New York City's first Chief Digital Officer, Rachel Sterne

In my January feature on New York City’s 24/7 contact center, my sources told me that 311′s next objective was to secure a chief digital officer to pioneer their social media initiative. Well, they found one as of yesterday. Her name is Rachel Sterne and she is 27 years old with a background in entrepreneurship, journalism, academics, and of course, social media. She was an adjuct professor at Columbia Business School, founded an civic journalism site called GroundReport, and has apparently been speaking all over the country.  She was also named one of America’s Most Promising Social Entrepreneurs by BusinessWeek.

Sterne was hired after a six-month-long search and will reportedly make $115,000 a year!

She has kicked off her new job with an active twitter feed (@rachelsterne) and is launching a 90 day social media listening campaign to be handed over to Commissioner Katherine Oliver and City Hall. She is encouraging New Yorkers to tweet suggestions to her about how to improve the city’s digital communications. Tweet your ideas to her, or just say congratulations!

A new report by IBM shows that customers are feeling more positive about their income following the 2010 holiday season. IBM’s analytics- based Coremetrics Retail Benchmark Study reports a 12 percent rise in online retail sales over 2009 — more than double the expected growth of five percent. Customers did respond to more aggressive retail promotions and there was a  significant increase in mobile shopping and increased spending on luxury items. Yet, the sentiment across the board among customers of all purchasing mediums was frugality.

Highlights from the survey observe that:

• Seventy percent of consumers are positive about their income situation.
• The top three shopping attitudes are to only buy what they need, search for items on sale, and wait longer to purchase.
• Forty-nine percent of respondents were “instrumented consumers” – those who use two or more technologies, e.g. a website, mobile device, or in-store kiosk to shop — a 36 percent increase since IBM’s last retail study a year ago.

Consumers and stores alike suggested a greater desire for shopping personalization, specifically through mobile devices and social networking, to find the best deals while concurrently shopping in brick and mortar locations.

ACI Worldwide released the results of a recent study of consumers in the U.S. revealing how little customers are invested in customer loyalty programs.

Rob Seward, senior industry marketing manager at ACI Worldwide, said in a statement that many Americans simply don’t have the wallet space to efficiently use rewards cards. He observed that the market requires that retailers consolidate loyalty programs onto a single device.

Because online shopping is so simple, Seward noted that loyalty programs “should” work online.

Seward stated that, “There’s a huge disconnect between retailers and consumers” and that retail customers desire a more consistent experience.

The highlights include:

• Nearly half (49%) of loyalty program members never or rarely take advantage of loyalty program perks when shopping online.
• More than three-quarters (78%) of Americans who are members of loyalty card programs say easy online access to their loyalty memberships would make them more likely to shop at the retail websites that honor their loyalty programs online.
• When shopping online, only half (53%) of Americans who are members of retail loyalty rewards programs visit websites of retailers where they can earn discounts and rewards, before looking elsewhere.
• The need for a consolidated loyalty device has been well-established, and half of American consumers (52%) prefer a single card that can hold all their memberships, versus a consolidated key fob or mobile application.
• One-third (32%) of Americans prefer a consolidated key chain card or key fob; 17% of Americans would like to see a mobile app that consolidates all of their retail loyalty rewards programs

“… In other countries, particularly the U.K. and South Africa, coalition programs are very well established,” Seward said.  “With American consumers demanding consolidated loyalty and rewards programs, U.S. retailers need to move in this direction, and we’ve made sure our ACI Retail Commerce Server for Rewards Management can manage multiple concurrent programs for a single customer, and can consolidate the programs onto a single device such as a card or key fob, thus enabling retailers to deliver loyalty and rewards programs in a way that works for consumers.”

ACI’s  survey was conducted in December 2010 by Wakefield Research.

When Aculab, a provider of enabling technology for the global communications market, introduced its AMS Server a few months ago, it intuitively knew the ability to create telephony-based applications in less time—and for less money—would be readily embraced by various developer communities.  By allowing developers to write in  C-Sharp (C#) and Python, rather than  C and C++ languages, AMS Server is estimated by some to speed up development time by two orders of magnitude.

Aculab put this concept to a test recently when it invited  developers to use AMS Server and its high-level APIs for Python and C# to build a customized interactive voice response application (IVR), all within one hour.  Participants ranged from programmers with extensive experience in these languages to salespeople with limited or no programming history.  The result: Each individual or team successfully built and demoed a working system within the time limit.

“While we did provide a very basic sample template, and the results varied widely, based on the programming expertise of the individuals, we were nonetheless extremely pleased that every individual and team successfully met the challenge,” said Chris Loutsaris, Aculab’s professional services team leader   “The challenge reinforced our belief that AMS Server offers developers very practical benefits in terms of reducing both time to market and development costs as a whole.”

While the less experienced programmers dove into the AMS Server toolkit, creating custom routing options and selecting appropriate .wav files for voice prompts, one team took the creativity challenge to an entirely different level.  As experienced developers with significant experience in C#, the team of Martin Bell and John Graham from AWCSL was not intimidated by the time limit.  In fact, they finished the basic IVR work in the first 20 minutes of the allotted hour.  Then, they really went to work creating a battleship  game for a caller to play while on hold.  To make it more realistic and fun for the caller, these guys went to the Internet and downloaded text-to-speech prompts and custom sound files. The result was a fun and functional IVR application that could be integrated into a complete suite of business applications.

“We were quite comfortable with the API after the introductory session, so we really wanted to have some fun and show the group a creative application,” Bell said. “Of course we won the challenge, but in the process we got a good feel for the Aculab product and capabilities. AMS Server definitely provides what we need going forward to create custom telephony applications for our products and customers.”

I recently got wind of a new book coming out in February called Not For Free: Revenue Models for a New World. Saul J Berman, the global lead partner for strategy & innovation and growth at IBM Global Business Services, explores the best methods by the leading companies in the rapidly changing marketplace, specifically with regard to new revenue streams.

Berman advocates that the foundation of all business models has always been the customer, but in Not For Free, he explains  how understanding your customer based simply on sex, age, and hometown has become an archaic approach. He advises studying your customers based on behavior and how they go about using your product.

This knowledge of the customer should allow for new models in three of the following categories:

Pricing Innovation

Berman envisions effective pricing innovation as being very much about shifting the amount of a purchase charged and the point at which a customer is asked to pay. He sees subscription plans, variable pricing, by-parts-pricing, bundling vs. a la carte, and rental models as alternatives to “free.”

Payer Innovation

Not at all customers who buy products are the same customers who use them, Berman points out. At present, there are many “indirect payer” innovations that cater to both advertising and sponsership.

Package Innovation

Not For Free walks readers through the three main forms of package innovation with illustrations: componentization, value integration, and value extension. Examples from Apple’s app store to Best Buy’s Geek Squad are included.