Dataforeningen Stockholm Riding on the New Market Logic of Social Ecosystems

Hello and welcome to another edition of Ephlux Insights. My name is Babar Khan and I’ m the entrepreneur in residence of this program. Today, we’re joined by Birgitta Edberg, the CEO of Dataforeningen Stockholm, a marketing strategist and an expert in the Social media ecosystem. She’s also written a book that we’ll talk about today Birgitta, if you could just a brief introduction about yourself, the work you’ve done thus far and how you got into this space?

Yes and thank you for inviting me here. Well, I’m working now in this Dataforeningen, in Sweden. We have 50K members, I’m the CEO and it’s a non-profit organization with a mission to increase knowledge and contacts through networking. So it’s a very pleasant work to engage and support people that are very passionate about their topic – it could be big data, architecture or change management. We have 60 thought leaders in different areas. They meet each other, physically, and exchange knowledge about various topics. That is my profession and I’m also an author. I’ve written a book that came last year “social business development in the network economy.” The book’s name is “Social Affärsutveckling i Nätverksekonomin.” It’s based on a research that I did when I was in university. I’ve checked all the traditional marketing and business modeling, so I understood that there is an understanding gap in the organization. So, one person understands the world where we’re equal and no matter if we’re in Pakistan or Sweden, we‘re connected. The old world that was built with physical barriers, and you have these 5 forces for example, is built on a world with physical barriers. A company or fabric today, can produce values, with each other, in the cloud – with new tools like ecommerce, People are really creating value together, and its most of the time outside the company or organization. This book is directed to the companies, that they should understand the new world – the change. The technology drives new market logic. No one can wait for companies to interact with the individuals, who are powerful now. In my book, I present the new model; it’s based on Lean consumption. In the 20th Century, all the academic marketing theories like you should position yourself in the value chain to be effective in the value chain, but today the idea of value chain is based on tailor. It’s like you’re manufacturing products and then they come out the assembly line and the products are just delivered. We don’t know who is making them. Today it’s different, we don’t like to wait and we want value then and there. The challenge for companies is to fit into this expectation, to fit into this market logic. I want to increase knowledge about this new market knowledge and that is what my book is about. When you study to be an Economist, I wanted my book to be part of the course literature.

In that case, congrats on being published. Could you recall what the Social Media Ecosystem is?

The Social Media Ecosystem is about cloud and mobility. The digitalization has made an infrastructure in the cloud. Before there was no structure but today you can do nearly anything in the cloud. The ecosystem is more like the infrastructure. It’s like when you built the railways, and then they realized they could build trains and put things on the trains. Now, it is in our fantasy to use this digital ecosystem. And create value. The tech is driving the behavior and the expectations, and some that understand this new logic and they use this social media ecosystem. Others are lost in their old thinking and they can’t really see the value of this. One of my 8 P’s instead of Kotler’s 4 P’s  – one of the P’s is platform and another is People, Today you need to have a meeting platform for value creation., where you’re equal. You’re not passive consumer waiting behind assembly line. Amazon, Facebook and those kinds of platforms. There are people who could create and there are people that are using it and there’s a value network instead of value change. Many researchers point to this and in my book I’ve put those in order. The market model is about co-creation in the ecosystem. It makes it very easy to find people with similar interests. You found me. It’s a lot of changes with the many possibilities. The marketing professor Richard Norman says that when the world is changing, the biggest challenge is the adoption of new ideas that the consumers roll and the organization adaption to the world.

Everybody is connecting now. You have to change ideas and adapt your organization and use the technology like a social hub. Everyone works together but in real-time.

The concept that’s frequently touting in the marketing circle is ‘the customer’s always right’ and in a time when the customer’s really changed and is quickly adapting with time but the company’s not ready to switch from the 4 P’s and they’re stuck in their old processes or fixed models of brick-and-mortar when there’s a possibility of selling to the customer on the spot. It’s mentioned in your book even, that the technology has an impact on the consumer behavior including the decision journey. On that note, could you talk a bit about how the decision journey has changed on the social media ecosystem? Also, how can brands optimize on that change?

You have a lot of old models marketing stimuli models. With a banner / ad you should get a brand promise to the consumer and when they see this nice brand vanish, they go after shock. This was the process before. The process starts with Google. Every company has to find value and market to pay for the value.  Today, if people want to solve their problems, they Google to solve their problems. So, if they don’t feel safe at home, they need to buy an alarm and they connect to other people who give a variety of options – you’ve got people recommending one alarm, and dismissing another. Today, banners have no effect. So the traditional model of marketing is set aside. Today, 90% Google and the friends in the ecosystem tell the solution.  The logic is different. What should you do as a CMO; well at first it starts with a philosophy. You should get easy answers. You should use content marketing, which is really talked about. Some marketers say they made a creative YouTube campaign as a content marketing or inbound marketing. When people have the need, they should find you and when they find you, you give valuable content. How do you get found? You can get whitepapers done; the philosophy builds on the exchange. In a relationship, you don’t push. It’s not enough that the business is customer – centric. It’s more like you invite your customers to the value change and in the marketing room, you have the ambassadors. It starts with the relationship strategy, and then comes the content marketing. It’s more like permission marketing. We need to develop good experiences. For that, we need to listen carefully. If you say, I don’t like your haircut; I have to change it because it’s a relationship.  As a marketer, researchers say that 1 or 2 companies interact with the customers when they tweet or like them on Facebook. Others are spending lots of money on the ads. It’s about thinking in new ways. It’s fun to do crazy campaigns. If you’re CMOs, you take part in the events and e-marketing. You don’t know much about customer service because that’s another department. You should connect on the company and know the business model, know you business and customers.

I don’t know if it’s 100% true, but in our part of the world people are reluctant to experiment in general. If they go to digital, they set up a two way communication channel. They focus on customer service to further relate to and cater to the existing customers and also create awareness with the new customers. That might not be the case in developed markets or developing and emerging markets. Maybe the brand manager or CMO or marketer should see how the ideas of the technology and frameworks have worked. These are related industries and it will endorse the idea more with a similar business in other countries. Share some examples of brands that have done this, how the ideator convinced to go ahead with the plan?

It starts with the philosophy of the business model. I have an example in my book, a lean start-up. You don’t know the perfect business. So you get the start up 8% ready, and then you interact and change and adopt and Amazon like business companies had adjusted to this big business idea. YouTube was a dating site at first and now it’s a site what it’s today. They interact and adjust their business model. In old companies, it’s much harder. One of the examples of best practice is Spotify. They have 5 years of being worldwide. There was a seminar about Big Data and how to navigate in this world. When we started, we wanted to sell music but we didn’t know the perfect product. Today we handle one pecta-byte. What do we look for in that data? We look at the feedback of the product. So from the start they said we don’t have the answer of the perfect product. We should be interactive like Amazon. When they see that someone doesn’t like they change and keep changing according to the consumer, with a very flexible platform and today they have a leading position in the distribution of music. They call it in the research a co-creation business idea. New companies can be really dynamic in that thought. They know what they must do and adjust and see the signals that it doesn’t fit well. It’s hard for old companies to do that because you have to adjust your thinking and it’s hard.

A Lot of businesses that I have worked with are quite difficult to convince, even to come to social, even when they do, it’s a slow process and the adoption across the whole value change is quite difficult. You only have the marketing person doing his job but hey completely alienate the customer service team. There’s a lot of talk on social media and other platforms about what consumer brands can do in this space. As you mentioned the railway analogy, unless people have smart phones in their hands no point pitching the idea of apps for them  you want the options of the technology first before you go further, like a touch point or LBS. What I want to know about how does a corporation, an agency or a consulting firm, brand itself in this new normal as Professor Strauss references, in enterprise 2.0.?

It really has to be a transformation journey. As a consultant you really have to show how many companies have died and will die as a result of this non-change. For example, Michael Porter’s company had a consulting company and he made the value change and was a guru, but his own consulting company died a year ago. Why didn’t this strategy save him? As a consulting company you have to show examples, there’s an index by the name Social Business Index. The companies that are high in this index understand the new world and are profitable. If you’re not there, you won’t be in the market in 5 – 10 years.

There are CMOs who have this in mind, but pitching it to the higher level is quite a challenge as it’s a mindset change. We need an approach that can convince them? How does a CMO convince their boards to move to this way? Aside from that, what advice do you have for CMOs for investment?

For the argument, let’s start with the cost. They should look for all the studies about inbound and outbound marketing costs.  Survey showed 63% less cost in inbound marketing than outbound marketing.  That’s a lot of money that you can save. There are also studies at the University of California where they did an experiment on Facebook in 2010, where James Fowler, leading the research, where they sent out the message to 60 million people that they should go and vote in American Congress. They had an A and B message, where A said that you vote for this and B had their friend’s names who had voted. The results showed that everyone voted from the B because they saw their friends do it. These 60 million Americans also mentioned their friends, and it added to 280 million people. It was a massive ROI. Today, you can really measure how much this ecosystem has a relationship on one another. They should do the research hand show that to the board.

Second question was about the tip for this year. You need to understand the new market logic. You have great thought leaders so you could go to Twitter and look for Inbound Business and social Marketing and enterprise and dream forces and conferences and people are sharing. Start to learn more about how people connect and how can you really know what’s valuable in a relationship. It’s not enough to handle activity and you need to know how human touch and feel works and how to take away the pain. People need to love the brand because you’re a good company and you care and you make a better world and not just good products.

Last person we interviewed was Professor Strauss and he follows the same ideology and he applies it and mentions it in a lot of conferences that it’s human to human marketing than business to consumer or business to business. If you can understand the human side of the decision making process, you’d make a great impact as opposed to looking at the utility aspect first. The decision making involves variable factors that are not just the needs but what goes beyond that. Another person Robin Bonn, Business Development Manager at Seven, an agency in the UK, mentions that content marketing changes with the buying decision journey. Whether the person likes or dislikes the content marketing changes. They have a digital banner that changes according to the time of the day. Like a campaign they did for a coffee brand, at the beginning of the day, it will say stuff like you need to wake up and at night it would say don’t have coffee at this time take rest. So when a coffee company does that, people know you care and you mean something. And late at night they’ll say have an espresso shot and pep up if you’re working late. It’s no longer a one way communication, its two ways and I thank you for taking out the time and talking to us especially about adopting the tech, very valuable insights. I would also like to connect you to a couple of people who are working in the same lines, across the globe. Thank you.


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