Category Archives: consumer behavior

Priming the pump for mainstream investors

money

Kiva has launched a remarkable employee giving strategy that enterprise companies like Google, HP and Deutsche Bank have taken advantage of, and with strong executive leadership, these companies have delivered significant results.

CSR programs work towards lifting morale by demonstrating support for communities in need. Traditionally, these employee activities have included out-of-office hands-on volunteer activities on personal or professional time working directly with a charity’s beneficiaries.   Kiva’s Team crowdfunding platform has created a low-risk opportunity for companies to engage employees in the act of lending. Recipients are not charity cases and the employees need not leave the office.

 Not only are the results measurable and the funding recyclable, but the experiential influence of the lending process has an end-to-end productivity spectrum that leaves the employee feeling satisfied and wanting more.  

Premal Shah, President of KIVA led a panel at SOCAP last week that gave us more details.   Ranging from $25-$75, each of these companies created a program whereby their employees could lend the maximum value. Participation has been anywhere from 43-60% with HP clocking in at 120,000 employee participants to date.   Google even created an online visual map that shows in real time, where the loan originated and the country it went to.  

Here is a CSR program with unique and real potential to unlock awareness for the value of socially beneficial business platforms.

The founder of LinkedIn, Reid Hoffman took the entire concept a step further by issuing a challenge in 2012 by providing $1M outside of his organization. Kiva was instructed to distribute certificates delivered through social media to introduce new would-be investors to the concept. Over the course of 14 months, not only was $994,000 returned to Reid but in incremental $1.2M got invested by newly indoctrinated investors and entrepreneurs received loans at 10x’s the normal rate.

Like all CSR efforts, the question is what comes next. Crowdfunding is changing financial markets and millennials are seeking to be a part of the solution.  Google invested in Oakland’s Impact HUB where Kiva Zip recipients can operate and Googlers can invest their time to assist in capacity building consultation.   CSR is a valuable company perk but where can these well-meaning efforts drive real market change?

Photo credit: Sharyn Morrow

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brands-do your research now!

inspect Adapt or die. Never has this statement been more true. Consumer brands are dealing with an overnight change in attitudes and values that is unprecedented in modern consumerism. From travel to jeans to soap to museums – no product or service or experience will survive this tumultuous period without re-examining their value proposition and the role they play in their consumer’s life.

Between the economic crisis lead by Wall Street and AIG, the environmental crisis and now adding insult to injury – the AIG bonus payout – consumers are retreating and rethinking every single dollar that leaves their pocket and who it will go to. In fact, the Edelman Trust Barometer reports that U.S. consumer confidence is even lower than it was after the dot.com bust and the Enron scandal. Things aren’t much better internationally, 62% of respondents across 20 countries included in this same survey report less trust in business than a year ago.

The result is that the brand relationship with consumers is about to get very interesting. Current brand equity will still play a critical role in consumer decisions but each and every brand needs to get out there and understand what their new consumer needs are a.s.a.p. There are a plethora of marketing reports coming out on issues of sustainability, moderation behaviors and other factors that will play a role in future consumerism. These reports are valuable but are simply the backdrop for independent research that should be done to understand these trend drivers first hand as they relate to a company’s brand. This shift doesn’t mean that brands need to lose or even change their core brand assets. They simply need to look for new ways to relate and to re-look at how their products communicate with their current audiences and their new behaviors.

For example, the New York Times reported last week that museums across the country are now opening their doors to entirely new audience segments via discounted special events that build on their core offerings. In San Francisco, the Academy of Sciences has debuted Nightlife – a weekly evening event incorporating DJ’s and special science activities that brings together a much different crowd than the kids, parents, tourists and science geeks the Academy usually attracts. Not only are they finding new hours to open their doors but they are attracting new audiences that have traditionally dismissed this type of cultural institution en masse.

It’s this type of re-invention and exploratory relationship building that needs to take place across the spectrum. Simply speaking to green or pricing trends via advertising or promotion will ultimately miss the opportunity to play an important and trusted role throughout the upcoming years of significant value and lifestyle restructuring.

the carbon authority: part one

carbon-neutralIn a swath of green fury, there is a whole new market emerging which most consumers have heard of but for the most part, have no clue if it will ever become relevant to their daily lives.   To some degree none of us know what role our march toward a carbon neutral economy will play in our not-too-distant future yet there are signals locally and globally that the carbon market may ultimately play a significant role in our daily choices.  The question is  – who will guide us in the adoption of practices that will truly help us understand this market.

To a certain degree, it is probably too early to ask this question.  The early days of the mobile phone industry were governed by industry wide regulation, distribution and demand.  Demand drove consumers to purchase despite mass confusion over cost protocol and brand authorities didn’t emerge until the market had stabilized and penetrated the most sought after consumer – the teen.  It took us over a decade to begin to feel like we understood how to evaluate “Rollover minutes” against “Nights and Weekends Free” against “myFaves” (although one could argue we still don’t know why we’re locked into two year contracts).

So, it’s likely that we are ten even twenty years before we truly begin to understand what the outcomes of all the debate in Washington and abroad is about as it relates to understanding our role in neutralizing the carbon in our atmosphere.  This is an operational challenge that will be driven by regulation not demand.   Yet there seems to be market activity that signals this evasive concept-commodity could and actually is being productized at a mass consumer level.

Many airlines now offer individuals the opportunity to purchase carbon offsets at the point of their ticket purchase and online calculators such as Terrapass provide individuals and businesses the opportunity to purchase carbon credits to offset their output.  Termed “offsets” these credits are the product of a  financial mechanism created to regulate carbon output and including organizations naturally protecting sequestered carbon.  Most of us have begun to hear the term “offset” but will readily admit we have no idea what it really means, let alone starting to dig deeper to know what “standard” the carbon has been verified against to determine its true value.

The interesting question is,  who will emerge to be the (brand) authority in this new market?  What business and in what tier of the consumer eco-system will emerge to establish credibility and drive the standard to which we will make our assessments? And what industry can we look to previously that might shed some light on where this new market might be going?

25 things…an innovation tool

25-thingsHow many articles have you read about “leveraging social media”  yet how much real implementation have you seen?  Researchers, companies pay attention.  Memes provide very specific opportunities to participate in social media phenomena.   And The 25 Random Things about [insert your product or service here] sweeping FaceBook – among others – is a no brainer to both implement and learn from.

People love to talk about themselves.  They also love to talk about the things they love (and hate for that matter).   Using FB or Ning or any other social network to initiate research on your product using this format has tremendous potential because it: 1) requires a long list…this means patterns will emerge; 2) it also means that people will be forced to think beyond the top well-published “issues”, they’ll be forced to think about the emotions and situations which cause them to love or hate – this leads to real usable insightful information;   and 3) besides yet another reason to publish a personal opinion, who doesn’t love participating in the trendiest thing out there?

Now, 25 Random Things about Me…….

iPhone as fundraiser

iphone1Is there anything the iPhone can’t do?

Shazam figures out what song you’re listening to.  A pocket flashlight (not to mention a light saber) is only two taps away.  And Yelp can get the phone number, directions and even a review of the place you’re trying to find and meet your friends at in a quarter of the time directory assistance, Safari, Google or any mapping software can do it.

So, why wouldn’t our love affair with the iPhone help us make the world a better place?  Why wouldn’t our obsessive usage create perfect opportunities for capturing micro-donation portals to make contributions to the micro-finance or giving sites of Kiva or Global Giving?  What about a carbon calculator that lets you immediately link to an offset purchase equivalent to the inquiry? It would seem that millions of tiny donations could add up to lots of impact.    It seems possible, and even more so fun.  But does it really add up to a smart fundraising play?

Part of what makes the iPhone so magnetic (and what Apple is famous for) is the sheer simplicity, intuitiveness and delight you experience when you begin interfacing with each of the singular functions that each application features.  Mostly they are personal devices for entertainment or utility.  They draw you to your phone because you either need the info or you need a time killer.  The apps are sexy brilliant in their use of the technology and the format.  Every time we download a new app, we are sucked in, at least for a short time period.

The challenge for social ventures to monetize applications will be to determine if there is a big enough audience at the intersection of 1) organization loyalists and 2) iPhone enthusiasts.   This will require some thoughtful creativity and long-term dedication on behalf of the organization.  Which is to say that creating an iPhone app alone is only one piece of the equation –  how each app gets marketed and updated will be critical to its effectiveness.
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electrical innovation

Changing consumer behavior can be a slow painful process.  Not only does it require educational efforts but often widespread systemic conformity is required. However innovation has radically altered some of our most fundamental behaviors.   Globally, we now access cash from a machine and we carry and use mobile phones for a significant percentage of our calling.  Its this type of basic change that will be required to have significant impact on socially and environmentally responsible consumption habits.

Shai Agassi has just such aspirations.  The electic car has been the talk of the town at the Detroit auto show this year but Shai’s concept is the most intriguing and well thought out.  In this week’s Newsweek, Fareed Zakaria talks to Shai about his idea for a Better Place in “Switched-On Highways”.    Shai does exactly what is necessary for radical innovation – he flips the approach.  Instead of framing the problem as “how to build a better car”, he frames it as “how to run a country without oil”.  He takes an ambitious approach that looks at both the infrastructure, the model of ownership and of course, the power source.

Return to electricity

Even with oil returning to under $50 a barrel, Shai’s new model is betting on the electric car to remove our dependency and make the switch to clean electricity.  With the required infrastructure in place, the cost ends up somewhere between six and eight cents per mile which is motivation in and of itself, even if oil got down to $25 a barrel.

The razor model

Taking a page from the razor, printer and video game model, he has also separated the car from its core function – the electric battery.   A truly radical idea when it comes to car ownership but one that makes a lot of sense.   The basis for this is the need to re-charge batteries after they drain all of their power.  This drops the price of the car and its operation even further and makes acquisition a lot more appealing.

Leveraging existing behavior

But what’s important about this model is that it leverages our existing and well-established behavior of stopping at the “gas” station.  For long haul driving – or even for convenience during a normal day of driving – it doesn’t make sense to have to stop and re-charge an electric battery when it’s run out of its juice.  So, Shai proposes switching stations where you just pick up a fully charged battery.

There are flaws in this model but radical innovation generally doesn’t happen perfectly the first time.  What is exciting about the Better Place concept is that it addresses consumer behavior from the get-go.   Plugging an electric car into your own garage sounds exciting but offering a car at a reduced price with the “benefit” of a switching station somehow puts the consumer at ease simply by offering them the comfort of a long-held tradition. Eventually we’ll get to fully plugged in at-home cars (cuz after all we all hate to stop at the gas station), but first Shai has to get them to buy the cars.

And the really exciting thing….California is already set to begin adoption of a Better Place this year!

image credit: Better Place logo by techpulse360 on Creative Commons