Steve Bendt

When I was wrapping up my work at Microsoft, I developed a case study in conjunction with Frost & Sullivan.  It outlines how we organized the Windows Social Media team to successfully launch Windows 7.  The case study is meant to recap the strategy and serve as an overview of how the execution was supported.  It was written to serve an audience who’s exploring building out a team to support Social Media efforts.  It lends itself to larger brands with resources.

The case study is embedded below.

On 9/9, I gave a presentation at Colle McVoy- a Minnepolis ad agency.  It was an all agency event with invited clients.  The presentation was titled n=1.  And this is the majority of it:

Today I’m going to talk to you about a simple formula.  Everything we discuss will come back to this one idea.  And that one idea is:

n=1

n is a person-a user. 1 is me. n=1 is the idea of serving 1 user at a time. Today you as an advertiser, as a marketer, have to serve me, convince me, make your way into my life. And today, I largely have to give you permission. If you want to get textbook, behavior has shifted- we’re no longer looking at a world where push advertising works as it once did. We’re shifting heavily to a pull environment. Especially for stuff that works.

Because the reality is I don’t care about you as much as I used to. And truthfully, I don’t know if I ever cared- you just had me over a barrel- I couldn’t do much without seeing you. And you were clever- you convinced me that 11 herbs and spices was worth a night of diarrhea. Or that if Mikey really did like it, its got to have something worth checking into.

The idea of n=1, to be personal and contextual, has moved from giving a teddy bear life its own heart and birth certificate to having awareness of where I am, who I’m with, and what I’m thinking about buying. The point is, the experience is highly personal. And today I expect experiences that are mine. I customize them, I guide them, I define them. They are customized to me and my own personal story. I watch TV on my terms (meaning I DVR everything and skip the commercials). Or I catch it on my mac, laying on my bed streaming through Netflix, Hulu, or through the latest iPad app. My phone is a customized operating
system that lets me find new friends, connect with existing friends, buy a book, play a complete stranger in a scrabble rip off. Apps are often more important than advertising in letting customers connect with a brand.

This is no surprise and you’ve seen it coming. This change has fueled lots of books, made the career of many consultants. And you’ve started to adapt your thinking about how you work. Social Media listening and participation are integrated into most of your campaigns. You’ve been building applications- Squawq, yearbook yourself, augmented reality. You’ve started building youtube channels for clients, changing the marketing mix to heavy up on Facebook, maybe even started messing with location based apps or sponsored tweets on Twitter.

And that’s awesome- you’re way ahead of a lot of agencies out there. But what we’ve started to see is that the same old paradigm of advertising appear in the digital space- where 99% of the stuff out there is crap and 1% of the stuff is brilliant and meaningful. And that crap appears when n does not equal 1. When traditional segmentation dilutes the ability to get local. Local to the individual person you’re trying to reach.

There are two ways I know of to get local with customers- to make sure that n almost always equals 1.

#1 is to make sure you’re solving real customer problems
#2 is to open up data.

Customer Problems

The most direct way to make sure you’re creating an experience that is local to each person is to simply solve a customer problem. This may seem obvious. Its at the heart of marketing. But the ability to identify a true customer problem is what separates the best Account people, planners and creatives from the masses. How many briefs do you receive that actually articulate a real customer problem. Most that I’ve seen serve a business problem. We need to do X so lets try to persuade customers to do Y.

If you want to get local- to reach an individual customer in the digital space, the best way I’ve seen to do this is to get to the root of a customer problem that your brand can believably solve. To build experiences that are contextual and personal.

Customer problems usually start with…
I can’t?
How do I?
I want to…

How does it play out. Here’s an example that I led at Microsoft for the WIndows 7 Launch.

So here’s Microsoft- this huge company that doles out business problems.

For the Windows 7 launch, the objective was to increase sales and preference for Windows 7. Classic business problem- Not a customer problem in sight.

But we had a direct line to the Windows customers through Social Media. We were listening, participating, asking questions. And guess what- people didn’t like us. They hated Vista. They didn’t trust us. And we didn’t give them a reason to until Windows 7.

The traditional media went out like it always does. And it did its job- delivered the appropriate TRPs. But it wasn’t personal. It wasn’t contextual, and it didn’t do much to overcome the number one customer problem we saw- people didn’t trust us.

Knowing that the majority of consumers would go online to research Windows 7, we decided to serve our business objective. But to get there, we backed up to the customer problem- I like XP. Vista sucked. Why should I try Windows 7 and why should I trust you?

The Windows 7 BETA went  live 10 months prior to release. Enough time to listen, to talk to our customers through social media,
and to make some changes.

It gave us time to see that we had an option to address the real customer problem-trust. Feedback on the product was great- people liked it- it addressed the limitations of XP and addressed the issues with Vista. Through Twitter, Facebook and blogs, we saw people getting behind Windows and we watched the Windows sentiment shift from Red to Green.

Understanding the trust issue, and knowing that the new product was being received well, we built contextual and personal experiences for people looking to research and buy Windows 7. The cornerstone of the Digital campaign was an aggregator- a social media hub that displayed real-time tweets, blog posts, flickr images, and youtube videos. It was a platform that not only
displayed the comments about Windows 7, but also let us insert that real time content into display ads, product detail pages, and any other web property. The content was tagged programatically so we could insert contextual tweets generated by users in product pages. So if a customer was interested in the Snap feature of Windows 7, live Tweets about Snap were featured on that Product Detail page

The strategy was to overcome trust by letting others tell our story on our behalf. And then take that data and make it personal and meaningful. n=1

So did it work? It did- it really did. We saw click through rates of over 2.5% from display ads to Windows.com, 200 Million earned impressions (through Twitter, FB) in 2 weeks, Windows trended 3rd on Twitter, Windows was the #1 page on YouTube, we saw 300K referrals from FB in 2 weeks.

But the most important indicator was that of all end actions on Windows.com (end actions are things someone does on the site- watch a video, read an article, click to learn more, etc) , of the people that visited the social media hub, they had the highest propensity to purchase Windows 7 in the next 6 months. So we felt pretty confident we created a local experience- an experience that addressed the customer problem we saw- that trust was a barrier. We lowered that barrier.

Best Buy’s Twelpforce is another great example of solving a customer problem and making it personal.  Customers can be frustrated with the quality of service at Best Buy.  Its come a long way but there are inevitably times, when the experience isn’t what we’d like.  Twelpforce allows customers the chance to interact with the most passionate group of employees that Best Buy has.  Twelpforce provides an experience that gives customers  multiple points of view and recommendations.  All based on their original problem or question.

Data

The other way to get to n=1 is open up data.

One thing your clients have is an abundance of is data. I’m not talking about ASI scores types of data. But what their customers

are buying, when they’re buying it, where they’re buying it, what time of day, what the weather is, if they’re male, female, used to be male etc.

This is where I lose half the creative group- data talk. But the curious ones will listen up. Because in that data is the stuff of stories. Stories about someone like me, who has the same customer problem as me.

Maybe that problem is as simple as finding the right BlueRay Player to compliment my 62”plasma. I’ll ask my friend, thanks.

Or finding the right pair of shoes to help with my lower back pain when I run a marathon.

Or as complex as “What tractors are other wheat farmers in Idaho buying who live on hilly terrain, farm over 400 acres, and yield 100 bushels per acre of winter wheat”. I’ll ask my neighbor before I ask you.

Whatever the problem is, its been solved before. And there’s data that can help solve that problem again. But most of the data is locked up in internal databases waiting for the Harvard schooled Marketing Manager to make a decision about how you push the next email blast at the person they think is the right target with the message they create and deliver- many times without input from the customer.

In other words, the data goes into the ether and is never made available to use again. But what if that data was anonymized? Then made available to me as a customer through some amazing application that showed me what people like me needed, wanted, or bought.

This is contextual. This is personal. This is n=1. This says that you as a marketer don’t have all the answers for my needs. Because you don’t. Today I kinda fit into your neat segmentation but I kinda don’t. And tomorrow, I definitely won’t. Plus as I showed in the Microsoft example, I don’t know you and I don’t trust you. I trust people like me. And more importantly, my friends.

The companies that understand this today are the companies that grew up on the web. Google, Ebay, Amazon, Netflix, Facebook.

These companies are built around data. And every time a person interacts with those brands, they collect more data. And every time a person takes an action, the experience gets better for the user, more customized, more personal. n=1

Amazon is one of the best at solving customer problems- finding the insights through data. Jeff Bezos, founder of Amazon says:

“We don’t make money when we sell things; we make money when we help people make purchase decisions”

And having worked with Amazon, I know that data is Amazons key to solving customer problems and helping to make customer decisions. They value data and analysis of that data over any MBA program. Because the data tells a story about me. And data allows Amazon to personalize every experience I have with that brand.

Amazon knows that I watched Green Zone on Amazon on demand. So it recommends I might like Book of Eli- a Friday night problem of what to watch. Based on data.

It knows that I bought some cables to hook my mac up to my TV so it recommends some additional hardware to solve my problem. Based on data.

It knows that I bought some bought some word games, so it recommends Scrabble. Data.

This is fine and good, but Amazon is also getting smarter about what data sources it can tap to be more relevant and more contextual.

In July, Amazon started letting users integrate Facebook into recommendations. If you go your recommendations, Using Facebook Connect, Amazon will now serve you social recommendations based on information in your Facebook profile- what you like and other information you add. So if you like Spoon, you can see which one of your friends also likes the band. You’ll also see upcoming birthdays and find your Facebook friends’ Amazon Wish Lists more easily. And you’ll get gift suggestions for your friends based on their Facebook profiles. Amazon is now a foaf – a friend of a friend. Can you say that? You could.

You all know the truth. Consumers don’t buy products from companies. People buy stories from friends.

The ability to customize isn’t just a fad- its driving serious business results. Amazon’s 2nd quarter profit rose 45% Revenue rose 41%

Nike was one of the first that I’ve seen to take data and make it personal and contextual. To solve a customer problem and create a new market. n=1

Nike Plus. For those that don’t know what it is, its a small sensor that collects data about me when I run. It allows me to save that data, share it with others, create custom workouts. It acts as a motivator, a fitness tracker, and a social network. It helps make me want to work out. Its completely customized to me. It makes me want to stay connected to the brand because it solves a lot of my workout problems- primarily motivation and tracking. Nike just announced improvements to its ability to collect data. GPS.

Take a look at this video:

Lets take what we learned from Nike and apply it to one a hypothetical that use case that I mentioned before.  Imagine you’re given the problem of helping farmers figure out which tractor is the best for them.   Traditionally, features and benefits are used to help make that case.  Its got a better engine, better traction, GPS options, ability to add more farm implements.  And compared to X, we’re better so choose us.  I’m not saying that’s not compelling.

But what if you opened up the data that that tractor company captures from its users.  It likely has precision farming functionality that tracks application control and helps improve yields, moisture monitoring, crop rotations guidance, mapping and analysis, and equipment owned.

Now start to think about building a story out of that data.   Where that farmer in Idaho who’s looking for a new piece of machinery knows that other wheat farmers in Idaho are buying the Magnum Series tractors and their yields of wheat are over 150 bushels/acre because they own 1200 series planters, have rotated the soybeans for 2 years, and averaged 45 inches of rain the past two seasons. And every time that farmer uses a this tractor, he’s contributing to that data making it better for himself and for other customers.  This use case is not far off.  Much of the data exists I guarantee it.  What this manufactuer needs is a partner to bring it to life and help them understand how to get it done.

This is n=1

You might be saying so what- Amazon and Nike are companies that control their own data and don’t rely on ad agencies- what do I care? How does this affect me? Here’s why you should. I can bet your clients aren’t thinking about data this way. And they need to be to compete now. To be able to create these important personal and contextual scenarios.

If you articulate and develop use cases – simple stories to illustrate where things are headed, there’s nothing more valuable than an agency partner. It’s not fundamentally different that what you’ve always done. You tell stories that are compelling, that get retold and built upon. The details just got better.

Best Buy has always been a company that believes in solving customer problems and challenging its business model. And we were able to convince leadership that data is the best way to solve those customer problems and create new businesses. By opening up the data we have we can turn the perceived liabilities of Best Buy – physical stores with lots of employees into the biggest strength. And we can let other people build applications on our behalf using our data. Its a strategy similar to Twitter- build a platform that allows easy access to the data. Twitter It now has more than 65 million tweets per day, most coming from services that use the Twitter API

Imagine the data we have at Best Buy:
• The knowledge base of 150K people who live and breath the products and services we sell
• 1000+ locations to try and buy right now
• Over 1 million current and historical products
• Fresh deals every week
• Reward Zone data of what I’ve bought and what I own

By opening this data up so that it can be useful, we’ve been able to get local, contextual and personal with customers.

Down the road, think of what you could do as a customer with access to
• Return rates- what products aren’t performing well
• Inventory- which are best sellers when
• Purchase behavior- what do people like me buy
• Friend behavior- what are my friends buying, liking

In our groups at Microsoft and Best Buy, there were constant searches for partners who could bring new thinking. Thinking about how to solve customer problems mirroring what start ups or web-based companies were doing. Agencies who would bring us use cases for how we could solve our unique customer problems. Telling us what data was needed. How we could unlock it
to create applications that could get better every time they were used. We needed agencies with creative technology groups. Its not easy to find. And we often hired our own developers or worked with local dev shops.

Cultural Elasticity for Customer Problems and Data

Understanding your clients cultural elasticity is the key to helping them craft an open strategy and open data. Cultural elasticity is the notion of how curious a culture is to solve new problems or challenge existing business models. In this environment, you’ll either find people trying to reinvent themselves to be relevant- high elasticity- or falling back into the reserves to protect the
business from future loss- low elasticity.

Regardless, customer problems and opening data can usually be solved best when you have a culture that is open. That doesn’t think it always has all the answers. And knows that the smartest people don’t always work within its walls. At Best Buy, when we were preaching the importance of an open culture, the thing that helped us to do that was to help people understand
that the 3000 smartest people didn’t sit within the 4 buildings in Richfield. 147K other employees and millions of customers had unbelievable ideas. Opening up the lines of communication through things like Best Buy IdeaX, getting executives to participate genuinely on Twitter and through blogs broke down barriers. And opening up the data we kept locked up, let other people take
our products and sell them on our behalf- in ways we couldn’t think of doing or support even if we did.

As an agency, you need to be an advocate for the appropriate level of openness for the culture of you client. Often times, an outside voice helps ground people and inspire change. The social media space is full of examples of companies that have opened up their cultures and their businesses. Many have seen great improvements in their business.

Dell
Zappos
Netflix
Starbucks
Ford
Google
Sears

Role of the Agency

How you inspire this comes down to two things.

1) Consult and provide case studies on why opening data will help you solve customer
problems more contextually and personally- n=1. As an agency you don’t own data. But you
need to create the use cases that drive the opening of the data

2)  Read Charlene Li’s Open Leadership
It’ll help provide additional examples
“Open Leadership reveals step-by-step, with illustrative case studies and examples from a wide-
range of industries and countries, how to bring the precision of this new openness to both inside
and outside the organization. The author includes suggestions that will help an organization
determine an open strategy, weigh the benefits against the risk, and have a clear understanding
of the implications of being open. The book also contains guidelines, policies, and procedures
that successful companies have implemented to manage openness and ensure that business
objectives are at the center of their openness strategy

In the end, cultural elasticity is what decides what you can and can’t do. Marketers suck at
doing the right thing. you own the creative process. The process is the same at the heart-
create something that people want and the culture bends- the elasticity expands.

I recently changed jobs and moved back to Best Buy from Microsoft.  I liked Microsoft and I feel good about the contributions I made to the Windows Consumer Marketing Team.  The reason I left is that I was given an opportunity at Best Buy that I didn’t think I could recreate at Microsoft.  And my respect for the Best Buy culture and leadership played a huge role in my decision.

At Best Buy, I’ll be leading marketing and partner acquisition for the Emerging Technology Group.  Translation- We’re building the capability to share all that we know with our customers. By making the things we sell, the things we know, and the services we provide available to partners and developers, we’re creating more contextual and personal experiences for each of our customers, wherever they are; at a Best Buy, at a competitor, using an application on their phone, searching online, talking with friends on Facebook.

Figuring this out won’t be easy.  There are a lot of cultural barriers when you start talking about opening up Data.  But this position is good for me- it affords a good amount of experimentation, has a good degree of cultural change that’s required, and most importantly, I believe this capability has the ability to transform how Best Buy redefines itself to improve relevance with customers

What is it?

The Windows 7 Social Media Hub was one of the cornerstones of the Launch of Windows 7.  It was an aggregator that pulled any Windows 7 conversation from Twitter, Facebook (Windows Fan Page only), YouTube, Flickr and Blogs.  We wanted people to see real time Windows 7 comments (positive and negative), show the volume and velocity of the conversation, and provide a path for people to learn more.

Why its important?

From a customer/Windows relationship standpoint, we wanted to be transparent,help people get more info, validate that Windows 7 has some chops and build a little trust along the way.

In my view, social media content integrated into the story of a site or campaign can provide tremendous value for customers.  Like ratings and reviews, it provides an independent validation for or against the product.  It also puts pressure on product development by shining a spotlight on what works and what doesn’t.

From a marketing standpoint, brands that use ratings and reviews benefit from higher trust and customer satisfaction (about an 11% lift on both metrics according to Forrester).  I’d argue that social media content can produce the same benefits.

What do you need to consider?

The trick is, finding the right balance of how to feature that content.  Social media content is really good in aggregate (what are the mass trends) and in relation to your network (what are your people saying).

For the Windows 7 launch, we had a strong indication that the buzz on launch day would be positive.  We knew that based on our interaction with our customers for 18 months leading up to the launch.  We were actively listening leading up to and after the release of every version of Window 7 (BETA, Release Candidate, and General Availability on 10/22).

Knowing that, we decided to feature the Windows 7 conversation in aggregate.  As referenced above, as a way to see real time comments (good and bad), show the volume, and provide a path for people to learn more.

Results

It worked.  You can see more detail in the Windows 7 Case Study here.  Within the first two weeks of launch the Hub had over 300K visits, 50% coming from Facebook. The hub drove a click-through rate of over 2.5% to Windows.com. End action analysis showed that active preference (likelihood to purchase within 6 months) for users who visited the Hub were 5-10% higher than any other end action on Windows.com.  The active preference number reinforces that independent validation of a product through social media can lead to an increase in purchase intent- much like ratings and reviews.

How it all Worked

The Hub was built with some modifications to some emerging Microsoft Technology.  We built a moderator application on top of a product called Looking Glass.  Looking Glass is a social media aggregation tool similar in concept to Radian6 or TruCast.

See more about Looking Glass here:

Demo
Looking Glass Announcement on Marketing Vox

The moderator application we built on top of Looking Glass allowed us to:

1. Remove spam and people gaming the system for promotion
2. Block obscenities (so we could pull the content into Windows.com- its a family site so the F-bomb doesn’t fly)
3. Provide some structure or organization to the data so its easier to consume

The moderation layer let us manually tag content coming through so we could help categorize it and add some structure to the unstructured data.  The theory was, by tagging it, we could then organize it into trends and display it in a way that’s more valuable for customers.  To be blunt, the approach didn’t work for launch.  Volume of content was too high to manually tag and for the first month and a half, customers weren’t talking about product details.  There was just a general “I Got It, “Its on its way” tone in the marketplace.

Where do we go from here

The conversation has shifted.  Now people are talking about what’s working, what’s not, where they need help, things they like.  For the last 3 months, we’ve been updating the moderator application to address this change and fix what didn’t work for launch.  We’ve built programmatic tagging functionality.  As content is pulled into the moderation application, we ID trends within the Windows 7 conversations.  We also auto-tag content based on search query strings representative of the conversation in the market.

With the tagged content, our options to organize content in useful ways increases greatly.  We’re moving beyond the ticker tape user interface we featured at launch and create a user interface that shows clusters of conversations relevant to Windows 7.  Clusters that customers can dig into to learn more about Windows 7 from other users.  We’ll also provide editorial content if users choose to search for more info.

The goal is to continue our transparency, let the product speak for itself through our customers, and to continue to build trust where we can.

The revised moderator application I mentioned is undergoing testing now.  We’ll have it in place in the next two weeks. We’ll begin exploring ways to update the user interface as mentioned above shortly.  When I have some updates to share, I’ll post.

Ping me with questions or comments…

Thursday morning I left Minneapolis for the move to Seattle.   Overall it was a great trip- lots of time to think,, some good podcasts, and a little time to relax.

On Thurs- I drove to Billings- about 12 hours.  By far the most boring part of the trip.  North Dakota and Eastern Montana is insanely mundane- and straight.

But on Friday, things got better.  I drove from Billings to Big Sky to get some biking in.  I went up on the mountain to do some downhilling.  First time I’ve done that- it was pretty intense.  It rained all morning so it was really slimy.  That along with the steepness, the rocks and the tight turns, I spent some good time off my two wheels.  With the helmet, the arm, and shin guards they make you wear it was all good.  Definitely want to do it again soon.

After biking, I drove to Missoula to crash for the night.

On Sat, I went on to Seattle, checked in to my corporate housing and went and watched the USA Mens National team beat up on Grenada 4-0.  One of the advantages of soccer being unpopular in the US is the ability to get awesome seats day of the game.  2nd row.

Tomorrow is my first day at Microsoft.  Orientation followed by happy hour with my new boss- Marty Collins.

More to come…

On March 3rd, Gary Koelling and I are presenting at Computer World’s Premier IT Leaders Conference.  When they first contacted us, it didn’t feel like a good fit for the work we’ve done.  After all, the event is the “only executive conference where you can hear from—and network with—Computerworld’s Premier 100 IT Leaders and Alumni.”  Not the  crowd we typically roll with:)  But they were interested in our story and thought others might be too.   Here’s a first draft of the presentation we’ll be giving.  Based on the agenda I think it’ll be different.

If you’re going to be attending, swing over and say “hey.”