Mouse is mightier than Sword!! Engage your customers through Social Media Optimization (SMO)

Several years before, management guru CK Prahlad wrote a definitive article on Co-opting Customer Competence, in which he had outlined how you can coproduce with your customer, and use his competence to sharpen your competitive advantage. One of the main tools of coproduction is not just listening to your customer, but engaging and actively using his inputs in your design and delivery of your products and services. A few years before, a website was a mere shouting tool - communication was often one way, with website providing information to the reader/user/customer. But today, online platforms are powerful interactive tool that allows you to engage your customers, not just communicate with them. Your customers are constantly communicating with their networks about everything including the products and services they use. They blog, tweet, share and buzz, and it is important to optimize your business and your online presence for social media in order to effectively engage and co-opt your customer in your success.


Why should you engage your customers? Why bother what they write about you in their social networks?


(a) Customers trust user generated content, reviews, and recommendations much more than they trust any of your traditional marketing tools including advertisements. Media advertisements are good to generate the first interest. But  beyond that, your previous customers evangelizing your product will get you much more sales and new customers. The Razorfish consumer experience report for 2008 reports that 61% of people rely on user reviews to buy products. According to a global Nielsen survey of 26,486 Internet users in 47 markets, consumer recommendations are the most credible form of advertising among 78% of the study's respondents.


(b) Consumers give you valuable inputs and real time feedback. The mouse is mightier than the sword. Internet users increasingly tweet, share, blog, and buzz about everything they do, feel, and think. Google has started crawling social media sites including facebook, twitter and its own buzz in order to give real time information of the latest information in its search results. You can listen in to what your customers and users are saying in real time. 


(c) The word of mouse.  In other words, do you have the latest tools to instantly share your information? Can your readers share the news about your latest product launch to their network using twitter, digg, or FB Share? The word of mouse is viral, and powerful. If only you can provide the right tools, every reader can become your brand marketer, every customer can become your ambassador.


How can you optimize your business for social media?


1. Have a blog page. Blog is a powerful tool to engage and educate your customers and visitors. Blog gives an opportunity for the visitor to learn more about your product/service, and understand why your product/service is better. You can blog about all the latest research and market trends that gives more information about your hypothesis to the users. You can test your new product ideas, and capture the user inputs early on. You can get more information on advantages of having a company blog here.


2. Have social media sharing tools to share instantly information from your site to other media sites like FB, Twitter, Digg, and the like. This is very vital for viral word of mouse marketing.


3. Have a FB Fan Page, and integrate FB Connect. Most of your customers and prospective customers are likely to be in Facebook or Myspace. Their positive (and negative) comments about your products and services will be instantly available to their networks and your networks. Unlike myspace, FB has a vast majority of real users with real friends. Comments from real people are more likely to be trusted and hence you must encourage.


4. Tweet and Follow. Encourage your customers and users to follow you. And you follow them. It is a great way to reach your customers and your follower's followers.


5. Influence the influencer. New concepts of social media influence are emerging, and tools such as Klout, and Mylikes are able to measure the influence of any user in the twitter and social networks. Social media gives quanitifiable and analyzable metrics to orchestrate influencer marketing strategies. But before that, you need to be present in the social media.


What has been listed above are some of the important channels. There are many more channels including youtube, bookmarking sites, and the like. This diagram gives the complete universe of social media. (image courtesy: www.theconversionprism.com, by Brian Solis)

But the most important thing is to listen to your customers and users feedback and inputs. Listen to what they are saying about the products and services they use. Capture the trend. Decipher their wish list. Discover their desired outcomes. There is a wonderful article written by Anthony W Ulwick on Turning your customer input to innovation. A good product manager will know what and how much to listen from his customers. As more and more users generate contents, and more and more users consume user generated contents, harnessing the power of the social media will become mandatory to maintain your competitive advantage. It certainly appears that mouse is mightier than sword.

Comments

Image Search 4.0 and Digital Marketing

Any search engine does image search by using the text input in the search query form to search for the text around the image, the keyword tags, the listing in the webpage and the keywords in the direct links. However, there is no search engine (that I know of) currently exists, in which you can use an image as a search query.Nevertheless, I think eventually we would have some search engine that can give us this image string search functionality. ( May be Google is doing R&D on this.) For example, if I have an image of some famous monument that I dont know the name and details of, I should be able to search for the details of the image and the details inside the image, through a search engine, by simply copy pasting the image in the search query box, and clicking search. So if I copy paste a photo of Eiffel Tower, and use this photo as my search query, then I must get my search results rank ordered with pages containing the exact same photo as I used in the search query, AND, pages that has all the relevant information details about Eiffel Tower. The idea is to find all the places in the web that has the same photo, and then find more information about the contents and subjects in the photo.


Such image string search 4.0 capabilities can have number of applications in digital marketing. Imagine this. Harley Davidson sells 50000 bikes in 2009 Q1. A proud owner of a new Harley Davidson bike takes photos of his road trip and uploads on his social networking profile. This is a great advertising tool for Harley Davidson, only that this photo has no Call-to-Action for the viewers of the photo. Those who are really interested will google the bike model name (often there is no precise information available), and try to get more information, but there are so many hurdles, including user inertia, and often these linkless photos dont generate leads.


Now imagine this. Using image string search 4.0, we can now search for all photos in the web that feature that Harley Davidson bike. Firstly, the user himself can search directly using the image and get more info. But importantly, now the digital marketing manager at Harley Davidson, can build an application that will use a particular Harley Davidson model photo as search string, and search for all pages, blogs, and social media user profile. Users can subscribe to this application, and allow the advertisers to directly supply a link on the user generated photos. So the moment I upload a photo of Harley Davidson in my facebook album, the application would crawl, and if it detects the same photo of the bike model supplied by the Harley Davidson ad campaign manager, then the application would supply a link to the Harley Davidson bike page. The owner of the photo can earn revenue under the ppc model. 


For the sake of brevity, I have outlined such a simplistic and direct model. In reality, there are a number of challenges before we even perfect face recognition in photo search. I have always wanted this image string search functionality in search engines. But I know that unless there are some perceived commercial applications, or strategic gain, there are no incentives to develop this kind of complex technology. Thus I thought of an commercial application that I outlined above. Will such an advanced image search technology ever be possible? Hmm...Why not?

Comments

Swoopo.com and Pay to Bid Auctions

Swoopo, advertised as an "entertainment" shopping site, is a pay to bid auction site where you can win certain selected goods that are on auction, for a much lower price than their retail price. To bid on these auctions, you must buy prepaid bids at $0.60 each (50 bids for $30). Then you pay to bid with a click, on items that are on auction . Each bid will raise the current bid price of the item by one cent. If no other user bids within the next ten seconds after you bid, (yes, you  only ten seconds need to win) you win the item, and pay the last bid price. You can get an iPad for as low as $20 + the cost of bids you placed, (each bid costing you another $0.60). 


Fantastic? Yes. You wonder how swoopo is making money at all? If you look at the final winning price of the iPad is $20, then it means Swoopo recieved 20x100 clicks (bids) = 2000 bids @ $.60 each. That means it has already pocketed $1200 for a $499 worth iPad. But there is much more to the economics of pay to bid auctions that what these simple numbers say. Here is an interesting paper about Pay-to-Bid Auctions by Brennan C. Platt, Joseph Price, and Henry Tappen y. If you want to know why it wont profit Swoopo to employ shill bidders fake bidders) who would place bids only to outbid the last bid placed and force the auction to be alive, and thus drive up the price, or if you wonder why any user would ever place the first bid (because they will almost always be outbid), then I recommend you to read that paper. It has some interesting insights.

Swoopo is more about gambling and less about shopping. Now lets walk through the bidders psyche. Lets assume that the winner probably bid 300 times to win the iPad. That means he paid $180 for his bids, and then paid another $20 for final auction price, a total of $200 for a $499 iPad! If you look at the home page of Swoopo, as auctions close, users bid, only to be outbid within seconds, and then, they again bid. In fact, Swoopo provides a bid butler tool, which would automatically keep bidding upto the value of bid credits limit set by user. So why would people continue to bid even when they see others outbid them every 2-3 seconds? Is it the lure of winning an iPad for only $20+(the bid cost, which is hidden)? May be it is a psyche of people to not let go what they lost, even when they know they have very little chance to recover it. I think this is why we see people keep increasing their stakes in gambles they are losing heavily. Rationality demands that we see every gamble afresh. But I think people see new gamble as an opportunity to recover what they lost in their previous gamble, and hence they keep bidding despite having very less chance to win. But with an estimated 1.4million visitors a month, Swoopo is clearly getting a lot users who are ready to pay-to-bid (actually, ready to blindly purchase the lottery tickets called Swoopo Bids), and Swoopo is probably laughing all the way to the bank.

Comments

Increasing Conversion Rates: Prevent Below-the-fold Blackout of displayed search results

Before I begin, let me explain two terms:-

(a) Above the fold page. When you visit a webpage, what you see in your screen as is, without having to scroll down is called the Above-the-fold page.

(b) Below-the-fold page Using the same logic as above, for convenience sake, let us then define that part of the page we see only after we scroll down, as Below-the-fold page.

Below-the-fold Blackout. 

Let me explain what I mean by Below-the-fold Blackout with an example. When you search for a video in msn, the search engine rank orders the results are per its algorithm, and displays 16 results per page neatly stacked in after the other, and the total results runs into several pages. There is a navigation button on the top and bottom of the search results display, to move from one search results display to the another. Normally, 8 videos are displayed on the Above-the-fold page, and the rest of the 8 videos on the below-the-fold page. (depending upon your screen size), something like this

If a user is impatient, or just plain lazy to scroll down, he might navigate away from one search result display page to the next, without scrolling down and seeing the entire search results on page 1. So effectively, out of the first 16 most relevant search results, the viewer has viewed (skimmed) only 8 videos, and when he uses, the top navigation button to go to page 2, he is served the display results from 17-32, out of which only 17-25 are visible in the above the fold of page 2; Thus, the search results 8-16 that were displayed Below-the-fold of page 1 were blacked out from the viewer. If the viewer follows the same pattern of skimming the results in each page before moving to next page, he is served the results
1-8----->17-24----->33-40---->49-56 and so on. The intermediate results 9-16, 25-32, 41-48 are blacked out, and this is a whopping 50% of the search results.

What are the implications of Below the fold blackout? When ecommerce sites siuch as bestbuy.com displays search results of products in the manner how msn video is doing, the users experience a discontinuous display of search match. By the time he is in page 3, he is seeing 33rd match of his search querry, without having seen the 50% of his best available matches that were served to him anyways (only that he didnt scroll down to see), and the ecommerce site will eventually lose the visitor because the chances that he will find his product are now less and less.

What can we do to prevent Below-the-fold blackout?

One simple way is to not provide the top navigation button. Keep the navigation button at the bottom of the screen. Let the users scroll down fully, and then navigate to the next page. But this can be irritating for the user , especially if your page is long. So, another method could be to incorporate a simple logic in your search display. Using javascript such as this, we can detect whether a portion of the screen has come to the viewing pane of the viewer. Now, when the viewer moves to the page 2 of the search results, we can then display from the results beginning from which the viewer has not viewed in page 1. In our example, it would be mean that the viewer is now served the results 9-24 if he has navigated from page 1 using the top navigating bar without scrolling down the page 1 to see the results 8-16.

I am not very sure how complicated this coding process would be, and there could be better ways of doing the same thing. But the fundamental idea is more effective conversion, and customer centricity. Putting ourselves in the shoes of the average customers, and giving what the customer wants and optimizing our ecommerce site to suit customer's natural behavior will certainly increase conversion rates. Many users have very limited  attention span in a page - about 3-5 seconds, and we cannot force the user to scroll the page down. A web analytics software may not be able to give you such detailed information and visibility of how a viewer (customer) "actually" navigates in your page, within your page. But what we can do is to alter our scripts and codes to serve the search display without such Below-the-fold blackouts, because, in ecommerce, Customer is King, and Conversion is Cash.

Comments

A passing thought - Should PayPal acquire Bump?

In my last post about PayPal's new P2P money transfer iPhone application based on Bump technology, I had also written about some possible use of PayPal Bump for P2P digital lending services. I am curious to know the relationship between PayPal, and Bump; Has PayPal licensed Bump platform? or What would happen if Bump starts charging a transaction fee for every transaction made through Bump?

To answer the above the question, first we need to explore why other technologically advanced P2P payment systems such as the Near Field Communications (NFC), is not likely to take roots in the US. The NFC mobile payment systems is an emerging standard, and it requires infrastructure installation at Point of Sale (POS). And like any new technology, the costs are very high in the beginning. However, to promote this standard, NFC systems must not only be adopted at the institutional end (POS, Banks etc) but also at consumer end (cost of NFC handset/behavioral change). So why will the merchants and consumers do that?  They wont, especially when other forms of payment are extensively available and entrenched. So in the developed countries such as the US, where credit card and other electronic forms of payment exist, NFC infrastructure and phones is very unlikely to take off. In the US,where the mobile phone trends are clearly by the iPhone,  I wonder if Apple will ever make an NFC phone, (I dont doubt their ability to make one though). Obviously, PayPal Bump is positioned to meet the consumer demand for P2P mobile money transfer, yet without having to go through the no-go route of establishing new technology infrastructure and standards. One aspect must be made clear here: PayPal already has a P2M (peer to merchant) mobile money transfer system; Now, the new hep PayPal Bump has greatly increased visibility among the consumers.

Looking at Bump, I feel Bump's growth strategy must be strongly directed towards making Bump a platform for various applications that has a P2P use - digital lending, music renting, contact exchange, file transfer, photo sharing; each of these application eventually has a monetization aspect, and PayPal Bump could be the integrated tool to complete the financial transaction. Sure, other services for P2P money transfer such as Square are available, but having an integrated payment system that gets completed in the same products/services transfer loop, is very attractive. Users need not use different platforms for transfer of a music file, and payment for the transfered music file.

So if Bump charges a transaction fee, then it would be costly for PayPal to use Bump. But if Bump emerges the standard for a sticky, hep and attractive  P2P transfer platform for the Gen Y and Z, it will make sense for PayPal to acquire Bump, and integrate their payment system with the P2P transfer services.

Comments

PayPal Bump, RIF Sim, and P2P NFC - Whats the Future?

Recently PayPal released an iPhone app using Bump technology for P2P money transfer.Already more than 1million people have downloaded the application. I think that enabling such a P2P payment service on smartphone platforms will open up a host of new avenues for services and business models to be built around it.

To begin with, PayPal bump service is conceptually a p2p NFC model, where phones communicate with other phones to initiate a transaction. In advanced economies with good credit card penetration installing NFC infrastructure such as readers/writers at POS will be an added burden, and may never take off. But in emerging economies, such as China and India, NFC has strong potential to be take roots. For example, China  Mobile has begun commercial roll out of contactless mobile payments system using RF SIM enabled phones, and China Telecom has promptly followed suit. Any P2P mobile transaction system - be it NFC, RF SIM or PayPal Mobile can lead to creating of new services and products around these platforms. Also customers could find so many new ways to use the p2p NFC, as in the case of MPESA, which was originally invented to deliver micro credits in Kenya, but one customers found innovate ways to use it, turning MPESA into one of most successful mobile payment systems in the world. Some of the services that I could think of where P2P mobile payments will find use are :-

1. Digital Lending. With value (not just money) transfer enabled, services like P2P digital lending can mushroom. For example, music companies can sell songs with DRM allowing certain number of times a song can be rented, and person renting the song can pay the lender directly using p2p NFC. iPad and Kindle have ebooks, and now ebooks can come with limited lending rights. Here again, a simple p2p NFC utility can work.

2. Value Transfer. Promotional coupons provided by advertisers can now be traded amongst peers. Not everyone who receives a $10 coupon has a utility for it, and now one can transfer the coupon to others who have a utility, and get the value in cash through P2P transfer.

3. Payments  for Services in Emerging Economies. Vast majority of daily service providers in emerging economies like India can benefit greatly by p2p NFC, Bump and other contact-less payment systems such as RF SIM. Everyone has a mobile phone but not a credit card. As such credit card penetration is almost non existent even with their customers. So customers can pay small businesses such as hair saloons, photocopying service, laundry services, daily door to door vegetable vendors - using P2P mobile money services.

Given that PayPal already has mobile payment services leads me to believe that the new iPhone, Andriod and Blackberry Bump App is one way to promote and increase use of PayPal mobile. The consumers are king. They will find innovative ways to use such a service. I am sure that the PayPal will see this service being used a number of different ways.

Comments

Mobile TV – What it means to mobile advertisements?

The next wave riding is mobile web, and naturally, the economic engine that would power the mobile web is the mobile advertisements. According to the Kelsey Group, a market research firm, “U.S. mobile advertising revenues (search and display) will grow to $3.1 billion in 2013, from $160 million in 2008, representing a compound annual growth rate (CAGR) of 81.2 percent”.  The advertising value chain on the mobile advertising is depicted here (credit: HeavyReading) .

However, there are some emerging trends on mobile TV broadcasts. Currently, services in Japan and South Korea enable content broadcasters to directly broadcast mobile optimized TV content directly to mobile handsets capable of receiving TV broadcasts. This is still an emerging trend, with number of infrastructure challenges; the handsets need high processing and memory power, longer battery life and better screen technologies to give optimum viewing pleasure; the service broadcasting standards itself are different in different countries; the services are free, and the content broadcasters have not yet figured out a way to subsidize their production and transmission costs. Sports, especially live telecast, and financial news broadcast are two genres of content a fast paced mobile user watching TV program on the move will be interested in.

The mobile TV provides new and exciting avenues for advertisers to monetize their ads. In a normal TV broadcast, often the lag between awareness, the time when the consumer views the ad, and action, the time when the consumer makes a purchase, is very long, and this time lag has not allowed advertisers to quantifiably measure the success of their campaigns in more concrete manner. However, mobile TV allows the adserver to provide tools for consumers to instantly purchase the goods and services. In three simple steps, a consumer action chain can be depicted  - Awareness, Assimilation, Action. 

For example, a Domino’s Pizza ad broadcasted on the NFL match can carry a link to order pizza instantly, with the ability to locate stores that are close using location based services(LBS). This would vastly reduce the time lag between ad consumption and product purchase that is seen in traditional TV advertisements, for a vast majority of goods. Of course, a consumer wont instantly purchase a car after watching an ad on mobile TV. However, foods and beverages, consumer products, less expensive fashion goods etc can benefit from this new ability that mobile TV advertising that is mashed up with instant purchase tools and payment options.  Mobile TV advertisements hold a promise to solve the long standing problem of campaign results quantification and monetization in TV advertisements.

Comments

Earning your customer's trust - The foundation of customer relationship and customer intimacy

In today’s world of technology services hosted in cloud and the resultant growth in commoditization of technology, the space for product differentiation for internet/ecommerce firms are getting narrower and narrower. Today, anyone can start an online retailing business without having to develop the technology, using services from integrated ecommerce solutions sites such as ecommercehub.com, google apps and enterprise solutions, and payment services such as paypal, google checkout, and Amazon payments. What you can do, your competitor can also do. So in order to have a competitive advantage, many companies including leaders such as Amazon .com don’t rely just on technology and product leadership, but rather concentrate on the other two aspects of value disciplines – customer intimacy and operational excellence, as enunciated by Michael Treacy and Fred Wisrsema in their book Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market.


With hundreds of ecommerce and gaming sites mushrooming, earning customer trust is one of most important means of attracting and retaining customers. Trust is the foundation of any relationship, including customer relationship. When customers are sharing confidential credit card information and paying for goods and services in your ecommerce site for the goods and services they purchase, all other things being equal, a site that appears and that is trustworthy is more likely to have higher conversion rates from visits to positive transactions. Customers, in the absence of any bricks and mortars, look for information in the site before they make a purchase. Some of the ways a site can radiate trustworthiness in their webpage


(a) About me. Having an about me column, and detailed description of who you are, what you do, and some information about the management team, investors, and other customers (if they are big and noteworthy) will certainly help establish the legitimacy of the company and the company interface. Remember, a webpage is the face of the company, and first impression is the best impression. Any customer who gets a negative impression is never likely to come back. Any customer with negative experience while doing business with the site, will not only never come back, but also spread the word around virally and cause negative publicity and prevent his network of friends from doing business with your site.


(b) Live webchat / Toll free number service support. This is not an element found in small sites, yet this can be very powerful tool to increase the trustworthyness of the site.


(c) Transparent terms and conditions. Lets face it. Even the biggies use fine prints. But any stealthy sign ups, deceptive offers, customer recruitment drive using partnership sign ups, affiliate marketing etc are more likely to catch customers off guard when they actually see their credit card bills later. As per Dan Ariely, a professor behavioral economics at Duke, a visiting professor at MIT and the author of the book “Predictably Irrational”, people often spend researching a product online after buying it than they do before buying it, to prove that they should not regret the purchase. Most customers who feel cheated, might not issue a chargeback, but many are not likely to ever come back for repeat purchases. This can have long term consequences in terms of increased churn rates and higher customer acquisition costs, which could be costlier than the deceptive promotion sold to customer.


(d) User Generated Content. It will be very useful if your site has testimonials, product reviews, and user generated content from real customers or users. A customer is likely to believe reviews and content generated by other people from his own content or network. One way to make this happen is to be able to use tools such as facebook connect and encourage users to post reviews using their facebook IDs. Then when a user logs in or browse information, then one serve the user review written by someone from his network, if any. Such advanced tools for collaborative filtering, and precision serving of reviews, can also be a product differentiator apart from improving customer intimacy.


Here is one example of an untrustworthy site and service with hidden charges, disguised acquisition, and deceptive promotion. The site is called make-my-baby.com I clicked their ad on my facebook page, and visited their homepage, uploaded the photo of me and my fiancee, blindly [trusted?] clicked on the terms and conditions, entered my phone number, received a pin through sms, entered the pin, and waited for the promised baby photo of my would be baby. Nothing came. I forgot about the whole thing, until I saw my telephone bill. I was charged $19.99 for apparantely signing up for some receive through the website www.make-my-baby.com for receiving mobile ranging from $9.99 to $19.99. I was signed up without my conscious consent for $19.99 plan. I was shocked, and I called the ATT customer care and cancelled the plan immediately. The site make-my-baby.com is dubious but they are mere customer acquisition tools for the mobile content company that is in the invisible second layer, and the payment is extracted from the customers through the legitimate third layer, which are the mobile service providers such as AT&T, Verizon, etc.


Such disguised customer acquisition using proxy websites, and deceptive promotions are at best suited for fly by night cheaters. If you are wanting to establish a long standing business, then better make earning your customers trust, your no 1 priority. If only you have customers who visit your site often, you can learn more about them and develop intimacy. That is why, I feel that earning the trust of your customer is the first step to developing long standing customer relationships, and developing customer intimacy.

Comments

iPad Teardown Photos: Thank you, FCC - CNET News

Here is the CNET news article link on iPad's tear down photos.

iPad teardown photo: bottom housing image - iPad Teardown Photos: Thank you, FCC - CNET News: "Usually it takes a few days, or at least a few hours, for teardown enthusiasts to rip apart and analyze a new Apple product. This time, courtesy of a disclosure by federal regulators, they've been able to do it before the iPad goes on sale on Saturday morning. (See CNET's review.)"

Comments

M-PESA Adoption Cycle - An example of two tail diffusion of technology

M-PESA is a hugely successful peer to peer mobile money transfer system run by the mobile operator Safaricom in Kenya. The M-PESA system allows customers to perform four basic transactions- transfer money from person to person, transfer money from individuals to businesses, cash withdrawals at designated outlets and ATMs, and loan receipt or repayment. The user loads the money on the mobile wallet by depositing cash with the agent at an authorized M-PESA outlet. Once the money is loaded on the mobile wallet, the user receives an “e-Float”, which is like virtual currency that can be used to make payments or transfer to any other person via merchant via encrypted SMS. The receiver of e-float can use this virtual currency to make further transactions or can cash-out from M-PESA designated outlets. M-PESA customers use this mobile money transfer system, to complete basic banking transactions without having to ever visit a bank, and thus M-PESA has turned into a branchless banking system in Kenya, where only 19% of the population has bank accounts, but over 42% of the population has mobile phones .

One of the important lessons M-PESA success allows us to draw is its technology diffusion and adoption cycle. In most technologies, the diffusion of technology follows a linear pattern, with the innovators, and early adopters adopting first, followed by the early majority and the late majority, and finally, the laggards. This is depicted by the picture 1 (source Wikipedia) below

Linear diffusion of technology

However, in MPESA’s case, there is a two tail adoption converging on the centre, causing an exponential diffusion of technology. The early adopters of M-PESA are young urban workers who wanted to transfer money to their folks living in rural areas. However, in order to receive the money, the receiver, typically an illiterate resident in rural Kenya, also needed to have an M-PESA account. Normally, these illiterate rural residents are considered the laggards, and are expected to be the last adopters of any new technology. However, in MPESA’s case, the early adopters and the laggards adopted M-PESA simultaneously, creating an explosion in network effects.  The diffusion of technology in MPESA is depicted in the picture 2 below.

Two tail diffusion of technology

This kind of diffusion of technology as seen in M-PESA’s adoption cycle is seldom seen in any other technology.  This brings out important lessons for designers of technology products and social games. There are opportunities and dangers in designing such products that would allow two tailed diffusion of technology. The opportunities lies in the fact that use of technology by the innovators and early adopters would not be possible and meaningful without one other group adopting the technology, and hence there will be exponential adoption as innovators and early adopters force the diffusion in other groups in order to even test the waters. On the other hand, such requirements that atleast two groups adopt a technology to be of meaningful use to any of the users, can create significant entry barriers for even innovators to test the waters.

Some of the other applications that I could think of where such two tail adoption is possible, are social games. For any social game, diffusion follows a linear pattern as described in picture 1. But say, if we design a social team game for families that requires individual families to form family teams, and compete with other family teams, we can induce a two tail diffusion. In such family games, the teen age kids, who are the innovators and early adopters, would recruit their older family members, who are normally the late majority and the laggards, to join their teams in order to play against another family team. This will automatically increase game adoption and get on board the early adopters and the late majority simultaneously. However, for such diffusion to be made possible, the games must be compelling enough for teenage kids to exhort their older family members to play the games. So a better way to create this two tail diffusion is to create compelling games that can be adopted by single user, and then create new avenues to play team form of the same game, and thus increase adoption. 

Comments