What’s the Big Deal About Relevance?

Relevance is the holy grail for sales and marketing success.  Relevance retains existing customers and wins new ones.  Relevance is at the very core of your customers’ decision to purchase.  It is relevance that closes the deal.

It goes without saying, the more relevant your products, services, events, etc. are to your target audience, the more your target audience will consume and tell others about them.  The more relevant your messaging and advertisements are for your target audience, the more they will resonate with that audience.

In this day and age information flows at the speed of light, and buyers are more informed and have more options than ever before. The sheer explosion of social networking and social media has only exacerbated the problem by making information even more pervasive and connecting people in ways never before imagined. As a result, both customer retention and acquisition have become major challenges.  Retention is the more vital factor because in general it costs 5 times as much to acquire a new customer that it does to keep an existing one.  And customers, who have bought from you before, are much more likely to buy from you again, representing around 80% of sales from only 20% of your customers.

Companies finding success in the market today are focused on strengthening relevance by knowing all they possibly can about their customers– fully understanding their customers’ needs first, and then demonstrating their commitment to the customer by building an offering that meets every aspect of the customer’s needs.  Establishing relevance energizes your influencers, activates positive word of mouth, strengthens loyalty, and increases customer retention and acquisition.

A Grand Social Experiment Called Sun Microsystems

I recently picked this up off of a Yahoo message board… “Sun has now fallen into the mid-cap category… Next week we could be looking at a small cap stock. Then the lights will be turned out and the yellow tape will wrap the Sun campus. Sun does not control their destiny any longer. The street has decided for them. The nightmare is near an end.” What this person is referring to is the fact that Sun Microsystems just last week, once again handed pink slips to over 2,000 employees.

Why should we care? It’s important that we keep our eye on this, what I refer to as “The Grand Social Experiment”, because Sun is a Fortune 500 company who is embracing social technology (blogs, wikis, forums, podcasts, vodcasts, Facebook, Second Life, and possibly their own attempt at customer social networks) as a strategy– as a means not only to increase customer accessibility, visibility, and interaction, but to reinvent itself and hopefully restore their once market prominence. Can social engineering save Sun Microsystems?

Sun Microsystems was founded in 1982 by Vinod Khosla, Andy Bechtolsheim, and Scott McNealy. In 1987 Sun formed an alliance with AT&T to develop a UNIX system for business computing. By 1988 Sun became the leader in the workstation market, with revenues reaching $1 billion. By the time the dot-com boom hit in the 1990’s, Sun Microsystems was positioned perfectly to take a leadership position. It was during this period that Sun experienced a meteoric growth in revenue, profits, and share price that even its executives struggled to defend. It was during this period that Sun adopted the slogan “We put the dot in dot-com.” But, as the story goes, that which goes up must come down. The synthetic expansion of demand during the dot-com boom eventually came to an end. When the bubble burst, the one-time king of the Internet suffered an enormous blow, leaving its market share and headcount in a compromising position.

In an effort to return to the profitability it had in the first Internet bubble, Sun has embraced open-source software, adopted servers based on competing processor technology, and switched CEOs. In 2006 Scott McNealy handed the reins to his successor, Jonathan Schwartz. Jonathan Schwartz is a maverick– willing to try new things– willing to embrace change in an attempt to reinstate Sun’s position as a marketplace leader. But most importantly, Jonathan is a thought leader who has embraced social media and community as a means to reinvent Sun—or at least the perception of Sun. Countless articles tout Jonathan as the #1 blogger of the Fortune 500— one of the few according to Fortune 500 Bloggers. In countless blogs and speeches Jonathan repeats the word ‘community’, again and again. The one thing Jonathan seems to understand is the importance of engaging the customer in the business. I truly believe that Jonathan ‘gets it.’ After all, today the customer, more than ever before, ‘is’ the brand. It is the masses—the customers– who will decide the fate of Sun and whether it’s worthy of surviving and thriving—or not.

Not unlike any other enterprise, the biggest detractor to Sun’s success with social engineering is itself. There is a great divide in Sun—those who believe, and those who don’t. It reminds me of the movie “The 300”, where 300 Spartans against insurmountable odds fight a Persian army of more than one million soldiers. There is a great silent majority inside Sun who believe that Jonathan is taking Sun away from what’s important. This same camp (what I refer to as the ‘Old Guard’) believes that all of this blogging, social adoption, and the creation of community is nothing more than a distraction– an enormous waste of time. And every time new blood enters Sun to embrace Jonathan’s vision for reaching out to the masses, the Old Guard selectively weeds them out with the next RIF (Reduction in Force—more commonly referred to as a layoff). Had Jonathan had more time, had the company not been on fire when he took the reins, possibly he could have focused a bit more on internal alignment before engaging the customers and the market– like with Dell’s EmployeeStorm initiative.

Sun Microsystems is the story of transformation and struggle, of rise and fall, of old vs. new. The battle for Sun is as much an internal battle as an external one—a battle to rebuild trust more than to build new technology— a grand experiment to reinvent Sun and the perception of Sun in the marketplace using social media, social networking, and Web 2.0. We’re currently in the fourth wave of computing which is all about connecting us to our information and to each other. Today, more than ever before it’s about word-of-mouth and connecting with the customer. And thanks to social engineering the market is voting– continuously. The best CEO’s today are thought leaders who listen intently to their customers, and take action. We’ve seen it with Dell’s IdeaStorm, Starbucks’ MyStarbucksIdea, and Salesforce’s IdeaExchange. Best-in-class companies are embracing social engineering to change and form market perception, and to grow revenues and profitability. If Jonathan Schwartz is successful, it will be one of the biggest turnarounds accredited in part to the adoption of social technology as a major part of their strategy. If I were a Fortune 1000 CEO, I would be monitoring the impact social engineering has on Sun’s transformation very closely, at least for lessons learned.

State of the Information Economy: “We’re Drowning”

In January 2008 the ISC Internet Domain Survey reported the number of hosts on the Internet at 541,677,360. As of March 2008 Internet World Stats counted over 1.4 billion Internet users globally. As of May 2007 it was estimated that the web consisted of over 19.2 billion documents, 1.6 billion images, and over 50 million audio and video files. In the 2007 article “The Fight Against Infoglut” Mary Hayes Weier states “ The numbers are barely comprehensible. The amount of digital information created, captured, and replicated last year was equal to 161 billion Gbytes, according to a recent IDC report, roughly equivalent to the contents of 12 stacks of books extending from the Earth to the sun. In 2010, IDC estimates, the info flow will reach 988 billion Gbytes… this year, for the first time, the amount of digital information generated will surpass the storage capacity available.”

The Web is so enormous that we can only find things by using powerful search tools like Google. But with each passing year it’s becoming obvious that even Google is losing the keyword-relevance search battle. Based on the enormous number of results returned, we barely get past the first two pages of results. What value lies in the remaining pages of Google search results that we don’t have the time or patience to weed through?

In the enterprise, and now in our private lives we routinely see hundreds of daily email messages. Mesmo, an email consultancy, determined that three out of every four employees spend at least half of their day sifting through email messages and a quarter spend more than four hours per day. Consider these stats and projections from the Radicati Group cited in a Wall Street Journal article of 11/27/07:

• Over the next four years the number of e-mail users worldwide will approach two billion people
• The average number of corporate emails sent and received per person, per day in 2008 is estimated to be 156. By the year 2011 that number will be 228
• By the year 2009 it is estimated that over 41% of the average workday will be spent managing email

To compound this problem it is estimated that the average percentage of spam in mail traffic amounted to 86.4% in January 2008. On New Year’s Day 2008 it was estimated that spam levels reached 97.4% for that day. It’s been estimated that spam in 2007 reached an astounding cost of over $197 billion in lost productivity. Despite our futile attempts to eliminate or even reduce spam, it keeps rolling forward, hammering our systems with spyware, viruses, and scams.

Web 2.0 only contributed to yet another massive explosion of information consisting of social media—video, wikis, forums, reviews, postings, micro-blogs, livecasting, podcasts, blogs, vlogs, social network postings, etc. etc. etc. In March 2007 Technorati was tracking over 74 million blogs and social network postings. Scarier yet, estimates show that the blogosphere has been doubling every six months.

As for Social Networks last estimates put global social networking subscriber growth rates at 47% year-over-year, expected to reach saturation somewhere around the year 2012. MySpace today has over 55 million subscribers, over 100 Billion rows of data with 14 Billion comments, 20 Billion mails, 50 Million mails per day, 10 Billion friend relationships, 1.5 Billion images (8 Million images uploaded each day), and 60,000 new videos uploaded daily– mostly contributed by a mere 1% of the subscribers. According to the 90-9-1 rule only about 1% of users in any given community actually contribute to any significant degree. Imagine what would happen if that number doubled to a whopping 2%.

The overload of cheap information threatens our ability to function in cyberspace. We’re generating information far faster than our individual capacity to process it. The term infoglut doesn’t give it justice… it’s more like an information tsunami. We spend an inordinate amount of time searching, sorting, and filtering just to find those valuable nuggets of information. At times it feels like searching for a needle in a haystack. When overwhelmed, we simply start ignoring information and search results. It’s the best we can do with our current technology. While the youth are still enamored by the faddish fun-and-game world of social networking, the ever-growing technically savvy professional herd is continuously gravitating toward anything that saves time… anything that provides real, bottom-line value. Time is an individual’s most valuable asset. We have very little time and once it’s gone, it’s gone forever. No one on their deathbed ever said, ‘I wish I spent more time at work.’

Directional Syndication is a concept I conceived and began working on in 2002– and continue to work on to this very day. Directional Syndication describes a collective networked intelligence concept that continuously delivers, high-value, relevant information in a timely fashion, to its intended individual recipient(s). A Personal Relevance Agent (PR Agent), owned and controlled by the recipient learns about the recipient through their profile as well as their behavior. It picks up on things they read, sites they visit, things they belong to, people they are connected to and people they interact with, messages they write and messages they receive, as well as ratings and their personal contributions. Directional Syndication is based on the premise “that which is not relevant, is a waste of time.” Too many people, too much information, not enough time, and things change, continuously. With Directional Syndication what you end up with is in essence a massive distributed intelligent content router. With Directional Syndication, you don’t find information, information finds you.

Whether it’s Directional Syndication or some other new-fangled technology, the time has come for a leap in technology—a technology that knows the receiver—a technology that knows what is relevant and valuable to the receiver—and delivers.