Yesterday, Steve Woda (buySAFE’s Founder) and I spent
the day in Philadelphia attending Wharton Professor Dr.
Eric Clemons’ Jones Center on Global Strategy and Knowledge Intensive
Organizations. The Jones Center
is essentially a research organization headed by Dr. Clemons that is designed
to highlight potentially disruptive industry changes and overwhelmingly
attractive opportunities long before they are visible through traditional
environmental scanning or trend analysis. In short, it’s an opportunity for companies and members to learn about cutting
edge research being performed by Dr. Clemons at The Wharton School and to share
ideas and insights. The center has been
operating for over 20 years. Steve and I
have been invited guests for the last few years.
Yesterday’s
session primarily focused on two key topics.
1) buySAFE and valuing the elimination
of uncertainty. A case study Download buysafe_wharton_case_study_clemons_0906.pdf
on buySAFE was reviewed and the
large body of statistical data that has now been collected which measures the
very pos
itive impact buySAFE is having on buySAFE Merchant conversion rates and
pricing was reviewed. In Dr. Clemons’ own words, “not surprisingly, this
represents a significant improvement over eBay’s rating systems, and not
surprisingly this translates into measurable price premiums for sellers”. We discussed buySAFE’s positive impact in the
context of the cost of Uncertainty in online transactions (this cost is borne
heavily by online merchants) and the value of Signaling in reducing uncertainty
which then leads in changes in online shopping behavior.
2) Reaching the Customer: The Future of
Advertising and Social Network Websites. This was a fascinating
discussion of the continued erosion in the effectiveness of traditional
advertising – primarily as a result of reduced trust in what the ads themselves
are saying and from the sheer overload of messages. It also covered the importance of marketers
to embrace the new channels and methods of marketing their product. In a world increasingly dominated by social
networks and user generated content, the implications of the resultant loss of
control over one’s message – create real challenges and opportunities for
marketers.
This
concept of the “death of push marketing” has obviously been around for a few
years now. I personally believe Seth Godin is one of the best at truly
understanding this topic and most importantly, for providing advice on how
marketers should change their paradigms of thought in order to leverage new and
much better ways to drive adoption of their products. If you haven’t read his work, you really
should. Start with Permission Marketing
and Unleashing the Ideavirus and work forward from there. Anyway, the implications of this for a
company in the Trust business (i.e. buySAFE) are quite interesting… my train of
thought goes like this…
a) falling trust in what the ads
themselves are telling you is a major contributor to their reduced effectiveness,
b) with reduced trust, consumers don’t
trust marketing pitches unless it’s from a trusted source (thus the power of
word of mouth marketing),
c) the internet is a powerful tool that
enables individuals to share ideas, thoughts and reviews but there’s a huge
need on the internet for the “source” to be validated and trusted (LonelyGirl15
on YouTube is a prime example of this), so...
d) how do you solve this?
1. Build your own brand (e.g. become
popular and well known enough that everyone knows who you are and trusts you)
2. Rely on the “wisdom of crowds”
3. Rely on an unbiased Trusted Third
Party
Each has
their own pros and cons, I believe the most reliable and effective is reliance
on an unbiased trusted third party, but what you do think?
