Open up your mind and say, ahh...

Part of an ongoing series dedicated to small businesses

As you read this, the business landscape is shifting right under your company’s foundation. How customers make decisions, how they discover, communicate, and share, how they influence and are influenced, is evolving considerably. In fact, customer behavior is not only changing, it’s fragmenting and opening the door to new touch points. Your business will now have to compete for the customers you know and additionally, a new breed of customers that you need to know. And, to earn their attention and ultimately their loyalty, you will need to better understand the top technology trends and how they’re impacting customer behavior.

At the heart of this customer divide is technology. But this isn’t about the technology we once knew, such as PCs, laptops, iPods, ebook readers, DVRs, etc. This change in consumerism is the inevitable result of disruptive technology and how it has affected behavior and reshaped expectations. Smart phones, social networks, apps, gamified everything, Google Glasses, self-driving cars, smart appliances, the list goes on, are placing consumers at the center of their own universe connected to one another through shared experiences. This plugged-in and always-on customers are learning to see the world differently. They’re empowered and they’re entitled. As a result, disruptive technology is grooming customers to expect information and opportunities to find them.

Everything starts with surveying the landscape for how you reach customers today and how their behavior and expectations are shifting. But this is also about the people you don’t reach now. This research will help understand how to appeal to a new type of customer as well.

If you thought that having a social media strategy and presences in the most popular social networks was enough, think again. What of adding social buttons to your website or in your email blasts? Still not enough? How about developing apps for iPhone and Android platforms? Nope. That’s not the right approach.

It takes research to truly understand how customer segmentation is materializing and how new technologies introduce opportunities to engage effectively with each group. More importantly, it takes interpretation, strategy, and a culture of innovation to recognize and prioritize these new opportunities and execute against them while windows for engagement are open.

Just like customer service, sales, and marketing, technology and your ability to translate trends into opportunities, are now part of your everyday business strategy. To what extent disruptive technology impacts your customer landscape, differs from industry to industry and it is your research that reveals where to concentrate and balance your focus and investments. To help, I’ve assembled a list of 10 current trends to evaluate . But, this is just the beginning. Use this list to build a regiment of research and innovation within your business now and over time.

10 movements to review for opportunities…

1. Social Networks from Facebook to Twitter to Google+ and how they’re connecting to influencers and businesses (note: pay attention to nicheworks as well such as Path and Instagram.)

2. Geolocation check-in services such as Foursquare and Facebook location updates to share locations and earn rewards or opportunities for discounts

3. Crowdsourced discounts and deals including Groupon and LivingSocial and what’s valued and why

4. Social commerce services like Shopkick and Armadealo and how they create personalized experiences that are worth sharing

5. Referral based solutions like Yelp, Service Magic (now HomeAdvisor), and Angie’s List to make informed decisions and how shared experiences can improve your business, products, and services

6. Gamification platforms such as Badgeville and Fangager, and why rewarding engagement improves commerce and loyalty

7. How your consumers using mobile devices today and what apps they’re installing. Also, how they’re comparing options, reviewing experiences and making decisions while mobile?

8. The online presence your business produces across a variety of platforms such as tablets, smartphones, laptops and desktops. You must realize how consumers are experiencing the online presences you create and whether or not they deliver a holistic and optimized experience for each platform.

9. The consumer clickpath based on the platform consumers are using. Are you steering experiences based on the expectations of your customers? And are you taking into consideration the device or network where the clickpath begins and ends? Are you integrating Facebook F-commerce and m-commerce into the journey?

10. The expectations of connected consumers, what they value in each channel and platform, where they engage and how your business can improve experiences and make them worthy of sharing.

What would you add?

No company is too big to fail or too small to succeed. Simply knowing your customer is one thing. The connected customers does not replace your traditional customer, they simply introduce new opportunities to grow your business. How you’re marketing, selling, and servicing customers today are in many ways missing these important customers and thus limiting your ability for engagement and growth.

Understanding how connected customers make decisions informs more meaning strategies and ultimately effective and engaging programs, products, and services. Now more than ever, the future of business isn’t created, it’s co-created.

Originally published at AT&T’s Networking Exchange Blog

Chart: Shutterstock

A few days before I grabbed a beef chilli lunch in London with Sunghan Kim at Samsung Design Europe’s office, the South Korean giant had posted some stellar financial results. As well as chalking up 81 percent growth in net income for the first quarter of 2012, it also overtook Nokia as the world’s top supplier of mobile phones. Its margins now rival those of Apple’s (between them they accounted for 99 percent of the mobile phone industry’s profits in the same period). Still Sunghan underplays Samsung’s triumphs, focusing instead on the challenges ahead.

He is approaching the end of a five-year term as chief of Samsung’s European satellite office and will return to the Seoul mothership in August. Sunghan has held the reins during a transformational period. It has become the biggest technology company by sales, as its traditional rivals, Sony and Nokia, have faded. The rules of the game have also changed: As well as competing with Apple in hardware, it now competes with a new set of competitors such as Google and Facebook in software and services. To help retool for new these challenges, Sunghan has recently completed an MBA specializing in service innovation. His strategy: capturing the value in what he calls the “platform economy.”

These current projects are more akin to building new businesses.

Sunghan makes a broad distinction between OS platforms, such as Android, iOS, and Windows, and service platforms like Facebook, Amazon, and iTunes. Not so long ago, Samsung controlled the whole product experience around their phones and TVs. The headache now is that, while it has its own fledgling mobile OS platform called Bada, most of its products and services now slot into ecosystems of interdependent partners owned by others. At one level, this all sounds rather familiar to the corporate-strategy MBA types who have been excited about business-model innovation since the dotcom boom. But what credible role can designers play in this next push?

Sunghan gives a glimpse of the complexity Samsung now faces in this new competitive landscape. Each ecosystem partner is jostling to maximize the value it can capture along the customer journey. Not only are many of their platform stakeholders also competitors, some that don’t pose threats today might become forces to be reckoned with tomorrow. Even platform owners have to walk a fine line: They have to open their product enough to attract partners and profit while ensuring that they retain control. This multisided market of buyers and sellers of hardware, software, service, distribution, and advertising then needs to be re-created for new areas for innovation. Samsung’s growing scope of operations–it recently announced a move into generic pharmaceuticals for example–means that the combinations of potential stakeholders are immense, and developing new offerings often entails building brand new ecosystems. Sunghan likens the projects he now works on to building new businesses rather than developing the products he was designing not so long ago.

As well as buffing up on ecosystem economics, there are also new craft skills to master.

The big design leadership challenge is the familiar one of managing design’s input and role in large cross-functional teams. “Design is more of a community-based activity now,” he reflects. For designers to succeed, they need to be able to collaborate with team members from different disciplines. We mull over to what extent product and service designers need to become with familiar with business modeling, or merely work effectively alongside business analysts. For Sunghan, it’s both. Just as in the Noughties, many product, UX, and service designers taught themselves how to code, in his view, designers in the coming decade will need to have a working knowledge of business modeling, especially at the concept stage, and learn multidisciplinary collaboration for the development phase.

As well as buffing up on ecosystem economics, there are also new craft skills to master. Designers have long played a pivotal role in mocking up or prototyping new ideas. This talent for making intangible ideas and discussions more concrete for multidisciplinary teams is even more valuable when talking about complex platform systems. However, Sunghan notes, the design communication tools he uses for current projects do not look like the prototypes of yesterday. He prefers to call early manifestations of concepts “boundary objects”–a term he borrows from sociology to mean a common body of information that separate disciplines understand but use in different ways.

In his modest but ambitious way, Han has set himself and Samsung’s designers a challenge that will define the company’s future success.

What do The Beastie Boys, Katy Perry, and PayPal have in common? They all pivoted.

When the Beastie Boys formed in 1979, they were a hardcore punk band that dabbled in performance art, a fixture at clubs like CBGBs and Max’s Kansas City. Their first full-length album, Poly Wog Stew, with bombastic minute-and-a-half paroxysms like “Transit Cop,” “Jimi,” and “Holy Snappers,” owed as much to the Sex Pistols as it did Dadaism. Always on the prowl for the absurd, they started rapping in rehearsals, mainly as a joke. But when they tried it during performances something magical happened: Audiences liked it better than the punk.

So in Eric Ries’ parlance, The Beastie Boys performed a “zoom-in pivot,” turning a feature of their product into their main offering. In 1983, they recorded “Cooky Puss,” their first track that incorporated elements of hip-hop, using a prank call to Carvel Ice Cream as inspiration. It quickly became an underground hit in nightclubs, so they added a DJ and layered hip-hop into their sets, until they had mastered a sound all their own.

Three decades and 40 million records sold later, the group was inducted into the Rock And Roll Hall Of Fame. Although the late Adam Yauch (MCA), along with Mike Diamond (Mike D) and Adam Horovitz (Ad-Rock) were and are prodigiously talented, it’s likely we never would have heard of the Beastie Boys if they hadn’t pivoted to hip-hop.

Now, pivoting is usually reserved for businesses that do a triple axel into a new business strategy, but Patrick Vlaskovits and Brant Cooper, authors of The Entrepreneur’s Guide to Customer Development and the forthcoming Lean Entrepreneur, say it can apply it to whole raft of disciplines. In fact, many Lean Startup methodologies–pivots, minimal viable products, product-market fit–can be used as an analysis tool for consumer-packaged goods, finance and investment, social entrepreneurship, art–anywhere there is innovation. Pivots and the like are as relevant to musicians and artists as they are for startups.

The speed of today’s well-funded startups is brutal.

But it does allow for change in direction. This series explores those destiny-altering decisions made by companies that have gone on to great success. Read more about their course corrections–and alternate endings–here.

But what’s the difference between a pivot and, say, an “iteration” or “reset”? For an apt analogy they say you should turn your radio dial. “If you’re twisting the dial to tune into a new station, going from 98.5 FM to 93.1 FM, then you’re pivoting,” they say. “If you’re trying to tune into a strong signal, and switching from 98.7 FM to 98.5 FM, then it’s an iteration. A reset is a ‘leap’ to a new business model, and that change is not based on real validation or learning.”

That last part is key. Pivoting has to be evolutionary, based on sifting through the appropriate data. It’s at the heart of the “fail fast” concept. The sooner you realize a hypothesis is wrong, the faster you can update and retest it. “It’s paramount to understand that a pivot isn’t simply a change in one element of the business model,” they add, “but rather a change precipitated by something the founder has learned and validated to be true or untrue about a hypothesis she has tested.”

This, of course, is exactly what Adam Yauch and his Beastie bros did. They market-tested punk and when customers gravitated to a specific feature of the product (hip-hop) they pivoted to that. And they aren’t the only ones. Pop music and artist development are clearly domains where artists can be viewed as startups trying to find product-market fit. Vlaskovitz and Cooper, who say they’re working with L.A.-based music producers on how to apply these principles to artist development, point to Katy Perry as an example. She began her career as Katy Hudson, a Christian gospel singer, releasing an album aimed specifically at specific audience, and the album didn’t make the charts.

What did she do? She underwent a “customer segment pivot,” repositioning herself to reach a different audience by altering multiple elements of her business model, including:

• Her marketing/look: Christian girl-next-door to sexy pop princess.
• Her product/subject matter: Christian worship themes to edgy, sexually suggestive songs.
• Segment: Teens who listen to Christian soft rock to mainstream teenagers.

It wasn’t a smooth road. Between her first album and second, she was dropped by two record labels. Nevertheless, she persisted (like any good entrepreneur) and went from her Christian-themed debut album praising Jesus to “One of the Boys,” which featured the hit “I Kissed a Girl,” as well as three other Top 40 singles. The album, which boasts some explicit lyrics and themes, went on to sell more than 5 million copies.

Vlaskovits and Cooper are even willing to stretch Lean Startup methodology to Picasso, who, they say, pivoted from work that was photo-realistic to cubism and the distortion of the human form. They also see clear connections between musicians/artists and technology startups. Both innovate in uncertainty and endure financiers: Musicians have record labels and startup entrepreneurs have VCs, with both historically playing the roles of arbiters of good ideas. And because of digital technology, it’s cheaper than ever to record and distribute music and launch a startup.

“Musicians can and do build Minimal Viable Products starring themselves,” they say. “This allows for faster and better market feedback on how to inform their ultimate vision for success.”

In other words, while the odds may be stacked against her, that guitarist croaking Adele’s “To Make You Feel My Love” on the subway platform could be the next PayPal, which, like Katy Perry, performed a customer segment pivot that also paid off.

Adam L. Penenberg is a journalism professor at NYU and a contributing writer to Fast Company. Follow him on Twitter: @penenberg.

Images: ReadySetRocket

It may seem like we have entered a golden era of product design, in which the world’s most valuable company has built its entire business on a dozen consumer products while heightening our appreciation of the subtleties of industrial design immeasurably. So why do I get a pervasive feeling of doom and gloom when I hang out with my product design pals? Maybe its because all of the action has moved to software and apps. There is a real startup frenzy out there with designers playing a meaningful role this time around. Yet it is still damn hard to get a VC to go along with any startup involving hardware unless you have already locked in distribution with Best Buy or Walmart.

When will hardware hit the masses, with MakerBots and 3-D printers on our desktops? The answer is pretty unclear. But in the meantime, you’ve got to love Kickstarter for creating a marketplace (or at least the impression of one), where the hardware plays can rise to the top. So I wanted to build on the comments I made in a recent New York Times article on the topic. I am thrilled to see a nascent hardware startup economy emerge around Kickstarter and not surprised that it is stealing headlines. So here is a broader take on the phenomenon from the point of view of someone who is immersed in the world of product design.

The Pebble, which has raised nearly $9 million.

1. Kickstarter Has Rescued Musty Categories

Product design is governed by the laws of supply and demand. There is a tremendous supply of talent, yet very few products actually make it to market. So most designers have a huge stockpile of high-fidelity concepts and beautiful renderings gathering dust. While a number of these concepts turn up on Core77 and Co.Design, they have zero paths to market. Now you can argue that we don’t need another slab phone/pad with a slightly different chamfer or bezel. But there are a whole host of neglected device categories desperate for attention, like watches, bathroom scales, and thermostats. These devices feel woefully out of sync in an iProduct world. Perhaps the biggest service that Kickstarter has done is to reinvigorate these categories to the point where bigger players might see their potential and escape from “Slab Land.”

2. People Now Believe, Gee Whiz, Tech Can Be Real

Ubiquitous Apple advertising has trained consumers to believe the magic and fill in the gaps when presented with a single image of a finger touching a beautiful screen or of a person sitting lazily on a couch. Renderings that would have seemed like science fiction 10 years ago are now taken at face value, imbued with a high degree of credibility. Part of that is due to amazing strides in technology. And part of it is due to the discipline in Cupertino. Apple has never shown us concepts; only real products.

Now, consumers can look at one image of the Nest thermometer or the Fitbit and fill in all the blanks (while rushing to pre-order). Eric Migicovsky, the inventor of the Pebble Watch–the biggest sensation on Kickstarter to date–conveys this perfectly in an insightful Co.Design post: “We really wanted to emphasize the use cases,” he says. “We wanted to say, ‘Here’s an example of how you’re going to use this in your everyday life.’”

Kickstarter’s first runaway hit: The Tik Tok watchband for the iPod Nano.

3. Imbuing Customer Relationships With a Sense of Ownership

Consumers don’t just want to understand the story. Increasingly, they want to be part of it, which is something even Apple won’t let them do. Let’s face it: There is nothing original about your iPhone other than your lock image. Even the funky case you bought is being sported by thousands of other people. There is actually something sort of horrifying when someone plops their iPhone on the counter, and it has the same case as your own. It strips away that “think different” mantra pretty fast. While people love their Apple products, they are looking for a stronger link to the products they use. They want to get closer to the source. Kickstarter offers anyone the opportunity to be the first to discover, invest, and share a new product concept within a circle of friends, which alone is worth some money down even if the product never actually makes it to you doorstep as promised.

A Windowfarm kit funded on kickstarter.

4. Delivering On Hollow Promises

But there are a few areas in which Kickstarter truly suffers. The path to market is very different for a book, restaurant, or gadget. It comes down to more than just the amount of money raised, as I noted in The New York Times piece. If you invest in a book, it is pretty reasonable to expect you might get a copy. But what about a smart-watch gizmo? It is much more of a gamble. With the increased complexity of software and services, the $7+ million that the Pebble Watch has raised will go very fast.

The downside of Apple-style marketing is that we have very high expectations for the seamless integration of software, services, and support in the finished product. Even Jawbone, which has raised more than $260 million in investment, had to do a complete recall of the Up health care monitor wristband due to the complexities of launching this kind of product. Plus, consumers as investors might reasonably expect the folks at Pebble Technology to provide a projection of how the millions they have raised might actually be spent. The percent amounts going toward offshore manufacturing, low-wage factory workers, and fuel costs for transport would make for a very different story on Kickstarter.

5. A Sacrifice of Craft

Last year, I visited Shanghai with Max Burton, one of Frog’s pre-eminent product design gurus who led the Nike watch team for many years pioneering some of the same unibody production techniques later adopted by Apple. Max and I are both watch geeks. He was planning to take some personal time to visit one of the factories he used to work with to look at the small-scale production of one of his own designs. This is about as close to the story as it gets, so I was happy to commit $500 to be one of the first in line for Max’s creation. Unfortunately, he came back empty-handed. Not only were the tooling costs out of reach. But it would have been impossible to reproduce the level of engagement that he was accustomed to from his Nike days. A significant part of the craft is in the manufacturing process, working back and forth, through numerous prototypes, to get to a satisfying design. That process is largely out of reach for a hardware startup.

The 999 bottle visualizes your eco-impact.

So how do we build on the enthusiasm within the product design world and create a more sustainable market for hardware startups? Here are a couple of closing thoughts:

1. Kickstarter should not be a shopping site

Product designers are blurring the line between investing and pre-ordering at their own risk. The biggest return on an investment in the Pebble Watch may not be getting the watch in the mail. It is in generating interest among bigger electronics companies to reconsider categories that they previously dismissed (like watches). You are voting with your dollars for the products you want to see in the world, regardless of whether they end up being made by startups or the big guys. It would be great if Kickstarter could create competitions around some of the more mundane gadgets in our lives–like thermostats or hotplates–to see what the design community can come up with.

2. Different Forms of Sponsorship

For that reason, it would be interesting if product designers could figure out a different way to personalize the investment, short of promising a product in the mail at some point. My guess is that a lot folks would be very happy with a signed form model from a standard 3-D printer. In fact, this might end up being more valuable and memorable than a watch gizmo that you will wear for a couple of years and then dump in a drawer. In recent years early Apple models and signed memorabilia have received high prices at auction. Designers could send out models in a variety of different form factors to gather feedback and support their user research. What about a limited edition of signed sketches? It is easy to see how you could offer different artifacts at different investment levels, all of which would help educate the public about the craft of creating a great product. I would love to see more creativity in this area.

3. Teaming With Industry, to Revive Unused Tech

At Frog, we work with so many clients that have valuable technologies sitting on the shelf. They don’t have the endless time, or creative resources to envision how these inventions could fit into people’s lives as meaningful products. And they have no cost-effective way to gauge consumer demand or interest for new product categories. I would love to see a few organizations, whether corporations or universities, open their kimonos and release some unused technical capabilities to this community, providing a marketplace for designers to explore applications in health, energy, or other markets–particularly ones with the potential for major social impact. They could work with Kickstarter to create sponsored competitions in which the designer and the technology organization share the IP that is created around the design, with the public voting along the way for their favorites. This could be a great way for companies to build a meaningful design community just like the developer communities they are constantly courting. The IP issues would be challenging to navigate, but Kickstarter could have the platform–and financial platform–to make this happen.

The Biggest Lesson From Kickstarter

At the end of the day, we all want a more meaningful connection and a more substantive say in the physical products we interact with. This is particularly true of the connected gadgets that are leaching into every facet of our daily experience. As Frog’s executive creative director of global insights, Jan Chipchase, is fond of saying: Opting out of these technologies is no longer an option in many societies. As we adapt more and more to the capabilities of so-called smart devices, we are looking for more meaningful ways to make them adapt to us as well. If we can’t do that with our smartphones, thanks to Apple’s closed ecosystem, at least we have a shot with smaller categories like watches that are equally personal. That is the true lesson of Kickstarter and the emerging hardware startup economy.

Last month, I talked to Amazon customer service about my malfunctioning Kindle, and it was great. Thirty seconds after putting in a service request on Amazon’s website, my phone rang, and the woman on the other end–let’s call her Barbara–greeted me by name and said, “I understand that you have a problem with your Kindle.” We resolved my problem in under two minutes, we got to skip the part where I carefully spell out my last name and address, and she didn’t try to upsell me on anything. After nearly a decade of ordering stuff from Amazon, I never loved the company as much as I did at that moment.

I never loved the company as much as I did at that moment.

Remember, this was a customer-service call, so I was fully prepared for it to suck. Like most American consumers, my experience with service interactions is largely negative, whether it’s on the phone, in the murky depths of a commerce site, or in the aisles of an electronics store. I’m accustomed to the company being in control, and for our communication to be cold, scripted, and inhumane. Barbara’s congenial but no-nonsense approach was part of what made this experience different, but more important, she had access to exactly the right data about me, and that made the favorable exchange possible. The fact is, Amazon has been collecting my information for years–not just addresses and payment information but the identity of everything I’ve ever bought or even looked at. And while dozens of other companies do that, too, Amazon’s doing something remarkable with theirs. They’re using that data to build our relationship.

The Most Useful Data Set in the World

Big Data has gotten a lot of attention over the past 18 months as retail, manufacturing, and technology companies realize the gold mines they’re sitting on and rush to scour them for competitive advantage. Nearly all of this discussion, though, revolves around consumer trends, marketing guidance, new product planning, and other market-level insights. When McKinsey wrote its omnibus report on Big Data last year, the consulting company identified five different ways it can be used to create value, but only one of those methods mentions customers at all, and then only in terms of improved segmentation. The Wall Street Journal outlines several business success stories in its Big Data blog series, but it focuses almost entirely on smarter market visualization, better process maps, and other efficiency enhancers. Efficiency is a worthwhile goal, but from a customer’s perspective, data has far more power at the personal level.

In order for interactions to feel individualized and human, they must be well informed.

Perhaps the only business and marketing topic that’s been talked about more than Big Data recently is the evolution of brand relationships into two-way conversations. Now that consumers have seen what social media and mass customization are capable of, they increasingly expect this kind of personalization in their communication with favored brands, not just a passive role absorbing marketing messages. Combine this insight with the rise of Big Data, and you have a clear mandate: In order for interactions to feel individualized and human, they must be well informed. That makes data about the customer you’re talking to right now the most useful data of all.

Technically, this is hard to do. Amazon has grown large while staying fairly consistent as an organization, but most big companies got big through acquisition, and that makes synchronizing data a massive chore. Getting targeted information in front of the person who’s dealing with an individual customer, or designing for one, is still a low priority. Customer service in its various forms is still treated as an expense to be minimized, not an opportunity to be developed.

Service designers know that the opposite is true. When a customer calls the support number, sends an email, or talks to a store employee, he is initiating a conversation. You have his undivided attention, even if he’s annoyed, and that makes it a crucial brand-defining moment. He’s hoping for a conversation, but bracing for an ordeal. He knows you’ve collected information on him for your own purposes and wondering why you don’t do something useful with it. Not useful to you–useful to him.

Synchronized data is worth the expense because it’s a hallmark of human interactions. If I talk to a friend and they keep asking me for information I know they already have, I have a right to get irritated. In the age of Big Data, I hold brands to the same standards. The few that meet those standards earn my trust and loyalty. But if you’re hoping to use personal data successfully, there are a few things you have to get right.

I have no idea what Barbara was looking at on her screen when she called me up, but it gave her the information she needed about me in a matter of seconds. Someone designed the tool that delivered it and made sure she had access to it. Despite your internal divisions, I as a customer have only one relationship with your brand, and it has to be seamless. That’s what makes information tools so vital. They transfer data that’s been collected automatically or through form-filling into the personal realm, allowing us to get the awkward, impersonal, corporate conversation out of the way, and make way for the human one. The rise of portable platforms makes this possible for designers and store employees, too, not just the headset-wearing call-center folks.

When I meet an old acquaintance at a party, she remembers my name and asks one or two questions about things we discussed last time we spoke. The fact that she remembers establishes rapport; the fact that she doesn’t list out every bit of information she possesses makes me feel comfortable. Without even thinking about it, humans are very good at conveying just the right amount of information in personal conversation.

She only referenced the data that was necessary. It quickly disarmed my self-defense instinct.

Companies need to do the same. When I spoke with Barbara at Amazon, she had access to plenty of data, but only referenced what was necessary, starting with my name and the problem I was trying to solve. It quickly disarmed my self-defense instinct and made me comfortable referencing facts we knew in common but hadn’t explicitly stated. “Can you send it to the Northeast Ninth Avenue address?” I asked when we got to shipping options, even though I hadn’t asked if she had it on file. “Sure,” she said, and I smiled.

Many of us have read the story of Target’s uncanny ability to recognize a customer’s pregnancy based on her purchasing habits. At first frightening, this revelation sounds reasonable on further review, but no less creepy. Target quickly learned to get nuanced about using this insight. To avoid upsetting these customers (and their parents), they now send them flyers customized to include just a few coupons for prenatal necessities, mixed in with a random assortment of others.

That’s a partial solution at best. In the future, smart retailers will be more transparent about their data-gathering efforts and use the results more appropriately. They’ll give customers more options for controlling how much they share and how that information gets applied. Regardless of who gathered it, customers still see it as their data. They expect to be treated like the owners.

The power of being known

There’s a quiet race going on right now among brands to form customer relationships that earn loyalty in the face of increasing competition, and personal data is the surest way there. Brands like Zappos, Netflix, and Amazon are already showing the power of such an approach. Not only does smart data use empower you to treat customers as individuals, it does so without invoking many of the fixed expenses associated with improved service. Good data support doesn’t require a vastly expanded workforce, or even a new type of employee–these are conversations that people already know how to have.

In the future, customers will expect these sorts of interactions.

But imagine the benefits if you get it right. An auto mechanic who’s smart about data could tell you that your fan belt is due for a change in 2,500 miles and suggest doing it today to save future labor costs. An airline that knows more than just your frequent flier number could propose a seat based on your past selections, offer discounted upgrades tailored to your preferences, and let flight attendants know you prefer tomato juice to orange juice in the morning–even if you’re just flying coach. If they’re really paying attention, they could even learn whether or not to offer you an upsell, and in which categories to do it.

As long as they’re given transparency and control, consumers are becoming quite comfortable with these kinds of interactions. In the future, they’ll expect them. When that happens, the question won’t be “How much do you know about me?” but “What are you going to do with what you’ve found?”

Images: almagami and Everett Collection via Shutterstock

Reading this, you may have just clicked away from Yammer, NationalField, or another enterprise social network. All those status updates are creating major shifts in the way we work, say Dion Hinchcliffe and Peter Kim in Social Business by Design, available now from Jossey-Bass. Fast Company talked with Hinchcliffe about how social media is blurring the line between company and customer, killing off status reports, and making the activity steam the new center of work–and why that’s a good thing.

FAST COMPANY: Why do businesses need to become social businesses?

DION HINCHCLIFFE: Because their customers have moved: Where they used to be visiting their website, watching TV, or reading the newspaper, they don’t do those things so much anymore. The developed world primarily uses social media, and it’s been that way since 2009. A billion and a half people, and they use it more intensely than anything else that they do.

What does a highly functional social workplace look like?

One in which people narrate their work. The organization finally has visibility into what people are really working on, and it also enables the process to be open and participative. We’re talking about a natural and open process of collaborating that looks just like a Facebook feed: You see what’s going on in your company, in your department, or with your team all the time. You gather information that you need and you share the information that others need.

What are the other elements of the enterprise social ecosystem?

A fully social ecosystem has the marketplace, everyone out there that you potentially want to connect with, the customers that you already have and need to support, or want to sell to, or need to communicate with;  your business suppliers in your entire supply chain; the whole B2B story around social; and it’s of course your workers themselves. The ecosystem consists of all the connections and all the conversations happening between all those constituent pieces.

I imagine that this creates a ton of data.

This is the famous thing that Clay Shirky said, “Information overload is not the problem; you want all the information. It’s filter failure.” You can’t listen to everything that’s going on in your company all the time. You want to filter it down to what matters to you at the moment and help you get your job done. You want to be able to find it all when it does matter. Later on, you say “I know they were working on this last week and I just realized I need to know what they were doing because it affects my work.” You can go find that. You can go find that conversation, that collaborative scenario, catch up on how its going, and maybe even join in on it, or start it back up if it’s not going.

If I’m a manager of company that’s not the most technologically nimble, what should I do to move toward becoming a social business?

The farther you are away from the technology industry, the less likely you’ll find social networking to be a natural thing for you to do. There’s more work you have to do.

You can try and find out what others in the organization are doing, because I guarantee you, if you’re a medium-sized business, or a large business, your organization is already doing social in some way. Don’t duplicate it, go and find out what’s going on, and see if you can join in and adapt your part of the organization.

Other than that, you can start looking at doing something locally. We know there’s really good tools for social CRM–customer support and care. It’s a really good scenario: high value, easy to do, and it’s something you can pilot without involving the whole organization.

Involved in this is a dissolving of the barrier between business and customer, is that right?

The customer wants more control. I think companies are uncomfortable with that, but if the customers really like something, they want to tell you how to improve it and change it.

For customer care, we find a bunch of examples in the book of companies that allow customers to talk to each other, the customer ends up being the best support people. They usually know more about the product collectively than the company does.

We see a blurring of when does the company end and when does it start, because customers are actually providing many of the most valuable functions, not the company itself, in this new model.

What’s the next trend?

We’re really seeing social moving to the center of work–right now it hangs around the edges, it forms the narrative fabric of what we do, but more and more we see evidence that over the next five years, with more companies, it will be the center of work.

You can wire in all the systems you use and have one activity stream, where all your collaborations are happening, all your records that you’re working on are right there, and they’re kept in the right place. You have this place that you’re working in that also involves everyone that you need to work with, wherever they are in the world, inside or outside the company. That seems to be the grand unified vision.

Why’s that such a good thing for managers?

They could keep track of what’s going on better than they ever could before. Often managers have to ask for status reports–can you imagine status reports going away? A lot of the traditional processes we have are highly duplicative: You do the work, and then you’ve got to describe it again in a status report, and then your manager has to look at it again–all that process goes away, you eliminate that duplication. You just acknowledge the work and the conversation. You don’t need those extra pieces. It will simplify what we do and improve the cycle times.

If I’m an entrepreneur, what’s the most important thing for me to keep in mind regarding social business?

We open the book with forward from Jeff Dachis, “everything that can be social will be,” and we also say that “everything that can be mobile will be, too.” I would really look at the hot areas as those that enable that vision, and we have a long way to go of making it simple, easy, and delivered the right way in terms of user experience on the right devices. There’s a lot of work left to be done.

The hottest area right now is social analytics. The data explosion has happened. We have the collective intelligence of the company out on display–now we have to do something with it, so there’s literally hundreds of startups focusing on mining that so we can get better decisions made faster than the competition.

And avoid that filter failure.

Yes, exactly.

To get a bigger glimpse of social-to-come, read our excerpt from Social Business by Design.

Image: Flickr user Andreas Levers

The digital landscape continues to undergo a significant shift that will have profound effects on business this year. The challenge is that hardly any business leaders noticed. That’s not their fault however. Even through the impact of technology on business and consumer behavior was widely reported, in depth reports on what to do next or how this will affect their business specifically were scant at best.

I’m sure you heard it from “experts” everywhere, “You need a Facebook brand page! Why are you not on Twitter yet? Have you checked-in on Foursquare? Hurry up and get set up on Google+. If you don’t get on social media, you’re going to go out of business!”

And, here you are…still in business I presume. But like any keen business leader, you’re avidly thinking about your next move. You already know that running the show in a mode of “business as usual” is not only limiting, it’s terribly complacent. But if you are to change, you need to better understand exactly how technology is influencing the behavior of your customers and why.

The truth is that you can create brand pages on every social network you can imagine and you won’t succeed unless you know whom you’re trying to reach and where, what it is they expect and value, and how these channels represent a meaningful opportunity for you and your consumers to connect. You first must answer what’s in it for them and what’s in it for you.

What the social media gurus aren’t telling you is that the landscape for business isn’t changing because of social media, it’s changing because consumer expectations are evolving. Your customers are empowered through technology where social media becomes only part of the disruption. Social networks, smartphones, tablets, review sites, gamification, geo-location, et al. are producing a new breed of consumer and businesses are largely missing them altogether. In fact, the emergence of this more “connected consumer” is forcing the end of business as usual. And at the same time, the pattern of decisions these connected consumers make usher in an era of risk where any business, large and small is vulnerable to digital Darwinism – the evolution of consumer behavior when society and technology evolve faster than the ability to adapt.

Your job is to not embrace new technology with arms wide open, but instead understand it and learn which disruptive technologies separate you from existing and potential customers. What’s unique about connected consumers is that they find and share information differently than their more traditional counterparts. They make decisions differently than the everyday consumers you’re used to engaging as well. But this part is the key, the connected do not displace your traditional customer, they simply expand your opportunity to grow your business. How you’re marketing, selling, and servicing customers today are largely missing this new breed of consumer and thus limiting your overall opportunity for growth.

To reach the connected consumer, you must first walk in their footsteps. It takes research not guesswork. It takes understanding not skepticism. And it takes a dedicated not generic or approximated approach. Why? Because while your traditional consumer relies on tangible media such as TV, radio, newspapers, direct mail, email, Google search or static websites, the connected consumer is not blindly seeking information, they are reliant on the right information finding them in the right places.

For example, your new prospective customer lives on their smartphones and tablets. They network with friends, family and the businesses they support in mobile and social networks. They check in to locations to signal to people nearby that they’re in the neighborhood and to alert businesses that they’re ready to interact live. Consumers install apps to better make decisions and to broadcast those decisions to their social networks. What’s more, they research products and services based on the experiences of their peers in real-time and in turn share their experiences with everyone else to shape and steer the experiences of others. In doing so they expand the idea of audiences to something far more efficient and expansive, an audience with an audience of audiences.

While it seems foreign or dismissible to those who are not actively embracing or even dependent on disruptive technology, connected consumers are only growing in size, magnitude and influence. Ignoring them is a step toward digital Darwinism. Understanding them and their behavior is a step toward relevance. In 2012, consider yourself a digital anthropologist or sociologist as you immerse in a day in the life of your connected consumer and seek to close the chasm between you and them. There are many professional analysts, researchers and strategists who can help you find the answers you seek.

Starting now and lasting well, forever, technology and empathy are now part of your business strategy. To what extent disruptive technology impacts your markets, will depend on your industry and the rate of adoption within it.

Your priority areas include understanding…

1. Social Networks from Facebook to Twitter to Google+ and how they’re connecting to influencers and businesses

2. Geolocation check-in services such as Foursquare and Facebook location updates to share locations and earn rewards or opportunities for discounts

3. Crowdsourced discounts and deals including Groupon and LivingSocial and what’s valued and why

4. Social commerce services like Shopkick and Armadealo and how they create personalized experiences that are worth sharing

5. Referral based solutions like Yelp, Service Magic, and Angie’s List to make informed decisions and how shared experiences can improve your business, products, and services

6. Gamification platforms such as Badgeville and Fangager, and why rewarding engagement improves commerce and loyalty

7. How your consumers using mobile devices today and what apps they’re installing. Also, how they’re comparing options, reviewing experiences and making decisions while mobile?

8. The online presence your business produces across a variety of platforms such as tablets, smartphones, laptops and desktops. You must realize how consumers are experiencing the online presences you create and whether or not they deliver a holistic and optimized experience for each platform.

9. The consumer clickpath based on the platform consumers are using. Are you steering experiences based on the expectations of your customers? And are you taking into consideration the device or network where the clickpath begins and ends? Are you integrating Facebook F-commerce and m-commerce into the journey?

10. The expectations of connected consumers, what they value in each channel and platform, where they engage and how your business can improve experiences and make them worthy of sharing.

This year and next are formidable years to solidify your position in how you compete for the future. Nowadays, no company is too big to fail or too small to succeed. Simply knowing your customer is one thing. But, understanding how they make decisions and participating in that process influences behavior while building meaningful relationships. Regardless of technology, the future of business isn’t created, it’s co-created. To succeed, it takes a culture of customer-centricity and the ability to recognize new opportunities and adapt based on what they present.

As Leon C. Megginson once said in paraphrasing Charles Darwin’s Origin of the Species, “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.”

#AdaptorDie

Image credit: Shutterstock

This post was written in April 2012. I’m just dating it so we can check in later and see if it’s still good. Yes, like a freshness date.

If I were a business person looking to understand how to use various digital channel making tools to build up my business, where would I start? What’s the right mix of tools to make this all make sense and work? What would I be able to accomplish? How would I work it all together? What would I do with my time?

Starting: Goals

For most businesses, I recommend using the human digital channel to promote media making, sales or memberships, and community/customer service functions. No matter the size of your organization, these are three baseline functions that should matter to you. The goals, then of those three functions are: exposure/awareness/helpful information, more sales or potential future sales, and any functions that will improve an existing customer’s experience with your business.

I’ll recommend some starting points for technology to point you in the right direction.

Starting: The Ecosystem: A Blog-Based Website

For media making, a blog makes a great tool for creating organic search engine optimization. It makes for a good “home base” for your online efforts. It provides a simple site infrastructure to let you build a website. You don’t HAVE to use your blog to write periodical updates and posts. I run several websites built on blogs that aren’t at all for posting or writing. They’re business sites for sales and sales only. But technology-wise, the blog software I recommend is an inexpensive/easy way to get onto the web. And in this case, I’m recommending a blog for media making.

I’d start with a blog running WordPress. Over the years, I’ve used several other platforms, often times the free ones where I just show up, pick a theme, and get going. I no longer recommend that. Here’s what I’m running on my sites and projects right now.

I highly advocate a simple custom theme like those provided by StudioPress (affiliate link). This site’s theme is Generate theme. I would pay for hosting based on the quality of service. For most of my sites, I use InMotion Hosting (affiliate link), who fixed a problem for me about an hour before I wrote this post. Inside of WordPress, I’m also running the Premise sales page maker (affiliate link). This helps me make very simple sales landing pages when I need them, and saves me a lot of time. One quick thing about setting up a blog: immediately make sure it’s equipped with either a dynamic mobile html theme (Genesis has many of these) or use some kind of plugin to ensure a great experience on mobile. I use wptouch on this blog to allow for that.

I would set up accounts to host and post video and audio. At present, I recommend YouTube primarily for video, because it’s not only simple, but it’s the #2 search engine in the world. If you want a second recommendation, I also really like Vimeo. For audio, I really like Soundcloud. I’m using it mostly for my music right now, but I also have used it for recording spoken word bits about business, and it works well, embeds well, and exists on several mobile devices.

Starting: The Ecosystem: Email Service Provider

Now that we’ve got the blog mostly set up, I want to move on to email marketing. I use InfusionSoft (affiliate link), which is a very robust and powerful email service provider. It might be a bit much for most people starting out. At the starting level, I’m a fan of both Constant Contact and Mailchimp. Many other people swear by Aweber. I think they’re great, too, but haven’t used them much personally.

Why have an email solution? Because it’s more intimate than interactions on social networks. It’s a way to maintain relationships with people. And no matter what you read about people switching more and more to social networks and SMS as a means of communication, email is still the backbone of the internet. Swing by chrisbrogan.com and you’ll see my email capture form top and FOREMOST on my site. I live by this.

Starting: The Ecosystem: Outposts

I consider the social networks to be outposts. By this, I mean that you do a lot of communicating and connecting on these sites, but never should you consider them primary to your business assets. They are tools to help you do many things, and though you must keep a gentle hand, your foremost goal is whatever you’ve mentioned above. Is it sales? Then sales might START on a social network, but you need them back to the home base to have that transaction.

Which networks do I find work best for business? Your mileage will vary. Here are some thoughts:

• Twitter – this is the serendipity engine. It’s brief, weird, shouldn’t work, and yet, it’s brought me more business than any other platform.
• Google+ – the new guy on the block. I read more blog posts telling me this network is failing. It’s growing daily, backed by a vastly wealthy and interested-in-its-success company, and widely integrated into several of the top 100 visited websites we all use. I wouldn’t bet against it.
• Facebook – I have never ever been successful selling on Facebook. It makes for a good community management page. There are many customer service functions that it can do well. I’ve never moved a single dollar from Facebook into any bank of mine.
• Pinterest – talk about bleeding edge. This is a visual bookmarking site, widely reported to be unique because it’s very heavily adopted by women (a first in social networks). I think there’s a lot of there there. I’m not an expert on it yet, but especially if women were a key buying element of my business, I would learn fast, were I you.
• LinkedIn – I’ve come to this: LinkedIn has about 150 million users, of which maybe 5 million use the service well. So, I think it’s a great tool used poorly by over 90% of its users. It doesn’t work well for my business, but I’m told that a steady hand and patience works well here.

That’s it for the “primary” social networks, but know this: to me, the magic these days is in finding niche networks that might serve your business well. If you’re selling hammers, hang out with the contractors and don’t worry about Facebook. Where are they? Google away. That’s what we do.

Starting: The Ecosystem: Listening and Analytics

I believe that the bigger opportunities in developing the digital channel into a human digital channel that promotes relationship-based business comes from the proper use of listening tools and analytics packages. In the case of listening, there are hundreds of systems out there. The current industry standard, I would say, is Radian6. It’s out of some people’s price range, so I’d also recommend Trackur, which is pretty decent, too. For analytics, I really haven’t found the best tool. Most people give me tools that let me count worthless things like views or likes or retweets. I need something more meaty than that. Maybe you’ve got recommendations.

Starting: Wiring This Into Your Organization

First, no matter the size of your business, align the use of these tools with your goals. Then, align those goals with who within the company is responsible for satisfying them. If you have a few employees, and one is responsible for marketing, while another is responsible for customer service, be clear who then touches what to get which results. It’s strange to say, but where many companies get this all wrong is that they put “one phone on one desk” and think they’ve wired up an office.

While we’re on this, realize that you have to have a conversation about what a salesperson will do with a comment found or a tweet or whatever that points to a customer service issue. Likewise, if a customer service person hears a potential sales lead, have the explicit conversation about next steps. This is the kind of stuff that wrecks it all. If you’re a company of one, this won’t be so hard (tee hee).

If you track sales leads, make sure to add spots for things like “blog, twitter,” and whatever else you want. If you are measuring handling times on your customer service calls, or time to resolve, etc, then make sure you account for these new channels. In short: wire it all in.

Starting: Strategy

Simple strategies are all I’ll give you here. For instance, if you want to promote your great home improvement company, then shoot video walkthroughs of before-and-afters on homes you’ve worked on. Write up a blog post, inviting people to contact you for a free 10-point checklist blah blah blah. Promote the post on the social networks you’ve selected. Use your listening tools to see if anyone’s seeking out what you sell. This is the basics of the homebase+outpost strategy.

Another strategy is the “keep community warm” strategy. Maybe this comes in building out a Facebook presence, backed with an email list. In this, you create interviews with people in your buying community. You follow their successes. You praise them. You write posts that help them do even more with your products/services. You answer most comments. You respond to emails via your email list. Your “calls to action” are minimal, but maybe you track sales by region, and/or use your customer relationship management software to match people on the social channels with buyers.

Another strategy is the “fill the funnel” strategy. Whatever metric you use to get more sales, use your digital channel to get more people into that funnel. If people buy based on referrals, then get more referrals. (Read The Referral Engine to do this better.) If people respond after a 30 day trial, then guide people to that 30 day trial.

Beyond that, my company offers strategic advisory and we’d be happy to talk with you about your business needs.

Just the Beginning

This post is already pretty long. Let’s make this a good ending point for now. We’ve talked about some tools, some strategies, some potential stumbling points. You’ve got a lot to chew on, maybe a lot to start learning about.

But what did I miss? What are you wondering that I forgot to cover? What else can I do to help you paint this picture more vividly?

The headline calls attention to everything that’s wrong with how businesses measure engagement in social media today. Businesses that invest any level of marketing resources in networks such as Facebook, Twitter, Google+ and the like (get it?) are being groomed to focus on soft metrics instead of the relevant activity that signals the strength and worth of a community. By weighing conversations, interactions, and views, businesses are fed raw numbers that demonstrate KPIs but they do not offer the insights necessary to glean ROI or deep understanding of what people do and do not want, need, or value. And that’s part of the problem as marketers and developers are focusing on stimulating movement, which by default becomes a game of competing for attention, moment by moment.

A recent study published by Ehrenberg-Bass Institute, an Australia-based research group found that less than 1-percent of Facebook “Fans” actually engage with brands. Researchers looked at the top 200 brands using Facebook’s “People Talking About This” metric as a proportion of overall fan growth over a six-week period in October 2011. As a result, the team discovered that the percentage of People Talking About This compared to overall fans was only 1.3%.  While this metric and approach is only one way to measure supposed engagement, the truth is that even by Facebook’s own standards of measurement, marketers are already boxed into a reporting process where each report serves as a benchmark for future activity. That’s the problem though. Engagement is confused with incidents and not outcomes or influence, the ability to cause desired effect or change behavior.

Businesses Take a Medium’alistic Approach

Brands and their marketers suffer from what I refer to as medium’alsim, a condition where inordinate value and weight is placed on the technology of any medium rather than amplifying platform strengths and ideas to deliver desired and beneficial experiences and outcomes.  Said another way, businesses are developing for the sake of development and establishing supporting presences without regard for how someone feels, thinks, or acts as a result. In doing so, “engagement” programs are calculated, brought to life in the form of an editorial calendar that, by its very nature, isn’t not designed to really engage people at all.

See, engagement is not defined through likes, comments, shares, RTs or impressions. This activity is simply a result of engagement.  Focusing on soft metrics is at the detriment of the customer experience and is potentially a distraction away from developing more meaningful connections and relationships. Engagement is by design. And, this is why businesses that are attempting to drive engagement numbers are benchmarking against lower standards. Instead of benchmarking against themselves, marketers and developers should consider benchmarking against the opportunity. Doing so is far more ambitious and as such, aspirational in the development of future strategies.

For example, I ran a quick experiment with a global beer brand to prove a point. We looked at the 1-percent engagement rate and decided to run a non-scientific experiment to not only debunk the value of the engagement number as defined, but also demonstrate the need to think through desired actions and outcomes. In the middle of a business day, I posted a picture of a frosty mug filled with said beer with an ocean view in the distance. I added one word to the post, “cheers.” Within minutes that 1-percent engagement rate was eclipsed with people uploading pictures of their favorite moments while enjoying their favorite beer. Along with comments, Likes, Shares, etc., the marketing and digital teams were temporarily elated but quickly realized that the engagement they witnessed was only fleeting. While a simple example, the lesson is that engagement must mean something more to groom the community toward desired sentiment, outcomes, or to simply serve the needs of the community based on stated expectations or desires.

Redefining Engagement to be More Engaging

It starts with redefining engagement as we know it today to ultimately improve experiences tomorrow. I spent some time exploring existing definitions and I was surprised to find a lack clarity around such an important word. Since we spent so much time talking about what engagement is not, I invested time in researching the best practices of brands that were clearly driving communities in a particular direction through digital, social, and mobile channels. Those companies include Virgin America, Dell, TOMS, Whole Foods, Giant Nerd, among others. As a result, a working definition for engagement came into view…

Engagement is defined by how a brand and consumer connect and interact within their networks of relevance.

Simple. But, it’s also incomplete. It’s not just about the moment or competing for attention, it’s about the aftereffect.

Engagement is measured by takeaway value, sentiment or feelings, and resulting actions following the exchange.

If we look at the nature of the community in which brands are investing today, editorial programming, contests, gimmicks, campaigns, etc. lend to only one of the multifaceted sides to customer engagement.  Community is much more than belonging to something, it’s about doing something together that makes belonging matter. This is why businesses must think about investing engagement by defining experiences, journeys, feelings and outcomes. Without doing so, they by default introduce experience divides that disrupt flow, hinder sentiment, and obstruct clicks to action.

Redefined engagement opens the door to new strategies and resulting metrics that lend to meaningful experiences and results. By designing more meaningful initiatives, businesses can now focus on causing effect, changing behavior, or reinforcing value where previous engagement metrics can now document the progress of progress. The ultimate measure however is now something more substantial, such as…

- Shift in sentiment
- Satisfaction
- Acquisition
- Referrals
- Conversion
- Leads
- Brand integrity/Reputation

Thinking through experiences, journeys, outcomes, and sentiment will at the very least improve the number of customer interactions and overall allegiance. It is in the relentless delivery of value that extends moments beyond merely competing for attention. Engagement is about cultivating community behavior against a defined vision, mission and most importantly, purpose. Step back to gain perspective and to see new possibilities that your competitors are missing. You are an architect of experiences and as such, you must begin with the end in mind. Then, reverse engineer the outcomes and experiences your community will value and in turn, your management will value as well.

Please consider ordering The End of Business as Usual today…

Via Brian Solis: http://www.briansolis.com

Marketers, educators, parents, it seems that almost anyone in the Generation X or Boomer demographic is scratching their heads trying to figure out Generation Y aka the Millennial. After all, it’s the first generation to seemingly possess digital prowess as part of their DNA. And, it’s the first generation to receive both a birth certificate and a social profile or presence upon delivery into this world.

A study published in 2011 by security company AVG and Research Now surveyed  2,200 mothers from around the world and found that 81% of children under the age of two currently have some type of digital footprint. 92% of U.S. children have an online presence created for them by the time they are 2 years old. In many cases, a digital presence is born before the child, with sonograms (23%) actively published and shared on social networks and blogs.

With every day that passes, Gen Y becomes far more important to the economy than we can realize. Yet the gap between how Gen Y communicates and connects and how businesses, educators, governments, et al. approach them is only widening. I often wonder whether or not we are simply trying to talk to ourselves in our approach when in reality, we are talking to strangers. This is important as without understanding what’s important to them and why, without learning their behavior or decision making cycles, or without empathy, we cannot reverse engineer nor create a meaningful and engaging journey. We cannot create bridges from where they are to us nor can we expect them to use them.

How well do you know Gen Y?

Here are some interesting points for discovery that get us thinking beyond what we think we know today:

59% update their social status in class.

29% find love through Facebook while 33% are dumped via TXT or Wall posts (SRS) – abbreviation for seriously

Millennials watch TV with two or more electronic devices

Only 11% define having a lot of money as a definition of success

Gen-Y will form 75% of the workforce by 2025 and are actively shaping corporate culture and expectations.

Only 7% of Gen-Y works for a Fortune 500 company as startups dominate the workforce for this demographic. Gen-Y expects larger organizations to hear their voice and recognize their contributions…increasing the need for an intrapreneurial culture.

Millennials trust strangers over friends and family. They lean on UGC for purchases.

They are 3x as likely to follow a brand over a family member in social networks

66% will look up a store if they see a friend check-in

73% have earned and used virtual currency

Gen-Y believes that other consumers care more about their opinions than companies do – that’s why they share their opinions online.

Gen-Y’ers are more connected on Facebook than average users managing a social graph of 696 Facebook friends versus 140.

If knowledge is the key to enlightenment, then perception and imagination are windows to engagement and relevance. We can learn all we want about Millennials, but if we can’t translate that into meaning or substance, we will continue to miss opportunities to build lasting relationships.

The gap isn’t just widening because of the growing pervasiveness of Millennials in our economy. As I introduced in The End of Business as Usual, anyone who places increasing emphasis on technology as part of their daily routine, in many ways, their behavior mimics that of Millennials and as a result, they prove elusive or immune to traditional marketing and service. In the book, I refer to this class of consumer as “the Connected Customer” and their behavior is noticeably dissimilar to that of their traditional counterparts. The connected customer is the stranger you must get to know as in comparison to the customers of the past, this group is only growing and it’s traversing demographics. As such, the connected customer becomes what we can or should now refer to as Generation C where the “C” represents connectedness.

No longer can we blame it on the youth. We must blame, if anything, the disruption of technology. Nowadays, age ain’t nothing but a number. It is how people embrace technology, from social networks to smartphones to intelligent appliances, that contributes to the digital lifestyle that is now synonymous with Gen-C.

A recent study published by Nielsen brings Generation C into light. In just one image, we can begin to comprehend the disruption of digital revolution on society. Call it the social economy. Call it the mobile or the app economy. Call it the connected economy. Whatever we call it, this incredible transformation that we’re witnessing, is indeed nothing short of a digital revolution.

The Last 10 Years

274 million American have Internet Access, which is more than double that of 2000.

81 billion minutes spent on social networks and blogs

64% of all mobile phone time is spent on apps.

42% of tablet owners use them daily while watching TV.

For the first time, the numbers of laptops have surpassed desktops within TV homes.

Women Rule Gen-C

In 2009, I discovered that in social media, women rule. As you can see in Nielsen’s report, women too rule Gen-C.  Specifically, they rule social media and online video and TV viewership. With smartphones, men and women are tied in adoption. With tablets however, men rule.

Gen-C, By the Numbers

If you compare Nielsen’s graphic with that of IBM’s research on Social CRM, you can appreciate the full dimension of Gen-C as every demographic, in their own way, is adopting disruptive technology. And, it’s only becoming greater.

Platforms for Digital Access

Every digital experience has its springboard. Whether it’s a PC, tablet, smartphone, and soon, a connected TV, our ability to every platform unifies the 5-C’s of engagement, create, connect, consume, communicate, and contribute.

274.2 million Americans have Internet access

169.6 million visit social networks and blogs

165.9 million people watch video on a PC

70% of time using tablets is spent while at home versus 30% on the go

Content accessed on tablets is 1) News at 39%, 2) Sports at 34%, and Books at 31%

On smartphones, 117.6 million visit the Internet

App usage peaks at 5 p.m. among adults

Smartphones are used by 44% of all mobile subscribers in the U.S.

Video Continues to Kill the Radio Star: Engagement is Cross Platform

Nielsen found that consumers increased their online video consumption by 7% from Q3 2010 to Q3 2011. As you can see in theimage below, online and mobile video consumption is significant.

Younger demographics watch less TV and watch video more online and on mobile devices.

With each generation, TV viewership rises with age.

Connected Customers are Multitaskers

Nielsen also shared the engagement habits and online activity of connected customers. As consumers watch a program, they are online with 1) 57% checking email, 2) 44% surfing the web, and 3) another 44% social networking.

When asked what they were doing while online during TV, some very interesting answers emerged. 29% looked up programming information related to the show. 19% looked up product information related to an ad. And, 16% looked up coupons or deals related to the ad.

The Top 5 Sites Visited While Watching TV

1. Facebook

2. Youtube

3. Zynga

4. Google

How Gen-C Spends their Connected Time

On PC’s and mobile devices, Gen-C is always on. Nielsen found that during October 2011, Youtube was the top destination for all online video content, accounting for nearly half (45%) of American’s total streaming time.

Social networking represents 21.3% of all time spent online using PCs.

Online gaming accounts for 7.7%

Email, in many ways still the largest social network in the world, represents 6.5%

55.8% of mobile phone time is spent in miscellaneous apps, with Angry Birds most likely accounting for a notable share of that time (just kidding).

Text messaging continues to test the limits of thumb dexterity and the ability to find new ways to abbreviate our vocabulary at 13.4%

Browser usage represents 11.1%

Social networking equals 5.5%

Interesting that email and IM are among the bottom of all mobile functions at 5.3%.

From e-commerce to Mobile Commerce

As Nielsen and so many other research reports herald, mobile commerce is influencing transactions and decisions. Mobile is just one of the many channels for emerging commerce including social, F-commerce, and more importantly, syndicated commerce. 29% of of mobile consumers use their phone for shopping-related activities and more than 50% visit daily deal sites daily.

Mobile shopping activities include:

38% compare prices online while in shopping in a store.

38% browse products through websites or apps.

32% read online reviews of products.

24% search for or use online coupons.

22% have purchased a product.

22% scan barcodes for product or price information.

18% use location-based services to find retail locations.

My favorite state isn’t related to what people are doing, but what they would do if businesses innovated in their approach to commerce.

27% of male and 22% of female consumers would use their mobile phone to make payments in restaurants and shops if they could.

This is an EmerGen-C

Connected customers or Gen-C is only becoming more pervasive in society and ultimately your economy. If you look back at the Gen-Y behavior list and replace the words “Millennial” or “Gen-Y” with “Connected Customer” or “Gen-C,” the similarities are uncanny. Now’s the time to recognize how your customer landscape is shifting and to what extent traditional and connected consumers discover and make decisions differently. The customer journey is far more complex than ever before, where new touchpoints not only emerge, they introduce a new customer journey.

With connected customers, decision making is no longer signified by a simple funnel, nor can business models support decision making before, during, and post transaction across these distributed, but connected platforms. This is a time for augmented engagement strategies to cater to different types of customers differently not only based on behavior, but also based on their expectations, needs, and also the platform they use to connect, communicate, and make decisions.