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Digitalization of Communication – Insights from the German Digitalization Consumer Report 2014

Digital phones, digital TV, digital newspapers, digital shopping – digitalization is omnipresent these days. But digitalization is far more than that. Digitalization induces serious changes in consumer behavior that managers should bear in mind to stay on track within the digitalization jungle. Thus, one special focus of our latest German Digitalization Consumer Report in  is on the digitalization of communication. Were you aware that already 37% of all our daily communication happens through digital devices? Neither were we.

Our underlying survey consists of a representative sample comprising almost 2,500 of German Internet users as participants and covers purchase decisions across 19 different industries.

Internet usage increased by 1 hour since 2012

With our report, we dedicate special attention to how digital technologies impact and change our lives. We learn that more than one-third of all our interpersonal communication is digitally mediated –whether private or business-related. One of the main reasons for this finding is the strong increase in the usage of Internet-based technologies. In only 1.5 years, the average daily Internet surfing time of our respondents has increased by one hour to 4 hours and 35 minutes per consumer per day!

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This rise is mainly due to today’s broad availability of mobile Internet and connected mobile devices: Mobile surfing increased by 27% and every fourth minute online is mobile now. Consumers are also using more Internet-ready devices. Already 43% of German consumers own two or more devices with Internet access – and 14% with more than four devices!

Google+, Twitter and Spotify are on the rise in Germany

When looking at social media, a lot has changed since our last report. Although often disregarded in the past, Google+ has grown 25% since 2012 and is now Germany’s third-largest social network in terms of active users. Twitter grew by 9% and is on rank 7 now – almost 12% of all German Internet users have a Twitter account. However, the hidden champion of this year’s social media ranking is music streaming platform Spotify. It gained 171% in terms of distribution within the last 1.5 years and nearly entered Germany’s social media top 10 virtually right away.

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Managers, do not fleece your consumers!

As digital communication becomes more and more important, investing in digital communication and marketing is a “must-do” for German businesses. But what is the best way to do so? One interesting finding from our report is what we call the “social media divide”: today, fewer people use more social media compared to 1.5 years ago. In fact, the total number of people using social media has decreased since 2012 and consequently the number of social media deniers has increased by 54% to 11.4% of the German population.

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This development should be a warning to all companies who practice a laissez-faire policy when it comes to data privacy and consumer trust. In all social media and Internet activities, managers need to stay humble, not fleece their customers, and not be intrusive. Customers will thank you for this through increased usage of your online outlets and, consequently, increasing all your favorable customer metrics, such as conversion rates, customer engagement, customer lifetime value and so forth.

Many companies are already on the right track. In fact, the average social media usage intensity of Germans who still use social media increased already by 6% and there is strong variance within the data depending on who the particular consumer is and where she shops. So managers should not fear digitalization, but rather unleash its potential and always stay humble.

If you want to read more you can download the full German Digitalization Consumer Report 2014 here.

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German Digitalization Consumer Report 2014

Our German Digitalization Consumer Report 2014 is out now! Link

Like always, find everything first on our blog – Press statement from Friday, July 18th:

eCommerce Enables Better Customer Advice and Threatens Stationary Retailers

• Study from the University of Muenster and Roland Berger: 37% of communication proceeds through digital channels
• 41% of all information that is relevant for purchase decisions comes from digital sources
• Online retailers improve the quality of advice, which constitutes a major threat to stationary retailers; multi-channel concepts are required
• Travel is most frequently booked online (80%); food and drugstore items are still under 10%
• Fewer people tend to use social media channels today. Since 2012, over two million users have withdrawn from social media

Continue Reading →

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Destination Social Business or How to Transform Your Organization

The IT-manufacturer Dell is widely known for its progressive and early commitment to social media. Now the experiences from Dell’s transformational journey from a computer manufacturer/seller to a truly social organization have found their way into a scientific paper.   According to a recent Forrester Research report, a majority of large firms plans to apply between three to seven collaboration technologies whereas small firms consider the use of one to three collaboration technologies. However, 90% of collaborative-technology initiatives fail. The latest article of Weinberg et al. (2013), focuses on providing initial guidance for how to harness the power of social media and how to employ principles and processes of collaborative community.

social-business

Four principles characterize a collaborative community:

  1. Finding a balance between pure self-interest and altruism. Therefore, mutual trust and a common purpose need to be developed.
  2. Establishing an ethic of contribution so that individual control, results and responsibilities diminish in importance.
  3. Implementing interdependent process management mechanisms to facilitate coming together and engaging collectively.
  4. Centralizing and mobilizing knowledge to create an infrastructure that enables employees to work for multiple teams and jump from one to another without destroying the system.

Social Media can facilitate the access to collective intelligence, creativity and passion what in turn enables improvements in organizational productivity with respect to each step of the value chain.

The article of Weinberger et al. (2013) was recently published in a special issue on “Social Media and Marketing” of the leading Journal of Interactive Marketing. Read the full paper here:

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Perspectives of Social Commerce: Social Media’s Role Beyond Immediate Influence on Purchase Decisions

From the German Social Media Consumer Report 2012/2013 we know that social media currently accounts for about 8% of the consumer’s purchase decision. However, social media’s role regarding the different steps of the sales funnel is still not sufficiently researched. Yadav et al. (2013) develop a framework that lays ground for a broader discussion of social commerce as an increasingly important aspect of online purchase behavior. In their paper they discuss social media’s role for need recognition, pre-purchase activities, the purchase decision itself, and post-purchase activities by also considering moderating product and media platform characteristics.

Yadav et al 2013 Social Commerce

 

For instance, in the pre-purchase phase, when consumers start to search for and evaluate alternative product or service options, social media are a short-cut to gather relevant information. The trustworthiness of consumer-generated content, determined by the degree of tie strength between platform members, makes such information quite powerful. Especially in cases where goods are characterized by a high level of perceived risk, customers engage extensively in product information search.

Want to learn more?

 

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Need for Better Social Media Performance Metrics? Check out Scientific Guidelines from Peters et al. 2013

Managing social media requires a performance measurement approach that differs considerably from one used for traditional and other online media. Therefore, Peters et al. (2013) propose a theoretical framework and derive nine guidelines on how to design appropriate metrics. The article has been published as the third article in our special issue on “Social Media and Marketing” issued by the prestigious Journal of Interactive Marketing.

Social Media Metrics Guidelines and Framework

Peters et al. (2013) arrange their framework according to the classic Stimulus (Marketing Inputs) → Organism (Social Media) → Response (Marketing Outcome) paradigm. The organism, being at the core of the framework, captures four major elements of social media (motives of actors, content traveling along dyadic ties, network structure, social roles and interactions) that interact continuously, thereby altering and reinforcing each other – similar to a living organism. Understanding the relevant phenomena is essential for practitioner because a “perfect universal dashboard or social media metric” does not exist. Instead, every organization has to choose appropriate metrics that are aligned according to individual organizational goals, structures and choice of social media. However, the authors derive nine fundamental guidelines that companies should take into consideration when deciding on metrics in order to avoid frequently occurring pitfalls. In one guideline for example, the authors advise to shift from convergence to divergence, thereby allowing for adversary as a means to capture differentiation. Another guideline encourages companies to publish performance metrics so that users will be able to “play with them” and behave accordingly.

To see all guidelines, click here:

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Fairytale or Nightmare? The MCM-Perspective on Content Marketing: „Managing Brands in the Social Media Environment“

Brand stories that are carefully authored by mangers belong to the past. Anchoring a clear knowledge structure about a brand in consumers’ minds is more difficult than ever. These days, highly empowered customers share their own versions of brand stories throughout social networks with an enormous speed and reach thereby overtaking brand control.  As a result, brand managers are challenged to integrate consumer-generated brand stories into their own marketing communication mix to create appealing brand stories – similar to improvisation theatre. Some brands have already shown that leveraged consumer input positively affects firm performance. How does the successful coordination of user- and company-generated brand stories look like to unfold its persuasive power?

Content Marketing Consumer Generated Brand Stories

Within our special issue on “Social Media and Marketing” that has recently been published in the Journal of Interactive Marketing, Gensler et al. (2013) pay considerable attention to research related to brand management in social media. First of all, the authors present a framework to illustrate the impact of social media on brand management. In the following, the framework is used to organize literature fragments and to identify an agenda for further research related to the issue in question. Three topics receive considerable attention and are further subdivided: (1) Consumers as pivotal authors of brand stories, (2) Networks of consumers and brands as a result of consumer-generated brand stories, (3) The coordination of brand stories.

For all those who want to update themselves on “Brand Management in Social Media” this article is a must-read:

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Have you already read it? New Study: “Managing Customer Relationships in the Social Media Era: Introducing the Social CRM House”

Quite recently, the Journal of Interactive Marketing has published our special Issue on Social Media and Marketing. As a result of our thought leaders’ summit, leading researchers from all over the world present in seven articles the best of social media knowledge. In one of them, Malthouse et al. propose a framework, called “Social CRM House”, that is used to illustrate how the emergence of social media going along with highly empowered customers challenges the three core processes of traditional CRM – customer acquisition, retention, and termination. The article is addressed to all those who want to recognize pitfalls emerging at the intersection of CRM and social media early to be better able to address them. If you are currently thinking about restructuring your CRM strategy, this article is a must read. For years, Malthouse et al. are the leading researchers when it comes to CRM strategy.

Journal of Interactive Marketing 2013 27 Managing Customer Relationships in the Social Media Era: Introducing the Social CRM House

Malthouse Heaenlein Skiera Wege Zhang
Social Media CRM House

The authors suggest to determine a company’s CRM strategy not just according to the aspired financial objectives but also to the degree of engagement (lower vs. higher) that customers will probably show. Customers who are highly engaged in company-related activities through social media channels are more likely to generate and disseminate brand-related content that might not be preferred by the company. Therefore, they require another social media strategy than customers who reveal lower levels of engagement. One of the key insights is that strategies related to acquisition and retention can no longer be separated. Furthermore, in such a highly interactive environment, the Customer Lifetime Value (CLV) as traditional performance measure of CRM is no longer sufficient enough to describe a customer’s value contribution to the company. What are other measures that have to be considered? How should the social media communication strategy look like? And even more important, how to deal with a company’s employees being at the core of success to reap off the full potential of CRM in social media?

If you want to find answers to all those questions, here are the details:

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“Marketing ist doch diese Bullshit Branche, in der immer versprochen wird und nichts gehalten…” – Thorsten Hennig-Thurau im WDR 5 Radiofeature Content Marketing

Werbung

Dok 5 – das Feature, vom 12.01.2014 auf WDR 5
Schöne, neue Werbewelt: Profitabel, ehrlich, demokratisch?

Zum Radiofeature
Zum Manuskript

„Kein anderes Thema elektrisiert die Werbebranche im Moment so sehr wie Werbung, die nicht wie Werbung aussieht. Wegschauen, wegzappen, wegklicken - weil viele Verbraucher Reklame nervt, suchen die Unternehmen nach anderen Möglichkeiten, ihre Produkte ins rechte Licht zu rücken, ohne dabei allzu aufdringlich zu wirken.“

Content Marketing ist ein neuer Trend in der Werbebranche: Es geht nicht mehr um die pure Anpreisung der Produkte, sondern um seriöse Information und allgemeine Unterhaltung. Der Trend Content Marketing ist eine Reaktion auf das Verhalten der Menschen im Internet: Die Websites der Unternehmen werden nur besucht, wenn die Surfer immer wieder auf neue Informationen und Entertainment stoßen. Ansonsten sinken die Besucherzahlen. Content Marketing kommt aus den Vereinigten Staaten, erklärt der Werbeagenturchef Thomas Knüwer:

“Die USA sind halt in allen digitalen Fragen wesentlich weiter…. Wir sehen in den USA ….dass schon 91 Prozent aller BtoB …Unternehmen, …. die sich an die Industrie wenden mit ihren Produkten und 88 Prozent aller BtoC Unternehmen, …. aller endverbraucherorientierten Unternehmen – die machen schon Content Marketing. Das ist natürlich eine gigantische Zahl!”

Professor Hennig-Thurau:
“In jedem Fall ist Content Marketing ein Weg, Kunden…für sich zu interessieren. Und tatsächlich mehr, …an Nutzen mehr zu bieten. Als nur das funktionale Produkt. Und heutzutage ist es eben so….dass sehr viele Produkte sich funktional nicht mehr differenzieren können…Der Unterschied ist tatsächlich die Markenaufladung. Und wenn sie das Produkt weiterverkaufen wollen, dann müssen sie tatsächlich etwas bieten, was diese Aufladung verstärkt – und das kann guter Content sein.” …

Das ganze Feature hier:
Zum Radiofeature
Zum Manuskript

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Manager Magazin Interview: Big-Data-Analyse im Online-Handel

How is big data related to Christmas shopping? Thorsten’s (German) interview at Manager Magazin:

Manager Magazin Online

Köln – Für Kinder, die mit staunenden Augen vor dem Weihnachtsbaum stehen, ist das Phänomen Teil der Festtagsmagie: Weihnachtsmann oder Christkind kannten ihre Wunschzettel scheinbar wieder in- und auswendig! Und selbst mancher heimliche Wunsch, der nicht auf der Liste stand, wurde erfüllt.

Wenn jemand die eigenen Wünsche genau kennt oder gar in weiser Voraussicht erahnt, sorgt das nicht nur bei Kindern für glänzende Augen. Auch Erwachsene lassen sich mit so viel Verständnis für ihre Bedürfnisse in Weihnachts- und damit in Shopping-Laune bringen – so jedenfalls die Hoffnung von Online-Händlern, die jetzt im Vorweihnachtsgeschäft um die Festtagsbudgets ihrer Kunden buhlen. Und dazu auf eine Technik setzen, die ihnen Einblicke in die Köpfe der Kundschaft verschaffen soll: Big-Data-Analysen.

Ein Thema, das lange…

Read the full story here:
http://www.manager-magazin.de/unternehmen/handel/big-data-analyse-im-online-handel-a-935555.html

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