Open Source Marketing Goes ‘Outside-In’

I have written this article for Web Pro News, so it's pretty long...

Traditional marketing has been built around the idea of creating a central set of messages and sending them out into the marketplace.

This can be thought of as an ‘Inside-Out’ approach, where the communications infrastructure required to manage brands and image (cameras, editing suites, media, design & creative personnel) is held inside large organisations and used to distribute information out.

However, as savvy consumers filter out unwanted advertising information using PVRs, adblockers, SPAM filters, RSS feeds, subscriptions and customer communities, the Inside-Out approach is becoming less and less effective.

Distributed Media
One reason for this is that communications infrastructure is no longer confined within corporate walls.  It is distributed widely and freely in the shape of digital cameras, blogs, RSS, communities, podcasts, Bittorrent feeds and P2P networks.

Operating as an Inside-Out organisation in this new distributed environment can create serious problems.

Firstly, customers become very frustrated.  This leads to an opt-out culture with consumers shielding themselves from unwanted messages.  Unfortunately, some Inside-Out organisations respond by working their infrastructure harder in an effort to reach the consumer.  This is a vicious circle which benefits no one.

Secondly, unhappy customers can find each other and mobilise into communities.  At the low end of such activity are ‘gripe sites’, where people air their grievances online.  However, increasingly sophisticated techniques are emerging such as the community of Verizon Wireless customers who took out a class-action lawsuit against the wireless operator.

Thirdly, marketeers grow out of touch and feel removed from their audience.  They find themselves pulling the levers but not getting the results.  In extreme cases, marketeers can develop a bunker mentality.  It’s as if consumers have turned the tables and put them ‘under fire’.  Sometimes this can lead to the position where brands are used as defensive shields, rather than positive business tools.

A practical example of this is the banking customer who feels bombarded by direct mail but cannot get a satisfactory, timely answer when something goes wrong.  He just struggles to infiltrate the complex systems of an Inside-Out company.

Open Source Marketing Goes Outside In
Not surprisingly, some companies are looking around for new ideas.  Open Source Marketing is one idea that people are turning to as they realise that the values behind the Open Source Movement can be applied to industries beyond technology. 

The Open Source approach can be described as ‘Outside-In’.   It recognises that in a distributed environment a lot of information and content about a company or brand is being produced outside of the organisation by consumers and other stakeholders.  And that companies need systems that allow them to react to this information.

It also recognises that frequently this information is more influential than the spiel produced by a company or brand.  For example, someone looking to book a hotel will probably place greater value on a customer community such as virtualtourist.com than a hotel website.

Companies introducing the Outside-In approach are seeing some success.

Converse, the Nike-owned manufacturer of training shoes recently launched the Converse Gallery, an online challenge to its customers to produce a film inspired by the brand.  The company has received around a thousand entries which can be found on its website.  They are of a very high standard and form the basis of a competitive community that is creating large amounts of branded content.  And all at no cost to the organisation.

Product Development
However, it’s important to recognise that the Outside-In approach is not restricted to promotion and can be used throughout marketing.

For sometime hackers have been seen as people who insist in meddling with newly released products.  But some enlightened companies have reclassified them as Lead Consumers or Brands Fans and started to bring their knowledge and enthusiasm into the product development process.   Lego and Boeing are two companies who have introduced such open, Outside-In systems.

Less Control, More Influence
Another aspect to the Outside-In model is to accept that customers like talking to one another because they trust other consumers more than brands.  Outside-In companies facilitate these conversations and join in as required.  In doing so they relinquish control in exchange for influence and credibility.  Amazon’s reader reviews are a good example.

However, the transformation from Inside-Out, to Outside-In can be challenging.

Most companies are organised to keep everything inside and only interact with the marketplace in a very controlled manner.  So changing to a more open model requires physically reorganising systems.  For instance, allowing a group of advanced users access to a prototype will involve reorganising production plans to allow feedback to be incorporated into the final product. 

It’s All In The Mind
Perhaps more problematically, companies find that moving to an Outside-In approach requires a new mindset.  The marketing departments of most organisations have been nurtured on a diet of ‘command and control’ which has reached a status of best practice or even ‘the norm’.  Changing such an ingrained mentality can be difficult and is best approached step-by-step.  Letting customers into the company one-by-one is more manageable than kicking the front doors wide open.

On a more subtle level the Outside-In approach can involve the development of a different attitude towards customers.  It’s something that Rupert Murdoch alluded to in a recent speech to the American Society of Newspaper Editors. “The percentage of national journalists who have a great deal of confidence in the ability of the American public to make good decisions has declined by more than 20 points since 1999”, the media mogul reported, “this is a polite way of saying that reporters and editors think their readers are stupid.”  The Outside-In approach promotes the customer to an elevated level of influence.

In many ways, none of this is new.  There can be few marketeers who would admit to not being interested in their customers’ views and the issues that shape their marketplace.  However, many do not appreciate the extent to which the new digital environment and distributed communications infrastructure has changed the rules of engagement.

If the Inside-Out model looked like a massive speaker booming out messages into the marketplace, the Outside-In model looks like a vast satellite dish scanning the marketplace for issues and conversations with which to engage in a quick and lively way.

It seems that change isn’t about turning everything Inside-Out, it’s about turning it Outside-In.

Comments

[Internet Resources]

An excellent article.

[Jack]

The open-source movement is primarily associated with software. Linux, MySQL, R, OpenOffice, Mozilla, Apache, and many other open-source software development projects have a profound effect on the software industry. They cause some of our best and brightest business minds to reinvent business models and legal scholars to revisit the meaning and purpose of intellectual property (IP) protection.

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Jack
[url="http://www.globalinternetmarketing.net"]Wide Circles[/url]