Innovation

Avoid an Epic Fail: Your Company’s NEW Secret Weapon Is Netnography

Eighty percent of new product and service introductions fail in the marketplace. This failure isn’t for lack of innovation and creativity — instead, it represents a lack of understanding of the customers’ worldview.

Focus groups, surveys and questionnaires are driving failure in business and innovation. Why? The information is wrong, and, because it’s wrong, using this data leads to bad decisions.

Here’s a quick example.

Just yesterday, I walked into one of the largest consumer electronic retailers in the country. I purchased a product, and at the cash register they proclaimed that I had been selected to participate in an online survey.

Wow!

Little old me … selected for survey. I get to go online and provide free information to this company and get a pittance in return! Are you kidding me? But this organization is just one of hundreds of companies that attempt to gain customer insights this way.

So let’s think about that for a minute.

Most productive, intelligent customers are not willing to participate by virtue of the time and inconvenience and, more importantly, the sheer lack of any real reward. So who does participate?

Apparently, just a small subset of customers that desperately needs a $10 coupon. This obviously represents a skewed socioeconomic segment. So does the information gained from this process matter? The answer is no — it does not matter. And if you use this information to make business decisions, you will fall into the statistical realm of product and service failure.

But wait, I have good news: There’s a new sheriff in town.

Netnography is a branch of ethnography, an analysis of the free behavior of subjects in their daily lives. Traditional ethnography relates to gaining customer insights and is basically a process where you observe the behaviors of your customers, typically in a purchasing or usage environment.

The problem with ethnography is that most observations are done in a sterile and fractional environment. In other words, the short-term observation of somebody making a selection of a product off-the-shelf doesn’t tell the whole story.

There are many other problems with ethnography — another major problem is the fact that the volume of data points is simply too small.

Netnography plugs into a massive and dynamic pool of data by listening into the conversations that occur across the Internet. Experts in this area evaluate brands, products, and trends and literally just about everything related to your product service or business.

Generally speaking, they look at these trends in a “4×4” grid that evaluates comments that suggest the following: gradient, hate, dislike, like and love. Essentially, it’s the advocates, and what one firm refers to as the “Madvocates,” that drive keen insight into where your customer and markets are heading.

In short, there is a colossal dialogue occurring 24 hours a day: It’s your customers talking, and, yes, they’re talking about you. If you’re not tapping into the magic Netnography, then, in my opinion, you’re really missing a tremendous opportunity to both head off disaster and to drive the success of your product and brand.

Now, here comes the catch. It’s virtually impossible to create the infrastructure to do this correctly yourself. It requires complex linguistic analysis of the dialogue in order to determine its relevance to your product and brand. One organization that uses a great deal of advanced linguistic analysis is netbase.

It’s also important to realize that there will be a need to interpret the reports. In other words the analysis from your Netnography efforts need to be connected into your overall innovation platform, brand strategy and your global goals and objectives.

I guess what I’m saying is, as Einstein has proclaimed, “Insight is not a cure” — in other words, knowing what your customers are saying does not necessarily result in a deployable customer or organizational benefit. So make certain you have the infrastructure in place that can use this amazing data, so that you can lead your industry with the highest levels of customer insight.

One final but very, very important point: Resist the temptation to completely digitize your customer listening functions. Some of the best companies in the world are gaining the best customer insights through a wide range of non-digital functions, including: customer advocacy boards, customer co-creation, innovation safaris, and internal innovation systems just to name a few. The truth of the matter is it takes both non-digital and digital methods to gain the highest possible level of customer insights.

This topic and more are included in the Vistage Connect™ CEO peer advisory sessions. Learn more.

See Nicholas Webb’s earlier posts:

Nicholas J. Webb is a Partner at Lassen Innovation, an innovation and business growth-consulting firm. He is also the author of The Innovation Playbook and The Digital Innovation Playbook. Visit his website at www.nickwebb.com or check out The Innovation Superstar Workbook — or get this tool free with a membership to Vistage Connect.

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  1. Espatopajo

    May 22, 2012 at 10:14 am

    And it does not introduce the same bias? Because on the first case only a small portion of customers are willing to answer for the 10% discount, but on the second one you are only having on account the people who a) have / use internet access b) use it to talk about brands or products.
    Either way you are only observing a portion of the total population in which you are interested.
    Great blog!

    • Espatopajo

      May 22, 2012 at 10:17 am

       Excuse my English, by the way.

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