Archive for the 'Uncategorized' Category

Enhancing Consumer Performance in Idea Generation

April 28, 2014

Toubia_IdeaGenerationIt can be argued that there is a science to ideation and innovation; it’s not “strictly” about creative inspiration and throwing caution to the wind. More and more, companies in a variety of industries are looking to consumers for fresh ideas (i.e. My Starbucks Idea).

Columbia Business School’s Olivier Toubia and Marshall School of Business’ Lan Luo found that for effective consumer ideation, the research process cannot be a one-size-fits-all approach. Their study, Fostering Consumer Performance in Idea Generation, offers research to help marketers and research and development teams to extract “better quality ideas from consumers and to identify their needs to inform new product and service development.”

Toubia and Luo write, “As firms… increasingly seek out consumers’ ideas in various domains, they will encounter individuals with different levels of domain-specific knowledge.” They segmented such individuals as low-knowledge and high-knowledge with regards to a particular area of interest. But with consumer segments at different ends of the knowledge spectrum come challenges in extracting insights. “The performance of low-knowledge consumers is likely to be hindered by their lack of relevant knowledge in the problem domain…,” note Toubia and Luo. “[High-knowledge] consumers often do not perform in accordance with their full potential (due to factors such as shallow processing and inattention).”

Despite the discrepancy in depth of knowledge, each segment provides valuable insights on said domain. The study examines the interplay and outlines a process for creating customized ways to mitigate such obstacles, so companies may experience enhanced consumer performance in idea generation. Further, their research explores ways to apply this customized task system to open innovation platforms conducted online, a practice many brands currently use.

Download Fostering Consumer Performance in Idea Generation to learn more about taking a strategic approach to consumer ideation.

BY ALLIE ABODEELY

CMO insights from IBM’s Global C-suite Study

April 28, 2014

IBM-Infographic-2014

For more than a decade, IBM has built upon research to produce its C-suite Studies series, one of the largest collections of C-level executive insights. Its latest research Stepping Up to the Challenge: CMO Insights from the Global C-Suite Study focuses on how CMOs “are helping their enterprises become more ‘customer-activated.’”

IBM Institute for Business Value found that employing a revenue-generating, customer-centric strategy can stem from digital marketing capabilities. But despite digital being a current area of focus for CMOs, it’s a world many still struggle with. Specifically, less than 20% of CMOs interviewed for the study “have integrated their company’s interactions with customers across different channels, installed analytical programs to mine customer data and created digitally enabled supply changes to respond rapidly to changes in customer demand….” Such CMOs are segmented as “Digital Pacesetters” in the report.

The issue isn’t that the other +80% are fire-walling technology, but rather they grapple with maneuvering through the explosion of data, and tethering digital media to bottom line numbers. As one CMO (anon.) in the study explains, “We know what we want to do. Our biggest challenge is creating the data infrastructure.”

This translates into potential missed opportunities. IBM Institute for Business Value reports, “There’s a close link between the degree of digital acumen CMOs display and the financial performance of the enterprises for which they work.” The research revealed that many CMOs have de-prioritized monetizing social media. They are “presumably finding it too difficult or see social mainly as a tool for building awareness and forging connections.”

While CMOs are becoming a stronger force when it comes to influencing CEOs on strategy, second only to CFOs, it’s the CMOs’ relationships with Chief Innovation Officers that generate results. IBM Institute for Business Value reports that businesses are 76% more likely to outperform in terms of revenues and profitability when CMOs and CIOs effectively work together.

According to the study, analytics are top priority for CIOs. IBM Institute for Business Value suggests partnering with CIOs to create an infrastructure for scalable cognitive analytics that produce actionable customer insights. It cautions not to be “all things to all people,” but rather concentrate analytics on those customer lifecycle phases that will be of utmost importance to your business in the next few years.

IBM Analytics InvestmentDigital Pacesetters, notes IBM Institute for Business Value, are “actively investing in the later phases of the customer lifecycle, where digital channels make the biggest difference.” While traditional phases end with the transaction, Pacesetters look at the bigger picture – focusing resources on long-term relationships and cross-channel experiences to turn customers into loyalists and collaborators and encouraging them to share these experiences. Such companies, per the study, “are 59 percent more likely to be outperformers.”

Download the complete study to learn more about IBM’s findings and strategizing digital.

BY ALLIE ABODEELY

#BoysGotGame

February 26, 2014

Lulu, the new app that allows women to anonymously rank their Facebook beaus, Luluhas quickly risen to smartphone fame. In a single year, it has attracted a user-base of well over one million with more than 200 million profile views and countless praise from esteemed media outlets like The New York Times, The Washington Journal, Business Insider and NPR. With backing from acclaimed financiers such as Yuri Milner, an early investor of Facebook, Lulu is poised to reign the dating app world.

Beyond just a simple ratings scale of 1 to 10, women can give detailed, yet pointed descriptions of their exes, flings, and male friends using hashtags (e.g. #SilverFox, #CheaperThanABigMac), hence easing the dating woes (or boosting desirability) for subsequent unsuspecting women.

Co-founder and CEO Alexandra Chong explains, “[W]e get references for jobs… or renting an apt…. Why not get references from women on the guys that they may end up in bed with.” After a six-hour brunch with her girlfriends chatting up everything from careers to guys, Chong saw opportunity to tap into “girl talk” by creating a private space where they can share past experiences to “empower girls to make smarter decisions….”

https://i2.wp.com/57vje3fqw032jqgx93yq531jak.wpengine.netdna-cdn.com/wp-content/uploads/2013/03/AlexandraChong-300x300.jpgInitially, marketing was geared towards sororities. One in four college women have the app, and average about 8 visits per week. This sparked a blaze that’s spread like wildfire among women in their 20s. But what’s really excited Chong has been the dynamic contributions of Lulu’s members. “… fifty-two percent of users create content. As you know in the social space that’s often unheard of. Typically the rule is 9-10%,” she tells Bloomberg TV’s Cory Johnson.

More than just piquing interest, user-generated content gives Lulu (and prince charmings) a huge advantage—credibility. According to Nielsen, 92% of consumers worldwide rely on recommendations from friends and family, and 70% trust online reviews. Word-of-mouth is a tremendous driver for Lulu.

Lulu makes it easy for ladies to add their own two cents by inciting them to inhttps://i0.wp.com/www8.gmanews.tv/webpics/v3/2013/04/320_Lulu_homepage_24April2013.jpgteract with the app through Cosmopolitan-style quizzes and content. Chong tells Johnson, “For our users, it doesn’t feel like they’re doing much to give information.” She likens Lulu to a Wiki for girls. “The idea for us is to move beyond relationships and into health and to beauty and to all the things women care about. That has endless opportunities.”

Surprisingly, men are responding, well… favorably. In an article last November, The New York Times reported that Lulu had received over half a million requests from dudes who welcomed (read: braved) #feedback. One poor soul who had received a 6.5 score was a good sport, tweeting, “I can only assume this is on a scale of 1 to 5.” Um, sure.

BY ALLIE ABODEELY

RESEARCH: The Temperature Premium Effect

February 12, 2014

In a comDepth_Perception_Cookiefortably warm room, a chocolate chip cookie seems to be closer than it actually is, and potential buyers are willing to pay more for it than if the room was colder. Purchasing behaviors are influenced by real-world environmental factors, like temperature. So much so, that moderately warmer temperature increases both product valuation and physical closeness perception.

Research from Columbia Business School professor Leonard Lee focuses on how consumers shop in real world environments and how environmental factors affect their shopping behavior and preferences.  His latest work with Jacob Goldberg of the Interdisciplinary Center in Herzliya, Israel, and Yonat Zwebner of the Hebrew University of Jerusalem, focuses on the important connection between physical warmth and product valuation.

They found that “warming temperatures increased the probability that shoppers would buy a product, even after controlling for seasonality and factors specific to individual products, and despite the fact that shoppers were hunting for bargains.” Findings apply both to brick and mortar and online retailers and to a variety of products, from cameras and watches, to books and chocolate cake. “We found that physical warmth, despite being product irrelevant, can shape consumer’s purchase decisions.” Furthermore, “the studies suggest that exposure to physical warmth activates the concept of emotional warmth, eliciting positive reactions and increasing product valuation.”

How warm is too warm? Lee’s experiments showed that an eight degree increase to the standard room temperature (71.6°F), or 79°F, would make participants “more willing to pay significantly more – at least ten percent- for a given product, compared to participants sitting in a cooler room (64°F).” However, “as the temperature increases, its effect on purchase intent diminishes.”

Read more about Lee’s research in Ideas at Work.

For the quants out there, download the full paper on the Journal of Consumer Psychology.

BY GABRIELA TORRES PATIÑO

Warby Parker: A Purposeful Vision

August 27, 2013

Warby Parker InterviewMuch like a brand repositioning itself, eyeglasses have a new image—from a functional apparatus that 1980s youth cringed over (à la braces) to a fashionable tool that many are proud to don.

This bodes well for Warby Parker. The burgeoning e-commerce eyewear company takes pride in likewise transforming those of us who vividly remember wandering blindly through school hallways into trendsetters for the “in-crowd” without breaking bank. But Warby Parker offers more than a pretty face. The student-founded start-up acted on a deeper vision and managed to hit its first-year sales goals in just three weeks… on a $120k budget.

For a mere $95 you can purchase “fully loaded,” custom fit glasses with anti-reflective, prescription lenses—which, by the way, are manufactured in the same facility as luxury brands that charge hundreds of dollars for frames alone. But the three-year-old retailer embraces an even greater purpose at its core—donating stylish specs for every pair sold to those who have forgone proper vision because they can’t afford to buy even low-priced eyeglasses.

Similar to what TOMS did for the shoe industry, Warby Parker is shaking up the optics market. Co-founder Neil Blumenthal explains, “[Glasses] stand for something…. So it wasn’t just about getting a bunch of cheap glasses and selling them online.”

When Blumenthal and three of his Wharton classmates heard that one billion people worldwide were without glasses, they risked trips to the Dean’s office to embark on this venture. Blumenthal tells Mike O’Toole, host of PJA Radio’s The Unconventionals, “[We wanted] to build… a business that is scalable, profitable, but does good in the world and doesn’t charge a premium for it…. The problems that we face are more complex and larger than ever before. And volunteering on the weekend is not going to solve it.”

Blumenthal explains that Warby Parker exists in three distinct worlds—fashion, technology and social enterprise. “We spent a lot of time thinking, ‘What are we?’ and ‘What are we not?’ ‘What do we stand for?’”

Warby Parker, the David in a Goliath world, competes with industry brands like Luxottica (Ray Ban, Oakley, Oliver Peoples) and LensCrafters that monopolize the market. But Blumenthal and his cohorts aim to make  their business model an example for small enterprises and Fortune 500 companies alike. “Ultimately businesses can be and should be a catalyst for good,” says Blumenthal.

For many, eyewear is more than utilitarian. It is indeed an extension of the fashion world, a form of personal style and expression. So the founders were challenged with persuading consumers to buy prescription glasses online rather than in-person at a retail establishment where they can immediately try them on.

Warby Parker implemented the “Home Try-On” program. Customers can select up to five different, non-prescriptive frames which are shipped at no cost to their doorsteps. They then have five days to try the frames, solicit feedback from family, friends, and style gurus. After making a selection, customers simply return the frames using a pre-paid shipping label and order their chosen pair through Warby Parker’s website.

Warby Parker Class Trip

The team behind Warby Parker succeeded in building awareness through a well-targeted campaign convincing aspirational media outlets like GQ and Vogue to feature them. After selling out of their top 15 styles in four weeks, Warby Parker accumulated a waitlist of 20,000 people.

Warby Parker has since expanded from operating out of Blumenthal’s apartment to selling frames at their own brick-and-mortar stores. More recently they launched the “Warby Parker Class Trip,” transforming a school bus into a mobile showroom for a cross-country road trip to bring the Warby Parker experience to the masses.

To hear more about how this start-up became one of the most talked about entrepreneurial ventures, listen to Neil Blumenthal’s full interview on PJA’s The Unconventionals.

By ALLIE ABODEELY

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