Notes for Workshop: Inspiring Market Responsiveness Through Social Networking

Targeting Opinion Leaders.

Central question: Does usage volume also affect how effective one is as a source of influence after one has adopted?

A key assumption underlying many network marketing strategies is that some customers are
not only better connected but also more influential than others.

Who these customers are is critical for selecting initial targets or “seeding points” in network marketing campaigns.

They investigate whether customers who are heavy rather than light users, a characteristic that is easier
and cheaper to determine than opinion leadership, are disproportionately influential among those
they are connected to.

The “stand-alone” customer lifetime value (CLV) of opinion leaders may be higher than that of other people because they tend to be early adopters and heavy users.

Their “network” value may be higher not only because they reach more people but also because, by being early adopters and heavy users, they start influencing others sooner and more effectively than less connected people.

Caveats:
If opinion leaders tend not only to adopt but also to disadopt sooner than others, and if the firm’s discount rate is low, then the “stand-alone” CLV of an opinion leader need not be systematically above average.

Customer’s heavy use may boost his “network” value only if the product is perceived to be risky and heavy users are more credible or otherwise more influential than light users.

When the new product challenges the power base or norms of the opinion leaders, the product is likely to be resisted by them and to be adopted first by members at the fringe of the network

Managers should also take note that heavy prescribers of the last drug launched in the
category tended to adopt the new drug early and also tended to be opinion leaders.
Overweight one’s marketing efforts at launch towards heavy prescribers is sound to generate not only quick trial sales but also a larger contagion effect. Heavy users have a higher “stand-alone” value both because they adopt early and because they use more after they adopt. They also have a higher “network” value both because they tend to have more connections and tend to be more influential within each of those
connections.

However, since the correlation between Use sociometric leadership can only be moderate, just focusing on heavy users will fail to leverage all potential influential seeding points.

Clink: Opinion Leadership and Social Contagion in New Product Diffusion

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1564856

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About Howard Oliver
The founder and CEO of What If What Next, Howard Oliver (holiver@whatifwhatnext.com) for more than 20 years has been an entrepreneur, writer, thought leader, PR Guru, business development strategist, technology evangelist, manager and consultant for numerous service, industrial and high technology companies. Howard provides leadership in the application of Agile and Lean project management methodologies for technology enabled social media marketing and PR campaigns that deliver revenue, customer and alliance engagement, and media buzz. Clients in technology and other industries recognize him as a driven, highly creative and disciplined thinker. He also created the WebVoyaging® brand, a market engagement methodology that optimizes the deployment of cloud based, best-in-class marketing automation solutions. The WebVoyaging® process is inspired by the great visionaries who conceived of and built history’s great sailing vessels, which helped establish trade routes and created huge wealth. An accomplished business educator, Howard has recently created the WebVoyaging® Master Class, a training program for organizations interested in implementing Lean marketing automation solutions. Howard holds an MBA from Wilfrid Laurier University, and a Bachelor of Commerce degree from McGill University. Howard is an avid sailor and collector of books.

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