Tag Archives: Dell

What is the ‘Magic Number’ of market leaders in Tech?

Jack Welch used to say, “Be Number 1 or Number 2 (or else get out of the market).” The operating principle of this was that the Number 1 company set the direction; the Number two company continuously challenged the leader; and everyone else was a reactive “me too” follower. Does this same “Magic Number” apply in the information technology and software world (where innovation is continuous and new markets emerge every 1-2 years thank to Moore’s Law)?

The Case for Four Market Leaders

When I first through about this, I said to myself, “In tech, the ‘magic number’ is four.” Just take a look at the “Four Horsemen of the Internet” (in the 1990s); the Browser Wars (IE, Mozilla, Chrome and Safari); mobile platforms (Android, iOS, RIM and Windows – with PalmOS left out in the cold); or servers (Dell, HP, Sun-Oracle and IBM).

But then I thought about other tech product categories and wondered about…

The Case for Three Market Leaders

Perhaps the case for the number of tech market leaders if three. In the Browser wars you could argue that Safari is a special case (Mac-focused) and the war is between IE, Mozilla and Chrome. In social media we have Facebook, Twitter and LinkedIN (with many wannabees). In the business applications space you also have IBM and Oracle buying every business vertical leader in sight to fill out a three-way competition with Microsoft. In search you have Google against Bing and Yahoo! (apologies to my old employer, AOL).

But are these really just pre-cursors to real ways between two leaders?

Jack’s Case: Two Market Leaders

Maybe Jack was right (he was about many, many things) and it really comes down to “Number 1 vs. Number 2 (with everyone else on the sidelines). In the database world this is Oracle vs. Microsoft. In the OS world it is Mac vs. Windows (in PCs) and Linux vs. Windows (in Servers). In the chip world it is Intel vs. AMD. You have Java vs. .NET in computer programming…

So What is the Answer?

I think the answer is one of life cycle and level. New markets can support four leaders. As they mature and settle out they will move to three for the “higher-level” items like applications (the speed of innovation will keep this from setting down to two – just look at what Salesforce is doing in CRM). If they are more “fundamental” like platforms or computing languages (things that require enormous capital and training investments to change) they will settle down to two (just like Jack said).

Social Networks for Business Tip #10: Connect All The Dots

I have found ten common tips that apply irrespective of what your enterprise does, your market is or what technology platform you are using. This is my last tip in this series of 10 posts; each with a particular theme. These intended to be read in the order presented, as they will build upon each other…

Tip10

Don’t Leave Your Community Detached

red_net_fAs I stated on the first post in this series, you business community is one of many channels within which you will interact with your customers, employees, partners and other stakeholders. If you do not recognize this fact and simply create a standalone community, you will only create a place where your stakeholders socialize. While this is nice, it will not create a large return on your investment (more often than not, it will not provide any return).

If you want to maximize the return on investment in your business community, you need to embed it into the your entire enterprise.

Start With Your Core

I am a big fan of modular architecture. This model advocates that you can achieve the better results, in a more flexible manner, by picking the best technology for each problem on hand instead of trying to find one perfect system that does everything.

I recommend starting with the following core of three modules to build a “best of breed” architecture ideally positioned to exploit value from your business community:

the_core

Module 1 is Your Business Community. Its purpose is to serve as channel to attract customer interest and drive engagement. It is essentially a virtual storefront to capture the ideas, preferences and experiences of your customers in a measurable, data-driven format.

Module 2 is Your Data Warehouse. The Data Warehouse extracts the wealth of interaction and engagement from your business community and merges it with all of your other business data (e.g., customer lists, sales, supply chain data, etc.) in a format ideal for business analysis. This enables you to detect patterns and make discoveries from your community that you can use to create value.

Module 3 is Your Primary Back Office Management System. Depending on you business this could be an enterprise resource planning (ERP), customer relationship management (CRM), sales force automation (SFA), billing and merchandising (B&M) or even content management systems (CMS). This is where you automate your data warehouse discoveries in the format of rules for advertising, promotions, offers, sales, customer care, shipping, billing and credit.

Note: For more information, you can click here to listen to my online Webinar on Social CRM (link no longer active) for more information as to about why this modular architecture model is better than trying do everything from a single, all-in-one platform.

Then Build Out to the Rest of Your Enterprise

Now that you have your business community integrated into your core, you easily add on every other part of your enterprise to leverage even more value from the discoveries you are making by engaging with your community members. In many cases, the much of your enterprise is already integrated with your primary back office system and data warehouse, making this extension far less daunting than it initially appears.

Here is how it works:

whole_system

  1. You put a Fan Page up on Facebook and a User Name up on Twitter to attract customers
  2. Through these mainstream consumer networks, you redirect customers to your business community
  3. Customers can view what you have to offer here freely, maximizing the number of Spectators you have
  4. When Spectators want to add to the community, they can easily become Joiners (and log in) by re-using their Facebook or Twitter IDs. All of their actions as Critics and Creators of content are automatically attributed to these accounts (which already have established contact and profile information)
  5. All of this (Critic and Creator) interaction is pulled into your data warehouse and joined with the rest of your enterprise data
  6. Your Marketing and Business Analysts mine this data and find new opportunities to present better offers, package better products or simply explain what you do (and its benefit) in clearer terms
  7. They work with your Business System teams to publish these findings in the forms of rules and workflows in your ERP, CRM, SFA , B&M and CM systems
  8. These new rules and workflows automatically drive changes in your Static Web Site, Business Community, Direct Response Campaigns, Contact Centers and Sales force
  9. You can capture customer feedback through all of these channels and combined it in you data warehouse with results from the your ERP, CRM, SFA and B&M systems to measure the value you have created

This creates an entire system that facilitates continuous improvement, generating over time growing understanding of your customers, employees and partners and using this to create growing value and ROI.

Smart Enterprises Have Already Shown How This Creates Enormous Returns

Tying all this together is not some imaginary view of success. Many smart enterprises have already down this. Three are highlighted below:

Dell’s IdeaStorm

Dell tied a set of open communities to their every aspect of their operation. This has generating ideas for new products and product configurations, improved customer satisfaction and increased online sales.

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Men’s Health

Rodale  has fully embedded their Belly Off Community into their online content and print magazine. This has boosted online advertising revenue, increased customer loyalty and boosted magazine sales.

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American Express OPEN Forum

American Express has tied their new OPEN Forum community into core entire enterprise and advertising network (even including affiliate marketing programs such as their join Shine-A-Light campaign with NBC Universal). This has created a clear value proposition for their customers leading to everything from increased card transactions to added OPEN card applications.

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You Can Do This Too

This entire blog series lays out the steps to do this. If you follow it, you too can create effective communities that drive business value.