500MM Users...So Why Can't They Show You The $$??

Sucharita  Mulpuru

I was so glad to read Malcolm Gladwell’s piece in the New Yorker, because as a Facebook bear, I often feel alone in the wilderness.  Finally, I thought, a widely respected contrarian on the topic of social networks!  He says the “revolution won’t happen on Twitter.”  And I say “no one's revenue will come from Facebook.” 

While there is no shortage of bragging about how many people in the world are on Facebook, sadly none of them have generated any significant revenue for other companies. That may very well be The Social Network's bane.  I spend much of my day talking with, surveying and interviewing retailers and the general consensus I hear about social networks is that they just don’t drive revenue.  Nearly 60% of retailers agree that the returns on social marketing efforts are unclear.  Retailers tell us Facebook fans don’t buy after becoming fans, they don’t click on the posts that retailers make, and no one visits or buys from the Facebook stores (unless that’s the only place where your merchandise is available).  I contrast social networks with search, which even 10 years ago was regarded as one of the most effective marketing tactics out there even when few retailers were using it.  The State of Retailing Online Report from way back in 2001 had 88% of retailers saying paid search was effective.  To this day, search continues to retain that honor.  Social networks?  Not so much.  Only 7% of retailers say it’s an effective customer acquisition source.

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Brand Experience Workshop: Learn The Tools Of Web Site Brand Experience Reviews (October 27th, Hilton Chicago)

Ronald Rogowski

Ever wonder why Web sites offer such lackluster brand experiences? Want to know how your site can help you differentiate your brand online?

If you care about how your brand succeeds online and are attending Forrester’s Consumer Forum 2010, I encourage you to consider attending our Web Site Brand Review workshop on Wednesday, October 27th (the day before the forum) at the Hilton Chicago.

During this one-day session, I will be presenting insights into the dos and don’ts of creating Web sites that effectively build brands. Attendees will learn the same methodology Forrester uses to evaluate how well sites build brands as published in reports such as “Best And Worst Of Brand Building Web Sites, 2008,” “Best And Worst Of Financial Services Brand Building Web Sites, 2009,” and "Web Site Brand Experience 2010: Hotels." 

This promises to be an educational, interactive, and entertaining way to learn the tools that will help you create the online experience your brand deserves. And, if you are attending the forum, we are offering a special discounted rate. For more information, and a detailed agenda, please visit the event page.

(By Any Other Name) RIAs Will Power Future Online Experiences

Ronald Rogowski

For a long time, people have debated the meaning of every part of the acronym RIA (rich Internet application). What is rich? What do you mean by "Internet"? What's an application as opposed to a site that renders content? (The last one has become clearer for some apps that sit outside of the browser but is still contested for functionality that runs within a browser.) The debate was really a way of making the case for player-based technologies like Flash and Silverlight vs. AJAX and dynamic HTML. While the former powered experiences that were more akin to software than sites (generally speaking), the latter enabled more dynamic, yet still page-based, experiences (again, generally speaking). But the lines are about to blur even further as we look at experiences that are increasingly fragmented across interaction points.

What does the future look like? Forrester believes that four attributes will characterize the online experience of the future. As my colleague Moira Dorsey points out in her report, "The Future Of Online Customer Experience," experiences will be: customized by the end user, aggregated at the point of use, relevant to the moment, and social as a rule, not an exception. 

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The Lone Cry for Growth In Insurance?

Ellen Carney

Yee Hah! The worst recession since the Great Depression was declared officially over in June of 2009. We should be feeling great, since all things considered, the insurance industry fared pretty well when it came to how it emerged from that dark tunnel. But except for one notable role voice, insurers, unlike their banking peers, are still holding back from growing the business. How do we know? We took a look at nearly 5,000 inquiries that Forrester answered for insurers, bankers, and securities firms in the wake of failure of Lehman Brothers to just after this May’s Flash Crash.

What was on the minds of insurers during these six quarters? For starters, insurers:

  • Asked more questions than their financial services peers. Of the three segments we looked at, insurers asked half of the inquiries we fielded—2,500 versus nearly 1,600 and 600 for banks and securities firms, respectively.
  • Framed more than half of those questions around risk. Insurers didn’t veer away from what got them through the recession intact (indeed, from the very nature of their business)—managing risk. Even questions about application development strategies were framed as a risk question, with most insurers seeking validation that they were following in the well-worn grooves of others in insurance (and other industries) before them.
  • Posed too few questions about growing the business. Unlike their banking and securities siblings who asked questions about growing the business through new product launches, up-selling and cross-selling, or luring new customers away from competitors, insurers, with one big role-based exception, did notreflect that Q2 2009 economic inflection point.
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Please Enjoy Your Columbus Day And Sorry About The Ryder Cup

Peter O'Neill

I wish all my American colleagues and clients a happy Columbus Day. I understand that our offices are closed for that reason on Monday.

Well, I certainly do not celebrate Columbus Day. I come from Wales, and I made the extra effort to return to my home town last week to watch the Ryder Cup onsite.

By the way, everybody knows that it was a Welshman, Prince Madog ab Owain Gwynedd, who discovered America back in 1171. See http://www.historic-uk.com/HistoryUK/Wales-History/DiscoveryofAmerica.htm

Unfortunately, he never returned, so the only evidence of the journey is the strange “Welshness” of certain Native American tribes in Alabama (musical voices, continuous searching for coal, and trying to get around in circular boats).  

Prince Madog actually challenged the Native Americans there to the first Ryder Cup, but that contest was declared null and void after one Native American replaced his ball with a fresh one because it had “gotten wet and dirty.” Nowadays, the American team are given a better chance – last Saturday, Ricky Fowler was only penalized one hole when he did the same. This kept the contest alive for a few more days (the TV networks rule). In fact, the Europe team even contrived to keep the contest going until the last pairing, which may have been leaving it too tight. I must say, the Americans were better dressed then, and their rainproofs did keep out the rain.

Anyway, always keeping you informed! Peter

What Must Still Be Distributed When We Have A Cloudy Industry?

Peter O'Neill

By Peter O'Neill

I have an exciting engagement next week; I will moderate a session during an annual review meeting of a leading tech distributor with its leading vendor. The topic we’ll discuss is the cloudy future of our industry and what that could mean for the roles and responsibilities of vendors, distributors, and resellers. I’ll have a presentation prepared, of course, but all analysts operate under the principle of “two ears, one mouth,” so I’ll also expect to hear much insight from both distributor and vendor on this topic —  and both parties will be represented by their top executives.

My colleague Tim Harmon and I have just submitted a report that explores this topic, based on a recent survey of 165 executives of channel companies across the world (only 52% in North America). We talked to resellers, distributors, systems integrators, managed service providers, and other channel players — in fact, no single executive was prepared to say that just one of these titles applied 100% to their company. We did the survey in collaboration with the organization Outsource Channel Executives. Interesting facts that we gathered in the survey include the fact that nearly two-thirds of these firms employ applications developers; most resellers are attracted to becoming managed services providers to their client base. Tim also went into some of these findings in his recent Forrester teleconference.

So, here are the title and agenda of my session next week:

                The Coming Upheaval In Tech Industry Channels

  • Diverse forces align to change the business of IT.
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The Data Digest: Uptake Of Home Networks In Europe

Reineke Reitsma

With the adoption of more and more devices that can connect to Wi-Fi, it’s interesting to understand the uptake of home networks. Forrester's Technographics® data shows that 30% of online Europeans have already set up a wireless home network, and a further 11% are planning to get one in the next six months. The adoption of wireless home networks has grown in Europe since 2006, while the adoption of wired networks is declining (dropping from 12% in 2006 to 6% in 2009).

Three-quarters of online Europeans with a wireless home network share an Internet connection among multiple PCs, and 17% have already connected their PC to their TV set. Wireless networks are especially popular among families and multiple-PC households: 86% of wireless home network owners have more than one PC at home, and 40% have children living at home.

An Experience With An American Express HERO

Ronald Rogowski

Ever since I signed my daughter up for a frequent-flier program, she's been receiving at least one credit card offer from American Express every week. Problem is, she's 2. It's unnerving to say the least to have these kinds of offers coming to your kids, but it's not hard to imagine how it happened. In fact, I know exactly how it happened since I had the same issue with my 4-year-old about a year ago — one company shares a contact list with or sells it to another, and somehow nobody filters for age (if that's even in the database, though one would assume it is). And voilà, mail campaigns are targeting your kids.

We started receiving these emails for about six months, about the time we took a family trip to Chicago. Finally, I got fed up and put in a call to American Express, which, to be fair, is not the real culprit here. However, I called, and after negotiating the IVR system (that seemed determined to give me an unwanted download on my account status, though that's a bit off-topic), I was routed to a representative who listened to my problem and expressed genuine shock at the situation, immediately making me feel like there was someone who understood — someONE, not some nameless, faceless database that was spitting out those credit card offers. It put me at ease to the point where I would have felt comfortable if the representative told me she had to mail some forms that I'd have to fill out and return. Instead, the representative asked me to wait a moment while she sorted this out. Clearly, this was not a typical request, so I figured it would take some time. However, after a few short minutes of waiting, the representative came back to tell me that she had submitted the necessary paperwork and that the mailings should cease within a few weeks. She apologized for the inconvenience in a human — not robotic — tone and sent me on my way.

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Cisco Umi Offers A Backdoor To The Future Of TV

James McQuivey

Today, Cisco unveiled its home telepresence solution called Umi (prounounced you-me, get it?). For those of us who aren't familiar with Cisco's use of the term telepresence, it's a term it coined to describe the very impressive (and very expensive) enterprise immersive videoconferencing experience it provides to businesses around the world. In the home, it basically means TV-based videoconferencing. 

The home offering is similar to the enterprise version in two key ways -- it is also impressive and expensive. Starting November 14, affluent consumers who really want to connect with family across great distances (and who are either unaware of or uninterested in Skype) can put down $599 and sign up for a $24.99 monthly Umi service fee and become HD videoconferencers. I tried the system in a real home and I'll admit the quality is eye-opening. As is the price. Read more of the details here in this post from CNET, but some of the less obvious points include: video voicemail, video voicegreetings, and the ability to record video messages when not connected to someone else. The camera rests above your TV screen and makes for one of the most believable videoconference setups I've seen (the person you speak to actually appears to be looking at you, imagine that). The whole experience rides on top of the existing video input so that while you watch TV you can see a message indicating a call is coming in. Choose not to take it and it will go to video voicemail. There are nice touches like a privacy-minded sliding shutter over the camera (complete with "shooshing" noise when the shutter closes) that helps you know via the senses of sight and sound that your camera is not on. So go ahead and give the missus a kiss while on the couch, no one is looking.

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Groupon: Scourge Or Phenom? Our Vote: Phenom. Here’s Why…

Sucharita  Mulpuru

A Rice University faculty member just published a study on how effective merchants find Groupon. To Groupon critics, it was honey because a whooping 40% of participants wouldn’t repeat the experience.

But here’s the catch and why I’m still a huge proponent of the “group buying” model that encompasses Living Social, Buy With Me, Tippr and now the Yellow Pages and local radio stations and newspapers too: most of that 40% thought the Groupon customers were cheap and tipped badly. 

If that’s the worst of the problems, this model may actually be worth much more than the billion-dollar valuations already placed on the space.  Here’s why.  First, businesses like restaurants can prepopulate the “tip” field.  I went to a restaurant in Charlotte called Zebra which has done multiple group buying offers and they include a 15% gratuity in the bill.  Any business not already doing that could and should be.  Second, and more powerful, is that the group sites could capture information on who is a good and bad customer from the merchant.  Every redemption has a unique code associated with it (see image). None of the group buying sites are doing that now and merchants, at least according to the few that I’ve interviews, are keeping track of redemptions in rudimentary excel spreadsheets. The first company to provide a merchant tool that allows the flagging of particularly good and egregiously bad customers will be the winner in this space. By eliminating the “bad” customers from the offer, a merchant is much more likely to experience profitability or service issues that strain these small businesses. 

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