In my previous blog post, ‘Value and ROI from Social Media: What can Health-Sciences learn from Retail?’, I discussed how visionary retail and consumer products companies were at the forefront of deploying social media (and mobility where relevant) to engage with their customers in new and exciting ways. These companies are leveraging social media (and mobility for greater reach) to “differentiate the consumer shopping and buying experience” and building loyalty thru dialog, listening and engagement with the consumer in whole new ways as was elucidated in ‘7 Stage Social Media (and mobility) Value and ROI Life cycle Model’ (figure 1 above).Given the challenges confronting companies today re, “What is the value and return on investment (ROI) from Social Media initiatives to justify continued and incremental investments”?, I also discussed how that these new forms of engagement with customers rendered possible by social media, mobility or a combo thereof, are delivering value and measurable ROI on these investments today. I further elucidated how healthcare and life sciences can indeed learn from and adapt from these best practices from retail and consumer products, going forward, given the fascinating opportunities emerging and rendered possible by the ‘Renaissance in Healthcare’ happening in the US and around the world.
How does one interpret the ‘7 Stage Social Media (and mobility) Value and ROI Life cycle Model’ illustrated in Figure 1 above? The X axis depicts progressive levels of customer engagement enabled by leveraging social media (and mobility where relevant) in ways not possible before, from the customer as a ‘Passive infomercial and customer service receptor’ (Stage 1) to the ‘Customer as proactive investor and evangelist’ in stage 7. The higher companies and organizations progress along this 7 stage framework, the higher (often exponential) the value creation and return-on-investment (ROI) on their social media and mobility initiatives as shown on the Y-axis in this framework.
But how does one tangibly measure the value created and delivered with social media initiatives? As well, which Key Success Indicators (KSIs) should companies use to quantifiably measure their success? These bases for value creation, allocation and quantification as well as the metrics and KSIs are enumerated in detail against each of these seven stages in Tables 1 and 2 below, and further elucidated for each stage in this life cycle in the sections following the table.
Here is a quick recap of the first four stages of this life cycle (refer Table 1 below)– the reader can refer to the previous blog post ‘Value and ROI from Social Media: What can Health-Sciences learn from Retail?’ for additional details.
Table 1. Value and ROI from Social Media (and Mobility) Initiatives in Retail, best practice exemplars and Key Success Indicators. (copyright Andy De. All rights reserved).
Level 1-engaging the consumer as ‘Infomercial or Customer Service Receptor’: A survey of the current literature reveals a disproportionate focus on Level 1 in this life cycle (figure 1 below) i.e. on the use of social media as an alternative channel for “push marketing” to consumers or for lowering customer service costs (assuming that the consumer is a passive “infomercial or customer service receptor’).
Value from these initiatives involve building customer loyalty at a lower cost of customer service delivery or acquiring new customers at a lower cost of message delivery relative to other marketing media and campaigns. Key Success Indicators or metrics to measure success are annuity revenues; cost of (and savings from) after-sales service; cost of new customer acquisition
Level 2 –engaging the Customer as ‘Offer Seeker’: The next level of value from social media and mobility begins with Level 2 engagement i.e. leveraging the customer as an offer seeker, as exemplified by Groupon for instance.
The value is seen in incremental revenues at a lower cost of customer adoption as well as higher lead-to-deal conversion while lowering search costs for customers. This potentially drives a win-win for the business (lower cost of new customer acquisition) and possible loyalty from these new customers subject to their satisfaction with the product or service.
Level 3 –engaging the Customer as ‘Idea Contributor’: involved proactively engaging with customers as “ideators” for ideas that can help improve the services offered as well as newer services, or the customer buying experience as a whole.
The value from this level of crowd-sourced idea contribution from customers is a lower cost of ideation and market research, as well as incremental revenues from new services potentially with a lower cost of customer acquisition. Actively listening to customers and responding visibly to their ideas and suggestions is often a formula for building brand and customer loyalty, while enabling incremental revenues.
Level 4 –engaging the Customer as ‘Community Volunteer’: usually involves developing a community networking platform integrated with social media tools like Facebook and Twitter that enable customers to share their buying, shopping and consumption experience to aid their peers.
The value here is ‘building and orchestrating a community to enable trust in the buying process based on peer reviews of the product or service’ which in turn, lowers the cost of new customer acquisition and potentially, higher lead-to-deal conversion and revenues while lowering search costs for prospects and consumers. Key success indicators are the cost of orchestrating a ‘brand community’, cost of customer reference acquisition, lead-to-deal conversion and incremental revenues and brand loyalty from the initiative.
Let us now dwell on the best practices in Social Media from Consumer Products illustrated in the seven stage model (figure 1 above) as stages 5, 6 and 7 in detail in Table 2 and the following sections below.
Table 2. Value and ROI from Social Media (and Mobility) Initiatives in Consumer Products, best practice exemplars and Key Success Indicators. (copyright Andy De. All rights reserved).
Level 5 –engaging the Customer as ‘Word-of-Mouth Influencer’: involves using social and other online media including community platforms to trigger discussions, exchanges and drive to product or prototype trials and eventual adoption.
Tremor is P&G’s in-house word-of-mouth (WOM) marketing organization that brings together P&G’s legendary marketing expertise with cognitive science to orchestrate electronic “Word-of-Mouth”-peer-to-peer conversations to build awareness and demand for new products, and consumer advocacy, on a national scale, leveraging Vocalpoint – a community and e-focus group of women who are active online. Tremor provides a combination of consumer market research, message development and campaign execution to enable consumer advocacy leveraging Vocalpoint’s network of more than 500,000 highly connected moms.
Tremor’s successes range from Olay Professional-Pro-X for skincare to Dinner Tool, a new recipe web-site that enables busy mom’s decide “what’s for dinner”, and is a best practice model worthy of emulation across other industries as well.
The value enabled by Tremor+Vocalpoint is lowering cost of conducting market research via focus groups and surveys while building brand awareness, accelerating time-to-market with innovation potentially at a lower cost of customer acquisition.
Key Success Indicators are cost of market research, cost of brand awareness and PR, cost of customer reference acquisition and savings thereof, as well as new product revenues.
Level 5 Implications and Opportunities for Health-Sciences: P&G’s Tremor and Vocalpoint and their social media enabled market research, focus groups and product trials to scale consumer advocacy offer a compelling model for healthcare and life sciences. The only comparable model in a healthcare context today, perhaps, is Patients Like Me. Patients Like Me provides patients with chronic or uncommon conditions an interactive platform to share their real-world health experiences in order to help themselves, other patients like them and organizations that focus on their conditions. Over time, it would seem feasible for Patients Like Me to develop its own “Tremor and Vocalpoint like” capabilities to better address the needs of its patient communities and further advocacy.
If not happening already, it may not be infeasible to imagine wellness and disease management services, mhealth apps and devices providers leveraging communities of patients on Patients Like Me or Facebook, as well as physician communities like Medscape (owned by Web MD) for focus groups, market research and potential recruitment for clinical trials.
In this context it is indeed relevant to refer to Pfizer’s recent remote “virtual” clinical trial for its overactive bladder drug Detrol LA. For the 16-week study, which will assess the safety and efficacy of Detrol LA, Pfizer will screen potential patients online, ship them medicines to their homes and monitor the results remotely. Patients will enter their results using a patient portal or their smart phones without physician supervision, unless needed – a first in the pharmaceutical industry.
The study, which will include 600 patients from 10 states across the U.S., will compare results with a previously completed phase IV trial on the same drug in the hope of validating the “virtual” clinical approach to research. If successful, this model could hold significant potential for the Life Sciences industry in lowering costs of clinical trials, at least for certain disorders that do not need intensive trial monitoring by physicians.
Level 6 –engaging the Customer as ‘Product Designer’: leverages “crowd-sourcing” from individuals to drive “Social Product Development” and is perhaps best exemplified by Quirky.
Quirky, launched in 2009, is a pioneer in ‘social product development’ has simplified the complexity pertaining to financing, engineering, distribution, and legalities that have often been barriers for inventors, designers and product or concept ideators in bringing their products to market commercially.Quirky, which has mastered the art of lowering time-to-market, brings two brand new consumer products (usually priced under $ 150) to market each week, by enabling a fluid conversation between a global community and its expert product design staff. Participants on the Quirky community influence the business in real-time by submitting, rating, and voting for product ideas, product designs, names, and other elements of the product’s development. As well, Quirky participants can browse and buy products, promote Quirky products to friends and family and earn a share of the profits through ‘social sales’. Participants can also collaborate, communicate and share with other participants using Facebook and Twitter.
A similar open innovation model/crowd-sourcing platform to enabling innovation in an enterprise B2B context is enabled by Innocentive. Innocentive is being leveraged by many large corporations to crowd source innovation ideas from its employees, customers and partners, and connect with the largest virtual ‘problem solving marketplace’ to slash time-to-market with innovation.
Innocentive’s challenge driven innovation methodology, community of millions of problem solvers, and cloud-based technology platform combine to fundamentally transform the economics of innovation and R&D through rapid solution delivery and the development of sustainable open innovation programs.
Leading commercial, government, and nonprofit organizations such as Eli Lilly, Life Technologies, NASA, nature.com, Popular Science, Procter & Gamble, Roche, Rockefeller Foundation, and The Economist partner with InnoCentive to solve problems and innovate faster and more cost effectively relative to traditional models.
The value enabled here using this ‘social product development platform’ is significantly lowering the cost and time for new product development, securing eager focus groups, early buyers and references and delivering products to pre-committed buyers at a lower cost.
Key Success Indicators or metrics to measure success include cost of market research; cost of product design, development and commercialization; time-to-market; cost of new customer acquisition; new product revenues.
Level 6 Implications and Opportunities for Health-Sciences: ‘Social Product Development’ potentially offers a compelling model for Life Sciences companies and Healthcare technology vendors to slash time to market with innovation and lower costs. Innocentive’s platform is already being adopted by leading Pharma companies like Eli Lilly and Roche, and holds significant potential for healthcare IT products and services as well.
In fact, given the recent demise of Google Health and the relatively modest success with Personal Health Records (PHRs) by Microsoft and Dossia, using open, crowd-sourced innovation platforms like Innocentive may be a viable option. Besides the concerns pertaining to security and ownership of a patient’s health information, one of the key challenges is the “one size fits all” model provided by current vendors.
Leveraging a crowd-sourcing platform like Innocentive to aggregate product design, feature, functionality, mobility capabilities and apps to meet the specific needs of core target segments (chronic diabetes patients on Medicaid, seniors recuperating from congestive heart failure or stroke et al) would be well advised. Transforming these specific requirements into a PHR on a familiar platform like a Smart Card that is usable at the doctor’s office, the pharmacy or with the payer may well be the winning solution that patients and the healthcare market is waiting for.
Level 7 –engaging the Customer as ‘Investor and Evangelist: involves presenting a product/service, project or idea and securing ‘micro-investments’ or pledges (as low as $ 25-50) virtually from interested investors/target customers to fund the development. If the funding is successful and the product or service is developed, then early adopters (who have also invested) evangelize to their peers and friends to further scale investment and adoption.
Perhaps, the best exemplar of this model that extends ‘social product development’ to ‘social product funding’ is Kickstarter, with its unique “all-or-nothing” funding model for innovation.
Kickstarter is a new way to fund creative projects predicted on the notion that a good idea, communicated well, can spread fast and wide and draw investments from a large group of people. Kickstarter is powered by a unique all-or-nothing funding method where projects must be fully-funded or no money changes hands. Kickstarter projects are efforts by real people to do something they love, something fun, or at least something of note. These stories unfold through blog posts, pics, and videos as people bring their ideas to life.
Kickstarter is focused on creative projects. It provides a forum and a great way for artists, filmmakers, musicians, designers, writers, illustrators, explorers, curators, performers, and others to bring their projects, events, and dreams to life.
Here is an example of an innovative new watch strap (Tik-Tok and Luna-Tik) promoted on Kickstarter that transforms the iPod Nano into arguably, the funkiest watch you have seen. I am personally proud to have invested in and purchased. My evangelism also influenced a number of my “early adopter” buddies to invest in this product line that has become a runaway success!
The key value enabled by this unique micro-funding model is for entrepreneurs to secure investors, customers and evangelists using one business model without losing equity to VCs.
Key Success Indicators are angel investments ($), number of early adopter customers and new revenues; cost of customer acquisition and product/service development; marketing and advertising costs, equity ownership in the venture.
Level 7 Implications and Opportunities for Health-Sciences: The ‘social funding and product development model’ instantiated by Kickstarter is game changing and potentially provides significant opportunities for small entrepreneurs in the healthcare arena to bring lower priced mhealth apps and devices/instruments to market. Companies like NervCell that aspire to provide an open connectivity platform for doctors and patients to exchange patient data, as well as an apps platform for apps developers are being spawned on Kickstarter as we speak. It will indeed be interesting to observe the success of Nerv Cell and similar companies to bring healthcare innovation to market.
In conclusion, this and the previous blogpost has presented a new and innovative model for engaging customers leveraging social media and mobility platforms and tools that are being deployed by leaders in retail and consumer products. These models show enormous promise, value, return-on-investment (ROI) potential and present new and novel opportunities for life sciences and healthcare technology companies to engage patients, physicians, clinicians, nurses and other healthcare stakeholders and also bring health-sciences innovation to market.
Your comments, feedback and pointers to best practices in health-sciences that I may have missed, are welcome.