Advance Praise for The Network Is Your Customer

Rogers’s work is thought-provoking and practical. It’s impor tant reading

for any marketer tr ying to engage the ever-evolving consumer in the

digitally networked space. His synthesis of vast amounts of information

and application of deep analytical rigor deliver a strategically grounded,

highly relevant, and, most impor tant, applicable operating model.

—Antonio J. Lucio, Global CMO, Visa Inc.

The Network Is Your Customer shows in real terms how networks have

changed our lives as customers as well as citizens. The book explains

how marketing and customer ser vice demand constant engagement and

commitment to customers, and it shows you how any business can meet

that challenge for better returns.

—Craig Newmark, founder of craigslist

This book will shake up your business and change the way you think about

the Internet. With more than a hundred real-world cases, Rogers shows

how customer networks impact the bottom line of ever y business and how

you can make them work for you.

—Bernd Schmitt, CEO of the EX Group, author of Big Think Strategy

In this groundbreaking new book, Rogers reveals the science and the psy-

chology behind our ever more connected lives. More impor tant, he shows
how to build the products, ser vices, and organizations of the future that

your customers will fl ock to join.

—John Gerzema, Chief Insights Offi cer, Young & Rubicam, and best-
selling author of The Brand Bubble and Spend Shift

Ever y marketer who wants to stay relevant should read this book. Rogers

shows fi ve strategies for how customer networks can drive bottom-line

results at companies of ever y size and industr y. Tap into the digital world
and make the network work for you!

—Sandy Carter, Vice President, Software Business Partners, IBM

Corporation

Your customers are changing your business model. Looking for answers?

This book holds key insights to understanding customers in a digital world.

With its fi ve strategies and straightfor ward advice for responding to change
in your own business, it’s a must read for any manager.

—Jeff Fleischman, Chief Digital Offi cer, TIAA-CREF

Rogers weaves great stor ytelling, compelling examples, and real business
insight into an important book that transforms our understanding of twenty-fi
rst-centur y business and what it will take to win in this new customer-

powered reality.

—Dwayne Spradlin, CEO of InnoCentive

Don’t miss this book. The Network Is Your Customer is a great choice for
anyone, from entr y-level worker to CEO, who wants to cut through the

clutter and discover brilliant ways ever y marketer can create value in

the age of the Web. With dozens of inspired case studies, Rogers clearly
illustrates how smar t brands are using digital channels to satisfy the need for
individuality in consumer choice.

—John Mayo-Smith, Chief Technology Offi cer, R/GA

For anyone looking to understand the future of customers in the digital

age, Rogers has written a fascinating business guide. He focuses not only

on the technological speed warp we’re living in but on the behaviors and

motivations that give it meaning and what organizations should be doing

about it now!

—Lisa Hsia, Senior Vice President, Bravo Digital Media

I call it Listenomics. Others call it The Relationship Era. You can think of it
as salvation. What Rogers details in this compelling book is that the ver y
forces that are destroying mass marketing—that is, the digital revolution—

also power the bright and bold future of commerce.

—Bob Garfi eld, host of NPR’s On the Media, editor for Ad Age, and author
of The Chaos Scenario

Rogers uses great real-life case studies to show you how to stop thinking

about your customers as a mass audience and star t leveraging the knowl-

edge and conversations in their networks.

—Francois Gossieaux, founder and par tner, Human 1.0, and author, The

Hyper-Social Organization

In a hyperconnected world, a great switch has been fl icked: the power

formerly vested in boardrooms is surging to the people formerly known as

consumers. Asking your customers, then, to connect with you only in yes-

terday’s terms—through the practice formerly known as mass marketing—

is a surefi re recipe for irrelevance. So if you want to understand why your

customers might be tuning you out—and how to start tuning into the thicker,
stronger, more meaningful signals they’re already listening to—then this

thoroughly practical book should be your guide.

—Umair Haque, Director, Havas Media Lab

The Network Is Your Customer

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The Network Is

Your Customer

Five Strategies to Thrive in a

Digital Age

DAVID L. ROGERS

New Haven & London

Copyright © 2010 by David L. Rogers.

All rights reserved.

This book may not be reproduced, in whole or in part, including illustrations,
in any form (beyond that copying permitted by Sections 107 and 108 of the

U.S. Copyright Law and except by reviewers for the public press), without

written permission from the publishers.

Yale University Press books may be purchased in quantity for educational,

business, or promotional use. For information,

please e-mail sales.press@yale.edu (U.S. offi ce)

or sales@yaleup.co.uk (U.K. offi ce).

Designed by James J. Johnson and set in Electra type by

Integrated Publishing Solutions.

Printed in the United States of America.

Library of Congress Cataloging-in-Publication Data

Rogers, David L., 1970–

The network is your customer : fi ve strategies to thrive in a

digital age / David L. Rogers.

p. cm.

Includes bibliographical references and index.

ISBN 978-0-300-16587-6 (clothbound : alk. paper) 1. Business

networks. 2. Social networks. 3. Digital media—Social aspects. 4. Digital

media—Economic aspects. 5. Strategic planning. I. Title.

HD69.S8R646 2010
658.8⬘12—dc22 2010029162

A catalogue record for this book is available from the British Library.

This paper meets the requirements of ANSI/NISO Z39.48-1992

(Permanence of Paper).

10 9 8 7 6 5 4 3 2 1

For my family, my most cherished network

This page intentionally left blank

Contents

Preface

ix

Acknowledgments xiii

How to Read This Book

xvii

PART I: A New Model for Customers in the Digital Age

chapter 1: The Customer Network Revolution

chapter 2: Network Science and Lessons for Business

27

PART II: Five Strategies to Thrive with Customer Networks

chapter 3: Access: Be Faster, Be Easier, Be Everywhere,

Be Always On

53

chapter 4: Engage: Become a Source of Valued Content

80

chapter 5: Customize: Make Your Offering Adaptable to

Your Customers’ Needs

106

chapter 6: Connect: Become a Part of Your Customers’

Conversations 133

Contents

chapter 7: Collaborate: Involve Your Customers

at Every Stage of Your Enterprise

176

PART III: Leadership and the Customer Network–Focused

Organization

chapter 8: Planning and Executing a Complete

Customer Network Strategy

221

chapter 9: Creating the Customer Network–Focused

Organization 243
Self-Assessment: How Networked Is Your Business?

277

How to Continue the Conversation Online

283

Cases and Examples by Industry

284

Notes

287

Index

301

viii

Preface

The spark for this book began at the BRITE conference. I started the

BRITE conference series in 2008 at Columbia Business School,

where I am executive director of our Center on Global Brand Leader-

ship. The focus of BRITE is on “brands, innovation, and technology.”

Over three years, I have led half a dozen large BRITE conferences

and smaller senior leadership summits at Columbia and with the

Center’s partner business schools in Asia and Europe. These confer-

ences have brought together innovative companies and nonprofi ts,

cutting-edge entrepreneurs, and big thinkers of all kinds to share ideas

about the ways emerging technologies are changing business. Topics

we have explored include: open innovation, viral media, customer

infl uence on brands, and the disruption of long-standing business

models by the Internet.

One of the things I was amazed to see at BRITE was that our

most exciting new digital business ideas were not just coming from Web

companies like Google. The intense disruption wrought by the Web

and its digitally empowered customers was transforming businesses

far beyond the usual suspects of record labels and newspapers. I saw

innovative new practices emerging in industries like consumer pack-

ix

Preface

aged goods, automobiles, fashion, fi nance, education, philanthropy,

and politics, as well as in technology and new media.

At the same time, a lot of hype and overheated speculation

were being generated about what the digital future might hold (revo-

lution! capitalism reborn! power to the people!). I saw a need for a

practical and evidence-based approach to digital business strategy.

Through our research center and independently, I had advised and

consulted on strategy for numerous companies in a wide range of in-

dustries. What I found they needed most were some basic frameworks

for how businesses that are not aiming to be the next Facebook or

Google might still harness the power of the Web. I wanted to distill

some fundamental strategies and approaches that could work for busi-

nesses in the digital age, whether they were selling shoes or news,

software or health care.

So I decided to write my next book.

The research was fun and always surprising. It took me (virtu-

ally) from Iowa to Afghanistan and Tel Aviv to Tokyo. I got to investi-

gate not just consumer behaviors and innovative companies but in-

surgent political campaigns and creative musicians (of whom I am

also one, although I got better business ideas from looking at my mu-

sical peers). In keeping with my subject, I read voraciously on my

smartphone, in my RSS reader, on Web sites, and, yes, in printed

books. My network was always with me. In the Mumbai airport, at

a bar in Barcelona, or riding a rickshaw in Singapore, I shared arti-

cles with my research team via Evernote, reached out to business

leaders on LinkedIn, followed the discoveries of other writers on Twit-

ter (@david_rogers), and sketched my emerging themes on my blog

(www.davidrogers.biz).

The key insight I found as my research progressed is that cus-

tomers have changed. To thrive in our digital age, businesses need to

reimagine our customers: not as a mass of isolated individual actors

but as networks—with each customer as a node linking and dynami-

Preface

cally interacting with each other and with us. The network is your

customer.

This was not where I started. Like most observers, I started

out thinking a lot about new media—“social media”—and all its latest

shiny new forms. But I quickly realized this was a distraction. If we

instead take a careful look at the changes in our customers—their behaviors,

their motivations, and what they value—we can develop a

broad strategic view of how to create value and reinvent our busi-

nesses for a digital future.

By focusing on customers, I identifi ed fi ve core strategies that

any organization can use. Equally important, I realized that customer

network strategy is not just something that impacts communications,

social networking, or public relations. It has the potential to drive

sales, to enhance innovation, to generate customer insights, to reduce

operational costs, and much more.

As I wrote, I was lucky to have the chance to speak about my

ideas to business leaders, small entrepreneurs, students, advertising

agencies, nonprofi ts, and the press, in interviews, classrooms, and

conferences in the United States, Europe, and Asia.

Their responses convinced me of the importance of my topic,

as many explained how networks have transformed their relationship

to customers and offer great opportunities for their business.

I also heard a lot of great questions: What is the business im-

pact of customer networks? Is it better for some companies to not engage

with networks? How does a network strategy work in different

business categories? Can you measure the return on investment? How

do different customer network behaviors relate? How does a network

strategy work if I’m selling something that isn’t a sexy consumer prod-

uct? This book distills two years of hard thinking to answer these

questions.

Some friends asked me, why write a book about the Web?

(Isn’t that like painting a picture of a television?) But I’m not sure

xi

Preface

books are as antiquated as we imagine. Unlike my previous two books

(on marketing, brands, and customer experience), this one will not be

read only on paper. Many of you will read these words on an e-reader

like the Kindle or Nook, on a tablet like the iPad, or even on your

phones (squint, squint). Some have proclaimed that our ever more

cluttered media environment demands that writing become ever

shorter if it is to fi nd an audience. I disagree. I think the unique value of

long-form writing is not diminished; indeed, it may have grown

(even as we fi nd it harder to make the time for it).

A book offers a unique opportunity to explore an idea in depth

and vet a hypothesis in meticulous detail to see how it holds up after

the initial thrill of a bold discovery has worn off. It offers the challenge of
tying many ideas together and teasing out the complexities of their

relationships to one another.

The biggest challenge in writing a book like this is that you

are writing for the future. The fi rst words you commit to the page will

likely be read by your average reader two or more years later. This

forces you to step back from the news of the moment, the trends of the

day, and take a much broader view of your subject. Technology is

changing too fast for me to write about it here in an up-to-the-minute

fashion. (As I write this, my latest speeches already contain new cases

that are too recent to make it in the book.) This forced me to focus not
on technology but on the underlying behaviors that shape our adop-

tion of technology and give it impact and meaning.

By understanding our behaviors, as individuals linked and liv-

ing together in the seamless web of our digital networks, I hope to shed

some light on the opportunities that lie ahead for us all.

xii

Acknowledgments

This book would not have been possible without my own network of

supporters, contributors, teachers, advisers, and readers.

Numerous companies, nonprofi ts, and entrepreneurs contrib-

uted cases to this book by dint of their exceptional work with customer

networks. I am especially grateful to those whom I met through their

appearances at the BRITE conferences that I lead at Columbia Busi-

ness School. These include: Dave Carroll (“United Breaks Guitars”),

Robin Chase (Zipcar), Carol Koh Evans (Microsoft), Bob Greenberg

(R/GA), Marty Homlish (SAP), Lisa Hsia (Bravo Media), David Hsieh

(Cisco), Tony Jebara (Sense Networks), Pamela Kaufman (Nickel-

odeon), Mark Kershisnik (Eli Lilly), Sylvia Marino (Edmunds), John

Mayo-Smith (R/GA), Alyson Meranze (American Express), Freddy

Mini (Netvibes), Ed Moran (Deloitte), Adam Nash (LinkedIn), Craig

Newmark (craigslist), Bre Pettis (Makerbot), Penry Price (Google),

Avner Ronen (Boxee), Vivian Schiller (NPR), Adam Selig (Visible

Technologies), Dwayne Spradlin (InnoCentive), Paal Smith-Meyer

(LEGO), Stephen Voltz (Eepy Bird), Luke Williams (Frog Design),

and the many other companies and speakers at BRITE that did not

make it into the book but inspired and informed it. I’d like to give a

special thanks for additional in-depth interviews with Richard Binham-

xiii

Acknowledgments

mer (Dell), Sandy Carter (IBM), Thomas Gensemer (Blue State Digi-

tal), and Mark Yolton (SAP).

Thanks are also due to the writers who have joined me at

BRITE and helped shape my thinking on networks, customers, and

business, including: Seth Godin, Francois Gossieaux, Umair Haque,

Jeff Howe, Jeff Jarvis, and Steve Rubel. A handful of others contrib-

uted critical ideas, though we never met offl ine: Albert-László Bara-

bási, Kevin Kelly, Clay Shirky, and Fred Wilson, thank you, as well.

But ideas are one thing; a fi nished book is quite another.

This book would not have happened without my agent, Jim

Levine, and my editor, Michael O’Malley. Each gave his enthusiastic

support and commitment to the project from the earliest stages and

provided valuable feedback as I developed the ideas into the full work

you see today. Kerry Evans at Levine Greenberg and Niamh Cun-

ningham and the editorial team at Yale University Press were constant

supporters at each stage of the process.

Bernd Schmitt was an invaluable advocate for this project,

prodding me to write the book and supporting its development at

every stage, beginning with the BRITE conference where so many of

my ideas began to take shape.

Jim, Michael, and Schmitt each gave detailed and invaluable

feedback to the manuscript at various stages, asking the right ques-

tions, pushing for clarity, and letting me know when I was on the right

track. Matthew Quint, Francois Gossieaux, and Richard Cacciato

were generous with their time in reading the manuscript and offering

excellent suggestions. Karen Vrotsos was a matchless editor, bringing

a fresh eye, an inquiring sensibility, and a keen sense of cadence to

the fi nal prose. Laura Jones Dooley gave an expert and invaluable

fi nal edit.

The research for the book was critically assisted by several

staff at our Center on Global Brand Leadership at Columbia Busi-

ness School. Danielle Bailey was my lead research assistant, tracking

xiv

Acknowledgments

down countless sources, pitching cases and examples for my consid-

eration, and serving as a sounding board. David Platt and Eileen Al-

hasic were of great help as I gathered my citations at the end of writ-

ing. Anna Fokina did a wonderful job bringing my scribbled

illustrations to life, as did Stephanie Shieh for the “A-E-triple-C” icons

that helped me remember the chapters of my own book.

I’d like to give a special thank you to Matthew Quint, Nancy

Oti, Dina Shapiro, Nick Peterson, John Davis, Jin Han, Cara Toh,

Joshua Safi er, Jennifer Tromba, Yaron Samid, Lloyd Trufl eman, Bill

Sobel, and all our tireless staff and volunteers who have made the

BRITE conference possible each year—and to the more than one

thousand insightful attendees and speakers who make up the vibrant

BRITE community.

My greatest and most enduring thanks go to Karen and George,

who supported, encouraged, fed, nudged, and loved me through

months of work while I wrote this book.

And thank you for reading it!

xv

This page intentionally left blank

How to Read This Book

This is meant to be a practical book.

It has a lot of stories—about a networked improv comedy act,

a Japanese newlywed writing a novel on her phone, Barack Obama’s

highly encrypted BlackBerry, American soldiers blogging in the war

zone, and a young Israeli entrepreneur’s quest to make his television

work better, among others.

The book also offers more than a hundred case studies and

examples of businesses applying strategic and innovative thinking to

customer networks. And it is organized to provide a few key frame-

works that should help you do the same in your own organization,

whatever it may be.

Depending on where you are in developing your strategy for

customers in the digital age, you may want to choose certain parts of

this book to focus on or read the parts in a different order.

So let me offer a quick user’s guide to this book.

Chapter 1

In this chapter you will fi nd an overview of the book’s key

concepts: what customer networks are, why they matter, and the

range of impact they can have on organizations. The chapter intro-

xvii

How to Read This Book

duces the fi ve core behaviors of customer networks and the fi ve strate-

gies that any organization can use to leverage them.

Use this chapter to orient yourself for the whole book.

Chapter 2

This chapter provides a more detailed and formal defi nition of

what a “customer network” is. It also steps back to provide some back-

ground—from the science of networks and the history of technology—in

order to shed light on the bewildering changes being wrought by to-

day’s digital tools. It concludes with a rethinking of the purchase fun-

nel and some of our other basic models of business.

Depending on questions you may have after chapter 1, you

may want to dig into this chapter next or come back later for addi-

tional background.

Chapters 3 to 7

This is the case study–fi lled “how to” heart of the book.

Each of these fi ve chapters explains one of the fi ve core cus-

tomer network strategies. Each chapter also presents several different

approaches to that strategy—for example, six approaches you might

use for an engage strategy. My aim is to make each strategy extremely

concrete for readers, and to show how each strategy might work in

your organization.

Each chapter presents over two dozen case examples, high-

lighting the best practices of different businesses. Cases were carefully

chosen to refl ect a variety of organizations: large and small, business

and nonprofi t, as well as consumer goods and services, B2B, media,

and technology companies. Most important, cases were chosen for

having proven benefi ts and clearly achieved business objectives.

As you begin developing your own customer network strategy,

you may refer back to chapters 3 to 7 for specifi c approaches and case

examples.

xviii

How to Read This Book

These chapters also explore key customer behaviors shaping

each strategy (for example, the rise of an on-demand culture, the

splintering of our attention among media, or the desire to collaborate

with others around shared values).

Each chapter ends with a peek at emerging trends (“The Fu-

ture of . . .”). These trends are already starting to impact customer

network behavior, but they are too nascent to offer case studies of how

companies will use them for business goals. I hope they may spur

your own thinking, so that your organization might provide one of the

fi rst case studies that we can learn from.

Chapter 8

Many business leaders see a promising new digital strategy

and simply jump in, trying to emulate another company’s success with-

out thinking through their own objectives or how the strategy might

best fi t their own business, customers, and competitive landscape.

Chapter 8 provides a fi ve-step planning and implementation

process to guide this thinking, so that customer network strategy is not

just driven by enthusiasm but is as carefully developed as any other

business strategy.

For larger and long-standing organizations, this management

process will help you apply a new conceptual framework (customer

network strategy) to your existing departments and business processes.

For any reader, whether a division manager or a CEO, it

should give you a road map to begin developing a customer network

strategy for your own organization.

Chapter 9

As a leader, you need to consider more than just having the

right strategy. Dwayne Spradlin, CEO of InnoCentive, told me once,

“Culture eats strategy for lunch.”

Leadership for customer networks requires more than just

xix

How to Read This Book

planning and implementing a single project or initiative. It requires a

fundamental shift in the orientation of an organization.

In chapter 9, I address the questions of “What will the organi-

zation of the future look like?” and “How do we create an organization

that is not just customer-focused, but customer network–focused?”

Drawing on interviews from inside some of the most forward-looking

organizations in business, technology, and politics, I offer a few key

principles that will defi ne the customer network–focused organization.

Leaders of established businesses that grew up before the rise

of customer networks need to ask themselves: What assumptions about

our business do we need to reconsider? How does our culture need to

change? What new skills and capacities do we need to foster? This

chapter will help you answer these questions.

Self-Assessment Quiz

One of my readers got to the end of my manuscript and said,

“I love this and want to get my team working on our customer net-

work strategy now. Can you give me a simple assessment tool that I

can give them, before they’ve read the whole book?”

That’s what this is. The list of questions here should help you

start thinking through where your business is right now, where your

customers are, and what your objectives might be.

How to Continue the Conversation Online

Because the subject of customer networks is so dynamic,

there will surely be much more to say, and many cases to explore, as

this book comes to print.

I hope you will join me at my Web site, www.davidrogers.biz,

where I will continue to write about cases and trends in customer

networks, and where I will ask for your input and contributions as

readers and experts in your own fi elds.

xx

A
R

A New Model for Customers

in the Digital Age

This page intentionally left blank

CHAPTER1

The Customer Network Revolution

Look closely at a bee.

You may see it fl ying from tree to bush, seeking the best nectar

to drink. You may watch it gather pollen on the bristles of its hind legs.

Or you may marvel as it secretes wax to build hexagonal cells in its hive.

Observing the bee up close, you might mistake this industrious insect

for a solitary hunter-gatherer, seeking food, building a shelter, acting

alone.

But look at the bigger picture, and you see a different story.

This single bee is part of a vast, thriving colony of more than ten thou-

sand bees: highly social insects that cooperate closely in seeking food,

building a hive, and reproducing. The colony is capable of coordinated

action, but it has almost no formal hierarchy or leadership, no more

than a school of fi sh or a fl ock of gulls. The “queen” bee is really more of
an indentured servant, tasked with producing thousands of eggs.

She is in charge of very little else. Yet despite the simple roles played

by each of its members, a powerful group intelligence emerges from

the colony as a whole. This is networked intelligence.

The organization of a bee colony depends on a web of con-

stant communication. The bees communicate as they build the brood

A New Model for Customers

comb together, place the pupae of offspring into cells, and seek out

new and better sources of food. The precise means of bee communi-

cation remain a mystery. But they appear to include a combination of

pheromones, low-frequency sounds, and a miniature dance of fi gure

eights and body shakes (the bee’s “waggle”). The lone bee that you see

hovering in a fi eld of clover has most likely found its chosen fl ower by

following the directions communicated by others in the hive. And

when the time comes to resettle en masse, a signal among them will

trigger thousands of bees to swarm out of the hive and establish a new

colony for the future.

Like the swarming bees in a hive, we humans are linked to-

gether today by an invisible web of communications. But instead of

waggles, hums, and pheromones, we communicate by the digital

technologies that permeate every aspect of our lives.

These technologies include the Web browsers that connect

us to the trillion-plus pages of the World Wide Web via our computers

and our smartphones. They include such messaging technologies as

email, instant messaging, Skype, texting, and Twitter. They include

technologies to download or stream radio podcasts, videos, photos,

and songs to our pocket-sized media players, to our laptops, or to

Net-enabled boxes attached to our TVs. These Internet technologies

run on devices that are increasingly embedded not just in our com-

puters and phones but in our game consoles, our cars, and even our

shoes.

Our constantly multiplying digital tools connect us to more

than just products, companies, and media channels. Far more impor-

tant, they connect us all to one another. The digital fl ow of our data,

our ideas, our commerce, and our identity turns each of us into a

node in an enormously powerful network of human interaction. It is

a network capable of spreading ideas, running businesses, organizing

political action, and subverting institutions. We are the network, and

the network is us.

4

The Customer Network Revolution

A New Paradigm: Customer Networks

The impact of this new network on businesses and organizations of all

kinds is profound. As the Internet links us in networks, it is transform-

ing customers’ relationships to each other and to organizations. Every

organization today must realize that its customers—whether shop-

pers, business clients, charitable donors, or election voters—are be-

having radically differently than in the predigital era. Our approach to

business must change to match.

Business in the twentieth century was based on a model that

viewed customers as isolated and passive individuals. With the rise of

mass media, such as radio and television, businesses could reach ex-

tremely large audiences of customers, but businesses could not market

to each of them as individuals. Business practice was therefore de-

signed to suit the paradigm of a mass audience. Under this paradigm,

product development, manufacturing, and communications were all

designed to suit the aggregate behaviors of masses of individuals.

Today, business needs a new paradigm: the customer net-

work. In customer networks, customers are no longer viewed as iso-

lated individuals but are seen as dynamic and interactive participants

in a network. These customers are constantly responding, connect-

ing, and sharing among themselves and with businesses they care

about. To succeed, businesses, nonprofi ts, and organizations of all

kinds need new strategies that match the behavior of customer net-

works. But fi rst we need to rethink our image of our customers, from

individuals to networks. We need to stop thinking about the bee and

focus on the hive.

Four Stories of Customer Networks

Businesses need to change the way they think about customers be-

cause the rise of customer networks has given much more power, in-

dependence, and infl uence to individuals.

A New Model for Customers

To illustrate, let me start with four short stories that show the

infl uence of customer networks.

Challenging Authority

Until recently, if a government controlled its country’s mass

media, individual citizens had no way to spread their own point of

view, to get their voices heard outside their borders, or to organize

themselves easily on a large scale. With the rise of customer networks,

however, even the most authoritarian government has much less con-

trol over the fl ow of information.

In the summer of 2009, the supreme leader of Iran announced

that incumbent president Mahmoud Ahmadinejad had won reelec-

tion in a landslide during the fi rst round of voting. The announce-

ment was widely disbelieved by supporters of the opposition candi-

date, who had expected that a close vote would force Ahmadinejad

into a second-round run-off election.

Iranians took to the streets in the hundreds of thousands, but

they didn’t just march. They used every variety of digital technology

available to communicate with each other and the outside world, in-

cluding the Twitter microblogging service. Although the Iranian gov-

ernment ruled the airwaves and promptly ejected every foreign re-

porter from the country, still the protesting citizens were able to report

their own view of events on the ground. The U.S. State Department

even requested that the owners of Twitter delay a scheduled mainte-

nance that would have taken down the service in order to leave it ac-

cessible to citizens of Iran during the protests.

As days of turmoil led to a brutal crackdown in the streets of

Iranian cities, local citizens spread images of the violence online to

viewers around the world as evidence against the regime. The murder

by security forces of one young Iranian woman, Neda Agha-Soltan,

was fi lmed on a cell phone, and the video clips spread rapidly online,

making her a martyr and symbol of the struggle for Iranians. The pro-

The Customer Network Revolution

testers’ call for a rerun of the election was not successful. But in this

new globally networked world, the government could not easily

squelch the voices of their protest.

Bashing a Brand

It used to be that if a customer had a terrible experience with your

business, you might lose a customer for life. Perhaps, if that customer told
family members or friends, your company might lose a handful of
customers. That would have been the worst that could happen. Now, because
of

the power of customer networks, one bad customer experience can poten-

tially have a huge impact on the image of a business or brand.

Take the experience of singer-songwriter Dave Carroll, who

was traveling from Halifax to Nebraska with his band, Sons of Max-

well, when United Airlines badly damaged his guitar. The airline ad-

mitted the damage, but for nine months it passed the buck, refusing
to compensate Carroll for the $3,500 in repairs to his instrument.

After speaking to the last customer service agent who refused to help,

Carroll promised United that he would write three songs about his

experience. The fi rst song, “United Breaks Guitars,” turned into a

comical YouTube video that hit a nerve with customers everywhere.

The video featured country-style lyrics and comical images: luggage

handlers ineptly tossing guitar cases through the air, a crime-scene

outline of the “victim,” sour and indifferent airline offi cials, and

Carroll’s band singing woeful harmony while gazing over his broken

instrument in a burial casket.

Within two days, the video had been watched more than a mil-

lion times and United was contacting Carroll to apologize and offer

him compensation (he declined but suggested they donate the money

to charity). United promised to mend its customer service ways, but it

was too late to prevent the hit to the company’s reputation. Within a

few months, the video had been viewed more than fi ve million times

and attracted thirty-fi ve thousand comments from customers. Those

A New Model for Customers

millions of viewers did not fi nd United’s actions a laughing matter: an

independent analysis found “the vast majority of comments citing

bad experiences, boycotts, and even other broken guitars.” 1

When United Airlines fi nally met with Carroll and an-

nounced new luggage policies, the company told him that they had

never made the policies before because his problem was “statistically

insignifi cant.” In the world of customer networks, every customer ex-

perience can be signifi cant.

Loving a Brand

Customer networks don’t only hurt brands; they spread positive

word of mouth as well. In 2008, a Facebook page for one of the world’s

most popular brands, Coca-Cola, rocketed to the number two spot on the

social networking site, with more than three million fans “friending” and

visiting the page to express their affection and affi nity for Coke.

What was surprising, though, was that the page was not cre-

ated by anyone in Coca-Cola’s marketing department or any of its

advertising agencies. It was created by two customers: Dusty Sorg, an

aspiring actor in Los Angeles, and his friend Michael Jedrzejewski.

Facebook users around the world soon began to come to the site and

post their own photos of Coke advertising and packaging, Coke deliv-

ery trucks, Coke vending machines around the world, Coke tattoos,
Coke memorabilia, and themselves drinking Coke. They also posted

comments in many languages:

“I was at Disneyland yesterday . . . drinking a Classic Coca-Cola :-)”

“i lv coke.........................................”

“hımm:)seni her türlü içerim”

“COKE ZERO MY FAVE THOUGH”

“Para mi es más necesaria la Coca Cola que el aire que respiro!!!”

“I just cannot live without you hahah. Coca Cola 4 life! (drinkin

cola every sec of the day :p)”2

The Customer Network Revolution

Within a few weeks, the page had 750,000 fans; within four

months, the number was well over a million. The exact reason was a

mystery to Dusty and Michael. They hadn’t launched an advertising

campaign, gone on the radio to tell the world, or otherwise publicized

it. In fact, there were more than two hundred other Coca-Cola pages

on Facebook, but none had come close to their growth. Something

about their page or, more likely, the network of Facebook friends that

they were linked to, and that their friends and friends’ friends were

linked to, had tapped into a powerful connection to the Coke brand
and spread their page through the network of Facebook users.

Then, three months after the page had been posted, Face-

book announced a new rule forbidding fan pages for brands that were

not owned by the company they represented. Dusty and Michael’s

page would either have to be shut down or given to Coca-Cola to

manage. Coke’s management was not pleased. They had no interest

in squelching the enthusiasm of their customers or putting them

under the corporate thumb. So instead, when Facebook handed the

page’s ownership over to the company, Coca-Cola handed manage-

ment of the page right back to Dusty and Michael. The page, and its

network on Facebook, continued to grow and thrive.

Driving Your Business

Customer networks are not just infl uencing brand image and

corporate reputations, however. They are also creating whole new

business models for companies.

It used to be that if you wanted to start a clothing company, you

needed to invest a lot of capital in product design, in marketing and pro-

moting your brand, and in manufacturing and launching a variety of

styles for each season—knowing that many styles would inevitably fail.

Jake Nickell and Jacob DeHart couldn’t afford the traditional

model for a clothing business when they started their company as

nineteen-year-olds. They had only a thousand dollars to launch the

A New Model for Customers

hip, urban T-shirt business they called Threadless. The two Jakes

couldn’t rely on the old business model, so they built a new one driven

by the power of their customer network.

Instead of hiring designers, the Jakes invite their customers to

create designs for T-shirts and upload them at the Threadless Web site

to compete in design contests. Winners receive a cash prize (which

has grown from $100 to $2,500), but submissions are motivated just as

much by the customers’ desire to see their T-shirt designs come to life

and be worn by others. Once their designs have been submitted, cus-

tomers have a strong incentive to send everyone they know to the

Threadless site to check out the contest and to vote for their design.

Instead of advertising, the company lets its own customers spread the

word. The winning contest designs get printed by Threadless and are

then sold back to the same customers who voted for them.

Jake and Jacob now have a thirty-million-dollar clothing busi-

ness with a 30 percent profi t margin, thanks to some unusual features:

zero advertising cost, virtually no product development costs, and a

100 percent success rate for their product launches, because every

one of them has already been preselected and voted on by the cus-

tomers who will buy it. 3

The Challenge of Customer Networks

Faced with the growing power of networked customers, every busi-

ness today faces a stark choice: Will your customers be your biggest

competitor? Or will they be your biggest business driver?

Right now, two college kids with a Wi-Fi connection could be

starting up the next craigslist, Napster, or YouTube. Your customers can

easily become your biggest competitive threat. They can also become

your best focus group, product developers, and volunteer marketing force.

To choose the right course, however, a business must develop a strategy to

engage with customer networks at every stage of the enterprise.

10

The Customer Network Revolution

Let me be clear: Pursuing the same mass-market business

strategies of the past and slapping up a Facebook page or launching a

Twitter account is not a customer network strategy.

As companies seek to respond to the growing power of cus-

tomer networks, they too often fall prey to the same basic mistakes:

• Infatuation with Technology: Executives read the business press,

see a list of the latest hot social media, and tell their managers:

Let’s get some of that!

• Lack of Customer Insight: Companies launch plans without tak-

ing the time to understand the networked behavior of their cus-

tomers and what is driving that behavior.

• Lack of Clear Objectives: Without a clear vision for how the

strategy will affect the business’s bottom line, efforts become

unfocused, lack impact, and are impossible to measure.

• Limited Scope and Vision: A few people in public relations or

communications are tasked with managing customer networks,

with no vision of how networks could transform other divisions

such as market research, innovation, sales, or marketing.

The results of these mistakes are all too clear. Large, success-

ful brands launch Twitter accounts without considering who will fol-

low them and why, only to see them languish with few followers and

even fewer customers actually interacting with the brand. Other com-

panies vainly hire ad agencies to fi lm funny videos that they hope will

go “viral” online. According to the 2009 Tribalization of Business

Study, one third of all online communities launched by businesses

fail to attract even a hundred participants.4 Without clear strategic planning,

such investments lead to efforts that neither inspire nor engage customers
and have zero impact on business.

An effective customer network strategy can be a powerful driver

of product innovation, brand engagement, and cost savings for business.

But to effectively inspire sales, loyalty, innovation, or word of mouth

among customer networks, businesses need to do more than post a funny

11

A New Model for Customers

video or jump on the latest social networking site. They need to do more

than harness tomorrow’s technology to sell last year’s products.

To survive and thrive today, companies need to understand

the core underlying behaviors of customer networks. And then they

need to innovate products, services, and experiences that help cus-

tomer networks get what they want.

So . . . what do customer networks want?

To learn the answer, companies need to stop focusing just on

new technologies and start paying attention to new and emerging customer
behaviors. They need to understand the network dynamics that persist even
as technologies rapidly change and evolve. How do customers behave in
networks? What do they value? What will they pay for?

Five Customer Network Behaviors

We now have four decades of experience living with the Internet, a

network of networks; fi fteen years of broad public use of the World

Wide Web; and nearly a decade since the adoption of widespread so-

cial media tools in the Web 2.0 era. By observing which media have

been embraced and how customers have used them, which new busi-

nesses have fl ourished, and which old brands have successfully adapted

to customer networks, we can begin to identify a few broad, underly-

ing usage patterns. I call these core customer network behaviors.

First, customers in networks seek to freely access digital data,

content, and interactions as quickly, easily, and fl exibly as possible.

Whether it is instant communication on our smartphones, on-demand

television from our digital cable boxes, or having a world of informa-

tion at our fi ngertips with search engines, we want it all and we want

it now. Increasingly, wherever we go, our choice of where to work or

play is infl uenced by the availability of Internet access without logins,

fi rewalls, or fees. The next generation of real-time data, location-aware

12

The Customer Network Revolution

mobile services, and cloud-computing technology will put each of us

in even closer and more constant contact with our networks.

Second, customers seek to engage with digital content that is

sensory, interactive, and relevant to their needs. We may be reading

fewer newspapers and magazines than fi ve years ago, but major news

publishers have more readers than ever. In Japan, a new literary genre

has emerged, the cell-phone novel, written for the smallest screen.

Internet video has become an established medium for everything

from amateur musicians to corporate communications. Gaming has

moved from a niche activity of hardcore fanboys to a medium for all

ages that is used for pleasure, learning, and even work. New mobile

operating systems are turning portable devices like phones, tablets,

and e-readers into our newest tools for engaging text, audio, and video.

Third, customers seek to customize their experiences in net-

works by choosing and modifying a wide assortment of information,

products, and services. Online retailers have accustomed us to a vast

range of choices that could never be matched by a physical book,

music, or video store. The Web itself is the ultimate customizable

medium, with a trillion pages to choose from as you browse for con-

tent, news, or commerce. Hypertext, RSS feeds, and widgets have

made digital content highly customizable and point to the future of

an increasingly personalized Web. But an overload of choices will make

recommendation engines and fi ltering tools increasingly important.

Fourth, customers seek to connect with one another by shar-

ing their ideas and opinions in text, images, videos, and social links.

Every day, tens of thousands of hours of video are uploaded to the

Web for sharing, along with countless photos, customer product re-

views, status updates, blog posts, and comments in discussion forums.

Across the world, people, brands, book clubs, and rock bands connect

with their “friends” on various social networking sites. They spend

time there for diverse goals, from friendship and dating to business

13

A New Model for Customers

networking and self-expression. Chronically ill patients are even using

social networks to compare results on different therapies. Increasingly,

our relationships in social networks are portable to other Web sites,

allowing us to personalize and enrich all of our digital experiences.

Fifth, customers seek to collaborate on collective projects and

goals through open platforms. Beyond just sharing ideas and conver-

sations, networked customers are mobilizing together to measure traf-

fi c fl ows, write computer software, and elect political candidates. Mil-

lions of voters have joined online networks to raise money and organize
in the offl ine world of phone calls, door-to-door canvassing, and hosting

house parties. With varying skills, others are collaborating online to

write encyclopedias, sustain journalism under totalitarian regimes, or

design clothes for their friends. Today’s digital tools allow groups to

form and collaborate easily across great distances, whether motivated

by curiosity, personal interests, or deeply held social values.

The order of these fi ve behaviors refl ects a progression from

fundamental value (to the customer) to complex value (to the cus-

tomer). This can be thought of as a parallel to psychologist Abraham

Maslow’s Hierarchy of Needs, which ranks human needs from the

most basic (physiological needs such as air, food, and water) to those

that are related to identity and purpose (the need for esteem, respect,

and morality). 5 Although they do not match Maslow’s categories, the fi ve

customer network behaviors are similarly ordered from the most

basic to the most complex value to the customer:

• Access: The ability to actually connect to networks easily, fl exibly, and

effectively

• Engage: The ability to fi nd relevant and valuable content and

experiences in networks

• Customize: The ability to match or adapt those network experi-

ences to unique customer needs

• Connect: The ability to express oneself and communicate with

other customers in networks

14

The Customer Network Revolution

• Collaborate: The ability to engage in purposeful action, with

shared goals, in networks

The relative priority of these values is not fi xed. We cannot gen-

eralize and say that “it is always more important to a customer to collaborate
than it is to connect, ” or even that “if a customer has achieved some ability
to engage, then he or she will focus on trying to customize. ”

Nor do these fi ve behaviors exist in isolation. In many digital

experiences, a customer may be simultaneously fulfi lling multiple

core behaviors (for example, seeking easy access to customized con-

tent). But understanding the unique value and importance of each of

these behaviors by itself can shed light on their cumulative effect.

Understanding them together offers a unique view into the motiva-

tions that continue to shape customer choice and actions as the tech-

nology of our digital networks rapidly evolves.

Last, the impact of these behaviors does not remain solely in

the world of digital bits and online experiences. Each of these fi ve

behaviors in online networks shapes our choices and actions in the

offl ine world as well, whether it is the places we travel, the votes

we cast, or the products and services we purchase. Ideas and conversa-

tions that start in digital networks quickly spread over into offl ine re-

lationships and interactions, and back again.

Five Customer Network Strategies

For organizations and businesses, the fi ve customer network behaviors—

accessing, engaging, customizing, connecting, and collaborating—can

provide the key to creating value, building strong relationships, and

designing products and services for customers in our digital age.

These

fi ve core behaviors provide the basis for fi ve powerful

strategies for customer networks: the access, engage, customize,

connect, and collaborate strategies (fi g. 1.1). You may remember

these as A-E-C-C-C, or “A-E-triple-C.”

15

A New Model for Customers

Customer Network Behaviors

Five Customer Network Strategies

be faster, be easier, be everywhere,

ACCESS

be always on
ENGAGE

become a source of valued content

make your offering adaptable to your

CUSTOMIZE

customers’ needs

become a part of your customers’

CONNECT

conversations

invite your customers to help build

COLLABORATE

your enterprise

Figure 1.1 Five customer network behaviors and fi ve core customer

network strategies. Illustration by Anna Fokina.

This book explores each of these fi ve strategies in detail and

examines how they have been successfully applied by a variety of

businesses and organizations. Here is a brief overview.

The ACCESS Strategy: Be Faster, Be Easier,

Be Everywhere, Be Always On

Every organization today faces the expectations of an always-

on world. To compete, businesses must fi nd ways to provide custom-

ers an easier, faster, more pervasive connection to digital networks.

Providing always-on Web connections to customers allows a service

16

The Customer Network Revolution

business like Virgin America airline to differentiate itself from com-

petitors. On-demand business models—such as USAA’s digital bank-

ing and Zipcar’s auto rentals—meet customers’ desire for more fl exi-

ble service. As smartphones make our networks increasingly mobile

and location aware, companies from Urbanspoon to Sears are fi nding

new ways to let customers browse, discover, and purchase on the go.

Meanwhile, cloud computing makes data accessible from anywhere,

and real-time feeds make it accessible at anytime, allowing compa-

nies from Coca-Cola to Serena Software to communicate faster and

better with employees. Businesses like Nike and Lifescan are connect-

ing customers to their data by embedding digital access in more and

more products, from cars to medical sensors to running shoes. And e-

tailers such as Amazon.com and products like the Flip Video camcorder

demonstrate how offering simpler and easier digital access can increase

sales and market share. By providing new and better kinds of network ac-

cess, businesses can make themselves indispensable to customers’ lives.

The ENGAGE Strategy: Become a Source of Valued Content

In the predigital age, companies could piggyback on mass media

such as television and radio to buy customers’ captive attention and blast

them with advertising messages. But in an environment of abundant

media and rampant ad-skipping, businesses that want to engage cus-

tomer networks need to create content that customers will actually want

to consume. Today, every business needs to think like a media business.

On sites like the American Express OPEN Forum and Dell’s digitalno-

mads.com, companies are engaging audiences by creating content that

is extremely useful for their core customers. Others, from Methodist

University Hospital to the Broadway musical Spring Awakening to New

Jersey retailer Wine Library, are engaging customers by showing an
authentic and personal face in their media. By focusing on niche audi-

ences and their particular interests, companies from General Electric to

Mercedes-Benz are creating content that engages infl uential segments.

17

A New Model for Customers

And businesses from IBM’s consultants to the makers of Webkinz stuffed

animals are engaging audiences and driving profi ts via interactive online

gaming. By becoming a source of valued content, media, and informa-

tion, companies can deepen relationships with customer networks that

are increasingly diffi cult to sway with conventional advertising.

The CUSTOMIZE Strategy: Make Your Offering

Adaptable to Your Customers’ Needs

Networked customers are not looking for cookie-cutter expe-

riences, identical content, and mass-produced products, especially in

the digital realm. By giving them tools to customize products, ser-

vices, and content to suit their needs and interests, businesses can add

real value that will differentiate them from competitors and engage

their customers more deeply. Personalized playlists allow brands like

Nissan and media companies like Pandora and NPR to provide cus-

tomers with exactly the content they are looking for. Thanks to Web

interfaces and digital prototyping, customers can also “mash up” and

customize physical products and services, such as the Nike ID shoe

line or the services at Affi nia Hotels. Choice can give your business a

human face, as the charity Kiva found when it let donors choose the

project they wished to fund online, whether it was a mother in Gua-

temala who needed four hundred dollars for equipment to start a tai-

loring business or a farmer in Angola who needed three hundred dol-

lars for new goats to milk. Other businesses have created platforms for

choice, among them HP’s Magcloud for custom magazine design

and Ponoko’s Web-based service for the custom manufacturing of

furniture, toys, or jewelry. But companies need to beware of what

psychologists have called the paradox of choice and not overwhelm cus-

tomers with disorganized options. This is why Netfl ix offered a million-

dollar prize to help improve its Cinematch movie recommendations.

Choice schemas, recommendation engines, and new social fi ltering

tools are essential to the future of digitally customized experiences.

18

The Customer Network Revolution

The CONNECT Strategy: Become a Part of

Your Customers’ Conversations

Customers are constantly sharing ideas and opinions on the

Web today in social media conversations that shape brand perception.

Companies can benefi t by joining these conversations—either in

popular forums like Facebook and Twitter or by creating their own

forums where customers express themselves. Joining the conversation

on established social networks allows organizations to connect with

their customers, whether it is Red Bull on its Facebook page, drug

maker UCB on the PatientsLikeMe epilepsy community, or Kogi Ko-

rean BBQ’s conversations on Twitter. Other businesses, such as Ford

Motor Company and Bravo Media, host their own forums for passion-

ate users to share opinions, start discussions, vote in polls, and connect

with one another. By asking customers for ideas, platforms like My-

StarbucksIdea.com and Dell’s IdeaStorm help companies innovate

valuable new products and services. In other cases, companies can

integrate the customer’s voice into their own, as in the March of

Dimes “Every Baby Has a Story” social marketing campaign or the hit

TV show iCarly, whose viewers upload their own videos and photos

in hopes of becoming part of the next episode. Customer conversations

can also add a layer of value to a business, as in Microsoft’s customer-

driven support forums, or the Epicurious.com recipe site, where users

add creative variations to each posted recipe. By connecting with cus-

tomers in their conversations online, businesses can build stronger

relationships, gain valuable insights, and build their brands.

The COLLABORATE Strategy: Invite Your Customers

to Help Build Your Enterprise

One of the most powerful ways to engage customer networks

is to invite them to collaborate with your business on shared goals and

projects. Collaboration can take many forms. Passive contribution

systems, such as the Dash car navigation system or SETI@home,

19

A New Model for Customers

allow users to contribute things like real-time traffi c information or

computer scanning of images from space to assist in large-scale data

projects. Active contribution systems allow customers to work on

small parts of a collective effort, such as contributing news photos to

CNN’s iReport, adding details to an online tax guide for Intuit, or

raising money for the next album by pop band Five Times August. In

open competitions, customers compete to develop the best solutions

to a challenge, whether it is a new T-shirt design for Threadless, a new

venture business plan for Cisco, or the design for a hundred-mile-per-

gallon car sponsored by Progressive Auto Insurance. By creating de-

fi ned platforms for others to build their own businesses, companies

like eBay, craigslist, and CD Baby can unleash tremendous creative

and economic activity by users. With open platforms—such as open

source code, software development kits, and Application Program-

ming Interfaces—Apple has attracted thousands of programmers to

develop applications for the iPhone and transform it into a category-

defi ning product. Using open platforms, New York City’s government

enlisted citizens to develop apps that make its public data more open
and useful for everyone. To collaborate with customer networks, busi-

nesses need to fi nd the right balance of motivators for participants

(love, glory, and money), to understand which large problems can be

divided into smaller tasks, and to strike the right balance of bottom-up

versus top-down control.

The Business Impact of Customer Network Strategy

As should be clear, these strategies are not just about creating good-

will on a few blogs or amorphous customer “buzz”; they can lead to

real business impact. Customer network strategies can be used to

achieve a variety of business objectives, including product differentia-

tion, speed to market, more effective sales channels, reduced costs for

customer service, customer loyalty and word of mouth, brand aware-

20

The Customer Network Revolution

ness among hard-to-reach target segments, customer insight, expanded

innovation resources, and improved knowledge management.

Customer network strategy is not just for small start-up busi-

nesses. It can be effective for organizations of all sizes—midsize local

businesses, Fortune 500 companies, and multinational giants.

Customer network strategy is not just for web and technology

companies, either. It can be effective for a wide variety of categories—

fashion, electronics, retailers, pharmaceuticals, business consulting, con -

sumer packaged goods, nonprofi ts, rock bands, and political campaigns.

Nor is customer network strategy only useful in reaching out

to end consumers. It is also effective in connecting with business cus-

tomers, external partners, and an organization’s own employees.

A few examples of the customer network strategies featured in

this book, and their business impact, include:

• Apple: Which tapped a network of outside developers to design

more than a hundred thousand apps to run on its second-gen-

eration iPhone, generating new revenue and transforming the

smartphone category.

• Author Stephenie Meyer: Who reached out to early fans in online

communities to build the cult following that propelled her Twi-

light series of vampire books into all four top slots of USA Today’s Best-
Selling Books list.

• Nike: Which launched the world’s largest running community,

with more than a million members who use digital sensors to

track, compare, and share their athletic performance and goals.

• Dell: Which gave voice to half a million customers on its Idea

Storm site and generated more than ten thousand ideas for new
product development.

• Canadian toymaker Ganz: Which reinvented the stuffed animal

product category with its Webkinz toys that children play with in

an online virtual world, an innovation that earned over a hun-

dred million dollars in annual sales.

21

A New Model for Customers

• Kraft Foods: Which created a branded iPhone application fea-

turing thousands of recipes made with Kraft products and then

charged customers for the app, selling more than a million copies.

• Ford Motor Company: Which, before the launch of the Ford

Fiesta, generated an astonishing 38 percent awareness among

Gen Y consumers, not with an ad campaign, but by selecting

one hundred young people to spend six months with the car and

share their unedited experiences online.

• Cisco: Which found what may be its next billion-dollar business

through an online contest that yielded a plan for a new enter-

prise based on “smart grid” technology.

• Kiva: Which let donors choose the family businesses they want

to fund around the world and attracted a network of more than

half a million donors funding two hundred thousand projects

worldwide.

• The 2008 Obama presidential campaign: Which gave millions

of supporters the online tools to raise funds, register voters, and

organize for caucuses across the country, propelling a long-shot

candidate to the Democratic Party nomination and, ultimately,

the White House.

The Rest of This Book

These cases and many more are presented in part II (chapters 3 to 7).

These fi ve central chapters explore the fi ve customer network strate-

gies: access, engage, customize, connect, and collaborate.

Each chapter defi nes a customer network strategy and dis-

cusses its impact on key organizational objectives. In stories that stretch

from Iowa to Tokyo, and from living rooms to war zones, the underlying
customer network behavior is explored, along with social and

technological factors which shape that behavior. Next, multiple ap-

proaches to that customer network strategy are presented. Each ap-

proach is illustrated by successful case studies of businesses from a

22

The Customer Network Revolution

variety of industries. Last, key lessons for implementing the strategy

are presented, as well as emerging technologies that will continue to

shape it in the future.

The over one hundred cases presented in part II draw on the

many exceptional organizations I have met since launching the

BRITE conference at Columbia Business School and at partner uni-

versities globally. Through BRITE (BRands, Innovation, and TEch-

nology), I have had the chance to interview, present onstage, and

bring into the classroom a wide range of tech companies (including

Google, craigslist, and MySpace), consumer brands (LEGO, P&G,

Nike, Dove, Citibank), pharmaceutical companies (Eli Lilly), media

businesses (MTV, NBC, NPR), and B2B fi rms (GE, SAP, Cisco), as

well as advertising and public relations agencies (R/GA, Ogilvy, Edel-

man), political campaigns (Barack Obama, Mitt Romney), nonprofi ts

(Soaringwords), and tech start-ups and entrepreneurs (Boxee, Maker-

Bot, Sense Networks). The contribution of insights from their busi-

ness cases has been invaluable in exploring the fi ve strategies pre-

sented in part II.

Part III (chapters 8 and 9) focuses on the broader manage-

ment and leadership of customer network strategy within an organiza-

tion. Imagine that you are put in charge of developing an overall cus-
tomer network strategy for your organization or for a division or a

product line: Where do you begin? How do you decide which of the

fi ve core strategies to deploy and how to connect them? How do you

sell your project to upper management, and if you move ahead, how

do you know if your project is working? Chapter 8 presents a fi ve-step

process for the development of an overall customer network strategy

for any brand, business unit, or organization (fi g. 1.2). This process

includes:

• Setting Objectives: Defi ning the most important business out-

comes for your organization.

23

1. Setting Objectives

2. Segmentation & Positioning

3. Strategy Selection & Ideation

ACCESS

Customer

COLLABORATE

ENGAGE

Networks

CONNECT
CUSTOMIZE

4. Execution

5. Measurement

Figure 1.2 The Five-Step Customer Network Strategy Planning Process.

Illustration by Anna Fokina.

The Customer Network Revolution

• Segmentation and Positioning: Understanding who your cus-

tomers are, how they are participating in networks, and what

your brand positioning and value proposition are.

• Strategy Selection and Ideation: Choosing which strategies to

pursue (A-E-C-C-C) and developing specifi c initiatives by map-

ping those strategies to your customers, your competitors, and

your own business.

• Execution: Implementing your strategy using skills from tradi-

tional disciplines such as marketing, customer service, and oper-

ations, as well as developing new capabilities suited to customer

networks.

• Measurement: Putting in place metrics to measure the results of

your strategy against defi ned objectives and gathering feedback

to continuously build and improve your strategy.

The

fi nal chapter (chapter 9) examines the nature of the cus-

tomer network–focused organization. It describes three large organi-

zations that have used customer network strategies broadly across cus-

tomer segments and business domains. These and other cases point to

how future organizations will operate in a networked world—by being

borderless, collaborative, and pervasively connected. The likely im-

pact on several industries is discussed, as well as the cultural traits that will
be required of organizations and leaders. Such previously laudable

attributes as transparency, responsiveness, and sharing social values

are now essential to your success in a world of customer networks.

But before we examine the building blocks of an effective

strategy for customer networks, we should answer a few questions re-

garding where we are and how we got here. What exactly is a network,

and what can network science tell us about our digitally linked behav-

ior? How has the Internet evolved, and what is so different about Web

2.0? How is the revolutionary rise of many-to-many communications

tools changing our society? And if we truly are no longer in an era of

broadcast messages and mass marketing, then what models should we

25

A New Model for Customers

now use for selling and for business? We will explore these and related

questions in chapter 2.

Today, whatever your business, the network is your customer. To thrive

in our interconnected world, every company needs a strategy designed

for customer networks. Aligning businesses with the reality of customer

networks will not be easy. But it offers enormous potential for organi-

zations to deepen relationships with consumers, business partners, and

employees. For long-standing organizations, this will require a shift

from strategies and business processes of the industrial era. These pro-

cesses aimed for mass economies, mass production, and mass market-

ing to an aggregate of thousands or millions of individual customers,

each acting alone and in isolation. In the era of networks, customers

are no longer alone. To succeed, businesses need to stop focusing on

the bee and learn to unleash the power of the hive.

26

CHAPTER2

Network Science and

Lessons for Business

Putting on a comedy show for a hundred people in a Manhattan club

may require months of effort and organizing. But for Charlie Todd,
producing an Improv Everywhere event requires only a clever idea,

an email to his network, and a video uploaded to YouTube to reach

millions of followers.

In one such gambit, Todd sent an email to the list who had

signed up at the comedian’s improv shows and his blog. The email

invited recipients who were men to meet him in Central Park on a

fall Saturday: he stipulated only that they be willing to take off their

shirts in public. With no further communication, 111 men showed up.

They burst into laughter when Todd announced that they were going

to perform a prank at the nearby Abercrombie & Fitch store. The hyper-

trendy fl agship store is known for employing shirtless male models to

stand in its entryway and display their hairless, sculpted chests to in-

coming customers and photo-snapping tourists. Inside the store, the

dark clubby atmosphere (pulsing music, pinpoint product lighting)

continues the fetishistic theme of strapping, shirtless men: images on

product packaging, buff mannequins, the muscular bronze statue in

the basement, and a four-story mural of ruddy, shirtless hunks labor-

ing on shipboard. Todd’s motley crew would present quite a contrast.

27

A New Model for Customers

They entered the Fifth Avenue store separately, choosing lo-

cations on assigned fl oors. At exactly 4:37 pm, all 111 men removed

their T-shirts at the same time, stuffed them into their pockets, and

continued casually browsing, displaying their own versions of Aber-

crombie’s bare-chested theme with widely varying body shapes, sizes,

and hairiness.

The stunt provoked shock, amusement, confusion, and an-

noyance among employees and shoppers; most laughed or took pic-

tures of the bizarre scene. After fi fteen minutes, the store’s manage-

ment requested that the half-dressed men leave, despite their protests

that they were only topless because they needed to buy a shirt. The

scene continued when the men exited to the street, with several of the

pranksters posing for pictures with the store’s befuddled, then be-

mused, offi cial model. Todd recorded the entire escapade with hid-

den video cameras and posted a video of the exploit on YouTube and

on his blog, where it attracted over a million views and press coverage

from New York to Belgium to Brazil. 1

This was just one of more than a hundred improvisational

missions that Todd has organized, although the term organized may

be an exaggeration. Todd’s theatrical events take some slight planning

on his part, but the crowd that performs them comes together in a

near-spontaneous fashion. A simple email, with scarcely any details,

spreads out to a network of curious volunteers who have signed up on

Todd’s list. In a phenomenon akin to what Howard Rheingold has

called “smart mobs,” they coalesce and disperse in rapid fashion, with

almost no formal organizing required. 2

Abercrombie & Fitch’s own sex-focused marketing message

was carefully planned, projected via an expensive set of tools (bill-

board ads, retail environment design, and staff training), and tightly

controlled by the company’s employees. By contrast, Todd’s parody of

that message was loosely planned, used free digital tools open to any-

28

Network Science and Lessons for Business

one, and harnessed volunteers brought together on the slightest sem-

blance of a relationship. Todd’s success cleverly reveals how today’s

digital technologies have burst the barriers to organized action, link-

ing us all into new kinds of human networks.

The Theory of Networks

The concept of a “network” fi rst arose in a fi eld of mathematics known

as graph theory, pioneered by Swiss-born mathematician Leonhard

Euler in 1736. In a seminal paper, Euler solved a long-standing puz-

zle of geography known as the Königsberg Bridge problem: Could

someone cross each of the seven bridges of that Baltic seaport without

repeating one? 3 Euler found the solution (No) by treating the city’s islands
and river banks as featureless nodes and Königsberg’s bridges as links
connecting them. By reducing urban geography to a simple

mathematical graph, the puzzle was easily solved, and the mathemat-

ics of networks was born. 4

At its most basic, a network is any system or structure of inter-

connected elements that can be represented by a graph of nodes (the

elements) connected by some kind of links (whatever ties them together).
The nodes of a network may be anything from landmasses to

cells in a body, political institutions, or people. The links between the

nodes might be physical connections, biochemical interactions, rela-

tionships of power and authority, or reciprocal social ties such as

friendship (fi g. 2.1).

In the midtwentieth century, the Hungarian mathematicians

Paul Erdo˝s and Alfréd Rényi greatly expanded the theory of nodes

and links in eight papers exploring the topology and behavior of ran-

domly generated networks.

In the late twentieth century, the mathematics of graph the-

ory gave birth to a new interdisciplinary science of networks, devoted

29

A New Model for Customers

Figure 2.1 Diagram of a network of nodes and links with

random clustering. Illustration by Anna Fokina.

to examining the common principles of network graphs that are found

across domains ranging from engineering to information science to

biology to sociology.

Transportation systems have been mapped as networks, starting

with Euler’s bridges of Königsberg, and continuing later as train net-

works, with stations (the nodes) linked by lines of track; road networks,

with cities connected by interstate highways; and air traffi c networks,

with airports linked by the airline routes that crisscross our globe.

In the fi eld of communications, networks were used to map

telephone systems, with their wires (links) connecting phone lines

and exchanges (the nodes). Later, these same phone networks began

to link computers into the Internet. In terms of communications con-

tent (rather than communications hardware), the World Wide Web

has been mapped as a network of interconnected Web pages linked

together by hyperlinks.

In biology, network science has been used to map out the re-
30

Network Science and Lessons for Business

lationships of nerve cells connected by the dendrites and axons that

transmit and receive their messages. Networks are used to map mol-

ecules in an organism by how they are linked through biochemical

reactions. Network maps have also been applied to tracking the spread

of infectious diseases, with patients representing the nodes and vec-

tors of disease transmission being the links between them.

Decades before the arrival of Web sites like Facebook, soci-

ologists attempted to map the social ties within groups via the fi eld of

social network analysis. Different typologies of networks were seen to

represent varying organizational structures, from the hierarchical

models of churches, companies, and traditional militaries to the more

distributed, centerless topologies of terrorist organizations like Al Qaeda,

whose numerous cells are only loosely connected to one another.

Just as disease may transmit through networks of people, so

too do ideas. Social network analysis has often focused on how and

why certain innovations spread rapidly, be they new technologies (use

of the telegraph), new language (urban slang), or new ideas (the

Christian teachings of the disciple Paul in the fi rst century). 5

In all these cases, a network model has allowed for new in-
sights to be gained into the behavior and properties of extremely com-

plex systems—insights that may not be visible by simply observing the

actions of their individual constituent parts.

Customer Networks: A Defi nition

Today the model of networks can yield critical insights and under-

standing for another domain—understanding customers in our digi-

tal age.

In the past, a network model may have been less relevant to

understanding the relationships of companies and customers. For the

most part, advertising and products radiated out from large compa-

nies to customers via unidirectional mass production channels. Al-

31

A New Model for Customers

though a customer might buy from a company, purchase and sale was

their only signifi cant means of exchange. In terms of communication,

companies advertised to customers but rarely listened to them (be-

yond responding to the occasional complaint letter).

Most important, customers had virtually no point of interac-

tion with each other. If you were a regular customer of Ford Motor

Company, that was a connection between you and the automaker,

but the only connections you might have with other Ford customers

would be extremely limited and local (perhaps the fellow patrons of a

repair shop or dealership).

With the rise of an increasingly social Internet, however, this

picture has changed dramatically. Any organization’s customers are now

quite easily connected to others around the world who share common

experiences, interests, preferences, and purchasing behaviors; and the

relationships of customers with organizations and with each other are

reciprocal, dynamic, and participatory. For any organization looking at

its customers today, the model of a network should appear very clearly

and sharply relevant. Let me offer a more formal defi nition, then.

A customer network is: the set of all current and potential cus-

tomers of an organization, linked to the organization, and to each other,

through a web of digital tools and interactions.

Note that, being a strategic business model, a customer net-

work is explicitly defi ned from the point of view of an organization

and in terms of that organization’s constituents. (Otherwise, it would

simply be a model of “human networks,” encompassing the entire

universe of digitally connected people.) But the “customers” in a cus-

tomer network may, in fact, be members of any key constituency of a

business. Depending on the organization, its customers may be busi-

ness clients, voters, music fans, students, or retail shoppers. Its “cus-

tomers” may include internal constituencies as well (employees, vol-

unteers, and so on).

Many organizations will have multiple types of customers to

32

Network Science and Lessons for Business

consider in their networks. The customer network of a business soft-

ware company may include client businesses, partners who develop

complementary products, and even internal employees who must

collaborate with outside innovators. The customer network for a liter-

ary agency could include both the publishers that it sells to and the

authors it represents. A pharmaceutical company’s customer network

would likely include both doctors and patients, as well as regulators,

insurance companies, and academic researchers, among others. For a

philanthropic or political group, the customer network would include

major supporters and small donors, as well as volunteers, grassroots

activists, consultants, and other constituencies and partners.

What ties these customers together in a networked fashion

are the “digital tools and interactions” in my defi nition above, which

may range from sending an email to conducting a search to unleash-

ing a malicious virus or editing a video in real time via the Web. They

include tools for communication (such as email, cell phones, and

social networking sites), for content creation and publication (blog-

ging, microblogging, video sharing, and product review sites), for

commerce and consumption (purchasing, downloading, streaming,

and subscribing), or collaboration (fi le sharing and wikis). These in-

teractions are carried today primarily over the Internet but also over

cell phone networks and proprietary networks using Wi-Fi, Bluetooth,

television cable, and other means of transmission.

What Network Science Tells Us

about Customer Networks

Our understanding of customer networks will come primarily from

investigating their patterns of behavior online and offl ine, and from

examining case studies of customers’ interactions with businesses in a

variety of industries. This will be the focus of parts II and III of this

book. But before we leave the hard science behind, it is worth under-

33

A New Model for Customers

standing a few principles from the science and mathematics of net-

work modeling and exploring what they reveal about the structure
and nature of human networks.

Greater Connections = Much Greater Impact

From the fi eld of telecommunications networks, we have a

principle known as Metcalfe’s Law. This principle states that as the

number of nodes in a network increases, the value or impact of that

network grows exponentially. An example can be seen in the inven-

tion of the fax machine. When the fi rst fax machine was hooked up to

a telephone network, its impact was nil. When a second fax machine

was attached to the network, it now offered a private channel for com-

munication between two parties. As the number of fax machines

grew, their utility grew rapidly. In general, as you increase the number

of nodes ( n) in a communication network, the number of possible

links between them increases exponentially, as n( n–1)/2. Two fax machines

can make one connection; fi ve fax machines can make ten

connections; ten fax machines can make forty-fi ve connections. Sim-

ilarly, as the number of Facebook members grows, the number of

potential links for each member rises.

The lesson of Metcalfe’s Law for customer networks is this: as

more of a business’s customers adopt a new digital tool (be it smart-

phones or text messaging or Facebook), the potential impact of their

networked behavior on that business increases dramatically. This

holds particular signifi cance for companies operating in markets

where Internet usage is still growing (for example in India, where PC

usage is low but growth is forecast for mobile Web usage by the coun-

try’s half a billion mobile phone users).

Clusters, but No Centers

Human networks tend to be mathematically complex; they have

no cen tral plan like the hierarchy of a traditional organization or the

34

Network Science and Lessons for Business

street grid of a modern city. But human networks are not random like

the graphs studied by Erdo˝s and Rényi, in which any two nodes have

an equal likelihood of being connected. Instead, human networks

(whether the World Wide Web or a network of personal friendships)

grow links spontaneously but shaped by underlying principles. One

such principle for the Web is that once a page has several links from

other pages, it is more easily found and is therefore more likely to at-

tract additional links. A principle for social networks is that if you and

I both share a friend, we are more likely to be friends with each other

than with another random person. Networks shaped by these kinds of

principles lack any defi nite center. They do, however, have clusters—
groups of nodes that are more closely linked to each other (in a net-

work of friendships, this might be a circle of friends, most of whom

know each other).

One lesson for business is that customers will cluster with

others around shared affi nities and interests (like Charlie Todd’s fans

and their affi nity for his sense of humor). Businesses should seek to

understand and learn from the shared affi nities of their own customer

networks. Another lesson for business is that there will be no clear

center to a customer network to be controlled; some customers will

be more connected than others, but this may shift at any given time.

Therefore, instead of trying to identify a few central customers (“in-

fl uencers”) in the network to market to, a business will do better to

foster relationships with many different customers who are slightly

more connected than the average—what Duncan Watts has called a

“Big Seed” strategy. 6

Six Degrees of Separation

In 1967, psychologist Stanley Milgram set out to prove what

he called the Small World Hypothesis, which states that in a complex

network, even with huge numbers of nodes, any two nodes are usually

only a few links apart. In a famous experiment, Milgram set out to

35

A New Model for Customers

demonstrate this hypothesis through social ties. Milgram gave a set of

letters to random people in Kansas and Nebraska and asked each of

them to try to get their letter into the hands of a stock broker in Boston

(whom none of the participants knew) by mailing the letter to whom-

ever they knew who seemed most likely to know the broker; those

recipients were then asked to do the same thing. The astonishing re-

sult: 42 out of 160 letters reached their target, with an average of 5.5

intermediate links between the Midwesterner and the Bostonian.

This remarkable result was the inspiration for the title of the play (and

later movie) by John Guare, which gave us the popular term “six de-

grees of separation.” In fact, as the characters in Guare’s play suggest,

everyone is closely connected in today’s networked world. A study of

the early World Wide Web when it had only eight hundred million

pages found that each page was, on average, only nineteen clicks away

from any other. 7

The importance of Milgram’s hypothesis for business is that

customers in networks are never more than a few links away from

each other. This is why customer points of view can spread so quickly
through customer networks—whether it is Dave Carroll’s story of bad

service on United or the enthusiasm of Threadless customers for a

new competition. Given this speed of transmission, businesses need

to be regularly monitoring online conversations and ready to leap in

and respond where appropriate.

Power Laws and the 90–9–1 Rule

Another principle of complex, nonrandom networks is that

they tend to follow what is called a “power law distribution.” Many

natural phenomena, such as the height of a species, follow the random

distribution known as a bell curve: most animals grow to be quite close

to the average height of their species, and those that deviate will be only
slightly taller or shorter. (Even in a planet with six billion people, none of us
is twice as tall as the average adult human.) But among phenom-36

Network Science and Lessons for Business

aluev

frequency

Figure 2.2 A power law distribution. Illustration by Anna Fokina.

ena that follow a power law curve, there is no clustering around the

average; instead there are a few extremely high values and then many,

many more increasingly small values (fi g. 2.2). This distribution can

be seen in the value of oil fi elds around the world: the total number
of underground oil deposits is huge, but the vast majority of them are

of insignifi cant value. A few deposits are very valuable, however, and

a handful of those have extraordinarily high value. Power law distribu-

tions are seen in the size of grains of sand, the populations of cities,

and even the distribution of wealth, as famously observed by Vilfredo

Pareto’s principle (later called the “80–20 rule”) that 80 percent of the

wealth is held by 20 percent of the population.

Customer networks follow this kind of power law distribution

as well: some customers are much more or less connected or active

37

A New Model for Customers

within a customer network than the average customer. Jakob Nielsen

described this in his “90–9–1 Rule,” based on participation in online

communities and forums such as Wikipedia. Nielsen’s rule states that

for every one hundred customers participating in an online network,

roughly 1 percent will be highly active (posting regularly to blogs,

writing detailed product reviews, or starting a new entry on Wikipe-

dia); 9 percent will contribute somewhat actively (commenting on

others’ blogs, rating products with a single sentence or on a fi ve-point

scale, or making edits to an existing Wikipedia entry); and the remain-

ing 90 percent will not contribute and therefore will be largely invis-

ible. They remain important, however, because as they search, read,

and observe, they are highly infl uenced by other network members. 8

The lesson for businesses is to realize that the highly active cus-

tomers in an online forum are only the tip of the iceberg. For every cus-

tomer posting a detailed product review, hundreds more may be reading

that review and shaping their opinions about a business based on it.

Easy Group Formation

fi nal lesson from network science is that networks allow for

extremely quick and easy formation of groups and coordination of ac-

tion without advanced planning. This can be seen in the synchro-

nized chirping of crickets, the simultaneous fl ashing of millions of

fi refl ies, or the ability of audiences at theater or sporting events to

begin clapping in unison.9 Today’s digital tools and interactions allow us to

congregate and coordinate over distances, too, and not just when

we are in the same room. Charlie Todd’s improv comedy mission to

Abercrombie & Fitch, organized with a single cryptic email, is but

one example of how human networks can take action with vastly less

planning and investment of resources than in the past.

In his book Here Comes Everybody, Clay Shirky presents a

case of customers organizing rapidly to lodge a protest against a busi-

ness’s practices. In 2007, the British division of HSBC bank had mar-

38

Network Science and Lessons for Business

keted its checking accounts to college students with a promise of no

fees on overdrafts (“bounced” checks). The promotion was very suc-

cessful in attracting customers during the school year, but over the

summer HSBC changed its policy back to charging for overdrafts, no

doubt assuming that the students, who had dispersed for the summer

holidays, would have no easy way to organize a protest. Instead, Cam-

bridge University student Wes Streeting set up a page on Facebook to

decry “The Great HSBC Graduate Rip-Off,” and it quickly attracted

thousands of HSBC’s customers who planned a public protest in front

of the bank’s London offi ces. HSBC caved in to the customers’ de-

mands before the protest could take place. 10

The lessons from network science for customer networks are

clear. Because of digital tools, it is now much easier for customers to

connect and mobilize—for or against your business—without any

formal or preexisting organization. Customer networks are inherently

centerless, diffi cult to infl uence, and lack any consistent leaders (Wes
Streeting was just another college kid with friends on Facebook).

Customers are more closely and fl uidly connected to one another

today than ever before. As the use of digital tools spreads, the infl u-

ence of customer networks will continue to grow.

The Roots of Revolution

Why now? What is different about today’s digital tools, and why have

they tied us closer together into networks of such growing power and

infl uence?

For many years we have had tools for instantaneous commu-

nication over great distances, such as radio and television. Many of

these tools have been widely available for individual communication—

the telegraph and the telephone—and have been credited with shrink-

ing the distances between us. There is one way in which today’s tools

are qualitatively different, however.

39

A New Model for Customers

Figure 2.3 How ideas spread via one-to-one communi-

cations. Illustration by Anna Fokina.

Until recently, the vast majority of the world’s population had

access to tools that followed a one-to-one communications paradigm.

These tools range from face-to-face speech to letter writing, telephone

calls, faxes, pagers, cell phones, and instant messaging. With one-to-

one communication tools, an individual can communicate his or her

own message or point of view, but only to one or a few recipients at a

time (fi g. 2.3). With access to only these tools, customers in the past

behaved very much as individuals, sharing limited amounts of infor-

mation with limited numbers of people. If a customer had a bad expe-

rience with a company, he or she might write a letter to the company,

might tell friends at work, and might tell some family members by

phone, but the customer’s point of view could not spread far.

40

Network Science and Lessons for Business

Figure 2.4 How ideas spread via many-to-many com-

munications. Illustration by Anna Fokina.

At the same time, a small group of large organizations have

had access to tools following a different paradigm: one-to-many com-

munications. These included broadcast radio and television, cable,

and the printing press for books, newspapers, magazines, and other

print materials. These tools have allowed large organizations to pro-

ject their own message instantly to large audiences, up to the mil-

lions. The resulting power imbalance allowed organizations to domi-

nate and assume a central role in interactions with customers.

What is qualitatively different about many of today’s digital

tools for communication is that they follow a new, third paradigm:

many-to-many communications (fi g. 2.4). Tools such as email (which can be

sent almost as easily to a thousand people as to one), blogs

41

A New Model for Customers

(which allow publishing on the Web with virtually no technical skills),

online comments, product review sites, social networking sites, video

sites, wikis, and Twitter allow any user to communicate any message

simultaneously to many others, who can in turn communicate to

many others. As a result, the voices of a customer can easily multiply

through a network, just as musician Dave Carroll’s did on YouTube

when he complained about United Airlines breaking his guitar.

The origins of these many-to-many technologies can be found

in the history of the Internet, the network of interlinking networks

through which they all operate. The Internet has grown dramatically

since its birth. In the 1970s it arose from a specialist tool for academics and
the military. In the 1990s it became a mass medium for sending

messages, ordering products, and reading Web pages. Today, it allows

seamless communication and integration in every aspect of our lives.

The Internet has also grown increasingly dynamic. At fi rst,

the pages and content of the World Wide Web were all created by

professionals or highly skilled amateurs with a knowledge of program-

ming languages like HTML. In the new century, a new generation of

tools makes it easy for anyone with some curiosity and a mouse to post

their own photos, videos, blog posts, social networking profi les, and

other media to the Web. The explosive growth of brand-name Web

services such as Flickr, YouTube, Blogger, Wikipedia, Facebook, and

Twitter make anyone and everyone a Web publisher. Even Web users

who have never penned a blog post or uploaded a baby video have

consumed from the sea of “user-generated content.” They may have

added their own voice to the social web without even realizing it, by

renting a movie on Netfl ix, commenting on a product or vendor on

eBay, or updating friends on their whereabouts or mood via Face-

book. By 2009, most U.S. Internet users were not just reading and

consuming content on the Web but creating it themselves. 11

Today’s Internet, then, is increasingly omnipresent and so-

cial. It is this maturing of the Internet, and its spread of many-to-many

42
Network Science and Lessons for Business

tools to everyone, that has given a worldwide platform for the voices

of aggrieved folk musicians on YouTube, enthusiastic Coca-Cola fans

on Facebook, and outraged protesters in the streets of Iran. These are

the tools that have given rise to today’s customer networks.

Lessons from History

In many ways, the rise of many-to-many communication tools via the

Internet parallels the broad social changes brought on by Johannes

Gutenberg’s invention of movable type printing in 1439. The history

of the printing press may offer lessons as we explore the forces at work

in the rise of customer networks.

Before the printing press, all printing was done by hand by a

professional class of scribes. The tremendous effort required meant

that there was basically only one book in wide circulation in Europe,

the Bible. The Bible was written in Latin and controlled by the Cath-

olic Church, Europe’s preeminent political power.

Much like the Internet, Gutenberg’s invention was revolu-

tionary because it removed the barriers to the distribution of informa-

tion. Suddenly, texts could be printed much more quickly and

cheaply. As a result, all sorts of publishers began to arise and produce

texts for a broad range of purposes. Not only were Bibles printed in

vernacular languages (over the protest of the Church), but secular

writings of all kinds (political, scientifi c, even erotic) became avail-

able to a population in which the rapid growth of literacy became an

immense source of empowerment.

The printing press, like the Internet, also posed profound

challenges to prevailing institutions and authority. Differing points of

view on religion, government, and society could reach a much vaster

audience than ever before. As Clay Shirky has observed: “Martin

Luther’s 95 Theses, reproduced widely, were the fi rst mass media event. ”12
There were big winners and losers. Vocations vanished, in-43

A New Model for Customers

cluding the profession of scribes, among others. The Church lost its

preeminent hold on the fl ow of information and, with it, political

control of the Continent. Raging debates about government were un-

leashed and rose to inspire revolutions and topple governments in

Europe and around the world.

We have yet to see the full fruit of the Internet revolution in

our own age, and as we look to the future, we should expect the unex-

pected. As Elizabeth Eisenstein describes in The Printing Press in

Early Modern Europe, the transition from a scribal society to a literate
society of the printed book was slow and messy. Decades after Gutenberg’s
invention, many were still passionately arguing for the defense

of the scribes, ironically using printed treatises to spread their point

more quickly.13 Although we can identify a few of the early losers in our
current revolution (print newspapers and major record labels, to

name just two), we still have yet to see the full impact of our digital

tools and the ways they connect us.

From Mass Market to Customer Network

One area where we do not need to wait to see if society will be changed

is in how businesses relate to their customers. As the examples we

have already seen indicate, the revolution of customer networks de-

mands a transformation in some of our core models for business.

Businesses today need to reorient themselves from a mass-market

model to a customer network model.

The old mass-market model arose in the early twentieth cen-

tury and came to its peak with the spread of television as a mass me-

dium. In this model, the company is central, and customers can be

treated as isolated and passive individuals (fi g. 2.5). A mass-market

strategy focuses on the mass production of similar products and ser-

vices and the use of mass communication to broadcast messages out

to as large an audience as possible. In this model, targeting specifi c

44

Network Science and Lessons for Business

mass production

Company

Customers

mass communication

Figure 2.5 Mass market strategy model. Illustration by Anna Fokina.

people for whom your message or product is relevant is desirable, but

not as important as using broadcast tools to maximize the range and

frequency of your messages.

In a customer network model, things look quite different (fi g.

2.6). Companies are no longer the only ones able to produce or to

communicate. Individual customers also have a voice, whether inter-

acting directly with each other or using powerful platforms like prod-

uct reviews, videos, blogs, and forums. Rather than simply receiving

messages and products from the company, customers both receive

and create. In a customer network strategy, companies recognize that

they exist within a network, sending and receiving messages, content,

and value to and from their customers. This leads to a shift in orienta-

tion. Before, businesses tried to control the relationship via outputs that were
entirely from the organization (products, advertising, and so on).
Now, businesses try to manage, infl uence, and nurture relationships, and
expand connections within their network, via a mix of outputs and inputs
that originate both from the company and from external parties.

The Purchase Funnel Revisited

How this plays out in marketing to customers can be seen by examin-

ing the model known commonly as the “purchase funnel,” which

45

A New Model for Customers

Comments

Blogs

Company

Forums

craigslist
current customer

potential customer

Figure 2.6 Customer network strategy model. Illustration by Anna Fokina.

arose out of consumer research into the “hierarchy of effects” of mar-

keting (fi g. 2.7).14

In the traditional purchase funnel, potential customers pro-

ceed through a staged process. This typically begins with awareness of a

product or product category, followed by consideration of purchase, then
preference for a particular product or brand, and fi nally action, which may
include purchasing a product, casting a vote, or becoming

a member. 15 At each stage of the process, there are fewer customers (only
some customers who have awareness will move on to consideration, and so
on), hence the funnel shape. Traditionally, customers are nudged along this
path through a series of outbound, company-controlled marketing tools, such
as television, out-of-home advertis-

ing, and direct mail. A fi fth stage, loyalty, was added to the purchase 46

Traditional Purchase Stages

Networked Purchase Stages

TV, radio, out-of-door

Awareness

Search, product buzz, blogs

Direct mail, brochure

Consideration

Online research, peer reviews

Product test, comparison

Preference

YouTube video, brand mashup

In-store purchase

Action

On-line/in-store/mobile purchase

Bookmaking, email opt-in

Reward points

Loyalty

Advocacy

Blogs, videos, reviews, online

communities

Figure 2.7 Traditional versus networked stages in a purchase funnel.

Illustration by Anna Fokina.

A New Model for Customers

funnel to represent that subset of purchasing customers who go on to

become repeat customers.

Today, a similar path can still be traced in customers’ deci-

sion-making process. And yet, at each stage, the customer is infl u-

enced much less by the outbound tactics of the company. Instead,

networked customers use tools like search and social networking to

fi nd a much broader range of information, including information

from other customers on blogs, product review sites, and even videos

that may mash up and distort the company’s original vision of their

brand. The stages of “action” and “loyalty” often take place in a digi-

tal space as well, with mobile shopping, online bookmarking, and a

digital opt-in for further communications. Most signifi cant, in a cus-

tomer network model, the purchase funnel adds an additional stage

beyond loyalty. This fi nal stage represents those customers who not

only become repeat purchasers but who advocate within customer

networks on the company’s behalf—feeding back into the informa-

tion sources at the top of the funnel with their own buzz, product re-

views, and commentary, which spread awareness, consideration, and

preference among other consumers.

This revamped purchase funnel, then, demands a new orien-

tation toward the discipline of marketing. Business must move past

the old mass-marketing approach.

In the old approach, the company broadcasted one-size-fi ts-

all messages and products, drove sales by advertising, and attempted

to interrupt customers and persuade them to buy. The dominant tools

were brand awareness, differentiation, and messaging.

The new approach to marketing for customer networks is dif-

ferent. Companies recognize that niche customers will seek out or

create distinctive products or services. Companies connect with cus-

tomers by both sending and receiving communications, and they earn

customer attention by providing relevant and useful content. Compa-

nies realize that customer advocacy is the strongest tool for selling and

48

Network Science and Lessons for Business

Table 2.1 Mass-market versus customer network approaches to

marketing

Mass-market

Customer

network

approach to marketing

approach to marketing

Mass

(market/manufacture/

• Niche: each will choose, create, or

message): one size fi ts all

modify to suit his or her needs

Broadcast

out

• Send out and receive; connect with

the customer

Interrupt

attention

• Earn attention by providing good

content, utility, and experience

• Most effective selling is by the

• Most effective selling is by custom-

company (advertising)

ers (advocacy, reviews, and word of

mouth)

• Goal of marketing is to persuade

• Goal of marketing is to inspire

(confi dence, trust, loyalty)

• Dominant tools: awareness,

• Dominant tools: innovation, col-

differentiation, and messaging

laboration, and values

aim to inspire confi dence and loyalty. The dominant tools of this ap-

proach are innovation, collaboration, and shared values (table 2.1).

A New Imperative for Business

In our digitally networked world, customers are dynamically con-

nected. Where they used to be isolated, they are now linked to others.

Where they used to be individual, they are now self-organizing. Where

they used to be passive, they are now active, dynamic participants.

Where they used to have little individual impact beyond the reach of

their own pocketbook, they now wield power and infl uence.

For organizations to succeed in the future, they must create

value by putting their network of interconnected customers at the cen-

ter of their business. This begins with a focus on providing the kinds

of value that customer networks seek in the new digital age. These

kinds of value correspond to fi ve core behaviors that continually shape

49

A New Model for Customers

customer networks. The fi ve core customer network behaviors are:

accessing, engaging, customizing, connecting, and collaborating.

As explained in chapter 1, each core behavior forms the basis

for a core customer network strategy: the access strategy, the engage

strategy, the customize strategy, the connect strategy, and the col-

laborate strategy.

In part II of this book, each chapter will take a detailed look

at one strategy. We will examine specifi c approaches that work using

numerous case studies and analyses of technological and social fac-

tors. By examining the fi ve strategies in greater detail, we can begin to

understand in depth what it means for an organization to embrace

the future of customer networks.

50

PARTII

Five Strategies to Thrive

with Customer Networks

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CHAPTER3

ACCESS

Be Faster, Be Easier, Be Everywhere,

Be Always On
On the day of his inauguration as the forty-fourth Amer-

ican president, Barack Obama received a gift from the

Secret Service: a specially encrypted BlackBerry. For

weeks, behind closed doors and in the light of the press, the president-

elect had been waging a battle with the national security and legal

offi ces of the federal government. Obama was determined to hold

onto his favorite digital device as he transitioned into the presidency.

While aides complained of his obsession with keeping it, the presi-

dent-elect complained to reporters, “They’re going to try to pry it out

of my hands.” 1

For Obama, the BlackBerry was not just a convenience. It

was the digital tool he used to keep in contact with a broad and im-

portant personal network. That network ranged from political advis-

ers to family, personal friends in Chicago, and the experts whose ad-

vice he had sought. During the campaign, Obama had eschewed the

traditional small circle of foreign policy experts and instead relied on

a network of three hundred leading thinkers around the world. He

also used his BlackBerry to keep up on Chicago White Sox scores.

After the election was won, Obama did not want to be con-

fi ned in the “bubble” of the American presidency. At his insistence,

53

Five Strategies to Thrive

his national security team developed the specially encrypted Black-

Berry, whose messages could not be forwarded and which could

receive email only from a list of approved contacts. As the fi rst Ameri-

can president born after the Baby Boom of the late 1940s, Obama had

a more networked approach to his work and communications than

any of his predecessors. Access to that network, at his fi ngertips, at any

time, was not something he was willing to give up.

Mullah Abdul Sallam Zaeef was a senior member of the Taliban

when it ruled Afghanistan, serving as its ambassador to Pakistan. Until

forced from power in 2001, the conservative Islamist regime banned

all modern technology in Afghanistan, including television, the Inter-

net, and cell phones. So Al Jazeera reporter Hamish Mc Donald was

understandably shocked to see Mullah Zaeef clutching an iPhone

when he interviewed him in Kabul in early 2009, after Zaeef’s release

from Guantanamo Bay.

“I’m addicted,” confessed Zaeef, in a thick beard, black tur-

ban, and traditional clothing as his fi ngers slid across the iPhone’s

glowing touchscreen, scanning Web sites. “The Internet is great on

this, very fast. ”2 Having left the Taliban, Zaeef had reconciled both with
Afghanistan’s new government and with the new role of digital

technology. “It’s easy and modern, and I love it. . . . This is necessary

in the world today. People want to progress.” 3

When the Taliban held power in Afghanistan, there were

only a few hundred cell phone users in a country of thirty-two million

people. Eight years later, more than eight million cell phones were in

use. In a country racked by war and extreme poverty, shops based

in roadside shacks sold mobile connection to the world. The Afghan

population was eager to access music and movies, to play virtual chess

games, and to vote by text message in the American Idol–like TV show

Afghan Star. Female lawmaker Shukria Barakzai told a reporter that the
youth were no longer so caught up in a culture of war. “They are

54

ACCESS

engaging with the rest of the world. That’s why technology is so im-

portant for Afghanistan. ”4

The Access Strategy

Like Barack Obama with his customized BlackBerry and the ex-

diplomat of the Taliban with his iPhone, we all share a powerful de-

sire to access digital data, content, and interactions as quickly, easily,

and fl exibly as possible. The pursuit of access is one of the core behav-
iors of customer networks.

Sixty percent of American adults report they would abstain

from alcohol for a week before giving up their mobile phone; 15 per-

cent would sooner have their teeth drilled by a dentist. 5 Internet ac-

cess is no longer something customers are content to have at their

offi ce and when logging in to a home computer late at night. Instead,

frequent travelers are using tiny EV-DO modems that plug into their

laptops and create a Wi-Fi connection over their phone networks, or

pocket routers like the MiFi that allow them to carry a “hot spot” in

their pocket, giving access to anyone sitting nearby. Virgin America

was the fi rst airline to introduce in-fl ight Wi-Fi throughout its fl eet

(videochat with the kids at thirty-fi ve thousand feet!). Passengers, not

surprisingly, are delighted. In fact, 76 percent reported that they

would change airlines to have in-fl ight Internet access.6 Access to networks
is no longer a premium experience; it is becoming like the air

we breathe, something that customers expect everywhere.

Imagine that you are traveling on business and arrive to check

into a premium hotel with a grand lobby and striking views of the city.

When you enter your posh room and put down your bags, you dis-

cover that the water is not running from your faucet or shower. “No

problem,” the front desk informs you when you call down. “We will
provide you with an ID and password. You can select from our range

55

Five Strategies to Thrive

of options for how many hours you would like your water to be on,

pay the required fee, click through a few screens, and you’ll have

water running in no time. If the pressure happens to falter, just let us

know if it lasts more than a few minutes.”

As outrageous as this scenario might sound, this is precisely

the treatment that most premium hotels offer their digitally connected

customers when they try to access the Internet. Many upscale hotel

chains fail to recognize that Internet access is the most pressing need

travelers have when they check in. Savvier midprice hotels attract

loyal customers by offering instant Wi-Fi access throughout their

building with no logins, no fi rewalls, and no extra fees.

Network access has transformed not just where and when we

work but how we work as well. Even during downsizing and layoffs,

companies continue to pay for their employees’ BlackBerry service

because they know that their entire workstyle is now based on always-

on access. The trend has helped spur a new style of worker: the “digi-

tal nomad.” These laptop-toting road warriors of the networked age

are able to take their work with them wherever they go. Their offi ce is

everywhere and anywhere. All they need is a Wi-Fi connection—at

home, in a hotel lobby, at a coffee shop, or in a shared space in any of

their company’s offi ces. Email is by BlackBerry, calling is by Skype,

communicating is on social networks, and meetings are scheduled on

Google calendars. Digital nomads may be independent agents or cor-

porate employees. The ability to access data and work anywhere is

especially valuable for knowledge workers, for whom mobility is pro-

ductivity. For some, the idea of a “desk job” is becoming obsolete, as

they forgo any designated desk and work always on the move.

The desire for better access—to digital data, content, and

interactions—is the fi rst core behavior of customer networks. It provides

a critical opportunity for businesses and organizations of all kinds to in-

novate, deliver value, and build closer relationships with their custom-

ers, be they busy travelers, online shoppers, or employees in the fi eld.

56

ACCESS

The

fi rst core strategy for customer networks, then, is the

access strategy—to provide your customers an easier, faster, always-

on connection to the digital world. A business can provide customers

better access to its digital services, products, and communications, or

it can provide customers better access to their own digital content and

interactions with others. Either approach can create a competitive

advantage for business by delivering experiences that networked cus-

tomers keenly value.

By improving the digital experience for customer networks

and employees, an access strategy can help an organization to achieve

such key business objectives as: differentiating its products and ser-

vices, optimizing communications with customers, increasing effi -

ciency in sales channels, increasing the speed of business decision-

making, and improving data transparency within the organization.

Developing

an

access strategy requires an understanding of

the changing ways that customers access digital networks. What new

technologies are they using? When, where, and how are they con-

necting to their online world? What are the key issues, problems, or

pain points that determine where they spend their online time, atten-

tion, and money? And how are your own employees accessing the
data and processes they need within your organizations at all times

and in real time?

Seven Approaches to Access Strategy

A decade ago, the imperatives of digital access were basic: have a Web

site, make sure it can be found by search engines, and design it so

users can easily fi nd products and information.

By now, most organizations of any kind have an established

Web presence. But evolving technologies, and evolving behaviors on-

line, have opened up a variety of new ways to provide digital access.

These include mobile phones and other newly connected devices,

57

Five Strategies to Thrive

networks that are aware of our location, and data that is accessible

anywhere and in real time.

These and other new elements of digital access pose chal-

lenges for organizations—just as creating a fi rst Web site did in the

past. But they also provide exciting new opportunities for businesses

to innovate, to distinguish themselves, and to better relate to their

customers. Each new technology offers new ways for an organization

to provide better, easier, more fl exible access to digital data, content,

and interactions.

Together these technologies point to a set of complementary

approaches to access strategy:

• Be On-Demand: Offer your services and content to customers

whenever and wherever they want them, on their schedule, not

yours.

• Harness the Cloud: Make your customers’ data accessible to

them from any device they use through cloud computing.

• Go Mobile: Take advantage of how smartphones and devices

allow us to be fully networked wherever we go.

• Find Your Location: Use location awareness to improve com-

munication and target your customers with more relevant inter-

actions.

• Be Real-Time: Provide instant feeds of the most critical information to

customers through real-time data services.

• Embed the Network: Provide access through the network con-

nections that are becoming embedded in objects all around us.

• Keep It Simple: Focus on simplicity and ease of digital access, as software

and hardware grow increasingly powerful and complex.

These seven approaches are not exclusive: an access strategy

can combine on-demand service with location awareness or go mobile

with real-time data. But it is helpful to examine each approach separately

at fi rst, to understand the technology and behaviors that are behind them

and how businesses have successfully used them with their customers.

58

ACCESS

Be On-Demand

In the 1970s, when Sony chief executive Akio Morita fi rst ordered his

engineers to develop a cassette player that could be worn on a belt

with earphones, it was a radical product idea. “Why can’t I listen to

music when I am playing tennis?” Morita reportedly asked. When the

Sony Walkman arrived in 1979, it offered a totally new experience—

the ability to access your music whenever and wherever you wanted.

Although many Sony employees were skeptical (the initial product

cost over two hundred dollars), the player became an international

sensation, eventually selling more than two hundred million units

worldwide. The Walkman became a cultural icon, eagerly adopted by

young consumers and entering the Oxford English Dictionary as a

new word in 1986. (In those days, dictionaries were not yet edited by

readers online as a wiki.) People loved or hated the way the Walkman

helped users tune out and disengage from others around them, but
there was no disputing the demand for the new experience it offered,

of listening to music on demand.

Today, digital networks allow for an on-demand experience of

any media we consume. Digital video recorders, since the original

TiVo box, have put television programming on the schedule of con-

sumers, rather than the networks. For gadget-loving consumers, the

Slingbox allows them to watch that same programming on a com-

puter or mobile phone, anywhere in the world. Movie rentals have

quickly shifted from a retail offering to mail order to an on-demand

stream served up by cable companies and the Web-based services of

Netfl ix, iTunes, and Amazon.

Even radio broadcast has shifted to on-demand service to

meet the appetites of networked customers. Not long ago, to hear

NPR’s All Things Considered, you had to turn on a radio at 5:00 pm.

Missed a segment? You had to ask a coworker about it in the morning.

Now customers can receive NPR programming at their own timing

and via a host of options: streaming audio, podcast, text articles on the

59

Five Strategies to Thrive

Web, Twitter, email alerts, newsletters, RSS feeds, mobile Web sites
and phone apps, and, of course, satellite and terrestrial radio.

This may sound like a lot of distribution channels to manage

for their content, and it is. But today’s customer networks make use of

a diverse media landscape. Whether you are a radio programmer or a

business looking to communicate about your products, you can no

longer reach a broad range of customers simply by broadcasting dur-

ing a single block of time and in a single mass medium. You need to

be able to reach customers on whatever medium they choose, on

their schedule, and on demand.

Digital networks allow us to turn more than just media con-

tent into on-demand experiences, though. Many other services are

leveraging networks to offer the on-demand access customers seek.

Banks have found that they can save signifi cantly on customer

service costs when customers bank online or via text message rather

than by calling toll-free numbers or visiting retail branches. Bank of

America began closing 10 percent of its retail branches nationwide in

2009, due to customers’ broad shift to on-demand banking. USAA, a

privately held bank serving members of the U.S. military and their fam-

ilies, has only one branch, in San Antonio, Texas; otherwise it relies

entirely on an on-demand model. An innovator in digital access, USAA

was the fi rst American bank to allow customers to deposit a check by

uploading a digital photograph of it through their phone. Banks save

money and customers save time when banking is on demand.

Zipcar has built a new business model by turning car rentals

into an on-demand service. Every car in its fl eet is equipped with a

network-connected box that sends data back to the company regard-

ing the car’s location, miles driven, engine performance, amount of

gas in the tank, and battery charge (for plug-in electric cars). Net-

working these cars over the Internet allows the company to offer

uniquely responsive service to customers. To rent one of Zipcar’s Mini

Coopers, VW Jettas, and other cool models, the customer has no wait

60

ACCESS

in line, no insurance paperwork, no sales pitches to upgrade, in fact,

no face-to-face registration at all. Customers simply log in to a Web

site, choose a preferred car parked nearby, then walk out to the car

and swipe their pass card over the windshield to unlock the door and

start driving. With its seamless on-demand experience and 275,000

members in North America, Zipcar has become the dominant player

in the new car-share market. As its next step, Zipcar has begun to
lease its dashboard boxes and network software to companies and mu-

nicipalities to manage their own car fl eets more effi ciently.

As networks increasingly facilitate interaction on the custom-

er’s schedule (and not just the company’s), other types of service busi-

ness may be transformed as well, from conferences, to healthcare and

education. Salman Khan is reinventing the experience of student tu-

toring with an on-demand library of video tutorials in basic subjects

like arithmetic, algebra, and biology. His free “Khan Academy” started

as a way to tutor his young cousins long distance when their schedules

did not match his own, but it quickly began attracting students from

Uganda to Dubai to his YouTube channel. Students loved that they

could watch the lessons at any time, and pause and rewind until they

mastered each one. By the time Khan had quit his job at a hedge fund

in 2010 to focus on his nonprofi t, Khan Academy’s fourteen hundred

videos were attracting two hundred thousand unique visitors per

month and had been watched fourteen million times on YouTube.

Khan, who had never been a professional teacher, had transformed

the model of tutoring by making it available to students anywhere

with a Web connection, at anytime, on their own schedule. 7

Harness the Cloud

BMX bike rider Cameron Muilenburg is always on the lookout for

great spots to ride and practice stunts—ramps to race, embankments

to leap, even stairs with long handrails that he can ride his bike down.

61

Five Strategies to Thrive

To keep track of the best locations he fi nds, Cameron uses Evernote—

an application that bills itself as “your external brain.” Using his

phone, Cameron takes a photo, adds a few notes or tags (“ramp”

“bikeable” or “rail”), and uploads it over the air to the database on

Evernote’s remote Web servers. From there, he can remember, search,

and fi nd his notes anytime—via his phone, desktop PC, or the Web

browser of any computer in the world. Cameron’s phone adds geo-

location tags to his photos, too. So the next time he returns on a bike

tour to Joplin, Missouri, he can simply open up Evernote’s map view

on his phone to see all the photos and notes he had posted on previ-

ous trips and fi nd Joplin’s best spots for BMX riding.

I used Evernote to clip and organize more than two thousand

articles, images, blogs, case studies, and my own topical notes on cus-

tomer networks as I wrote this book. Evernote synchronizes my data

to multiple local versions so that I can access my notes on my phone

or my laptop even when I don’t have an Internet connection. And if

an idea comes to me in conversation or on the walk home from my

train, I can use Evernote’s voice memo function to capture and fi le it.

Because all the data is stored in a server cloud, my research team at

Columbia University can continually feed new sources into my Ever-

note notebooks for me to review, tag, and fi le. I even use Evernote to

remember which wines I like from my local wine shop. Each time

I go into the store, I can revisit varietals and vineyards by opening

Evernote on my phone and fl ipping through my annotated snapshots

of wine labels. “This wine was great with shrimp last time—do you

have that in stock?” I love having an external brain.

Evernote is an example of cloud computing—the practice of

storing data and running computing applications on remote servers

located in the “cloud” of the Internet rather than on our own comput-

ers located at home or work. Increasingly, cloud-computing technolo-

gies like Evernote will defi ne how customer networks access their

data. Customers are already familiar with Web mail services like Hot-

62

ACCESS

mail and Gmail, which keep their email inbox in the cloud. Calen-
dars and personal contacts are likewise stored online by programs like

Microsoft’s Outlook and Apple’s MobileMe. Services like Flickr and

Snapfi sh keep photo collections in the cloud for easy sharing. But

what if every fi le on your desktop or laptop computer was saved on the

Web? You could access them all from any Web-enabled machine in

the world or from a simple lightweight netbook or smartphone. Cloud-

based storage has become popular for emergency backup of data. But

new Web applications by companies including Zoho, Adobe, Google,

and Microsoft allow users to do much more: create documents and

spreadsheets, edit photos, and even query databases, all through the

Web, with the fi les stored remotely.

When Marc Benioff left his job at enterprise software giant

Oracle to start his own company, he saw an opportunity to use cloud

computing to reinvent the business of corporate databases. His new

company, salesforce.com, offered small businesses a way to buy pow-

erful database and customer relationship management (CRM) capa-

bilities without a large price tag. It did this by keeping the entire data-

base in the cloud and offering a suite of Web applications that his

customers could use to access the data through a simple Web browser.

Using the “software as a service” model (SaaS), salesforce.com charges

companies a simple monthly fee for use of the data and applications.

Customers no longer pay for software licenses, data servers on their

own property, or salaries for an IT team of their own to take care of

their databases. Salesforce.com began by serving small and medium-

size business. As its capabilities grew and awareness spread of the

power of cloud computing, salesforce.com quickly grew into a bil-

lion-dollar business with companies like Siemens, Motorola, Allianz

Insurance, and the American Red Cross among its seventy-seven

thousand customers. More recently, salesforce.com launched a plat-

form called Force.com, which allows users to build and run custom

applications on top of its computing platform. Whenever a custom

63

Five Strategies to Thrive

application is upgraded, the update is distributed automatically to all

users, avoiding the usual delays for deployment and licensing that you

would experience with traditional software.

The market for cloud-computing services is expected to sur-

pass $150 billion by 2013. Moving data and processing into the cloud

is redefi ning how businesses not only access information but com-

municate within their own networks of employees. Coca-Cola Enter-

prises, which distributes Coke beverages in North America, uses a

mobile cloud-computing platform to keep in touch with the twelve

thousand merchandisers who deliver its products in the fi eld to re-

tailers every day. The platform allows merchandisers to enter data

on their deliveries at each stop and tracks their progress via GPS in

their phones. The resulting information allows the company to better

allocate merchandisers, reduce their driving time, and keep them in

closer contact with fewer trips back to the central offi ce.8

In

The Big Switch, author Nicholas Carr predicts that cloud

computing will turn computing power into a utility service, like elec-

tricity or running water, as broadband access becomes more powerful

and ubiquitous. As data processing increasingly moves to servers run

by enterprise providers like Google and Amazon (both of which pro-

vide cloud-computing services to companies), everyone else will save

on overhead cost, as they access all their data in the cloud. In this

scenario, companies will have to own much less and maintain much

less; they will simply “turn on the switch” and pay a usage fee to con-

nect to the digital world. 9

Go Mobile
When I was a kid watching television episodes of Star Trek, the technology I
was most amazed by was not the phaser guns, the USS Enter-

prise’s warp-drive engines, or the transporter that beamed crew members to

the surface of alien planets. What most amazed me was

64

ACCESS

the ship’s computer, which the captain could effortlessly address by

a simple voice command, as if speaking to the air. “Computer!”

he would bark out, with no need for a keyboard, a touch screen, or

even that strange eyepiece that Spock would gaze into on the bridge.

“What are the coordinates of Gamma Centurion??” And miracu-

lously, a seemingly disembodied computer would calculate and re-

spond to the captain’s question.

Today, we are surprisingly close to life on the deck of the USS

Enterprise. Mobile access to digital networks has brought us to a rough

approximation of that ability to pose any question, wherever we stand,

and retrieve a near-instant answer. Just watch anyone with a smart-

phone and its browser pointed at Google.

In fact, “smartphone” is probably a misnomer for the new

generation of computing devices that fi t in our pockets and are revo-

lutionizing where, when, and how we access digital networks. My

“phone” is, fi rst and foremost, a mobile computer that connects me to

the power of the Internet at virtually any moment: walking on the street,

waiting in line for lunch, riding in a taxi. Smartphones now offer full-

fl edged operating systems for sophisticated applications that range from

social networking to games to business tools. My mobile computer

has even replaced the magazine at my bedside for an idle moment’s

reading while my wife slips into something more comfortable.

Friends and colleagues have similarly described the freedom

of using a mobile computer. “It used to be, if I was at home and

wanted to email or go online, I had to go somewhere—stop what I

was doing and walk into the room where my computer was,” says in-

novation and experience guru Bernd Schmitt. “Now, I can just stay

on the sofa, or in front of the refrigerator, or wherever I am. It’s always with
me.” One survey found that 25 percent of iPhone users felt as if

the phone was an extension of their brain or body. 10

We are just beginning to understand the lifestyle implications

of carrying our network connection with us everywhere we go. Blog-

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Five Strategies to Thrive

ger Steve Rubel proclaimed the death of boredom thanks to his

iPhone. How could he be bored during any idle moment when in his

pocket was a device that contained “a rented movie, three video and
audio podcasts, two thousand songs, fi ve Amazon Kindle ebooks, 10

games, 125 unread RSS items in NetNewswire plus dozens of cached

articles in Instapaper, the New York Times, and WSJ apps”? 11 This was the
downloaded content he could access during the temporary

downtime of an airline fl ight without Wi-Fi. When he landed, the

whole online universe would return as well.

By 2011, smartphones (such as iPhones, BlackBerries, and

Android devices) are expected to outnumber standard mobile phones

in the United States. 12 Every business can expect to see a large and
growing share of its customers using these mobile devices for network

access. Whatever a business’s Web sites, Web services, or online prod-

ucts, it will need to ensure that they are customized to work optimally

on the small screens and interfaces of these pocket computers.

But the network in our pocket opens up more opportunities

for completely new products and services as well. Companies can

now innovate software and services that would make no sense on a

deskbound computer, or even a laptop. Think of Evernote’s photo-

taking function that Cameron Muilenburg uses to snap memories of

biking ramps. Or the iBird Explorer—a fi eld guide on the iPhone,

complete with bird calls that you can use to attract feathered friends

to your feeder or identify their species. Or Shazam, an application

that can listen to a song playing from a radio and search an online

database to identify the song title and artist. These mobile applica-

tions demonstrate the potential for new products and services for cus-

tomers with mobile access.

Mobile applications are also being used to give employees

better access to company data and to each other. Pharmaceutical

company Genentech uses a mobile application to support its sales

reps when they visit doctor’s offi ces to discuss the company’s cancer

66

ACCESS

drugs. If a technical question comes up that a rep cannot answer (for

example, a particular drug-to-drug interaction), the rep can use his

or her smartphone to search Genentech’s employee social network

for a colleague with the appropriate expertise. Genentech offers sales

reps more than a dozen phone applications in an app store modeled

after Apple’s; offerings include the social network, Google apps, and

salesforce.com. 13

Mobile commerce (or “m-commerce”) will provide a range

of new options for interacting with customers via their phones and

mobile computers. Increasing numbers of consumers are making

purchases of physical goods via their phones, through mobile Web

pages (entering a credit card, as on any Web browser), SMS text mes-

sages (after creating an account, with billing information), or new

smartphone apps and accessories. Retailers including American Eagle

Outfi tters and Amazon.com have started using SMS shortcodes

(numbers you “call” with a text message) that allow customers to

purchase by phone or request information on a product. Magazines

such as Cosmopolitan include shortcodes in advertisements that readers can

text to receive free product samples or enter advertiser sweep-

stakes. Sears’s ShopYourWay initiative links mobile commerce, Web

sites, and retail stores to provide networked customers with a wider

range of purchasing options. Customers who can’t fi nd the product

they want while shopping in a store can order it at an in-store Web

kiosk. Customers who order a product by phone can arrange to pick

it up in-store with easy curbside pickup.

The future of mobile commerce can be better seen in Asian

countries like Japan, where 90 percent of cellphone subscribers use

the mobile Web. As early as 2005, more Japanese used mobile phones

to access the Internet than used personal computers. Today, Japanese

consumers use their phones to place orders at fast-food restaurants;

purchase products via credit card, bank transfer, or debit to their mo-
bile phone bill; check in for fl ights at airports; open car doors via

67

Five Strategies to Thrive

electronic key; and scan bar codes on products to check prices and

download product information. Emerging markets such as India

and China will create huge markets for mobile products, services,

and purchasing experiences, as the affordability of mobile phones en-

sures that they are much more widespread than personal computers.

Find Your Location

Because mobile computers include geo-positioning capability (via

GPS satellite and other technologies), they also open up the possibil-

ity for what are called location-based services (LBS). These services

include geo-tagging (tagging by location) for photos and other docu-

ments created on a mobile computer. But many other kinds of ser-

vices can take advantage of location awareness as well.

Apps such as the popular Urbanspoon, Yelp, and iFood As-

sistant help users search for restaurants, supermarkets, or wine stores

within their immediate vicinity. As computing becomes increasingly

mobile, location-based results may become the standard in search

engines, rather than a special feature. LBS apps allow much more
specialized and in-depth information on what is nearby. With Urban-

spoon, users can search for nearby restaurants while setting parame-

ters on type of cuisine, specifi c neighborhood (Soho yes, Tribeca no),

popularity, and price range. They can pull up a menu for the nearest

bistro and read customer reviews as well. After dining, they can give

their own thumbs-up or down within the app, post a photo, write a

review, and share it all with their Facebook friends with one click.

Other specialized apps will allow users to search nearby wine stores

(what’s in stock? who liked it? what was Wine Spectator’s score for that
cahors? ), subway lines (what’s my shortest route from here to Carroll
Gardens?), or nightclubs (what’s the new popular spot this week here

in Haight-Ashbury?).

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ACCESS

Location awareness also allows companies to communicate

with customers in a more targeted way, often at the point of purchase.

Location-based apps may include discounts and promotions offered

by local businesses to customers in their vicinity. Services like

8coupons.com aggregate discounts of all kinds by location and

neighborhood—so that you can see which bar is offering a two-for-

one happy hour as you get off work or which dentist is offering a free
initial checkup when you move into a new town. LBS opens up the

potential for marketers to target advertising directly to customers

nearby a point of purchase, with just the right incentives and com-

munications that are welcome and unobtrusive.

Be Real-Time

The data we access on networks is increasingly shifting toward real-

time fl ows of information. The growth of the microblogging service

Twitter fi rst demonstrated the power of real-time information and

real-time search on the Web. By 2008, enough users around the world

were posting short status updates on Twitter to make it the source of

breaking news and information on earthquakes, plane crashes, and

political uprisings—for general users and professional journalists

alike. Previously, users of search engines like Google could not even

sort Web sources by date (a year-old article on “IBM profi ts” might

appear before the latest quarterly report). The ability to search Twitter

by topical keyword or by hashtag (used to indicate a topic, such as

“#iranelection”) opened up an entirely new kind of search: real-time

search.

Twitter’s search offers a true real-time window into conversa-

tions on customer networks. With third-party dashboard applications

like Tweetdeck and Seesmic, companies can follow trending topics of

interest, as well as user comments on their own products and brands.

69

Five Strategies to Thrive

Search engines such as Google and Bing have quickly responded,

incorporating real-time data from sources like Twitter and Facebook

into their results. By 2010, six hundred million real-time searches

were being conducted each day on Twitter. 14

Real-time data can be applied to specifi c information needs

of customer networks as well. A weather forecast that is updated hourly

may be fi ne for choosing what coat to wear as you head out the door.

But in choosing which route to drive on a commute, customers would

prefer traffi c information that is analyzed in real time (you’re about to

come to a bridge: should you get in the lane that will cross on the

upper level or lower level?). Mapping and traffi c services like Israel’s

Waze will offer real-time traffi c analysis that can feed into driver nav-

igation systems.

Real-time data is likely to become important for data shared

within businesses as well. Serena Software’s Jeremy Burton trans-

formed his management style, acting as both CEO and head of sales,

by maintaining constant access to real-time business data on his

smartphone or computer. Burton uses an iGoogle home page with a

variety of widgets to display up-to-date sales data, as well as news feeds,

social networking updates, email, and instant chat. 15

Start-ups like Notify.me are developing platforms so that

companies can create customized real-time data feeds that are sent

out to computers like the “push” email feature on a BlackBerry. Al-

though customers may not want to “put their mouth on the fi rehose”

of a real-time stream of alerts from a business, the possibilities for in-

ternal use are compelling. Medical fi rms see the potential for doctors

to receive real-time lab results and critical patient updates on drug

confl icts or allergies without having to log in to a Web service to re-

quest them. Manufacturing businesses could use real-time order and

production information to improve effi ciency and streamline supply

chains. Real-time inventory analysis may lead, in turn, to greater sales

effi ciency through fl exible, real-time pricing.

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ACCESS

Embed the Network

Network access is not only moving into the devices we used to call

phones. Thanks to the power of tiny chips and short-range broadcast-

ing, it is becoming embedded in nearly every object that technology

touches.

A running shoe might seem like an odd place to insert a link

to digital networks, but that is precisely what Nike did with its Nike+

running platform. Customers insert a small device the size of a rubber

eraser into their shoe. As they run, the device measures their speed

and the distance traveled and transmits the data to a receiver plugged

into their iPod. Runners set a goal before starting, and voice prompts

interrupt their iPod’s music to update their progress (“one mile

fi nished; two miles to go”). When they return home and plug their

iPod into its computer dock, the data from their run is automatically

uploaded to their account on Nike’s online running community,

Nikeplus.com. Runners have long enjoyed tracking their mileage

while running; Nike created a device that allows them to connect that

data to the cloud and access and share it digitally. Nike has found that

once a customer tracks and uploads his or her performance on fi ve

runs, the habit becomes irresistible. In fact, most customers who pur-

chase Nike+ use it at least four times a week.

Access to Nike+ also provides customers with a regular and

powerful experience of the Nike brand. Rather than visiting a Nike

Web site only when they are shopping for a new pair of shoes, custom-
ers interact with the brand online several times a week, giving Nike

natural opportunities to showcase new products. Just as important,

Nike’s site is designed to be social. Customers form small running

groups with their friends to share their goals and accomplishments,

motivate each other, and pose competitive challenges (fi rst to run a

hundred miles, fastest fi ve-mile time, and so on). In the fi rst two years of
Nike+, more than a million runners bought the device and joined

71

Five Strategies to Thrive

this network, logging over a hundred million miles of running data,

and making it the largest community of runners ever assembled. Over

the same period, Nike’s global running-shoe sales rose $1.7 billion,

and its U.S. share of the category grew from 48 percent to 61 percent.

Industry analysts have attributed a signifi cant amount of that growth

to Nike+. 16

Others are following suit by embedding Internet access in a

variety of devices. Since the introduction of the iPhone’s operating

system 3.0, any developer can create applications that allow iPhones

to talk to external accessories, such as shoes, televisions, and even

medical devices. LifeScan was quick to introduce an application for

diabetes management. With it, patients who need to test their blood
sugar level and inject insulin throughout the day can transmit glucose

readings automatically to their phone, easily track their diet, calculate

how much insulin to take, and even choose to transmit their progress

to their physician or family. Operating systems for other smartphones

are likely to soon offer similar compatibility, linking embedded sen-

sors in our physical world to our data and networks in the virtual

world.

Other products are quickly incorporating their own embed-

ded access to the Internet. E-book readers like the Kindle and the

Nook download and synch books and magazine content over a wire-

less Internet connection. Game consoles, televisions, printers, and

cameras are all using Wi-Fi connections to download, upload, and

share data and content without needing a computer connection. Our

increasingly connected cars will look more like the Zipcar that trans-

mits data on location, performance, and safety to servers in the cloud.

By 2015, it is predicted that there will be fi fteen billion devices with

chips inside connecting them to the Web—in what has been dubbed

the “Internet of Things.” 17

Our networks will even be embedded in our own bodies soon,

thanks to innovations in the new fi eld of “intelligent medicine.” Com-

72

ACCESS

panies such as Proteus Biomedical have developed tiny sensors made

of food ingredients, which are activated on swallowing and transmit

an ultra-low-power digital signal before being digested in the body.

This signal transmits data to a receiver on the body (such as a digital

wristband), which tracks the patient’s medication (dose, type, and time

taken), as well as the body’s response, including heart rate, activity, and
respiratory rate. For only a few cents per sensor, these devices may

soon allow for much more personalized and effective medication.

Keep It Simple

One more feature has been critical to the success of every new break-

through in network access, whether it is Nike+, Twitter, the iPhone,

or salesforce.com. Each of these services is simple to use. By focusing

on their core functionality, each one sacrifi ced or avoided some of the

countless additional features that engineers could have easily crammed

into them (imagine the temptation to add a heart-rate monitor and

GPS into Nike+). Instead of overwhelming complexity or a steep

learning curve that would hinder customer adoption, each of these

services is built with an interface that is intuitive for new users. As a

result, each one provides customers a compelling simplicity.

Customers demand that network access be made simple.

After years of “feature creep” in technologies from word-processing

programs to digital cameras, customers are turning away from any-

thing new that requires a [Your brand] for Dummies book. No one

wants to pay for diffi cult experiences any more. Our digital world is

already so complex, with so many platforms and devices to wade

through, that customers gravitate toward any product or service with

fewer features and an easier, more intuitive access to the digital

world.

Think of the mobile computing market. Microsoft invested

heavily in its initial Windows Mobile platform, which tried to cram

73

Five Strategies to Thrive

in the entire functionality of Microsoft Offi ce into a mobile phone

screen. “Look, you can edit Excel spreadsheets, PowerPoints, and

Word documents!” said Microsoft. But users just saw a tiny screen

fi lled with drop-down menus and unreadably small icons. By con-

trast, the BlackBerry focused on doing a few things really well—email

and phone—and created an incredibly simple and effi cient design for

them. Apple’s iPhone offered another equally easy operating system,

with an intuitive touch interface focused on browsing the Web, music,

and media. Like most Apple products, it came with an instruction

guide the size of a cocktail napkin. Unsurprisingly, the iPhone and

the BlackBerry won the hearts of customers and reviewers alike.

The Flip pocket video camera is another product that suc-

ceeded by offering simpler network access. When the Flip arrived, the

few customers who were already shooting digital video largely derided

the camcorder for its lack of features and its low resolution. Why would

anyone buy a video recorder whose image was not much better than

what you could shoot with a digital camera? But the radical value of the

Flip was its simplicity. Small enough to fi t in a shirt pocket, the Flip

featured one-push recording and a fl ip-out USB key on the side. All

you had to do was push to record, push to stop, then plug the USB key

into the side of your computer, and . . . voila! The footage was automatically
uploaded to your YouTube account and the world.

YouTube had already made online video incredibly popular

by making access simple. Its strategy was to lower the bar somewhat

on image quality and focus on making video incredibly simple to cre-

ate, embed, and share in networks. No more worries about codecs,

compression rates, and incompatible player formats. Suddenly, any-

one with digital video footage piling up unused on their computer

could easily share it online. The Flip camera applied the same strat-

egy to solve the last remaining hurdles for mass users: shooting that

video and moving it off the camera. Together, YouTube and the Flip

revolutionized online video, turning millions of users into videogra-

74

ACCESS

phers for the fi rst time—just as, more than a century ago, Eastman

Kodak’s simple and inexpensive Brownie box camera turned millions

of amateurs into fi rst-time photographers after its launch in 1900.

Simplicity of access is critical for any organization as it exam-

ines how to conduct business and communicate with constituents digi-

tally. How easy is it for customer to access your digital content and ser-

vices? How easy is it for them to do business with you? To pay you?

Retail giant Amazon.com has built its business with a relent-

less focus on optimizing the online customer experience—making it

easier to fi nd, evaluate, purchase, track, and receive products from

Amazon than from any other e-tailer. Amazon Web designers con-

stantly tweak, test, and modify every icon, purchase link, and informa-

tion display. Amazon’s metrics team uses A/B tests to compare the

impact of each proposed modifi cation against a previous control. One

of Amazon’s early differentiators, the “1-Click” purchase option, was

widely regarded as likely to fail, even by employees. This was back in

the 1990s when customers were still afraid to enter a credit card on a

Web site, let alone commit to a purchase without multiple confi rma-

tion screens. But when 1-Click went live, the results were clear: cus-

tomers bought more, and they even took the time to write Amazon

and tell them how much they loved its simplicity.

Amazon’s innovations have continued since then, all focused

on making products easier to fi nd, evaluate, and purchase. Amenities

include: the ability to locate your previous orders (forgot what exact

type of printer ink you need? Just click on what you ordered six months

ago), save prior shipping addresses (need it sent to your Chicago of-

fi ce? No need to type it in; you sent something there last year), or

display arrival dates next to each shipping choice (“2-day shipping

costs $11.99—will ship Dec 19 and arrive Dec 21”). When Amazon

began selling digital music downloads, it knew that stealing market

share from Apple’s iTunes would require making its interface easy for

iPod users. Amazon developed a download interface so that the fi rst

75

Five Strategies to Thrive

time you paid for an MP3 song, it could seamlessly download the

music into your preexisting iTunes music library, without even requir-

ing users to browse and select the appropriate fi le folder. Amazon’s

relentless focus on simplicity and ease of access has made it one of the

top-converting retail Web sites and recipient of consistently high

scores in the American Customer Satisfaction Index.

The Future of Access

Even as customers’ desire to access digital data and interactions stays

constant, the technologies available to help them achieve that con-

tinue to evolve. As network access becomes more ubiquitous and em-

bedded in more devices around us, your customers’ online and off-

line experiences will continue to merge.

This is already visible at conferences, where the live experi-

ence of speakers, panels, trade booths, and face-to-face networking

are today juxtaposed with “backchannel” conversations and search on

digital media. Danah Boyd relates a typical experience of listening to

a speaker at a Modernity 2.0 conference in Urbino, Italy, with laptop

in hand: “During the talk, I had looked up six different concepts he

had introduced (thank you Wikipedia), scanned two of the speakers’

papers to try to grok what on earth he was talking about, and used
Babelfi sh to translate the Italian conversations taking place on Twitter

and FriendFeed. . . . Of course, I had also looked up half the people

in the room . . . and posted a tweet of my own.” 18

For some of the older attendees at the conference, the behav-

ior of Boyd and others was perplexing, but for her cohort of digitally

networked scholars, access to the Internet during presentations is a

tool to enrich their understanding and participation. Readers on her

blog chimed in with comments describing how they, too, access the

mobile Web in the classroom, in museum galleries, and at dinner par-

ties to expand on and enliven their daily experiences. 19

76

ACCESS

As more data shifts to real time on the Web, our network ex-

periences will focus less on searches of relatively static content and

more on live interactions. New hardware for self-charging phones (for

example, magnetic coils that recharge as you walk) will allow us to

stay online at all times. As sensors and network connections become

embedded in more of our world, our pocket computers will be con-

stantly talking and learning from the things around us—scanning bar

codes on the pedestals of public statues, picking up Bluetooth signals

from passing stores, or receiving the expected arrival time of the next

train as you approach a station.

Our new experience of “augmented reality” (AR) will allow

us to literally juxtapose the online and offl ine worlds and see network

data as we look at the world around us. The start-up Layar was one of

the fi rst to bring AR to mobile phones that have both location aware-

ness (where you are) and a compass (which direction you are facing).

Using the Layar app, users can hold up their phone and on the screen

see the city streets in front of them (coming through the phone’s cam-

era lens) overlaid with fl oating markers and digital information about

their surroundings. In Layar’s fi rst iteration, this information included

arrows to nearby subway entrances and hovering real estate listings of

apartments for rent or sale. Soon users had the option of accessing

other layers of information—reviews for that bar you are looking at,

historical information from Wikipedia about the park you are visiting,

or sale prices on the items in the store you are passing by. In the next

generation of AR (“true AR”), live video input from your phone will

allow it to respond to dynamic information on people, vehicles, and

other nonstationary items around you.

Keys to an Access Strategy

The desire to access digital data, content, and interactions is at the

heart of today’s customer networks. Whatever your type of business,

77

Five Strategies to Thrive

an access strategy can add value to customers who are increasingly

spending their lives in digital networks.

This can be done by innovating new products and services

that help your customers access their own data and interactions more

easily and fl exibly, or by making it easier for your customers to access

your business’s digital products, services, and communications.

Successful approaches to an access strategy include: offering

on-demand services and content; using cloud computing to make

data accessible from any device; offering mobile access for phones

and portable devices; using location awareness to better target and

communicate; providing real-time feeds of critical data; embedding

network connections in new products; and focusing on simplicity and

ease of digital interfaces.

Whatever the approach, digital access is largely about speed:

you want to offer the most fi ndable, fl exible, speedy choice among

competitors. On-demand car rentals, real-time Twitter feeds, and mo-

bile-phone payment systems are a part of our lives, and the speed of

service has become increasingly critical to business and mass custom-

ers alike. “I can get that for you tomorrow” is fast becoming a reason

for your customer to look somewhere else. Faster access to shared

data within a business is increasingly critical as well. Can you, like

Jeremy Burton, fi nd up-to-the-minute information on your critical

business metrics, wherever you are, throughout the day?

If your business is focused on better digital access both within and

outside your organization, you are well on your way to delivering

value to customer networks and earning their business and their

loyalty.

But as customers connect with you more easily, quickly, fl ex-

ibly, and ubiquitously, what will they fi nd? What information are you

providing? Are you simply using the new tools of our networked age

to blast out the same broadcast messages: “Our brand is best! We de-

78

ACCESS

liver innovative, global, best-in-class products! Buy now!”? Or do you

recognize that the best way to communicate with customer networks

is to provide valued content and information, so that they will engage

and spread the word virally among others?

What is the content that people want? In a world of amazing

network access, we all seem to suffer from information overload and

attention defi cit. So how do you get customers to pay attention to you?

To fi nd the answer, we fi rst need to understand which content cus-

tomer networks seek out and engage with, and why.

79

CHAPTER4

ENGAGE

Become a Source of Valued Content

Mone was just the kind of young woman whom Japa-

nese pundits decried as evidence of the death of read-

ing; her generation seemed to spend all their time on

cell phones, while book lovers of any kind were a vanishing breed.

Mone was twenty-one, a college dropout and newlywed, when she

went home from Tokyo to her parents’ house in the country for a visit.

Melancholy and refl ecting on her life, she began to while the hours

composing a story of a girl not unlike herself, written in short screens

of Japanese characters on her cell phone. Mone (the pseudonym she

picked to write) was posting to a Web site called Maho i-Land where
users can post media of various kinds, including on a “let’s make nov-

els” template. Mone posted about twenty screens of text each day.

After three days, readers on the site started asking her to post more,

eager to hear what happened next to her characters. Within nineteen

days, Mone had fi nished writing “Eternal Dream.” This keitai sho-

setsu (cell phone novel), written on a lark by its fi rst-time author, was read
nearly three million times online and went on to become a successful movie
and printed book.

Keitai shosetsu may be the fi rst new literary genre of the digi-

tal age. It fi rst appeared when Japanese phone companies started of-

80

ENGAGE

fering unlimited data plans for Web-enabled phones. The genre is

dominated by romantic fi ction like “Eternal Dream” where young

love is foiled by tragedy and drama at nearly every turn. But the story

of the genre has been anything but a tragedy. In a country where read-

ership of books was bemoaned for being in decline, the genre has

proven explosively popular with young readers. Maho-i-Land receives

a staggering three and a half billion visits to its site per month. Keitai

shosetsu have had a profound impact on the sagging business of

printed books as well. As the most popular works have started to be

released in print copies, keitai shosetsu have dominated Japan’s best-

seller lists for fi ction, and been a boon to publishers struggling to

make a profi t.

Written on the screen, these novels read left to right, rather

than the standard top-to-bottom sequence for Japanese characters.

They make heavy use of hiragana script, because kanji (an important script
in literary writing) can only be typed indirectly on a phone. The

resulting style is breezy and slangy, with copious line breaks to rest

the eyes of a small-screen reader. When the best-selling keitai sho-

setsu were fi rst released in print, publishers kept the unorthodox print-

ing style, which had never before been seen in a Japanese book. They

not only succeeded, they began to infl uence other print books. The

Goma publishing house has begun releasing traditional literary clas-

sics in new editions for the youth market, formatted on the page to

mimic the distinctive scripts and left-to-right format of cell phone

writing. Goma’s marketing describes them as “Masterpieces in your

pocket! Read horizontally!” 1

Mone was an accidental author, more comfortable compos-

ing on her phone than with a pen in her hand. Yet her readers point

to the fact that even a generation weaned on digital networks still

continues to seek out engaging content. It may simply take new and
unexpected forms.

81

Five Strategies to Thrive

The Engage Strategy

Customer networks seek to engage with content: cell phone novels,

Wikipedia entries, breaking news updates, sports scores, or video clips

from Saturday Night Live. The content may be trivial or complex,

useful or entertaining, a momentary glance in a multitasking fl ow, or

completely absorbing. The media that embody our content are chang-

ing, though, as are our habits of engaging with it.

Contrary to the wailings of doomsayers, we are not becoming

a nation of nonreaders. The readership of print newspapers in the

United States continues to decline sharply, and yet at the same time,

the New York Times (via its Web site, mobile site, RSS feeds, online video,
blogs, and phone apps) has millions more readers than ever

before. A few short years ago, when you rode the New Jersey Transit

trains into New York City during commuting hours, you would see

passengers reading newspapers and magazines; now they are still read-

ing, but on their phones.

The average age of Americans who watch television program-

ming via broadcast (rather than time shifted, or over the Internet) is
now fi fty. 2 Coincidentally, the customer age at which most television
advertisers stop paying for viewers is also fi fty years old. So by the
standards of mass-media marketing, half the audience for TV is literally

too old to count. At the same time, consumption of TV content on

the Web continues to rise, with Hulu.com (the joint venture showing

programming from NBC, Fox, and ABC) having become one of the

most watched sites for video on the Web. The top-ranked site, You-

Tube, receives more than one hundred million unique visitors every

month from the United States alone.3 Niche video content draws audiences
as well, such as the TEDTalks series, which showcases

speeches by innovators and scientists on new ideas from their fi elds.

TEDTalks have been viewed online more than 150 million times.

Online video has exploded as a mass-creator medium (as opposed to

82

ENGAGE

simply a mass-audience medium); it is being produced not just by

television networks but by amateur musicians, movie mash-up artists,

and corporate communications departments.

Other digital media like gaming are quickly becoming main-

stream as customer networks seek out interactive content. Nintendo’s

Wii game console, with its interactive physical style (swing the con-

troller to swing your virtual bat) and easily shared group play, helped
bring younger and older audiences into a gaming world that was once

dominated by eighteen-to-twenty-four-year-old men. New technolo-

gies like augmented reality are poised to provide even more interac-

tive digital experiences for customers, blending the online and offl ine

worlds. In 2009, U.S. Internet users spent fi fteen billion hours on

online content sites, more than any other category (including social

networking sites), and 40 percent of their total time online. 4

Engaging with digital content—interactive, sensory, and rel-

evant to our desires or needs—is the second core behavior of cus-

tomer networks. It provides a powerful opportunity for businesses and

organizations of all kinds to attract, connect, and strengthen relation-

ships with customers by providing content that those customers seek.

The second customer network strategy for business is the

engage strategy—to become a valued source of content and informa-

tion for customers. This content can be funny, entertaining, or highly

useful. It may be content the business produces, curates, or sponsors.

By creating engaging content for customer networks, an

engage strategy can help an organization achieve key business objec-

tives, including: breaking through media clutter, earning permission

to market to customers directly, communicating to hard-to-reach cus-

tomers, driving direct marketing sales, and generating customer leads.

The road map of how to engage customers with content has

shifted dramatically in the age of customer networks. In the broadcast

marketing era, companies would simply piggyback advertising mes-

sages onto mass-media content, interrupting customers to force them

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Five Strategies to Thrive

to watch marketing pitches in an era when customers had no way to

avoid them and few media choices. Today’s customer networks face

no such limitations, and engaging them with content requires a dra-

matically different approach.

Who is producing content that attracts audiences? How are

customers consuming, sharing, and repurposing it? And what formats

do they fi nd engaging in new digital media? To understand how busi-

nesses can use content to engage customer networks, we must fi rst

better understand the new landscape of media.

Age of Abundance

Google’s CEO Eric Schmidt estimates that by the year 2019, the digital

devices in our pockets will be able to carry more hours of video than we

could watch in a lifetime. “Start watching when you’re born. Maybe

you’ll see the fi nal credits in old age.” 5 There will be no trouble fi lling up
these devices, thanks to the ubiquity of content in our digital age.

The

fi rst challenge for an engage strategy is the abundance

of content today. In an earlier era of industrial information, the distri-

bution of media required large capital investments in infrastructure,

such as printing presses, delivery trucks, radio transponders, local

television stations, and movie theaters. Creating content for news-

papers, radio, television, fi lm, and other mass media was expensive,

too (think of those professional copywriters, camera operators, and

editors). But most of all, it was the cost of distributing that set limits.

Only a small number of players ever got air time on mass-media

broadcast channels.

Today, anyone with Internet access and a consumer device

like a digital camera or a mobile phone is empowered to create video,

audio, text, and photos and share them with the world via online

networks. And create it they do. The result has been described as a

glut, or an “information overload.” More accurately, what we are ex-

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periencing is a dramatic reversal of abundance and scarcity in our

economy of information.

In the past, that economy was marked by a scarcity of content

(two local newspapers and three national television channels were

the only options for most of us) and an abundance of attention (an

advertiser could reach the attentive eyeballs of tens of millions of

viewers by advertising on a single television program). Today, the situ-

ation is reversed. We face an overwhelming abundance of content

and a scarcity of attention. We have moved from three national TV

networks to hundreds of cable channels to the near infi nitude of the

Internet. As customer attention fragments between all these options,

advertisers are rushing to buy ever smaller and smaller slices of it.

Which is not to say that attention cannot be won. Compel-

ling content continues to draw large audiences online. New opportu-

nities have arisen, such as search advertising, to buy the attention of

customers. Most important, as the mass media decline in reach and

power, more opportunities are opening up for companies to reach

their customers directly without the intermediary of a television pro-

gram, radio show, or other media from a third party. But the challenge

of standing out in the ocean of content, of capturing customers’ atten-

tion directly, is intense. The ability to engage customer networks with

content is simultaneously more diffi cult and more valuable.

Malleable Bits

Another challenge for content in the digital age is the diffi culty of

controlling how it is distributed or distorted within digital networks.

When content existed only in analog formats—newspapers,

music records, television broadcasts, and the like—it came in a whole

piece, uneditable to the customer. But digital content is inherently

more malleable. By design, the Internet is a giant “copy machine,” in

the words of futurist Kevin Kelly, capable of producing and distribut-

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Five Strategies to Thrive

ing infi nite copies of any information for free. 6 It is also radically easy to
parse that content into ever smaller pieces. Anyone who has used a

mouse to point and click can grab the text content of any Web site,

select portions, rearrange it, and share it with others via email, blog,

or social network. Even our less malleable digital media, such as audio

and video, can be easily captured and edited by many users.

The result has been the atomization of content on digital net-

works. That is, any content in networks can be, and will be, reduced

by users to its most elemental unit—its “atom.” With the shift to on-

line distribution, music quickly reverted from a medium of albums to

a marketplace of individual songs (the atom of music), downloaded

or streamed from sites like iTunes or Rhapsody. The atom of news

journalism is the article, and although the New York Times has many readers
online, they frequently arrive via hyperlink to read a single

article—without needing to enter through the site’s home page or

purchase an entire day’s newspaper.

As a result of this atomization, media producers have lost

much of their ability to bundle content. It used to be, if you wanted to

read the classifi ed advertisements in your city, you had to pay to buy

the national news, sports, fashion, and politics, too—a whole news-

paper that was fi nanced, in large part, by the classifi ed ads. Now, of

course, classifi ed ads exist as a separate service (mostly free on craigs-

list), and each section of the local paper must attract its audience on

its own merits.

This unbundling of media also poses a stark challenge for

advertisers. Once upon a time, television could force huge audiences

to watch advertisements bundled in with its programs. Now viewers

skip many of these ads by using digital video recorders or watching

TV content online. New formats and technologies offer some oppor-

tunities to foist unskippable advertising on customers, but the tide has

shifted. Customers are increasingly disinterested in having their lives

interrupted by advertising. They have more options to engage content

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without it. So they are less willing to give their attention to the media

that continue to insist on interruption.

Advertising agencies have talked for years about how to mea-

sure how “engaging” their ads are for customers. But if broadcast ad-

vertising was truly engaging, we would have no need for television

programming, and a lot of money could be saved on producing all

those comedies, sci-fi dramas, and reality show contests. But the fact

is, no one has ever turned on the television at 7:00 pm because he or

she wanted to watch a beer commercial.

Engaging Formats

The formats of content that customers fi nd engaging are also changing,

so content needs to adapt. These new formats are much more dynamic

than in the broadcast age, or in the fi rst era of the mass consumer Web,

with its static HTML pages and reliance on text and low-resolution im-

ages. Instead, networked customers are drawn to content that is:

• Sensory: Customers seek out the rich media that a broadband

Internet is now able to provide, including video, audio, maps to

navigate, and plentiful images. Even newspaper Web sites have

become multimedia platforms, incorporating original video,

audio interviews, and photo slideshows, to bring stories to life for

customers.

• Interactive: Customers seek content they can interact with,

rather than just consume passively. They want to search for key-

words, follow hyperlinks to pursue related information, rewind

or skip forward within audio and video, and scan across maps or

diagrams while zooming in and out. They want to navigate

through virtual space, whether steering an avatar in an online

game, exploring panoramic views of the planet at all angles and

resolutions in Google Earth, or strolling through a virtual con-

ference as they network with professional contacts and explore

diverse presentations and content online.

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Five Strategies to Thrive

• Shareable: Customers don’t just want to experience content on

their own, they want to share it with others in their networks by

emailing a link, posting a video to their blog, or embedding a

widget in their Web page. When customers share your content

in networks, it extends the impact and creates the opportunity

for a “viral” effect, carrying content to many more customers

than you could reach on your own. Your content comes with

much more credibility when it arrives from a known colleague

or friend rather than directly from your business. But sharing is

not just good for your business, it’s an experience that customers

enjoy. The content becomes more engaging because they can

share it with others who they think will enjoy it as well.

• Mashable: Some of the more sophisticated customers in your

network will enjoy doing more than just passing along your con-

tent; they will want to “mash it up.” Mash-ups are the collages of

a digital age. Just as Georges Braque and Pablo Picasso cut out

and combined pieces of paper, fabric, and images to create

painterly collages, today’s digital artists create new works out of

editing and remixing what came before—like the critically

acclaimed Grey Album by Danger Mouse, which mashed up

musical elements from the Beatles’ White Album and The Black

Album by Jay-Z.

• Portable: Customers prefer content that is accessible and porta-

ble. If they can download it for later viewing, subscribe to it on

a podcast or videocast, or access it through their phone, this

increases their opportunities and likelihood to engage with it.

Increasingly, content is not just consumed during dedicated

moments sitting before a television, desktop computer, or movie

screen. It is engaged on the go, through mobile devices.

• Varied in Size and Length: It used to be that rich media content over the
Internet was greatly limited in length. With limited

broadband access and fi le compression, it was not feasible to

deliver videos longer than three minutes. As those limits on

delivery have vanished, platforms like Hulu.com and Netfl ix’s

streaming service have proven that there is an audience for

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ENGAGE

thirty-minute and even ninety-minute content on the Internet.

Length now should be determined by the content itself and how

the customer seeks to consume it—be it in short serial form or

in longer in-depth pieces.

Five Approaches to Engage Strategy

With the broadcast advertising model turned on its head, businesses

face a remarkable new imperative: to create or provide content that

engages customers directly. We are all media companies now.

If brands and businesses hope to foster awareness and rela-

tionships with customers, they must create content and experiences

that customer networks will value, seek out, engage with, and share

with others. The emerging model for marketers is to create content

that actually engages the customer with your brand—rather than en-

gaging them with something else and then shoving ads at them at

regular intervals.

To engage, a business may become a media producer itself.

Or it may become a curator, pulling together content from the over-

whelming abundance of the Web that is selected to be particularly

relevant to the customer and the company. Businesses may become

sponsors, reinventing the model of early television programs and inte-

grating their brand into content in new ways. Whatever roles busi-

nesses take, they need to understand the dimensions of engagement

in a digital age.

By looking at businesses that have successfully created con-

tent that both engages customer networks and increases their connection to
the business and its brands, we can see fi ve approaches to an

engage strategy:

• Try Branding, Not Selling: Offer a story, entertainment, or a

compelling idea that you can link convincingly to your brand,

rather than trying to sell products or services directly.

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Five Strategies to Thrive

• Offer Utility: Provide content and interaction that helps solve a problem or
answers a critical information need for your audience.

• Show a Personal Face: Engage customers by showing a personal

side and an authentic voice in digital content rather than the

objective and authoritative voice of an institution.

• Focus on the Particular: Focus on niche audiences and their spe-

cifi c needs and interests, rather than trying to engage every pos-

sible customer with the same content.

• Make It a Game: Use the interactive, goal-based play of online

games to engage customers for fun, education, and relationship-

building.

By examining these fi ve approaches and how they have been

used successfully by a wide range of organizations, we can gain in-

sights into how to create engaging content for customer networks.

Try Branding, Not Selling

When California pop-punk band Blink-182 reunited after a four-year

hiatus, fans of the band got their fi rst chance to see them together on

the back of a bag of “Late Night” fl avored Doritos. The band’s musi-
cal performance came to life for consumers using augmented reality,

one of the newest forms of interactive digital media. A special marker

was printed on the back of select bags of chips; when the custo-

mer visited Doritos’ Web site and held up the bag to the webcam of

their computer, a 3-D image of the band seemed to burst out of the

chips bag and perform a song on a holographic stage. Users could

manipulate the concert by shaking and moving their Doritos bag in

front of their webcam, and if they made enough noise at the end of

the song, the virtual band would come back onstage and play an en-

core, which was followed by an opportunity to enter a Doritos contest

to win tickets to the band’s non-virtual summer tour. Ann Mukherjee,

marketing vice president of Frito-Lay North America, said the experi-

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ence gave Doritos lovers a chance to enjoy their favorite music in an

unprecedented way. It also gave them an unprecedented experience

of the Doritos brand. 7

One of the biggest success stories in promoting a small busi-

ness with online content is the Blendtec video channel on YouTube.

In its now-famous “Will It Blend?” videos, fi lmed with cheesy music

in a retro 1970s style, company founder Tom Dickinson shows off his

high-powered blenders. He puts them to the test by pulverizing every-

thing from glow sticks to golf clubs to an iPad. The small, specialty

food manufacturer built huge awareness of its blenders as the short

videos attracted more than eighty million views. Not bad visibility for

a brand that never bought a television spot.

Like the Doritos virtual concert in a bag, the Blendtec blender

videos give the customer an extremely entertaining experience. They

put the company’s brand front and center in that experience. And

they create positive associations for the brand, linking it to an idea

(“powerful blending” or “cool late night entertainment”) and a mem-

orable musical or visual story.

In neither case, however, was the digital content a traditional

advertisement focused on selling. The Doritos virtual concert was a

high-tech reward for customers, with a chance to enter a sweepstakes

(and, no doubt, enter a database for follow-up communications from

the company). The Blendtec videos keep the focus on the comedy

and make no mention of the product model or where to purchase it.

“The thing about all these things that go viral on the Web,”

says digital marketer Stephen Voltz, “is that the brand is very small.
It’s there, but sort of down in the corner. It’s not trying to push you

with any hard sell to buy. ”8

Voltz should know. He was the customer who, along with

Fritz Grobe, created a set of videos in the woods of Maine showing

how to turn Diet Coke bottles and Mentos candies into exploding

fountains. Their videos, created completely independently of the

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Five Strategies to Thrive

companies, have been seen more than forty million times and spurred

millions of dollars of additional sales for Mentos and Diet Coke.9

Customers are seeking entertainment, not hard-sell advertising. Busi-

nesses need to understand that.

Offer Utility

For many companies, the most effective way to create content that

their audience will seek out is not to be creative, funny, or entertain-

ing but simply to be useful. By providing content that solves a prob-

lem or answers critical questions for the audience, organizations can

create extremely engaging experiences for networked customers.

That was the goal for American Express when it launched its

OPEN Forum site for small business owners—the target customers

for its American Express OPEN accounts. The OPEN Forum’s Idea

Hub features articles on such topics as money, marketing, manage-

ment, technology, innovation, and entrepreneurship that are written

by well-known business writers including Henry Blodget, Guy Kawa-

saki, and Adam Ostrow, thanks to media partners that include Busi-

nessWeek and Wired magazines. Additional contributors write articles for

entrepreneurs focusing on “in-the-trenches” topics such as fran-chise
management or taking a small business global. The forum in-

cludes a video series that features entrepreneurs ranging from Susie

and George Kirchhoffer of Moravian Florist in Staten Island, New

York, to Richard Branson, chairman of the multibillion-dollar Virgin

Group. The forum’s calendar highlights upcoming events and con-

ferences for small business owners around the country. Its “Pulse”

feature pulls Twitter updates that are relevant to small business own-

ers, sortable by industry. Altogether, these features make the OPEN

Forum a powerful resource for small business owners seeking useful

content on the Web, whether commissioned, produced, or curated by

American Express. It’s a strategy that matches Amex’s focus on build-

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ing its OPEN business by becoming a strategic partner for small busi-
ness owners. The Forum grew from 20,000 to 160,000 monthly

unique visitors in just one year. 10

Computer maker Dell has pursued a similar strategy with its

Web site digitalnomads.com. The site targets the mobile workforce of

“digital nomads” who are prime customers for Dell’s laptop comput-

ing products. The Digital Nomads site sponsors blog and video con-

tent from independent thought leaders focusing on the lifestyle and

work trends of today’s mobile workforce. Content includes tips for

working remotely, data security in the cloud, the best airline Wi-Fi

service, work-life balance, keeping in touch with the offi ce when work-

ing from home, smartphone product reviews, software links and down-

loads, and even listings of the best cafés to work in. Instead of creating

a site to advertise Dell’s laptops, Dell engages the most ardent and

infl uential laptop users with useful and relevant content, sponsored

by Dell, and with a few Dell product videos in the sidebars.

Content that aims to engage by being useful can also take

forms that are more interactive than articles, videos, and news. One

such form is branded apps for smartphones. Kraft created its iFood

Assistant phone app with the goal of forging deeper relationships with

its customer network, particularly women age twenty-fi ve to fi fty-four

who shop for family meals with their smartphone in hand. The iFood

Assistant offers seven thousand recipes that can be browsed by meal

type, key ingredient, or length of preparation time. Users can add

them to a mobile recipe box that feeds into “smart shopping lists”

on the phone and sorts the ingredients from all the recipes by shop-

ping category (dairy aisle versus produce versus meat). With their

digital shopping list in hand, customers can search for nearby grocery

stores via GPS. Back at home, step-by-step instructions and instruc-

tional videos aid in preparing the recipes—which happen to include

a healthy sampling of Kraft-manufactured ingredients.

The iFood Assistant quickly became the second most popular

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Five Strategies to Thrive

app on the iPhone in the “lifestyle” category, with more than a mil-

lion downloads despite a cost of $0.99 to consumers. Besides being

able to charge customers for its marketing, Kraft sees the app as a way

to gather data on when and how customers are shopping and which

ingredients and recipes they prefer. The app encourages purchase of

Kraft’s products via its recipes and displays advertisements during

some videos and searches. Most important, it provides useful content

that builds affi nity between the customer and the brand by engaging

in an intimate experience with the customer. One customer reviewed

the app thus: ‘‘I’ve never really cooked a lot but these recipes make

me feel like Rachael Ray in the kitchen! Thanks Kraft!’’

Opportunities to engage customers with genuinely useful

content can be found in almost any industry. Home Depot has built

a popular YouTube video channel featuring how-to instructional vid-

eos with tips on mowing your lawn, starting a container garden, and

saving money with home insulation. The video channel positions

Home Depot as a trusted adviser to customers. Fidelity Investments

offers customers podcasts with insights on market trends, widgets for

monitoring your investments on your computer desktop, and market

commentary throughout the day on Twitter. Like Kraft, grill maker

Weber has a cooking app for the iPhone. Weber’s all-purpose grilling

companion lets you set a timer for your specifi c cut of meat (strip

steak versus porterhouse) and its thickness (measured to the quarter

inch). One reviewer exclaimed, “A man, a grill, and an iPhone. What

could be better?” As customers continue to tune out advertising, offer-

ing utility can be an effective approach to getting customers to experi-

ence your brand and tune in to the voice of your business.

“Are you making something better for your customer or in-

truding on an experience they are having?” asks Claire Bennett, se-

nior vice president of advertising, marketing, and media at American

Express. “We want to be invited in by the consumer: from transaction

to relationship; from disrupting to empowering. ”11

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Show a Personal Face

After taking offi ce, President Barack Obama continued posting on-

line videos to reach his constituents, but now he used both the “White-

House” YouTube channel and his “BarackObamaDotCom” channel.

Both featured the same star brand, yet the personal channel had more

than twice as many subscribers during his fi rst six months in offi ce

and received ten times as many views.12 What was the difference?

Both sites covered the same topics: the president’s agenda, legislative

goals, and Supreme Court appointment. But while the White House

channel offered offi cial-feeling videos of public speeches, bill sign-

ings, and press conferences, the Barack Obama channel featured in-

timate video chats by the president and the stories of individual Amer-

icans facing the challenges his agenda aimed to address. The most
viewed of all the videos: candidate Obama dancing as he came on-

stage for Ellen Degeneres’s talk show.

Content that is more personal, that shows the authentic sto-

ries and perspectives of individuals, and not just the talking points of

a press release, is far more engaging to customers and more likely to

be embraced and shared within customer networks. This is why the

best corporate blogs have a personal point of view—they are clearly

written not by a nameless communications offi cer but by an execu-

tive, CEO, or business manager with a particular interest, specialty,

and personality.

An authentic persona comes across loud and clear in the on-

line videos created by wine seller Gary Vaynerchuk for his Wine Li-

brary TV channel. When Gary took over his father’s wine distributor-

ship in Springfi eld, New Jersey, it had annual revenues of about fi ve

million dollars. Within three years, he had grown the business to ten

times that size, in large measure due to the runaway success of his

online video channel.13

Every weekday, Gary sits down in his offi ce wearing a New

95

Five Strategies to Thrive

York Jets T-shirt to sample a few wines by swishing them in his mouth

and spitting into a large metal bucket. In spontaneous, unscripted,

and unedited monologues, Gary reviews his wines of the day, offers

thoughts on wine appreciation, and answers questions that fans have

sent him on Facebook. Gary has tested wine outdoors during a snow-

storm. He has tasted kosher wines for Passover with his dad. In an

episode devoted to developing your fl avor profi le, he tasted kiwi, cur-

rants, buttered popcorn, Cinnamon Toast Crunch cereal, sage, pa-

prika, a sweaty sock off his own right foot, and a mouthful of New

Jersey dirt. Through it all, Gary’s offbeat personality emerges. His

natural lack of pretension complements his intense passion about

his subject and his eagerness to engage his audience. That audience

has steadily grown, to include countless thousands of “Vayniacs.” In-

cluded among these are celebrity guests on his show: British wine

guru Jancis Robinson, hockey star Wayne Gretzky, and tech entrepre-

neur Kevin Rose, to name just a few. The growth of Vaynerchuk’s in-

tensely loyal audience, and the impact on his business, show the

power of an authentic personal voice to engage customer networks.

A similarly devoted video following can be found among a

different customer group: musical theater fans. More than two hun-
dred thousand people have tuned into the YouTube channel featur-

ing the touring production of the Broadway musical Spring Awaken-

ing. (By way of comparison, this is nearly ten times the number of views for
the very active YouTube channels of three landmark consumer brands:
Kodak, Toys “R” Us, and Southwest Airlines.)14 The

musical’s channel, dubbed “Totally Trucked,” eschews carefully ed-

ited interviews and opening shots of well-lit performances before ap-

plauding crowds. Instead, its camera focuses on the real faces of the

cast and the not-quite-glamorous tales of their life on the road: re-

hearsing songs in the dressing rooms, chatting on the tour bus during

an eight-hour ride, strolling the streets of Louisville, tasting juices at a vegan

bar in Baltimore, or performing a song at an Apple Store in

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Boston. This is not a site to slickly promote the show to a mass audi-

ence. It is clearly an online haven for musical theater geeks who fi ll

up the comment sections with questions and praise for the show and

linger to watch the cast’s back-stage confessionals about opening night

nervousness.

Personal stories can also engage customers in more conserva-

tive business categories, such as health care. Like hundreds of other

hospitals, Methodist University Hospital in Memphis has begun using

digital media including blogs, Twitter, Facebook, and YouTube to

communicate with its constituents. One of the most effective ap-

proaches it has found is letting Methodist’s patients share their stories

and even their procedures. Shila Renee Mullins, for example, partici-

pated in a live Webcast of her surgery during an awake craniotomy.

The video showed Mullins speaking while surgeons cut into portions

of her brain and praising the hospital’s work afterward. More than

twenty thousand people watched a preview of the surgery on You-

Tube; thousands more saw the Webcast live; the hospital’s marketing

department even knows which viewers followed up to request ap-

pointments of their own. At other hospitals like Henry Ford Hospital

in Detroit, doctors blog their proceedings on Twitter after or even dur-

ing an operation (dictating to a tweeting assistant, of course). By spot-

lighting real patient stories and experiences, hospitals like Methodist

University fi nd that they are better able to demystify medical care,

locate patients for clinical trials, attract recognition and donors, and

recruit top doctors.

Focus on the Particular

The Internet is a mass medium in terms of whom you could possibly

reach, but in terms of whom you are likely to reach, it is often as local as a
small-town newspaper. Organizations that are trying to create
content that engages customers often succeed by choosing a segment

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Five Strategies to Thrive

of potential customers and creating the content that they will fi nd

most compelling. Instead of thinking like a television producer, com-

panies should think of themselves as niche publishers, creating con-

tent for a very particular audience.

In many cases, this means creating content that is not in-

tended for end consumers at all. Business-to-business (B2B) com-

panies may want to focus on creating content that engages business

customers, suppliers and partners, investors, or regulators. General

Electric uses its Web site GE Reports to communicate with pre -

cisely these kinds of constituents, particularly investors. The site’s

blogs, videos, and Twitter account provide in-depth news at a moder-

ately technical level focused on technology, innovation, and social

responsibility. For example, it highlights GE’s “healthymagination”

projects, supporting such goals as broader access to medical technolo-

gies in India. Amazon Web Services (the division that provides cloud

computing and hosting to companies such as Linden Lab, 37signals,

and Virgin Atlantic) has its own blog, aws.typepad.com. Content for
its highly tech-oriented audience focuses on such subjects as “secure

test and dev environments,” “scaling to the stars,” and “elastic load

balancing.” (No, I have not the faintest guess what that is about.)

Rather than relying on one overarching blog, many large enterprises

opt for a profusion of channels and voices, so that different business

customers can pick what they wish to learn about. IBM, one of the

fi rst large companies to embrace blogging by employees, hosts over a

hundred designated topical blogs. The content on these B2B chan-

nels is quite different from what you would see in an advertisement,

even in a vertical industry publication. The content is highly topical

and extremely focused on information that is relevant to the custom-

ers’ interests. These businesses are acting not like advertisers but like

media companies.

Businesses that create content for end consumers benefi t

from the same focus on particular audiences and interests. In many

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cases, they do best by fi nding a core audience of customers who have

the greatest affi nity and interest in the brand. Coca-colaconversations.

com is targeted at the kind of fans who collect Coke memorabilia and
attend or are curious about events for collectors. The site is managed

by Phil Mooney, who has served for three decades as Coca-Cola’s

historian and archivist. Blog posts and videos chart his visits to con-

ventions worldwide, offer information about commemorative bottles,

and showcase personal stories of the brand’s many collectors. Masi, a

premier bicycle manufacturer with a devoted following, keeps in

touch with bike enthusiasts via the Masi Guy blog. The author, Tim

Jackson, writes about his trips to trade shows around the world and

posts links on vintage Masi bike restorations, along with photos of

street art, his personal Pandora music channels (with eclectic artists

like Madeleine Peyroux, Daft Punk, and M.I.A.), links to “bike stuff

for bike nerds,” and tips about his favorite brand of socks for riding.

Tim self-identifi es on the blog as: “Devoted father. Lifelong recover-

ing bicycle addict. A tool of corporate oppression—well, Marketing/

P.R., anyway.”

Even when a business is trying to increase its appeal to a

broader consumer audience, it may want to focus on creating content

that engages a small but infl uential subgroup. When Mercedes-Benz

wanted to increase the appeal of its brand among younger audiences

(its future customers), it focused on creating content for a specifi c

group: musical tastemakers. Mercedes-Benz’s long-running “Mixed

Tape” music Web site attracted over two million users and became

one of the most popular sites for in-the-know music lovers, because it

consistently discovered exciting emerging artists in the independent

music scene. The brand’s bimonthly program offers ten free down-

loads of new music, and rising acts in Europe and the United States

vie to gain extra credibility by inclusion in Mercedes-Benz’s mix.

Toyota has taken an even narrower focus in curating music

culture for its own Scion car brand. The Internet radio station Scion

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Five Strategies to Thrive

Radio 17 focuses specifi cally on DJ subculture, highlighting artists

like British Underground blue-collar hip-hopper Reach, and Amp

Live, producer and DJ of Zion-I. By programming specifi cally for DJs

and not for a general audience, this automotive brand creates a much

more cutting-edge music magazine than a media company like MTV.

The Scion Radio app for the iPhone allows users to tap along to a

track with their thumb on the screen to measure its BPM (beats per

minute) and use this to mix together shareable playlists of songs at the

same tempo. BPM-based song mixes are an important part of DJ cul-

ture, and Scion clearly understands its audience. Like Mercedes-

Benz, Scion is building its brand with its next generation of customers

by creating content for a particular and infl uential customer segment.

Make It a Game

The growth of digital gaming offers important opportunities to think

about how businesses can engage customer networks. Gaming has

shifted from an industry catering to a young male audience to one

that reaches men and women across a wide age range. Two-thirds of

U.S. households include gamers, and 40 percent of them are women. 15

Popular game platforms range from graphic-intensive consoles, in-

cluding the Sony Playstation, Microsoft Xbox, and Nintendo Wii, to

apps on smartphones and handheld gaming devices, to Web-based

games that may be played individually or by huge numbers of simul-

taneous users interacting with each other from around the world

(massively multiplayer online games, or MMOG).

Companies in all kinds of industries use branded games to

produce engaging content for customers. Games are found on the

Web sites of consumer brands from beverage (Mountain Dew) to au-

tomotive (Mini Cooper). Apps for smartphones like the iPhone have

created another market for spreading free branded games. Nissan’s

well-rated Cube Party Roundup for the iPhone allows the user to

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ENGAGE

drive the streets in the taxilike Cube car, picking up friends in multi-

player mode, adding music, and fi nding their way to the evening hot

spot just in time. Others, like the Coca-Cola Happiness Factory app,

have won praise from customers for innovative game play that beats

many paid games for excitement. Expectations are high, however,

in the competitive market of smartphone games. Any business seek-

ing to create an engaging game experience linked to its brand will do

best to hire a designer with a proven track record in the medium.

Other brands are seamlessly integrating themselves into gam-

ing experiences as a sponsor. A gamer is driving through an American

landscape in a virtual race—what should be placed on billboards as

the car passes? On Xbox Live, brands placed in these and other back-

ground settings can be interactive, with links to video clips or more

information if the player clicks on one. In some cases, brands are in-

tegrated directly into the gameplay (a shampoo brand appearing in

the online game of The Price Is Right) or into storylines (a credit card brand
as part of the fraud in a mystery in the CSI game). In games

where brands had this kind of prolonged attention, aided customer

recall of the brands has approached 80 percent. 16 As huge brand owners
like Unilever shift money into brand integration, corporate spend-

ing on in-game videogame advertising is expected to reach $650 mil-

lion by 2012. 17

Gaming experiences can even help revive an established

product category. With its Webkinz “pets,” introduced in 2007, Cana-

dian toy company Ganz transformed the product category of stuffed

animals by linking offl ine toys to an online gaming experience. For

eleven dollars, customers get an adorable stuffed animal, such as a

Clydesdale horse, a hedgehog, or a koala. But they also get a code that

provides entry to a virtual online world where their animal comes to

life as an online character (an avatar). Once there, kids can play

games, feed their pets, start a garden, or decorate their room with

themed furniture. They can also meet and visit actual friends in Web-

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Five Strategies to Thrive

kinz World, compete with them in games, or mail them virtual pres-

ents. The toys became a breakaway hit in their fi rst year, with sales

estimated well above a hundred million dollars18 and over six million
unique visitors to the site per month. 19 With many users purchasing several
Webkinz, some gift stores were forced to take advance orders,

and discontinued product lines have sold for hundreds of dollars on

eBay. Webkinz’s success has inspired a host of knock-offs, including

Beanie Baby 2.0, an online world for Barbie dolls, and virtual worlds

for kids of various ages developed by Disney and Nickelodeon.

Gaming is more than just a platform for race cars, avatars,

and cute animals, however. It offers a unique class of experiences for

engaging customers based on interaction, goals, and, frequently, com-

petition (against other players, oneself, or the game). Gaming tech-

nology is being used to bring greater interactivity to other media that

are not strictly “games”—the Wii, for example, has already been

mashed up to work with Google Earth, creating a gamelike fl ight

simulator that harnesses the Wii to fl y over the globe.

Gamelike experiences may be a growing part of education, jour-

nalism, and even lead generation for marketers. IBM’s number-one soft-

ware is Websphere, a product that helps customers improve business

process management (BPM of a different kind than the beats per minute

of Scion Radio’s music DJs). When the division in charge of marketing

Websphere wanted to generate new leads, it built a video game called

Innov8. Its goals were to educate the marketplace on the topic of BPM—

an overlapping discipline of business management and information tech-

nology—and to demonstrate IBM’s leadership in the fi eld.

The

fi rst generation of the game aimed to educate and grow

IBM’s potential market. Targeted to universities, it used familiar ele-

ments of gameplay (joystick, villain, team members, and scavenger

hunts for critical data) to let players explore how different business

model processes succeed or fail when faced with changing busi-

ness scenarios. The second generation of Innov8 was designed for

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ENGAGE

business leaders, from fresh MBAs to C-level executives. It featured

shorter play time to suit this audience, and it added more process-

focused game modules: call centers, supply chains, green scenarios, traf-

fi c management, and order processing. In Innov8’s third generation, the

game moved to the Web and allowed users to post their scores on Face-

book and MySpace. If users wanted their initials on the scoreboard, they

needed to provide information about who they were to IBM.

“Innov8 has become our number one marketing tool for lead

generation,” says Sandy Carter, IBM’s vice president in charge of strat-

egy for Websphere. By targeting potential customers, educating and ex-

posing them to IBM’s thinking on BPM, and capturing voluntary user

information, Innov8 has proven a new model of marketing for IBM.

Carter has also catered to a variety of customer types by focusing

gaming options on their particular needs. Users from the business man-

agement side use some modules (for example, the traffi c management or

green scenarios), while the tech people make more use of the tech-

focused modules. In its newest iteration, IBM is opening up parts of

Innov8 as open source code, so that companies can modify it to focus on

the key performance indicators (KPIs) used by their own organization.20

The Future of Engage

As digital media continue to evolve, content will rapidly change to

match them. New media lead to new messages. Books, for example,

will likely undergo dramatic change in the next few years. Shorter

works, in particular, will transfer well to reading on phones and other

devices that are less book-centric than the Kindle e-reader. Books as

phone apps may be shorter, more link-based, and less linear. Already,

travel books by Lonely Planet and a Klingon dictionary for Star Trek

fans have been launched successfully as phone apps. These and other

types of books have been printed for years but are better suited for a

smartphone than a bound set of pages with no search function.

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Five Strategies to Thrive

New digital interfaces will allow for increasingly interactive ways

to engage with content. Large touch-screen interfaces will greet custom-

ers as part of retail displays. Cheap 3-D chips from companies like

Canesta will allow the cameras in devices such as PCs and cell phones to

recognize a user’s gestures in space. As a result, turning on a TV or play-

ing a videogame may soon require little more than a wave of one’s hand.

Currently, Web content faces a trade-off between interactivity

and rich media. Text and simple images can incorporate signifi cant

interactivity for users, but richer media experiences such as video are

much more taxing to edit and manipulate. The viewer of an online

video cannot interact with it with the same speed and dexterity as with

a map or discussion forum. These limits are changing quickly, how-

ever, as Internet bandwidth increases and innovative new tools are

developed for on-the-fl y editing and manipulation of rich media.

Start-ups like Innovid are pioneering technologies that will

make online video far more dynamic. Imagine a speaker in the fore-

ground (Stephen Colbert delivering a monologue from The Colbert

Report) with a video background that can be redesigned on the fl y,

including dynamic elements that the user can click on to move, alter,

or learn more from.

These and other emerging technologies will provide new op-

portunities to include brands in engaging digital content and to cre-

ate experiences that customers will participate in and share with oth-

ers in their networks.

Keys to an Engage Strategy

The desire to engage with relevant, sensory, and interactive content is

at the heart of customer networks. Whether your organization is an

automaker, a hospital, or a fi nancial services fi rm, an engage strategy

can help you cut through the clutter of media messages and build

powerful relationships with your target audience. This can be done,

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ENGAGE

not by piggybacking advertising onto other content, but by creating

content that your customer networks will seek out themselves.

By thinking of yourself as a media company, and not an ad-

vertiser, your business can use an engage strategy to communicate

with hard-to-reach customers, earn permission to market to customers

directly, and drive lead generation and direct marketing.

Successful approaches to an engage strategy include: offer-

ing a powerful story or idea linked to the brand, rather than selling
directly; providing utility to customers by helping solve their prob-

lems or information needs; showing a personal face and authentic

voice in digital content; focusing on niche audiences and their par-

ticular needs and interests; and using gaming to engage customers in

an interactive, goal-based experience.

Whatever the approach, to capture the scarce attention of cus-

tomers, your business must focus fi rst and foremost on what is relevant

to them. Too often, businesses start with the message they want to trans-

mit to customers. Instead, businesses should ask themselves: What do

customers want? What do they care about? What content will they be

most interested to see, to hear, to interact with, and to share?

By helping customers engage with content that is relevant to their

particular needs and interests, businesses can effectively communi-

cate and market to customers no longer living in an age of mass media

and mass consumption.

But how narrow can your niche focus go? And if one message

or type of content will not work for all your customers, can you still

offer all of them the same product or service? Just as the Internet has

splintered attention into a million channels, it has fostered a million

customer niches, each of which value and seek different things. To

innovate for all of the niches in their customer network, businesses

must fi nd ways to help each customer fi nd or create the unique prod-

ucts and services he or she is looking for.

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CHAPTER5

CUSTOMIZE

Make Your Offering Adaptable to

Your Customers’ Needs

I have seen the future of television, and it looks good.

No longer will the fl at screen in the living room, the

most expansive screen in our increasingly multiscreen

homes, be confi ned to showing cable and television broadcasts. In

keeping with our networked lives, our TV, too, will be networked, al-

lowing us to view our choice of digital media.

Video from across the Web will appear in large-screen glory

from sites like MLB.com, ComedyCentral, and Howcast.com. Mov-

ies from Netfl ix, television shows from Hulu.com, and music from

sites including Pandora and Last.fm will all stream live to the big

screen. The TV will pull in news and blog feeds from Digg and

Tumblr. Videos on YouTube and photo albums on Flickr will enrich

our couch-potato experience. You will be able to screen any media

fi le stored on your hard drive—your downloaded movies and TV

shows, family digital photo albums, and MP3 music libraries—when

and where you want.

If all those choices seem like too much to navigate, don’t

worry. The television experience of the future will be nothing like the

cable experience of today. Instead of scrolling through long vertical

programming lists in day-glow text, you will be able to search and

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CUSTOMIZE

jump directly to the media you want. The awkward and time-consum-

ing menus of today’s “on-demand” video will be replaced by simple

icon-based navigation. And if you are unsure where to start with so

many choices, you’ll be able to get ideas from your friends using a

social recommendation system to see what they are watching and lis-

tening to and which media are their favorites.

The choice-rich television of the future is already here, in the

form of an open-source software platform called Boxee. Started by the

quietly enterprising Avner Ronen, an Israeli transplant to New York,

this small start-up has shaken up the television business by giving us

our fi rst taste of its future. For years entrenched players in the televi-

sion business have dragged their feet, claiming that “consumers don’t

really want an Internet-like experience with their TVs.” 1 These lud-dites

have left the fi eld wide open to early innovators like Boxee, and

soon others like GoogleTV, to offer integrated TV and Web. By open-

ing up its source code, Boxee even invites outside developers to create

additional applications for its platform, bringing more content, in-

creased design options, and added choice to the Boxee experience.

The result is television as it should (and soon broadly will)

be—not a mass medium for broadcasting limited choices but a cus-

tomizable medium for the age of customer networks.

The Customize Strategy

Customer networks share a desire to customize their digital and phys-

ical experiences—the content that they watch, listen to, and read; and

the products and services they use and enjoy. In an era when digital

networks provide access to seemingly endless choice, the options for

customers are irresistible.

Consumer choice has been growing for decades. Supermar-

ket aisles are fi lled with ever greater varieties of cereals and tooth-

pastes. Where we once could choose from one color (black) of one

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Five Strategies to Thrive

automobile (the Model T Ford), we now have cars in every size,

shape, style, and detailing. Marketers have known for years that we do

not all want the same thing, and even in a mass-market economy they

found it valuable to offer brand extensions and niche products. Where

we once might have drunk a Coca-Cola, we now choose between

Diet Coke, Coke Zero, Caffeine Free Coke, and Coca-Cola Bla¯k—

not to mention the array of juices, energy drinks, bottled teas, and

branded waters offered by the same parent company.

For customer networks, though, customization is about much

more than picking from a dozen bottles in the beverage aisle. The

new tools of our digital age allow us vast choice and vast options for

personalization—of not just digital products and services but physical

ones. With centralized inventories, distributed selling partners, and

dynamic Web interfaces, online retailers such as Amazon.com are

able to offer far more products than even the largest big-box store

could ever carry. Netfl ix.com can offer more than a hundred thou-

sand DVDs for rental by mail, more than ten times what a retail video

store could carry. As customers go online, they fi nd themselves ex-

posed to vastly more options—not just today’s best-selling new books

and movies ( Spiderman I, II, and III), but niche products and offerings (a
documentary on jazz bassist Charles Mingus) that simply were

not available to most customers a few years ago. The Web itself is the

ultimate customizable medium. Its endless pages, with options to fi nd

just what we are looking for, epitomize the rise of niches and of niche

audiences. There are well over ten thousand Web sites that regularly

draw a hundred thousand different visitors every month. The profusion

of smaller niches online is even more pronounced: the number of sites

with over two thousand monthly visitors (comparable to that small-town

college radio station you love) is nearly half a million. 2 Meanwhile,

new technologies for fi nding and remixing media allow us to easily

“mash up” our content just the way we want it. And new digital proto-

typing tools mean that we can easily modify physical products as well.

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CUSTOMIZE

Customers have always sought choice and control of individ-

ualized experiences. Welsh sociologist Raymond Williams famously

observed that “there are, in fact, no masses; there are only ways of see-

ing people as masses. ”3 During the age of mass media, it was convenient
and cost-effective to lump customers together in vast swaths of

demography: eighteen-to-twenty-four-year-old female, urban Hispanic

voter, baby boomer. But each one of us is, in reality, an individual, not

a demographic. Today’s customer networks do not behave like demo-

graphic categories. Our digital choices and tools have rekindled our

desire to satisfy our individuality in consumer choice.

The pursuit of customized content, products, and services—

with the help of digital tools for choice and personalization—is the

third core behavior of customer networks. It provides a powerful op-

portunity for businesses and organizations of all kinds to develop

stronger and more valuable relationships with customers.

The third customer network strategy for business is the

customize strategy—to provide services and products that are adapt-

able to the unique needs of each customer. This can be done by offer-

ing a variety of options and ways to choose among them. Or it may be

done by offering tools to modify products and services to suit individ-

ual desires. Either approach can deliver value to customers and com-

petitive advantage to businesses.

By creating an offering that is fl exible and adaptable to cus-

tomer needs, a customize strategy can help an organization achieve

key business objectives, including: achieving greater sales in online

channels, differentiating products and services, reaching customers

with diverse habits of media consumption, and marketing to high-

value niche audiences.

But offering choices does raise issues as well. Which choices

will you offer? How much choice do customers really want? Some of

the fi rst attempts at customization in the early days of the Internet

were failures. Psychologists have demonstrated what is dubbed “the

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Five Strategies to Thrive

paradox of choice”: the fact that too many options may shut down

consumers and reduce the likelihood of their making any choice at

all. 4 To carry out a customize strategy successfully, business needs to

understand what makes choice valuable and meaningful to their customers,
rather than overwhelming.

The Quest for 10 Percent Better

Why do we like what we like? Can human taste be predicted? If I

loved the fi lm Michael Clayton, will I like A Few Good Men? For nearly
three years, more than fi fty thousand contestants from 186

countries puzzled over those questions as they grappled with the larg-

est set of customer ratings data ever released to the public. The con-

testants were statisticians, engineers, and computer scientists special-

izing in machine learning. The data set was one hundred million

movie rankings by Netfl ix customers, scored on a scale of 1 to 5 stars.

The goal of the contest was to improve Netfl ix’s Cinematch recommen-

dation engine, which attempts to predict a customer’s preference for an

unseen movie based on that customer’s previous preferences. To gain

the million-dollar Netfl ix Prize, the winning team had to improve the

accuracy of Cinematch’s mathematical algorithm by 10 percent.

This may seem a rather modest improvement, but the chal-

lenge of the Netfl ix Prize was exceedingly hard. Although some fac-

tors of human taste can be fairly easily mapped with mathematics (a

penchant for courtroom dramas or a dislike of historical war movies),

others proved baffl ing for the contestants. Customers’ tastes change

over time. Some days they may simply rate movies lower because they

are in a bad mood. And certain quirky independent fi lms—like the

cult hit Napoleon Dynamite—just seem to defy categories or predict-

able customer reactions. The “Napoleon Dynamite Problem” was

one of the biggest sources of Cinematch error.

For years, the task remained out of reach for scientists like

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CUSTOMIZE

Bob Bell (a scientist at AT&T working on the puzzle), Len Bertoni

(trading ideas with his teenagers and running computations on the

family computer), and Martin Piotte (working at night in Montreal

after putting his four kids to sleep). Every time a solution was sub-

mitted, it would appear on a live leaderboard, showing its ranking. But

the closer each team got to a 10 percent improvement on Cinematch,

the more their progress slowed. Netfl ix had to give out “progress

prizes” of fi fty thousand dollars each year to the leading team just to

ensure that they would stay in the game. Eventually, some of the

highest-ranked competitors formed super teams, and two of them

broke the 10 percent threshold thirty-three months after the contest

was announced.

But why was a small improvement in Cinematch worth a mil-

lion dollars to the company? For Netfl ix, 70 percent of rentals come

from the “backlist”—smaller, independent fi lms, as well as major stu-

dio fi lms that are no longer recent. (By contrast, traditional retail

stores make only 20 percent of their business from backlist; but they

don’t have the voluminous backlist catalog that Netfl ix does.) Cine-

match recommendations drive fully 60 percent of all Netfl ix rentals,

especially the discovery and rental of backlist movies. Because cus-

tomers pay a fl at monthly fee even if they watch no movies, Netfl ix

needs to keep mining the backlist and fi nding them well-suited fi lms
to rent in order to retain them as happy, paying customers. 5

Without tools like Cinematch, fi nding the right movie out of

a hundred thousand is like pulling the proverbial needle from a hay-

stack. Digital networks give us an alluring range of choices. But they

have also replaced the glazed-over eyes of the customer wandering

the aisles of a video store with the glazed-over eyes of the customer

staring at a computer screen, clicking through endless lists. Netfl ix is

not the only business that has discovered the urgency of providing as-

sistance to customers seeking to make the most of their choices in a

networked world.

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Five Strategies to Thrive

The Paradox of Choice and Six Filters to Fix It

For years, access to more choice was seen as an unqualifi ed plus for

human happiness. Psychologists and economists alike found that

greater choice corresponded with greater intrinsic motivation, sense

of control, and life satisfaction. But a groundbreaking series of experi-

ments by Sheena Iyengar and Mark Lepper revealed that offering too

many choices can sometimes have the opposite effect.

In their fi rst experiment, shoppers in a grocery store were of-

fered a discount on gourmet jams. One group of shoppers was offered

free samples of six different fl avors, and the other group was offered

twenty-four. Amazingly, the shoppers given more fl avors to consider

were one tenth as likely to make a decision and use the coupon to buy one of
the jams. A similar experiment with chocolates found that students allowed
to choose a free chocolate from thirty selections were

less satisfi ed with their choice than those offered only six to choose

from. In a fi nal experiment with homework assignments, students

were offered a chance to write a short essay for extra credit. Students

given a longer list of writing topics to choose from were less likely to

complete the assignment. 6

The more choices you give a customer, the harder it may

become to make a choice. Like the customers faced with two dozen

fl avors of free jam, many may simply throw up their hands and leave

without choosing anything. This phenomenon was dubbed “the para-

dox of choice” in a popular book of the same name by psychologist

Barry Schwartz. 7

The paradox of choice points to the critical need for fi lters to

help customers choose from a vast array of options. While many see

the Internet age as creating a problem of information overload, it is

perhaps more accurate to see our predicament as a problem of “fi lter

failure.” As Clay Shirky has observed, the old media barons fi ltered

our options because they could offer only a limited range of media

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through the old expensive distribution systems, such as broadcast tele-

vision and radio. Once the price of distribution dropped, everyone

become a broadcaster, and no one held the editorial role of fi ltering

options for the consumer. 8

Today, to make choice work for customer networks, we need

to be sure to offer the right kinds of fi ltering tools, including recom-

mendations, ratings, and choice schemas. Following are six ap-

proaches to help you help customers to choose. Many of these fi lters

are quite familiar to anyone who has browsed a site like Netfl ix or

Amazon, but understanding each one is helpful to learn how they can

combine to help customers avoid the paradox of choice.

Taxonomies

Sorting through a hundred thousand types of toothpaste

would certainly be overwhelming, yet choosing from a hundred thou-

sand books or movies is not. One reason for this is that we carry around

in our heads a shared system for classifying books and movies: what
we call genres. Comedy, romantic comedy, British comedy, political

comedy, spoofs and satires, African-American comedies . . . these are

all categories used by Netfl ix. A taxonomy is any system of subdividing

a group into subcategories. Netfl ix could subdivide its movie library

in countless ways, but most would be of no use to customers search-

ing for something to watch: Sort the fi lms by year of release? Alpha-

betically by title? Date of birth of the director? The key to making

taxonomies a useful fi ltering tool is to use a system that is intuitively

meaningful to most users. Traditionally, taxonomies were hierarchi-

cal, with only one option at each level of categorization (an animal

can be a mammal or a bird but not both). Tagging systems allow for

overlapping categorizations, so that a movie may appear under com-

edies as a “romantic comedy” and under foreign fi lms as “Italian.”

This allows more dynamic fi ltering, such as an option to see “all Ital-

ian romantic comedies.”

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Five Strategies to Thrive

Ratings

Sometimes simply knowing what others have liked can be a

valuable fi ltering tool. In its most basic form, ratings can be a “top
sellers” list, like the list of top-selling iPhone apps in the iTunes store.

To be more useful, ratings can be combined with taxonomies (“20

top-selling paid apps in the Medical category”). Ratings can be based

on popularity in purchasing or on user satisfaction, such as the 1-to-5-

star ratings on Netfl ix. Other kinds of ratings may include objective

product criteria that can be measured by the seller. When consider-

ing a long list of airline tickets, we sort by price, airline, departure

time, and length of travel in making a choice. Combining user ratings

with objective ratings can allow for very dynamic fi ltering.

Text Reviews

Text reviews, either by designated experts or open to all cus-

tomers, are a valuable fi ltering tool. Although the data in text reviews

is not quantifi able (you can’t sort a list for “movies with the most glow-

ing text reviews”), it can be extremely helpful in evaluating choices.

When choosing between two espresso machines on Amazon.com, it

is only moderately helpful to know that one model averaged 3.4 stars

among eighteen reviewers while another model scored 3.2 stars

among nine reviewers. It is far more useful to read the reasoning be-

hind each reviewer’s rating (speed of brewing, ease of cleaning, attrac-

tive visual design, whether it fi t beneath custom cabinets in the

kitchen). Traditionally, product reviews were the exclusive domain of

professional critics and testers, and many businesses still offer “staff

picks.” But companies like Amazon.com are able to offer much more

help to customers by encouraging them to post their own product re-

views, thereby allowing many more voices to evaluate. Customers are

often more inclined to trust each other’s reviews, perhaps because

they are seen as more authentic and less biased.

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Collaborative Filtering

Amazon is also famous for another kind of fi ltering tool: the

messages that show up on its Web pages declaring “Customers who

bought this, also bought . . . .” By tracking the aggregate behavior of

millions of customers, Amazon is able to make surprisingly useful

recommendations based on as little information as the last two books

you looked at on its Web site. This technique, called “collaborative

fi ltering,” was pioneered by MIT professor Pattie Maes in 1994, when

she created the fi rst Web site where users listed songs and bands that

they liked and received recommendations based on the preferences

of other users. Collaborative fi ltering does not require a great deal of

information to work—rather than needing to know a great deal about

one person’s tastes and choices, it relies on knowing a little bit about

the behavior of a great many people. At its simplest, collaborative fi l-

tering uses only one-to-one correspondences: how many people who

bought product 37 also bought product 96. Research from the Netfl ix

Prize has introduced such mathematical techniques as singular value

decomposition, which can look at the data of millions of customer

choices and group products that share some common quality (like

“lighthearted female-driven comedy”) that tends to predict customer

preference. 9 As new techniques such as these are incorporated and more

data is captured—on what we browse, purchase, and enjoy—

collaborative fi ltering systems will develop increasingly sophisticated

recommendations.

Choice Schemas

A choice schema is any step-by-step process that a customer

can use to reduce the number of potential choices (and arrive at the

most relevant ones) without having to consider them all. This often

takes the form of a series of questions that successively narrow the

range of options. An online guide for choosing a digital videocamera

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Five Strategies to Thrive

(I used one by David Pogue of the New York Times) may start by ask-

ing usage questions, such as “Are you fi lming for home use or profes-

sional?” or “How long do you want to shoot without having to down-

load your footage?” With a handful of careful questions, hundreds of

product options can be narrowed down to a short list of appropriate

ones for the customer to compare. Retailer Sears lets its online cus-

tomers create an avatar (an online persona) and use preference-

matching software to view a personalized selection of products from

Sears’s countless departments (clothing, kitchen appliances, furni-

ture, and so on). This choice schema allows customers to fi nd what

they are looking for from a much narrower range of products. Some

Sears business units that use the choice schema have seen double-

digit increases in their average order value.10

Social Filters

Friends and family were always a crucial source of recom-

mendations in the predigital world. With the rise of social networking

services online, they help customers make choices in virtual space as

well. Facebook Connect is a service that allows third-party Web ser-

vices to access the network of friends that a customer has on Facebook

(unless the customer opts out). This allows companies to add a social
layer to recommendations. Not sure which book to read? See a list of

the latest nonfi ction titles purchased by friends in your social net-

work. In essence, your own friends become the “experts” whose re-

views and ratings may be given more weight in your own personalized

recommendation engine. Early efforts at social fi lters, such as Net-

fl ix’s “Friends” feature, were not used much because they relied on

creating a list of your friends at each retail site. By allowing customers

to carry their existing friends list across many sites, services like Face-

book Connect may make social fi ltering a seamless, effortless tool for

customers.

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Five Approaches to Customize Strategy

A successful customize strategy requires both tools for choice and tools

for fi ltering. It is the combination of the two that allows business to avoid
the “paradox of choice” and create compelling value for customers.

The motivations to customize may vary. Customers may cus-

tomize your business offerings to suit their interests, to fi t specifi c

functional needs, to match their aesthetic sensibilities, or to express

themselves to others.

What they customize may be physical or digital; it may be

products or services. When they do customize, it may be a single choice

or an ongoing and iterative process. They may make a choice from a set

of options or start with a basic template and modify it at will.

By looking at businesses that have successfully used digital

tools to help customers adapt their own products, services, and con-

tent, we can see fi ve approaches to a customize strategy:

• Offer a Vast Menu: Take advantage of the Web to offer a huge

range of products, but pair them with a useful set of fi lters to

help customers fi nd what they are looking for.

• Customize Your Playlist: Provide a steady stream of content that adapts to

the preferences and feedback of your customers.

• Mash Up Your Products: Let customers modify your products or

services to express their individuality or match their interests.

• Make the Choice Personal: Put a human face on the choice

you offer customers, so that by choosing, they connect with real

people.

• Create a Platform for Choice: Find or build a platform that allows others to
create more products or content for your customers to

choose between.

By examining these fi ve approaches and how organizations

have used them successfully, we will learn how to add value to any
business by helping customer networks customize their experiences.

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Five Strategies to Thrive

Offer a Vast Menu

One approach to helping customers customize is to offer them a vast

range of options among the types of products, services, or content that

you offer. As we have seen with companies like Netfl ix and Amazon,

the Internet allows businesses to offer customers a vast menu of op-

tions far beyond what could be provided in a traditional retail store or

catalog.

Of course, that vast menu will need to be paired with appro-

priate choice fi lters in order to be useful to customers. In Netfl ix’s

case, its vast catalog of movies is made navigable thanks to taxonomies

(like movie genres), ratings, text reviews, and the collaborative fi lter-

ing by its Cinematch software. For every movie a customer sees listed,

Netfl ix provides a personalized score (“Our best guess for you: 3.2

stars”), but the user can also see a raw score (the unweighted average

of all reviewers).

The menu of products on Amazon.com is much larger and

seems to grow by the minute. Although the site began as an online

bookstore, it has expanded partnerships with others to allow it to sell

everything from books to music, movies, toys, electronics, offi ce sup-

plies, home furnishings, groceries, clothing, sporting equipment, and

even automotive parts and accessories. When searching within a cat-

egory, customers can sort their results by the most popular items (in

terms of sales), the best customer reviews, or the price. As users visit

specifi c product pages, Amazon uses its own collaborative fi ltering

tools to make constant recommendations (“Customers Who Bought

This Item Also Bought . . .” and “Customers Who Viewed This Item

Also Viewed . . .”).

The open-source television software Boxee expands customer

choice in a similar way. Boxee’s value is that it offers customers a

much vaster menu of media options when they sit down in front of

their television set: Web video, music, photos, and all the media stored

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on their hard drives, along with their traditional television program-

ming. Boxee’s simple visual interface makes moving among all these

choices easy. Its social fi lters allow customers to see what their friends are
watching as well as how they are rating it.

The My Virtual Model Web service lets users create an avatar

to try on clothing and other products from such online retailers as

Adidas, Levi’s, Land’s End, Best Buy, and Sears. As customers use it,

the system narrows the full assortment of products to specifi c options

and recommendations that match their needs. Retailer Land’s End

has seen a 45 percent jump in its conversion rates and 15 percent in-

creases in the average order value of customers using this choice

schema. Adidas has used My Virtual Model with its retail business

partners, letting merchandisers see and give feedback on virtual pro-

totypes of shoes Adidas is developing, thereby saving the manufac-

turer millions of dollars each season. 11

Customize Your Playlist

As we saw in the previous chapter, engaging content is critical not just

for media businesses but for any business seeking to build a relation-

ship between its brand and customers. Yet not all customers want to

engage with identical content, not even a narrow target group. In-

stead, businesses can succeed by offering a customized “playlist” of

content that fi ts the individual interests of each customer.

The Pandora digital music service does this by offering cus-

tomers a personal radio station playing a mix of songs suited specifi -

cally to their tastes. The user simply picks a favorite song, and Pandora
uses collaborative fi ltering to start generating a radio playlist of other songs
with similar musical qualities that it thinks the user will enjoy.

Rather than relying purely on mathematical algorithms, Pandora uses

a team of fi fty employees to map what it calls a “music genome” for

each song—assigning values on up to fi ve hundred attributes, such as

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Five Strategies to Thrive

“aggressive female vocalist,” “Brazilian jazz infl uences,” and “varying

tempo and time signatures.” The result is a vector profi le on each

of the seven hundred thousand songs in Pandora’s database that al-

lows the service to recommend songs that may not yet be well known

by users (and therefore would not show up in simple collaborative

fi ltering) but have similar musical qualities to their favorite songs. 12

Pandora’s fi ltering is iterative as well. Once the service starts playing

recommended songs, the user can vote on each one with a thumbs-

up or down and skip over those songs that don’t interest them. This

data is also collected and feeds into Pandora’s database so that it can

continually improve its recommendations and provide an ever-more

customized playlist. The results have drawn forty million listeners to

Pandora to listen to 361 million custom radio stations and have made

Pandora the number-one music app on the iPhone. 13

Another kind of customized playlist is used by followers of the

microblogging service Twitter. Many users, like myself, use Twitter to

create a real-time fi lter for news, commentary, and articles on topics

of interest to them. By choosing a list of twitterers to “follow,” the user can

quickly and easily generate a twenty-four-hour mix of news articles,

blog links, and discussion. If a user is interested in trends and news

on digital media, marketing, and technology, they could subscribe to

twitterers such as Edelman analyst Steve Rubel (@steverubel), ven-

ture capitalist Fred Wilson (@fredwilson), and myself (@david_rogers).

They could generate a celebrity magazine mix by following the likes of

Ashton Kutcher (@aplusk), Diddy (@iamdiddy), and TMZ (@tmzaol).

To generate a feed of up-to-the-minute news headlines, they could

follow accounts like CNN (@cnnbrk), the New York Times (@nytimes),

and the BBC (@bbcbreaking). Or to get new thinking on book pub-

lishing, they could follow such writers as Joanna Penn (@thecreative

penn), Shelley Lieber (@wordywoman), and Dana Lynn Smith (@Book

Marketer).

Used this way, Twitter becomes an extremely powerful social

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fi lter. Unlike Facebook Connect, though, the user is appointing

whomever they fi nd most knowledgeable or interesting on a given

topic to be their “fi lter” for news, rather than the assorted mix of fam-

ily, high school friends, and work colleagues who populate their Face-

book friend list. RSS readers can be used in much the same way to

generate a customized mix of daily reading from blogs on specifi c top-

ics and interests. But although they offered this capability to users

much earlier than Twitter, RSS readers were always somewhat com-

plicated to set up and lacked a simple interface, so they never gained

broad user adoption. The simplicity of Twitter has made the same

type of fi ltering much easier and helped millions more customers dis-

cover the value of a custom mix of content.

Customized mixes can also be offered by a single media chan-

nel or even a single brand providing content for its customers. NPR’s

podcast service allows users not only to choose from a list of topical

podcasts (with popular programs like Science Fridays and Car Talk).

The NPR “Mix Your Own Podcast” tool allows customers to create a

customized podcast mix. Customers can enter keywords for topics

they are interested in (“technology” or “swine fl u”), as well as names of

programs, favorite reporters, and musicians. The tool then creates a

custom podcast just for them, pulling in all the day’s stories that are
tagged with any of the search terms they have chosen.

Nike has also shown the value of custom content mixes for

brands that sell products instead of media. As part of Nike’s Sparq

program for athletic training, the company created more than sixty

training videos for sports including football, basketball, and soccer.

Customers can use an online tool to mix the videos into a customized

training program. Custom mixes can be downloaded to mobile video

players and act as virtual trainers for customers.

When Nissan created the urban-guide.co.uk content Web

site for its Quashqai car brand in Britain, it wanted to connect with a

young, urban audience by offering in-the-know advice on the best

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Five Strategies to Thrive

things to do and see in such cities as London, Birmingham, and Liv-

erpool. Rather than create a single urban guide to fi t all users, Nissan

recognized their individual tastes by creating a customizable Web site

for each city. Using a library of widgets, the site allows visitors to cus-

tomize which cool bloggers (Rob Ellis or Graeme O’Callaghan),

video news streams (“100 percent London” or “Urban Undiscov-

ered”), and topics (“art & music” or “pubs & bars”) will fi ll up the page
with constantly updating content and blog posts. For a target
audience that would not be likely to accept any one vision of what’s

cool in their home town, Nissan’s site offered a customizable experi-

ence that users could make their own.

Mash Up Your Products

Networked customers are familiar with a wide range of tools for fi nd-

ing and adapting content, products, and services to fi t their particular

needs. But customization also enables self-expression and affi rms

identity. This can be seen in the phenomenon of media mash-ups

that fl ood the Web. Mash-ups are created by remixing, editing, and

combining existing media, content, or software to create something

new and distinctive. It is the digital age’s answer to collage—the early

twentieth-century art form based on pasting together fragments of ex-

isting photographs, fabrics, drawings, and painting.

Many of the most popular videos on YouTube are video mash-

ups that combine existing audio or video—the soundtrack from Bud-

weiser’s famous “Wassup?” commercial, scenes from an episode of

The Simpsons, or footage of a political candidate. Comedian Stephen Colbert

is famous for his “green screen challenges,” where he asks

television viewers to mash up footage of himself (or, once, presiden-

tial candidate John McCain making a particularly uninspired speech)

with whatever other sources they choose to create a humorous new

video. Fans of Japanese anime enjoy creating new music videos by

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mashing up scenes from Japanese cartoons with soundtracks of pop

music and unrelated dialogue. There is even a contest—the Iron

Editor contest, modeled after the Iron Chef TV show—in which con-

testants must remix video in real time, in front of judges and a live

audience.

Likewise, businesses can offer customers the digital tools to

create personalized versions of their products and services, inviting

the customers to express their identity, style, and taste.

The NikeID platform allows customers to create unique de-

signs for Nike running shoes. On a Web site or in the NikeID Studio

at NikeTown stores, customers use a digital interface to mash up a

variety of color options for the laces, trim, swoosh, collar, and other

elements of the shoe design. The result combines the functional fea-

tures of a Nike training shoe with the opportunity to wear a one-of-a-

kind design that shows off the customer’s unique sense of style. Cus-

tomers can share their designs with friends online and purchase their

one-of-a-kind shoes for a premium price. Nike has engaged customers

with other design interfaces, too, such as a touch screen that lets win-

dow shoppers play with the NikeID experience before entering the

store. An interactive billboard in Times Square allowed passersby to

customize a pair of shoes on a seven-thousand-square-foot public bill-

board; they would then receive an SMS message to their phone with

links to download a wallpaper image and order the shoes online. The

PhotoID interface allows European customers to send any photo from

their mobile phone to Nike and receive back a sample NikeID shoe

design combining the color elements of that photo into a shoe. In

Britain, Nike has extended this mash-up concept to football (soccer)

uniforms, with a digital kiosk that allows customers to create uniform

designs in the store.

BMW’s Mini Cooper has linked its brand closely to the self-

expression of drivers who can customize their cars. The Roof Studio

online tool allows customers to create unique roof designs—a leopard

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Five Strategies to Thrive

skin print, Brazilian fl ag, or multicolored racing stripes. Customers

can also choose from hundreds of options among the car’s compo-

nents because of BMW’s fl exible production cells, which enable it to

manufacture the vehicles on demand.

The LEGO brand has always been about creativity and mak-

ing your own designs. But what if you don’t have just the right LEGO

bricks to build your vision? At LegoFactory.com, customers can de-

sign their own models in virtual 3-D space with the LEGO Digital

Designer. After fi nishing a design, they can purchase it as a real-world

LEGO kit that arrives by mail with printed instructions, all the bricks

needed to assemble it, and custom packaging with the customer’s

own name and model number. They can also share their designs with

other users on the site (who can adapt them by adding and subtracting

their own parts). More than three hundred thousand customers have

participated in LEGO Factory worldwide.

Businesses can help customers mash up services to suit their

personal style, too. Affi nia Hotels, a boutique chain in New York, Chi-

cago, and Washington, DC, allows customers to design a personal-

ized hotel experience through its MyAffi nia.com online tool. Guests

can choose from six types of pillows for their bed, including a natural

buckwheat pillow, a self-molding Swedish “Memory Pillow,” and a

“Sound Pillow” with ultrathin speakers inside that play music from an

MP3 player. Travelers can choose the grooming options that will
await them in their room, as well as electric chargers and adapters to

suit their laptop and mobile phone. For more distinctive fun, guests

can request cupcakes, a rubber ducky, or an Ibanez acoustic guitar to

greet them. To make choosing easier, Affi nia uses a choice schema to

bundle some of its options into themes, such as the StayFit Kit (yoga

mat, weights, and workout bands), the Walking Kit (pedometer, city

walking guide, and a preloaded iPod shuffl e), and the BYOB Kit (wine

carrier, picnic blanket, and guide to the best local picnic spots).

By offering choices to personalize products and services, busi-

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CUSTOMIZE

nesses can provide a niche experience that allows customers to ex-

press their personality and connect more deeply to the brand.

Make the Choice Personal

Digital tools for customization do more than just tap into a customer’s

creativity and sense of style, however. Choice can also allow for a

much stronger and personal connection to a business or organization.

This is particularly true for nonprofi ts, where the customer is moti-

vated by the impact of contributing time and money rather than the

desire to consume goods or services.

Matt and Jessica Flannery are two young Americans who

were living in Uganda when they fi rst got the idea to start an online

microcredit service. “My wife got really excited about living in Af-

rica,” says Matt, “and I was really excited about living in San Fran-

cisco. So we had this marriage dilemma.” 14 They solved the dilemma by

starting Kiva, a Web start-up based in San Francisco that funds

small loans to entrepreneurial families and individuals in Uganda and

183 other countries around the world.

Kiva is a new kind of philanthropy, one based on individual

donors (lenders) and individual recipients (entrepreneurs). With Kiva,

anyone with twenty-fi ve dollars, a credit card, and an Internet con-

nection can choose his or her own way to better the world.

Rather than donating money to a giant collective fund man-

aged by a large charitable organization, Kiva lenders make loans di-

rectly to individuals who have been prescreened by microfi nance in-

stitutions in their home country. Lenders may choose to contribute to

a farmer in Peru seeking to buy a cow, to a seamstress in Lebanon

seeking to buy a new sewing machine to employ her sister in her shop,

or to a barbecue stand owner in Samoa needing money for a stove,

pot, and materials to build a roadside stand. On Kiva’s Web site, lend-

ers can view hundreds of loan requests and sort by the recipient’s
125

Five Strategies to Thrive

gender, geographical region, type of business, or fundraising status.

By clicking on a recipient, lenders see a photo and profi le of the fam-

ily, business, and terms of the loan. By bringing lenders face to face

with borrowers, Kiva makes giving loans to those in need far more

personal, and compelling to users. As Mother Theresa said, “If I look

at the mass I will never act. If I look at the one, I will.” 15

By turning loans into a personal choice—which entrepreneur

will you support with your twenty-fi ve dollars?—Kiva has unleashed a

groundswell of participation among networked donors. Within its fi rst

four years, more than half a million lenders loaned eighty million dol-

lars to two hundred thousand recipients around the world. The average

loan request waits only four days to be fi lled. With a repayment rate of

over 98 percent, loan funds are constantly being redirected by their

lenders to new businesses and families in need around the world.

Other charities, such as GlobalGiving and DonorsChoose,

have similarly found that giving choice to customers increases their

involvement in the process of helping others. Pierre Omidyar, founder

of eBay, had already made his fortune creating a Web auctioning ser-
vice that served the niche markets of customer networks when he

turned his attention to philanthropy and the support of organizations

like DonorsChoose. Started by public school teacher Charles Best,

DonorsChoose lets users pick specifi c projects to fund at local schools

around the corner or around the country. On the Web site, donors

can search for projects by state, by school subject, or by keyword top-

ics such as “fl ash cards,” “gardening,” and “autism needs.” The char-

ity has attracted more than a hundred thousand donors for whom

choosing whom to support makes giving all the more meaningful.

Create a Platform for Choice

There are limits to how many product options and choices one com-

pany can generate for customers on its own. While LEGO building

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CUSTOMIZE

blocks easily generate endless iterations, a hotel like Affi nia must cre-

ate and source each new feature, service, or option itself.

One extremely powerful way to generate options for a

customize strategy is to use or build a platform for choice. A platform

for choice is a technology, service, or protocol that encourages other

people or organizations to develop options for your customers. Busi-

nesses may create their own platform for choice, or they can tap into

an existing platform to fi nd a broad range of niche offerings.

The RSS protocol for Web publishing is one popular platform

for choice. RSS established a standard format for anyone publishing con-

tent online (text articles, videos, and audio) to make it available in public

“feeds” to attract more viewers. RSS is what allows Web sites such as

Nissan’s Urban Guide to pick from millions of Web publishers and blog-

gers and assemble a targeted menu of content options for its customers

(while directing profi table traffi c back to the original publishers).

When Amazon.com moved beyond selling books, it also de-

veloped a platform that allows independent retailers to sell their prod-

ucts through Amazon’s site. Large specialty retailers like J&R Music

and Computer World offer an expanded range of products that show

up in Amazon’s standard product listings. The Amazon Marketplace

allows much smaller businesses to sell used, discounted, and hard-to-

fi nd books and music. By providing a platform for other businesses to

sell online, Amazon is able to greatly increase the huge range of prod-

uct options it offers. Similarly, when Amazon introduced its Kindle

e-book reader, its success hinged on Amazon’s ability to offer more

than three hundred thousand popular books, newspapers, magazines,

and blogs, already suited to the Kindle’s reading format.

New digital technologies continue to create more platforms

for choice. HP’s MagCloud service allows micropublishers, from cor-

porations to individuals, to create customized and microniche print

magazines and books. This new print-on-demand technology allows

anyone to upload the publications as PDF fi les and have HP take care

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Five Strategies to Thrive

of the printing (through one of a network of print shops that have

purchased the MagCloud printers). MagCloud can print one copy of

a hundred different magazines for the same price as a hundred copies

of one magazine. Publishers, who pay twenty cents a page, have started

to create niche magazines on topics such as paintings by Mormon artists

or for industries such as the Arizona cactus business. On-demand print-

ing for books is also allowing niche publications to aim at specifi c

valuable audiences with a particular interest. For example, Lexus pro-

duced a custom book on its environmental practices and published it for

eighteen hundred specially selected customers. On-demand books have

soared in recent years: in 2008, for the fi rst time, the number of on-de-

mand titles surpassed the number of traditional books published. 16

An even greater impact on the book industry may come from

the arrival of custom-printing kiosks, such as the Espresso. This “ATM

for books” can print a hundred pages a minute and bind the pages

into a fi nished book on a machine that will fi t in the corner of a local

bookstore. The fi rst Espresso in Europe appeared in the famed Black-

well’s bookshop in central London, where it expanded the bookstore’s

famously large selection with an additional half-million titles, ready to

print from digital fi les. A customer coming in to fi nd Charles Dar-

win’s out-of-print book on earthworms was able to print a copy in

minutes for about twenty dollars (instead of paying a thousand dollars

on the secondhand market for rare books). The fi rst Espresso in the

United States was in the homey Northshire Bookstore in Manchester,

Vermont. The store found that many aspiring authors came in to print

short runs of their own unpublished books once they found out they

no longer needed an established publisher to accept their manuscript.

As its digital library expands, the Espresso will allow small, local book-

stores like Northshire to offer just as many niche books as an online

powerhouse like Amazon.

On-demand manufacturing services can produce more than

just books. Services like Zazzle allow businesses large and small to
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CUSTOMIZE

offer customizable products for customers. These personalized de-

signs can be printed on T-shirts, mugs, and stationery, of course, but

also on skateboards, postage stamps, and even canvas shoes. Custom-

ers of Flip Video can use the Café Press customization platform to

buy a pocket camcorder emblazoned with their own cover design,

just like they can design the roof of their Mini Cooper.

On-demand manufacturing is much more than just decals

and graphic designs added to fi nished products, however. New plat-

forms allow small designers, or even individual customers, to order

products built to their own physical design specifi cations. London

custom clothier Styleshake allows customers to customize dresses,

tops, skirts, and accessories. Users select a fabric, create a custom de-

sign using the online studio (or select from those already created),

and order the clothing tailored to their measurements. In its fi rst three

months, the site received twenty-fi ve thousand customer designs and

glowing reviews in the fashion press.

New Zealand fi rm Ponoko lets designers around the world

custom manufacture furniture, jewelry, toys, housewares, and even

electronics. An independent designer creates a design using such

tools as the open-source Blender 3-D or Google’s free Sketchup soft-

ware. Next, he or she uploads the digital design to Ponoko’s Web site.

Then, at one of a network of fabrication shops, laser cutters are used to

automatically trim wood, acrylic, bamboo, cardboard, leather, or felt to

bring the design to life. The result (some assembly may be required) is

shipped to a consumer anywhere in the world. For anyone with a big

idea and no design skills, there is an option to commission a product to

be designed by one of the community of designers on Ponoko.

The Future of Customize

New platforms and new technologies will continue to expand the

ways businesses can use customize strategies.

129

Five Strategies to Thrive

New, better, and easier design tools will enable more people

to create their own designs for some products and to tweak and modify

others with a personal touch (think of your Garage Band software, but

for editing furniture instead of music). The ProFORMA modeling

tool by Cambridge University student Qi Pan already shows how a

full 3-D scan of an object can be made by rotating the object in front
of a simple webcam on any computer.

After customizing the design, a new generation of 3-D print-

ers will give customers the power to fabricate their own unique physi-

cal products right on their tabletop. Bre Pettis’s Brooklyn-based Maker-

bot Industries has already pioneered a 3-D printer that can fabricate

any shape you upload into it out of layered ABS plastic. Need a plastic

cup? A plastic bust of your own head? Just print it. At a thousand dol-

lars, the Makerbot offers the power of 3-D printing in your own home

for less than the cost of many laptops. As the next generation of design

and prototyping tools becomes easier to use and more fl exible, an

ever wider range of products will be customizable to suit the niche

needs and creative expressions of customers.

Customers may also begin to develop more detailed digital

profi les of their tastes, interests, and purchasing behavior. Sharing

these profi les with organizations could allow for much more tar-

geted and helpful products, services, and communications. Detailed

profi les would allow us to receive advertising that is more suited

to our own interests, to automatically subscribe to newsletters or

blogs in the format and frequency we prefer, and to integrate a

personalized social element into the results we fi nd on search en-

gines like Google. Journalist and author Stephen Baker predicts that

if magazines like Business Week are to survive online, they will need to grow
more dynamic, so that article topics, and even their length

and level of detail, will be matched to the preferences of each

reader.17

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CUSTOMIZE

Keys to a Customize Strategy

Whether your business is selling products or services, digital or physi-

cal, a customize strategy can offer your customer network the chance

to choose from, or modify, a diverse range of products, services, and

content. This can be done by offering a wide array of products and the

tools to sort through them or by offering digital tools that let custom-

ers design and modify to suit their own needs and taste.

While too much choice without structure or guidance can be

off-putting for customers, the right fi lters can assist customers in mak-

ing decisions that add value for them. A customize strategy can in-

crease sales, differentiate from competitors, and build closer relation-

ships with networked customers.

Successful approaches to a customize strategy include: offer-

ing a vast menu of products, services, or content; providing a playlist

of streaming content that adapts to customer preferences; letting cus-

tomers modify or mash-up your products or services; using choice to

help customers connect with real people; and fi nding or building a

choice platform that allows third parties to continually create new

products or content for your customers to choose.

Whatever the approach, it is critical to offer choices that people

care most about. Not many customers would choose to customize their

stapler, yet everyone has an opinion about what movie they want to see

next weekend. Figure out where your customers’ desires diverge and

what matters most to them. They may customize to make a statement or

express themselves, to match their specifi c interests, or to answer a par-

ticular functional need. If it matters to them, it should matter to you.

By helping customer networks customize their products, services, and

communications, businesses can enhance their value, deepen their

relationships, and learn more about how to innovate for their custom-

ers’ needs.

131

Five Strategies to Thrive

But let’s go further. Networked customers want more than

just to create, purchase, consume or enjoy what is personal and re-

fl ects their individuality. They want to share their unique selves with

others in their networks. They want to share their ideas in words,

sound, and images and to share their relationships in network links to

others. One of the most powerful drivers of customer networks is the

desire to connect with others. But how do businesses facilitate and

participate in all this connection? Do customers even want them to,

or would they prefer that businesses butt out of online conversations?

If business is going to tap into the personal connections within cus-

tomer networks, they will need to fi rst understand how and why cus-

tomers share and connect with one another.

132

CHAPTER6

CONNECT

Become a Part of Your

Customers’ Conversations

When U.S. Army soldier Jeff Taylor was considering

the diffi cult decision of whether to reenlist for another

tour of duty in Iraq, he discussed it with his wife,

Sarah. She was back in their home in Fort Riley, Kansas, but could

see Jeff in his room in Baghdad, thanks to an Internet connection

and the video webcams connected to their laptop computers. Sarah

would leave the video connection on much of the day, her own lap-

top propped on a coffee table so that Jeff could watch their infant

daughter and young son. With grainy video streaming from Iraq,

Sarah would watch Jeff come home in the evening and get ready for

bed. Across thousands of miles, it felt a little like having him in the

same room. 1

GIs like Taylor serving in Iraq and Afghanistan use a variety

of network technologies to stay connected to loved ones back home.

On battlefront blogs, soldiers share their day-to-day experiences of war

in a way that no television footage or news article can capture. Other

soldiers share photos online at Flickr.com, write short text updates to

Twitter, or share links with friends on MySpace and Facebook, in

each case using digital technology to connect with others in their

personal and professional networks.

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Five Strategies to Thrive

Or at least they do so when they’re not being banned from

these sites by superior offi cers. Throughout the wars, the U.S. military

leadership has wrestled with itself back and forth on whether, when,
and how to allow personnel access to these communication tools. At

one point, the army announced that all blog posts, and even personal

emails, needed to be cleared by a superior offi cer. Then they issued a

“clarifi cation” that suggested soldiers could write at their own discre-

tion. Policies varied: in the summer of 2009 alone, the army ordered

that all bases provide free access to Facebook, the Marines issued a

ban of all major social networking sites, and the Department of De-

fense mulled a blanket Web 2.0 prohibition for all the armed services.

The reasons given for prohibition were frequently nonsensical (for

example, to save bandwidth for mission critical activities, despite the

modest bandwidth used by many of these sites).

Many within the military loudly decried the restrictions, ar-

guing that allowing soldiers to honestly share their experiences online

was the best way for the armed forces to represent themselves to civil-

ians back home. They also saw digital media as a critical tool for sol-

diers to share insights among themselves. That had been the goal of

army majors Nate Allen and Tony Burgess when they started the on-

line forum CompanyCommand.com on their own dime.

Inspired by a discussion forum for outdoors hunters, Allen

and Burgess’s unsanctioned site invited offi cers (with a password) to

ask questions, share advice, and pose topics for discussion. After the

army entered Iraq in 2003, the site became an invaluable tool for new

offi cers arriving with little training in local customs or counterinsur-

gency warfare. CompanyCommand gave them crucial real-time learn-

ing from their more experienced peers already on the ground in the

war zone. Participants shared leadership advice on such topics as cop-

ing with fear and handling the pregnancy of a subordinate; practical

advice on how to kick in a door, holster a gun in a Humvee, or protect

a convoy; insight on local customs such as tea sharing and funeral

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mourning; and recommendations on equipment including simple

tourniquets and the best sunglasses for sandstorms. 2

CompanyCommand was greeted with wariness by more se-

nior offi cers, but after the site grew to include more than a third of all army
captains, it was made offi cial and moved onto the military’s Web

servers. Allen and Burgess were brought home to teach at West Point,

and they continue to run the site. By 2009, the top commander in

Iraq, General Ray Odierno, had set up his own Facebook page, and

the top commanders in Afghanistan had set up MySpace and Face-

book pages, a YouTube channel, and multiple Twitter feeds to repre-

sent the campaign in that country. The army was even experimenting

with a wiki to allow soldiers of any rank to add their anecdotes and

experiences to many of the fi eld manuals used for troop training, just

as one might contribute to an article on Wikipedia.

The uncertainty with which the army’s leadership has re-

sponded to the spread of new media and their adoption from junior

offi cers up to senior brass, mirrors the reaction of many large, estab-

lished businesses. These traditional organizations, built upon hier-

archies of command and control, are understandably uncomfortable

with the increasingly democratic and unmanaged fl ow of information

within and outside the organization. Yet both traditional businesses

and militaries realize that they face the threat of disruptive competi-

tors (start-up innovators or loosely organized combatants) who will

use networks to organize and communicate. To compete, large, estab-

lished organizations will have to adapt to a world where not all com-

munications are controlled from the top.

The Connect Strategy

Today’s networked customers seek to connect with one another by

sharing ideas, opinions, and feelings through digital media. Like the

general, the soldier, and the military family back home, they use a
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Five Strategies to Thrive

variety of tools for creating and sharing text, images, videos, votes, and

social links with others around the world.

Much of this connecting is happening on social networking

sites like Facebook, MySpace, and Twitter. By linking to other users

on these services (becoming someone’s “friend” or “follower” in their

parlance), hundreds of millions of people worldwide have connected

to each other in the digital realm, instantiating a web of personal ties.

The prevalence of social networking sites is hard to overestimate. The

global population of active Facebook users surpassed four hundred mil-

lion in 2010. 3 But other social networking sites dominated in some regions:
QZone in China, Orkut in Brazil, and VKontakte and LiveJour-

nal in Russia.4 Although participation in social networking sites was initially

driven by young users, their demographic reach quickly broad-ened. By
2009, most Facebook users were over twenty-six years old, and

the fastest-growing segment was fi fty-to-sixty-fi ve-year-old females. 5

On these and a variety of other types of Web sites, customers

are producing an avalanche of “user-generated content” that they use

to share ideas with one another. By 2009, nearly a quarter of online

adults in the United States wrote their own blogs, uploaded original

audio or video, or posted stories online. 6 Others express themselves in

smaller contributions, such as voting, posting short comments, or

sharing links to what they fi nd interesting online. The total outpour-

ing of customer opinions and ideas takes many forms and is produced

at an incredible rate:

• Videos: Twenty hours of new footage are posted every minute to

YouTube.7

• Status Updates: Twenty-one million short texts are posted each

day on Twitter, or as many words as are in a Harry Potter book

per minute.8

• Blog Posts: Two hundred million people blog; most of them blog

or tweet every day. 9

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• Wiki Entries: Fifteen million encyclopedia entries in 262 lan-

guages can be found on Wikipedia. 10

• Photos: Four billion user photos are shared on Flickr. 11

• Combinations of the Above: Five billion pieces of content are

shared every week on Facebook, including messages, links, pho-

tos, videos, and more. 12

Other popular media for sharing ideas online include cus-

tomer product reviews (on sites like Yelp), reader comments (on

blogs), votes for news content (on Digg), user ad postings (on craigs-

list and eBay), and tags and social bookmarks (on Deli.cio.us). New

tools continue to emerge for sharing ideas, opinions, and messages

within customer networks.

The desire to connect with others—by sharing and commu-

nicating our ideas in a range of media—is the fourth core behavior of

customer networks. It provides a powerful opportunity for businesses

and organizations of all kinds to learn from and build relationships

with customers by participating in these conversations.

The fourth customer network strategy for business is the

connect strategy—to become a part of their customers’ conversa-

tions. They can do so by joining the conversations already happening

in popular forums like Facebook and Twitter or by creating their own

forums where customers express themselves and have a voice.

By participating in the conversations going on in customer

networks, a connect strategy can help an organization achieve key

business objectives, including: gaining customer insights, building

brand image, capturing and evaluating customer input and ideas,

nurturing and amplifying positive customer word of mouth, lowering

customer service costs, and aiding reputation management and crisis

response.

Developing an effective connect strategy requires an under-

standing of the conversations already taking place in customer net-

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Five Strategies to Thrive

works. What media are customers using, and what is it that makes

these media so “social”? Who are your customers connecting with,

what are they sharing, and what is motivating them? And what is

the impact of their conversations on brands and businesses? Answer-

ing these questions will be required before beginning to develop a

connect strategy.

All Media Are Social Media

Taken together, social networking sites and our various tools for user-

generated content are collectively referred to as “social media.”

Unlike the traditional media that preceded them, social media

allow users a voice of their own. With traditional media—newspapers,

magazines, television, radio—customers merely consume the content

provided by reading, watching, or listening. By contrast, in social media,

customers still consume content, but they also connect with one an-
other, either by contributing their own content or by linking, voting,

and commenting on the content created by others.

But is “social media” even a distinct category anymore? Or is

it just a description of what all media are becoming in the digital age?

Today, even traditional broadcast media companies are incor-

porating social elements. Most American newspapers, for example,

now incorporate user-generated content in their online editions, in-

cluding user photos, videos, and even articles. Nearly all allow reader

comments—the fi rst step in a two-way communication pattern that

gives readers a voice of their own. In fact, many newspapers like the

New York Times have stopped referring to their audience as “readers”

and describe them instead as “users.”

Broadcast television is getting social as well. Viewers of Amer-

ican Idol help shape the content of that hit program by casting votes for the
performers they like. In the United States, 57 percent of Inter-138

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net users watch at least some of their television while simultaneously

using the Web. 13

News broadcasters have started not only to accept questions

and comments via Web sites and services like Twitter but to rely on

viewers to provide them with breaking news content—particularly for

global news of disasters, terrorist attacks, or political upheaval, when
reporters are unable to be on the ground at the scene. In 2010, one of the

prestigious George Polk Awards for journalism was awarded to the un-

named citizens who fi lmed and posted the online video of the death of

Iranian student Neda Agha-Soltan during Iran’s 2009 election protests.

Books may be the oldest traditional medium still in wide-

spread publication today. Readers can write notes in their margins,

but the printed page still does not allow these comments to be easily

shared with other readers or the author (perhaps the next e-reader will

improve this). And yet, many books are now published alongside au-

thor blogs, MySpace pages, or other platforms that allow readers to

contribute their point of view. In many cases, the author’s blog builds

the audience that lands them their publishing deal before the book is

ever written.

Even advertising billboards—perhaps the ultimate example

of one-way traditional media—have started getting “social” around

the edges. This trend fi rst appeared with the inclusion of SMS short

codes on signs (“Send a text to 55522 to get a free ringtone”). More

recently businesses have begun to adorn their billboards and roadside

signs with their Twitter addresses. The Naked Pizza restaurant in New

Orleans turned its roadside billboard into an invitation to follow the

restaurant on Twitter. Restaurant cofounder Jeff Leach says that 20

percent of Naked Pizza’s sales stem now from its Twitter presence.14

Whether powered by WordPress or a printing press, all of our

media are increasingly including ways for customers to comment,

contribute, and connect. Given the tremendous popularity of social

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Five Strategies to Thrive

media among today’s customer networks, this should come as no sur-

prise. In ways large and small, customers are seeking to connect with

one another and share their point of view at every opportunity.

Why We Connect

The motivations for customers to connect via networks are many. A

single medium such as Twitter may be used for business advertising,

for a personal interchange like email, for discussion of a technical

topic with an audience whom the author has never met face to face,

or for sharing the trivial minutiae of one’s day with their close friends

(“Rainy outside, taking the dog for a walk”).

This mix of motivations can be confusing to social media

newcomers. They may see one person posting on Twitter about their

morning dog walk and ask, “Why on earth should my business use
Twitter?” But it would be a mistake to think that a communications

tool like YouTube or blogging or Twitter is used for only one purpose—

any more than telephone calls are used for only one type of conversa-

tion. Customer networks connect via these tools to share an incredibly

wide variety of ideas, opinions, and feelings.

Some of these expressions are intended for a few close rela-

tionships—such as sharing news of a death in the family with friends

on Facebook or making a marriage proposal to a beloved via Twitter

(several have been offered and accepted via the Twitter @ message

format). In other cases, our digital expressions are intentionally sent

out to the whole world. When American graduate student James Karl

Buck tweeted that he had been arrested in Egypt while covering an

antigovernment protest, he notifi ed a host of online “followers” who

helped to alert his university and assist in his release the next day.

Countless others have used social media to share eyewitness up-

dates and photos of important events with the whole world. In 2008

alone, these included testimony of the massive earthquake in China’s

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Sichuan province, photos of US Airways fl ight 1549 landing safely in

New York’s Hudson River, and news of the terrorist attacks on hotels

in Mumbai, India. In each of these dramatic events, personal mes-

sages via social media broke the news before the traditional media of

television or radio.

We connect online to express our opinions and discuss the

things that matter most to our lives. For some, these may be matters of

faith or spirituality. Ireland’s Cardinal Sean Brady asked the Catholics

of that country to “Make someone the gift of a prayer through text,

Twitter or e-mail every day. Such a sea of prayer is sure to strengthen

our sense of solidarity with one another.” 15 Church Solutions, a magazine

for pastors, recommends that they use Twitter or Facebook regu-

larly to keep in closer touch with their congregation and the chal-

lenges they are dealing with, so that pastors can make their sermons

more relevant to parishioners and pray for those in need. On networks

like Twitter and specialty sites like Gospelr.com, believers share a mix

of personal experiences, Bible quotations, and spiritual votives such

as this one tweeted by @twitturgies: “Move into my neighborhood,

God. Come sing in these suburban streets. Love the loveless. Laugh

with the lonely. Spray the walls into beauty. ”16

For others, connecting through networks is a way to cope

with intense challenges. The site PatientsLikeMe hosts online com-

munities for those suffering from chronic illnesses such as ALS, Par-

kinson’s, HIV/AIDS, multiple sclerosis, and mood disorders. Using a

search function similar to those found on online dating sites, mem-

bers can fi nd and meet others with medical profi les that closely match

their own. With easy-to-use charts and health tracking tools, users

share some of their most private medical information (symptoms,

medications, and health outcomes) in minute detail, often adding

personal photos and their real names. Users can also share any drug

side effects they are experiencing and report them directly to govern-

ment regulators. But mostly, members are driven to connect with one

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Five Strategies to Thrive

another, fi nding companionship among others who share the burden

of living with an incurable illness.

Others use social media to connect around more joyous occa-

sions. Rebecca Sloan turned online for the wisdom of others when

she was approaching the birth of her fi rst child. A thirty-fi ve-year-old

biologist, Sloan had already completed childbirth classes, read the

standard books on “what to expect,” and logged on to the mommy

chat rooms when she turned to YouTube to watch some of the real
birth experiences of other mothers. She found thousands of videos

there, like Sarah Griffi th’s nine-part video of the birth of her son Bas-

tian, from moans and contractions to the baby’s crowning head and

fi rst cries. Bastian’s birth has been viewed online more than three mil-

lion times. In the nineteenth century, women regularly observed the

birth experiences of family and neighbors in their homes before their

own pregnancies. In the twentieth century, childbirth was mostly se-

questered from view within hospital maternity wards. But social media

has given mothers a chance to demystify birth and once again share

their experiences with each other. 17

Expectant mothers are just one of the many groups that con-

nect online around shared experiences. People with shared affi nities

and values, “tribes,” as author Seth Godin calls them, are using the

tools of social media to form niche networks that connect far fewer

members than a general service like Facebook, but their members are

held together by unique bonds. 18

More than forty thousand fi refi ghters around the world meet

online at Fire Fighter Nation, a niche social networking site that was

built using the Ning platform. On this network, members read news

articles related to their profession (news of forest fi res, hiring and re-
tirement of chiefs, successful rescues, fi refi ghter injuries or fatalities).

They read and post to discussion forums on topics relevant to them

(fi re suppression tactics, safety rules, vehicles and equipment, educa-

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tion and outreach). They create profi les of themselves, introduce

themselves to other members, and join smaller subgroups (fi re engine

drivers, volunteer fi refi ghters, the “Offi cer’s Club,” the “Firefi ghter
Saloon,” fans of the TV show Rescue Me). They organize and publicize offl
ine events in the real world (golf outings, memorial services,

fi refi ghting conferences, fi eld days for volunteers). They share their

personal points of view and experiences in blog posts, photos, and

videos.

In more than a million niche networks of this kind, your cus-

tomers are joining together to connect in similar ways: by sharing

content, reading topical news, meeting others, discussing online, and

organizing activities that happen offl ine. These groups form around a

variety of affi liations. Some coalesce around ethnic identity, like

360pars.com, a global social network of forty-four thousand Persians

around the world. Others share a common geography, such as the

dating site Singles En Barcelona or Why Leave Astoria?, a site where

residents of that outer-borough New York neighborhood plan events

and meet neighbors. Some networks form around professional voca-

tions, such as the niche dating site Farmers Only (care to meet a

bachelor dairy man?) or the GovLoop network for professionals in

U.S. federal, state, and local government. Some of the most passion-

ate networks form around amateur passions: Classical Lounge (classi-

cal music afi cionados blog and share music), Kicks On Fire (avid

sneaker collectors show off their latest footwear), and Chainlink (a

one-stop resource for Chicago bicyclists to fi nd rides and routes). For

popular sports teams, authors, or musicians, a social network can pro-

vide a place to nurture an ardent fan community with insider news,

artist videos and blogs, special offers, and, of course, opportunities for

users to comment, discuss, and post their own content. Rapper 50

Cent’s social network ThisIs50 provides an online hub for nearly half

a million fans to connect with one another.

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Five Strategies to Thrive

How Brands Are Shaped by Conversations

The vibrant online fan community of 50 Cent is, of course, a boon

for his brand and sales of his recordings. But conversations in cus-
tomer networks reach far beyond music artists and popular entertain-

ment brands. Customer word of mouth is hugely infl uential for all

kinds of business, and customer networks have greatly expanded its

impact and reach.

Research has found that recommendations from personal ac-

quaintances are trusted by 90 percent of global online consumers in

evaluating products, far more than any other source of product infor-

mation. 19 This is not a new phenomenon: word of mouth and refer-

rals have always been critical to business, especially for small and

medium-size businesses who could not easily reach their audiences

with broadcast advertising on mass media. What is new is that the

word of mouth of today’s customers is reaching far larger audiences as

they connect and share opinions online. Rather than sharing a com-

ment about a product or company with three friends over lunch, a

customer today may post it on their Facebook page, and a hundred

friends could see it in their news feed the same day. If the customer

posts on a more public online forum, such as Twitter, their comment

may be passed along and seen by thousands of people outside of their

direct circle of friends.

When customer word of mouth reaches those farther afi eld,

does it lose its credibility and impact? Who would pay attention to an

online product review posted by someone they have never met? Lots

of people. The same research found that the second most trusted form

of information on products was “consumer opinions posted online.”

With 70 percent trusting them “somewhat” or “completely,” online

opinions edged out newspaper articles (the traditional goal of public

relations) as a source of trusted information, as well as surpassing

brand sponsorships and all types of advertising: television, print, radio,

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billboards, banner ads, and search engines.20 With so much infl uence, it’s
no surprise that opinions shared in customer networks have

begun to have a powerful effect on companies’ reputations and brands.

In chapter 1, we read about musician Dave Carroll, who,

after terrible customer service from United Airlines, posted a comical

music video called “United Breaks Guitars” that attracted millions of

views and a fi restorm of bad publicity for the airline. Other infamous

examples include the “Comcast Technician Sleeping” video, seen a

million times on YouTube, in which a repairman arrived for a service

call and proceeded to fall asleep on the customer’s sofa while waiting

on hold for an hour to speak with Comcast’s central offi ce. Even more
notorious was the story of blogger (now author and professor) Jeff

Jarvis and his campaign against Dell. In 2005, Jarvis received terrible

customer service for a new laptop, despite having bought the gold-

plated service plan. He posted a complaint on his blog. Dell’s policy

at the time was to not respond to customer complaints on blogs, but

Jarvis’s post, titled “Dell Sucks,” was seen by other customers who

recognized his experience as their own, linked to his post, commented

on it, and created sarcastic Web sites about the truth of “Dell Hell.”

Soon, Jarvis’s original complaint had become a focal point of so many

links that it was appearing on the fi rst page of Google results for any

search on “Dell.” By the time mainstream press outlets like Business-

Week and the Houston Chronicle were covering the story, Dell’s rating in the
American Consumer Satisfaction Index was down 5 percent

and its stock price was sliding in a year when competitors were expe-

riencing rapid growth. 21 (To his credit, Dell founder Michael Dell used this
experience to help spur a broad effort to improve service and

focus on customer networks.)

Bad buzz travels faster now, too. For movies, it used to be that

customer word of mouth would take at least a week to sink a fi lm that

failed to live up to its marketing hype. Now many moviegoers use

mobile devices to post their opinion of a new movie from their seats
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Five Strategies to Thrive

while the credits are still rolling. In a 2009 Web poll, 12 percent of

respondents told Movietickets.com that Twitter infl uenced their

movie choices. Add in Facebook, MySpace, and other social media,

and you start to see a signifi cant portion of the movie audience. 22

When the shock comedy Bruno received scathing opening night re-

views on Twitter, the fi lm suffered a 39 percent drop in ticket sales

from Friday to Saturday. 23 Bruno had arrived with much anticipa-tion as a

follow-up to the cult hit Borat, but many movie industry watchers guessed
that its quick box offi ce demise was accelerated by

what was dubbed “The Twitter Effect.”

But customers’ word of mouth can also have remarkably pos-

itive impact on brands online. We read the story, in chapter 1, of L.A.

actor Dusty Sorg and his friend Michael Jedrzejewski, who created a

Facebook fan page for Coca-Cola. What began as a simple online

expression of love for their favorite soda blossomed into an online fan

community with more than three million “friends” adding their own

testimonials about the beloved brand. Close behind Coke on Face-

book is another consumer brand, Nutella, whose page was originally

built by fans. With almost no advertising budget, the hazelnut and

chocolate spread has nevertheless built an intensely loyal following:

three million fans are proud to display their love for the brand on their

Facebook profi le.

Another place where brands are benefi ting from customer

conversations is mom blogs. These family journals on the Web have

become extremely popular: hundreds of thousands of mom blogs

generate at least ten thousand page views per month. Mom bloggers

love to review products and let readers in on which ones they like.

Many companies have started sending them sample products to re-

view, just as they send to magazine editors. When a group of top mom

bloggers convened at the South by Southwest (SXSW) digital confer-

ence in 2009, record producer Steve Greenberg brought along one of

his new artists, singer-songwriter Diane Birch, to meet them over

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lunch and share some of her music. The mom bloggers immediately

connected with Birch’s songs and sumptuous voice, reminiscent of

Janis Joplin, Rickie Lee Jones, and Carole King. They jumped at the

chance to help spread the word about her music, writing about it on

their blogs and including a widget linking to Amazon and iTunes that
would donate one dollar to a charity picked by the bloggers for every

album sold. Venture capitalist and music lover Fred Wilson mused

that mom blogs may be “the new radio”—the place where bands (and

other consumer products) need to be in order to get heard and be

discovered by today’s networked customers. 24

Six Approaches to Connect Strategy

The conversations in customer networks are happening every day,

and their impact on any business or organization cannot be ignored.

This fact poses great challenges for managers seeking to shape the

image of their brands, products, and organizations. But it also high-

lights an opportunity to better connect with customers by participat-

ing in these digital conversations.

This participation may be limited, confi ned to listening in

and answering questions when asked. Or it may be extremely active,

focused on building new relationships with and among customers

and leveraging them to benefi t brands and add value to the business.

By looking at businesses that have successfully connected

with customer networks in their online conversations, we can see six

approaches to a connect strategy:

• Listen and Learn: Monitor and learn from the online conversa-
tions your customers are already having about your business and

your industry.

• Join the Conversation: Respond to issues, answer questions, and

make friends by joining the give-and-take of online conversations.

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Five Strategies to Thrive

• Provide a Forum: Create new places for your customers to express their
views and connect with each other around shared interests.

• Ask for Ideas: Solicit ideas from customers to tap into the wis-

dom of the crowd and show that you care about what they

think.

• Integrate Their Voice in Yours: Bring customers’ stories into your own
content and marketing.

• Let Conversations Add a Layer of Value: Make the conversa-

tions among your customers an added source of value for your

business.

By examining these six approaches and how they have been

used successfully by a wide range of organizations, we can gain in-

sights into how becoming a part of customers’ conversations can help

any business to better connect with its customer network.

Listen and Learn

The fi rst thing any company should do as part of a connect strategy

is to begin listening to the conversation in customer networks and

learning from it.

Monitoring for Your Brand

Monitoring online conversations that relate to your brand or

business can begin quite simply. Free tools such as Google Alerts (for

news), Technorati (for blogs), and Seesmic Desktop (for status up-

dates on Twitter and Facebook) allow you to set up automatic searches

of social media on key terms. Google Trends allows you to measure

the frequency of search terms on Google. This refl ects far more of

your audience (because more people use Google search than blog or

tweet) and can provide a good measure of the zeitgeist (a coffee re-

tailer might learn: Are more customers looking for “espresso” or “cap-

puccino”?). Whichever tool you use, key words should be chosen to

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monitor social media conversations about your brands, products,

businesses, and senior leadership, as well as conversations about your

competitors. Key conversations to listen for include customer compli-

ments, complaints, or problems with your business, as well as com-

ments that provide evidence of the impact of your marketing cam-

paigns. You will also want to monitor topics related to your business

category and the key issues that you solve for your customers (for ex-

ample, discussions of “ERP software,” if that is what you provide to

clients) in order to hear the conversations going on at the point of

need for your potential customers. For organizations with many cus-

tomers and a great many mentions in social media, paid services from

such vendors as Visible Technology and Radian6 provide sophisti-

cated tracking with analytics that quantify measures including vol-

ume of comments, share of voice online, sentiment (positive versus

negative comments), associated words (what words does your brand

name frequently appear next to), and even infl uence and impact (by

measuring which customers have the most visibility and “reach” on-

line). With tools of this kind, social media monitoring can yield de-

tailed maps of your brand’s image and show how ideas and opinions

are propagating within your customer networks.

Gaining Valuable Insights

Once monitoring is established, it is important to be ready to

capture ideas, respond, and act on insights. MasterCard has generated

ideas for sweepstakes prizes and creative elements of its ad campaigns

from listening to conversations in customer networks and discovering

what people were most interested in. General Mills introduced its suc-

cessful line of gluten-free baking products after listening to the conver-

sations of customers who were avoiding gluten because of Celiac dis-

ease or other reasons. When side effects for Pfi zer’s Champix smoking

cessation pills were discussed in the press, the company considered a

costly ad campaign as a response until social media monitoring re-

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Five Strategies to Thrive

vealed that customer sentiment toward Champix remained positive.

On the other hand, when Tropicana launched a major redesign of its

orange juice cartons in 2009, the response from their most loyal and

infl uential customers online was deafening. The sleeker new design

was judged “generic,” “ugly,” even “stupid.” Tropicana promptly re-

versed course and announced it would return to the classic packaging

that featured the image of a straw piercing a ripe orange.

Customer Networks as Market Research

Networks can supplement, or even take the place of, much

traditional market research, typically at much less cost. Pharmaceutical

companies and academic research labs have purchased data from the
PatientsLikeMe social networks of disease sufferers, after it has been

aggregated and stripped of personally identifying information (the data

is shared with consent of the site’s members). Data from patients’ on-

line conversations about symptoms and treatments can provide insights

available nowhere else and lead to new hypotheses for drug research.

In other cases, pharmaceutical companies have used the networks to

quickly recruit subjects for clinical trials. With as many as 5 percent

of all U.S. patients for a given chronic disease already enrolled on the

site, the population and data sets are larger than anything available

anywhere else. Drug maker UCB helped set up a new group within

PatientsLikeMe for epileptics in order to gather data about compara-

tive effectiveness of different therapies, understand quality of life for

patients, and measure drug safety and side effects. (The site is open to

all epileptics, not just those on UCB treatments.) On Sermo, a social

network for physicians, pharmaceutical companies pay for anonymized

polling comments and data from doctors and for the opportunity to

survey doctors directly within the social network. The opportunities for

social media as a market research tool are still being uncovered. Today,

any company should start by listening to its customer networks before

spending money to hire a focus group.

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Join the Conversation

Once they are listening, businesses need to be ready to join in on the

conversation as well, responding where needed, and taking advantage

of the opportunity to make new connections and reach customers.

There are several ways to join the conversation.

Respond to Issues and Concerns

I am a frequent user of Google Maps, so I was frustrated one

day when I found that it was no longer reloading properly in my

Firefox Web browser, even after rebooting. I was not optimistic about

getting help from Google, so instead I turned to Twitter, which I had

recently begun using. Perhaps my contacts there would have an an-

swer or at least share my outrage. “Why the #$%! does Google Maps

not work on Firefox?? Try changing the address and hitting return to

refresh—nothing. Can we start a revolt?” I tweeted. Two hours later,

I received a reply in Twitter, not from my followers, but from an ac-

count named @fi refox_answers. The message helpfully suggested

that it might be a confl ict with the Skype plug-in and told me where

to switch that off in Firefox. I was stunned. I immediately tried the

solution and reported back that it didn’t work. Firefox suggested that

I test my other plug-ins and see if turning any of them off fi xed the

problem. Within minutes, I had identifi ed the confl ict: a recording

plug-in for RealPlayer that I had added the week before. I eagerly

tweeted this news back to Firefox, which thanked me and said it

would share the information with others. In thirty minutes I received

another tweet, this time from RealPlayer, saying that it was looking

into the faulty code. Obviously, Firefox had found my initial com-

ment because they had someone monitoring the universe of Twitter

(probably via a free application). With a few brief 140-character mes-

sages, the company had found an unhappy customer (before I even

reached out to them!), identifi ed a product bug to be fi xed, solved my

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problem, and turned me into a loyal fan who would go on to share

this story with many others.

This is what customer service looks like in the age of social

media: proactive (be on the lookout), genuinely helpful (no shrug-

ging off the customer with “it’s not our problem”), and in a human

voice (no bureaucratic rules or offi cious language). Companies in-

cluding Microsoft, General Motors, Marriott Hotels, and Wells Fargo

bank have all incorporated social media response protocols into their

customer service and communications. Even airlines have found that

they can win over some of their dissatisfi ed customers with this ap-

proach, rather than inspiring them to compose musical satires on

YouTube. With Wi-Fi access now available to passengers on its fl ights,

Virgin America has its Web marketing team monitor Twitter for in-

fl ight customer complaints, forwarding issues on to public relations,

to guest care, and to onboard crews as appropriate. Providing helpful

information and customer care on Twitter is quite visible too, espe-

cially if the company has a lot of followers (Southwest and JetBlue

each have more than a million). So the good service offered to one

customer may be seen by many more.

Be Visible, Make Friends, and Be Viral

How does an airline get a million followers on a social net-

work? Isn’t that kind of popularity supposed to be reserved for movie

stars? Joining the conversation in social networks is not just about

lurking in the background and responding to customer complaints.

Businesses large and small can use the most popular networks to cre-

ate a visible presence online beyond their own Web site and make
friends with new and potential customers

Many organizations, from politicians and bands to mass mar-

ket brands, have developed a major presence on Facebook. Compa-

nies often attract fans by offering incentives to get customers to “like”

them online. Keeping customers engaged, though, takes attention.

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Best practices include: a regular fl ow of creative content (comments,

videos, and images), active discussion (on discussion boards and in wall

comments), and a fun and casual tone to match the medium. Star-

bucks, for example, posts interesting status updates every couple of

days that cover a mix of coffee topics, as well as reviews of music and

books sold in their stores. Each post receives thousands of comments

by their Facebook fans. Adidas attracted many friends on Facebook

with a contest to win an MTV house party. After the contest, it featured

a stream of content from the party on its page (blog posts, photos, and

party video). Red Bull displays the brand’s edgy humor for its young

target audience by offering funny apps on its Facebook page, such as

one that lets fans rate the phone calls of drunk callers to Red Bull’s

phone line.
All of this content and interaction benefi ts from the viral ele-

ment of Facebook: every time a customer “likes” Starbucks for a cof-

fee discount or comments on its music reviews, “likes” a video they

see on Adidas’s page, or uses a humorous app on Red Bull’s page, this

interaction appears in the customer’s personal Facebook feed and is

seen by all of their friends. When you see a friend interacting with a

brand, you can click and become a friend of the brand as well. Star-

bucks has found that for every four customers who interact with one

of their content items, three new friends join. A single post announc-

ing a mini-Starbucks card drew thirteen thousand comments and

“likes” from friends: thus, one post could yield nine thousand new

followers. 25

Interact Like a Real Human Being

Joining the conversation on social networks is not just about

content, prizes, and links, however. It is also about online interaction

with customers: a genuine dialogue based on listening, responding,

and exchange. First-time author Stephenie Meyer reached out to her

fans this way when they started the fi rst fan Web sites for her book

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Five Strategies to Thrive

Twilight, a horror-romance between Bella, a teenage girl, and her vampire
schoolmate Edward. Meyer answered readers’ questions about

Bella and Edward on MySpace. She responded to creative writing on

fan fi ction sites and fi lled in backstory details on her characters for

their Twilight Lexicon Web site. She created a personal Web site with

pictures of herself with fans at book readings and with her family at

home. She even used customer networks to arrange “I Love Edward”

parties and to organize a real-life high school prom for Edward and

Bella, attended in full costume by hundreds of her fans. Readers re-

sponded enthusiastically, traveling thousands of miles to participate

in events, joining online discussion groups in the tens of thousands,

introducing Meyer’s books to their friends, and championing each

new release on Amazon. This network of enthusiastic customers

helped buoy Twilight and its three sequels to such success that in the fi rst
quarter of 2009, they held all four of the top sales spots on USA Today’s
best-sellers list, accounting for one in seven books sold that quarter. 26

Larger companies can also show a personal face online by

having specifi c employees represent them in social media. Shashank

Nigam, a top airline industry blogger and CEO of Simplifl ying, ob-

serves that this personal face of the company is often critical to gain-

ing customers’ trust. “Why do so many travelers trust what they read

in a customer review on Trip Advisor? Because under that review is

the customer’s name, and they can click and read the profi le of a real

person who is sharing their opinion. Too many businesses are still

speaking online in the faceless voice of some anonymous corporate

communications department, and that undermines trust.” 27

Take Customer Service to the Customer

Given the impact of word of mouth in customer networks,

customer service is an essential part of any digital communications

strategy. This means responding to complaints and issues that you

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overhear (as Firefox did in my case) and more than that; it means let-

ting customers know they can connect with you online about con-

cerns, questions, or issues.

Many companies use dedicated Twitter accounts for cus-

tomer service as an ancillary to phone and email. This approach was

pioneered by Comcast (which needed some better buzz in social

media after its sleeping technician video). Frank Eliason, senior direc-

tor of Comcast Customer Service, leads their effort, monitoring an

onscreen scroll of inquiries directed to his account @comcastcares or

to the public Web. If the customer is venting (rather than asking a

question), Eliason’s fi rst reply may be just “Can I help?” or “We try.”

Then, if the customer opts to continue, he will get the details to pur-

sue the problem. That may involve checking a customer’s modem

remotely, clearing up problems with a collection agency, suggesting a

change of settings that may solve a customer problem, or sending a

technician to the customer’s house. This approach has earned Eliason

more than twenty thousand followers on Twitter and helped to reshape

the image of his company online. Eliason is known to answer tweets on

his BlackBerry from the beach. But when he announced he would be

on vacation for a family event, several customers spontaneously volun-

teered to answer other customers’ questions during his day off.

Municipal governments are following suit as well. San Fran-

cisco has launched an @SF311 channel to allow citizens to fi le com-

plaints or questions about city services via Twitter. The city of Boston

has created an iPhone app called Citizen Connect that allow citizens

to snap photos of potholes, graffi ti, and illegal trash violations in their
neighborhoods and upload them directly to the appropriate city

agency. Start-up SeeClickFix has created a simple Web platform that

allows municipal governments anywhere in the country to collect in-

formation like this from citizens’ phones or computers. All these con-

nections increase government’s responsiveness while ensuring that

requests are submitted in a centralized and effective fashion.

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Five Strategies to Thrive

Make Them an Offer

Of course, one of the friendliest ways to get customers to join

you in conversation online is to make them an offer—whether it is a

discount, a product giveaway, an invitation to an event, or just fi rst

dibs on a new menu item. Dell has sold over six million dollars of

excess inventory through Twitter, simply by announcing sale items on

its @DellOutlet account to more than 1.5 million followers (not bad

for a free direct-marketing channel). 28 In Los Angeles, a traveling taco cart

called Kogi Korean BBQ sends out a steady stream of updates, via

its blog and Twitter, to let customers know where it will be parking

each night to serve its unique Mexican-Korean fusion fare (kimchi

hot dogs and spicy pork tacos, anyone?). Kogi’s followers show up by

the hundreds each time it parks, spread the word on their own social

media, and help the truck fi nd new locations on the occasions when it

is asked to move. With more than forty thousand followers, the customer

community has contributed names for the taco trucks and even pro-

duced a music video, “Chasing the Dragon,” on YouTube. The online

buzz has landed Kogi’s founder, Mark Manguera, several investment of-
fers and a chef’s position at a nonmobile restaurant, L.A.’s Alibi Room.

Provide a Forum

When asked why he robbed banks, Willie Sutton famously said, “Be-

cause that’s where the money is.” For many businesses pursuing a connect
strategy, it makes sense to go where your customers already are.

That is: Facebook, Twitter, or whatever the next popular social media

platform may be. But in certain cases, organizations may also benefi t

from creating their own unique forums for customer connection.

Give Room for Comments

Allowing comments on the content of your own Web site is the

fi rst step to hosting a conversation on your own turf. For corporate blogs,
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this turns a channel for broadcasting updates into a forum for genuine

discussion with customers. Media companies are also discovering the

benefi ts of allowing users to comment on their sites. In the Toronto

Globe and Mail’s Cover It Live feature, professional reporting on

breaking stories is combined with video and real-time comments

from readers. Coverage of the confi rmation hearings for Supreme

Court Justice Sonia Sotomayor on newspaper sites like NYTimes.

com gave us a fi rst peek of what may be the future of online newspa-
pers: displaying live video streams (CSPAN-style) alongside detailed

articles by reporters and near-real-time comments from users.

Aggregate Ratings of Others’ Stuff

Another valuable type of forum that businesses can provide

for customers is aggregated ratings sites. Yelp has become one of the

most popular applications for the iPhone by collecting ratings of local

businesses from bars and restaurants to optometrists and fabric stores.

Users can log in on their phone or computer to add their own ratings

and read others’ reviews. CitySense allows users to share their votes

for the hippest nightlife in cities like San Francisco, so that savvy lo-

cals and out-of-towners can log in via their phones to fi nd the place to

be. Vitals.com offers users a rating system for medical doctors by com-

bining empirical data with consumer reviews. With the growing trust

that customers give to the opinions of other customers, forums like

these will continue to add value and attract users.

Give a Forum to Express Views on Your Own Brand

Media brands often have customer networks that are especially

eager to share opinions on their brands. Bravo Media has channeled the

enthusiasm of its audiences for shows like Top Chef and The Real House-
wives of Orange County in its own online customer forums. Before, during,
and after the TV shows, avid viewers log on to vote for and against
contestants, answer polls, chat with other viewers, and send in live com-

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Five Strategies to Thrive

ments that may run across the bottom of the screen. Lisa Hsia, senior

vice president of Bravo Digital Media, turns all this interaction into

millions of dollars of extra revenue for the network via sponsorships,

advertising, and fees for users who vote or download ringtones and

wallpaper. Hsia is building affi nity groups among Bravo’s customer

network, focused on themes of food, fashion, style, and design. She

has also recruited customers to take a trivia quiz to join the “Bravo

Infl uentials,” a new tastemaker panel offering opinions on program-

ming and advertising and receiving free gifts for participating. Says

Hsia, “My job is to try to interact and engage our users before the

program, during the program, after the program, and always.” 29

Before the introduction of the Ford Fiesta in the U.S. market,

Ford Motor Company invited one hundred social-media-savvy young

consumers to test drive the car for six months and gave them a forum

to share their uncensored opinions: FordFiestaMovement.com. More

than four thousand consumers applied by submitting online videos,

and winners were chosen for their passion, story-telling ability, diver-
sity, and sociability—that is, the number of friends in their social net-

works. “Agents” included California actress Olga Kay, twenty-six, who

posted photos of herself inside the hatchback, and Andy Didorosi,

twenty-two, an aspiring race car driver and automotive journalist from

Michigan. They were given monthly “missions”—drive a friend to

the ocean who’s never been before, drive your Fiesta until it runs out

of gas, and so on. The missions stimulated stories to tell in blog posts,

tweets, and videos. The results were positive (most thought the Fiesta

was a great car for the price), authentic (with some genuine sugges-

tions to improve the car), and exuded personality. Ford’s goal was to

spur interest in Generation Y consumers (born 1979 to 1995), who

are hard to reach by television but make up 28 percent of U.S. drivers.

The campaign resulted in 3.5 million YouTube views, 2.7 million

Twitter impressions, and an astonishing 38 percent awareness of the

Fiesta among Gen Y consumers. Getting these customers familiar

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with the Fiesta before its launch also yielded valuable insights into

how the target audience would perceive the car. 30

Give a Forum to Connect around Lifestyle or Interests

Other companies are connecting with customers by providing

them a forum to discuss shared interests and lifestyles rather than spe-

cifi c brands and products of that business. Automotive site Edmunds

.com hosts the online forum CarSpace, where auto enthusiasts create

profi les, join discussions, vote in polls, and upload photos and video,

all around car brands, companies, models, and engineering. Nike

hosts its Ballers Network, which basketball fans use to organize neigh-

borhood pick-up games. Using a Facebook application or a mobile

Web site, Ballers Network members can scout out courts in their cit-

ies, connect with other “ballers,” and manage their own league. On-

line stock trading service TradeKing hosts the Trader Network, where

participants can see what securities are being traded that day, follow

the picks and performance of top traders, share advice, and fi nd out

why fellow members made specifi c trades. In each of these cases, net-

work members are discussing the category (cars, basketball, or stock

trading), not the specifi c company hosting the site. But creating the

forum allows the business to become an important part of their cus-

tomers’ networks and lives.

Create a Temporary Forum Tied to a Major Event

When a major public event is particularly important to custom-

ers in a business’s network, it can leverage the excitement by providing a

temporary forum for customer communication. CNN partnered with

Facebook to create an online event around the television broadcast of

the 2009 U.S. presidential inauguration. More than eighteen million

viewers watched live video coverage at CNN.com. They logged in using

their Facebook accounts and posted up to three thousand comments per

minute in a sidebar that allowed them to chat live with their friends.

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Five Strategies to Thrive

Other major live televised events—such as sports games and

awards ceremonies—may provide similar opportunities. One in seven

TV viewers of the 2010 Super Bowl were online while watching the

game. That capped a year in which the Winter Olympics and awards

shows like the Grammys and Emmys all saw marked increases in tele-

vision audiences, many of whom were having simultaneous conversa-

tions via Twitter and Facebook. 31

In other cases, the online forum may be tied to an event that

the business organizes itself. In 2008, Nike sponsored the Human

Race, a ten-kilometer run held in twenty-fi ve cities worldwide, from

Chicago to São Paulo. Nearly eight hundred thousand members of

their nikeplus.com network participated in 142 countries, many of them

running on their own and logging their times online to compete in

the event. For businesses that don’t already have a network like nike

plus.com, Facebook offers a widget that any company can place on its

own site to host customers’ Facebook chat alongside the company’s

own live-streaming content.

Create a Private Forum for Loyal Customers

Creating a private forum or social network can be a way to

invite select customers to provide feedback and feel that they have a

hand in shaping your business. Mercedes Benz invited members of

its Owners Club to join the GenerationBenz social network. Cus-

tomers can create personal profi les, invite friends, upload photos and

video, and interact with one another during special sessions, such as

a sneak peak at an upcoming car model. The Intercontinental Ho-

tels Group runs three private communities for members drawn from

its loyalty program. Using surveys and threaded discussions, these

customers are asked what is most important to them during hotel

stays and what they think of new planned promotions. The customer

insights that are generated are integrated into Intercontinental’s

strategic planning, creative briefs for marketing and advertising,

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and employee training programs. Community members have also

shown marked increases in their likelihood to recommend the brand

to others.

What to Expect When You Manage Your Own Forum

If you do plan to create your own forum for your customer

network, make sure that customers have a compelling reason to come

to your site and keep coming back. Bear in mind that they probably

have already taken the time to create a profi le at one or more large

public networks. The motivation to join your smaller forum may stem

from a true passion for discussing your products and news (such as

Bravo’s hit television programs), or it may be an enthusiasm for the

specifi c product category you are in (such as stock trading). If your

network is based around a product category, make sure you are not

replicating a site that already exists.

It is also critical that you devote enough resources to launch-

ing a network and have realistic expectations of its results. Keeping

customers coming back to a stand-alone forum requires constant in-

vestment in fresh content, discounts, and offers, as well as careful

moderation of comments (to establish norms and preclude spamming

and nasty behavior). In measuring the participation of your custom-

ers, keep in mind Jakob Nielsen’s “90–9–1 Rule” (discussed in chap-

ter 2). Roughly 1 percent of the participants in a social media forum

will contribute signifi cant content (posting blogs, uploading videos,

or initiating discussion topics), another 9 percent or so will post com-

ments on that content, and roughly 90 percent of users will simply

read and be infl uenced by the discussions of the others.

Last, you should recognize that one of the benefi ts of running

your own forum is that it will tend to attract your most loyal, engaged,

and high-value customers. TradeKing has found that although only 5

percent of its members participate in the Trader Network, they are

responsible for 10 percent of the trades and commissions. Among

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those participants, the traders who network more actively in the com-

munity also have signifi cantly higher balances and funding; they are

TradeKing’s “high-value clients.” Hosting your own forum can be a

way to identify your highest-value customers so that you can more ef-

fectively market to them and deepen your relationship with them.

Ask for Ideas

Asking customers or employees to share and vote on ideas for new

products, services, and business ventures is another valuable approach

to a connect strategy. Because customers and employees may have

different levels of knowledge about your business, they may be best

served by different tools for idea generation.

Ask Customers to Submit, Discuss, and Vote on Ideas

Starting in 2007, Dell’s IdeaStorm forum began asking cus-

tomers to submit, discuss, and vote on new ideas for Dell products

and services. In its fi rst three years, IdeaStorm generated more than

ten thousand ideas, eighty thousand comments, and half a million

votes cast by customers. Dell implemented hundreds of the ideas,

ranging from a SupportPro service program for business customers to

a DataSafe service that allows customers to remotely access and share

data online for a fee. When teachers suggested that Dell offer a cheap,

kid-tough laptop for the education market, Dell launched its Latitude

2100 netbooks. Starting at under four hundred dollars, they come in

a rubberized case with optional fl ash memory (sturdier if you drop it),

a vent-free bottom to protect the netbook from drink spills, optional

carrying strap, touch screens for younger children, and cases in fi ve

bright primary colors: School Bus Gold, Chalkboard Black, Ball Field

Green, Blue Ribbon, and Schoolhouse Red. The netbooks even sport

a network activity light, so that a teacher can tell when students are

going online in class.

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An IdeaStorm platform was used in a very different product

category to run the MyStarbucksIdea.com Web site, announced by

Starbucks founder and CEO Howard Schultz in 2008. The site en-

courages customers of the coffee chain to offer ideas on how to im-

prove the Starbucks experience: from coffee fl avors to packaging to

the in-store and online music selections. MyStarbucksIdea.com taps

into three key ways that customers connect online: sharing ideas, dis-

cussing and commenting on ideas, and voting. Within the fi rst hour,

three hundred customer ideas were posted; within the fi rst week, a

hundred thousand votes had been cast; within the fi rst year, more

than seventy thousand ideas were shared.

An algorithm on the site pushes the most popular ideas to

the top based on votes received, how recently the votes were cast, and

the volume of comments. Forty-eight Starbucks employees (“idea

partners”) help moderate the discussion, prune out duplicate ideas,

and take those with the most votes back to their own departments to

advocate for their consideration. Dozens of customer ideas have al-

ready been implemented, and many more are under way. These in-

clude: free Wi-Fi in stores for customers; a Starbucks music applica-

tion for the iPhone; reusable “splash sticks” to plug the hole in drink

lids and prevent sloshing; the return of the Yukon Blend coffee fl a-

vor; a Mini-Starbucks purchasing card; and a more natural food

menu with fewer artifi cial ingredients, no high-fructose corn syrup,

and more healthy foods like egg whites, multigrain muffi ns, and

whole fruit.

Starbucks and Dell do not offer their customers any rewards

or compensation if their ideas are used, but they don’t have to. Cus-

tomers are usually happy to share ideas and try to improve your busi-

ness if they feel that you are listening. That feeling of being listened

to is one of the best benefi ts of creating a platform to ask customers

for ideas.

Another context for soliciting customers’ ideas can be seen in

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the American Express Members Project. Rather than being asked for

business ideas, card members were invited to submit ideas for chari-

ties that Amex could support. Members then discussed their ideas

with other customers and voted for them online (again: submit, dis-

cuss, vote). American Express gave two million dollars to the winning

charity in the fi rst year, and fi ve million dollars total to the top

fi ve charities in the second year. Customers rallied around their favor-

ite causes and spread word of the contest with photos and videos, as

well as widgets and banners that they shared on Facebook and

MySpace. Over two years, more than eight thousand charitable proj-

ects were submitted and more than half a million members registered

to vote and participate.

For the top-winning charities—a water purifi cation program

for rural children and an early detection education program for

Alzheimer’s—the Members Project delivered both money and valu-

able publicity. For American Express, the benefi t to its brand was sub-

stantial, with hundreds of blog, print, and TV news articles and more

than three million visitors to its Web site. The Members Project was

the most recognizable campaign in the company’s recent history, with

over 50 percent recognition among current and prospective card

members. Amex’s “net promoter score”—the chance that a current

customer would recommend the company to a friend—was lifted an

amazing 85 percent. 32

Ask Employees to “Invest” in an Idea Market

Employees can also be a valuable network to ask for ideas on

improving your business. The U.S. government’s Transportation Se-

curity Administration uses an “IdeaFactory” much like Dell’s IdeaStorm

to invite ideas from its forty-three thousand employees. Within its fi rst

year, more than forty-fi ve hundred ideas were submitted on this non-

public site, thirty-nine thousand comments posted, and about twenty

ideas implemented as national policy.

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When asking employees for ideas, however, organizations

may want to use a different tool to tap the intelligence of their net-

works. Given their greater knowledge of the details of your business,

you should probably judge employees’ ideas using a more sophisti-

cated technique than simple vote counting. A more robust tool to

evaluate such ideas is the “idea market” or “exchange.”

In an idea market, network members have the opportunity to

propose business ideas; they then choose to invest a fi xed amount of

their own virtual money by dividing it among the ideas they feel have

the most value. Employees have the option to invest more of their

money in an idea they strongly support or to spread it across smaller

investments in several ideas. The effect is a sort of stock exchange

for ideas, with the ideas that attract greater investments bubbling to

the top, like assets whose prices rise on an exchange. (Note: Idea mar-

kets are frequently confused with “prediction markets” such as the

Iowa Electronic Markets, famous for beating many polls in predicting

elections. But the mechanism and use of prediction markets is quite

different.)33

Cisco has used idea markets to generate employee ideas for

new start-up ventures. The ideas that attract the highest “stock price”

from the employee network are not always those that upper manage-

ment thought were promising; instead, the market provides access to

the wisdom of engineers and employees on the ground level. Cisco

has used its idea market to pick several winning ideas to invest in

through its Emerging Technologies Group. The employee who pro-

poses a winning idea is given the option to lead the project. 34

Motorola has used a similar idea market to sort through the

thousands of ideas its employees submit to its ThinkTank system. The

system generates ideas for new products and process innovations to

improve productivity. Each idea starts at ten dollars a share, and each

employee gets a virtual hundred thousand dollars to invest. The stock

values of ideas rise as employees buy and sell shares. GE has devel-

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Five Strategies to Thrive

oped a similar process for idea markets called the Imagination Mar-

ket, which it uses to help answer such questions as “What new tech-

nology ideas should we be investing in?” and “What new products

should we develop?” GE also licenses its own process to other organi-

zations seeking to run idea markets in their own networks.

Integrate Their Voice in Yours

One of the most powerful ways to strengthen your relationship with

customer networks is to incorporate their own voices, stories, and

opinions into the public voice and face of your organization.

One way to do this is by tapping the content created by your

customer networks for use in your marketing. Sprint created a great

deal of excitement with its “Now Network” clock, the fi rst advertise-

ment on YouTube’s homepage to be built with user-generated con-

tent. Building on Sprint’s marketing campaign around its “Now Net-

work,” the YouTube clock displayed the current time throughout the

day with four digits culled from user video submissions to Sprint. For

example, at 12:48, the four squares in the clock would show four dif-

ferent videos in which users had represented the numbers 1, 2, 4, and

8. YouTube visitors who clicked on the “add yourself” button could

upload videos of themselves depicting a number and hope to be added

in the real-time ad as the minutes ticked by through the day. Thirteen

million visitors saw the ad in its fi rst day, and it lived on as a widget on
Sprint’s Now Network Web site.

Sometimes your customers will be willing to produce the en-

tire ad for you. Doritos has run contests in which customers create

Doritos ads to run during the Super Bowl, the most expensive adver-

tising slot of the year. While this might seem risky, the results have

been more popular than many of the ads produced by agencies to

plug other brands. In 2009, an ad dubbed “Free Doritos” created by

two unemployed brothers was rated highest among all Super Bowl

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ads by USA Today’s Ad Meter poll. The same ad was the most talked

about ad online, according to Zeta Interactive. A year later, the

customer-made Doritos ad “Snack Attack Samurai” was the most

viewed advertisement of all time.35 On a smaller scale, the March of

Dimes charity has reached out to members of its online community,

EveryBabyHasAStory.org, inviting members to create a virtual scrap-

book out of videos and blogs. Community members submitted video

advertisements telling their own story for a March of Dimes public

service announcement to raise awareness of premature births. More

than eighty ads were submitted, over three thousand votes were cast,

and the winning ad was distributed on TV stations nationally. Net-

worked customers are increasingly interested in each other’s stories

(and less interested in advertising), so including the authentic voice

of your customers in your own communications is a great connect

strategy.

If your organization is a media company or publisher, you

can integrate the voice of the customer directly into your content and

programming itself. This approach has been hugely successful for

Nickelodeon’s television show iCarly, helping to make it the number-one

television program in America for kids fourteen and younger

(beating out American Idol and Hannah Montana). The show is a scripted
comedy series about a teenage girl who runs her own Web

TV show with her best friend and her neighbor. Their show-within-
the-show features talent contests, interviews, and wacky comedy. In a

television fi rst, it also features homemade videos submitted by the

real-life viewing audience. Responding to requests within the program

(“We need some dance videos!”), kids log on to the Web site iCarly.

com to submit their own videos, hoping for a shot at being featured on

television or on the Web site. While visiting the site, they can also

read the characters’ blogs, post comments, and vote in polls. The con-

cept was so eagerly received by the audience of digital kids that more

than two thousand videos were uploaded and nearly forty thousand

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Five Strategies to Thrive

kids registered before the fi rst episode of the show had even aired. By

its third season, iCarly was drawing twenty-six million viewers each week
and had become the most watched cable television program on

Saturday nights.

Let Conversations Add a Layer of Value

Enabling the conversation within your customer networks can do

more than just enrich your relationships and communications with

customers. It can also add value to the core products and services that

your business offers. By sharing their expertise and insight with one

another, customers benefi t as they strengthen the community around

your organization.

One way they can do this is by answering one another’s ques-

tions about your products and services. That is why Intuit created a

user forum for its popular TurboTax tax preparation software. On

every page of the program, while users are fi lling out their tax returns,

they can pose questions and look up past answers on the TurboTax

Live Community. Within only a few weeks of launching the commu-

nity, one-third of the customer questions were being answered by

other customers rather than by Intuit’s internal tax experts. That num-

ber soon reached 40 percent. Intuit also watched carefully to see what

kinds of answers customers would provide. They were pleased to fi nd

that users were providing accurate, relevant information and that the

conversation was self-correcting: as users continued to discuss a topic,

they refi ned their answers to improve them.

Having saved 40 percent on its customer support calls for

TurboTax, Intuit went on to add a similar community for its popular

QuickBooks accounting program for small businesses. In the Quick-

Books live community, diehard users answer product-related questions.

They also blog and post on general small-business issues, including

offering local help to each other in fi nding a good lawyer, marketing

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coach, or accountant. Especially active community members choose

to answer countless questions for fellow members. Michelle Long, an

accountant in Lee’s Summit, Missouri, has posted more than 5,600

answers to questions on the forum.36 As in any user forum, the an-

swers are searchable, so many more users have read and learned from

Long than the 5,600 who posed the questions she answered. As a re-

sult, Intuit has found that 90 percent of users are able to get their

questions answered successfully on the community site rather than

calling Intuit’s call center. Beyond that huge savings in customer ser-

vice cost, the conversation in the QuickBooks community makes In-

tuit’s product much more useful for new customers. The strategy

helps Intuit to sell over a million copies of the two-hundred-dollar

software and boost its market share to 94 percent.

Highly active customers like Michelle Long may have mul-

tiple motivations for contributing so much time and expertise in a

customer forum. For some, the psychic rewards of helping others,

being thanked, and getting to demonstrate their knowledge are the

primary motivator. For others, participating may offer a chance to net-

work professionally and raise their profi le among a community that is

important to their career. Business software company SAP has nearly

two million members worldwide in its SAP Community Network. To

encourage the customers who connect and share answers there, SAP

established a Customer Recognition Program that awards points to

customers based on their contributions, such as responding to forum

questions, adding to a wiki page, or maintaining a blog. There is no

direct compensation from SAP, but these points benefi t the network’s

most active members—who are software developers, vendors, and in-

dustry thought leaders—by communicating their reputation and exper-

tise to others who may consider them for a job, a contract, or a sale.

Similarly, Microsoft uses an MVP Award to recognize top

contributors on its developer network, which spans ninety countries,

thirty languages, and ninety Microsoft technologies. MVP’s include

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Five Strategies to Thrive

people like Yongguang Zhu, who has translated Microsoft articles

into Chinese for other readers and helps organize a club for .NET

developers; Mr. Tutang MM, a book editor in Indonesia who pub-

lished an article on how laptop users can stay connected with Win-
dows as they travel between work and home; and Deb Shinder, who

wrote a blog post on how to enhance your productivity using the new

“jumplists” feature in Windows 7.

Customers sharing ideas online can contribute value to even

less technical businesses, however, as long as there is a topic that spurs

active discussion and contributions. Cooking Web sites like Epicuri-

ous.com feature thousands of professionally developed recipes, but

they also allow customers to comment. Those comments include

more than just a rating (“4 forks”) or an appraisal (“My wife loved this,

and it went great with mashed potatoes”). The most active customers

log in to share their own advice on how to modify, amplify, or some-

times signifi cantly change the recipe. I’m a fan of homemade enchi-

ladas and found a highly ranked recipe on Epicurious’s site. The fi rst

of 130 comments begins: “Following a number of reviews, I made a

bunch of changes to add fl avor and use up a bunch of veggies. For

the sauce, I used swiss chard instead of spinach, all milk (no cream),

and added a chopped jalepeno, some garlic scapes, chili powder, and

lime, and omitted the coriander. Salting the sauce properly seemed

important: 1 tsp Kosher.” Another reviewer wrote: “I’ve made this

quite a few times and think it’s tasty as is, especially as part of a buffet.
However, I now make it with the following changes—make 1 ½ times

the white sauce and use the entire package of spinach and the whole

can of chilies.”

Enchiladas are not haute cuisine, nor is this a community of

professional chefs, but Epicurious’s customers are passionate about

food and love fi nding ways to improve or customize the recipes to suit

their tastes. Whenever I make a recipe from the site, I start by reading

the comments to fi nd additional ideas.

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When customers share this kind of passion and desire to con-

nect and communicate about your product or service, make that

conversation part of your offering. By harnessing your customers’

knowledge and willingness to share ideas, your business gains a layer

of value that you would never be able to add on your own.

The Future of Connect

The ways that customer networks connect—sharing ideas, opinions,

votes, and links—will continue to evolve with new expressive tech-

nologies such as widespread mobile video, and new platforms, like

the next Facebook or Twitter.

One important trend will be how mobile and location-based

technologies continue to merge the world of our online networks and

connections with our offl ine ones. Social networking tools for mobile

devices will allow us not only to share a thought as we hop out of a

taxicab but to fi nd out which members of our network happen to be

nearby. Mobile social networking games like FourSquare already

allow you to check which friends of yours have recently visited the bar

you are walking into, and perhaps even check their drink recommen-

dations. As connecting becomes more mobile, our digital networks

may start to resemble Meetup, the Web site that helps nearly six mil-

lion members organize local groups online to meet in real-world loca-

tions over shared interests, passions, or professional goals.

Another area of rapid change will likely be in the extension of

our “social graph” from networking sites to other digital experiences.

The social graph (a term popularized by Facebook’s founder Mark

Zuckerberg) is the web of relationships that we establish digitally

within social networking services like Facebook or LinkedIn and con-

tact lists like our email address book. Viewed as a literal map of all our

connections, the social graph will yield many more possible applica-

tions beyond just communicating within a social networking site.

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Five Strategies to Thrive

Facebook Connect allows customers to transport their social graph

from Facebook into partner Web sites or game consoles, adding a so-

cial dimension to them as well. I’ve used it to share articles with my

Facebook friends while reading NYTimes.com or to fi nd out what

music my friends are listening to on Pandora. Twitter is developing

similar capabilities with its @anywhere initiative. Many developers

believe that our social graphs should be freely portable, so that if you

“friend” me on one service, that tie can be carried across any other

Web site, or even another social networking service. MySpace, Ning,

Orkut, and most other services have rallied around a shared open

system called Open Social. But so far, Facebook, the eight-hundred-

pound gorilla in the room, is keeping its data to itself.

The prospect of incorporating our social graph into every

other digital experience seems enticing. But the power of the social

graph may be limited by the fact that a “link” within a social network

can mean something very different to each of its hundreds of millions

of users. Sometimes a “friend” is not quite a friend. This was revealed

rather humorously by a Facebook advertising campaign started by

Burger King in December 2008 called “Whopper Sacrifi ce.” The

campaign consisted of a Facebook application that enticed customers

to “sacrifi ce” ten Facebook friends in order to receive a coupon for

one fl ame-broiled Whopper burger. The user would open the appli-

cation in Facebook, pick their friends to be sacrifi ced, and then watch

their profi le images vanish in smoldering fl ames while Facebook

erased them from the user’s friends list—and sent the friends a mes-

sage that they had been sacrifi ced for a shot at a burger coupon. Would

you do that to a friend? Burger King customers did, sacrifi cing nearly

224,000 “friendships” before Facebook disabled the application, can-

celing Burger King’s campaign only three weeks after it started.

One area you can expect the social graph to be exploited is in

advertisement targeting. Marketers have long known that their most

effective ad dollars are those spent on existing customers, who are

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known to have an interest in their product. Beyond that, fi nding the

right targets among the population of noncustomers has always been

a challenge, as well as the goal of segmentation, media buying plans,

and the zip code and street-level demographic analysis that drives
modern political canvassing.

A 2006 study by Shawndra Hill, Foster Provost, and Chris

Volinsky found that the network “friends” of a company’s current cus-

tomers may be three to fi ve times more likely to respond to product

advertising than the targets identifi ed by traditional segmentation and

targeting. 37 It is not clear how much of this effect is attributable to word of

mouth (customers actually discussing the product with their

friends) versus homophily (customers choosing friends who have sim-

ilar interests and likes), nor whether the impact would be quite as

dramatic across different product categories. (The research was done

with a large sample of customers for AT&T.) But you can expect to

see advertisers try to put your social graph to work in choosing who to

target with advertising in the near future. Media6Degrees licenses

user information from social networking sites to help advertisers tar-

get the friends of their customers. Companies like Lotame and

33Across are mapping social graphs by tracking the creators of user-

generated content and the followers who consume it. MySpace is

scraping information from the profi les of users to allow hypertarget-

ing of ads across Web sites owned by its parent, News Corp., and

Facebook will likely follow suit. 38 The next wave of Web advertising may
likely be based on mining social networks.
Keys to a Connect Strategy

The desire to connect—by sharing ideas, opinions, and social links—

is at the heart of today’s customer networks. Whether your organiza-

tion is a software maker, a media company, a coffee retailer, or a non-

profi t charity, a connect strategy can help you grow closer to your

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Five Strategies to Thrive

customers by contributing to that digital conversation. This can be

done by joining the conversation on large social media platforms or

by providing a unique forum of your own for your customers to con-

nect and share.

The conversation in networks is already shaping businesses

and defi ning brands. By joining this conversation effectively, a

connect strategy can yield customer insights; improve relationships

with key customers; and build your brand image through improved

customer service, positive word of mouth, and opportunities for cus-

tomers to affi liate with your brand.

Successful approaches to a connect strategy include: moni-

toring and learning from online conversations already happening

around your brand and industry; responding to issues, answering

questions, and building relationships in existing online forums; creat-

ing your own forum for customers to express views and connect with

others; asking customers for their ideas on how to improve your busi-

ness; integrating the voice of your customers into your own content

and marketing; and letting the conversation among customers add

additional value to your business.

Whatever the approach taken, the fi rst step for many busi-

nesses will be to learn to listen. Customer networks and new media

have made it easier than ever to fi nd out what your customers are

thinking, wanting, and saying. The challenge for many organizations

is: Are you ready to listen? Before implementing a connect strategy,

you must be ready to take back the lessons you learn from your cus-

tomer networks and to evaluate, respond, and implement or build on

them. Bringing the voice of the customer inside your organization is

useless if decision making will continue to be dominated by past prac-

tices, bureaucratic inertia, and disdain for anything “not invented

here.”

Companies should also remember to focus on their passion-

ate customers—both passionate fans and disappointed critics. These

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will be the customers who are most actively discussing your business,

the ones who will share the most ideas, and infl uence others, and the

ones whom you might easily convert from critics to lifelong support-

ers by giving them a little respect and attention.

Last, before you try to connect with customers in conversa-

tion, be sure you know what’s in it for them. Whether it’s quicker

service, answers to technical questions, a community of like-minded

friends, special discounts and offers, or a shot at social media fame—

there needs to be a clear reason for them to spend their time online

connecting with you rather than with their friends, colleagues, and all

the other brands and businesses that they know. Replicating the ben-

efi ts of a popular service that already exists doesn’t count. Even though

you may be a great camera company, if your customers already use

Flickr.com, they don’t need you to build them a photo-sharing site

with your brand on it. Before you embark on a connect strategy,

take a hard look at whatever you are offering and ask yourself: If I were

the customer, would I join in?

By helping customers connect with one another around what is most

important to them, you can deepen your relationships with existing

customers and build ties to valuable new ones.

But sometimes networked customers want to do even more

than express themselves, cast their vote, and put their ideas out into

the world. On the things that matter most to them, they want to work

with others. They want to join together toward shared goals. They

want to collaborate in an ongoing fashion and feel that they are a part

of something larger than themselves. The deepest connection that a

business or organization can have with its customer networks is built

on this desire to collaborate. To tap into it requires a full knowledge

of how, when, and why customers contribute so much of themselves

to the work of their network.

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CHAPTER7

COLLABORATE

Involve Your Customers at Every

Stage of Your Enterprise

Thomas Gensemer was watching his computer moni-

tor carefully when Senator Barack Obama took to the

stage in Springfi eld, Illinois, to announce his long-shot

candidacy for the presidency of the United States. It had been only
nine days since the Obama campaign had hired Gensemer and his

partners at the small, new media company Blue State Digital to pre-

pare for the launch of his candidacy. Those nine days had been spent

furiously transforming Obama’s Web site into the digital platform for

a new kind of voter participation in politics: myBarackObama.com.

Gensemer’s partners had tried to use the Internet four years

before to energize another insurgent presidential candidacy, Howard

Dean’s. But despite intense online excitement and donations, that

campaign failed to channel its supporters’ energy into action that

counted: votes and boots on the ground. After months of money and

buzz, Dean’s campaign sputtered and crashed at the fi rst voting in the

Iowa caucuses.

This campaign would be different. From the beginning, the

myBarackObama Web site (called MyBO by the campaign) was de-

signed not just to elicit donations, Facebook friends, and exuberant

YouTube videos. It focused also on the hard, unsexy work that wins

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COLLABORATE

contests—voter registration, phone banking, and door-to-door can-

vassing. It gave Obama’s supporters the tools to organize for real cam-
paign work. Other candidates were visible advertising on as many

Web sites as Obama. But when a viewer clicked on an ad for Obama,

they were fi rst asked not to donate money (as they were by the other

campaigns), but to sign up to volunteer and be invited to events.

In the fi rst twenty-four hours after Obama’s announcement

speech, Gensemer saw hundreds of thousands of profi les created by

new members on the MyBO network. As the numbers climbed to

millions, MyBO provided each of them with a broad array of online

tools to collaborate with the campaign. Supporters downloaded voter

registration forms. They attended and organized house parties and

meet-ups in bars to recruit others. They formed online fundraising

“hubs” where they set personal goals, solicited donations from friends,

and tracked progress with a personal fundraising “thermometer.” On

the MyBO network, they could download targeted lists of phone

numbers to call before a primary vote or lists of names and addresses

of undecided voters in their own neighborhood to visit, door to door.

The campaign even launched an iPhone app that sorted the phone

numbers in a user’s address book by the priority of states (with friends

in key battleground states like Virginia appearing fi rst) and allowed

users to track which friends they had called on behalf of the cam-
paign. Most importantly, the MyBO platform recognized that differ-

ent supporters would have varying degrees of commitment and avail-

able time. It allowed supporters to contribute at their own level—be

it a twenty-fi ve-dollar donation at a friend’s Obama party, two hours of

phone calls on election eve, or a trip out of state to spend a weekend

canvassing door to door in a key electoral county.

The results of this unprecedented online platform for col-

laboration with voters were unmistakable. In the fi rst caucuses in

Iowa, the Obama campaign stunned political observers by winning

the contest, thanks to countless house parties and an incredibly orga-

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Five Strategies to Thrive

nized group of local supporters. In the South Carolina primary, the

MyBO network was directed toward a massive get-out-the-vote effort.

As the Democratic nominating race turned into the fi rst true fi fty-

state political contest in decades, the ability of Obama’s supporters to

self-organize provided a critical edge against the better-known candi-

dacy of Hillary Clinton. When the multistate primary day dubbed

Super Tuesday arrived, Hillary Clinton held a daunting lead in polls

in Texas, but thanks to MyBO, Obama had nearly fi ve times as many

volunteers signed up to organize his efforts within the state; he won

the delegate count ninety-nine to ninety-four. 1 Every week, as both

campaigns’ professional staff arrived in a new state in preparation for

the next contest, Obama’s team found that their supporters had al-

ready prepared the infrastructure for their local campaign using tools

that they found on MyBO.

By the end of the campaign, thirteen million volunteers had

joined Obama’s online network. They had organized more than two

hundred thousand local events, formed seventy thousand fundraising

hubs, and helped raise a record-shattering $750 million dollars, most

of it in donations of fewer than a hundred dollars. 2 In the fi nal four days of

the general election, Obama’s network made three million

phone calls to turn out voters, helping to spur the highest voter par-

ticipation rate in the United States since 1908. With this surge of

Net-enabled activism, Obama eked out close victories in traditionally

“red” states like Indiana, Virginia, and North Carolina.

The digitally organized network of supporters behind the Obama

campaign certainly contributed to the margin of his ultimate victory in

the November general election over John McCain. More important,

however, his network was probably the deciding force behind his un-

expected victory in the Democratic nomination, which allowed him

to even compete against McCain. At each stage of the campaign sea-

son, Obama’s online strategy showed that by giving supporters the

tools to collaborate, he could outmaneuver the more experienced po-

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COLLABORATE

litical candidates who were still using a traditional run-from-the-top

campaign strategy.

The Collaborate Strategy

Like Barack Obama’s digitally connected supporters, the most ener-

gized customer networks want to do more than just share ideas, opin-

ions, and conversations online. They seek to collaborate on collective

projects toward shared goals, and they fl ock to online platforms that

allow them to act independently.

The drive to collaborate has always existed. With the growth

of digital networks, however, we have gained the ability to collaborate

with much broader groups of individuals. Limitations of geography,

time, and existing relationships have been largely surmounted by the

ability of ad hoc networks to form, communicate, and collaborate via

the Internet.

The
fi rst landmark case of network collaboration was the

Linux operating system, started by Linus Torvalds in 1991 and devel-

oped by thousands of software developers around the world, each

writing small contributions to the huge quantity of computing code

required to build an alternative to Microsoft’s Windows. Linux was

created out of free labor and is free to anyone to use. Although the

operating system is not known to many average computer users, the

success and scope of the Linux project proved to the developer com-

munity the power of network collaboration.

Wikipedia, the free online encyclopedia that started in 2001,

took network collaboration and made it mainstream. Where Linux

was an operating system used by a small, tech-savvy minority, Wikipe-

dia quickly became one of the ten most frequently visited sites on the

Web. Just as important, Wikipedia is a project that anyone can con-

tribute to by editing or creating their own articles. Don’t know any-

thing about technology? No problem. Whatever particular knowledge

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Five Strategies to Thrive

you have—on fl y fi shing, Ghanaian cooking, or the jazz music of

Charlie Parker—you can use it to add to, or improve, the site. Wiki-
pedia soon grew to encompass over two hundred languages, with its

English-language site offering articles on vastly more topics than any

printed encyclopedia in human history.

Linux and Wikipedia were both nonprofi t efforts where the

collaborators worked for free, knowing that no corporation was profi t-

ing from their efforts. Their success implicitly raised the question of

whether collaboration in customer networks could be used by busi-

nesses working with average consumers.

The

fi rst proof that it could may have come from the T-shirt

company Threadless (as detailed in chapter 1). Launched in 2000,

Threadless reinvented the concept of a clothing company by inviting

its customers to collaborate in every stage of the enterprise, from

product design through to marketing and sales. In a fashion industry

that usually expends signifi cant cost on product development, Thread-

less operates with almost no product development costs and has a 100

percent success rate for all its new products, because it prints only the

T-shirts its customers have chosen in advance. By 2008, what started

as the hobby Web site of two teenagers had grown into a thirty- million-

dollar business with a 30 percent profi t margin. 3

Network collaboration can be used to generate not just a

product but also an ongoing service or process. Starting in 2006, CNN

proved this in the fi eld of news gathering. With CNN iReport, the

channel invited viewers to contribute ground-level journalism by up-

loading photos, videos, and eyewitness reports from anywhere in the

world. In a few short months, iReport grew from its fi rst user sub-

mission (a photo of a squirrel) to become a groundbreaking tool for

in corporating viewer videos and reporting from the front lines of

earthquakes, terrorist attacks, and political revolutions around the

world. CNN retains complete editorial control over which submis-

sions it chooses to air and how it frames, edits, and adds detail to

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COLLABORATE

them. But by engaging thousands of citizen journalists around the

world, CNN has expanded the reach of its news gathering from the

level of national and regional bureaus down to street-level eyes and

ears. As Vivian Schiller, CEO of NPR, has said about collaborative

journalism, “No matter what story you are covering, no matter how

brilliant a reporter you are, there is somebody out in your audience

that knows more about that than you do. ”4

Apple’s iPhone App Store has shown one more model for

profi table collaboration. After the initial launch of the iPhone in

2007, independent software developers recognized its potential as a

mobile computing device and began coding programs for the iPhone.

Apple resisted these efforts at fi rst, and iPhone users had to hack into

the phone to install the programs (a process dubbed “jailbreaking”).

With the launch of the second iPhone in 2008, however, the famously

secretive company reversed course. This time, Apple invited the out-

side developers to build programs (or “apps”) for the iPhone and ar-

ranged for the apps to be sold in an offi cial App Store. By opening the

iPhone up as a platform to others, Apple unleashed a torrent of in-

novation far beyond anything it could have matched itself. Within a

year, developers had created more than eighty thousand customized

applications for the iPhone, ranging from popular games like Tetris to

Oracle business software for tracking fi nance and manufacturing.

More than a billion apps were downloaded that same year, with sales

on the paid apps estimated in the hundreds of millions of dollars. 5 In

addition to keeping 30 percent of that revenue, Apple saw sales of the

iPhone jump 245 percent the year the app store launched. 6 By col-

laborating with others, Apple had turned its iPhone from a promising
gadget into a groundbreaking product.

Collaborating is the fi fth core behavior of customer networks.

It goes beyond the conversational give and take and exchange of ideas

that we saw in the previous chapter. When networked customers col-

laborate, they choose to participate in real work—organizing voter

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Five Strategies to Thrive

events, writing software code, raising money, reporting breaking

news, designing T-shirts, or writing encyclopedia articles. This kind

of network collaboration provides a powerful opportunity for busi-

nesses and organizations of all types to work with their customers to

achieve their goals.

The

fi fth customer network strategy for business is the

collaborate strategy—to invite customers to help, build, and drive

your enterprise. This can be done by inviting customers to work to-

gether on a project or by inviting them to each take a piece of the

project to work on independently. Customers may participate for a

range of motivations, from curiosity, personal passion, or deeply held

social values to a desire for status, fame, or fi nancial reward.

By inviting customer networks to participate in projects, a

collaborate strategy can help an organization achieve key business

objectives, including: increasing effi ciency despite limited resources,

extending the reach of marketing and communications, expanding

the capacity for innovation, and building deep audience engagement

and support.

But developing an effective collaborate strategy is not al-

ways easy. The success of projects like Linux and Threadless has gen-

erated a great deal of interest in network collaboration. A variety of

terms, including “mass collaboration, ”7 “crowdsourcing,” 8 and “peer

production” 9 have each refl ected a different part of the phenomenon or a

different point of view on how we are collaborating in digital networks. But
although there have been notable success stories, attempts to

replicate them have often demonstrated the challenges and limitations

of network collaboration. Several imitators of Threadless have failed,

including one launched by Threadless’s own parent company that at-

tempted to enlist customers to design products other than T-shirts.

In order for a collaborate strategy to succeed, it needs to

begin with an understanding of several issues. What are the key tech-

nologies used for network collaboration? What mix of motivations

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COLLABORATE

will inspire outsiders to contribute to your enterprise? How can you

divide a project into pieces for collaborators to tackle, and how much

expertise will they need to participate? And fi nally, who will make the

fi nal decisions on the project now that you have opened it up to your

network as partners?

Technologies for Collaboration

A variety of digital tools have emerged recently that can assist in group

collaborations. Each brings its own capabilities and may be suited to

solving different problems.

Let’s start with the wiki. A wiki is a Web site that allows con-

tributors to easily create and edit the wiki’s own pages, using a simpli-fi ed
editor that anyone can operate within a Web browser. Altering a

wiki page involves no more diffi culty than fi lling out a form on a stan-

dard Web site. The self-editing software that makes wikis possible was

invented in 1994 by Ward Cunningham. Jimmy Wales was leading a

foundering effort to create an online encyclopedia written by experts

(dubbed “Nupedia”) when he tried out Cunningham’s software for a

side project, open to the public, and inadvertently launched the

world’s most famous wiki, Wikipedia. Other organizations have used

wikis for a variety of projects where they want to enable a geographi-

cally dispersed group of people to contribute to a shared collection of

knowledge. While many wikis are open to the public, others are for

internal use only. In 2005, the U.S. government’s intelligence agen-

cies launched Intellipedia, a set of three wikis running on the same

software as Wikipedia but used to gather unclassifi ed, secret, and top-

secret information about regions, people, and issues of interest. By

using a more collaborative and real-time approach to sharing knowl-

edge among agencies, Intellipedia aims to change an internal culture

that has previously failed to “connect the dots” between knowledge in

different agencies.

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Five Strategies to Thrive

Collaborative

offi ce software, such as Google Docs, Micro-

soft Offi ce Web Apps, and Zoho’s software suite, allow users to perform

the tasks of typical offi ce software (word processing, spreadsheets, data-

bases, and presentation design) in a collaborative environment. Based

on the Web, this type of software can allow a team to work together on

a single shared document, even editing it at the same time while

working at computers in remote locations. For small teams, such soft-

ware allows a simple, dynamic platform for quick collaborative work.

Other digital tools are effective in organizing in-person, face-

to-face gatherings for collaboration. The largest platform of this type

is the site Meetup.com, started in 2001 with the aim of using the In-

ternet to help people connect not just in virtual chat rooms but lo-

cally and in person. More than six million members use Meetup to

create or join groups and events organized around professional net-

working, personal interests, or politics. Popular social networks like

Facebook have incorporated event organizing features as well.

Custom-designed social networks have now begun to incor-

porate all of these types of collaboration tools in a powerful fashion.

The myBarackObama site developed by Blue State Digital was one

example. Enterprise 2.0 software from companies such as Cisco and

Microsoft allow businesses to create internal sites for their employees

that combine wikis, collaborative offi ce software, event organization,

project planning, social networking, and more collaborative features.

Three other tools are geared specifi cally toward collaboration

in the development of software and web applications: software devel-

opment kits (SDKs), Application Programming Interfaces (APIs), and

open-source software. SDKs, such as the one for the iPhone App Store,
give outside developers the information they need to write programs

that will work on a given device or in a given operating system. APIs

allow outside development by defi ning kinds of information that can

be exchanged with a data library or operating system on a device or

over the Internet. Open source is an approach to software in which

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COLLABORATE

the software’s code is made publicly available so that anyone can

modify and create their own version of it or create add-on or “plug-in”

programs that will work with the commonly used version. Later in

this chapter we will see examples of how SDKs, open APIs, and open-

source code can each be used to foster open collaboration.

Motivations: For Love, Glory, or Money?

Besides providing the right tools or platform for collaboration to take

place, any organization must ask what will motivate its customer net-

work to participate. Why would anyone contribute an article to Wikipe-

dia? News footage to CNN iReport? A T-shirt design to Threadless? In

some cases, customers may be motivated by curiosity, personal inter-

ests, or deeply held social values. In other cases, they have more com-

mercial goals or a desire for personal benefi t. The biggest cause of

failure in network collaborations is likely a misunderstanding of the

customer’s motivation. Thomas W. Malone, Robert Laubacher, and

Chrysanthos Dellarocas of MIT’s Center for Collective Intelligence

describe the motivations for network collaboration as love, glory, or

money. 10 These three categories can provide a good starting point for
understanding why customers choose to collaborate.

Love

In many cases, participants choose to collaborate with others

out of purely social motivations. These motivations may include: al-

truism (the desire to contribute to the common good); a passionate

interest in the topic; work that is entertaining, fun, or creative; par-

ticipation and connection in a community; the chance to contribute

to social values they believe in (such as a cause or candidate); or a

sense of duty or obligation (perhaps because they are already enjoying

the benefi ts of the project).

These social motivations are the kind that spurred supporters

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Five Strategies to Thrive

of Barack Obama to participate in the MyBO network for his candi-

dacy. They also explain why users contribute to Wikipedia without

fi nancial reward or byline. New Wikipedia articles are typically writ-

ten by users with a particular knowledge of their subject and often a

passionate interest in it. Other users who frequent Wikipedia may

take the time to fi x an occasional misspelling or error that they spot

out of gratitude for the value they gain from the site. The power of the

networking tools behind MyBO and Wikipedia is that they allow all

these small acts of generosity to add up to very large impact, far be-

yond what was feasible in our prenetworked past, when it was virtually

impossible to amass and assess contributions of people scattered

around the world.

As Clay Shirky has observed, “We have always loved one

another. We’re human. It’s something we’re good at. But up until re-

cently, the radius and half-life of that affection has been quite limited.

With love alone, you can get a birthday party together. Add coordinat-

ing tools, and you can write an operating system. . . . In the past, we

could do little things for love, but big things, big things required

money. Now, we can do big things for love.” 11

But what if your cause is not an inspiring political candidate

or a charity or a free public service? It is very unlikely that you will get
people to contribute for “love” alone, even if they do have a passion

for the project. Your customers may love taking photos of local events,

but they may not want to share them anonymously on your news plat-
form if you will be earning a profi t from and retaining the rights to the

images they produced. Fortunately, humans harbor other motivations.

Glory

The key to CNN attracting unpaid collaborators to its iReport

news project is that their submissions are not anonymous. If a customer’s

photo, video, or story appears on CNN’s Web site or broadcast, his

or her name is credited for all to see. The opportunity to be seen as a

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COLLABORATE

“citizen journalist” contributing to such a famous and popular net-

work provides a powerful motivation to the iReport customer network.

Even without such a mass-media spotlight as CNN, mecha-

nisms that highlight and confer social status can be an effective moti-

vator for active collaborators. As we saw in the last chapter, the top

participants in technical forums will answer thousands of questions

posed by fellow customers when they are recognized in the forum as

a major contributor. Forums can use public markers of status—awards,

name recognition—to draw attention to users’ high level of contribu-

tion, their expertise and knowledge, or their creativity, taste, or style.

Money

Of course, sometimes the best way for a for-profi t business to mo-

tivate network collaboration is to offer money or other commercial benefi ts.

When Cisco announced its Innovation Prize, or I-Prize, in

2008, the company placed an open call for teams anywhere in the

world to identify billion-dollar business opportunities for Cisco’s

Emerging Technologies Group. After several rounds of winnowing

down twelve hundred business proposals received from 104 countries,

Cisco announced the winners: Anna Gossen, Niels Gossen, and Ser-

gey Bessonnitsyn, a wife, husband, and brother team of two computer

science students and an engineer. The three not only received

$250,000; they were also given the opportunity to work for Cisco on

their proposed new venture, a “smart grid” framework to reduce the

passive consumption of power by electronic devices. The prize award

was a small price to pay for Cisco, which estimated that the project

could generate a billion dollars in revenue within fi ve to seven years.12

It is important to note that while the prize was a good deal for

Cisco, it also represented an extraordinary reward for the recipients,

who were doing work (business plan development) that was not part

of their normal careers or business. Some short-sighted companies

have seized on the notion of “crowdsourcing” as a means to exploit

187
Five Strategies to Thrive

the same vendors they would normally hire to carry out a professional

task. Rather than hiring one fi rm to complete work, they simply ask

many to submit a solution and offer to pay “the winner” at a rate similar

to what would normally be professional work for hire. This kind of

spec-work masquerading as “collaboration” can yield resentment and

a bruised reputation, as ad agency Crispin Porter + Bogusky found

when it tried to solicit logo designs for an advertising client with a

thousand-dollar prize. 13 Businesses should not confuse collaboration with

exploitation. But money can be an effective reward when the sum

received or the type of work is out-of-the-ordinary for participants.

Hybrids

In many cases the motivations for members of a network to

collaborate with a business are a hybrid mix of social, status, and fi -

nancial rewards. Threadless contestants may be motivated as much

by the chance to see their design advertised and worn by others (they

are not, generally, professional clothing designers) as by the cash re-

ward. In the Netfl ix Prize (discussed in chapter 5), the team that pro-

duced the winning solution to improve the company’s recommenda-

tion engine received not only a million dollars but extensive coverage

in mainstream media such as BusinessWeek, Wired magazine, and the

New York Times. And although a quarter million dollars may have attracted
participants to the Cisco I-Prize, the winners were probably

motivated just as much by passion for their business idea as for their

long-shot chance at winning the money.

Slicing the Problem and Slicing the Crowd

Another key issue in developing a collaborate strategy is to under-

stand whether and how to divide up the task at hand.

The key to a collaborative project like Wikipedia or the Linux

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COLLABORATE

operating system is that the core task can be divided into many very

small tasks that can each be tackled independently by others. No

single person could have written the millions of articles in Wikipedia.

But to contribute, all a participant needed to do was to write one ar-

ticle—or, even less, to make a minor change or improvement to an

article begun by another. Similarly, the entire Linux effort was possi-

ble only because its founder, Linus Torvalds, organized the project so

that individual programmers around the world could work on the

code of one small piece of the operating system and submit that piece

for inclusion in the whole.

The ability to divide a collaborative project into smaller parts,

which Jeff Howe calls “modularity,” is not essential, but it is an impor-

tant and defi ning aspect of many collaborate strategies. 14

Some tasks, however, cannot be effectively broken into dis-

crete pieces. The attempt to create an experimental wiki novel enti-

tled A Million Penguins generated nothing but disjointed rubbish. A much

publicized effort to incorporate online suggestions into the horror movie
Snakes on a Plane did little to rescue it from mediocrity. No doubt, the
singular vision behind a narrative work of fi ction cannot be

easily doled out in pieces to a crowd, no matter how eager.

A related issue for collaborations is whether contributing to

the project requires any special expertise that will limit the pool of

potential volunteers. In the case of CNN’s iReport, anyone with a

digital camera can perform one of the key tasks—capturing an image

of a breaking news event he or she happens to be near. As a result,

CNN can solicit collaborators from an extremely broad pool. Creat-

ing a Wikipedia article requires, by comparison, a specialized knowl-

edge of the subject of the article (say, the history of genetics). But

because you can contribute an article on any subject of expertise, no

matter how obscure, the pool of potential collaborators is also quite

large. To contribute source code to Linux or a mathematical algo-

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Five Strategies to Thrive

rithm for the Netfl ix Prize, by contrast, requires a specifi c set of skills not
held by the general population. The power of digital networks is

that even in these cases, a collaboration with very narrow requirements

may still attract numerous participants from around the world, thanks

to their ability to connect and organize easily over the Internet.

The Bottom Is Not Enough

Much of the excitement around network collaboration stems from a

belief in the power of bottom-up thinking and the infallible wisdom

of networks. However, numerous instances show the shortcomings of

these beliefs. When the Finnish soccer club Pallokerho-35 adopted a

text-message polling system that let its fans vote on the club’s recruit-

ing, training, and game tactics, the season ended poorly, the coach

was fi red, and the crowd polling was scrapped. 15

Network collaboration still requires top-down leadership and

vision to be successful. Obama supporters were given independence

and initiative to carry out a great many tasks on the MyBO network.

But it was the Obama campaign that set the goals of the project and

carefully steered the group’s range of actions. Unlike the online po-

litical group MoveOn.org, the campaign made no attempt to subject

its policy positions or strategy decisions to a vote.

Similarly, the editing and maintenance of Wikipedia has re-

lied from the beginning on a mix of both open contributions by every-

one and editorial control by an elite group of mostly unpaid, but heav-

ily involved volunteers. If I were to make an edit to the page on

“Portuguese Water Dogs,” an alert would likely appear soon in the

in-box of a volunteer expert on dog breeds who had signed up to ob-

serve such content. They could quickly determine if my error was

mischievous vandalism and then immediately revert it, spoiling my

fun. Otherwise, the editor could quickly judge if my addition violated

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COLLABORATE

Wikipedia’s guidelines (such as adding a personal story about my

neighbor’s dog), merited further review for accuracy, or was good

enough to leave as it was. Jimmy Wales has said that Wikipedia works

“by a confusing but workable mix of: consensus (minority views

count); democracy (but not usually simple voting); aristocracy (those

who have built respect in the community have greater sway); and

monarchy (‘benevolent dictator’—someone to make a decision when

it needs to be made).” 16

Kevin Kelly, whose book Out of Control in 1995 predicted

the growth of “bottom-up” collaborative systems, has consistently tem-

pered his enthusiasm for networks’ ingenuity with a sober belief in the

need for some centralized design and planning. In his seminal article

“The Bottom Is Not Enough,” Kelly points to Wikipedia’s need for

top-down control and argues that any collaborative network needs a

role akin to an editor to “select, prune, guide, solicit, shape, and guide

the results from the crowd” to achieve excellence.17

In designing a strategy to collaborate, an organization needs

to decide which functions it will control from the top and which it

will let go “bottom up.” (Designing campaign ads requires central

control; phoning undecided voters is perhaps best led from the bot-

tom.) Sometimes there are different stages where work may be gener-

ated by participants and then evaluated or edited by the organizers.

Five Approaches to Collaborate Strategy

No single model for network collaboration will fi t all objectives, orga-

nizations, or customers. In order for a collaborate strategy to

work, the organization leading it needs to fi nd an approach that suits

its goals, as well as those of the participants. Success will hinge more

on these human and problem-defi nition issues than on specifi cs of

technology.

191
Five Strategies to Thrive

By looking at businesses that have successfully harnessed the

ideas, energy, and expertise of customer networks for major projects,

we can see fi ve distinct approaches to a collaborate strategy:

• Passive Contribution: Participants agree to contribute to a project via

actions that they are already taking.

• Active Contribution: Each participant actively contributes work

to part of a large project.

• Open Competition: Many participants create their own solutions

to a single project, competing to be chosen as best.

• Defi ned Platform: Each participant builds his or her own project on the
platform, but the project type is narrowly defi ned.

• Open Platform: Each participant builds his or her own project

on the platform, with wide latitude for what the project will be.

The

fi rst three of these are “project-based” approaches to col-

laboration, in which the organizer defi nes the scope of what will be

done. (Wikipedia saying, “We are building an encyclopedia; please

help us.”)

The last two listed are “platform-based” approaches to col-

laboration, in which the organizer creates a foundation on which oth-

ers can initiate their own projects and contributions. (In announcing

the iPhone App Store, Apple was saying, “We have a touch-screen

pocket computer; create any program you can imagine for it.”)

Each of these approaches is marked by different characteris-

tic elements, including: the type of motivations for participants, the

modularity of the project, the breadth versus expertise required of

participants, and the mix of top-down versus bottom-up decision mak-

ing. In addition, the different approaches tend to have varied levels of

interaction among participants and different ownership of the fi nal

results of the collaboration (table 7.1).

By examining these fi ve approaches and how they have been

used successfully by a wide range of organizations, we can gain in-

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COLLABORATE

sights into how inviting customer networks to collaborate can help

any business achieve its goals.

Passive Contribution

In a passive contribution system, participants opt in to contribute to

the work of a collective task or process, but their contribution is merely

a byproduct of effort or activity they are already engaging in. It does

not demand additional work. Passive contribution is easy on the con-

tributor but can still lead to quite powerful collaborations.

Capturing accurate real-time information about traffi c fl ows

has long been a daunting problem for transportation planners. The

traditional approach—placing roadside monitors alongside major

traffi c routes throughout a metropolitan area—is a huge undertaking

with high costs to implement with any geographic detail. Several

companies have discovered that a much more effective solution can

be created by getting drivers to voluntarily transmit automated infor-

mation about their location as they drive. This data shows their cur-

rent speed on the road they are driving, and collectively it provides an

up-to-the-minute record of traffi c fl ow in a metropolitan region. The

Dash Express navigation system built this voluntary system into a

GPS device, as does the Inter-Navi system for Honda vehicles in

Japan. John Geraci, founder of DIYcity.org, has pointed out that after

twenty years of New York City trying to develop a real-time tracking

system for city buses, the transit authority would do better to allow cell

phone users to voluntarily run phone applications that transmit their

location, direction, and speed while riding the bus. 18

Other examples of passive contribution systems include SETI

@home, which since 1999 has allowed users to download a program

that runs in the background during their computers’ idle moments,

processing radio telescope readings from outer space in search of signs

of extraterrestrial life. With nearly two hundred thousand participants

193

Table 7.1 Elements of the Five Approaches to collaborate Strategy

Breadth versus

Decision making

Interaction

Collaborate

Motivation for

Modularity of

expertise of

(top versus

between

Ownership

Approach Examples

Defi nition

participants

the project
participants

bottom)

participants

of results

PROJECT-BASED

1. Passive Con-

Dash Express,

Participants

Love (fun or

The project

Maximum

All decisions

No interaction

Owned by the

tribution

SETI@home,

agree to con-

benefi t).

must be divis-

breadth, with
made by the

between par-

organizer, or

GWAP

tribute to a

ible into dis-

no expertise

organizer.

ticipants.

made freely

project via work

crete pieces.

usually

public.

that they are

required.

already doing.

2. Active Con-

Wikipedia,

Each partici-
Love (Wikipe-

The project

Preferable to

Decisions are

Interactions

Owned by the

tribution

TaxAlmanac.

pant works

dia, MyBO) or

must be divis-

require least

divided be-

among partici-

organizer or

org, MyBO,

actively on a

glory (CNN

ible into dis-

expertise, in
tween partici-

pants may vary

made freely

CNN iReport

small part of a

iReport); par-

crete pieces.

order to attract

pants and the

from none to

public.

larger project.

ticipants are

maximum

organizer.

quite a lot.

too numerous

breadth.

for money.

3. Open Com-
Netfl ix Prize,

Many partici-

Money, love

Single project

Expertise

Winner is usu-

Participants

Owned by the

petition

Cisco iPrize,

pants create

(excitement

is given to all

needed will

ally picked by

work individu-

organizer.

X Prize,

their own solu-

for project),
participants to

depend on the

organizer, but

ally or in teams,

InnoCentive,

tions to a single

and usually

work on in

project, and

sometimes

usually with no

Threadless

project; the

glory (unless

parallel.

determine the

with input

interaction with

solutions com-

anonymous).
breadth of par-

from partici-

others (unless

pete to be cho-

ticipants.

pants.

participants will

sen as the best.

vote on the

winner).

PLATFORM-BASED

4. Defi ned

eBay, craigs list,

Each partici-

Just money

Single project,

Little techni-

Decisions

Participants

Owned by
Platform

CD Baby, You-

pant builds his

(craigslist,

designed by

cal expertise is

made by par-

work individu-

participants

Tube

or her own

eBay); just

each partici-

needed, allow-

ticipants; orga-

ally; however,

but with rev-

project on the

glory (You-

pant.
ing for wide

nizer may play

discussion fo-

enue share or

platform, but

Tube); or a

breadth of par-

a limited “gate-

rums may

fee to the orga-

the project

mix of love,

ticipants.

keeper” role.

arise.

nizer.

type is nar-

glory, and

rowly defi ned

money for en-

(e.g., ten-min-

trepreneurs

ute videos).

(CD Baby).

5. Open

Linux, Twitter

Each partici-

Mix of love,

Single project,

Technical

Decisions

Participants

Owned by

Platform

apps, iPhone

pant builds his

glory, and

designed by

skills (e.g.,

made by par-
work individu-

participants;

and Android

or her own

money for

each partici-

programming)

ticipants; the

ally; however,

they may pay

apps

project on the

entrepreneurs.

pant.

required, lead-

organizer may

discussion fo-

revenue share

platform, with

ing to narrow
play a limited

rums may

or fee to the

wide latitude

range of par-

“gatekeeper”

arise.

organizer or

for what the

ticipants.

role.

simply add

project will be

value to the

(e.g., any soft-

organizer’s

ware applica-

platform.

tion).

Five Strategies to Thrive

volunteering small amounts of power on their computers, the SETI@

home project has enough computational power to make it the fourth

fastest computer in the world. 19 More recently, “games with a purpose”

(GWAP), like Luis von Ahn’s ESP Game, have provided enter-

taining online games for users that contribute to some data-process-

ing task (such as image labeling, to assist with cataloging a large

dataset) as part of the game play.

In passive contribution systems, the motivation for partici-

pants is usually either that they enjoy contributing or they feel obliged

to opt in because they benefi t from the shared information—as in the

Dash navigation system. (Note that I am excluding involuntary user

input systems from the defi nition of collaborate.)20

The shared project for passive contribution must be divisible

into discrete pieces. Because large numbers of participants are needed,

these collaborations should require little or no expertise to join.

Because of their passive nature, all decisions (such as how to

manage the data or results) are made by the organizer, and there is

little or no interaction among participants. The results of the collabo-

ration are owned by the organizer, although they may make it freely

public (perhaps under a Creative Commons license).

Active Contribution
In the second approach to network collaboration, participants actively

contribute a piece of work to a single, large collective project, such as

building an encyclopedia, running a presidential campaign, or pro-

viding images and reporting breaking news. Wikipedia, MyBO, and

CNN iReport are all examples of an active contribution approach to

collaborate.

Financial software company Intuit has used an active contri-

bution system to build a closer relationship with one of its core

customer segments: professional tax preparers. To better serve them,

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COLLABORATE

Intuit launched TaxAlmanac.org, a wiki where users can contribute

and access detailed information on every topic or question related

to U.S. tax fi lings, no matter how obscure. Intuit launched the site

with 150 articles written by its own tax professionals, as well as search-

able copies of the Internal Revenue Code, Treasury Regulations,

and court cases that would be helpful to accountants in doing re-

search. Then Intuit opened the site up à la Wikipedia, so that tax

professionals could add questions, answers, articles, and news of their

fi eld. Thanks to their collective efforts, the site has grown to more
than 170,000 pages, and is used by four hundred thousand unique

visitors—nearly the same number as professional tax preparers in

the United States.21 TaxAlmanac keeps a revision history for each page and
a list of “recent changes,” which allow for easy fact checking

and cleaning up of entries by the community and by the small group

of administrators Intuit assigns to deleting, protecting, and maintain-

ing site content. Intuit’s customers benefi t from being able to quickly

research and fi nd answers to obscure questions (such as how to fi le

Oklahoma’s “Bonus Depreciation Addback”) and the latest IRS rules

and temporary deductions to incentivize home or car buyers. Tax pro-

fessionals can easily post questions, answer others’ queries, search the

site, or sign up for watch lists on topics of interest. Intuit benefi ts by visibly
sponsoring a unique and unmatched resource for its core customers and by
advertising its products on a site that has minimal costs

and an ideal and engaged target audience.

The

Guardian newspaper in London has used an active con-

tribution system to catch up with a competitor and greatly expand its

ability to sort through a huge amount of data. In 2009, a national

scandal erupted when the Guardian’s rival, the Daily Telegraph, broke the
news that members of Parliament had been claiming expenses for unjust
reimbursement for many years (such as thousands of

pounds on gardening, dry cleaning, and second homes). The Daily

Telegraph already had taken the lead in breaking the story when a

197

Five Strategies to Thrive

Freedom of Information Act request made public the records of seven

hundred thousand expense claims. There was no way the Guardian’s

reporters could sift through that much data in time to begin their own

reporting. Instead, the paper hired a Web developer and launched a

Web site in under a week that invited outraged readers to chip in a

few minutes of time sorting through some of the expense claims and

fl agging any that looked erroneous for the Guardian to investigate.

Thanks to the immense public outcry, the site attracted more

than twenty thousand volunteers who sifted through 170,000 docu-

ments in the fi rst eighty hours alone. 22 Part of this success was due to the
site design by Simon Willison. A four-button interface let users

quickly fl ag each expense they viewed; a progress bar on the front

page showed how much of the work the community had completed

so far; mug-shot-style photos of each parliamentarian were added to

their expenses; and a leaderboard showed a running tally of which

readers had reviewed the most expenses. The site made the hunt for

government miscreants feel less like a civic duty and more like a com-

puter game.
Others are successfully using an active contribution system to

raise donations from supporters, a phenomenon sometimes called

“crowdfunding.” When musician Brad Skistimas was planning to re-

cord the next album by his band, Five Times August, he realized he

couldn’t afford to pay for it all himself. As an independent musician,

he was keenly aware that once he recorded and released an album,

many listeners would fi nd a pirated copy for free rather than pay to

download. So he asked his fans for the money before making the

album. Using the Web site Kickstarter.com, he posted a challenge,

asking his fans to pledge $20,000 within thirty-one days to fi nance the

recording, mastering, and promotion of the album. Donors received

a variety of benefi ts at different pledge levels, starting with a digital

download of the album for a fi ve-dollar pledge; adding a CD, T-shirt,

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COLLABORATE

and thanks in the album’s liner notes for pledges of up to fi fty dollars;

and offering more personalized awards such as a video message, din-

ner with Brad, or a private concert and signed acoustic guitar for those

donating up to $2,500. Total pledges had to reach the full $20,000 by

the fundraising deadline, or no money would be collected at all, as

per Kickstarter’s rules. In the end, the project raised $20,546 from 398

backers. Skistimas, who was the fi rst unsigned artist to get national

distribution through Wal-Mart stores, proved that the generosity of

fans could provide a new business model for independent music.

Other organizations are using collaborative funding to sup-

port projects in fi lm, visual art, and even journalism. On the Spot.us

Web site, journalists pitch stories they would like to investigate, and

donors sign up to fund them. The fi nal articles are either published

publicly under a Creative Commons license or sold to a news organi-

zation, with donations returned to the funders.

In active contribution systems, participants may be motivated

primarily by the opportunity for recognition and fame (such as being

seen on air in CNN iReport) or they may participate more from a

belief in the value of the project (Wikipedia or Spot.us). As a rule, fi -

nancial reward will not be an effective motivation because partici-

pants are too numerous to be suffi ciently incentivized.

As in passive contribution, a shared project must be divisible

into discrete pieces for active contribution to work. It is usually prefer-

able to demand less expertise from participants in order to attract as

many as possible.
Because of the large number of participants, decision making

must be carefully divided between the collaborators and the orga-

nizer. For example, participants in MyBO had the latitude to choose

who to call on their phone lists and to adapt their call scripts to the

talking points they felt most comfortable with, but the campaign set

the overall strategy, such as where volunteer resources would be de-

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Five Strategies to Thrive

voted in different states. As Wikipedia has shown, quality control in

such collaboration requires a mix of community supervision and top-

down oversight to ensure quality on a large scale.

Interactions between participants may vary from none (such

as for contributors to iReport and for many who make small edits to

Wikipedia) to quite a lot (such as MyBO participants who hosted

fundraising events and participated in online forums). The results of

the collaboration are owned by the organizer, although they may be

made freely public (for example, Wikipedia licenses its content under

Creative Commons and GNU Free Documentation).

Open Competitions

The third approach to collaborate strategy is the open competition.

In this approach, the project to be tackled is not easily broken down

into smaller pieces that can be given to different contributors; it must

be tackled in its entirety by one person or team. The improved algo-

rithm sought by the Netfl ix Prize, an innovative business plan for

Cisco’s I-Prize, the design of a new T-shirt for Threadless—each of

these projects required focused attention and an understanding of

the whole. Each project also benefi ted from attracting a wide variety

of solutions from the diverse minds of their customer network. This

approach—throwing out a single problem to the network in hopes of

generating many competing solutions—is the heart of an open com-

petition. Such competitions have existed for centuries (notably, the

solution to measuring a ship’s longitude at sea was found by clock-

maker John Harrison in the eighteenth century after a decades-long

open competition). 23 But the rise of customer networks today allows open
competitions to draw contributors from around the world and

allows the participants to collaborate in teams at great distance. The

result can yield a much broader range and diversity of participation.

In open competitions it can be useful to pose a problem to

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COLLABORATE

an established network of innovators. These kinds of networks are

managed by companies like InnoCentive, NineSigma, and yet2.com.

InnoCentive has a global network of 175,000 of these “solvers”—

independent academics, graduate students, and experts in a variety of

fi elds who are based in 175 countries and linked by the Internet.

More than a hundred organizations, among them Procter & Gamble,

Eli Lilly, and the Rockefeller Foundation (called “seekers”), turn to

InnoCentive’s network to tackle the toughest problems that have sty-

mied their own research and development departments.

Sun Microsystems cofounder Bill Joy famously said, “No

matter who you are, most of the smartest people work for someone

else.” InnoCentive’s network brings the advantage of a much larger

and more diverse set of minds. Typically, the toughest challenges are

solved by someone from outside the standard area of expertise. When

the Ocean Spill Recovery Institute posed a challenge to separate fro-

zen oil from water in an Arctic sea cleanup, the solution was proposed

by John Davis, a nanotechnology expert from the cement industry

who applied a technique normally used to vibrate cement and keep it

in liquid form. When another “seeker” company was looking for a

chemical to use in art restoration projects, the answer came from a

twenty-year-old chemistry student in Indiana based on a solution

he had found to help his mother dye cloth. The winners of a chal-

lenge for a new polymer design included the owner of a small agricul-

ture business and a veterinarian.

InnoCentive’s global reach is also evident in its competitions.

Texas-based nonprofi t SunNight awarded an engineer in New Zea-

land for the design of a solar-powered fl ashlight that is now bringing

light to communities without electricity in Africa and the Gaza Strip,

providing safety outdoors and allowing children to study at night.

More than a thousand previously unsolved problems have

been posted to InnoCentive, in these and other fi elds such as remote

sensing, public transportation, and plant genetics. An independent

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Five Strategies to Thrive

analysis for a Swedish packaged goods company found that it received

a 74 percent return on its investment and a faster research cycle by

using the InnoCentive network. 24

InnoCentive’s process begins with the “seeker” developing a

clear technical problem that can be posted publicly without giving

away vital trade secrets (for example, a company developing a new

shampoo might post a challenge seeking one chemical compound

that will bind effectively with another under specifi c circumstances).

The challenge is posted along with a prize amount, ranging from fi ve

thousand to a million dollars. Solvers then review an initial descrip-

tion of the challenge; if they are interested in pursuing it, they sign a

nondisclosure agreement to receive more detailed information. After

solvers submit their solutions, the seeker can choose to buy one or

more solutions at the agreed prize amount, with InnoCentive ensur-

ing the transfer of intellectual property and the rights of all parties.

During the open competition for the Netfl ix Prize, the com-

pany found that many of the participants were sharing information on

their online forum and eventually forming teams to pool their ideas.

Similarly, InnoCentive has found that many of its most productive

“solvers” have assembled their own teams of collaborators, whether in

an academic lab or on an ad hoc basis. To better leverage the forma-

tion of teams within its network, the company is developing tools

based on discussion forums, shared workspaces, and social network-

ing sites. The goals are to help solvers fi nd others with complemen-

tary skills anywhere in the world, to encourage team formation, and

to easily manage teams’ shared intellectual property.

Where innovator networks like InnoCentive are focused on

narrowly defi ned technical problems, the X Prize Foundation has

taken the opposite approach to open competitions. Starting with its

fi rst Ansari X Prize, which awarded ten million dollars to the fi rst per-

son to develop a vehicle that could be used for commercial space

travel, the foundation has sought to inspire game-changing innova-

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COLLABORATE

tions that will reshape industries or launch new ones. The Ansari X

Prize was awarded in 2004 to SpaceShipOne designer Burt Rutan.

He provided the technology for Space Adventures, Virgin Galactic,

and other companies to enter what is so far a fi eld of tourism for the

ultrarich (thirty-fi ve million dollars for a ride into space, anyone?).

Since then, new X Prizes have included the Archon Genomix X

Prize, aimed at developing high speed, low-cost sequencing of human

genomes; and the Progressive Automotive X Prize to build a commer-

cially-viable 100 mile-per-gallon car. The X Prize approach is simi -

lar to the Netfl ix Prize in that the award is high, the challenge is

extremely diffi cult, and solutions are pursued by global teams over

multiple years.

There are many other variations on the open-competition ap-

proach to collaboration, including Threadless’s contest for amateur

designers to create the most popular new designs for its T-shirts and

Cisco’s I-Prize in which teams around the world competed to develop

plans for new business ventures. Another example is uTest, whose

quarterly Bug Battle competition brings together more than a thou-

sand software testers around the world to compete for prize money in

fi nding bugs in popular software platforms. Thousands of software

bugs have been uncovered in uTest Bug Battles of Web browsers

(Chrome, Internet Explorer, and Firefox), social networks (Facebook,

MySpace, and LinkedIn), and Twitter applications—for only a few

thousand dollars in prize money at each contest.

The motivation for participants in an open competition is

mainly the chance to win, which may bring with it signifi cant money

(such as the Netfl ix Prize, Cisco I-Prize, and X Prizes), usually com-

bined with public recognition (although not for InnoCentive’s anony-

mous “solvers”). Excitement about the project, however, is also often

a powerful motivator. No doubt the three winners of the I-Prize were

particularly excited by the opportunity to work at Cisco to bring to life

the smart-grid energy framework that they had conceived.

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Five Strategies to Thrive

In open competition, the project does not need to be divisible

into parts, because the same project is given to all participants to work

on in parallel. However, that project may be a discrete part of a larger

business issue—like many of the technical challenges submitted to

InnoCentive. Open competitions may require widely differing levels

of expertise (such as the ability to design a T-shirt versus a space craft),

which will result in much broader or narrower groups of participants.

Typically, the organizer decides who wins in an open compe-

tition. However, the decision may be made by participants in cases

where they have enough information to decide and the feasibility of

the winning solution is not an issue (for example, customers voting on

the winning T-shirt design for Threadless, where the cost of produc-

ing one T-shirt versus another is not an issue).

Participants in open competitions usually work individually

or in teams, with no interaction with others. But in projects where

participants vote on the fi nal decision, there tends to be much more

interaction. In some cases, teams will spontaneously share informa-

tion with competitors (as during the early rounds of the Netfl ix Prize).

The results of open competitions are owned by the organizer, except

in nonprofi t cases, such as the X Prize, where the goal is purely to

spur innovation by others.

Defi ned Platforms

The last two kinds of approaches to collaborate strategies are based

on platforms. In these cases, the collaboration’s organizer creates a

foundation upon which others can create their own projects, con-

ceived and driven by their own initiative. Microsoft Windows, for ex-

ample, is a platform: the operating system provides the environment

in which countless other companies, independent of Microsoft, have

built software businesses (including companies such as Adobe Sys-

tems, Electronic Arts, and Intuit, each worth billions of dollars). In

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COLLABORATE

Microsoft’s case, it has profi ted indirectly from businesses using its

platform. The ecosystem of companies writing software for Windows

has allowed the Windows product itself to achieve a dominant market

share and extremely high profi t margins. Other platforms, such as the

auction site eBay, yield profi t directly, by taking a share of revenue

from all businesses that use the platform. The power of a platform

approach to collaboration is its scalability, speed, and openness to in-

novation. A lightweight platform can grow rapidly if it attracts collabo-

rators. The core code for the entire eBay Web platform was written by

its founder, Pierre Omidyar, over a long Labor Day weekend.

Omidyar’s simple but fl exible auction service has attracted millions

around the world who use it as the platform for their own small busi-

nesses, growing eBay to more than sixty billion dollars in total pay-

ments per year.

Ebay is an example of a defi ned platform, our fourth ap-

proach to network collaboration. Defi ned platforms are those that

provide clear specifi cations of what others can build on top of them.

On eBay, anyone can set up an item for auction or sale to be delivered

by mail. On YouTube, another defi ned platform, anyone can upload

videos to share. On neither site can you sell MP3 music downloads,

however. Craigslist is another defi ned platform: anyone can create a

classifi ed advertisement in a wide range of categories, but you cannot

post videos or run an auction on craigslist. You cannot even create

another Web page that pulls data from craigslist and adds another

layer of functionality to it (some have tried, and craigslist promptly

shuts down their access to its site). 25

The power of defi ned platforms lies in their simplicity, which

limits make possible. As discussed in chapter 3, simplicity is a key

value in spreading new products, services, and behaviors through cus-

tomer networks. It is much easier for others to build their own small

business on top of craigslist or eBay than it is to build one on top of

Microsoft Windows (which requires fairly advanced programming

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Five Strategies to Thrive

skills). That is because the narrow scope of what can be built on de-

fi ned platforms allows them to have extremely intuitive user inter-

faces that are as easy to use as sending an email or uploading a video.

That ease of use allows them to attract numerous collaborators who

will build their own businesses on the platform.

CD Baby is the world’s leading online store for independent

musicians selling CDs and music downloads directly to consumers,

with more than two million tracks for sale. But CD Baby wasn’t started

by a large retailer or by an e-tailer like Amazon. It was started by one

musician, Derek Sivers, as a Web site to sell his own CDs, and then

the CDs of his friends, and then the CDs of any other artist not signed

to a major record label.

CD Baby is a clearly defi ned platform: it allows any artist with

a music CD of their own to set up their own storefront by paying only

thirty-fi ve dollars, fi lling in a few paragraphs of marketing text, and

mailing in the fi rst four copies of his or her CD. Its phenomenal

growth is due, no doubt, to the fact that it was built by an indie musi-

cian, Derek Sivers, and built to match his exact image of the perfect

store for indie musicians. All musicians get paid weekly. Musicians set

their own prices, with CD Baby taking a fl at four-dollar cut per disc

(much less than such retailers as Amazon). Musicians receive the full

name, email, and address of every customer they sell to (unless the

customer opts out), allowing bands to build and network with fan

lists. CD Baby even offers actual credit-card swiping machines to mu-

sicians, equipping them to sell CDs and merchandise at live shows

(often the largest venue for sales for indie bands). CD Baby’s site ac-

cepts no advertising and no payments for preferential placement of

CDs on the home page or anywhere else. And as a matter of funda-

mental trust, no musician will ever have his or her album dropped

from CD Baby’s catalog for lack of sales. By understanding what inde-

pendent musicians want and need, Sivers created an unmatched on-

line platform, which quickly grew to more than thirty million dollars

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COLLABORATE
in annual sales. Most remarkably, even as CD sales were contracting

industrywide, CD Baby’s platform bucked the trend and grew 28 per-

cent in 2008.26

In

defi ned platforms, the motivation for participation may be

primarily money (for example, selling an item on craigslist or eBay)

or fame and glory (many videos posted to YouTube). For platforms

like CD Baby that allow entrepreneurs to showcase their work, the

motivation will be a mix of both money and glory, along with the

participants’ love and excitement for their projects.

Modularity is not an issue for collaboration in platforms, as

participants each design their own projects and complete them in

entirety. A wide range of participants is possible, since a well-defi ned

platform allows for easy participation with no technical expertise.

Decision making in defi ned platforms rests mostly with the

participants, although the organizer may play a limited “gatekeeper”

role (setting standards for what can be added or listed). Participants

tend to work individually; however, they may interact in discussion

forums (such as the numerous eBay and craigslist user forums). Par-

ticipants almost always retain ownership of their projects that they

build for defi ned platforms, but they agree to a revenue share or a

service fee paid to the organizer.

Open Platforms: SDKs, APIs, and Open Source

The fi fth and fi nal approach to collaborate strategy is the open

platform. In open platforms, the range of possible projects by collabo-

rators is not narrowly defi ned. Microsoft Windows is an example of an

open platform because, unlike CD Baby or YouTube, the organizer

does not know what kinds of projects others will build on its platform.

Micro soft did not just allow others to write music editing software for

Windows; it allowed them to write any software for any task. This is what
has led to the vast ecosystem of software for Windows comput-207

Five Strategies to Thrive

ers. The iPhone has created a similar platform for developing software

in the mobile computing space. Rather than tell developers something

like “You can sell your music on our platform,” Apple said, “You can

design any kind of application you can imagine for the iPhone.”

Participant motivations and interaction are similar on open

platforms to what we saw in defi ned platforms, as is the lack of modu-

larity (participants work on their own whole projects). However, open

platforms usually attract a narrow set of participants, because an open

platform requires more technical skills to participate (such as pro-

gramming skills).

Typically, the organizer still plays a gatekeeper role and re-

quires a revenue share or service fee from participants. However, in

some cases, such as Microsoft Windows, the platform’s organizer

takes no fi nancial cut and allows participants to join in without an

approval process. In this case, the primary objective is for participants

to build projects that add value to the underlying platform, which the

organizer owns.

The critical difference in open platforms, however, is the

freedom and fl exibility that they allow collaborators. In order to allow

this, open platforms need a much more open architecture than the

kind of Web interface used for posting an ad on craigslist or selling an

album on CD Baby.

Three powerful tools for software and web development have

provided the building blocks for open platforms to date: software de-

velopment kits (SDKs), Application Programming Interfaces (APIs),

and open-source code. Each can be a powerful tool for open platform

collaboration.

SDKs

Lim Ding Wen was only nine years old when he wrote his
fi rst application for the iPhone. Called Doodle Kids, it allows users to

sketch colorful pictures and patterns with their fi ngers on the screen,

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COLLABORATE

take a snapshot of their creations, and clear the screen by shaking it (a

sort of digital, multicolor Etch-a-Sketch). Lim, a fourth grader in Sin-

gapore’s Lianhua Primary School, spent just three days writing the

application, which he developed for his little sisters Xin Quan, age

fi ve, and Xin Mei, three. But as a free application on the iTunes App

Store, Doodle Kids went on to be downloaded 480,000 times in its

fi rst three months.27

Lim Ding Wen is not an employee of Apple Inc., but he is

one of more than fi fty thousand independent developers who have

been the driving force for innovation on Apple’s iPhone (and later,

iPad). Each one has downloaded an SDK, which allows them to write

programs coded to work in Apple’s unique operating system. While

Lim’s app is free in the App Store, many others have written success-

ful paid apps. Ethan Nicholas coded the iShoot game in his free time

and eventually quit his day job when the game earned him more than

thirty thousand dollars in a single day. 28 Others have started small

businesses writing programs for the iOS platform. Ian Schenkel, cofounder
of EuroSmartz, says that its app, which allows users to print

from the iPhone, took only three weeks of work to develop but grossed

three hundred thousand dollars in three months. 29

The phenomenal success of the iPhone and iPad has been in

large part because they are open platforms for innovation by develop-

ers like these. Apple’s SDK (only ninety-nine dollars to download), its

huge built-in audience of customers, and the relatively small share of

revenues that it takes (only 30 percent) have all attracted developers

to write programs. The devices’ unique hardware has given develop-

ers a creative set of tools to play with: large touch-screen interfaces,

accelerometers that detect movement (allowing them to respond to

users’ shaking or turning), location awareness, camera, compass, and

more. For Apple, making the iPhone and iPad open platforms has

unleashed an army of collaborators who have created more software

than Apple could have ever imagined, let alone designed in such a

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Five Strategies to Thrive

brief period. Apps turn the iPad into a magazine, chessboard, or work-

space; the iPhone into a language translator, gaming device, musical

instrument, restaurant fi nder, mass transit guide, and more. As the

iPhone redefi ned the smartphone category, competitors like Black-

Berry had no choice but to begin developing app stores of their own.

Their platforms will need to be at least as open as Apple’s if they hope

to foster as much innovation for their devices.

Open APIs

One of the most powerful recent tools for open platforms is

the use of open Application Programming Interfaces. Where an SDK

gives collaborators the keys to programming for a particular device, an

open API gives them access to the organizer’s data and ways to “talk”

to the organizer’s applications.

The rapid growth of Twitter in 2008 and 2009 was an exam-

ple of the ability of open APIs to grow a platform. Twitter’s core is

quite simple: a service for transmitting 140-character messages via the

Web and SMS. Twitter started as a small company and allowed itself

to be radically open to others. It was so open that independent com-

panies were soon developing add-on services (such as specialized

iPhone apps to use Twitter) that were making them money, while

Twitter itself still had zero revenue. As a result, however, Twitter’s

platform was able to grow at a phenomenal rate (buoyed by an ecosys-

tem of great apps) while the company’s owners invested very little in
product development and focused on maintaining the core messag-

ing service in the midst of rapid growth in the number of users. Even

Twitter’s tool for searching real-time conversations around the world

(arguably, the one central feature of Twitter besides sending and re-

ceiving messages) was developed by another company using Twitter’s

open API. (Twitter used some of its early venture capital to buy that

company, Summize.) Twitter’s open platform approach refl ected not

just a technical choice but a philosophical one as well. Its founders

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COLLABORATE

intentionally left Twitter open to others to help defi ne it as it grew.

Many of the most popular uses of Twitter—retweeting, hashtags, and

even the word tweet—were invented by Twitter’s customers, not the

company. Twitter’s founders were not even sure what the service

would be used for when it launched. What they expected to be a so-

cial networking tool was turned by users into more of a microblogging

platform and real-time search tool. Twitter did not even defi ne a busi-

ness model before launching. Instead, it waited for others to fi nd prof-

itable uses for its platform (from direct selling to customer service,

broadcasting, and advertising) before deciding what the best model

for its own revenue might be.

Open APIs are not only used by Web companies, however.

Any organization with a database can use open APIs to create a Web-

based platform for open collaboration. Under the direction of Vivek

Kundra, the federal government’s fi rst chief information offi cer, the

United States began a series of initiatives in 2009 aimed at opening

up government data to the public online, using tools such as open

APIs to encourage collaboration and innovation. On the Web site

Data.gov, data sets such as the Federal Register and the U.S. Geo-

logical Survey are providing massive amounts of data to the public in

a machine-readable format that can be analyzed by anyone. In re-

sponse, citizen groups like Sunlight Labs are organizing volunteers to

sort through government data to track congressional earmarks, spend-

ing on stimulus projects, and how contracts are being awarded. Media

companies such as the BBC, the New York Times, and NPR have

opened up their APIs to encourage others to develop innovative new

applications that combine their articles with other sources of informa-

tion, thereby reaching new readers and linking some of them back to

the news services’ own sites. By opening up its API, Google Maps has

become the platform on which a wide range of companies and non-

profi ts build their own customized maps. When customers of Netfl ix

fi rst started using iPhones, they clamored for an iPhone app to man-

211

Five Strategies to Thrive

age their accounts on the go. Rather than commit the resources to

developing an app, Netfl ix simply opened up its API to let others

quickly build one for them. Developer Brent Jensen soon launched a

$2.99 iPhone app called iPhlix, which, thanks to Netfl ix’s API, can

search the database of available movies on Netfl ix, add a new order

for one that you want, or tell you which movies are already in your

order queue. Netfl ix’s iPhone customers can now reserve a movie at

any time (such as when hearing about it from a friend in a coffee

shop), thus increasing their loyalty to the service at no innovation cost

to the company.

Open Source

The third tool for building open platforms for innovation is

open source, an approach to software design in which the source

code is made public with few or no copyright restrictions. This ap-

proach allows for extremely open collaboration among independent

developers, who may each develop software contributions and share

them freely with the community. Benefi ts to business can include

lower IT and innovation costs, quicker development of new solutions,

and broad participation in a new platform.

The seminal success of the open-source model for software

was the development of the Linux operating system. Finnish univer-

sity student Linus Torvalds began the project in 1991 and soon had

attracted thousands of other developers around the world to contrib-

ute code to this mammoth project. Today, much of the Internet runs

on servers using a combination of software known as the “LAMP

stack”—Linux operating system, Apache server software, MySQL

databases, and PHP programming code—all open source. Nearly 90

percent of the world’s supercomputers (used for running incredibly

data intensive processes such as modeling of weather, climate change,

and aircraft aerodynamics) run on Linux. Linux is installed on count-

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COLLABORATE

less devices, including cell phones, video game consoles, and MP3 music

players. Since 1999, IBM has made Linux-based products a core part

of its technology consulting. With the rise of netbook computers (an

inexpensive, ultraportable style of laptop), the Ubuntu version of

Linux has even entered the mainstream consumer marketplace.

As the worldwide market for smartphones continues to grow,

the biggest challenger to Apple’s iPhone as a platform for mobile

phone applications is the Android open-source operating system.

Based on Linux and introduced to the market by Google, Android is

becoming the operating system for a wide range of mobile devices.

Although the iPhone established a large head start in its consumer

base, Android competes with a platform that is even more open in a

number of ways. First, it offers a greater diversity of devices and

phone networks (versus the iPhone’s single product model, offered

only on AT&T in the United States as of 2010). Android was offered

on dozens of phones from every major phone carrier by the end of

2010, as well as on other mobile devices such as the Nook e-reader.

Second, Android’s diversity allows for greater customization. Where

the iPhone’s design must balance the different needs of many busi-

ness and consumer segments, handset makers are using Android to

offer different phones with interfaces tailored to different needs. An

early example is the Motorola Cliq, a phone optimized for fans of

social networking services, with a home screen that combines email,

Facebook, MySpace, and Twitter into a single feed. In the race to

develop many phone apps to compete with the iPhone, Android

hopes to attract more developers with an easier programming lan-

guage (Java), and the do-it-yourself Google App Maker for nonpro-

grammers. Just as important, anyone who creates an app for Android

phones can sell it to consumers without seeking permission from a

centralized app store like the iPhone’s. Given that Apple has rejected

some high-profi le apps that seemed to compete with Apple’s own

213

Five Strategies to Thrive

business (like Google Voice and Google Latitude), Android’s lack of

a gatekeeper could attract many developers to innovate for Android

phones.

Perhaps the biggest example of the innovation possible with

an open-source platform is the World Wide Web itself. Its open stan-

dards and protocols have allowed anyone, from Fortune 500 compa-

nies to individual students and hobbyists, to develop Web sites, ser-

vices, and applications. As Howard Rheingold has pointed out, the

Web has provided a “platform for cooperation” that unleashes the

creative energies of entrepreneurs, the market, and society at large, to

the great mutual benefi t of all. 30

The Future of Collaborate

The rise of collaboration within digital networks poses opportunities

and challenges to existing organizations of all kinds. As Yochai Ben-

kler has pointed out, the greatest disruption wrought by Wikipedia

was not upon the business model of encyclopedia publishers but upon

our collective defi nition of “authority.” 31 Instead of turning to a select

group of professional experts for answers to our questions, Wikipedia

has trained us to look to ourselves and to the collective knowledge of

the network.

Network collaboration will continue to play an especially

large role in the future of nonprofi t organizations, due to their ability

to inspire passion and commitment to dearly held causes. New inno-

vators like TheExtraordinaries.org are exploring the possibility of what

is called “microvolunteering”—where citizens can use idle moments

on their phones and computers to contribute fi ve-minute bursts of

effort (translating a text into another language, tagging an image for a

museum, or reviewing congressional bills for pork) that may add up,

Wikipedia-like, to a large social impact. The challenges of dividing

socially benefi cial work into such small tasks, however, may mean

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COLLABORATE
that the greater impact of network collaboration is in projects where a

smaller number of participants are committed to work in a more sus-

tained fashion. Blue State Digital’s Thomas Gensemer has remarked

that it is easier to garner a large email list of people concerned about

a political issue than it is to lead them into effective action. The criti-

cal difference in networks like myBarackObama.com may be that

they combine online coordinating with face-to-face meetings and in-

teraction by their network members in the real world.32

For-profi t businesses will need to fi nd careful ways to balance

value creation for their enterprise with appropriate rewards and moti-

vation for their network collaborators. The success of Twitter and the

iPhone in attracting a network of innovators may point to an increas-

ing role of open platforms for new businesses. The new business

model of the digital age may be smaller, leaner companies that do

less work developing their business. Instead, they create a great busi-

ness idea, keep their work simple and focused, and leverage an open

platform like an API to attract a network of ancillary businesses to feed

their growth.

Keys to a Collaborate Strategy

The desire to collaborate with others on collective projects is one of

the greatest potential opportunities of customer networks. Whether

your organization is a political campaign, a news organization, an

online business, or an offl ine enterprise, a collaborate strategy can

help you to tap into the knowledge, skills, expertise, and enthusiasm

of your networked customers.

With widely varying levels of expertise required, and more or

less interaction between participants, a collaborate strategy can be

used to help design products, to solve intractable technical questions,

to analyze large sets of data, to organize key stakeholders, or to iden-

tify new business opportunities.

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Five Strategies to Thrive

Successful approaches to a collaborate strategy include: of-

fering a chance to passively contribute to a project via work customers

are already doing; inviting customers to actively contribute to a small

piece of a large shared project; sponsoring an open competition for

customers to vie in creating the best solution; building a defi ned plat-

form that allows customers to easily create their own project of a spe-

cifi c kind; or using an open platform, such as an SDK, an API, or

open source, that allows participants wide latitude for inventing con-
tributions to your enterprise.

Whatever the approach, it is important to be sure that you are

creating value for all parties. A successful collaboration cannot be just

about your organization and its needs. Make sure you understand the

values, wants, and motivations of your network. For some collabora-

tions, love of the cause alone is enough: just make sure that you are

rewarding participants with a clear sense of how they are contributing

and the importance of their work. For other collaborations, an oppor-

tunity for social recognition—whether fame or the esteem of select

peers—or fi nancial reward may be the right motivation.

Be sure to leave the door open for collaborators to surprise

you, too. You may begin a network collaboration with a clear set of

goals in mind. Once your network participants become involved,

however, they may very well uncover new opportunities for your orga-

nization that you had not imagined. Be fl exible in leading any network

collaboration and be ready to follow or lead it in new directions.

By inviting customers to collaborate with your organization on vital

and important projects, you can harness their talents and energies

while building a closer relationship. This collaborate strategy is the

last of fi ve strategies that any organization or business can use to thrive with
customer networks.
But although these fi ve strategies are distinct, they are cer-

tainly not separate. In many of the businesses and nonprofi ts we have

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COLLABORATE

seen, these strategies work in tandem. This raises several questions.

When should the core customer network strategies be combined?

How should a manager begin assessing his or her organization,

customers, and needs in order to determine which strategies to

apply? And how will customer networks change the shape and cul-

ture of the organization as a whole? In the fi nal part of this book we

will examine these and other issues for the management and leader-

ship of customer network strategy within an organization.

217

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PARTIII

Leadership and the

Customer Network–Focused

Organization

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CHAPTER8
Planning and Executing a Complete

Customer Network Strategy

As we have seen, the fi ve core strategies for customer networks—

access, engage, customize, connect, and collaborate—can be

used by companies and organizations of all kinds and sizes to build

more fruitful relationships with customers and to drive such key busi-

ness objectives as product differentiation, customer loyalty, sales effi -

ciency, reduced costs, brand building, and innovation capacity.

No two organizations will apply these strategies in precisely

the same way. A midsize retail chain, a Fortune 100 fi nancial services

company, and a small technology start-up each have very different

customers, they possess different organizational skills and strengths,

and they have to contend with very different sets of competitors. Not

surprisingly, then, each company should execute an effective cus-

tomer network strategy in its own way.

A key challenge for any organization, therefore, is how to plan

and implement a complete customer network strategy in a way that

best matches its specifi c business. This chapter provides a manage-

ment process for strategy planning and implementation that can be

applied to any organization.

221

Leadership

The Five-Step Customer Network

Strategy Planning Process

Any organization that is serious about customer networks will want to

develop an overall customer network strategy—that is, a broad plan

that includes one or more of the fi ve core strategies of access, en-

gage, customize, connect, and collaborate and is matched to

the specifi c needs of the organization or business.

Such an overall strategy may be a companywide initiative led

by the CEO or founder of a business or the president of a nonprofi t.

In other cases, developing a customer network strategy may be an

initiative assigned to a specifi c division, brand, or business within a

larger company. In each case, the manager in charge of creating an

overall strategy faces several key questions:

• Where do you begin, and what goals should you set for your

project?

• How should you match your strategy to your customers’ needs

and to your business and brand?

• How do you decide which of the fi ve core strategies to deploy

and how to connect them to one another?

• Which divisions of your business do you need to involve in exe-

cuting the strategy successfully?

• How do you sell your project to upper management, and if you

move ahead, how do you know if your project is working?

The Five-Step Customer Network Strategy Planning Process

presented below answers these questions and can be used by any or-

ganization to guide the development and successful execution of an

overall customer network strategy designed to meet the needs of its

business (fi g. 8.1). This process includes:

Step 1. Setting Objectives: Defi ning key outcomes for your organization
that your strategy will aim to achieve.

222

1. Setting Objectives

Innovation

Marketing

Sales

Communications

Operations

2. Segmentation & Positioning

Customer profile
Technology use profile

Brand assessment

3. Strategy Selection & Ideation

Strategic decision

Mapping strategies to

Ideation & selection

questions

customer/org/competitors

of concepts

ACCESS

Customer

COLLABORATE

ENGAGE

Networks

CONNECT

CUSTOMIZE

4. Execution

Leveraging capabilities

Developing new

across domains
capabilities

5. Measurement

Translating objectives

Focusing on

Measuring

into metrics

impact

over time

Figure 8.1 The Five-Step Customer Network Strategy Planning Process

(complete). Illustration by Anna Fokina.

Leadership

Step 2. Segmentation and Positioning: Understanding your

customers and their network behavior, as well as your brand

positioning, to provide the foundation for any new strategy.

Step 3. Strategy Selection and Ideation: Selecting which of the fi ve core

strategies to include and understanding how to fi t them to

your business, your customers, your competitors, and your

objectives; concept ideation and testing must then be used to

select specifi c innovations to implement.

Step 4. Execution: Enlisting the right team to carry out your strategy across
functional disciplines—from research and development
to operations, customer-facing services, outbound

communications, and top-level leadership.

Step 5. Measurement: Putting metrics in place that can measure

the results of your project against the objectives you defi ned in

the fi rst step. Metrics should measure the strategy’s impact and

return on investment (ROI), as well as what is working and why,

in order to improve and build on the customer network strategy.

Step 1: Setting Objectives

The fi rst step to developing and executing an overall customer net-

work strategy is to identify your primary objectives. Are you under-

taking this initiative to build your brand and increase loyalty among

repeat customers? To generate more leads and improve online sales?

To lower your customer service costs? By defi ning the objectives up

front, you can ensure that the development of your customer network

strategy will focus on achieving real impact for your organization.

As we have seen in numerous cases, customer network strate-

gies can help organizations of all kinds achieve real business impact.

Recall the toymaker Ganz, which created a hundred-million-dollar

product by linking online and offl ine play in its Webkinz toys. Or

Ford, which drove a 38 percent prelaunch awareness of its Ford Fiesta

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A Complete Customer Network Strategy

among Generation Y consumers with its online customer “move-

ment.” Computer maker Dell generated more than ten thousand new

ideas for products and services simply by inviting customers to share

ideas at Dell IdeaStorm. By mixing utility and mobility, Kraft Foods

created an iPhone app that promoted recipes for its products and sold

over a million copies to paying customers. And the iPhone itself built

a library of more than a hundred thousand such apps and helped

drive a surge in sales in its second year by launching its App Store,

which tapped the open innovation of a network of developers.

Objectives that have been achieved by these and other cus-

tomer network strategies range across the domains of innovation,

marketing, sales, communications, and internal operations. Specifi c

objectives that an organization may consider as it begins strategy de-

velopment include:

Innovation Objectives

• Gaining customer insights

• Capturing and evaluating customer input and ideation

•
Differentiating

products

Differentiating

service

• Expanding the capacity for innovation

Marketing Objectives

• Building brand image

• Building audience engagement, loyalty, and support

• Amplifying positive customer word of mouth

• Marketing to hard-to-reach customers

• Marketing to high-value niche audiences

Sales Objectives

• Generating new customer leads

• Driving direct marketing sales

225

Leadership

• Achieving greater effi ciency in online sales channels

• Earning permission to market to customers directly

• Educating your market to grow it

Communications Objectives

• Managing reputation and crisis response

• Breaking through media clutter

• Improving product support and documentation

• Mobilizing employees through better communications

• Improving data transparency within the organization

Operations Objectives

• Extending the global reach of your business

• Lowering customer service costs

• Increasing productivity despite limited resources

• Increasing speed of business decision making

Of course, all of these objectives may appear worthwhile.

Who doesn’t want to generate leads on new customers or build their

brand image? But just like any other project, starting a customer net-

work strategy requires prioritizing and choosing objectives to focus

on. When IBM began developing the Innov8 online game, its objec-

tives were to “reach niche customers” and to “educate its market” on

business process management, and thus grow its customer base. By

contrast, Intuit was focused more on “lowering customer service

costs” when it launched its TurboTax Live Community to help cus-

tomers ask and answer one another’s questions on tax preparation. In

neither case was their primary aim to “capture customer ideation,” so

neither one muddled their project by trying to add something like

Dell’s IdeaStorm into the mix. Different organizational objectives

lead to a different focus for customer network strategies.

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A Complete Customer Network Strategy

The objectives of your strategy will likely evolve, or become

more defi ned, as it is developed in Steps 2 and 3. However, it is im-

portant to begin with an initial list at the start, even if it is somewhat

exploratory and will be refi ned later. By identifying clear objectives,

you can be sure you are focusing on a strategy with real business im-

pact in the subsequent steps, and not just one that creates buzz and

excitement over the newest shiny gadget of the new media world.

Step 2: Segmentation and Positioning

The second step in planning and executing an overall customer

network strategy is to understand who your customers are, how they

are participating in networks, and what your brand positioning or

value proposition is for them. This background research—which

fi ts under the traditional marketing practice of segmentation and

positioning—will provide an essential foundation for creating effec-

tive new strategies.

Customer Profi le

Traditional segmentation focuses on understanding your cus-

tomer demographics (age, sex, income, geography, and so on) and

pertinent psychographics (interests, social values, popular activities,

self-identity). The point of segmentation is that any organization serves

more than one kind of customer. An automaker may need to under-

stand and serve the needs of young adults making their fi rst purchase

in the category, parents whose family size dictates their purchasing

needs, and a smaller group of affl uent consumers who are seeking a

different kind of automotive experience. An auto company does not

seek to produce one car model—or ad campaign—to reach all of these

customer segments. Similarly, one customer network strategy may not

effectively reach all these segments, either.

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Leadership

Technology Use Profi le

In addition to traditional market research on each segment, it is

critical that businesses examine their values, their behaviors, and their
technology adoption in customer networks. Is your customer segment

more focused on using networks to connect socially with friends, to solve

problems for their family, or to meet goals in their professional life? Which
new media have they adopted, and how actively do they use them?

In answering these questions, it is important to rely on rele-

vant and recent data and not simply the standard assumptions of your

industry. New technologies are not only adopted by the young (the

growth of Twitter was driven largely by adult professionals, and Face-

book and YouTube have a lot more grandparents on them than you

might expect). After years of resisting the online world, major luxury

fashion brands like Prada, Bulgari, Fabergé, and Burberry discovered

that younger consumers and working women were replacing baby

boomers as their dominant consumer group and that these new con-

sumer segments are extremely active online. In the recessionary year of

2009, Burberry doubled its share value as it shifted to more direct-to-

consumer sales and pushed its classic British brand into the digital age

using Facebook, Twitter, YouTube, and Burberry’s own social network.1

When engaging customer networks, go where your custom-

ers already are. Barack Obama’s campaign raised millions of dollars

through its own myBarackObama.com network, but it also made a

point of engaging millions of supporters on other networks that they

were already using, including Facebook and MySpace, but also Black-

Planet, MiGente, and AsianAve. If your organization operates glo-

bally, it is important to realize that the ways customers connect to

networks vary greatly by country and region. Different social networks

dominate in different countries. Japan and South Korea have average

broadband speeds ten times that in the United States, but usage is

much more likely to be on the mobile Web. 2

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A Complete Customer Network Strategy

Brand Assessment

In addition to understanding your customers, it is critical to

start with a clear understanding of your brand and what it means to

them before developing a customer network strategy. Strong brands

communicate and deliver a clear promise to customers, whether it is

an experience (for end consumers) or a more functional value propo-

sition (for business customers). Strong brands have a powerful mes-

sage at their core. Here are a few:

• Nike: Athletic aspiration (“Just do it”)

• Apple: Your digital life made easy

• Kiva: Make a difference for a real person (“Loans that change

lives”)

• Starbucks: A“third space” to relax between work and home

• SAP: Making your business a best-run business

Taken together, an understanding of the customer and of the

brand promise will provide clear guidance for the kind of experience

that any new customer network strategy should create. For Burberry,

any customer network strategy should focus on rich media (to convey

the vivid aesthetics of luxury fashion), social sharing (luxury is inher-

ently conspicuous), and the ability to connect to others. For Apple, no

matter what it does, it has to be incredibly easy to use (Apple’s core

value proposition) and appeal to people who like technology but often

do not know a great deal about it (the brand is not just for geeks). For

Nike, a network strategy has to help customers push themselves as

athletes, whatever their current level.

Step 3: Strategy Selection and Ideation

The third step in customer network strategy planning is where man-

agers must decide which of the fi ve core strategies to pursue, develop

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Leadership

specifi c ideas for new innovations and initiatives, and then select
which of these to include in their fi nal plan.

Strategic Decision Questions

In selecting from the fi ve core strategies—access, engage,

customize, connect, and collaborate—you will want to explore

and answer a set of key decision questions.

The

fi rst question is: Which of the fi ve core strategies will you

prioritize for your own organization? The fi ve strategies do not have any fi
xed priority of their own. We therefore cannot generalize and

say that “collaborate is more important than connect,” or even

that “If you are successfully helping your customer network to en-

gage, then you should focus your attention on helping them cus-

tomize.” Rather, in answering the question of prioritization, each

organization should look at its own objectives, at its customer seg-

mentation, and at its positioning and brand—that is, the insights from

Steps 1 and 2 of the planning process. Likely, there will be evident

opportunities to achieve your objectives through more than one, or

even all fi ve, of the core customer network strategies.

The second decision question, then, is: Should you focus on

only one strategy, on a few, or on a holistic approach that encompasses all fi

ve? Each approach has trade-offs. If a business can effectively employ
multiple strategies for customer networks, the benefi ts to the
customers and the business will be greater: more opportunities for

differentiation, more business objectives achieved, and a deeper,

more holistic relationship with the customer network. However, that

does not mean that a single stand-alone initiative focused on one or

two customer network strategies should not be implemented if

there is a clear opportunity. We have seen several cases of such fo-

cused initiatives that have been quite successful. The Ford Fiesta

Movement—which focused solely on a connect strategy—was used

to effectively drive prelaunch awareness of the Fiesta car model

230

A Complete Customer Network Strategy

among a target of Generation Y consumers by creating a forum for

one hundred of them to share their experiences as test drivers of the

car. By contrast, Apple Inc. has eschewed any sort of connect strat-

egy, virtually ignoring social media and maintaining a culture of in-

tense secrecy. Yet the company’s successful products like the iPhone

have delivered game-changing value in customer network access (to

the Web, to media, to email) and have harnessed a collaborate

strategy to build its breakthrough iPhone App Store. The decision to

pursue either a narrowly focused customer network strategy or a more

holistic one using several strategies will depend on how broad your

mandate is, how much of your resources you can commit, and how

quickly you need to launch the project and show results.

If you have chosen more than one network strategy, then your

third decision question is: Should the strategies be connected or sepa-

rate? Different customer network strategies may be developed in

stand-alone fashion if they are targeting distinct customer groups.

However, if two or more of the fi ve strategies are being developed

for the same audience segment, they will benefi t from coordination.

In the case of Nike+ (seen in chapter 3), both the digital shoe sensor

and the online running community benefi ted greatly from each other

and their sharing of data (rather than being two separate and uncon-

nected offers for Nike runners). Similarly, the Kraft iFood Assistant

phone app creates a powerful branded experience for customers by

integrating an engage strategy (providing relevant content on cook-

ing simple meals for the target audience of busy working parents)

with an access strategy (offering a seamless mobile app design that

lets you fi nd a grocery store, buy your ingredients, and follow your

recipe, all with the phone in your pocket).

Your last decision question, if you are including multiple net-

work strategies, is: In what sequence should the strategies be developed or
launched? Once again, this will need to be decided on a case by case basis,
as there is no generalizable rule that any of the fi ve strate-231

Leadership

gies should be developed before any others. For example, the Nike+

running platform could have easily started development as an idea for

a connect strategy (to build an online community where Nike’s most

passionate runners can share their stats and routes and set challenges

with one another) and then been extended to incorporate the access

strategy (to strengthen the community experience by letting runners

connect to it via their shoes while they are running and not just via

their PCs when they are at home). But in fact, the strategy for Nike+

actually arose in the reverse order: access and then connect. Nike

started experimenting with how runners could capture and track data

on their running as early as the 1980s, with an experimental Nike

Monitor that was strapped around your waist and used radar and

headphones to calculate and communicate your running speed. Years

later, Nike brought back this idea of embedded data measurement

(access) and added the idea of an online community (connect),

and Nike+ was born. 3

Mapping Your Strategies to Your Customers,

Your Organization, and Your Competitors

Once you have selected one or more of the fi ve core strategies

to focus on, you will need to understand how you will implement them.

To do so, you should map the selected strategies against your own cus-

tomer needs, organizational capabilities, and competitive environment.

Any customer network strategy must be developed to match

the needs of your identifi ed customer segments. If you are consider-

ing an access strategy, you need to understand what drives access for

your own customers: Are they young consumers who make heavy use

of the mobile web? Are they business customers for whom data porta-

bility is critical? Or are simplicity and speed of online transactions

critical motivators?

If you are considering an engage strategy, you need to de-

velop a clear sense of the kind of content that will be most valuable

232

A Complete Customer Network Strategy

and relevant to your customer segments: Is it gaming and interactive

entertainment? Specialized information in a technical fi eld or general

news and perspectives on a particular industry? Do your customers

seek out long-form or short-form content?

If you are considering a customize strategy, you will need to

identify the specifi c elements of your value offering that customers

would most like to have more control over: Product design elements?

Choice of service plans? A more personal touch? A greater refl ection

of their style and identity? Or just a variety of options for how and

when to hear from your business?

For

connect strategy, you will need to understand why,

where, how frequently, and with whom customers are already con-

necting online: Are they better reached in a broad social networking

platform that they already participate in, or are they open to joining a

more specialized one? How much can you learn by simply listening

in to the connections they are already sharing online?

For

collaborate strategy, it is critical to understand what

kind of relationships you might have with key customer networks and

how they might be motivated to collaborate with you: Do you have

passionate followers who believe in your mission and may contribute

to it out of shared values? Or will they be more motivated by com-

mercial incentives or a chance at fame and glory? Do you have any

customer segments with specialized skills that could collaborate with

you, or will your collaboration do better to rely on a broad pool of

contributors without deep expertise?

Next you must consider the unique capabilities and culture

of your organization and assess how your chosen strategies might be a

good match. Is yours a technology focused company that is likely to in-

novate a new piece of hardware, software, or Web service that creates a

breakthrough experience for customer networks? (Think of Research

in Motion’s development of the BlackBerry or Amazon’s continuing

innovations in online interfaces.) Or are you a nontechnological

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Leadership

company with a strong marketing and innovation orientation—one

that can harness existing technologies to create a new and compelling

experience for customers? (Think of Nike’s development of Nike+ or

Affi nia Hotel’s use of basic Web technology and an extraordinary ser-

vice culture to offer a radically customized hotel experience.) Are you

a media-focused company with proven ability to generate compelling

content that your customers seek out and value? If so, could that con-

tent be combined in new ways with networking technology to create

new platforms for your customers? (Think of Nickelodeon’s develop-

ment of the iCarly TV show.) Are you an organization with a powerful

operations focus that might use customer networks to improve speed

of business, knowledge sharing, or innovation within your organiza-

tion? (Think of GE’s imagination market and Cisco’s I-Prize.)

Finally, you need to examine the competitive landscape that

you face for each strategy you have chosen. Whether you are consid-

ering the launch of a branded online forum, the design of a new on-

line commerce experience, a newly customized service offering for

your customers, or a sponsored content channel for high-value cus-

tomers, you fi rst need to understand the current state of your business

category (be it charitable giving, discount airlines, athletic clothing,

or online movie rentals). What are the current expectations for your

category, in terms of your chosen strategy? For example, if you are

planning a new kind of mobile customer experience, how high is the

current bar for your category? Are you already falling behind, are you

leading the pack, or are you somewhere in the undifferentiated mid-

dle along with your competitors? When assessing your category, be

careful not to assume that the status quo is justifi ed and that there
“must be a reason” no one is meeting a customer need that you may

have identifi ed. Often, by benchmarking outside of your category—

learning lessons from some of the businesses we’ve seen in prior chap-

ters—you can easily apply a customer network strategy that is new to

your category and leapfrog ahead of your competition. Imagine what

234

A Complete Customer Network Strategy

might happen if a car rental company followed the example of Affi nia

Hotels in offering its customers an easily customized set of low-priced

extra amenities.

Ideation and Selection of Concepts

Through the questions above—assessing customer needs, or-

ganizational strengths, and competition within your category—you

may have already identifi ed several ideas for innovative applications

of your chosen strategies by your organization.

Your ideation—the generating of new ideas—should con-

tinue in a formal process led by designers, engineers, and marketers

from various divisions in your organization. Ideation should draw on

your greatest insights into your customer’s values and needs, as well as

careful benchmarking of other companies. Benchmarking is too fre-

quently conducted by examining only what has been done by com-

petitors in your category. It is often far more productive when you

look at organizations outside your industry. For example, if you are

looking to create an open competition to benefi t your consumer pack-

aged goods brand as part of a collaborate strategy, look at successful

network competitions run by other businesses, whether they are cloth-

ing makers (Threadless’s design competition), online retailers (the

Netfl ix Prize), or automotive designers (the Progressive Automotive X

Prize).

Your ideation process should be wide open and yield a wide

variety of concepts, many more than you are likely to implement.

After ideation is complete, you will need to select which to keep

through a process of concept testing. The key areas to test for are:

• Feasibility: Can you pull it off? Do you have the required skills and
capabilities for the innovation you are considering?

• Relevance: How appealing is your idea to your target customer?

Don’t take your colleagues’ word for it. Use simple prototypes to

235

Leadership

get feedback from real customers on whether your idea will mat-

ter enough to shift their behavior.

• Differentiation: How different is your idea, really? Has your

competition already done something similar? Will your new ini-

tiative actually stand out and be noticed by your customers?

• Sustainable Advantage: If your idea is a great success, how easy will it be

for others to mimic? How long will it take your competitors to knock it off?

• Return on Investment: How much resources will your idea

require? If it does succeed, will the objectives met more than

justify the expense? If one of your objectives is to generate reve-

nue, do you have a clear business model for your idea?

To see how these tests might work, consider IBM’s initial con-

cept of building an online game to teach prospects about business

process management and to demonstrate IBM’s expertise. Sandy Car-

ter, the project leader, needed to ask several questions before commit-

ting to the concept. Feasibility: Could her team build a game with the right
features, or would they need to hire an outside party with game

design skills? Relevance: How could the game appeal to its two different
audiences, business managers and information technology profes-

sionals? Differentiation: Did a competitor already have a similar game in the

marketplace? Sustainable Advantage: How hard would it be for a competitor
to copy IBM’s game? Could IBM maintain an edge by

continuing to update the game or by using it to build tighter relation-

ships with the businesses and universities it was targeting? Return on

Investment: What budget would the project require, and would the
potential revenue from new customers justify this expense?

In applying these tests to your project concepts, keep in mind

that not every initiative aimed at customer networks needs to be your

next front-page, game-changing, blockbuster new product. That type

of project can have high rewards but typically carries high risks as

well. Other projects may have a more focused scope and audience,

236

A Complete Customer Network Strategy

but they can easily justify their investment. In general, a broad

customer network strategy should incorporate two tiers of initiatives:

“Quick Wins” and “Big Plays.” Quick Wins are elements of your strat-

egy that are relatively easy, cheap, and certain to be popular. They are

likely to rely on smart deployment of existing platforms (such as You-

Tube and Facebook). Their impact is likely to be either limited (to a

specifi c audience) or of temporary advantage (a great, simple idea

that your competitors will start offering within three months, too).

But they can be effective in terms of winning customer support, as

well as internal support, for more ambitious endeavors. Those ambi-

tious Big Plays are your strategic initiatives that require more invest-

ment and more risk but that you expect to have a great impact. Big
Plays will be much harder for your competitors to easily knock off

because they draw on your unique strengths as an organization. These

are the initiatives that typically lead to tangible product or service dif-

ferentiation or powerful, self-energizing communities and network

collaborations.

Step 4: Execution

Once the core strategies have been selected (for example, collabo-

rate) and specifi c ideas have been ideated and chosen (such as an

open competition to develop new variations on your most popular

product line), your organization must begin the execution of your

customer network strategy. To do so will require an interdisciplinary

mindset and a broad range of capabilities. Some of those capabilities

may already exist in different domains within your organization. Oth-

ers may need to be developed.

Leveraging Capabilities across Domains

Customer networks do not fi t neatly into one organizational

bucket, such as “advertising” or “product engineering.” Therefore execu-

237

Leadership

tion of customer network strategies will require leveraging capabilities

from different domains within your organization. These typically include:

• Customer-facing Domains: Customer service and call centers;

sales, retail, and other front-line positions; e-tail, mobile com-

merce, and other sales channels

• Research and Development Domains: Market research, cus-

tomer insight, innovation, and product development

• Outbound Communications Domains: Advertising, public rela-

tions, corporate communications, and internal communications

• Operational Domains: Finance, business model planning, human

resources, and knowledge management

• Strategic Leadership Domains: Market entry, business strategy,

and business process management

Developing New Capabilities within the Organization

Customer network strategy may also require the development

of new capabilities. This may require the formation of new units or

teams within the organization, focused on areas including:

• Social Media: A team focused on interacting with customers

using new platforms like Facebook, Twitter, or discussion forums

(versus traditional call centers or help desks)

• Idea Capture: A team capable of capturing, assessing, and directing ideas

from customers in order to feed them into product
innovation and business process improvement

• New Media Production: A team capable of generating regular

content for customer networks that is neither traditional adver-

tising (because it focuses on content and utility, not selling mes-

sages) nor traditional public relations (because it is aimed at

customers instead of the press)

Leadership of this kind of interdisciplinary effort must, of

course, operate under someone’s sponsorship. Depending on the size

238

A Complete Customer Network Strategy

of the organization and the scope of the strategy, it may be sponsored

by the CEO or president, by the head of a business unit, by a divi-

sional head such as the chief marketing offi cer (but with clear man-

date to tap resources outside the division), or by the head of a new

division charged with leading customer network strategy across the

organization (we will see examples of this new structure in the next

chapter).

Step 5: Measurement

As you begin to execute your customer network strategy, it is essential

to have in place a set of metrics to measure the customer response

and ultimate impact of your initiatives, as best you can. No measure-

ment system will fully capture the precise monetary benefi t of every

initiative you undertake, but with careful planning, a good approxi-

mation can be made for whatever strategy you implement.

Translating Objectives into Metrics

Measurement should begin with the key objectives which

you set for your strategy back in Step 1. At this point, with a full-

fl edged strategy planned out, you may need to revisit and recalibrate

those objectives, as some of them may have proven unfeasible and

others may have emerged as additional benefi ts that you hope to gain

from the strategy you have developed.

Whereas your objectives may be very broad (“product differ-

entiation” or “brand engagement”), your metrics need to be specifi c

enough to be measured quantitatively. Typically, one objective may

be measured with the use of multiple metrics.

For example, one of Apple’s likely objectives for its App Store

strategy was to increase the product differentiation of the iPhone dur-

ing its second year on the market (compared with other smartphones

like the BlackBerry). That objective could be measured in terms of

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perceived differentiation in the minds of consumers (via surveys

before and after asking, “How different is the iPhone from other

phones?”), as well as in terms of changes in both market share and

sales volume of the newly differentiated product.

One of the stated objectives for the Nike+ community was to

increase customer engagement with the brand. That objective could

be measured by several metrics, including: the amount of time spent

on the site per user, the likelihood of users to return and continue to

upload their running information on the site, the number of friends

users connect to and share running information with on the site, and

users’ likelihood of clicking on links to learn more about Nike prod-

ucts, sponsorships, and promotions.

Focusing on Impact

Overall, it is important to make sure that metrics focus on

results and impact (sales, brand perception, leads generated, reduced

customer service costs), and not merely on measuring activity. If you

are running an online forum for your brand, and the only thing

you are measuring is site visitors, you need to ask, “To what end do

you want visitors to come to your site?”

If Intuit’s goal with its TurboTax community is to reduce cus-

tomer service costs, then it should be measuring not just how many

customers are visiting the forum but how many questions they are

answering for one another, how many times other customers are fi nd-

ing and reading those answers, how favorably they are rating these

peer answers (“very helpful” or “not helpful”), and how many fewer

customer questions paid employees are having to respond to each week.

If the goal of MyStarbucksIdea.com is to generate valuable

product ideas from customers, then Starbucks should be sure to mea-

sure not just the number of ideas generated but also the number of

ideas that it evaluates and deems worthwhile, the number of ideas

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A Complete Customer Network Strategy

that the company implements, and any measure of ROI or new busi-

ness generated by these ideas.

By shifting metrics from focusing on activity (how many peo-

ple are joining your forum) to focusing on impact (what that is doing

for your business), you can avoid the temptation of judging a cus-

tomer network strategy on “buzz” and “cool factor,” which, in the

end, may do little to help your organization.

Measuring over Time

Metrics that are carefully designed and measured both before

and after your strategy gets off the ground will help you achieve sev-

eral important goals.

First, they may help you the sell your strategy internally—as

upper management gets a more specifi c idea of how it will see a re-

turn on its investment of resources. Demonstrating how IBM’s Innov8

would be measured for its lead generation and market education

helps make the case for designing an online game for customers.

Second, knowing the metrics you will be judged by will help

you focus the implementation of your strategy on your key objectives

and not just on the technology or on interesting but ultimately divert-

ing initiatives. IBM’s goals kept the focus of its game design on what

mattered most: educating and holding the attention of prospective

customers.

As your strategy is implemented over time, good metrics will

help you measure its success and ROI in order to determine whether

to continue it, wind it down, or increase your investment in the strat-

egy. By seeing the results of the fi rst generation of Innov8, IBM knew

that it was worth continuing the game and building another genera-
tion aimed at additional customer segments.

Finally, metrics should include some qualitative measures

(such as open-ended questions and feedback from participants), which,

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Leadership

along with your quantitative metrics, may help you to improve, learn

from, and build upon the initial success of your strategy.

We have now seen a fi ve-step process for planning and implementing

an overall customer network strategy: from setting objec tives to cus-

tomer segmentation and positioning, strategy selection and ideation,

execution, and fi nally measurement. You should now be ready to

begin implementing a customer network strategy in your organization.

As we have seen, customer network strategy does not sit com-

fortably in one division of a company. In fact, a true customer net-

work orientation requires a broad shift in the culture of the organiza-

tion, a way of doing business that differs greatly from the processes

and organizations that arose to meet the age of mass markets.

In the future, the rising infl uence of customer networks and

the spread of new and emerging technologies may lead to a very dif-

ferent type of organizational structure than we have seen in the busi-

nesses, governments, and nonprofi ts of the past fi fty years. To get a

sense of what that may look like, we will want to fi rst look at the na-

ture of a few large companies that have already begun focusing on

customer networks broadly throughout their organization. By looking

at these and other cases, we may get a sense of what is coming in the

customer networked organization of the future.

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CHAPTER9

Creating the Customer Network–

Focused Organization

The rise of customer networks is very recent. Yet we can already see

how networks have begun to transform many aspects of organizations,

from communications to innovation to strategic planning. The scope

and impact of customer networks are not confi ned to any single

department, though, as they reshape marketing, public affairs, engi-

neering, sales, senior leadership, and more. What then are the impli-

cations of customer networks for the shape of organizations as a whole?

And how will the organizations of the future change to adapt to them?

From a Customer Focus to a Customer Network Focus

At the end of the twentieth century, most thinking on how organiza-

tions should relate to their key constituencies was embodied in the

notion of the “customer focused organization.” Within academic lit-

erature, this concept (also known as customer orientation or market

orientation) was studied to identify the factors most important for or-

ganizational success. In an infl uential article synthesizing research on

the subject, Ajay Kohli and Bernard Jaworski identifi ed three key ele-

ments of customer focused organizations:

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Leadership

• Intelligence Generation: The ability to gather information about

customers and use it to identify current needs and anticipate

future needs. Intelligence generation may employ traditional

market research tools such as surveys and focus groups, second-

ary research such as industry reports and databases, and infor-

mal contacts with customers and business partners.

• Intelligence Dissemination: The ability to communicate the

fi ndings of intelligence generation among a company’s divi-

sions. Intelligence dissemination may include newsletters and

internal training programs, as well as casual mechanisms such

as interdepartmental lunches and water cooler conversations.

• Responsiveness to Intelligence: The ability to respond quickly

and effi ciently to the customer needs uncovered by intelligence

generation. Responses can include a choice of which customers

to focus on, the development of new goods and services to meet

the needs of those customers, and effective marketing and pro-

motion of those goods and services to them.1

These three elements remain important to any organization

today. And for their own era, they offered a fairly comprehensive sum-

mary of how organizations might focus on customers’ needs. But they

also reveal how the model of a customer focused organization arose to

suit the reality of customers in an earlier age. In this model, intelli-

gence is only gathered from customers, who remain passive actors.

Within the organization, interaction and knowledge-sharing are based

on periodic broadcasts ( dissemination) between company “silos” that

otherwise go about their business separately (sales, marketing, engineering,
and so on). Responses to customer needs are carried out by

the organization, with no further input from the customers them-

selves. All three elements, then, refl ect a model that was created in

the age of one-to-one communications, when customers were isolated

from each other, unable to coordinate, and easily reached by mass

media.
Now, of course, we live in a different age, one transformed by

244

The Customer Network–Focused Organization

the use of many-to-many communications tools by customers. No

longer are customers passive bystanders in the research, planning,

and development of new products and services, waiting patiently for

companies to roll them out to a mass market and trumpet them with

blasts of one-way communications. The Internet’s many-to-many tools

have given rise to customer networks that are dynamic, intercon-

nected, and able to act independently of the strategies and plans of

businesses. This age demands a different model for companies: a

model of a customer network–focused organization.

What would a customer network–focused organization look

like? We do not yet have a clear picture. Few organizations have arisen

under the pervasive infl uence of customer networks, and fewer still

have grown to a large size in industries outside of digital media. But

we can glimpse the future by looking carefully at established busi-

nesses that have been particularly forward-leaning. These companies

have embraced customer network strategies broadly—not just in a

single experiment but in multiple initiatives, and across the divisions

of their company. In these organizations a vision of customer net-

works is pervasive and emanates from the most senior leadership.

These organizations, for different reasons, started thinking about net-

works earlier than others and have made networks central to their

strategy. By looking at three such vanguard organizations, we can gain

insights into what the customer network–focused organizations of the

future will look like.

Dell: Trial by Fire

Computer manufacturer Dell started thinking seriously about cus-

tomer networks early on because it had to. Starting in 2005, Dell

faced two trials by fi re (one fi gurative, one literal). First, there was the
storm of complaints by bloggers, set off by Jeff Jarvis’s blog post about

customer service in “Dell Hell,” and spread rapidly by a host of other

245

Leadership

bloggers as the company failed to react because of a hands-off policy

toward blogs. Within a year, the company was facing another public

relations nightmare in the form of a laptop that was photographed

bursting into fl ames owing to a faulty battery. By then, the company

had already made a dramatic shift in policy, having formed a “SWAT

team” of the best and brightest members of its tech support division to
contribute to the customer forums on Dell.com (which had been

running since 1996) and to reach out to external blogs and forums.

This allowed for a rapid response to the fl aming laptop incident (a

quick “autopsy” led Dell to pull its laptops much faster than competi-

tors’ laptops facing the same problem), which garnered respect from

the network of bloggers and customers.

Under direction from the top, Dell began building on its

blogger outreach program to fi nd new strategies for connecting with

customer networks. Urging the company toward a wider embrace of

customer networks, founder and CEO Michael Dell spurred his em-

ployees: “These [customer] conversations are going to occur whether

you like it or not. Do you want to be part of that or not?” 2

As the company followed Michael Dell’s directive to join the

conversation in customer networks, it continued to launch new initia-

tives: Direct2Dell became the company’s own blog, run out of corpo-

rate communications, with topics that quickly branched out beyond

technical support to such matters as discussing the company’s shifting

retail strategy. By 2007, teams working in tech support and in com-

munity support were fused into a new “communities and conversa-

tions” division with a mandate to generate new ideas. “We created it

as a greenhouse for a whole bunch of quick experiments,” says Rich-

ard Binhammer, a manager who was instrumental in the effort. “We

wanted to fertilize new ideas, let things die if they didn’t work, con-

solidate others, and keep learning. ”3

Among the ideas that came out of the greenhouse was Dell

IdeaStorm, the online platform for customers to propose new product

246

The Customer Network–Focused Organization

and service innovations for the company (discussed in chapter 6). An-

other initiative was digitalnomads.com (described in chapter 3), the

content and community site for members of the laptop-toting mobile

workforce. When Twitter became popular among its customers, Dell

launched Twitter accounts focusing on such topics as enterprise serv-

ers (@dellservergeek) and the education market (@edu4u), as well

as personal accounts, such as Binhammer’s own @richardatdell. The

@delloutlet Twitter account was launched as a sales channel to an-

nounce discounted inventory, and by 2009 it had made $6.5 mil-

lion in sales. 4 Numerous other initiatives have included Dell’s community

forums (where customers answer most of each other’s

ques tions, so Dell doesn’t have to), and the environmentally focused

site regeneration.org.
Dell had always been a very customer-focused organization

because of its direct-selling model of building computers to order for

consumers. In 2009, Michael Dell reorganized the company into

four units based on their key customer markets: consumers, small and

midsized business, large enterprises, and public sector and govern-

ment. By then, Dell’s customer networks focus was ingrained through-

out the company and no longer resided in any single place. Estab-

lished initiatives were therefore taken out of the greenhouse and

“planted” into each of the four business units with appropriate teams

and tech skills to support them. A smaller team was left behind in a

streamlined version of the greenhouse under the new name of Social

Media & Community. “We wanted to make social media not a special

expertise, but part of the whole direct business model and how Dell

connects with customers,” Binhammer told me. “It needs to be

throughout the organization. That’s why the greenhouse team has

shrunk, as it has expanded and pushed out into the business units. ”5

The focus of the streamlined greenhouse was on nurturing new in-

novations, identifying best practices, driving adoption and coordina-

tion across business units, and developing governance and metrics.

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Leadership

Those metrics vary widely, depending on the business objectives of a

given project.

Dell has seen many returns on investment for its focus on

customer networks, including: cost savings in customer service, im-

proved brand reputation and sentiment, and the ability to serve as an

early warning system for any business, product, or customer issues

that the company may face. Most important, perhaps, are the benefi ts

of a general orientation toward listening to customer networks. Com-

bining forums, communities, Twitter, and more, Dell has over 3.5

million follower and subscriber connections—all with customers who

have opted in to connect with the company. No wonder it is the sec-

ond most mentioned brand on the Web, with over four thousand

mentions a day.

SAP: An Ecosystems Strategy

Another company that has embraced a far-reaching focus on customer

networks is SAP, the global leader in database and resource-manage-

ment software for businesses. Like Dell, SAP’s focus on customer net-

works has begun to reshape the very structure of its organization.

SAP’s focus on customer networks may not be surprising,

given the extremely Web- and tech-savvy population that it deals with

every day, from IT departments of its corporate customers to indepen-

dent developers writing software to work on top of SAP’s systems, ser-

vice companies that specialize in installing and customizing SAP’s

software for businesses in every industry, and companies developing

complementary software (such as Adobe) or hardware (such as Dell)

that must run effectively with SAP’s enterprise databases.

SAP’s focus on customer networks refl ects something else,

too. Much more than its direct competitors, SAP has chosen to pur-

sue a business strategy focused on collaborating with this ecosystem of

developers, service providers, and software and hardware companies.

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The Customer Network–Focused Organization

Rather than narrowly defi ning and focusing on its own piece of the

market, SAP has focused on collaborating with partners, sharing

knowledge, and thereby increasing the value of its products and their

utility for customers. In essence, SAP’s very business strategy has been

modeled on a network, in which its own company is linked to a web

of nodes representing all the other businesses that are critical to the

information technology success of SAP’s customers.

As a result, customer network strategy has a special place at

SAP. Rather than being a subject that is managed by a division like

marketing or sales, SAP has created its own stand-alone division called

SAP Global Ecosystems. Although smaller in staff (with approxi-

mately fi ve hundred employees, including those in the fi eld, or 1 per-

cent of the company’s employees), Global Ecosystems sits parallel to

the four other divisions of the company: Marketing, Sales, Product

Development, and Support. The head of SAP Global Ecosystems re-

ports to the CEO along with the heads of the other major divisions.

This offers many advantages, not the least of which is direct

access to top leadership. It also means that SAP’s customer network

strategy is not fi ltered through the lens of marketing, product support,

or any other division. “If communities are viewed just as a marketing

activity within an organization, then other channels are disadvan-

taged,” says Mark Yolton, senior vice president within Global Ecosys-

tems. “Other opportunities for communities—for product insight, for

innovation, for product support, or direct customer feedback—are

disadvantaged.” 6 Part of this is a matter of measurement. If customer

networks are the responsibility of marketing, then they will be measured
only in terms of marketing objectives. By placing Global Eco-

systems outside any single division and tasking it to support the goals
of all of them, SAP has made it the new division’s responsibility to

connect with every stakeholder in the outside world and to feed back

the results of those connections to every part of the organization

without bias.

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Leadership

This approach can be seen in the many initiatives emerging

from Global Ecosystems. The largest initiative, which Yolton heads,

is the SAP Community Network, home to nearly two million custom-

ers, employees, partners, analysts, and thought leaders in the market

who infl uence the purchases of others. Many of these members have

been hired, invited to pitch for business, or promoted within their

own company based on the recognition they earned in the SAP Com-

munity Network. Other initiatives by SAP Global Ecosystems have

included offi cial corporate Twitter accounts, such as @SAPnews, @SAP

network, and @SAPcrm, along with over two hundred personal ac-

counts by employees like Yolton who identify themselves as SAP em-

ployees and use their accounts to track what is being said about SAP

online and join in where appropriate. Docupedia is SAP’s new docu-

mentation wiki, which hundreds of customers are contributing to,

thereby providing product documentation that is most suited to their

own uses and needs. SAP is also an investor in InnoCentive (described

in chapter 7), with which it has launched an online Innovation and

Technology Pavilion that invites outsiders to propose solutions to

such questions as how best to demonstrate the power of SAP’s software

to manipulate billions of records of information.

SAP Global Ecosystems has yielded important benefi ts in the

effi ciency of customer service. Consulting-type questions not focused

on core support issues (such as “What’s a best practice for using this

in my own industry?” or “What did I do wrong in this planning?”) are

more quickly, effectively, and cheaply answered by peers within the

SAP network. Another major benefi t has been in market insight—

allowing the company to better understand what customers are look-

ing for in products, what their contracts will allow, and what tools can

support their partners. A third major benefi t has been in expanding

the global reach and speed of SAP’s enterprise with a global network

of touch points to listen to, respond to, and engage with customers.

When a new product is not adopted as quickly as expected, SAP

250

The Customer Network–Focused Organization

Global Ecosystems will reach out to the right customers and infl uenc-

ers and make sure they have enough information and answers to ques-

tions, dramatically accelerating product adoption in the marketplace.

Perhaps the biggest impact of SAP Global Ecosystems, though,

is in breaking down barriers between the company and its many types

of external customers and constituencies. “We have become a much

more porous organization,” says Yolton. “There is much less of a wall

between our company and the enterprises we engage with.” 7

Obama ’08: Community Organizer in Chief

The remarkable role of customer networks in Barack Obama’s 2008

campaign for the presidency stemmed in large measure from the

candidate’s roots in community organizing in the housing projects of

Chicago. Even before his candidacy was launched, it was decided

that the Obama campaign would rely to an exceptional degree on

using the power of new many-to-many communications technologies

to extend the principles of local community organizing to a national

scale.

To do so, the campaign hired Blue State Digital, whose part-

ners had begun developing such tools four years previously while

working for the presidential campaigns of Howard Dean and Wesley

Clark. After the 2004 election, they joined forces to form Blue State

Digital and were hired by the Democratic National Committee (by

then headed by Dean) to build Web-based tools to deliver on the

DNC’s new fi fty-state organizing strategy. In 2004, Dean had used

Meetup.com to organize supporters on a local level, but all the data

on this grassroots network stayed in the hands of Meetup. To tap into

the real power of its network, Obama’s campaign would need a cus-

tom platform, my.BarackObama.com. The campaign had more fans

on Facebook, but it was able to raise far more money per capita on

its own platform than on any other network. More data about mem-

251

Leadership

bers allowed the campaign to shape each fundraising “ask” around

the personal activities of different members.

More effective fundraising was the fi rst visible impact of the

campaign’s new approach to networks. Another major impact was in

organizing, particularly as the contest for the Democratic nomination

stretched on into a full fi fty-state contest, going where no Democratic

presidential campaign had gone in recent times. “When Idaho be-

came relevant,” says Thomas Gensemer, managing partner of Blue

State Digital, “no one had planned for that in their budgeting sce-

narios. ”8 Hillary Clinton was forced to pull a campaign team member

from a tough contest in vote-rich Pennsylvania to fl y out to Idaho for

a traditional campaign outreach, talking to local labor unions. Clin-

ton herself had to take time to fl y in to drum up support. By contrast,

the Obama campaign was able to use its digital network to quickly

identify those grassroots supporters who were already most active in

Idaho and use them to coordinate meetings across the state. It was a

much more effi cient organizing model.

The success of the campaign’s network strategy may have had

much do with its role within the organization as well. Joe Rospars,

who was in charge of the digital component of the campaign, reported

directly to David Plouffe, the campaign manager (the CEO or COO

equivalent). As a result, Rospars sat in on all top campaign meetings

alongside the fi nance director, fi elds director, and communications

director. Hillary Clinton’s campaign, by contrast, had very talented

technology people, but not one was represented in the senior staff or

garnered the infl uence or budget that comes with that position.

“Traditionally, the digital group is brought into a campaign

by fi nance or by the fi elds operations,” says Gensemer. “The problem

is, if you don’t have a seat at the table with top leadership, you have to

deal with competing interests.” 9 This affects what the customer net-

work strategy is measured and judged by. If it is run out of fi nance, the

goal may be to focus on numbers of new donors brought in each

252

The Customer Network–Focused Organization

week; an effort run out of the fi elds operation will be asked to deliver

on the number of volunteers signed up. For Obama’s digital cam-

paign, all of these goals were placed on an equal level of importance.

Most important, the customers themselves were not put in silos—

judged to be either “donors” or “volunteers” or “activists” when, in

fact, a single supporter might be all three at the same time.

The Three Elements of the Customer

Network–Focused Organization

In each of these cases—Dell, SAP, and the Obama campaign—the

focus on customer networks is central to the overarching strategy and

vision of the organization and is supported with leadership from the

top. We probably have yet to see a full picture of the customer net-

work–focused organization of the future. But many of the differences

from the customer focused organization are already clear. New orga-
nizations will need to do more than simply generate, disseminate, and
respond to market intelligence. Three new critical elements will de-fi ne the
customer network–focused organization. The organization

will be: borderless, collaborative, and pervasively networked.

Borderless

For the customer network–focused organization, there will

be fewer barriers both between the company and its customers and

between the company and the other organizations it interacts with.

In the traditional organization, customers were clearly and

distinctly outside the organization. The organization captured intel-

ligence about customers and then set to work using that information

internally. Customers acted as an information input and, later, as the

object of product and marketing outputs.

Boundaries are much more porous in a customer network–

focused organization. Technologies are used to bridge between the

253

Leadership

company’s employees and a diverse range of constituencies, includ-

ing business partners of all kinds and end consumers. A constant level

of interaction and exchange connects these nodes in the business’s

“ecosystem” and blurs the lines between who is inside and outside
the company. This can be seen in Dell’s constant interaction with its

3.5 million connected customers or the thousands of bloggers on the

SAP Community Network or the dynamic participation of millions

of supporters in the Obama campaign. The net result is to blur the

lines between inside and outside of the customer network–focused

organization.

Collaborative

In the customer network–focused organization, interaction

with customers is highly collaborative. Rather than simply listening to

the company’s marketing messages and choosing whether to respond

or purchase a product, customers are expected to interact and (to

varying degrees) participate.

In the Obama campaign, supporters were not just sending

checks and planting lawn signs; they were organizing campaign events,

recruiting other volunteers, and bringing the campaign to new pri-

mary states before the professional staff even arrived on the ground.

In SAP’s innovation pavilion and Dell’s IdeaStorm site, customers

contribute to the development of new products, business ideas, and

marketing messages.

The customer network–focused organization does not just

observe customers and then plan and develop products and ideas on

its own; it actually listens to the customers’ perspectives and fi nds

ways to involve them directly in the planning. This does not mean

that the organization relinquishes control; management must still

make the decisions, and the company’s every strategy will not be put

to a vote by customers visiting its Web site. But planning, innovation,

and communications will be much more iterative. Rather than get-

254

The Customer Network–Focused Organization

ting something “perfect” and then rolling it out to the market, organi-

zations will rely on customer input, begin developing ideas, test those

ideas for customer feedback, evolve them further, launch a new proj-

ect or product in beta, and quickly incorporate feedback and new

ideas to evolve it rapidly.

Pervasively Networked

The focus on customer networks will be pervasive through-

out the entire organization. It will be incorporated in the culture and

practice of every division—as in the teams embedded in each of Dell’s

four divisions and the independent SAP Global Ecosystems division

that works will all the other business divisions. Digital networking
tools will not be confi ned to the information technology department.

Nor will they sit tucked away in a single department such as market-

ing or customer service within a company, or fundraising or volunteer

organizing within a nonprofi t.

The focus on networks will also pervade the internal work

and communications of the organization. The traditional customer

focused organization relied on a model of “dissemination,” whereby

information was shared in occasional broadcasts among the separate

units of a company. By contrast, the customer network–focused orga-

nization will use many-to-many communications tools to continu-

ously connect these units and share knowledge among them in an

internal network of employees. Sometimes known as “enterprise 2.0,”

this internal use of networks harnesses collaborative tools for every-

thing from threaded conversations (via tools such as Google Wave) to

collaborative project management (such as Zoho Projects), recruiting

employees via social networks (such as LinkedIn), large-scale brain-

storming and idea-generation (such as mind-mapping and idea jams),

and advanced systems for enterprisewide sharing of market intelli-

gence. The net result is an organization that looks as much like a

network on the inside as its customers do on the outside.

255

Leadership

The Near Future of Seven Industries

What would an organization built around these three elements look

like? How would a large organization that arises in the age of cus-

tomer networks evolve to be borderless, collaborative, and pervasively

connected? The details will vary depending on the industry, of course,

yet they are easy enough to imagine based on trends that are already

becoming apparent.

Fashion

In the past, businesses in the fashion industry were built on

the strength of design skills (for example, Prada), the ability to manu-

facture and project an alluring brand image (for example, Victoria’s

Secret), or supply chain prowess that could bring down costs and

bring products to market quickly with good inventory management

(for example, Zara). The next big fashion house, though, may look

more like the user-generated T-shirt company Threadless, but on a

much larger scale.

A customer network–focused fashion company would thrive

by connecting customers directly with designers, marketers, and re-

tailers. Customers will have opportunities to preview and vote on new

product designs, to see what clothing the friends in their social net-

works are buying or looking at, and to contribute design ideas in open

contests (although most products will continue to be designed by em-

ployees of the company). Selected products will be available for cus-

tom alteration in fi t, fabric, and color for those who want a unique

statement without paying haute-couture prices.

New fashions, and the image of their brands, will not be based

just on visual design but will be connected to pop culture and lifestyle

trends in sports, health, technology, and environmental concerns.

Fashion innovations could range from wearable technology to bio-

metric sensors. Fashion brands may also bleed over into media, with

256

The Customer Network–Focused Organization

sponsored content showcased online and personal images, stories,

and videos contributed by loyal fans. These same active core users

will have the chance to weigh in on early design ideas from the com-

pany, connect with one another in exclusive forums, and receive dis-

counts, event invitations, and other perks. Like the street teams who

thrive on and support up-and-coming rock bands, the customers will

feel a sense of ownership in the fashion brand that brings them into

its network.

Retail

Traditionally, retail chains attract customers through a com-

bination of product selection, staff training, ambience, and perhaps a

sense of community among those who gather there (think of Star-

bucks or your favorite independent bookstore). With competition from

increasingly facile e-commerce, a customer network–focused retailer

will need to attract customers to shop in person by building a sense of

community that bridges both physical and virtual space.

Arriving at your favorite wine store or coffee shop will begin

with a digital “check in” (as on the FourSquare mobile social net-

work) to see which of your friends have visited recently, to earn loyalty

points, and to gain access to complimentary Wi-Fi in the store. Loyal

users may gain more points (toward discounts or rewards) by synch-

ing their social networking profi les to anonymously share what they

are listening to on Pandora, reading on their Kindles, or watching on

Netfl ix.

With local staff in the store joining the online space, a real

online + offl ine community can begin to emerge. Rather than relying
on a corporate marketing department to pick recommended books to

promote at the counter, visitors may browse a virtual bookshelf that

includes different “shelves” showcasing picks by their friends, by the

local staff behind the counter, or by the community of customers fre-

quenting the local store (much like the movie suggestions offered by

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Leadership

Netfl ix that show what others in your zip code are renting). In-store

events—classes, tastings, reading groups—may be organized by the

store or by the customers based on topics of interest, much like a

Meetup gathering. In addition to fi nding out about the real people on

both sides of the serving counter, customers can submit product or

recipe ideas for voting and inclusion in the store (“This month only:

Karen’s cranberry pumpkin bread, $6.99”).

Automotive

Traditionally, automotive companies included customers in

research and then relied on engineering prowess and outsourced pro-

duction to compete with products that could be marketed on a mass

scale. In a customer network–focused car company, the customer (be

it a single driver or the purchaser of a corporate fl eet) will have more

insight and input into the entire business process. Blogs and other

digital content from the company will yield greater transparency and

insight into design plans, while virtual test driving experiences will let

customers know more about their prospective purchases before they

get behind the wheel.

Driving itself will be a much more networked experience,

with voice interfaces allowing drivers to access information (“Find me

Mexican restaurants ahead with an easy off-ramp from the highway

and good reviews”) while keeping their hands on the wheel and their

eyes on a dashboard that measures carbon emissions as well as fuel

consumption. Because cars are such a high-involvement purchase,

customers will have the opportunities to customize detailing before

they purchase and share their favorite driving experiences in social

networks after taking the car home. Loyal customers will have the

chance to preview new models, vote on the colors to be offered for

next year’s lineup, and request the features they most want to be in-

cluded in the standard packages. Open-source design competitions

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The Customer Network–Focused Organization

will allow hundreds of design enthusiasts to submit their favorite con-

cepts for a unique chassis design, with the top winner each year pro-

duced for a limited run.

Pharmaceutical

Pharmaceutical companies have traditionally focused solely

on their proprietary research to develop unique medicines and thera-

pies that can differentiate themselves in clinical trials. These innova-

tions will continue to be critical. But as the health care industry shifts

from pay-for-treatment toward paying for patient outcomes, it will be

increasingly important for pharma companies to focus not just on the

chemistry of a drug but on how it is or is not successfully integrated

into a patient’s life.

The customer network–focused pharmaceutical company

will develop effective content, training, guidance, and mobile con-

nections between patients, doctors, and researchers in order to ensure

that every new therapy has the best chance of success in real patients’

lives. Online communities of patients with the same disease, as well

as online doctor communities, will provide points of contact for the

company to listen, learn, and fi nd out how better to assist in patient

health care. They will also help companies understand better the life-

style issues that shape disease treatment.

Researchers within the company will reach out to scientists

around the world to collaborate on key science problems via plat-

forms for sharing or open competitions to fi nd the best solution to a

problem. Big decisions about which areas to invest in for new research

(with drug development pipelines that span a decade of more) will be

made not just with the knowledge of a few corporate strategists but by

tapping thousands of points of market intelligence and harnessing the

collective opinions of researchers and doctors throughout the com-

pany and at laboratories and universities around the world.

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Leadership

Media

The traditional media company was based on holding a near

monopoly in the mass distribution of content and relied on teams of

creators and editors to produce as much content as possible for as

broad an audience as possible. The customer network–focused media

business will focus much less on distribution, since that will be much

less differentiating in an environment that is open to anyone with a blog.

Instead, the business will attract an audience both by fi nding areas of

unique content to produce and by developing a curatorial relationship

with independent content producers (of blogs, podcasts, videos, games,

and so on) whom it may select, feature, sponsor, or recommend.

The audience will be the biggest source of this independent

content, whether it is sending in eyewitness footage of breaking news,

contributing to blogs and customer forums, or voting to pick selec-

tions for the media company’s “best of the year” compilation. A key

source of value for a media company will be in artfully moderating

the forums and online discussions of its customers, so that genuinely

interesting dialogue and exchanges of ideas fl oat to the top, aided by

voting by the customers themselves. As customers share their network

profi les, media companies can show them what others in their social

network are reading, watching, or listening to and can offer content

that is selected to match the customers’ tastes (as well as a few sur-

prises). Media brands will no longer defi ne themselves by format

(magazine, radio, TV), as every publisher will rely on a mix of media

and will make its content available anywhere and on any device (al-

though greater access may require a premium price).

Philanthropy

Traditionally, philanthropies focused on telling their custom-

ers just enough to get alarmed about the problems of the world and
funneling them into a role as small donor, volunteer, or large donor.

The customer network–focused philanthropy will seek to build much

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The Customer Network–Focused Organization

more active and informed relationships with supporters and will offer

them more ways to contribute.

Supporters will have the opportunity to organize fundraising

events at their schools, community groups, or places of worship. With

content produced and curated by the philanthropy, they may choose

to delve deeper into the issues (what microfi nance is, what medical

needs are in a war zone, and so on) than the bullet points in a public

service announcement. Those who volunteer on aid projects will be

able to easily share their experiences and success stories with others

online and contribute to the stories that the organization uses to mar-

ket itself to new supporters. Other supporters may use digital tools to

volunteer small increments of time working online or choose which

projects they want to fund with their money. Open calls for collabora-

tion will be used to develop cheap, effective solutions to pressing so-

cial needs (whether a solar-powered fl ashlight to reduce kerosene

consumption or more effective mosquito netting to prevent malaria).

And digital mapping and data visualization tools will allow different

philanthropies and nongovernmental organizations to share data and

identify emerging trends and pressing needs.

Education

Traditional educational institutions have focused on the unique

value of face-to-face learning and collaboration among students and

teachers at the same physical campus. Learning materials (especially

in primary and secondary schooling) were largely limited to mass-

produced textbooks, and teachers developed curriculum in relative

isolation, sharing ideas only with those in their department.

In the customer network–focused educational institution,

students will be able to take advantage of the benefi ts of virtual col-

laboration and instruction, as well as face-to-face learning. Online

video libraries like the Khan Academy (described in chapter 3) will

replace rote lectures in many subjects, freeing teachers to focus more

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Leadership

on interactive learning. Classes in core subjects such as math and

reading will benefi t from the face-to-face interaction of a physical

classroom. But at other periods of each day, students may use digital
tools (e-readers, video conferencing, and online collaborations) to

participate in virtual classes that can focus on much more specifi c

topics and student interests. A student in rural Nebraska may be the

only child in that school taking a course on frog ecosystem preserva-

tion or the theology of Hinduism in Southeast Asia, but he or she can

easily participate in a class with twenty other students in other cities

and states, all taught by a teacher with the specialized knowledge to

develop an age-appropriate curriculum. Students will learn to use

video, audio, mapping, photos, and text in school, but as tools for

critical thinking and analysis. Class participation grades will refl ect

both in-person and online discussions, and students will learn the

media literacy skills to fi nd their own content sources and evaluate

them for their perspectives and merits.

Students will not be the only ones working collaboratively

with digital tools, however. Teachers will use blogs, wikis, and online

forums to create, fi nd and share curriculum and lesson plans with

one another (using Creative Commons licensing) and to bookmark

and vote on the sources that are most appropriate for teaching current

issues to students at various grade levels. Instead of scouring govern-

ment Web sites for a single good article on climate change that is up
to date and appropriate for a sixth-grade audience, teachers will be

able to easily see what others in their network have already found and

shared and to comment and vote on what did or didn’t work when

they brought it into the classroom. As students and teachers collabo-

rate and learn with peers both in their home community and across

the world, translation-powered learning tools will allow them to gain

a sense of the global environment the students will need to live in and

contribute to as adults.

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The Customer Network–Focused Organization

Why Organizations Are Holding Back

You may call me a dreamer, but the scenarios above are hardly radical

or beyond the ken of innovative leaders today. Why then have we not

yet seen more customer network–focused organizations? Most of the

platforms described in the scenarios above (social networks, collabo-

ration tools, mobile social networking, and so on) already exist. All of

the underlying technology is already here, and much of it requires

only modest fi nancial investment. What is required of established or-

ganizations, though, is organizational change. And that is usually the

most diffi cult investment to make in a large, legacy institution.

While newcomers and start-ups see opportunities for new

businesses and new relationships with customers, many older organi-

zations see that their familiar ways of doing business are threatened.

For established organizations, the rise of customer networks—and the

uncertainty, disruption, and change they pose—brings a great deal of

fear. For leaders hoping to thrive in the new era of customer networks,

this may pose serious obstacles to organizational change.

The

fi rst obstacle is a desire for control. Managers see the

open nature of social media and hear the voices of customer networks,

and they are afraid to enter into an environment in which they cannot

maintain complete control over their organization, their brand, and

what their own employees might say. A 2009 report on the use of so-

cial media by major brands revealed that Toyota, the world’s largest

automaker, had strongly resisted the idea of having a blog. Instead,

the company had tasked its three-person (!) social media team with

using YouTube and Twitter to broadcast the content already being

developed by its marketing and corporate communications depart-

ment. 10 At the same time that movie and television celebrities were using
Twitter to stoke the eager attention of millions of fans, the National Football
League passed rules forbidding its players to post to
Twitter, or even have an assistant post to their accounts for them, for

263

Leadership

ninety minutes before or after a game. The Washington Post passed

rules prohibiting staff and reporters from expressing personal opin-

ions in social networks, lest they jeopardize the perceived impartiality

of the Post. Of course, any organization should apply their rules for confi
dentiality and disclosure to employees in new media, just as they

do in any other communications medium. But for an organization to

simply reject online conversation is not an option. The fact is that

organizations have already lost absolute control of their message in a

world of customer networks. Employees, customers, business part-

ners, and anonymous voices will have their voices in the mix of social

media, and silencing a company’s own voice will only make matters

worse.

Another fear holding back many organizations from embrac-

ing customer networks is a reaction against anything “not invented

here.” In a traditional organization with a clear boundary between

company and customers, the expectation is that all innovation, ideas,

and value will be created inside the organization. Ideas generated by

customers or outside parties are either ignored or seen as a threat to

their intellectual property. In 2008, toymaker Hasbro discovered that

two fans of their Scrabble board game, brothers Rajat and Jayant Agar-

walla of Calcutta, had developed a Facebook application, Scrabulous,

based on the game. The application allowed users to play Scrabble

with friends online via the social network. Hasbro had failed to capi-

talize on the potential for social network versions of its game proper-

ties, and it watched as Scrabulous quickly attracted hundreds of

thousands of users, becoming the most popular application on Face-

book. Rather than embrace the Agarwalla brothers or hire them to

head up a new social gaming unit for the company, Hasbro slapped

them with a lawsuit. The Agarwallas withdrew their game from Face-

book to howls of protest from online fans. Hasbro later launched its

own version of Scrabble for Facebook but attracted far fewer users. 11

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The Customer Network–Focused Organization

To innovate in the future, companies like Hasbro will need to be

more open to ideas that emerge outside their organization.

A third fear preventing many established organizations from

embracing customer networks is the fear of letting go of old business

models or experimenting with new sources of revenue. A hundred-

year-old newspaper company (with signifi cant assets and personnel

invested in physical printing and distribution) will fi nd it much harder

to consider moving to a digital-only distribution model than will a

start-up publisher like the Huffi ngton Post. A wide range of industries

that have been disrupted by digital technologies and open informa-

tion fl ows have resisted investing in new, uncertain business models

as they watch the profi ts of their old business models dwindle inexo-

rably. The question for any such organization today is, “What busi-

ness are you really in?” Is the New York Times really in the newspaper
business or the journalism business? Is CBS really in the business of

broadcasting content via affi liate television stations or the business of

creating premium content to distribute in any media that will attract

viewers, advertisers, and potentially other sorts of revenue? One rea-

son that Hasbro was out-innovated by its customers with the Scrabu-

lous game may have been that Hasbro still thought it was in the busi-

ness of making board games rather than the business of making social

entertainment experiences.

Cultural Traits That Organizations Will Need

The world is changing fast. Long-standing institutions and organiza-

tions of all kinds will need to reorient themselves quickly if they wish

to avoid profound disruption and even irrelevance. For any organiza-

tion today, networks are the future face of their customers, be they

business customers, end consumers, voters, or donors.

To succeed in building the customer network–focused orga-

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Leadership

nization may require, fi rst of all, new cultural attitudes within the or-

ganization. More than new technologies, or new tech-savvy employ-

ees, these cultural qualities will be the key to building an organization

focused on customer networks.

Interdisciplinary Thinking

Any organization seeking to thrive in a world of customer net-

works will require a capacity for interdisciplinary thinking. This will

mean no longer viewing their own organization as a set of vertical,

highly separate silos, like marketing, sales, and product development.

For decades, this kind of division has brought structure and effi ciency

to large organizations, but it has imposed costs as well. In the era of

customer networks, the costs of lack of communication between silos

are too high to sustain. Specialties and focused disciplines will re-

main, but they need to be crisscrossed by network ties and interdisci-

plinary collaboration within the enterprise.

Some of this will be as simple as bringing people together in

the same room—so that if a public relations crisis is erupting in a

large company, someone thinks to invite the human resources depart-

ment, which manages internal communications to the thousands of

employees inside the organization (who are no doubt sharing their

own point of view on the crisis in social media). Some of it will involve

using collaborative digital tools inside the organization, so that a formal

meeting or interdivisional task force does not need to be called before

insights can be shared between the company scientist attending an

academic conference, the sales person hearing customer product

requests, and the design team working on the next product prototype.

Some of it will require insisting that outside partners take an interdis-

ciplinary approach as well—that everything digital is not left to the

advertising agency, while the company’s public relations agency con-

tinues to focus on an old mass-media model for communications.

Companies may choose to restructure their formal divisions

266

The Customer Network–Focused Organization

around their customers, as Michael Dell did in reorganizing his com-

pany into divisions focused on large enterprise, small business, end

consumers, and government customers. Others may keep organizing

themselves around traditional divisions such as marketing and sales.

In either case, they must use internal networks to foster pervasive con-

nections among these divisions. That will require that the company’s

focus on customer networks be interdisciplinary as well. This may be

achieved with a special unit like SAP Global Ecosystems that has a

seat at the top of the organization. Or it may be that the customer net-

work focus is diffused throughout every division, as at Dell, but with an

incubator or greenhouse dedicated to innovating new best practices.

Whatever the approach, the role of customer networks must become a

reason for organizations to become more interdisciplinary, not less.

Trust-Based Leadership

In the chaotic and messy world of combat, every military offi cer

knows the truism “No plan survives contact with the enemy.” The same

can be extended to organizations in our digital age: “No detailed plan sur-

vives contact with the customer network.” If an organization is to be truly

borderless and powered by collaboration between customers, partners, and

diverse employee groups, then a new kind of leadership will be required.

In their book Made to Stick, Dan and Chip Heath describe

the military leadership concept known as “commander’s intent.” This

approach to leadership does not rely on a detailed plan laying out

exactly how an operation is to proceed. Instead, the commander’s in-

tent focuses on a spare statement of the most crucial goal of the mis-

sion and the means chosen to achieve that goal. The point is to iden-

tify the idea at the core of the commander’s strategy and communicate

it in such a way that when the unexpected happens, personnel at

every level can make independent decisions that are aligned by a

shared understanding of that strategy.12

Leadership in networks, indeed in any collaborative situa-

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Leadership

tion, hinges on trust: trusting those you work with and ensuring that

they are able to act independently and maintain that trust. Leaders

must realize that they will not be able to plan for everything that will

happen or sign off on every decision that will have to be made in a

dynamic and fl uid environment. Leadership therefore requires trust

in the independent action of others.

In a network focused organization, there is no option for a

command-and-control approach to leadership. Managers can’t order

their business partners around, and neither can they order around

their customers. They can’t succeed by trying to control everything

their employees do either. It is simply not possible for a large organi-

zation to monitor and manage every employee utterance and interac-

tion in networks by running it through a traditional corporate com-

munications vetting process. Businesses that try to take this approach

to social media wind up in the hypocritical position of proclaiming

their great openness to customers in new media while being unable to

respond to some of the simplest queries from people outside the orga-

nization (a failure I witnessed several times in researching this book).

Employee guidance on communications should focus not on prohi-

bitions, control, and vetting for the utmost consistency. It should rely

on employee responsibility (posting online is tantamount to speaking

to the press), disclosure (always let people know what company you

work for), and knowledge at all times of the commander’s intent: what

are we doing, why are we doing it, and how can you help support this

as part of our network.

Moderation Skills

As many organizations have by now realized, simply opening

your virtual door to customer networks is not enough to ensure a thriv-

ing and valuable conversation or collaboration. Without the right skills

for moderating the give-and-take of an open network, an admirable at-

tempt at openness can run into a lot of unintended consequences.

268

The Customer Network–Focused Organization

When NASA announced a call for Americans to vote on a

new name for the Space Station module formerly known as Node 3,

it may have seemed like a simple way to invite citizen participation.

Once comedian Stephen Colbert heard of the contest, however, he

quickly enlisted his online fan community to swamp NASA with votes

for naming the space module after himself. When the contest ended,

the write-ins for “Colbert” came in fi rst among over a million votes

cast. Fortunately, NASA had reserved the right to make a fi nal choice

from among the top vote getters. They chose “Tranquility”—a name

that was also suggested by voters and received many votes—but they

made a point to name the Space Station’s exercise machine the

“Combined Operational Load Bearing External Resistance Tread-

mill,” or C.O.L.B.E.R.T.

Less careful leaps into customer-led branding have yielded

more embarrassing consequences. When Skittles sought to embrace

its customers on social media, it temporarily turned its home page

into a real-time search of everything being said about the brand on

Twitter. It wasn’t long before pranksters began fi lling the home page
with a stream of vulgarities and criticism of the brand, forcing the

company to cancel the experiment.

As organizations reach out to customer networks, they will

need more than a willing and open mind; they will also need the skills

to moderate the often unruly give-and-take of online communities.

This begins with knowing and being clear about your rules of engage-

ment, as NASA was. Another key part of playing the moderator in a

network is knowing how to keep things civil. Requiring participants to

identify themselves with a verifi ed name is often effective, particularly

for internal networks such as employees. At the same time, to keep

interactions honest and valuable, participants should not have to fear

undue policing and punishment for simply expressing an opinion.

Skillful moderation requires keeping all participants invested in

participating; companies like SAP and Microsoft use nonmonetary

269

Leadership

reward points and recognition to encourage and validate the contri-

butions of their network members. And moderation requires the abil-

ity to tap appropriate resources, feeding questions and new ideas from

customers to the right subject-matter experts within the organization.

In many cases, the biggest challenge of moderation is simply

to separate the network’s wheat from its chaff, drawing out the most

valuable ideas and voices from a crowded conversation. When a blog

post receives ten comments from readers, it has sparked a conversa-

tion. When it receives a thousand comments, it has sparked a prob-

lem. The author will never be able to read through and consider each

of them. Sites such as the New York Times attempt to tackle this situation by
having readers vote (thumbs up or down) on the comments

of others, thus elevating highly favored comments to the top of the

list. Other less democratic mechanisms may also be used to curate a

discussion and draw out voices that are more thoughtful, less sarcas-

tic, or provide a diversity of views. With a brand such as Dell, which

receives four thousand mentions a day by users online, moderation

begins with separating background noise from what merits close at-

tention. The ability to fi lter, redirect, judge, and encourage valuable

participation in networks—to moderate effectively—will be critical

for every networked organization.

Transparency

In 2006, Virginia’s George Allen was in a seemingly safe cam-

paign for reelection to the U.S. Senate when he was caught on video

taunting a volunteer in his opponent’s campaign with a racial slur,

“macaca.” As questions circulated regarding the comment and allega-

tions of prior racial slurs surfaced, Allen watched his double-digit lead

in polls collapse into a narrow loss of his Senate seat. The Washington Post
speculated that if not for the recording and ceaseless replaying of his
“macaca” comment online, Allen not only would have won re-270

The Customer Network–Focused Organization

election but would have been a serious contender for the 2008 Re-

publican presidential nomination. 13

In the age of online social networks, blogging, and video

camera phones, we are all George Allen now. No one, least of all a

public fi gure or leader of a major organization, can assume that ac-

tions that affect customers and the public can safely escape scrutiny.

What is said in private or behind closed doors will not necessarily stay

there. The old adage “What happens in Vegas stays in Vegas” has

been updated: “What happens in Vegas goes on Facebook.”

Michael Wesch describes the moment of confusion that many

video bloggers face when they fi rst turn on their Web camera as “con-

text collapse”: the realization that whatever they are about to say could

be seen by anyone in the digital world, now or into the future, in an

infi nite range of possible contexts. 14 Organizations today face this same
context collapse in all their actions and communications.

What does this mean for them? There is no longer a profi t in

deceiving customers. Now that customers, and not just large institu-

tions, hold access to the means of mass communication, it is simply

not a long-term profi table strategy to try to systematically fabricate or

misrepresent the actions of your organization. After the early years of

planting fake comments in online forums or secretly sponsoring cus-

tomers to blog nice things about you, companies have realized it is

better public relations to argue for what you are than to try to pretend

you are something else.

In a networked world, companies will succeed by embracing

transparency with customers and business partners and sharing as

much information as possible in order to foster greater collaboration

and mutual benefi t. In the future, competitive advantage will not lie

in keeping an organization’s strategy secret from competitors but in

sharing it with networks of customers and partners inside and outside

the organization.

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Leadership

Responsiveness

No matter how scrupulous, skillful, or well managed, any

business or organization will face problems that challenge its relation-

ships with networked customers. Products will fail and need to be re-

called (like Toyota’s massive auto recall in 2010). Crises will be mis-

handled by the organization (like Jet Blue leaving passengers stranded

on airport runways during the Valentine’s Day blizzard of 2007). Cus-

tomers will be offended by a marketing campaign (like the 2008

Motrin Moms advertisement that enraged many of its target custom-

ers). Or employees may just be caught behaving badly (like the Dom-

ino’s Pizza staff who, in 2009, posted a video of themselves adding

disgusting ingredients to their store’s food).

In a networked world, bad news will spread fast, and one cus-

tomer’s unhappiness will not stay isolated. Customers have a voice

and a platform now, and they will use it to express their displeasure.

And when one customer complains of a problem that many others are

also experiencing, their voice will resonate and be amplifi ed through

networks. This is why Jeff Jarvis’s Dell complaint and Dave Carroll’s

“United Breaks Guitars” song each took on a life of their own and

spread virally through networks.

Organizations therefore need to respond to customer con-

cerns much more quickly than in the past. Not only can a bad story

about a business spread more quickly today, but customer’s expecta-

tions for a speedy response are much higher. Where once a company

responding within a week might have seemed appropriate, it will now

be expected to respond within a day. In many cases, that means the

organization will be responding before it knows the answer to what

caused the problem or even how serious it is. Companies that are

used to waiting behind closed doors until they have a full explanation

will now have to speak out before the situation is resolved. Dell took

this approach with the fl aming laptop, fl ying a team to Japan to re-

trieve and investigate the faulty product before Dell knew whether it

272

The Customer Network–Focused Organization

bore any responsibility for the problem. In the end, the fi re hazard

was discovered to be caused by a battery problem faced by Dell’s com-

petitors as well—but Dell was much faster in recalling the batteries

than Apple or HP. Dell’s Binhammer says, “Companies today need to

get used to the idea of not waiting until they know what the problem

is. They need to be comfortable saying, ‘Yes, we hear you, we are

working on it,’ before they have found a solution.” 15 Often the solu-

tion to customer unease is quite simple: just knowing that you hear

their concern may be the most important thing.

Organizations need to do more than respond effectively in a

moment of crisis, however. They also need to learn to respond solici-

tously to the everyday questions and concerns of customers. Respon-

sive and effective customer service has always been one of the best

tools for businesses to build positive word of mouth among custom-

ers. In an age of customer networks, it is simply more important

than ever. As commentators from Brian Solis to Steve Rubel to Thor

Muhler have observed, “Customer service is the new P.R.” Where

public relations traditionally focused on maintaining relations with

the press (which used to hold a monopoly on one-to-many communi-

cations), today it is equally important to maintain the trust, respect,

and support of your customers. When your customers speak about

your organization to others, it is their voices that will be heard with

the most credibility.

Shared Values

For the borderless organization, there will be no fi rm and im-

permeable boundary between customers and company. The organi-

zation must share not just products, conversations, and collaborations

with its customers; it needs to share their values, too. This may come

naturally to many nonprofi ts and social enterprises. But as more busi-

nesses reach out to customer networks to contribute to and collabo-

rate in their mission, these businesses need to make sure that the val-

273

Leadership

ues they espouse to customers match their internal policies, that walk

matches talk, and that practiced strategy matches professed mission.

In the early industrial era, works of social good were left to the

philanthropic deeds of business tycoons; the businesses they owned

were not expected to refl ect an ethical orientation. Later, many large

businesses took to setting up corporate foundations to contribute to

society, often with little attempt to draw attention to themselves. As

mass communications and brand management evolved to become

more emotionally driven, companies began practicing “cause-related

marketing” wherein partnerships with nonprofi ts were chosen for max-

imum public relations appeal and carefully marketed to bolster the

company’s image. More recently, we have seen the idea of “corporate

social responsibility” (CSR), which argues that businesses should

evaluate their decisions in terms of a range of social impacts (environ-

ment, sustainability, employment, and so on) as well as profi ts. In

practice, CSR sometimes consists of isolated, but well- publicized,

good deeds.

Some businesses, though, have distinguished themselves by

committing quite broadly to a set of values that they share with cus-

tomers. This can be seen in Tesla Motors (with its commitment to

developing high-performance cars run entirely on electricity), in

Whole Foods (which always stressed organic and natural foods but

added an emphasis on local growers as this became important to cus-

tomers), and in Google (with its commitment to open Web standards

and its motto, “Don’t be evil,” which sets tough expectations for the

company but has led many customers to view it differently from its

competitors).

For the networked organization, values that are shared with

customers are critical to maintaining the trust and support necessary

to partner fully with customer networks. These shared values need to

be represented in more than just one-off initiatives, however. They

must be part of the overall strategy of the company, and every aspect

274

The Customer Network–Focused Organization

of the company should refl ect them—from products to communica-

tions, vendor relationships, environmental impacts, and human re-

sources policies. Only then can a borderless enterprise succeed with

the full support of internal and external networks.

As the Internet continues to grow more mobile, more distributed, and

more embedded in our physical lives, the impact of our human net-

works will be seen not just in individual organizations but in our soci-

eties as a whole.

With their growing importance in our lives, networks may

come to be more than a means to communicate and share our deep-

est values. They may become a source and a repository of new values

themselves. Openness, connectedness, self-expression—these values

hold a special role in many cultures, and for centuries they have been

enshrined in our philosophies, religions, and legal frameworks. In a

world of networks, these values may have greater weight, nuance, and

meaning. But they also are vulnerable to technological censorship

and surveillance. The fragility of political freedom worldwide shows

us that open networks are not always assured, nor are they immune to

threat.

In January 2010, after an international cyber attack on the

networks of Google and the Gmail accounts of Chinese political dis-

sidents, U.S. Secretary of State Hillary Rodham Clinton delivered a

landmark speech that laid out a new vision of digital networks and

their meaning to society. In it she described network access as a

human right, linked to the freedom of assembly enshrined in the U.S.

Bill of Rights. “Governments should not prevent people from con-

necting to the Internet, to websites, or to each other. The freedom to

connect is like the freedom of assembly, only in cyberspace,” Clinton

said. She spoke of the universal right to freedom of worship and about

how worship takes place today not just in churches, synagogues,

mosques, and temples but also online.

275

Leadership

“The Internet is a network that magnifi es the power and po-

tential of all others,” she proclaimed. “Freedom of expression . . . is no

longer defi ned solely by whether citizens can go into the town square

and criticize their government without fear of retribution. Blogs,

emails, social networks, and text messages have opened up new forums

for exchanging ideas, and created new targets for censorship. . . . We

stand for a single Internet where all of humanity has equal access to

knowledge and ideas.” 16

In the future, we may all be called upon to defend and

strengthen that digital access, those digital expressions, and our digi-

tal freedoms. If we do, then our future networks will continue to make

us not only more connected but, let us hope, more human.

276

Self-Assessment:

How Networked Is Your Business?

Understanding Your Customer Network

1. Who is in your customer network? What types of “customers” determine

the success of your organization? (These may include con-

sumers, business customers, investors, analysts, business partners,

regulators, donors, volunteers, music fans, voters, and parishioners,

among others.)

2. Who matters most? Which of these types of customers are most important
to the success of your organization? Who are the most im-

portant potential customers that you want to bring into your net-

work?

3. What are your goals for your customer network? What are your most
important objectives for each type of customer in your network? Do

you want to gain customer insights and increase product differentia-

tion? Amplify word of mouth and connect with hard-to-reach cus-

tomers? Drive direct sales and generate new customer leads? Build

your brand image and break through the media clutter? Lower cus-
tomer service costs and increase your productivity? Any customer

network strategy needs to start with identifying your most important

objectives.

4. What network technologies are your customers already using? What

hardware are they using to get online (phones, tablets, laptops,

desktop computers)? What media are they interacting with

(YouTube, Flickr, phone apps, blogs, Web sites)? How do your

277

Self-Assessment

customers prefer to communicate (email, phone, text, Twitter)?

What social networks are your customers already using (Facebook,

LinkedIn, MySpace, specialized networks)?

Your Access Strategy

1. Are you fi ndable? Are you making it easy for customers to fi nd you and
incorporate you into their digital lives? Are you optimized for

search, with appropriate paid keyword advertising? Can customers

fi nd you on the social networks they are using?

2. Are you fl exible? Do you offer your services and content to customers on
their schedule, not yours? Can customers reach you by email,

text message, Twitter, or phone? Do your Web services run well on

any browser, smartphone, or digital interface?

3. Are you mobile? Does your business work on the small screen in your
customers’ pocket? Can they use their phones and mobile devices

to fi nd you, learn about you, and pay you? Are you delivering prod-

ucts and services that take advantage of mobility and location

awareness?

4. Are you fast? Do you realize that “I can get that for you in two days” is a
reason for your customer to look somewhere else? Are you offering on-
demand services rather than making customers adapt to

your schedule? Are you turning out new content while it is fresh

and current? Are you responding to customers online in a timely

fashion?

5. Are you simple? As technology grows increasingly powerful and

complex, are you keeping yours simple? Are your products and

services as easy as emailing on a BlackBerry, searching on Google,

or uploading to YouTube? Are you eliminating the hoops that cus-

tomers must jump through to fi nd you, connect with you, or pay you?

Your Engage Strategy

1. Are you creating valuable content for your customers? Are you thinking
like a media company? Are you creating content that earns your

customers’ scarce attention in a busy world? Have you moved

beyond just running ads online and started creating content and

stories that actually engage your customers?

278

Self-Assessment

2. Are you sensory and interactive? Does your content include text, images,
and video? Are you incorporating interactive elements like

maps or gaming? Is your content easily shared by your customers—

through email, on Facebook, or by embedding it in their blogs?

3. Are you useful for your customers? Who is your content aimed at?

What needs does it answer for them? What problems does it solve?

Do your customers have a good reason to return to your content

more than once? Is it genuinely useful?

4. Are you authentic? Does your content speak in the voice of real people
inside your organization? Does it express a genuine point of

view? Will customers who have interacted with you in person

recognize your voice in your content?

Your Customize Strategy

1. Do you let customers choose what they hear from you? Have you

stopped broadcasting one-size-fi ts-all communications? Can

customers customize your content? Can they pick the topics they

are most interested in? Can they adjust the frequency? Can they

pick the format (email versus podcast versus RSS versus Twitter)?

2. Do you act as a fi lter for your customers? Do you help them to pick out
what’s relevant to them from the cacophony of voices, products,
and options in their digital world? Do you curate? Do you make

recommendations?

3. Are your products or services adaptable? Can customers adapt your

services or products to suit their interests and needs? Can each customer fi
nd a unique experience of his or her own?

4. Do you offer a personal choice? Do you learn from your interactions with
customers? Do you know what elements of your offering they

would most like to customize? Do you offer choices that refl ect

their passions and express their individuality?

Your Connect Strategy

1. Are you listening to what your customers are saying? Do you use tools to
track your buzz online? Do you know what is being said about

your brand, your competitors, and your business category? Are you

279

Self-Assessment

following and learning from the conversations of your current and

potential customers?

2. Are you making connections in popular online forums? Do you have a

presence in such forums as Facebook, LinkedIn, Twitter, or Google

Buzz? Can customers fi nd you there to ask a question or report a

problem? Can they “like” you or express support for your brand?

Can they introduce you to their online friends?

3. Are you proactive and helpful? Are you responding quickly to concerns
about your business that are voiced online? Do valued cus-

tomers know they can ask you for help? Are you generating good-

will and positive buzz by showing that you are helpful?

4. Are you connecting to your most passionate customers? Are you building
relationships online with your biggest supporters? Are you giv-

ing them opportunities to connect with you and champion you on-

line? Are you showing your critics that you are at least listening to

them?

5. Are you giving your customers a place to meet and share ideas? Are you
creating your own space for customers to connect and converse

online? Are you asking your customers for their ideas on how to im-

prove your business? Are you testing out new ideas, products, mes-

sages, or strategies to get their input? Do you have the skills to col-

lect, evaluate, and act on ideas from your customers?

6. Are you incorporating your customers’ voices into your own? Are the
testimonies of your customers refl ected in your communications?

Are you giving customers a chance to answer one another’s

questions? Has the conversation among your customers become a

vital part of your business?

Your Collaborate Strategy

1. Are you identifying your most motivated customers? Are you tapping into
their knowledge, skills, expertise, and enthusiasm? Are you
lowering the barriers of entry for customers to get involved? Are you

offering different levels of participation for those who can contri -

bute just a little and those who want to contribute a lot?

2. Are you giving customers ways to work together? Are you helping them to
collaborate in an ongoing fashion? Are you giving them the tools

280

Self-Assessment

to work together on shared goals and projects? Do they feel that

they are a part of something larger than themselves?

3. Are you splitting up large projects into small tasks that customers can
contribute to? Are you using tools like wikis that allow each participant to
contribute to a collective project? Are you giving customers

a choice of tasks that can be accomplished in a short time? Are you

tapping into the full breadth and expertise of customers who might

want to collaborate with you?

4. Are you asking for help on challenges you can’t solve yourself? Are you
posing your most bold and vexing business questions to your customers for
answers? Are you open to ideas that come from outside

your organization and willing to reward them? Do you understand

the values and motivations that might inspire your customers to

contribute?

5. Are you leaving parts of your business open for others to build upon?

Are you providing datasets for your customers to freely use? Are you
using Web-based platforms to make it easy for others to run a busi-

ness that contributes to yours? Are you using tools such as SDKs,

APIs, and open-source licenses to create an open platform where

the innovations of others can add to your own?

Your Internal Customer Network

1. Is your business transparent on the inside? How accessible is your own

data for yourself and your employees? Can you fi nd up-to-minute

information on your critical business metrics wherever you are and

at any time? Can you see and update your data through the Web

from any secure device?

2. Are you using collaborative tools for work? Are you harnessing tools such
as wikis, threaded discussions, collaboratively edited documents, and
internal social networks? Are you using them to share

knowledge, assemble fl exible teams, and collaborate on projects?

3. Is your organization pervasively networked? Are you training all your

employees in new digital skills and tools? Have you liberated your

network strategy from the “social media interns” in your public rela-

tions department? Are you embracing customer networks in every

division of your business: market research, product development,

281

Self-Assessment

marketing, sales, customer support, human resources, and more?

Are you using networks to collaborate across divisions?

4. Are you constantly learning, listening, and sharing with networks? Are
you using networks to be more responsive to customers? Are you

constantly learning from constituents of all kinds (business partners,

end consumers, press, volunteers)? Are you lowering the boundaries

that stand between those who are inside and outside your organi-

zation? Are you becoming more open to new ideas?

282

How to Continue the

Conversation Online

This book is complete and will go out into the world without updates,

additions, or links; such is the technology of books. But of course, the

topic of customer networks will not stand still, and neither will my re-

search and writing.

I hope you will join me at my Web site: www.davidrogers.biz.

There, on my blog and media pages, I will continue to share new ideas

and put into practice the strategies outlined in this book.

You can, of course, access the site from any browser on any

computer or mobile device. The site will aim to engage you with fre-

quently updated content, including video, audio, slide decks, blog posts,

tweets, links to further reading, and more. The site will offer options to
customize that content by sorting cases by the industries and topics

most relevant to you. I hope you will connect with me and others by

sharing your ideas, feedback, and questions in the comments sections

and on my linked presences in Twitter, LinkedIn, and Facebook. And I

invite you to collaborate by contributing examples of effective strate-

gies from your own organizations or from others that you witness. There

are far too many important trends and innovative approaches to cus-

tomer networks unfolding every day for one lone author to properly fol-

low, record, and share.

As I fi nish this manuscript, I have already started to collect and

post more cases from my daily research and the advice of others in my

network. So please stop by and join the network. I look forward to see-

ing you there!

283

Cases and Examples by Industry

Consumer packaged goods

craigslist

Coca-Cola

eBay

Frito-Lay (Doritos)
My Virtual Model

General Mills

Ponoko

Kraft Foods

Wine Library

Mars (Skittles)

Zazzle

Red Bull

Tropicana

Retail

Burger King

Consumer durables

Home Depot

Blendtec

Kogi Korean BBQ

Masi

Naked Pizza

Weber

Sears

Starbucks
Fashion

Abercrombie & Fitch

Health Care

Adidas

Lifescan

Burberry

Methodist University Hospital in

Nike

Memphis

Styleshake

PatientsLikeMe

Threadless

Pfi zer

Proteus Biomedical

Etail

Sermo

Amazon

CD Baby

Cases and Examples by Industry

Toys and Games

Travel and Hospitality

Ganz (Webkinz)

Affi nia Hotels

Hasbro

Intercontinental Hotels

LEGO

United Airlines

Xbox

Virgin America

Zipcar

Telecom

Comcast

Financial Services

Motorola

American Express

Sprint

Bank of America

Fidelity

Web

HSBC
Boxee

TradeKing

CitySense

USAA

Evernote

IT and Software

Facebook

Amazon Web Services

Foursquare

Dell

Google (Android)

HP

Innovid

Linux

Kickstarter

Microsoft

Layar

Mozilla (Firefox)

Meetup

salesforce.com
Twitter

SAP

Urbanspoon

Yelp

B2B / Business Services

Cisco

Consumer Electronics

GE

Apple (iPhone)

IBM

Dash Navigation

InnoCentive

Dell

Intuit

MakerBot

Flip Video

Media and Entertainment

RIM (Blackberry)

Bravo Media

Edmunds
Automotive

Epicurious.com

Ford Motor Company

Netfl ix

Mercedes-Benz

Nickelodeon ( iCarly)

Mini Cooper

OnDemandBooks (Espresso)

Nissan

Pandora

Toyota

Wikipedia

285

Cases and Examples by Industry

News

Nonprofi t

CNN

DonorsChoose

The Guardian

Kiva
NPR

Khan Academy

Spot.us

March of Dimes

The Washington Post

The X Prize Foundation

TheExtraordinaries

Arts

Birch, Diane (musician)

Politics and Government

Meyer, Stephenie (author)

Cities of Boston, New York, and

Skistimas, Brad (musician)

San Francisco

Spring Awakening

NASA

Obama Campaign 2008

Offi ce of National Intelligence

Transportation Security Adminis-

tration
U.S. Army

286

Notes

Chapter 1. The Customer Network Revolution

1. The analysis of online comments, conducted by Visible Measures, was

reported in Jennifer Van Grove, “United Breaks Guitars Surpasses 3 Million

Views in 10 Days,” Mashable, July 15, 2009,
http://mashable.com/2009/07/15/united-

breaks-guitars/.

2. Visitors to Coca-Cola fan page on Facebook, “Wall,” Facebook, http://

www.facebook.com/cocacola (accessed June 2009).

3. Profi tability fi gures are from Max Chafkin, “The Customer Is the

Company,” Inc. Magazine, June 2008,

http://www.inc.com/magazine/20080601/

the-customer-is-the-company.html.

4. Deloitte Development LLC, “2009 Tribalization of Business Study:

Transforming Companies and Communities with Social Media,” October 5,

2009,

http://www.deloitte.com/assets/Dcom-UnitedStates/Local
percent20Assets/Documents/

TMT_us_tmt/us_tmt_TribofBusFlipBook_100609.pdf. The study surveyed

“400+

companies that have created and maintain online communities.”

5. A. H. Maslow, “A Theory of Human Motivation,” Psychological Review

50 (1943): 370–96.

Chapter 2. Network Science and Lessons for Business

1. Todd’s own telling of his Abercombie & Fitch mission can be found,

along with YouTube video of the exploit, on his blog at Charlie Todd, “No
Shirts,”

The Improv Everywhere Blog, October 17, 2007,

http://improveverywhere.com/

2007/10/17/no-shirts/.

2. Howard Rheingold, Smart Mobs: The Next Social Revolution (New

York: Basic Books, 2002).

287

Notes to Pages 29–53

3. Information on Euler’s original paper can be found at the Euler Ar-

chive, “E53—Solutio problematis ad geometriam situs pertinentis,” The

Euler Archive

at Dartmouth College,
http://www.math.dartmouth.edu/~euler/pages/E053.html.

4. Albert-László Barabási, Linked: How Everything Is Connected to

Everything Else and What It Means (New York: Plume, 2003), provides an
excellent introduction and overview of the science of networks. Barabási
tells the story of Euler and the Königsberg Bridge problem at 10–12.

5. Barabási, Linked, 3–4.

6. Duncan Watts, “Measuring Diffusion and Infl uence on Twitter”

(BRITE ’10 Conference, New York, March 31, 2010).

7. Barabási, Linked, 27–34.

8. Jakob Nielsen, “Participation Inequality: Encouraging More Users to

Contribute,” Jakob Nielsen’s Alertbox, posted October 9, 2006,

http://www.useit

.com/alertbox/participation_inequality.html.

9. Barabási, Linked, 44–57.

10. Clay Shirky, Here Comes Everybody: The Power of Organizing without

Organizations (London: Penguin, 2008), 179–81.

11. There are many different measures for what percentage of Internet

users are content creators rather than simply consumers, depending on what
is measured to represent “created content.” This fi gure is from eMarketer,
based on the percent of U.S. Internet users ages fourteen to seventy-fi ve
maintaining a social networking profi le (in 2008: 48 percent; in 2009: 57
percent). This measure is ex-cerpted from an eMarketer report and reported
in Jennifer van Grove, “Baby Boomers and Seniors Are Flocking to
Facebook [STATS], ” Mashable, http://mashable

.com/2010/01/28/baby-boomers-social-media.

12. Clay Shirky, “Tools and Transformations,” Penguin Group USA’s

Blog, March 11, 2008, http://us.penguingroup.com/static/html/blogs/tools-

and-

transformations-clay-shirky.

13. Elizabeth L. Eisenstein, The Printing Revolution in Early Modern

Europe (Cambridge: Cambridge University Press, 1983).
14. For a summary of research into the hierarchy of effects, see Thomas

Barry, “The Development of the Hierarchy of Effects: An Historical

Perspective,”

Current Issues and Research in Advertising (1987): 251–95.

15. These fi rst four stages of the purchase funnel are sometimes labeled

Awareness, Interest, Desire, Action—abbreviated as the AIDA model—as

per one of the fi rst models of a hierarchy of effects; Edward K. Strong, Jr.,
“Theories of Selling,” Journal of Applied Psychology 9 (1925): 75–86.

Chapter 3. ACCESS

1. Jeff Zeleny, “Obama Keeps His BlackBerry in a Hard-Fought E-Victory,”

New York Times, January 22, 2009,

http://www.nytimes.com/2009/01/23/us/politics/

23berry.html?_r=3&scp=15&sq=obama percent20blackberry&st=cse.

288

Notes to Pages 54–72

2. Al Jazeera, “Focus: One Month In Kabul,” Al Jazeera, February 7, 2009,

http://english.aljazeera.net/focus/2009/02/20092238554740328.html.

3. Associated Press, “Ex-Taliban Diplomat Hooked on His iPhone,” March

4,

2009, http://www.smh.com.au/news/technology/extaliban-diplomat-hooked-
on-his-iphone/

2009/03/04/1235842465754.html?page=fullpage#contentSwap1.

4. Associated Press, “Ex-Taliban Diplomat.”

5. BusinessWire, “Best Buy® Mobile Survey Reveals America’s Appetite

for Smartphones and the Killer Apps They Can’t Live Without,” June 30,
2009,

http://www.businesswire.com/portal/site/home/permalink/?
ndmViewId=news_view

&newsId=20090630006051&newsLang=en. This public press release

contains key highlights from Best Buy’s survey, including the numbers I
have cited here.

6. Ben Parr, “In-Flight Wi-Fi: 76 Percent of People Will Change Airlines

to Have It, ” Mashable, http://mashable.com/2009/08/31/w-fi -alliance-poll.

7. Salman Khan, “Khan Academy” (Gel 2010 Conference, New York,

April 30, 2010).

8. Coca-Cola Enterprises’ use of cloud computing by its merchandisers

is detailed in Steve Hamm, “How Cloud Computing Will Change Business,”

BusinessWeek, June 4, 2009..

9. Nicholas Carr, The Big Switch (New York: W. W. Norton, 2008).

10. Dan Hope, “IPhone Can Be Addicting, Says New Survey,” MSNBC.

com, March 8, 2010, http://www.msnbc.msn.com/id/35768107. The survey

was of

two hundred Stanford University students, 70 percent of whom had owned

their iPhones for less than a year.

11. Steve Rubel, “Bye Bye Boredom, We Hardly Knew Ya,” Micro Persua-

sion, June 5, 2009, http://www.micropersuasion.com/2009/06/bye-bye-

boredom-we-

hardly-knew-ya.html.
12. Roger Entner, “Smartphones to Overtake Feature Phones in U.S.

by 2011, ” Nielsen Wire, March 26, 2010,

http://blog.nielsen.com/nielsenwire/

consumer/smartphones-to-overtake-feature-phones-in-u-s-by-2011.

13. Hamm, “How Cloud Computing Will Change Business.”

14. Six hundred million daily searches included queries to Twitter’s API

by outside services, as announced by Twitter’s founders at the Chirp

conference and reported by Nick Bilton, “Chirp, Twitter’s First Developer
Conference, Opens Its Doors,” New York Times’s Bits Blog, April 14, 2010,
http://bits.blogs.nytimes.com/

2010/04/14/twitterers-gather-at-chirp-twitters-fi rst-developer-conference.

15. Hamm, “How Cloud Computing Will Change Business.”

16. Jay Greene, “How Nike’s Social Network Sells to Runners,” Business-

Week, November 6, 2008,

http://www.businessweek.com/magazine/content/08_46/

b4108074443945.htm. U.S. market share for Nike running shoes is reported

byMatt Powell, an analyst at the market research fi rm SportsOneSource of
Princeton, NJ. Powell is quoted as saying that “a signifi cant amount of the
growth comes from Nike+.”

17. Estimate of 15 billion chips is by Intel, and reported by Stacey Hig-

289

Notes to Pages 76–95

ginbotham, “Intel Inside Becomes Intel Everywhere,” Gigaom, March 2,

2009,
http://gigaom.com/2009/03/02/intel-inside-becomes-intel-everywhere.

18. Danah Boyd, “I Want My Cyborg Life,” apophenia blog, July 13, 2009

http://www.zephoria.org/thoughts/archives/2009/07/13/i_want_my_cybor.ht
ml. This

is a great story of culture clashes and the blending of online and offl ine
worlds in public space, both the original blog post and the comments that
followed it.

19. Boyd, “I Want My Cyborg Life.”

Chapter 4. ENGAGE

1. Dana Goodyear, “I ❤ Novels,” New Yorker, December 22, 2008,

http://www.newyorker.com/reporting/2008/12/22/081222fa_fact_goodyear. I
am

indebted to Goodyear’s excellent article for the story of Mone, Maho-I-land,

and Goma Publishing and for her introduction to keitai shosetsu.

2. Michael Learmonth, “Time for Networks to Figure Out the Internet:

Average Network TV Viewer Now 50 Years Old,” Silicon Alley Insider,

June 27,

2008, http://www.businessinsider.com/2008/6/average-network-tv-watcher-
now-50-

years-old. Learmonth’s source is a report by media buying fi rm Magna

Global. Fifty is the median age of broadcast viewers (hence, half are fi fty or
older).

3. Quantcast, YouTube.com, measure for U.S. monthly traffi c in January

2010, http://www.quantcast.com/youtube.com (accessed March 16, 2010).

4. “Internet Activity Index,” Online Publishers Association, http://www.

online-publishers.org/internet-activity-index.

5. Bret Swanson, “Eric on the Exafl ood,” May 5, 2008, Progress & Free-

dom Foundation Blog,

http://blog.pff.org/archives/2008/05/print/005143.html.

Quoting Eric Schmidt speech at the Milken Institute Global Conference,

April 29, 2008.

6. Kevin Kelly, “Better Than Free,” The Technium, January 31, 2008,

http://www.kk.org/thetechnium/archives/2008/01/better_than_fre.php.

7. Lewis Wallace, “Blink-182 Rocks ‘Augmented Reality’ Show in Dori-

tos Bag,” Wired, July 6, 2009,

http://www.wired.com/underwire/2009/07/blink-182-

rocks-augmented-reality-show-in-doritos-bag.

8. Stephen Voltz, “TV 2.0, Online Video, and the Future of User-Gener-

ated Content” (BRITE ’08 Conference, New York, February 8, 2008).

9. Voltz, “TV 2.0.”

10. Mike Perlman, “American Express Open Forum Leverages Social

Media,” Compete blog, February 12, 2009,

http://blog.compete.com/2009/02/12/

american-express-open-forum-twitter/. Compete is a Web analytics fi rm.

11. Karl Greenberg, “American Express CMO: ‘Go from Disrupting to

Empowering,’” MediaPost, April 18, 2008,

http://www.mediapost.com/publications/
index.cfm?fa=Articles.showArticle&art_aid=80877.

12. YouTube Channel stats as of July 25, 2009: Youtube.com/whitehouse:

290

Notes to Pages 95–111

79,000 subscribers, two million channel views.

Youtube.com/barackobamadotcom: 175,000 subscribers, twenty-one million
channel views.

13. Kermit Pattison, “Selling Wine the Web 2.0 Way,” Fast Company,

September 16, 2008,

http://www.fastcompany.com/articles/2008/09/interview-gary-

vaynerchuk.html.

14. Channel views as measured on YouTube as of July 25, 2009: offi cial

YouTube channels youtube.com/totallytrucked,

youtube.com/nutsaboutsouthwest, youtube.com/toysrusonline, and
youtube.com/kodaktube.

15. Rita Chang, “Game Advertising Goes Mainstream,” Advertising Age,

July 13, 2009, http://adage.com/print?article_id=137829. Data from Frank

N. Magid Associates and the Entertainment Software Association.

16. Chang, “Game Advertising Goes Mainstream,” citing a study commis-

sioned by MTV Networks.

17. This forecast is by IDC video game market analyst Billy Pidgeon,

quoted in Matt Hartley, “In-Game Ad Market Comes of Age with Microsoft-

EA

Deal,” Globe and Mail, March 18, 2008.

18. “Toys with a Second Life,” BusinessWeek, December 20, 2007, http://

www.businessweek.com/print/magazine/content/07_53/b4065091329372.ht
m. The

sales estimate is by Sean McGowan, an analyst at Needham.

19. Business Insider, “Webkinz,” Silicon Alley Insider, March 28, 2008,

http://www.businessinsider.com/companies/webkinz. The fi gure for unique

visitors is attributed to Compete (a Web analytics fi rm).

20. Sandy Carter, phone interview by David Rogers, December 18, 2009.

Chapter 5. CUSTOMIZE

1. Matt Richtel, “What Convergence? TV’s Hesitant March to the Net,”

New York Times, February 15, 2009,

http://www.nytimes.com/2009/02/16/technology/

internet/16chip.html?_r=2. Quoting Greg Belloni, a spokesman for Sony.

2. “Top 1,000,000 Sites, ” Quantcast Corporation, http://www.quantcast

.com/top-sites-4901. As of March 16, 2010, Quantcast’s site registered

489,900 sites with average traffi c of more than two thousand U.S. monthly
visitors.

3. Raymond Williams, Culture and Society, 1780–1950 (New York: Co-

lumbia University Press, 1983), 300.

4. Barry Schwartz, The Paradox of Choice: Why More Is Less (New York:
Ecco, 2003).

5. Clive Thompson, “If You Liked This, You’re Sure to Love That,” New

York Times, November 23, 2008,

http://www.nytimes.com/2008/11/23/magazine/
23Netfl ix-t.html. Thompson’s article describes the Netfl ix Prize
competition; the work of Bob Bell, Len Bertoni, and Martin Piotte; the
Napoleon Dynamite Problem; and fi gures on the value of backlist catalog
for Netfl ix and other DVD rental companies.

291

Notes to Pages 112–135

6. Sheena S. Iyengar and Mark R. Lepper, “When Choice Is Demotivat-

ing: Can One Desire Too Much of a Good Thing?” Journal of Personality
and Social Psychology 79 (2000): 995–1006.

7. Schwartz, Paradox of Choice.

8. Clay Shirky, “How Social Media Can Make History” (lecture, TED@

State, Washington, DC, June 14, 2009),

http://www.ted.com/talks/clay_shirky_how_

cellphones_twitter_facebook_can_make_history.html.

9. Thompson, “If You Liked This.” Discussion of singular value decom-

position in solutions to the Netfl ix Prize.

10. Fabrizio Salvador, Pablo Martin de Holan, and Frank Piller, “Crack-

ing the Code of Mass Customization,” MIT Sloan Management Review,

April 1,

2009, http://sloanreview.mit.edu/the-
magazine/articles/2009/spring/50315/cracking-

the-code-of-mass-customization/.

11. Salvador, de Holan, and Piller, “Cracking the Code of Mass Custom-

ization.”
12. The Pandora Music Genome Project is well described by Rob Walker,

“The Song Decoders,” New York Times, October 14, 2009,

http://www.nytimes.com/

2009/10/18/magazine/18Pandora-t.html?
_r=1&ref=technology&pagewanted=all.

13. Number of custom radio stations (as of spring 2009), Salvador, de

Holan and Piller, “Cracking the Code of Mass Customization,” 72; number
of

users, Chris Nuttall, “Pandora Could Be a Hit in 2010 IPO parade,”

ft.com/tecblog,

December 16, 2009, http://blogs.ft.com/techblog/2009/12/pandora-could-be-

a-hit-

in-2010-ipo-parade/.

14. Flannery’s quotation is from Knowledge@Wharton, “When Small

Loans Make a Big Difference,” Forbes, June 3, 2008,

http://www.forbes.com/2008/

06/03/kiva-microfi nance-uganda-ent-fi n-cx_0603whartonkiva.html.

15. Paul Slovic, “‘If I Look at the Mass I Will Never Act’: Psychic Numb-

ing and Genocide,” Judgment and Decision Making 2 (April 2007): 79–95,
http://

journal.sjdm.org/7303a/jdm7303a.htm.

16. Bruce Kasanoff, “On Demand Books Grow Rapidly, While Tradi-

tional Titles Shrink,” Now Possible blog, October 2009,

http://www.nowpossible
.com/2009/10/on-demand-books-grow-rapidly-while-traditional-titles-
shrink/.

17. Stephen Baker, in-person interview by David Rogers, July 28, 2009.

Chapter 6. CONNECT

1. David Greene, “With Jobs Scarce, Soldiers Re-Enlist,” NPR, April 10,

2009, http://www.npr.org/templates/story/story.php?storyId=102974015.
Tells the story of Jeff and Sarah Taylor.

2. Dan Baum, “Battle Lessons: What the Generals Don’t Know,” New

Yorker, January 17, 2005,

http://www.newyorker.com/archive/2005/01/17/050117fa_

fact. Tells the story of Nate Allen and Tony Burgess starting
CompanyCommand.com.

292

Notes to Pages 136–144

3. Facebook, “Statistics,” Facebook Press Room, 2010, http://www.face

book.com/press/info.php?statistics (accessed March 17, 2010).

4. Robin Wauters, “World Map of Social Networks Shows Rise of Face-

book,” TechCrunch, December 21, 2009,

http://www.techcrunch.com/2009/12/21/

world-map-social-networks.

5. Justin Smith, “Fastest Growing Demographic on Facebook: Women

over 55,” Inside Facebook, February 2, 2009, http://www.insidefacebook.

com/2009/02/02/fastest-growing-demographic-on-facebook-women-over-
55/.

6. Phyllis Korkki, “An Online Outlet for Creating and Socializing,” New
York Times, August 30, 2009,
http://www.nytimes.com/2009/08/30/business/30count

.html. Korkki cites Forrester Research.

7. Ryan Junee, “Zoinks! 20 Hours of Video Uploaded Every Minute!”

YouTube Blog, May 20, 2009, http://www.youtube.com/blog?

entry=on4EmafA5MA.

8. Clay Shirky, estimate of Twitter volume per minute, Twitter.com/

cshirky, July 13, 2009 approx. 10 pm EST,

http://twitter.com/cshirky/status/26252

20015.

9. Erik Qualman, “Statistics Show Social Media Is Bigger Than You

Think,” Socialnomics, Social Media Blog, August 11, 2009,

http://socialnomics.

net/2009/08/11/statistics-show-social-media-is-bigger-than-you-think/.

10. “Wikipedia,” Wikipedia, http://en.wikipedia.org/wiki/Wikipedia (ac-

cessed March 17, 2010). This is a semi-protected page.

11. Heather Champ, “4,000,000,000,” Flickr blog, October 12, 2009,

http://blog.fl ickr.net/en/2009/10/12/4000000000/.

12. Facebook, “Statistics,” Facebook Press Room, 2010, http://www.face

book.com/press/info.php?statistics (accessed March 17, 2010).

13. Jennifer Van Grove, “STUDY: 57 Percent of TV Viewers Use the Web

Simultaneously,” Mashable, September 14, 2009,

http://mashable.com/2009/09/14/

web-tv-study.

14. Clare Baldwin, “Twitter Helps Dell Rake in Sales,” Reuters, June 12,

2009, http://www.reuters.com/article/idUSTRE55B0NU20090612?sp=true.

15. Simon Dumenco, “The Coming End of YouTube, Twitter and Face-

book Socialism,” Ad Age, May 4, 2009,

http://adage.com/mediaworks/article?article_

id=136388

16. Quoted by Ben Schott, “Twitturgy: Religious Tweeting. (Twitter +

liturgy.),” Schott’s Vocab, March 26, 2009,

http://schott.blogs.nytimes.com/2009/03/

26/twitturgy/.

17. Malia Wollen, “Lights, Camera, Contraction,” New York Times, June

11, 2009, http://www.nytimes.com/2009/06/11/fashion/11BIRTHS.html.

Tells the stories of Rebecca Sloan and Sarah Griffi th.

18. Seth Godin, Tribes (New York: Portfolio, 2008).

19. “Global Advertising: Consumers Trust Real Friends and Virtual

Strangers the Most,” July 7, 2009,

http://blog.nielsen.com/nielsenwire/consumer/

293

Notes to Pages 145–165

global-advertising-consumers-trust-real-friends-and-virtual-strangers-the-
most/. Re-

sults are from the Nielsen Global Online Consumer Survey of more than
twenty-fi ve thousand Internet consumers from fi fty countries.

20. Ibid.

21. Gita V. Johar, Matthias Birk, and Sabine Einwiller, Brand Recovery:
Communication in the Face of Crisis (New York: Columbia Business School
Case Study, 2008). Jarvis tells the story himself in Jeff Jarvis, What Would
Google Do?

(New York: HarperBusiness, 2009), 12–20.

22. Michael Sragow, “Hollywood’s All A-twitter over Instant Fan Reviews,”

Baltimore Sun, August 19, 2009, http://articles.baltimoresun.com/2009–08–

19/

features/0908180074_1_twitter-tweets-bruno.

23. Andrew Hampp, “Forget Ebert: How Twitter Makes or Breaks Movie

Marketing Today, ” October 5, 2009,

http://adage.com/madisonandvine/article?

article_id=139444.

24. Fred Wilson, “Is Momblogging the New Radio?” A VC, June 2, 2009,

http://www.avc.com/a_vc/2009/06/is-momblogging-the-new-radio.html.

25. “The World’s Most Popular Brands,” ENGAGEMENTdb, July 2009,

http://www.engagementdb.com/downloads/ENGAGEMENTdb_Report_200
9.pdf.

26. Anthony DeBarros, Carol Memmott, and Bob Minzesheimer, “Book

Buzz: What’s New on the List and in Publishing,” USAToday.com, April 8,
2009,

http://www.usatoday.com/life/books/news/2009–04–08-book-buzz_N.htm.

27. Shashank Nigam, interview by David Rogers, November 5, 2009.

28. Lionel Menchaca, “Expanding Connections with Customers through

Social Media,” June 29, 2009, Direct2Dell,

http://en.community.dell.com/blogs/

direct2dell/archive/2009/12/08/expanding-connections-with-customers-
through-

social-media.aspx.

29. Lisa Hsia, “Bravo TV’s Digital Media and Marketing Strategies”

(BRITE ’09 Conference, New York, March 4, 2009),

http://www.briteconference

.com/Videos/Hsia.aspx.

30. Brent Snavely, “100 Web-Savvy Drivers Review Ford Fiesta,” Free

Press, August 16, 2009,

http://www.freep.com/article/20090816/BUSINESS01/

908160432/1322/100-Web-savvy-drivers-review-Ford-Fiesta
percent26template=

fullarticle (accessed September 9, 2009).

31. Nielsen survey reported in Brian Stelter, “Water-Cooler Effect: Inter-

net Can Be TV’s Friend,” New York Times, February 24, 2010, http://
www.nytimes

.com/2010/02/24/business/media/24cooler.html.
32. Brian Quinton, “Doing Well by Doing Good,” Promo, November 1,

2008, http://promomagazine.com/interactivemarketing/1101-amex-digitas-
campaign/.

33. Idea markets are frequently confused with “prediction markets” such

as the Iowa Electronic Markets, where users place bets up to fi ve hundred

dollars of real money on the outcome of future events, such as “Will John
McCain Win the 2008 Presidential Election?” The Iowa Electronic Markets
are famous for beating 294

Notes to Pages 165–180

many polls in predicting elections and were once considered by the Pentagon
for an exchange that would bet on likely targets for terrorist attacks (the plan
was canceled once it became public). In his book The Wisdom of Crowds:
Why the Many Are Smarter Than the Few and How Collective Wisdom
Shapes Business, Economies, Societies and Nations (New York: Doubleday,
2004), James Surowiecki argues that the accuracy of such prediction markets
stems from the diversity of opinion, independence, decentralization, and
aggregation of members’ opinions.

However, while an idea market such as Cisco’s or Motorola’s or GE’s also

harnesses collective intelligence, it is fundamentally different from a

prediction market. There is no binary prediction of a future event that either
will or will not occur (McCain either wins or he doesn’t), so there can be no
fi nal judgment call of whether the collective wisdom of an idea market was
“correct.” Investors in idea markets cannot be motivated by a reward for
picking correctly. Fortunately, employee and customer networks usually
have a great deal of intrinsic motivation to

“invest” in the ideas they judge best based on their own unique knowledge.

34. David Hsieh, “Open Source Models of Innovation: Crowd-Sourcing,

Open Platforms, and Customer Co-Creation” (BRITE ’08 Conference, New

York,
February 8, 2008).

35. Stuart Elliott, “And the Recaps of the Super Bowl Spots Just Keep on

Coming,” Media Decoder,

http://mediadecoder.blogs.nytimes.com/2010/02/09/and-

the-recaps-of-the-super-bowl-spots-just-keep-on-coming/. Source on
viewership is

the Nielsen Company.

36. Reena Jana, “How Intuit Makes a Social Network Pay,” BusinessWeek,

July 2, 2009,
http://www.businessweek.com/magazine/content/09_28/b4139066

365300.htm.

37. Shawndra Hill, Foster Provost, and Chris Volinsky, “Network-Based

Marketing: Identifying Likely Adopters via Consumer Networks,” Statistical

Science 21 (2006): 256–276.

38. Brian Morrissey, “Connect the Thoughts,” Adweek, June 28, 2009,

http://www.adweek.com/aw/content_display/news/e3i344418db676344f04f7
c79ca44

7c6e96.

Chapter 7. COLLABORATE

1. David Talbot, “How Obama Really Did It,” Technology Review, Sep-

tember–October 2008. http:// www.technologyreview .com/web/21222.

Subscrip-

tion may be needed to access the full article.

2. Peter Overby and Renee Montagne, “Obama Campaign Shatters Fund -

raising Records,” NPR, December 5, 2008,

http://www.npr.org/templates/story/story

.php?storyId=97843649.

3. Max Chafkin, “The Customer Is the Company,” Inc. Magazine, June

2008, http://www.inc.com/magazine/20080601/the-customer-is-the-
company.html.

295

Notes to Pages 181–193

4. Vivian Schiller, “Engaging Audiences in a Changing Media Land-

scape: The Future of Public Radio” (BRITE ’10 Conference, New York,
March 31, 2010).

5. Timeline Strategy Consulting, “How Much Profi t Is Apple Making

from the App Store?” Seeking Alpha, April 20, 2009,

http://seekingalpha.com/

article/131730-how-much-profi t-is-apple-making-from-the-app-store. Apple

does

not disclose its revenue on paid iPhone apps, but this post offers a detailed
analysis from public information, arguing that Apple’s share of the revenue
was approxi-mately $150 million by the time it reached its one billionth
(paid and unpaid) app download in April 2009.

6. Philip Elmer-DeWitt, “iPhone Sales Grew 245 Percent in 2008—

Gartner,” Fortune.com, March 12, 2009,

http://brainstormtech.blogs.fortune.cnn
.com/2009/03/12/iphone-sales-grew-245-in-2008-gartner/.

7. Don Tapscott and Anthony D. Williams, Wikinomics (New York: Pen-

guin, 2006).

8. Jeff Howe, Crowdsourcing: Why the Power of the Crowd Is Driving the

Future of Business (New York: Random House, 2008).

9. Yochai Benkler, The Wealth of Networks: How Social Production Trans-

forms Markets and Freedom (New Haven: Yale University Press, 2006), 59–
90.

10. Thomas W. Malone, Robert Laubacher, and Chrysanthos Dellarocas,

Harnessing Crowds: Mapping the Genome of Collective Intelligence, MIT

Sloan Research Paper no. 4732-09, February 3, 2009.

11. Clay Shirky, “Supernova Talk: The Internet Runs on Love,” Shirky.

com, February 1, 2008,

http://www.shirky.com/herecomeseverybody/2008/02/super

nova-talk-the-internet-runs-on-love.html.

12. Dave Webb, “Why the Cisco I-Prize Is So Powerful,” ITbusiness.ca,

October 22, 2008, http://www.itbusiness.ca/it/client/en/home/News.asp?

id=50430.

13. Cliff Kuang, “Crispin Porter + Bogusky’s Crowdsourcing Experiment

Backfi res,” Fast Company, August 28, 2009,

http://www.fastcompany.com/blog/

cliff-kuang/design-innovation/cripins-latest-experiment-backfi res.

14. Howe, Crowdsourcing, 2008.

15. Eric Bonabeau, “Decisions 2.0: The Power of Collective Intelli-

gence,” MIT Sloan Management Review, January 9, 2009,

http://sloanreview.mit

.edu/the-magazine/articles/2009/winter/50211/decisions-20-the-power-of-
collective-

intelligence.

16. Darren Sharp and Mandy Salomon, “User-led Innovation: A New

Framework for Co-creating Business and Social Value,” Swinburne

University of Technology (January 2008), 21.

17. Kevin Kelly, “The Bottom Is Not Enough,” The Technium, February

12, 2008,
http://www.kk.org/thetechnium/archives/2008/02/the_bottom_is_n.php.

18. John Geraci, “The Future of Our Cities: Open, Crowdsourced, and

296

Notes to Pages 196–215

Participatory,” O’Reilly Radar, April 6, 2009,

http://radar.oreilly.com/2009/04/the-

future-of-our-cities-open.html.

19. Willy de Zutter, “SETI@home—Credit Overview,” BOINCstats. http://

www.boincstats.com/stats/project_graph.php?pr=sah (Retrieved June 28,

2009).

20. In some discussions of “collective intelligence,” involuntary systems

for harnessing user input are included, such as Amazon’s collaborative fi

ltering (which observes what books you look at on the site, so as to make
better recommendations to others visiting the same pages). However, the
involuntary and often un-conscious nature of the user’s contribution makes
these cases less than a “collaboration” from the customer’s point of view.
Therefore, these cases are not included in this defi nition of passive
contribution systems.

21. Scott Cook, “The Contribution Revolution: Letting Volunteers Build

Your Business,” Harvard Business Review, October 2008.

22. Michael Andersen, “Four Crowdsourcing Lessons from the Guard-

ian’s (Spectacular) Expenses-Scandal Experiment,” Nieman Journalism Lab,

June

23, 2009, http://www.niemanlab.org/2009/06/four-crowdsourcing-lessons-

from-the-

guardians-spectacular-expenses-scandal-experiment.

23. Dava Sobel, Longitude: The True Story of a Lone Genius Who Solved

the Greatest Scientifi c Problem of His Time (New York: Penguin, 1995).

24. “The Rise of InnoCentive,” Economist, September 17, 2009, http://

www.economist.com/business-fi nance/displaystory.cfm?
story_id=14460185.

25. Gary Wolf, “Why Craigslist Is Such a Mess,” Wired, August 24, 2009,

http://www.wired.com/entertainment/theweb/magazine/17–09/ff_craigslist.

26. Tony van Veen, “CD Baby 2008 Stats for CD and Download Sales,”

cdbaby, January 15, 2009,

http://www.cdbaby.org/stories/09/01/15/8158752.html.

27. Tham Yuen-C, “Boy, 9, Writes Program Which Scores 480,000 Hits,”
Straits Times, April 1, 2009.

28. Claudine Beaumont, “Apple’s iPhone Is a Developer’s Goldmine,”

Daily Telegraph, April 16, 2009,

http://www.telegraph.co.uk/technology/apple/

5163678/Apples-iPhone-is-a-developers-goldmine.html. The fi gure given

for Nicholas’s earnings is £20,000.

29. Beaumont, “Apple’s iPhone.” The fi gure given for EuroSmartz’s earn-

ings is £160,000.

30. Howard Rheingold cited in Darren Sharp and Mandy Salomon,

“User-led Innovation: A New Framework for Co-creating Business and

Social

Value,” Swinburne University of Technology (January 2008), 20.

31. Yochai Benkler, “Openness in a Networked Society” (speech, NY

Open Video Conference 2009, New York, June 19, 2009).

32. Thomas Gensemer, “From BarackObama.com to AT&T: Using On-

line Communities to Engage, Energize, and Mobilize Constituents” (BRITE

Workshop on Online Communities, New York, October 16, 2008).

297

Notes to Pages 228–271

Chapter 8. Planning and Executing a Complete Customer Network

Strategy

1. Julia Werdigier, “Burberry Looks Online for Ways to Gain Custom-

ers,” New York Times, November 9, 2009,
http://www.nytimes.com/2009/11/10/

business/global/10burberry.html.

2. Erik Chang, “Costs around The World: Internet Access,” billshrink

.com, October 1, 2009, http://www.billshrink.com/blog/5787/internet-

penetration-

costs/.

3. Mark McClusky, “The Nike Experiment: How the Shoe Giant Un-

leashed the Power of Personal Metrics,” Wired, June 22, 2009.

Chapter 9. Creating the Customer Network–Focused Organization

1. Ajay K. Kohli and Bernard J. Jaworski, “Market Orientation: The

Construct, Research Propositions, and Managerial Implications,” Journal of

Marketing 54 (April 1990): 1–18.

2. Richard Binhammer, “Integrating Online Communities: From ser-

vice and product forums to a holistic approach to customer communities”

(BRITE

Workshop on Online Communities, New York, October 16, 2008).

3. Richard Binhammer, phone interview by David Rogers, December

17, 2009.

4. Lionel Menchaca, “Expanding Connections with Customers through

Social Media,” June 29, 2009, Direct2Dell,

http://en.community.dell.com/blogs/
direct2dell/archive/2009/12/08/expanding-connections-with-customers-
through-

social-media.aspx.

5. Binhammer interview.

6. Mark Yolton, phone interview by David Rogers, December 21, 2009.

7. Yolton interview.

8. Thomas Gensemer, phone interview by David Rogers, December 22,

2009.

9. Gensemer interview.

10. Ben Elowitz and Charlene Li, “ENGAGEMENTdb: Ranking the

Top 100 Global Brands,” ENGAGEMENTdb,

http://www.engagementdb.com/

downloads/ENGAGEMENTdb_Report_2009.pdf.

11. Christopher Palmeri, “Hasbro Learns to Spell B-O-T-C-H,” Business-

Week, August 7, 2008,

http://www.businessweek.com/magazine/content/08_33/

b4096034648201.htm?campaign_id=rss_topStories.

12. Chip Heath and Dan Heath, Made to Stick: Why Some Ideas Survive

and Others Die (New York: Random House, 2007), 25–28.

13. Tim Craig, “The ‘What If’ of Allen Haunts the GOP Race,” Washing-

ton Post, February 6, 2008, http://www.washingtonpost.com/wp-

dyn/content/article/

2008/02/05/AR2008020503237_pf.html.
14. Michael Wesch, “The Machine Is (Changing) Us” (speech, Personal

298

Notes to Pages 273–276

Democracy Forum, New York, June 30, 2009),

http://www.youtube.com/watch?v=

X6eMdMZezAQ.

15. Binhammer interview, 2009.

16. Hillary Rodham Clinton, “Remarks on Internet Freedom” (speech,

The Newseum, Washington, DC, January 21, 2010),

http://www.state.gov/secretary/

rm/2010/01/135519.htm. The complete text of the speech, well worth a read,

is

available in English, Arabic, Chinese, French, Persian, Russian, Spanish, and

Urdu.

299

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Index

Abercrombie & Fitch, 27–28

Agha-Soltan, Neda, 6, 139

Access strategy, 16–17, 55–57;

Ahmadinejad, Mahmoud, 6

approaches to, 57–76; creating, with

Allen, George, 270–71

customers in mind, 232; future of,

Allen, Nate, 134–35

76–77; keys to, 77–79; self-assessment

always-on Web connections, 16–17

of, 278

Amazon, 233; Amazon Marketplace,

action, as part of the purchase funnel,

127; Amazon Web Services, 98;

46, 47

collaborative fi ltering on, 115; ease

active contribution, 20, 192, 194, 196–200

of access to, 75–76; text reviews on,

Adidas, 119, 153

114; using menus with fi lters, 118

advertisement targeting, 172–73

American Express: Members Project,

advertising, skipping, 86–87

164; OPEN Forum, 92–93

advocacy, as part of the purchase

Android, 213–14

funnel, 47, 48–49

Ansari X Prize, 202–3

A-E-C-C-C strategies, 15–20

Apple, 21, 229; favoring Access and

affi liations, groups formed around, 143

Collaborate strategies, 231; iPhone

Affi nia Hotels, 124, 234–35

App Store, 181, 192, 231, 239–40.

Afghanistan, digital technology coming

See also iPhone

to, 54–55

Application Program Interfaces (APIs),

Agarwalla, Jayant, 264

184, 208, 210–12

Agarwalla, Rajat, 264

ATM for books, 128

aggregate ratings sites, 157

atomization, of content, 86

301
Index

attention, scarcity of, 85

bottom-up thinking, 190

augmented reality, 77, 83, 90

Boxee, 107, 118–19

authority, challenging, 6–7, 43, 214

Boyd, Danah, 76

automotive industry, with focus on

Brady, Sean, 141

customer networks, 258–59

brand assessment, 229

awareness: building, through forums,

branding, as part of Engage strategy,

158–59; as part of the purchase

89, 90–92

funnel, 46, 47

brands: bashing of, 7–8; integrated into

gaming, 101; loving, 8–9; shaped by

Baker, Stephen, 130

conversations, 144–47
banking, on demand, 60

Branson, Richard, 92

Bank of America, 60

Bravo Media, 157–58

Barakzai, Shukria, 54–55

BRITE conference, ix–x, xiii–xv, 23

bee colony, as networked intelligence,

Buck, James Earl, 140

3–4

Bug Battles, 203

Bell, Bob, 111

Burberry, 228, 229

bell curve, 36

Burger King, 172

benchmarking, 235

Burgess, Tony, 134–35

Benioff, Marc, 63

Burton, Jeremy, 70

Benkler, Yochai, 214

businesses: needing to reorient to

Bennett, Claire, 94

customer network model, 44–45;

Bertoni, Len, 111

needing to view customers as network

Bessonnitsyn, Sergey, 187

participants, 5; nurturing relation-

Best, Charles, 126

ships, 45; viewing customers as

Big Plays, 237

isolated and passive, 5

Big Seed strategy, 35

business models: creating through cus-

Big Switch, The (Carr), 64

tomer networks, 9–10; fear of letting

billboards, as social media, 139

go of, 265

Binhammer, Richard, 246, 247, 273

business objectives, lack of, 11

Birch, Diane, 146–47

business process management, 102–3

BlackBerry, 53–54, 74, 233

business-to-business (B2B) content, 98

Blendtec, 91

Blink-182, 90

capabilities: leveraging across domains,

Blodget, Henry, 92

237–38; new, developing within the

blog posts, 136

organization, 238–39

Blue State Digital, 176, 251

Carr, Nicholas, 64

BMW, 123–24

Carroll, Dave, 7–8, 42, 145, 272

books: on demand, 128; shortening of,

car-share market, 61

104; as social media, 139

Carter, Sandy, 103, 236

borderless, feature of customer net-

cause-related marketing, 274

work–focused organization, 253–54

CD Baby, 206–7

Boston, city of, iPhone app, 155

cell phone novel, 80–81

302

Index

change, resistance to, 263–65

communications networks, 30

childbirth, 142

communications objective, 226

choices: creating a platform for, 117,

CompanyCommand, 134–35

126–29; personalizing, 117, 125–26

competition, examining the landscape

choice schemas, 115–16

for, 234–35

Cinematch, 110–11, 118

concepts, ideation and selection of, for

Cisco, 22, 165; Innovation Prize (I-Prize),

customer network strategy, 235–37

187, 200, 203, 234

conferences, increased network access

CitySense, 157

at, 76

Clark, Wesley, 251

connection, 132; brands shaped by,

Clinton, Hillary, 178, 252, 275–76

144–47; customers seeking, 13–14;

cloud computing, 17, 58, 62–64

reasons for, 140–43

clusters, 35

Connect strategy, 16, 19, 135–38;

CNN, iReport, 180–81, 186–87, 189

approaches to, 147–48; creating,

Coca-Cola, 8–9, 64, 99, 146

with customers in mind, 233; future

Colbert, Stephen, 122, 269

of, 171–73; keys to, 173–75; self-

Collaborate strategy, 16, 19–20,

assessment of, 279–80

179–83; approaches to, 191–93,

consideration, as part of the purchase

194–95; creating with customers in

funnel, 46, 47

mind, 233; future of, 214–15; keys to,

consumer choice, growth of, 107–9

215–17; self-assessment of, 280–81

content: abundance of, 84–85; changing

collaboration, 14, 19–20, 49; drive for,

to match media, 104; creating value

179; failures, reasons for, 185; as fea-

through, 17–18; creation of, 33, 42;

ture of customer network–focused

distribution of, 85–87; increasing inter-

organization, 254–55; motivation for,

activity with, 104; matching to readers’

185–88, 203, 207; platform-based

preferences, 130; personal nature of,

approaches to, 192; project-based

95–97; reasons for seeking, 78–79;

approaches to, 192; technologies for,

specifi c, as part of Engage strategy,

183–85; tools for, 33

97–100; usefulness of, 92–94; user-

collaborative fi ltering, 115, 118, 119–20,

generated, 136. See also digital content

297n20

context collapse, 271

collaborative funding, 198–99

control, management’s desire for, 264

collaborative journalism, 180–81

conversations, value-added nature of,

collaborative network, needing top-

148, 168–71

down control, 191, 199–200

corporate social responsibility, 274

collaborative offi ce software, 184

craigslist, 86, 137, 205–6

Comcast, 145, 155

Crispin Porter + Bogusky, 188

commander’s intent, 267

crowdfunding, 198–99

comments, on corporate Web sites,

crowdsourcing, 182, 187–88

156–57

Cunningham, Ward, 183

commerce, tools for, 33

customer behaviors: in networks, 12–15;

communication, tools for, 33

paying attention to, 12

303

Index

customer-facing domains, 238

customer service: as the new public

customer focused organization, 243–44

relations, 273; as part of digital com-

customer insight, lack of, 11

munications strategy, 151–52, 154–55

customer-led branding, 269

Customize strategy, 16, 18, 107–10;

customer network behaviors, fi ve,

approaches to, 117–29; creating,

12–15, 16, 50

with customers in mind, 233; future

customer network focus, moving to,

of, 129–30; keys to, 131–32; self-

243–45

assessment of, 279

customer network–focused organiza-

tion, 245; cultural traits required for,

Daily Telegraph, The, 197–98

265–76; elements of, 253–55; indus-

Davis, John, 201

tries built around, future of, 256–62;

Dean, Howard, 176, 251

organizational change required for,

defi ned platforms, 192, 195, 204–7

263–65

DeHart, Jacob, 9–10

customer networks, 5; challenge of,

Dell: as a customer network–focused

10–12; core behaviors of, 12–15;

organization, 245–48, 254, 255; digi-

creating new business models

talnomads.com, 93, 247; IdeaStorm,

through, 9–10; defi ned, 31–33; ease

21, 162–63, 225, 226, 246–47; Jarvis

of group formation within, 38–39;

“Dell Hell” complaint, 145; reorgani-

giving power, independence, and

zation of, 247; responsiveness of,

infl uence to individuals, 5; hierarchy

272–73; Twitter accounts of, 247

of behaviors in, 14–15; internal, self-

Dell, Michael, 145, 246, 247, 267

assessment of, 281–82; as market

Dellarocas, Chrysanthos, 185

research, 150; power law distribution

Dickinson, Tom, 91

of, 37–38; shared affi nities of, 35;

Didorosi, Andy, 158

strategic planning for, 11–12; types

Diet Coke, and Mentos, 91–92

of, 33; understanding of, 277–78

differentiation, as element of concept

customer network strategies: business

testing, 236

impact of, 20–22; execution of,

digital business strategy, need for practi-

237–39; mapping, for customers,

cal approach to, x

organization, and competitors,

digital content: atomization of, 86;

232–35; matching, to the organiza-

engaging formats for, 87–89; engag-

tion, 233–34; model for, 45, 46,

ing with, 13, 83–84; malleability of,

48–49; planning process, steps in,

85–87. See also content

222–24; prioritization of, 230; process

digital nomads, 56, 93

for, 23–25; sequence of use, 231–32;

domains, leveraging capabilities across, 238

types of, 15–20; using together or

DonorsChoose, 126

separately, 231

Doodle Kids, 208–9

customer orientation, 243

Doritos, 90–91, 166–67

customers: as receivers and creators, 45;

dynamic fi ltering, 113

reimagined as nodes, x–xi; voice of,

integrating into the company’s voice,

eBay, 205

148, 166–68

Edmunds.com, 159

304

Index

educational institutions, with focus on

feasibility, as element of concept testing,

customer networks, 261–62

236

80–20 rule, 37

feature creep, 73

Eisenstein, Elizabeth, 44

Fidelity Investments, 94

Eliason, Frank, 155

fi lter failure, 112

embedded Internet access, as part of

fi lters, for helping customers choose,

Access strategy, 58, 71–73

112–15

employees: investing in an idea market

Fire Fighter Nation, 142–43

for, 164–66; representing companies

Firefox, 151–52

through social media, 154

Flannery, Jessica, 125

Engage strategy, 16, 17–18, 82–84;

Flannery, Matt, 125

approaches to, 89–103; creating with

Flickr, 137

customers in mind, 232–33; future of,

Flip pocket video camera, 74–75

103–4; keys to, 104–5; self-assessment

Ford Motor Company, FordFiesta

of, 278–79

Movement, 22, 158–59, 224–25,

Enterprise 2.0, 184, 255

230–31

Epicurious, 170

forums, 148, 156–62; expectations from,

Erdo˝s, Paul, 29

161–62; private, for loyal customers,

Espresso (ATM for books), 128

160–61; temporary, 159–60

“Eternal Dream” (Mone), 80–81

FourSquare, 171, 257

Euler, Leonhard, 29, 30

freedom, of digital access as human

events: organizing, 184; temporary

right, 275–76

forums tied to, 159–60

Evernote, 62

games, as part of Engage strategy, 90,

execution, of customer network strategy,

100–103

25, 223, 224, 237–39

games with a purpose (GWAP), 196

gaming: brand integration into, 101;

Facebook, 136–37; and CNN during

increased appeal of, 100–103; inter-

Obama inauguration, 159; Coca-

active content in, 83; interactivity

Cola page on, 8–9; customer word of

with other media, 102; as a lead

mouth on, 144; Facebook Connect,

generator for business, 103

116, 172; fan pages for brands, 146,

Ganz, 21, 101–2, 224

152–53; and HSBC customer protest,

Genentech, 66–67

38–39; impact of more connections,

General Electric, 98, 234

34; linking with company’s streaming

General Mills, 149

content, 160; Scrabulous application,

Gensemer, Thomas, 176–77, 215, 252

264; and social graph, 171–73; use

George Polk Awards, 139

by U.S. military, 133–34; What hap-

geo-tagging, 68

pens in Vegas goes on, 271; Whopper

Geraci, John, 193

Sacrifi ce, 172

glory, as motivation for collaboration,

faith, and spirituality online, 141

186–87

fashion industry, with focus on

Godin, Seth, 142

customer networks, 256–57

Goma publishing house, 81

305

Index

Google: collaborative offi ce software,

IBM: blogging, 98; Innov8 game, 102–3,

63, 184, 255; cyber attack on Gmail

226, 236, 241; use of Linux, 213

accounts, 275; as enterprise cloud

iCarly, 167–68, 234

utility, 64; Google Alerts and Google

idea capture, developing new organiza-

Trends for brand monitoring, 148;

tional capabilities for, 238

Google Calendar, 56; Google Earth,

idea market, 165–66

87, 102; Google Maps and Firefox

ideas: shared online, 136–37; soliciting

service story, 151; Google Maps open

from customers, 148, 162–66

API, 211; iGoogle widgets, 70; real-

ideation, for customer network strategy,

time search, 69–70; shared values,

235–37

274; Sketchup 3D design software,

Improv Everywhere, 27–29

129. See also Android

information overload, 84–85

Gossen, Anna, 187

InnoCentive, 201–2, 250

Gossen, Niels, 187

Innov8, 102–3, 226, 236, 241

graph theory, 29

innovation, 11, 49; customer network

Greenberg, Steve, 146–47

approach to marketing, 49; idea mar-

Gretzky, Wayne, 96

kets for, 165; innovation objectives,

Griffi th, Bastian, 142

225; iPhone App Store, 181, 209–10;

Griffi th, Sarah, 142

iterative, 254–55; and marketing, ori-

Grobe, Fritz, 91–92

entation, 234; and open APIs, 211;

group formation, ease of, 38–39

and open source, 212–14; platform

Guardian, The, 197–98

approach to Collaborate strategy,

Guare, John, 36

205; reaction against “not invented

Gutenberg, Johannes, 43

here, ” 264; spread of, in networks, 31

GWAP (games with a purpose), 196

Innovid, 104

intelligence: dissemination of, 244;

Harrison, John, 200

generation of, 244; networked, 3–4;

Hasbro, 264, 265

responsiveness to, 244

Heath, Chip, 267

intelligent medicine, 72–73

Heath, Dan, 267

Intellipedia, 183

Here Comes Everybody (Shirky), 38–39

interactive content, 87

hierarchy of effects, 46–48

Intercontinental Hotels Group, 160–61

hierarchy of needs, 14

interdisciplinary thinking, as cultural

Hill, Shawndra, 173

trait of customer network–focused

Home Depot, 94

organization, 266–67

homophily, 173

Internet, maturing of, 42–43

hotels, Internet access at, 55–56

Internet of Things, 72

Howe, Jeff, 189

Intuit, 168–69, 196–97, 226

HP, 127–28

Iowa Electronic Markets, 294–95n33

HSBC bank, 38–39

iPad, 209–10

Hsia, Lisa, 158

iPhlix, 212

human networks: complexity of, 34–35;

iPhone: apps and App Store, 208–10,

growing impact of, 275

213–14, 225; simplicity of, 74

306

Index

Iran, people of, responding to 2009

Lim Ding Wen, 208–9

elections, 6–7

links, 29–30

iReport, CNN, 180–81, 186–87, 189

Linux, 179, 180, 188–90, 212–13

Iyengar, Sheena, 112

live interactions, as future of Access,

76–77

Jackson, Tim, 99
location awareness. See location-based

jailbreaking, 181

services

Japan: anime mash-ups in, 122–23;

location-based services, 68–69; as part

broadband speed in, 228; cell phone

of Access strategy, 58

novels in, 80–81; smartphone usage

Long, Michelle, 169

in, 67–68

love, as motivation for collaboration,

Jarvis, Jeff, 145, 245, 272

185–86

Jaworski, Bernard, 243–44

loyalty, as part of the purchase funnel,

Jedrzejewski, Michael, 8–9, 146

46–48

Jensen, Brent, 212

Joy, Bill, 201

Made to Stick (Heath and Heath), 267

Maes, Pattie, 115

Kawasaki, Guy, 92

MagCloud, 127–28

Kay, Olga, 158

Maho-i-Land, 80–81

keitai shosetsu (cell phone novel), 80–81

Makerbot Industries, 130

Kelly, Kevin, 85–86, 191

Malone, Thomas W., 185

Khan, Salman, 61

Manguera, Mark, 156

Khan Academy, 61

many-to-many communications, 41–43,

Kickstarter, 198–99

245, 251, 255

Kirchhoffer, George, 92

March of Dimes, 167

Kirchhoffer, Susie, 92

marketers, engaging content as emerg-

Kiva, 22, 125–26, 229

ing model for, 89

knowledge workers, 56

marketing, mass-market vs. customer

Kogi Korean BBQ, 156

network approaches to, 45–49

Kohli, Ajay, 243–44

marketing objectives, 225

Königsberg Bridge problem, 29

market orientation, 243

Kraft Foods, 22, 225; Kraft iFood Assis-

mash-ups, 88, 117, 122–25

tant, 93–94, 231

Masi, 99

Kundra, Vivek, 211

Maslow, Abraham, 14

mass collaboration, 182

LAMP stack, 212

mass-market model, 44–45, 48

Laubacher, Robert, 185

McCain, John, 178

Layar, 77

McDonald, Hamish, 54

LBS. See location-based services

m-commerce, 67–68

Leach, Jeff, 139

measurement, for gauging results of

LEGO, 124

strategy, 25, 223, 224, 239–42

Lepper, Mark, 112

media: increasingly social aspects of,

Lifescan, 72

139–40; unbundling of, 86–87

307

Index

media companies, opening up their

Motorola, 165–66

APIs, 211

MoveOn.org, 190

media consumption, on demand, 59–60

movies, word of mouth about, 145–46

media industry, with focus on customer

Mr. Tutang MM, 170

networks, 260

Muilenburg, Cameron, 61–62

Meetup.com, 184

Mukherjee, Ann, 90–91

Mentos, and Diet Coke, 91–92

Mullins, Shila Renee, 97

Mercedes-Benz, 99, 160

multimedia platforms, 87

Metcalfe’s Law, 34

municipal governments, using digital

Methodist University Hospital (Mem-

communications to improve services,

phis, TN), 97

155

metrics: focusing on impact, 240–41;

musical theater, 96–97

including qualitative measures in,

music genome, 119–20

241–42; measuring over time,

myBarackObama.com, 176–79, 184,

241–42; translating objectives into,

186, 190, 199–200, 228, 251. See also

239–40

Obama, Barack: 2008 presidential

Meyer, Stephenie, 21, 153–54

campaign of

microfi nance, 125–26

My Virtual Model, 119

Microsoft: MVP Award, 169–70;

Windows, as example of a platform,

Naked Pizza, 139

204–5, 207–8; Windows Mobile plat-

Napoleon Dynamite problem, 110

form, 73–74

NASA, 269

microvolunteering, 214–15

Netfl ix: Cinematch ratings, 110–11,

Milgram, Stanley, 35–36

118; Netfl ix Prize, 110–11, 115,

Million Penguins, A, 189

189–90, 200, 202, 204; users of, desir-

Mini Cooper, 123–24

ing an iPhone app, 211–12; using

Mixed Tape, 99

menus with fi lters, 118

mobile access, 64–68

network access, as a human right,

mobile applications, 66–67

275–76

mobile commerce, 67–68

network collaboration, 179–82; depen-

mobile computing, 73–74

dent on top-down leadership and

mobility: as part of Access strategy, 58;

vision, 190. See also Collaborate

as productivity, 56

strategy

moderation skills, as cultural trait of

networked behavior, increasing impact

customer network–focused organiza-

of, 34

tion, 268–70

networked intelligence, 3–4

modularity, 189, 207

network graphs, 30

mom bloggers, 146–47

networks: access to, customers’ expec-

Mone, 80

tations of, 55; online, shaping offl ine

money, as motivation for collaboration,

behavior, 15; theory of, 29–31; trans-

187–88

forming modes of work, 56; trans-

Mooney, Phil, 99

forming relationships, 5; treating

Morita, Akio, 59

as customers, 26

308
Index

new media production, developing new

open APIs. See Application Program

organizational capabilities for, 238

Interfaces (APIs)

news, consumer-contributed content

open competitions, 20, 192, 195,

for, 139

200–204

New York: making data public in, 20;

open platforms, 20, 192, 195, 207–14,

tracking system for buses in, 193

209–11

Nicholas, Ethan, 209

Open Social, 172

Nickell, Jake, 9–10

open-source software, 184–85, 208,

Nickelodeon, 167, 234

212–14

Nielsen, Jakob, 38, 161

operational domains, 238

Nigam, Shashank, 154

operations objectives, 226

Nike, 21, 229; NikeID, 123; Nike+, 71,

organizational change, required for shift

231, 232, 234, 240; using custom

to customer network focus, 263–65

content mixes, 121

Ostrow, Adam, 92

90–9–1 Rule, 38, 161

outbound communications domains,

Nissan, using custom content mixes,

238

121–22

Out of Control (Kelly), 191

nodes, 29–30, 34

NPR: CEO on collaborative journal-

Pandora, 119–20

ism, 181; customizable podcast on,

paradox of choice, 18, 110, 112–16

121; on-demand programming on,

Pareto, Vilfredo, 37

59–60

particular content, focusing on as part

of Engage strategy, 90, 97–100

Obama, Barack: BlackBerry specially

passionate customers, focus on, 174–75

encrypted for, 53–54; online pres-

passive contribution, 192–94, 196

ence of, 95; 2008 presidential cam-

PatientsLikeMe, 141–42, 150

paign of, 22, 176–79, 251–53, 254.

peer production, 182

See also myBarackObama.com

personal face, as part of Engage strat-

objectives: setting, 23, 222–27; translat-

egy, 90, 95–97

ing, into metrics, 239–40

personalization, 13, 18, 108. See also

Odierno, Ray, 135

Customize strategy

Omidyar, Pierre, 126, 205

pervasive networks, as feature of cus-

on-demand business models, 17

tomer network–focused organization,

on-demand experience, as part of

255

Access strategy, 58, 59–61

Pettis, Bre, 130

on-demand manufacturing services,

Pfi zer, 149–50

128–29

pharmaceutical industry, with focus on

one-to-many communications, 41

customer networks, 259

one-to-one communications, 40

philanthropy, 125–26, 260–61

online conversations: joining, 147,

Piotte, Martin, 111

151–56; listening and learning from,

playlists, customizing, 117, 119–22

147, 148–50; monitoring of, 36

Plouffe, David, 252

online opinions, infl uence of, 144–46

podcasts, 94, 121

309

Index

Ponoko, 129

Ronen, Avner, 107

portable content, 88

Rose, Kevin, 96

positioning, 25, 223, 224, 227–29

Rospars, Joe, 252

power law distribution, 36–38

RSS, 121, 127

prediction markets, 165

Rubel, Steve, 66

preference, as part of the purchase fun-

Rutan, Burt, 203

nel, 46, 47
printing press, history and infl uence of,

salesforce.com, 63–64

43–44

sales objectives, 225–26

Printing Press in Early Modern Europe,

San Francisco, Twitter account, 155

The (Eisenstein), 44

SAP, 169, 229; as customer network–

print-on-demand technology, 127–28

focused organization, 248–51, 254,

Proteus Biomedical, 73

255; SAP Community Network, 250;

Provost, Foster, 173

SAP Global EcoSystems, 249–51

purchase funnel, 45–48

Schenkel, Ian, 209

Schiller, Vivian, 181

Qi Pan, 130

Schmidt, Eric, 84

Quick Wins, 237

Schmitt, Bernd, 65

Schultz, Howard, 163

ratings, 114

Schwartz, Barry, 112

reading, increase in, 82

Scion Radio, 99–100

real-time data, as part of Access strat-

Scrabulous, 264

egy, 58, 69–70

scribes, 43–44

real-time search, 69–70

Sears, 116

Red Bull, 153

SeeClickFix, 155

referrals, 144–46

segmentation, 25, 173, 223, 224, 227–29

relationships, portability of, 14

Sermo (physicians’ social network), 150

relevance, as element of concept test-

SETI@home, 193–96
ing, 236

shareable content, 88

Rényi, Alfréd, 29

shared interests, customers with, con-

research and development domains,

necting through forums, 159

238

shared values, 49; as cultural trait of

responsiveness, as cultural trait of cus-

customer network–focused organiza-

tomer network–focused organization,

tion, 273–75

272–73

Shinder, Deb, 170

retail industry, with focus on customer

Shirky, Clay, 38–39, 43, 112–13, 186

networks, 257–58

ShopYourWay, 67

return on investment, as element of

simplicity: as part of Access strategy, 58,

concept testing, 236

73–76; as reason for the power

revenue, experimenting with new

behind defi ned platforms, 205–6

sources of, 265

singular value decomposition, 115

Rheingold, Howard, 28, 214

Sivers, Derek, 206–7

Robinson, Jancis, 96

six degrees of separation, 36

310

Index

Skistimas, Brad, 198–99

Streeting, Wes, 39

Skittles, 269

student tutoring, 61

Sloan, Rebecca, 142

Styleshake, 129

Small World Hypothesis, 35–36

Surowiecki, James, 295n33

smart mobs, 28

sustainable advantage, as element of

smartphones, 65–68, 72, 213; branded

concept testing, 236

apps for, 93–94; gaming on, 100–101.

Sutton, Willie, 156

See also Android; BlackBerry; iPhone

Snakes on a Plane, 189

Taliban, 54

social fi lters, 116

target marketing, 172–73

social graph, 171–73

TaxAlmanac.org, 197

social media, 19, 138–40; developing

taxonomies, 113, 114

new organizational capabilities for,

Taylor, Jeff, 133

238; gaining insights from, 149–50;

Taylor, Sarah, 133

monitoring of, 148; reasons for using,

technology, infatuation with, 11

140–43

technology use profi le, 228

social motivations for collaboration,

TEDTalks, 82

185–86

television: content, 82; future of, 106–7

social network analysis, 31

temporary forums, 159–60

social networking, 136; merging online

text reviews, 114

and offl ine worlds, 171

TheExtraordinaries.org, 214

social networks, 19; custom-designed,

Threadless, 10, 180, 182, 200, 203, 204

184; private, 160–61

Todd, Charlie, 27–29, 38

software as a service (SaaS) model, 63

Torvalds, Linus, 179, 189, 212

software development kits (SDKs), 184,

Toyota, 99–100

208–10

TradeKing, 161–62

Sony Walkman, 59

transparency, as cultural trait of cus-

Sorg, Dusty, 8–9, 146

tomer network–focused organization,

speed, as key to digital access, 78

270–71

spirituality, 141

Transportation Security Administration,

Spot.us, 199

193

Spring Awakening, 96–97

Tribalization of Business Study (2009),

Sprint, 166

11

Starbucks: brand promise, 229; on Face-

tribes, 142

book, 153; MyStarbucksIdea.com,

Tropicana, 150

163, 240–41

trust-based leadership, as cultural trait

status updates, 136

of customer network–focused organi-

strategic decision questions, 230–32

zation, 267–68

strategic leadership domains, 238

Twilight (Meyer), 153–54

strategy selection and ideation, 25; for

Twitter, 136; customizable playlists

customer network strategy, 223, 224,

with, 120–21; as example of open

229–37

APIs growing a platform, 210–11;

streaming content, 88–89

monitoring, 151–52; power of, 69;

311

Index

reasons for using, 140; used during

wiki entries, 137

2009 Iranian elections, 6; used for

wiki novels, 189

customer service, 151–52, 155

Wikipedia, 38, 179–80, 183, 186,

Twitter Effect, 146

188–92, 214

Williams, Raymond, 109

United Airlines, 7–8, 145

Willison, Simon, 198

Urbanspoon, 68

Wilson, Fred, 147

USAA, 60

Wine Library, 95–96

user-generated content, 136

word of mouth, 144–46, 173

U.S. government: military policies of,

World Wide Web, 30; as example of

relating to new media tools, 133–35;

open-source platform, 214; as ulti-

opening data to the public, 211

mate customizable medium, 108

uTest, 203

utility, as part of Engage strategy, 90,

Xbox Live, 101

92–94

Xin Quan, 209

X Prize, 204

value, creation of, for all parties, 216

X Prize Foundation, 202–3

Vaynerchuk, Gary, 95–96

videos online, 74–75; content of,

Yelp, 68, 137, 157

82–83; value of, 136

Yolton, Mark, 249, 251

viral effect, 88, 91–92

Yongguang Zhu, 170

Virgin America, 55, 152

YouTube, 74–75, 136; BlendTec chan-

vision, lack of, for managing

nel on, 91; “Comcast Technician

networks, 11

Sleeping” video on, 145; as defi ned

Volinsky, Chris, 173

platform, 205; Home Depot channel

Voltz, Stephen, 91–92

on, 94; Improv Everywhere video

von Ahn, Luis, 196

on, 28; Khan Academy on, 61; Now

Network clock, 166; Obama chan-

Wales, Jimmy, 183, 191

nels, 95; Spring Awakening channel,

Washington Post, The, 264, 270

96–97; “United Breaks Guitars”

Watts, Duncan, 35

video on, 7–8

Weber, 94

Webkinz, 101–2, 224

Zaeef, Abdul Sallam, 54

Websphere, 102–3
Zazzle, 128–29

Wesch, Michael, 271

Zin Mei, 209

Whopper Sacrifi ce, 172

Zipcar, 60–61

wiki, 183

Zuckerberg, Mark, 171–72

312
Document Outline
Contents
Preface
Acknowledgments
How to Read This Book
PART I: A New Model for Customers in the Digital Age
CHAPTER 1: The Customer Network Revolution
CHAPTER 2: Network Science and Lessons for Business
PART II: Five Strategies to Thrive with Customer Networks
CHAPTER 3: ACCESS: Be Faster, Be Easier, Be Everywhere, Be
Always On
CHAPTER 4: ENGAGE: Become a Source of Valued Content
CHAPTER 5: CUSTOMIZE: Make Your Offering Adaptable to
Your Customers’ Needs
CHAPTER 6: CONNECT: Become a Part of Your Customers’
Conversations
CHAPTER 7: COLLABORATE: Involve Your Customers at
Every Stage of Your Enterprise
PART III: Leadership and the Customer Network–Focused
Organization
CHAPTER 8: Planning and Executing a Complete Customer
Network Strategy
CHAPTER 9: Creating the Customer Network–Focused
Organization
Self-Assessment: How Networked Is Your Business?
How to Continue the Conversation Online
Cases and Examples by Industry
Notes
Index
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 Table of Contents
Contents
Preface
Acknowledgments
How to Read This Book
PART I: A New Model for Customers in the Digital Age
CHAPTER 1: The Customer Network Revolution
CHAPTER 2: Network Science and Lessons for Business
PART II: Five Strategies to Thrive with Customer Networks
CHAPTER 3: ACCESS: Be Faster, Be Easier, Be Everywhere, Be
Always On
CHAPTER 4: ENGAGE: Become a Source of Valued Content
CHAPTER 5: CUSTOMIZE: Make Your Offering Adaptable to Your
Customers’ Needs
CHAPTER 6: CONNECT: Become a Part of Your Customers’
Conversations
CHAPTER 7: COLLABORATE: Involve Your Customers at Every
Stage of Your Enterprise
PART III: Leadership and the Customer Network–Focused Organization
CHAPTER 8: Planning and Executing a Complete Customer Network
Strategy
CHAPTER 9: Creating the Customer Network–Focused Organization
Self-Assessment: How Networked Is Your Business?
How to Continue the Conversation Online
Cases and Examples by Industry
Notes
Index
A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
Q
R
S
T
U
V
W
X
Y
Z