Tomorrow’s greatest asset is not a currency, commodity or company shares. Nor is it people, property or prized art. It’s data. Those who take the biggest byte – capturing, analysing and acting on real-time customer data – will rule the business world.
Data is revolutionising industry. Algorithms that crunch vast volumes of data are creating unprecedented customer insights, allowing companies to tailor products and marketing messages like never before, and transforming product innovation.
Data capture is not just an issue for giant multinationals. Through simple, low-cost social media techniques, small enterprises use data to create stronger, faster ideas and innovations, and commercialise more of them.
Here are eight considerations.
Front-load your social media
Many small enterprises, and plenty of larger ones, use social media as a marketing and communication channel. Nothing wrong with that. But the real potential is using social media insights at the start of the product development to discover or learn about customers, competitors and current or future product.
Create a portfolio of experiments
Business has been too linear for too long. That is, a company has a customer insight, develops a product, promotes it and hopes the market buys it. This step-by-step approach is becoming too slow and costly in fast-moving industries.
Instead, take a lean approach to “product development”, using insights from social media to create a portfolio of ideas. Rather than put all your effort into one big idea, consider using social media to experiment with several ideas.
The best ideas usually emerge where industry or market boundaries blur. A small business owner, for example, talks to someone in a different industry and finds a new use for their product. Or they connect online with an offshore business owner and discover new markets.
If you’re serious about innovation, build a network of collaborators, inside and outside your firm. Find 50 people who’ll help your business, from employees, to customers, suppliers, distributors and other stakeholders. Form an online network and use your supercharged “focus group” to create and test ideas in real time.
The best social media insights often come from forums controlled by others, so build your information set, monitor it, and feed it into your innovation process.
Become good at (ethical) spying
Find 10 forums that most influence your industry. These could be prominent bloggers who comment on industry developments and get lots of reader feedback; competitors who post reader comments online; or forums where customers give their views on your products and those of competitors. The best social media insights often come from forums controlled by others, so build your information set, monitor it, and feed it into your innovation process.
Use content to plant the data seed
Clever content marketing campaigns encourage customers to give their views online and sometimes provide information “gems”. An informative blog or tweet might attract dozens of comments from current or prospective customers. A video, whitepaper or online survey could do the same. A regular flow of useful information could put your brand at the centre of customer conversations.
Shorten the feedback loop
Asking customers for comments months after they buy a product, and taking that long again to act on them, is a timebomb in today’s business. Aggravated customers vent their frustrations online or switch to competitors in a blink.
Use technology to create simple feedback mechanisms: a Facebook page, an online survey implemented after product purchases, a star rating system for articles on your website, and so on. Ensure you know what’s good or bad about your product faster than ever, and act on it even sooner.
The best ideas usually emerge where industry or market boundaries blur. A small business owner, for example, talks to someone in a different industry and finds a new use for their product.
Excel at “active online listening”, not just talking to customers via social media or glancing at forum comments. Serious active online listening means developing processes to capture, measure and analyse comments.
It need not be costly or time consuming – it's simply a recognition that an online conversation, from a company’s perspective, is only as good as those who listen to it and can extract the gold from the garbage.
Think like a software program
The software industry’s approach to product development is catching on in other sectors. A developer launches a program, watches how customers use it, improves it or fixes bugs, and releases the next version. The program becomes a series of regular updates and new versions rather than a product that is static for years.
Use social media to do the same in your business. Gain customer insights, create a portfolio of experiments, develop a minimum viable product (or beta version), get it to market quickly and cheaply, and test it through your online focus group. Use the comments to enhance, reshape or kill the product, and develop it in a series of rapid iterations.
This approach will not suit all businesses or products, and it may be best kept for new product development rather than the core business, at least at the start. But the underlying principle is immensely powerful and enduring: let customers shape the product earlier in the development process. Social media just makes it faster and easier than ever to do so.
Tony Featherstone is a former managing editor of BRW and Shares magazines.