Yesterday’s lunchtime session with James Poulter from Lexis PR yielded some extremely interesting points. It got us thinking long and hard about the value of recommendations in the ‘freebie’ society. Here are our thoughts on the session.James began with these points:
1. We live in a society where media and other stuff doesn’t need to be owned any more (think Spotify, Love Film, car share schemes and the like).
2. If you don’t own anything there are no transactions to measure and monitor your consumption. This means purchasing is invisible.
3. If purchasing is invisible, you can’t target or analyse your market.
4. So how do you do it? Through recommendation (liking and sharing on Facebook, Google Reviews, Tripadvisior etc.).
5. You need to be able to monitor, engage, measure and drive recommendations.
But what exactly is a recommendation? James says it’s about three things:
Direction
Naming
Association
Or – handily – DNA
James has explained these 3 ideas eloquently and clearly in his blog, so rather than reproduce them I’ll provide a direct link
jamespoulter.co.uk/2010/10/recommendation-economy-dn/
There’s even an infographic on there, and followers of the Organic Development blog will know how we feel about them! (click here if you don’t know what I mean)
We think James’ DNA model is a fantastic insight. It’s a really good way of breaking down the concept of recommendations – which at first may seem deceptively simple – and understanding exactly how and why recommendations function as they do.
However, it’s not all plain sailing. We have some issues with ‘recommendation economy’ model:
1. People are really good at association – BUT they often do it to define themselves and their own personality, rather than trying to say something about a product or service. You can't guarantee that it’s a genuine recommendation. In other words, people aren’t saying 'I like this or value this or recommend this' – they’re saying 'I am like this because I like this'.
2. There is still a major disconnect between recommendation and the action of actually buying a product. The tools of recommendation (like buttons, share, Trip Advisor) and the strategies that marketers use in the social sphere to generate recommendations and turn them into sales are not sophisticated enough to bridge this gap at the moment. They can - and do - try, but there’s no measurable correlation.
3. The ‘economy’ model is potentially unhelpful. Here’s why:
a) It talks about recommendations as if they have a value. However, you can’t value a recommendation unless you really TRUST and understand the source. For example on Trip Advisor, an old couple wanting a quiet holiday won’t appreciate a party hotel in Ibiza but a group of 18-30 year olds might, and may well post positive feedback accordingly.
b) Recommendations are often more about personal identification – aligning oneself with a trendy band, for example – than about an actual desire to buy.
c) Most recommendations have no context.
d) If you start talking about recommendations in an economic sense – as the currency of a new economy – you need an independent measure for that unit of currency that everyone can agree on. Otherwise, it’s not a market.
e) Creating an independent shared unit of value for information – which is what a recommendation is – is probably impossible. At the moment it’s search engines that define the value of content most of the time, and as we know that’s a commercially biased view.
To sum up, I think James’ general perceptions are correct, and the DNA model is a great way of deconstructing and understanding recommendations, but the language needs to move away from the economy metaphor because – when applied in practise – it’s doesn’t quite hold up.
Perhaps the Complex Adaptive Network approach offers a model and language framework that is more suited to the way recommendations function? We’ll expand on this in a later post, but if you want to get an idea of CANs, take a look here and here. If you acknowledge the complexity of the system, and accept that you can’t identify a relationship between referrals and sales, then you can start to talk about how to market your products and relate to your customers in a much more human way (not just in terms of market forces and economic and supply and demand).
Many thanks for a great session James, we’d be delighted to hear your thoughts on our post.
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