Archive for the ‘social media’ Category
Instead of turning to paid analysts, or internal experts some companies are using the crowd to help improve the accuracy of demand forecasts as well as better manage inventory and manufacturing capacity.
Predictive markets, often also referred to as information markets, aggregate the knowledge of the crowd to make predictions regarding unknown future events. By aggregating distributed knowledge the predictions of the crowd are often more accurate than when companies rely on only a handful of experts.
How do they work?
In prediction markets, individuals buy and sell “futures” or “shares” based on their beliefs regarding the probability of the event taking place. If they are correct, they are rewarded for their efforts. Because of U.S. laws related to online gambling, rewards often take the form of play money, gift certificates, or recognition within the market.
What is interesting about prediction markets is their structure creates incentives for individuals to act on their closely held information. Because rewards are tied to correct predictions, individuals in the crowd who have access to more information, which may aid in their understanding of the market, tend to buy more shares than those who are just guessing.
For example, Google uses over 300 internal prediction markets to assess events such as customer demand for new products (“How many Gmail users will there be on January 1, 2009?”), company and product performance (“When will the first Android phone hit the market?”), and competitor performance (“How many iPhones will Apple sell in the first year?”). In addition to new sources of predictions, Google has used these prediction markets to better understand and improve the flow of information within their company.
Do predictive markets work?
As with many new uses of the crowd, we have only scant evidence regarding the effectiveness of prediction markets. Best Buy reports internal prediction markets designed to predict holiday sales of gift cards were 99.5% accurate compared to a 95% accuracy rate from external consultants. Intel also reports success with their internal “forecasting markets.”
Faced with the difficult task of predicting demand of products requiring lead times of months or even quarters, Intel found their internal markets were at least as accurate as official figures and in some cases more accurate by 20% (i.e., 20% less error).
There is, however, evidence that outside factors can impact results of these markets. Some data suggests employees may be overly optimistic regarding company performance tending to artificially inflate positive results. For publically traded companies, stock performance can influence predictions upward or downward in line with the latest market swings. And finally, there are also numerous issues related to providing the right incentives for participation as well as obtaining executive buy-in for such initiatives.
Often the term crowdsourcing is associated with large groups of people contributing information or data (e.g., Wikipedia), with product innovation (e.g., Dell’s IdeaStorm), or with advertising (e.g., Doritos and Pepsi superbowl ad). But a number of companies are also leveraging the crowd to better serve customers and reduce those long wait times.
One area where the crowd is being leveraged is to supplement or even replace call centers. Because companies often struggle with issues related to ensuring operators have the right level of expertise to efficiently and effectively answer incoming questions, some researchers are suggesting that turning to active user communities as a source of expertise may be a more efficient and cost effective way of providing continuous and expert-level support. Active community members often represent the most knowledgeable customers and are likely already providing advice as part of their online activities. Even if only a small percent of calls can be re-directed to these über-users, it could result in substantial cost reductions and potentially more satisfied customers.
Companies such as HP, Microsoft, and AT&T are currently leveraging their user communities to supplements call center staff. In fact, Intuit reports a reduction in total support calls for TurboTax during tax season by 40%. Other companies such as giffgaff, a UK mobile phone operator, leverage their user community forums to handle 100% of their customer support issues, most within 5 minutes. In addition to leveraging their own communities, companies are working with intermediaries who connect them with other knowledge communities. For example, FixYa.com is an online service that “leases” access to knowledgeable crowds to help companies supplement their current customer support services. And Arise leverages 120,000 highly trained, home based independent contractors to provide high quality support resulting in a 25-30% cost savings relative to traditional brick-and-mortar call centers.
Of course, there are many potential issues with leveraging the crowd for customer service. How do you motivate über-users to act as on-call experts? How can you ensure that someone in the community can answer the question in a timely fashion, after all they don’t work for you? And what are the risks of having non-employees act in a capacity that suggests a company sanctioned response? Certainly these are difficult questions.
So the next time you call a customer service line, you might strike up a conversation and see who’s actually answering the phone.
A new twist on an old saying…
Posted on: September 16, 2010
I ran across this new saying at a panel discussion I was on regarding teaching with technology. Got me thinking. Has Google replaced thinking? Has Twitter replaced speaking?
I don’t think so. I think it’s more a comment on the impact the Internet and social media is having on our culture. Both positive and negative. We now have new ways of learning about new topics and verifying facts.
But with all the user generated content on the web, how do we ensure the accuracy of what we’re reading? Studies on Wikipedia have shown it is as accurate as the Encyclopedia Britannica. But what about other sources? Do sites referenced by a Google search provide us with accurate information?
There used to also be another saying, “If it’s printed in the newspaper it must be true.” Is society transferring that (potentially unknowingly) to the Internet?
Crowdsourcing, for the birds.
Posted on: March 21, 2010
No, I don’t mean crowdsourcing is “for the birds,” as in worthless. I literally mean crowdsourcing for birds. Here’s an interesting application of turning to the crowd to generate data – bird data.
Cornell Lab of Ornithology and the National Audubon Society have joined together to leverage the collective productivity of the crowd to accomplish a task they would never be able to do on their own. They have created the online site eBird.org.
eBird enlists the help of bird watchers across North America to collect and document the presence of specific bird species. Using the eBird site, birders can report sightings and access the latest data on bird populations across the western hemisphere.
By leveraging the interests of the crowd and providing the ability for them to easily contribute to a shared cause, site sponsors are now able to accurately track bird populations more quickly and economically than they could with in-house staff. In 2006, more than 4.3 million observations were submitted by bird watchers across the country.
Interestingly, the site doesn’t have any collaborative tools where birders can talk to each other, but it doesn’t appear to need them to generate a sense of community.
If you know of other sites that leverage the crowd to collect data, please let me know.
Title: Enterprise 2.0: New Collaborative Tools for your Organization’s Toughest Challenges
Author: Andrew McAfee (not the security guy)
Pub Date: 2009, Harvard Business Press
This is not another “2.0” fluff book. McAfee’s book is a great overview of the changing competitive landscape and the role Web 2.0 tools can play in helping enterprises stay competitive. How? Mostly by helping enterprises become more innovative within and outside their corporate walls.
Corporations can no longer rely on inside R&D and product development teams as the only means of innovation. Instead, if they want to remain competitive, they must reach out to employees throughout the enterprise, as well as vendors, customers, and even competitors. McAfee believes (and I agree) that enterprises who use new collaborative Web 2.0 tools to facilitate innovation inside and outside their enterprises will be more successful than those who don’t.
Using real examples along with current research findings McAfee outlines the potential and benefits of Web 2.0 tools for innovation within large and small enterprises.
Some tidbits:
- “Enterprise 2.0…allows good new business ideas to emerge from anywhere and spread organically, rather than being developed at the center and imposed from the top down.”
- “I have yet to come across any true horror stories – scenarios that make me question whether the risks associated with deploying [Web 2.0 tools] actually do outweigh the benefits.”
- “I do not advocate that decision makers should ask for quantitative ROI analyses, either before approving and Enterprise 2.0 effort or to assess its progress.” A controversial statement to be sure, but McAfee makes a compelling argument for this stance.
Best piece of advice:
“Enterprise 2.0 is about abandoning the assumption that unilateral control is the best way to achieve desired outcomes, and instead trusting in people’s ability to interact productively without constant supervision from above.”
Want to hear more?
You can keep up with McAfee here:
“Aflac!” We’ve all heard it and we all know it’s the Aflac duck. As a brand symbol, the Aflac duck has been one of the most successful in terms of recognition. Not so good in terms of people knowing what the company does, but certainly an excellent tool for building initial awareness. Well now the duck has turned to social media and is doing a pretty good job.
Duck, duck, Facebook.
The Aflac duck is now on Facebook. But what the duck is doing right that other aren’t is this…
- He, I’m assuming it’s a he, doesn’t just talk about himself and his company. He brings humor and personality to his posts with a lot of duck references and photos of his workplace.
- He shows a softer, more personal side of the company by uses his page to raise money for the Aflac Cancer Center charity. (They raised over $1M). He posts videos of the children who receive these donations.
- He uses contest to draw people into participation.
- He’s current – linking to popular videos on YouTube and icanhascheezburger.com.
As of this post he has over 160,000 fans. But we all know that just having fans doesn’t mean engagement. According to Alfac, their fan page receives more interaction per fan than any of the other top 10 fan pages (iMedia). Just check out his photo page and you can see all the people uploading photos of ducks and commenting on them.
A duck that quacks and tweets.
Aflac is also using Twitter to reach out to customers and extend their brand awareness. As with Facebook, they are talking about more than just themselves. From a Twitter perspective they are also doing some things right:
- The writing is light and witty.
- They cross-promote their charities (and fun videos) here as well as on Facebook.
- They have a combination of just simple tweets, RTs, and links to other sites. Mimics what real “tweeple” do.
- And again humor, personality, and references to current events abound. “Just cracked some Skittles, then Kanye came out of nowhere and grabbed them. I guess Beyonce deserved them more.” How do you not smile?
The duck is also active on Twibe for popular shows like LOST and The Office, and uses twitpic.
Extending the Aflac brand.
Alfac is a great example of how to extend your brand using social media. The company also seems to be just trying things out and feeling their way through – another great lesson. They understand that it doesn’t have to be all or nothing. They can walk before they run. (OK, I’m down with the cheesy clichés.)
Will it create more business? We’ll have to wait and see But awareness and connection to the brand is the first step to getting new customers. The duck connects you to the company and that trickles down for many into a feeling that the company is more than just a corporate entity, that it’s personal. Exactly what you’d want in an insurance company.
Kudos to Alfac.
Wired Pursuits 