional software world where big companies dominated the software market, Social Media applications and services are developed by thousands of single person or small companies all across the world. This fluidity in the marketplace leads to security and privacy concerns for users along with concerns about longevity of these tools. On the other hand, since these applications and services serve as a front-end to the social networking services, there is no lock-in, like the traditional software world, and it is easy to switch from one tool to another without any significant disruption to the workflow.
To understand the role of Social Media app stores, a comparison to mobile app stores will help.. In the mobile market, we have seen app stores for iPhone, Android phones, Windows Mobile, Nokia phones, etc.. Some of these app stores are completely controlled by the company behind the phone or operating systems or mobile networks. Some of these companies, like Apple with the iPhone, exerts complete control over the applications that are allowed in their stores and their financial models. This centralized model, though undemocratic, allows the company to ensure the quality of the applications that can be used in the phones. On the other hand, other companies like Google adopt an open model, allowing developers to list their products without any restrictions and lets the users rate/review them to help other users, using a concept called crowdsourcing.
Once a business identifies the social networks they want to focus, it is possible to identify the right set of applications and services. In fact, there are many tools that work across many different social networking sites.
Once a business identifies the social networks they want to focus, it is possible to identify the right set of applications and services. In fact, there are many tools that work across many different social networking sites. These tools play a crucial role in ensuring that the business delivers a consistent message across all networks without affecting its brand. There are tools that let businesses administer Social Media usage of employees. Such tools play a crucial role for businesses by ensuring that employees are adhering to the organization’s Social Media policies and, also, in preventing rogue employees from damaging the brand. To select appropriate tools for the Social Media strategy, it is wise to hire a consultant or rely on trusted application directories or stores.
Comparatively, Social Media app store trends are still emerging. They are unique in the sense that these app stores, along with crowdsourcing, allows us to tap into our social graph (set of friends we have in our networks) to get trusted recommendations. Like in the case of mobile app stores, we see both a centralized model and an open model. In our experience, app stores implementing an open process are more trustworthy and can help businesses maximize their ROI.
3) Are there app stores for social media? If yes, what is their role and why it is unique?
4) How will these app stores fit into our social media strategy?
Yes, there are app stores for Social Media. App stores are marketplaces for applications and services available for use with different social networking ecosystems. These app stores offer a trusted place to identify and
With the advent of social networking tools and applications, there are a myriad of choices to make. app
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talk about products and services all the time and on distributed networks. Organisations might feel that they are transitioning from complete control of their brand to zero control. However, it doesn’t mean that Social Media is bad for businesses. Even if businesses ignore Social Media, their customers are going to talk about them and a tactic that sees businesses ignore these App stores fit into the organization’s Social Media conversations has the potential to be greatly damaging. strategy in two important ways. First, it helps select the Instead, businesses should adopt an agile Social Media right set of tools with the features the organization needs strategy to safeguard their brands. To achieve success, via the categorization of applications and the description businesses should be sincere in their conversations. provided for each application. The user review/rating They should never try manipulative strategies to system will not only help the organization with reliable undermine their customer reactions. Instead, businesses applications and services but also aids in mitigating the should convert criticism into an risks by helping organizations select opportunity to reach out to tools that are compliant with the To achieve success, businesses disgruntled customers and convert security and privacy needs of the them into loyal ones. A bad move by should be sincere in their organization. a brand in Social Media gets 5) Can you use traditional conversations. They should amplified many times, eventually knowledge with social media tools? never try manipulative turning into a full scale PR The use of Social Media changes the strategies to undermine their nightmare. To avoid such nightmares, rules of the game in a big way. it is important for organizations to Traditionally, the conversations customer reactions. Instead, devise a smart social media strategy between the business and their that includes proper policies, training, businesses should convert customers used to be private whereas criticism into an opportunity follow up procedures, etc.. Social Media tends to make these 7) How do different verticals use conversations public. Traditional to reach out to disgruntled social media? Can you give some approaches allowed a restricted customers and convert them examples? dialogue whereas Social media allows stores make it easier to select the right set of tools that fits well with the social media strategy of the organization. The selection of Social Media tools becomes crucial because it not only helps the organization monitor its brand, but because lack of reliability could have a negative effect on the brand.
into loyal ones. a direct dialogue with all participants There is widespread adoption of with no recognition of hierarchy. Social Media in the Biotech and Traditionally media results in individual problems Pharma sector. In fact, the FDA recently held a Public remaining singular whereas Social Media can amplify Hearing on the Promotion of FDA-Regulated Medical issue en masse. Traditionally, businesses used to have Products Using the Internet and Social Media Tools. For limited resources whereas Social Media makes their example, there has been an explosion of Twitter users resources virtually limitless. Hence, traditionally, from the Pharma industry. While the FDA guidelines innovation was much slower than what it is today with will be welcomed by the industry and will be used to the use of Social Media. Therefore, it is important for streamline Social Media usage, Pharma and Biotech businesses to understand how Social Media has changed companies have already embraced Social Media in a big their business functions, fine tune the traditional way. knowledge and apply it with the right kind of tools. Online communities of patient groups are being used for 6) What are the PR challenges involved in social research by Pharma companies. Some companies use media and how to handle them? corporate blogs to communicate directly to patients and customers. Others have setup community platforms to Social media is about people talking to people. Today, communicate and share within user-groups. Video based customers are empowered by Social Media. They will 14
social networks like Youtube are already tapped by Pharma companies regularly to reach out to customers. Similarly, Physicians have also embraced social media to connect with patients. Patients are tapping into Social Media to find relevant information and, also, to form help groups based on their needs.
This is not a definitive list but the points are designed to highlight the importance of following best practices towards successful implementation of Social Media strategy. If the organization lacks the necessary expertise, we strongly encourage the hiring of reputed consultant.
Real Estate is another vertical where Social Media is used very well. Everyone wants to know everything possible before buying a piece of land or a home from a seller. Social networks fit in perfectly to serve this need for information and make it possible for buyers and sellers to interact directly. Social Media adoption in proliferating in many different verticals from financial markets to Social Media government.
9) How do we measure the impact of social media? Are there tools available for such metrics? How do I identify such tools?
8) Does social media require heavy investment? What are the good practices to get a higher ROI?
Social Media can be used both internally and externally. Internally it can be useful to tap the vast distributed knowledge available within the organisation. It can also be used for recruiting, training and collaboration among employees. It can tools don’t be used in projects cutting across require any big upfront borders and time-zones. Externally investment because the tools Social media can be used for Customer Service, Customer / Supplier are either free or available at interactions, customer / supplier a very low cost. However, the feedback and for problem solving, etc.. Social Media tools can be used for cost of hiring human acquiring new customers and to resources to use these tools network with external partners and should be considered. Without experts. In order to be successful in such interactions, it is important to proper planning, these costs measure the impact of Social Media could escalate thereby and optimize it based on a continuous feedback loop. diminishing the returns.
There are no huge capital expenditures but there will be indirect operational expenditures. Social Media tools don’t require any big upfront investment because the tools are either free or available at a very low cost. However, the cost of hiring human resources to use these tools should be considered. Without proper planning, these costs could escalate thereby diminishing the returns. In order to maximize ROI, it is important to follow some best practices such as
Impacts of Social Media can be measured with various metrics depending on the social networks. Some of these metrics include:
V Understand that Social Media use is part of the
business process and strive to develop a smart strategy
V Number of Subscribers (Passive customers) V Number of Customer Interactions (Active
Customers)
V Set proper expectations by having short term and
long term goals
V Number of Referrals
V Select the right set of diverse tools suitable to
V Quantitative mentions ratio (How many times your
mitigate any risks
brand has been mentioned)
V Develop a strategy to measure relevant metrics and
V Positive/Negative mentions Ratio
use a feedback loop to continually tweak the organization’s Social Media strategy
V Comments/Forwards (also called retweets in the
case of twitter) Ratio per post
V Ensure adequate resources are deployed to engage
V Number of participative actions
customers through Social Media
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practices, these threats can be easily mitigated. For example, employee behavior can be managed by proper internal policies and by selecting the right tools that offer fine grained access control. Adopting the right controls, education/training and enforceable policies are some examples of steps that should be taken to protect the brand. It is also important to establish a reward and penalty system within the company to help protect misuse or damage, similar to the systems traditionally in place.
V Quantifiable increase in customer satisfaction or
Sales V Awareness of Brand V ROI calculations by way of leads, sales,
conversions, earnings, goodwill etc. etc. V Baseline and the deltas after implementing Social
Media Strategy V Activity Time-Lines and Monitoring Sales with
appropriate relative metrics
Outside threats can be thwarted by following proper These are some examples of metrics that can be security guidelines similar to the ones followed in IT. analyzed while implementing the The organization’s Social Media organization’s Social Media strategy. policy should clearly provide There are other metrics that can be In this networked era, every guidelines on who owns the content, important depending on the business liabilities, providing information business should adopt a objectives and Social Media about authorizations, etc. strategies. Monitoring these metrics smart Social Media strategy. The emergence of app stores will help will help the organization fine tune its Businesses cannot ignore users and organizations identify bad activities to be more productive, applications very early and, thereby, Social Media because resulting in a positive engagement avoid damage to the brand and other through social media. This, in turn, customers are already potential threats. This makes such app will produce results that can be voicing their opinion on stores an important part of the Social measured as part of the organization’s Media evolution. ROI exercise. The trick lies in social networking sites. Lack monitoring and reading of the metrics to drive the business in a positive direction and a positive ROI.
of Social Media action could lead to loss of market share and brand reputation.
Conclusion:
In this networked era, every business should adopt a smart Social Media strategy. Businesses cannot ignore Social Media because customers are already voicing their opinion on social networking sites. Lack of Social Media action could lead to loss of market share and brand reputation. In fact, businesses can leverage Social Media to better position their brand and reach out to customers. Such a strategy has very high payoffs with higher ROI than traditional methods. A smart Social Media strategy also involves using the right set of tools and app stores can help businesses leverage these tools effectively.
Measuring the Social Media Impact is somewhat difficult but possible. There are many tools available that can help organizations measure the impact with these metrics. Social Media app stores makes it easy to identify the exact tools needed for the purpose.
10) How secure is social media for brands? How do I protect my brand while using social media tools? Security has always and will continue to be the most important part of the business strategy. Social Media Strategy should also include security at its core. The threats include employee behavior, spam, phishing and malware attacks, etc.. If unchecked, these threats could significantly damage the brand. With good policies and
(Originally posted at: http://www.slideshare.net/ VaradhKrish/building-trust-on-your-brands-using-socialmedia-tools)
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A RT R TI C L E Crowdsourcing: Turning customers into creative directors FIONA GRAHAM of taking a job traditionally performed by a designated agent (usually an employee) and outsourcing it to an undefined, generally large group of people in the form of an open call.”
“The office building doesn’t look so good from the outside, we don’t need it to, so the rent is lower, but inside it’s really nice.” Ning Li is Made.com’s 28-year-old CEO, and we are at the company’s London office, on the 11th floor of an unremarkable Notting Hill office block. Made.com is an online-only furniture retailer, so there’s no danger that customers will drop by. The company is six months old and already approaching profitability, with revenue doubling month on month, despite relying on word of mouth rather than marketing.
Companies who have embraced it include Procter & Gamble. Their Connect + Develop initiative gave birth to the Swiffer range of cleaning products. InnoCentivecrowdsources solutions to R&D problems; chipmaker Intel is looking for the home phone of tomorrow; industrial giant GE is offering $100,000 for a green electricity grid, and Crowdspring deals in design.
But this is a furniture business with no warehouse - and no inventory.
Crowdsourcing helped mining firm Goldcorp to discover 8m ounces of new gold deposits in 2000.
Instead, products are “crowdsourced”.
It’s the internet, of course, that makes crowdsourcing possible - on a global scale.
This is how it works. Visitors to the website are encouraged to submit their designs. The best of these are worked up into prototypes, and posted on the website. Registered members of the Made.com community vote. The most popular pieces are then available for pre-order - made in China, shipped by container and delivered directly to buyers from the port. The designers are paid nothing upfront - but receive 5% royalties on successful designs, which Li maintains is above the industry average. By going directly to manufacturers in Mr Li’s native China, he says the company can offer high-quality furniture at discounts of between 60-70% compared to traditional high street retailers. “People buy things from very valued brands. They buy from an importer, who buys from an agent, who sources it from elsewhere. Each time a mark-up is added, sometimes it changes hands three to four times.” “You can sell cheap furniture for a cheap price, but that’s not a bargain for consumers. The only way to create a bargain is to create quality furniture for a good price. “How do we do that? When you link the consumer to the manufacturer there are huge areas of opportunity.”
So is turning your customers into both creative director and chief of research the ideal low-cost model for business? John Winsor is the author of Spark: Be more Innovative through Co-Creation and chief executive of Victors & Spoils, an ad agency built on crowdsourcing principles: “First of all it’s a lot cheaper, and secondly you get a lot more diversity of ideas, so those are the big advantages, and the speed - you get hundreds of ideas in a matter of four or five days. Great ideas come from the edges.” But there are pitfalls. “The biggest caveat is the issue of curation. It’s great you opening the gates up to everybody - but all of a sudden you’re going to get a lot more stuff.” To cope, ever more companies offer to help setting up crowdsourcing solutions. Mr Li, though, feels that the technology doesn’t need to be onerous. “We take very good photos, with a solid, fast website. We have a technical team so everything’s been built inhouse. The voting section for instance, this kind of feature is very easy to design.” “It was just a fun, creative project” Threadless co-founders Jake Nickell and Jacob DeHart met on an online art forum in 2000, after Nickell won a t-shirt design contest. He started a thread asking people to post designs, the best of which he would print. The
Defining crowdsourcing Crowdsourcing isn’t new. Wired magazine’s Jeff Howe, who coined the term back in 2006, defines it as “the act
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designer would get some cash and some free t-shirts. Chicago-based Threadless was born.
able to see what your customers are thinking and what they’re dreaming of, and you’re able to measure that against what you’re doing.”
Mr Nickell claims that “it wasn’t intended to be a business at all, I never really thought it could get big like this. It was just a fun, creative project.
Fluevog outsources some of the coding of its website, but most of the technology remains in-house. Open source designing has proved so successful, the company has branched out into crowdsourcing print advertising through Fluevog Creative.
“We later learned that it was this revolutionary business model. I think the reason it’s so pure like that is the reason it’s worked so well as a crowdsourcing company.”
‘Design by committee’
Ten years on the company is highly profitable, bringing in close to $30m in revenue in 2009.
Not everyone is so sanguine about the benefits. Jaron Lanier is a US computer scientist, virtual reality pioneer, and author of You Are Not a Gadget. He made Time magazine’s 2010 list of the world’s 100 most influential people.
Around 1,200 designs are submitted a week. The best are posted online, where the community votes. The company then decides which of the most popular designs should go into production.
The crowdsourcing model has critics; companies, they say, are simply getting spec work done for free.
His concern is that by “mining” the crowd in this way, the wealth that results from the work done remains concentrated in the hands of the people who put out the call - ultimately endangering jobs and the economy. Mr Lanier also believes that crowdsourcing threatens creativity.
Mr Nickel doesn’t see Threadless that way: “I think that the way companies are seeing crowdsourcing is a lot different from the way we see it. They are looking at it as this new business model, as a way to outsource your work to an anonymous crowd of people. We’re more about giving people something productive to do with their passions.”
“The wisdom of crowds is what we call in the trade an optimising function, meaning that if you can set up a problem where you just want a simple answer. Crowdsourcing is good at that but for synthetic creation there just aren’t any examples of it being good - it leads to what we call design by committee, dull derivative stuff.
“What differentiates Threadless is there’s no spec.”
“Do you really think that Simon Cowell would have promoted the Beatles through some show where the crowd was voting? ... Of course not.”
Winning designers get $2,000 plus $500 in vouchers. Should the t-shirt go to a reprint, they get a further $500.
The technology is also an in-house production. He says “it’s simple to make a website like Threadless, it’s not so much the software that makes the company, it’s the community.”
Despite this, use of crowdsourcing as a low-cost means of innovation seems unlikely to disappear. Made.com’sNing Li says, “I can’t imagine any business doing what we’re doing with a lower cost structure. The model’s been proven - we’re selling one container a day of products which for a six-month business is absolutely fantastic.
Engaging your audience Canadian shoe design company Fluevog has been around since the 1970’s. In 2002, it started Open Source Footwear, a website where customers - or ‘Fluevogers’ as they’re known - can upload designs. Winning shoes are named after their creator, who also receives a free pair.
“I think the features for crowdsourcing are not very complicated to develop. What’s complicated really is to keep your promise. Because consumers can like something but eventually if you don’t do anything about it, it’s frustrating and disappointing for people who trust you with their votes.”
So far the company has produced 12 of the designs. Marketing Director Stephen Bailey says that it has benefits beyond the shoes in terms of customer engagement. “It’s an affordable way to be ahead. You’re
Courtesy: BBC World Service
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LEADERS SPEAK Importance of Social Media 1.
chat. It would be fair to say that social media is the new water cooler spot for employees to express themselves. Having said that, we must also understand that social media must be one among a multi-pronged approach to create a strong shared culture
How do you think is Social Media different from traditional media? It is different in the sense that no medium has been able to capture the imagination and mind share as that of Social Media across any generation. The fascination lies in the ability of social media to integrate so much of information and people at the same place at the same time.
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In an era where the success of one’s creation is judged by the number (read million) of hits or views on youtube, the world is slowly changing towards integrating analytics of consumer behaviour from patterns evident in the online platform. From that perspective, the imperative need of social media in a company’s scheme of things is evident
Do you think Social Media is complex to handle or is it simple? Social media, like every medium comes with an entry barrier which is the resistance of the mind to embrace change.As long as one views it as something outside their lives, social media shall continue to remain complex. Once, people see it as a part of their routine, it becomes easy. Functionalities of all social media per se are easy to understand and adapt to.
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What according to you is the best social media tool? Why? In my view, the power of bringing vast sections of people together at the same time is best leveraged through tools that promote events online
Can social media make a difference in crafting and implementing business/operational strategy?
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I think so. This medium provides a great window to gauge the pulse of a new product or service from the consumer. The beauty is, a company gets instant feedback on its offerings immediately after launching it. This market pulse of own services and that of competition will provide critical insights to organisations on its market and enable to strategize themselves, especially in a customer centric environment 4.
How effective is social media as a tool for communicating your product/service?
What would be your advice to other professionals for using social media for business? Social media is a double edged sword. It can give you immediate returns or burn your brand overnight. Use it well!
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What next for social media? I see social media furthering its position as a hunting place for business and job opportunities. Social media has the potential to replace television in terms of higher usage/viewing time. Learning process can be integrated as part of social media functionalities at the workplace.
Can social media help internally in creating a strong shared culture? Certainly! Social media gives the power to listen to your employees and chart the people agenda. It positions itself as the ideal place for office chit
Views expressed by Mr. Shashikanth Jayaraman, Head - Human Resources, TVS Automobile Solutions
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