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The Power of Customer Misbehavior - AKF Partners

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The Power of Customer Misbehavior - AKF Partners

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The Power of Customer Misbehavior explores the idea that customer misuse of features is the key to viral growth through product development based on this information. This book introduces the concept of self-identity as a motivator for participation in social networks as well as product purchases. Additionally, The Power of Customer Misbehavior covers several technological features such as the user interface and page load time and their impact on user adoption and retention.

http://akfpartners.com/books/the-power-of-customer-misbehavior

The Power of Customer Misbehavior explores the idea that customer misuse of features is the key to viral growth through product development based on this information. This book introduces the concept of self-identity as a motivator for participation in social networks as well as product purchases. Additionally, The Power of Customer Misbehavior covers several technological features such as the user interface and page load time and their impact on user adoption and retention.

http://akfpartners.com/books/the-power-of-customer-misbehavior

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The Power of Customer Misbehavior - AKF Partners

  1. 1. ABBOTT, KEEVEN & FISHER PARTNERS PARTNERS IN HYPER GROWTH The Power of Customer Misbehavior Mike Fisher Marty Abbott 1
  2. 2. ABBOTT, KEEVEN & FISHER PARTNERS PARTNERS IN HYPER GROWTH About Us Marty Abbott Tom Keeven Mike Fisher 2
  3. 3. ABBOTT, KEEVEN & FISHER PARTNERS PARTNERS IN HYPER GROWTH Books 3
  4. 4. ABBOTT, KEEVEN & FISHER PARTNERS PARTNERS IN HYPER GROWTH Other Publications 4
  5. 5. ABBOTT, KEEVEN & FISHER PARTNERS PARTNERS IN HYPER GROWTH Our Business – 10 Countries & Growing 5
  6. 6. ABBOTT, KEEVEN & FISHER PARTNERS PARTNERS IN HYPER GROWTH The Power of Customer Misbehavior 6
  7. 7. ABBOTT, KEEVEN & FISHER PARTNERS PARTNERS IN HYPER GROWTH Growth is Good! For Profit Businesses: • Higher Valuations • Greater Access to Capital • Larger Profits • Higher Employment • Better Able to Contribute Socially Not For Profit Businesses: • Greater Social Impact • Better Network Effects • Better Access to Funding 7
  8. 8. ABBOTT, KEEVEN & FISHER PARTNERS PARTNERS IN HYPER GROWTH Viral Growth is Better! Viral Coefficient (Cv) = Fan Out * Conversion Rate Viral Growth = (Cv * Retention)Frequency Cv > 1 In order to achieve viral growth the viral coefficient must be greater than 1 Viral Growth with Low Retention is still better than non-viral growth. © AKF PARTNERS 2013 8
  9. 9. ABBOTT, KEEVEN & FISHER PARTNERS PARTNERS IN HYPER GROWTH Comparison of Social Networks  Founded by Jonathan Abrams and Chris Emmanuel in 2002 in Mountain View, CA  Live in March 2003, adopted by 3 million users within months  Total funding $48.5M Only $40.7M invested by 2007, eventual total investment $1.49B  Pages eventually took up to 40 seconds to load IPO raised $16B valued the company at over $104B  Hired four CEOs in three years  In 2009 sold for $26.4 million MOL  Founded by Mark Zuckerberg and fellow Harvard students in 2004  Initially restricted to college students (.edu email)    500 million users by 2010 9
  10. 10. ABBOTT, KEEVEN & FISHER PARTNERS PARTNERS IN HYPER GROWTH Social Networking for Pets “These are fakesters, they're not people. This is supposed to be for actual people, so let's get them off of there.” – Jonathan Adams By 2012, there were an estimated 22.9 million misclassified accounts including millions created for pets (Kelly 2012). A Facebook executive observed, “I still run across occasional people profiles that are actually of their cats or dogs or something like that.” 10
  11. 11. ABBOTT, KEEVEN & FISHER PARTNERS PARTNERS IN HYPER GROWTH College Parties Friends Groups Events 11
  12. 12. ABBOTT, KEEVEN & FISHER PARTNERS PARTNERS IN HYPER GROWTH How Do You Achieve and Sustain Viral Growth? 12
  13. 13. ABBOTT, KEEVEN & FISHER PARTNERS PARTNERS IN HYPER GROWTH Technology Adoption S-Curve Introduced Neal Gross and Bryce Ryan Uses Explained adoption of hybrid corn seed as a social process © AKF PARTNERS 2013 13
  14. 14. ABBOTT, KEEVEN & FISHER PARTNERS PARTNERS IN HYPER GROWTH Technology Adoption Lifecycle Introduced Rogers, Beel and Bohen in 1957 paper Validity of the concept of stages in the adoption process Uses Provided psychographic profiles of adopters at each stage. © AKF PARTNERS 2013 14
  15. 15. ABBOTT, KEEVEN & FISHER PARTNERS PARTNERS IN HYPER GROWTH Technology Acceptance Model Introduced Fred Davis 1989 MIS Quarterly paper Perceived Usefulness, Perceived Ease of Use, and User Acceptance of Information Technology Perceived Usefulness Attitude Toward Using Uses Single user / single technologies like ERP, CSM, and email Behavioral Intention to Use Actual System Use Perceived Ease of Use © AKF PARTNERS 2013 15
  16. 16. ABBOTT, KEEVEN & FISHER PARTNERS PARTNERS IN HYPER GROWTH Viral Growth Model TAM Combine TAM with Viral Growth factors Perceived Ease of Use and Perceived Usefulness Positively Impact Viral Growth Perceived Usefulness + Perceived Ease of Use + Fan Out Growth + Retention © AKF PARTNERS 2013 16
  17. 17. ABBOTT, KEEVEN & FISHER PARTNERS PARTNERS IN HYPER GROWTH Users Help “Create Value” Co-Creation Co-Production  “the act of interacting, creating content or applications by at least two people” (Trogemann and Pelt, 2006).  “the process through which inputs used to produce a good or service are contributed by individuals” (Ostrum, 1975)  The contributions of users to Wikipedia are typical examples of co-creation.  Creating social media accounts for pets  Adding hashtags to find updates  Using a product in new, innovative and unforeseen ways  Posting status updates, pictures, sharing links, etc. through user generated content (UGC) 17
  18. 18. ABBOTT, KEEVEN & FISHER PARTNERS PARTNERS IN HYPER GROWTH The Virtuous Cycle of Misbehavior: Co-Creation Leads to Co-Production Use/ Co-Create Misbehavior/ Co-Produce 18
  19. 19. ABBOTT, KEEVEN & FISHER PARTNERS PARTNERS IN HYPER GROWTH CoCreation Misbehavior Drives Growth Virtuous Misbehavior and Collaboration + Fan Out CoProduction Growth Perceived Usefulness + Perceived Ease of Use + Retention + © AKF PARTNERS 2013 19
  20. 20. ABBOTT, KEEVEN & FISHER PARTNERS PARTNERS IN HYPER GROWTH CoCreation Virtuous Misbehavior and Collaboration But What Drives Misbehavior? + Fan Out CoProduction Growth Perceived Usefulness and… Perceived Usefulness + Perceived Ease of Use + Retention + © AKF PARTNERS 2013 20
  21. 21. ABBOTT, KEEVEN & FISHER PARTNERS PARTNERS IN HYPER GROWTH Self-Identity “Even those who deny any interest in how others view them actually do care, if only by making sure that everyone else understands that they don't. The way we dress and behave, the material objects we possess, jewelry and watches, cars and homes, all are public expressions of our selves” - Donald Norman, Emotional Design (2007) Voyeurism CoCreation Self Identity Virtuous Misbehavior and Collaboration Exhibitionism + Fan Out CoProduction Growth Perceived Usefulness + Perceived Ease of Use + Retention + © AKF PARTNERS 2013 21
  22. 22. ABBOTT, KEEVEN & FISHER PARTNERS PARTNERS IN HYPER GROWTH Simplified Model with Feedback Loops Identity Usefulness Misbehavior Growth Ease of Use 22
  23. 23. ABBOTT, KEEVEN & FISHER PARTNERS PARTNERS IN HYPER GROWTH Be Open to Misbehavior 23

Notas del editor

  • Iowa Agricultural Experiment Station had developed hybrid corn seed that was drought resistant and could increase yields by 20%1941 Neal Gross was a grad student working for Bryce Ryan at Iowa State University and interviewed 345 farmersRyan and Gross published their results which included: - hybrid corn required 12 years to reach widespread diffusion or near complete saturation of potential adopters. - the average farmer needed seven years to progress from initial awareness of the hybrid corn to full-scale adoption - The cumulative number of adopters when plotted over time results in an S-shaped curve - MOST IMPORTANTLY The sources of information about the innovation were different at various stages in the decision process with the mass media more important at the awareness stage and peers more important at the persuasion stage.
  • Everett Rogers was a young boy growing up on a farm in rural Iowa in 1930s. His father loved electromechanical innovations but was leery of biological-chemical innovations. In 1936 a sever drought hit Iowa, devastating Roger’s family’s corn crop. Neighbors who had switched to hybrid corn seed were able to withstand the drought. Finally Roger’s father switched.Rogers had no plans on attending college until a teach drove him to Ames (Iowa State University) where he ultimately received his PhD in 1957.Rogers, Beal, and Bohlen introduced the Technology Adoption Lifecycle, in their 1957 paper, “Validity of the concept of stages in the adoption process” published in the journal Rural SociologyInnovators – Larger farms, high status, active in the communityEarly Adopters – Younger, higher educated, read more papers and magazinesEarly Majority – Slightly above average in age, education, and farming experience; attended more agricultural meetings.Late Majority – Older, less educated, and less socially activeLaggards (Non-adopters in the report) – Least educated, oldest, receive and read the fewest bulletins, papers, and magazines.
  • Based on 1970’s Theory of Reasoned Action by Fishbein and Ajzen which states that a person’s attitude when combined with subjective norms creates a behavioral intent.In other words, a person’s voluntary behavior is predicted by their attitude toward that behavior and how he or she thinks other people would view them, if they carried out that behavior.Fred Davis proposed the Technology Acceptance Model in his doctoral thesis at the MIT Sloan School of ManagementThe model was developed in order to “provide an explanation of the determinants of computer acceptance that is general, capable of explaining user behavior across a broad range of end-user computing technologies and user populations, while at the same time being both parsimonious and theoretically justified.”perceived usefulness was defined as "the degree to which a person believes that using a particular system would enhance his or her job performance.”perceived ease of use was defined as “the degree to which a person believes that using a particular system would be free of effort”
  • Simon Rothmon was a typical young executive,MBA from Harvard Business School in 1995, joined McKinsey & Company, in 1998, joined eBay.In 1998 eBay had net revenues of $47.4 million, up from $5.7 million the prior yearAt this time Used car sales were becoming big business, with retail dealerships selling more than twice the number of used cars as new cars (20.5 million used vs. 8.8 million new)If eBay Motors only addressed 50 basis points (0.5%) of the used car market in the late 90s, it would mean as much as $1.75 Billion in gross merchandise sales.

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