Social Networks Improve Business Performance

McKinsey says that social networks are “extending the organization;” that’s a key take-away from their fifth annual study of the use of technology in organizations.

They continue to identify the key benefits of effective use of technology as increasing speed to access both internal and external knowledge, reducing communication costs and both increasing customer satisfaction and decreasing marketing costs. In terms of technology usage, they identify 4 types of firms: developing, internally networked, externally networked and fully networked. It should come as no surprise that few enterprises identify themselves as fully-networked while the largest number identify themselves as externally networked.

In this chart they collapse the benefits into internal, customer and partner/supplier benefits. Fully networked organizations have seen the greatest increase in payback from social technology. McKinsey warns, though, that it can be difficult to scale the benefits in a large enterprise. It is clearly worth the effort. They found improvements in market share, operating margin and market leadership from the use of specific technologies. See that detail in Exhibit 5 of their report. See an interactive version, showing changes over the last 4 years, here.

The report also features a chart showing what kinds of technologies are being used for what purposes. Again, it’s no great surprise to see social networks, blogs and video at the top of the list in terms of most overall usage. Many of the firms are using wikis; more than you would see if the emphasis was solely on external audiences. This reinforces the point that you need to select technologies carefully, based on use and audience, before you invest time and effort in them.

The McKinsey report has some data on adoption of technology by industry. Dion Hinchcliffe has an excellent post that includes data from a similar study by IBM and examples of success in healthcare, manufacturing, finance and insurance. He makes the point that across industries have examples of increased worker productivity and efficiency through the use of social networks.

Why is that? Business Intelligence expert Ken Chow has a provocative answer. Writing in the Information Management newsletter he says:

the next evolutionary force that will impel the BI market will come by way of technologies that overcome these limitations [heavy architectures, long development cycles and high costs] and deliver high-value information to people in much more productive ways. Information delivery of the future will include the collaborative and social mechanisms that already dominate our personal interactions.

We are familiar with these social tools and we already know how to use them. Chow continues:

Tools built into social media sites allow users to convey opinions, emotions, share data and interact with greater abundance, speed, transparency and collaboration, making the pros of this approach in BI readily recognizable.

I remember in the “early days” giving the advice that businesses should test social tools internally, learning to use them before deploying them to interact with their customers. That advice has now been upended. Firms are making extensive use of social platforms to deal with their customers, and rightly so. Now they need to take a strategic look in how to use some of those same tools internally to create a more efficient and effective business.

Article first published as Social Networks Improve Business Performance on Technorati.

Nokia's Vision for Social Media Marketing

Nokia generally shows up on lists of the top global brands. This year it was 8th on Interbrand’s annual survey. The report describes today’s consumer as “skeptical, social and savvy” and has good content on branding in that environment. Nokia’s response on their Conversations blog is also worthy of note by social media marketers.
It’s Nokia’s vision for what’s really their integrated marketing communications strategy, not just their social media strategy, that I find compelling. Their emphasis on getting away from isolated campaigns (“big bangs”) in favor of continuous engagement in earned media represents clear understanding of communications in a global, connected world. Forrester defines “earned media” as customers becoming the channel as a result of a sustained and well executed social media strategy in paid and owned (branded) media.

But even if you are a big brand with a lot of resources things will sometimes go wrong as they recently did for Nokia. However, they managed to turn a distinct negative into something reasonably positive.

It’s a story of a sports blogger being approached by Nokia’s PR agency with incentives for participating in one of a set of sports events as part of an outdoor-themed campaign. There’s more to it and you should read it for yourself, but the bottom line is that the promises to the blogger were simply not kept. Is that more likely when the campaign was outsourced? You can decide that for yourself.

The story was published on the British Econsultancy blog on October 12. Nokia’s response wasn’t fast (see the October 20 comment), but when it came social media director Mark Squires took responsibility for the fiasco and made it clear that Nokia tried to make up for the failure. When you screw up, that’s about the best you can do.

The good news is that it seems to be a relatively rare screw-up by a company that generally does its social media marketing well. In fact, the early October interchange with Econsultancy appears to have resulted in a late October interview with Mark Squires that’s worth reading for insights into how Nokia’s strategy has evolved within the organization.

While researching this post, I came across an interesting conference presentation by Molly Schonthan who was then head of social media for Nokia in North America. The section on their complex and apparently effective program at SXSW2010 is especially interesting. If you don’t have time for the 30-minute video, page through her presentation for more interesting insight into a company that takes social media marketing seriously.

Social Media Business Model - Lead Generation?

Every once in awhile I have an ‘ahha’ moment. That’s one of the fun aspects of working in an emerging discipline where we are still figuring things out. A few months ago it was the realization that we don’t need to use awareness—in the traditional media sense—as a social media objective. Why spend money on marketing research to measure creation of awareness when we can offer people reasons to act? Is it possible for a person to take action, even a simple click-through, without having some minimal level of awareness? I don’t see how. We can manage the results of behavior to take them a step further, perhaps following the steps of the traditional hierarchy of awareness, but we can use behavior to measure each step, not marketing research. Here’s one related post.

That line of thinking probably led to the ‘ah ha’ I had last week. Almost all social media marketing is the first step in a conversion process. There are several possible scenarios:
• Most marketers are not going to sell things directly on social networks, at least for some time to come. Threadless is one of the few successful businesses doing so. Others like Zappos use social media as an integral part of their online communications but sell from their website. That’s the typical model today.
• Whether you are using social media to drive people to websites or to retail stores, there is clearly a ‘next step’ behavior you want them to take. It is possible that you link to a product page on your website or to a retail coupon, and the ‘next step’ is taken immediately. If so, you have metrics, and you can track the referral back to the social media site. However, research shows this is often not the case; purchases are often not made as a result of a first visit to a website. That requires the marketer to build a complex tracking process to match a later purchase with first exposure. That is part of conversion marketing metrics.
• Social media is often part of a relationship building strategy. Getting people to friend our Facebook page or getting them to register for our enewsletter represent two good examples. There are all sorts of reasons why people may not purchase right away. There are an equal number of good reasons why marketers should be in touch while they move through the purchase cycle.

All except the immediate click-through and purchase represent the need for formal conversion marketing strategies. I don’t have any data, but my guess is that the second and third bullets represent the bulk of social media-initiated contacts with customers. The second scenario requires creating a conversion path through the website. The third requires a conversion strategy that’s based in a set of communications steps. Both are conversion marketing!

That begs a simple definition of conversion. Consider the possibilities. For the social marketer, “conversion” can be a referral from the social network to the website. For the online marketer it can be registering for brand communications. For the brand marketer it is likely to be the purchase. It’s a process, the traditional conversion funnel. Today there are even more marketing actors involved in the process. That’s complex from the perspective of the marketing organization. It has to be seamless from the perspective of the customer.

So does this statement make sense? Most social media marketing is the first step in converting someone from a spectator to a customer.

The Importance of Social Media Policies

One of the annoyances of writing a blog is how often you see content the very next day that adds to what you just posted. Usually I just hope people will see it. But this one is so timely and so important it deserves its own post.

This Marketing Charts post from yesterday was in my inbox today. It headlines two important issues:

1. Formal social network policies are important for employers
2. 75% of the employers recently surveyed by Manpower do not have a social network policy

The Manpower report quotes statistics that attribute lost productivity to employee use of social networks at work. True, some of it is undoubtedly totally frivolous. But employee participation in social nets can also be a brand building activity—think Zappos as only one example of many. I gave links to guidelines from ESPN and Cisco yesterday.

The Manpower report acknowledges that workplace use of social nets can add value in the following areas:
• Productivity
• Collaboration
• Knowledge Management
• Innovation
• Employee Alignment and Engagement
• Recruitment
• Reputation Management.

This seems to be especially true if the firm has a substantial number of relatively young employees who are comfortable with social nets (or wants to be attractive to younger workers). I would argue that all companies need, as suggested yesterday, a crisis management plan that includes social nets. Toyota is the cause célèbre at the moment. I heard strategy guru Jeffry Sonnenfeld critize Toyota’s total lack of engagement with the auto blogosphere on CNBC this morning. Newsweek agrees and has recommendations.

This isn’t really a new thought, is it? If companies have thoughtful strategies and policies to implement them, they often navigate choppy waters reasonably well. If they don’t, something always jumps up to bite them. It may be customer complaints, it may be a product quality problem, it may be an environmental crisis, and many more. But stuff happens, and being prepared with employees who have social media skills and policies to guide them is one step in the right direction.

Responding in Social Media

For quite awhile I’ve been using a conceptualization of social media with 5 steps:

Listen > Speak > Engage > Support > Cocreate

Recently I’ve noticed conceptualizations that have these three elements
• Listen
• Respond
• Engage
They aren’t necessarily in this order (although Listen is always first—always!) and some have an additional element; I’m going to call it
• Collaborate. That covers working with both B2B and B2C customers in way that is supportive and that encourages them to add their own content. It gives me a more concise strategy concept to work through over the next week or so, starting with the two listening posts on Friday and Monday. All are issues I’ve written about before; all need updating.

The other thing that occurs to me as I’ve read through posts and articles is that there may be a discernable difference in the terms that public relations and marketing practitioners use in talking about responding. There is the true crisis situation, for which PR needs to have a plan in place. I’m talking about responding in a marketing sense—responding to everyday brand-related conversations. Some of them are positive, some may be negative. Some can spiral into a real crisis or at least a black eye for the brand. Such was the ill-conceived Motrin ad last fall. Frederic Lardinois, writing on ReadWriteWeb, points out that Motrin bowed to a vocal minority and removed the ad, ignoring whether it was offensive to a majority of their target audience and not engaging with that audience on the web. See the ad on the RWW link (or many other places!) and judge the ad for yourself. RWW points out that the brand response was a press release. I’ll have to take their word for it; I can’t find it on either the Motrin site or the McNeil Pharmaceuticals site. That’s a really effective response, right??? Sounds to me as if they were embarrassed and trying to forget all about it!

So how should you go about responding to everyday conversations? I found this chart by Laura Bergells that really squares with my own experience. I’ve come to think of it as ‘social media triage’ and someone (or a team) has to be responsible for responding. Unless it’s an assigned responsibility issues are likely to fall through the cracks. Of course, that assumes that the business saw it in the first place—is your listening operation well honed?

My own experience says:

• Deciding whether it’s positive or negative is the essential first step. That’s usually easy, although sometimes you may not be entirely sure and have to keep watching that specific line of conversation to be sure.
o If it’s positive, seriously consider saying “thank you.” All of us get thanked too infrequently, and it’s just nice. Beyond that, it may start a useful conversation.

• If it’s negative, there’s a consideration that a lot of people don’t think carefully about. Does it really need to be answered? Laura Bergells calls them ‘trolls;’ I have some other names for them; ‘boneheads’ is the nicest. They are actually rather easy to identify. What they say often doesn’t make sense and it is borderline, if at all, relevant. They tend to be ‘serial commenters’ either on a specific subject or just for their own entertainment. You may have to follow comment feeds for awhile to be sure. But no one takes them seriously—you shouldn’t either. They will quickly move on to something else or they will get entangled in arguments with other commenters. Either way, stay out of it.

• If it’s a factual error, you need to fix it, politely but immediately. Do you need internal experts you can call on to ensure the accuracy of your facts? If so, make sure they are lined up before the need arises.

• If customers are reporting a negative experience with your brand, you need to respond in a way that resolves the issue. That simply goes back to good customer service—apologize, take ownership of the problem, fix it, or at least explain why you cannot provide a perfect remedy. People are the angriest if they are ignored. Saying you are sorry, offering whatever restitution is appropriate, goes a long way.

Some of this is policy. I like Fresh Networks posts on writing your social media policy. Here’s an interesting post about an experience ESPN had that includes their policy. I recently ran across a discussion of Cisco’s social media policy; this appears to be the current posting.

The very existence of those policies suggests a tension in the way social media is handled by organizations. On one hand, certain people must have clear responsibilities for things like monitoring brand-related conversation. On the other hand, everyone in the organization should consider social media part of their job description. (Does that remind you of discussions of “customer orientation” in Marketing 101? It should!) In fact, a lot of communities rely heavily on members for monitoring; they can be an excellent early warning system. How do you keep these roles straight?

I come back to a simple rule from customer service. Everyone in the firm must be concerned about the customer; not everyone is a good customer service rep. As long as we’re talking about training and internal organization, that’s controllable. In today’s brave new world of social media a lot of that control has flown out the window. That’s why companies must have not only social media strategies, but policies about how they deal with customer conversations and the participation and response of their employees!

The Importance of Integration

I've been aware for quite some time that IBM was exploring the use of social media in various contexts. Today I listened to a webcast by Sandy Carter, Social Media Evangelist at IBM. The webcast has strategy, case histories, and advice on how to make social media initiatives work in an organization.













View the webcast here.

All those are very important subjects to the social media marketer. And the title makes the key point; marketers have to integrate social media into their overall marketing mix! Sandy Carter makes a strong argument for better results for existing marketing programs with the inclusion of social media component.

It's well worth the 40 minute duration of the webcast, now archived on BrightTalk.

Now It's "Inbound Marketing?"

I’ve found myself several times lately explaining (with an exaggerated air of patience) that now many people are referring to “Inbound Marketing.” I hear the term frequently, although Hubspot whose blog has that title, might like to lay claim to inventing it. In any event; they have a good post that gives their definition. Mine is simple. It’s necessary to get your message OUT to your target audience—wherever they are these days, and use those messages to bring people to your website to do whatever you want them to do there.

Is Inbound Marketing the new marketing paradigm? It well may be. Take a look at this chart from Hubspot. They characterize the outbound side as a sledge hammer, the inbound side as a magnet, and that a great communications metaphor. Look at that chart from a business perspective. Everything until you get to email (the only digital entry, you’ll notice) is expensive — some of it terribly expensive. On the inbound side, much is low in direct costs, although not low in expenditure of time. The exception on the inbound side is SEO. A lot of visibility is free—think tagging your blog posts. Some is relatively low cost; with PPC ads you only pay for the clicks you get. Website (and maybe blog) optimization can be quite expensive, primarily because it takes a professional to do real SEO. But note that there are other routes to visibility, a broader term. And in terms of email, it’s really outbound/inbound. Email links bring people to your site to take action.

I was also struck by Jeremiah Owyang’s recent post on organizing for social media. His hub-and-spoke concept was reminiscent of my metrics conceptualization, although in a different content.

So put these concepts together and what do you get? My concept of inbound marketing!

The spokes are meant to be categorizations, not a complete description of what’s out there. Take social networks, for example. I didn’t have room for MySpace, LinkedIn and many other popular socnets, so I just settled for “etc.” There are a lot of “etcs” in other categories also.

The strategy imperative is clear. No business can sit back and wait for customers to come. Without at least search visibility, they won’t. Firms have to get their message out to where potential customers are—remember the quote about teens and newspapers yesterday? These short messages have to be appealing enough to entice people to the website (or a blog can be a hub also) for additional information that will incite them to the desired action.

All of that shouts STRATEGY!!! None of this is going to happen by accident. If you’re still at the “we should have a Facebook page” stage, back off and develop an Inbound Marketing strategy that fits your target audience and your marketing objectives.

It will be time well spent!

The Importance of Community Monitoring

Marshall Kirkpatrick of ReadWriteWeb sent me a copy of his recent Guide to Online Community Management. It’s a comprehensive, well-done guide that is recommended for anyone serious about the new position of community manager—either hiring one or being one.

I was on their distribution list because they picked up on a post of several months ago about monitoring community. In it I said that even with the help of a consultant it would take 3 to 6 months of serious effort to build a meaningful community. The report says that’s actually a short time, even with help, and in retrospect I couldn’t agree more. I also find interesting the comment that the more cost-effective long-term solution is an internal community manager.

It’s a 75-page guide, and I can’t cover all the issues they discuss, but I’d like to hit a few high points. Social media is not advertising, is it even marketing? Maybe. Is it more public relations and customer service? Quite possibly.

They do touch on the universal questions, “Should we have/do. . .?” In terms of corporate blogs, they see them as valuable for all except the businesses that refuse to devote sufficient time to them, especially in the midst of a crisis. I think that’s right on. Twitter they also see as invaluable. I’m a Twitter convert and absolutely see its uses. I follow a number of marketers who consistently provide good info in their Tweets and I greatly appreciate them. I also brutally unfollow people who are self-serving or fatuous (that’s a nice old-fashioned word that fits a lot of what I see). I don’t see Twitter as very useful for personal communication, but it’s a great professional asset and “value” is the point. The guide suggests being cautious about spending a lot of time on a corporate Facebook page because returns are hard to achieve. I’d also agree with that.

There’s a lot of focus on the importance of community managers in start-ups. They argue that a CM can be one of the early hires and one of the most cost effective. If you believe in the power of community , that makes sense. The alternative is traditional marketing with a sizeable budget. Community may make more sense for the start-up, but what about the established business? Deborah Ng provides a perspective from an established web business:

Do all businesses need a CM? I’m not sure. I think any company with a heavy Web presence would do well to have someone to spread the word and find out what makes its audience or client base happy. CM’s establish personal relationships and are more invested in the product or service than your usual publicist for hire. Plus, we know the social networks, we know the Web, and we know the bloggers. BlogTalkRadio wouldn’t have hired me if I was just Joe off the street. Being a pro blogger and being able to speak with other bloggers put me ahead of the other candidates. p. 21

What does it take to make a community successful? In a nutshell, a lot of hard work! But it has to be hard work that understands the nature of community. According to Justin Thorp from ClearSpring:

“Your users are the lifeblood of your community. You want to treat them like you’d treat guests in your house. Otherwise, like me, they’re going to make their way to the exits and not come back. One of the benefits of the Web 2.0 era we live in is that there are lots of places I could spend my time.” That’s the kind of plain-spoken, utility-based approach that all parties could probably agree with. That’s language that other people in a company could likely hear from a community manager and agree with (emphasis mine). p. 43

It’s an important part of the job of community manager to do the internal marketing that supports the community effort. That includes, but is not limited to, the importance of good metrics. Isn’t it interesting that efforts like lead generation are easily measured in social media and others like brand development are hard to track—just like in traditional marketing media! They also point to the 90/9/1 rule—it can be hard for a new community manager to remember that only 1% are likely to become “hardcore contributors.”

There’s a lot more, but I’d like to end with Heidi Miller’s tounge-in-cheek warings about using social media:

Treat people in your new social networks as prospects, not friends. Make sure that you constantly bombard them with one-way messages about how great your product is.

Be in a hurry to show “results.” Forget that “Connections over time equal trust” (--Tara Hunt); insist on showing immediate sales, hits, and click-throughs from your blog, podcast, Twitter, or Facebook page with no concern for building relationships with your friends and participants.

Keep it impersonal; sounds like a corporation. Avoid speaking in a human voice; always “regret any inconvenience we may have caused you,” instead of saying “sorry we messed up.” People love to interact with stale, sterile impersonal corporations, right?

Be the same. Never change. Keep on doing what you’re doing. Don’t bother to differentiate yourself from your competition; just stick with what you know. Never reach out.

Be afraid. Let your fear of loss of control of the conversation cause you to treat social media like traditional media. p. 45

As I said, there’s a lot more. The report is probably a bit pricey for a casual read, but for community managers—or those who need to have one—it’s must reading!

Social Media Experts On the Client and Agency Side

Thanks to Tom Martin’s Tweet, I read this morning's article in Ad Age and his comment, along with the writer’s response and another interesting comment. I found something to agree with in all of them. I was also reminded of the buzz a couple of weeks ago about the NYT hiring a “social media expert.” Finally, what seems like an eon ago, I wrote about looking within your own organization for (young) people who understood social media.

I found the most compelling commentary on the NYT issue to be from Hubspot. They said the NYT needed to do 3 things. I’m paraphrasing, because I think their three recommendations apply to all organizations:

1. Train all marketers on the basics of SEO. Sites need to be designed for optimization and all content needs to be written for search. Marketers must demand that, even if they are not designing sites and creating content themselves. Hubspot is entirely correct that going back and reworking for search is costly and often less effective.
2. Train all marketers on social media. Rather than having one person alone responsible for social media, train the entire company on it, and get everyone involved. . .
3. Provide an ongoing inbound marketing training program for everyone. This will allow for continued learning and development as the tools and technologies change, and it can be a forum for sharing best practices and case studies of things that have worked well.

Amen to all of that! Social media is not the technology. It’s an attitude of transparency and inclusion that has to permeate the entire organization. (Does that remind anyone of the marketing concept as studied in Marketing 101?)

The agency issue is even more challenging. For me also, it brings back earlier attempts to bring, first direct marketing and later, digital marketing into the agency skill set. Both proved problematic.

Agency people who have specific media expertise are essential to carrying out campaigns. Whether media experts are in the best position to integrate social media into strategies and convince clients of their (long term) usefulness is questionable. It’s for sure that most businesses don’t understand how to integrate social media into marketing. Are account managers well enough versed in the new media to explain and persuade? I wonder.

On the client side, I’m convinced that making effective use of social media requires a careful process of organizational change management. The Hubspot recommendations pick up on some of that. They don’t highlight the need for a champion at a senior organizational level.

Social media personnel in agencies (I can’t say that without assuming some dedicated expertise!) have to redouble their efforts to demonstrate the value of their work, as I suggested in the metrics post last week. In time, they have to show a clear ROI. That’s relatively easy to do in areas like lead generation and hard to do in brand development. We should not let the difficulty of measuring brand efforts skew our efforts toward tactical uses at the expense of long-term brand building.

There are major challenges and roadblocks on both the agency and the client side. There’s a lot of internal marketing needed in both environments! Change management again!

Reputation Monitoring or Brand Management?

In another effort to tie some issues together for my social media students, I’ve just prepared a presentation on Reputation Monitoring and Management. I’m not a PR specialist, but it seems to be an important topic to include in a social media course. In the process of putting this presentation together and focusing primarily on Web 2.0, I learned some things and formed some opinions.

When I began, I had a vague idea that the lines between PR and marketing were blurring. That perspective strengthened as I worked through the story line of this presentation. It seems clear that both disciplines use the same tools, especially for monitoring (listening). They both have responsibilities for managing. Does it make sense to say that the responsibilities of marketing lie in the area of brand management and the responsibilities of PR lie in the area of reputation management? It seems so to me.

Another clear theme that emerged is the large—and growing—effort required to monitor the diverse and ever-growing channels of communication. Just one example is that a year ago, not many of us paid much attention to Twitter. It has grown rapidly as a significant channel with business uses and implications. Even I have TweetBeeps set up for myself and for the organization I work with.

In my recent posts on metrics I recommended using behavioral metrics from the platforms themselves in the absence of integrated metrics solutions. I started on reputation management from the same perspective. I quickly realized, however, that the issue is different. As much as we look forward to metrics that integrate social platforms, metrics are by definition aggregations. Monitoring requires assessing individual communications; aggregations are relevant in the same way.

The more I thought about it and the more I looked, the more I began to see a process. The basic idea was confirmed by students who are engaged in monitoring. It’s possible to monitor one or two channels that have relatively low volume in what’s essentially a manual fashion. That could include RSS feeds and filters, but what it implies is a labor-intensive effort to deal with (respond, etc.) to relevant communications and to understand the strategic implications of the stream of communications. As the number of channels and the volume of communications grow, it becomes an impossible task.

The graphic represents a series of steps that make sense for learning and growth in social media channels. The presentation has details on tools available at each step, some examples and an interesting case history of NPR’s transformation to digital PR. The tools are just a representative sample of the many tools available. The issue is a strategic approach to reputation monitoring, not emphasis on the tools themselves.

I liked the metaphor of the ostrich with its head in the sand as the ending. What is being said in the communications ecosystem is being said. We can’t change it. We can, however, listen, deal with issues that arise, and establish relationships with our customers and affinity groups.

Two questions:
1.Can we afford not to do RMM?
2.How can we do it in the most cost- and strategically-effective way?

Your thoughts?

McKinsey on Web 2.0 Success

For a long time I’ve worked with McKinsey consultants on a non-profit board. I admire their work and I admire the content of the McKinsey Quarterly. When I first started reading it, you

either had to be a customer or to know someone in order to get access to it. It has interested me to watch as they moved onto the web and gradually made more valuable content available there. I get their emails so I don’t miss anything.

Several days ago I got a newsletter and was immediately attracted to “Six Ways to Make Web 2.0 Work.” The article is a summary of what they’ve learned from numerous surveys of middle and top level managers who are finding their way into the Web 2.0 economy. They make six main points about how to make Web 2.0 initiatives work in your organization and, in the article itself, they give examples of each. They are worth reading. Here are the six rules for success:

1. The transformation to a bottom-up culture needs help from the top.
2. The best uses come from users—but they require help to scale.
3. What’s in the workflow is what gets used.
4. Appeal to the participants’ egos and needs—not just their wallets.
5. The right solution comes from the right participants.
6. Balance the top-down and self-management of risk.


Their focus is mostly on internal and B2B uses in this article, although the admonitions fit B2C environments as well. The B2B evolution from automation to collaboration is highlighted in this chart. The focus is on workflow and improving productivity, and that’s very important.

What’s also fun to watch is that McKinsey is following the advice it gives. The next day I got another email from McKinsey. It encouraged me to participate in their Web 2.0 initiatives. As I’ve often pointed out, Web 2.0 initiatives are not “build it and they will come.” They have to be nurtured and promoted, both of which take effort from employees.


They also understand the importance of using multiple channels and making their content visible. When you go to the site to read the article, notice a widget you can download to put McKinsey headlines onto your website or blog. That not only provides additional fresh content to your visitors, it allies you with a respected brand. What’s not to like?

Look again at the six success factors above. They are all management—not technological—factors. In fact, the article makes the point that Web 2.0 tools often represent “a relatively high overlay” in terms of technological investment.

This article represents yet another call for managers to encourage strategic Web 2.0 initiatives and to manage in ways that offer opportunities for success. Without management commitment, Web 2.0 initiatives are doomed to failure!

Twittering to Support Their Brands

There’s been controversy lately in the pages of ClickZ about the value of Twitter in business communications, both pro and con.





Comcast, aka ComcastCares, runs its Twitter activity out of the customer service department, and that’s clearly the thrust of the activity, beginning with the name. Dunkin Donuts, on the other hand, started their Twitter program with the rather vague goal of engaging with their loyal customers. Another interesting difference is that the ComcastCares account has a human face, Frank Eliason, their Director of Digital Care. The Dunkin Donuts Twitter page identifies only “Dunkin' Dave, ” whom I would guess to be David Tryder, their Manager of Interactive Marketing. Two points. First, I prefer the identifiable human face—what about you? Second, even though a Twitter account is free, these programs are taking up the time of top marketing executives. They need to be worthy of that time.

The major buzz at the moment is around Scott Monty, formerly of the Crayon agency, who was hired to bring Ford into the social media age. In a short time at Ford he has already used Twitter to good effect in dealing with brand controversies including one with the independent aftermarket products site The Ranger Station. Scott’s full title is Global Digital & Multimedia Communications Manager for Ford and he has a strong strategic perspective on social media, including Twitter. Here’s an interview that’s worth listening to.

Did you know that the Prime Minister of Great Britain twitters? Well, at least someone in his office maintains an account for the PM. Barak Obama used Twitter in the campaign, and I doubt he wrote his messages either. That’s another model.

The take-away from all of this twitter about Twitter is that it does have potential uses, whether as a reputation management tool, a customer service tool, or – more problematically—just to hear what your customers are thinking. The emphasis should be on tool. And the question should be “how does this tool fit into our strategy?” Then there are issues of who has the expertise to do it well and how management is going to evaluate its effectiveness.

All of which says that--unlike individual consumers who may be twittering just for fun--it should be a strategic undertaking, not just “should we twitter?”

Should Marketers be Listening or Talking?

I’ve been following material on reputation monitoring for awhile now. There’s an interesting overlap here between marketing and PR that suggests the need to modify our organizations as I suggested recently. Reputation monitoring is clearly an artifact of the social media scene; we didn’t need to do this when all communication was controlled by the brand.

I came across an interesting report from the recent PRSA conference that speaks to the subject. It has a simpler, more focused model that the one I used in the webinar (and still like) and it’s worth attention. The report is in the format of FAQs about social media—a nice presentation also—take a look.


















Let me focus on a couple of issues of special important to marketers. The report groups social media tools into 3 categories based on their use by the audience—ones that create, ones that recommend, and ones that interact. Listening to all this conversation is the essence of reputation monitoring. The report also suggests that the audience is moving to greater interactivity as they become comfortable with the new media environment. That’s important for marketers to understand, but it doesn’t mean that it’s easy to get people, especially middle aged and older, to interact in most situations. Marketers have to work on that by providing real value in terms of content as well as products.

I haven’t found any social media pundit who doesn’t believe that listening is the first step. This report quantifies that advice. I especially like the advice to spend only 10% of marketing time/effort talking! And remember to “converse with” not “shout at.”

The marketer’s world has changed—radically and forever. The PRSA report has a set of useful guidelines to help us deal with this new world!

CMO to CCO?

Monday’s post looked at some of the challenges facing the CMO today. The common thread is that we must all adjust to the new media world, and in doing that we may find our jobs changed. The EIU report quotes the IBM SVP of Marketing and Communications as saying:

Some long-standing advertising agency partners are still figuring out how to help their clients make the necessary transition. The marketing agencies and the advertising agencies are really having a rough time, not embracing the new methods, but making money from them, says IBM.s Mr Iwata. Although virtually all traditional advertising agencies tout their new-media skills, some are relying on old-media business models and profit margins. For example, some agencies offer to produce podcasts and YouTube videos for clients, just as they produced print advertising and television spots. Yet they still charge clients tens of thousands of dollars, he notes, for new-media content that costs next to nothing to produce. And the clients who don.t know better say, .What a bargain compared to prime-time television. (p 17)

Ouch! I can vouch for how careful we need to be when buying services of any kind. I just ran into a situation where two services firms were offering essentially the exact same product but the charge differed by tens of thousands of dollars. Quotes for custom work often vary widely; that’s not a surprise. But I was surprised to find so much difference between two products that seemed to offer exactly the same functionality.

Mr. Iwata has been in the “chief communicator” job at IBM since July. The combination of marketing and communications under a single senior executive is interesting, especially in the light of what this study says. I looked around a bit more and found an excellent video done at the PRSA convention in October. Mr. Iwata talks about his perspective on how to meet the challenges—a worthwhile 5 minutes!(but you may have to go to the Nov. 22 post and pause that video; sorry!!)

With his comments about technology and social media being embedded into business models of all types today, the recommendations of the report make a lot of sense. They see they job of CMO morphing into a CCO in the sense of John Iwata at IBM. This gives the CCO a leadership role in:

• Defining and instilling corporate values
• Building and managing relationships among a multiplicity of stakeholders
• Enabling the enterprise with new media skills and tools
• Establishing trust with all constituencies.

A while paper by the Arthur W. Page Society calls this “The Authentic Corporation” (download from this page.) I’m writing this on the day that CEOs of the American auto makers are driving to Washington for another round of Congressional hearings, so the conclusion of this report seems especially prescient. They say that corporate:

actions and reputations, which used to be safeguarded by a cadre of professionalized functions, are now the responsibility of everyone in the enterprise. What used to be controlled within the company’s “four walls.” Is now spread across multiple partners, communities and individuals around the globe. (p. 6)
A tall order for all of us, especially the CMO/CCO!

Whither the CMO?

One of the items that’s been sitting on my desktop for a couple of weeks is a study by the Economist Intelligence Unit sponsored by Google. It’s entitled Future Tense: The Global CMO, and it represents the views of 263 CMOs from a survey in February 2008 (download the pdf from this page). A few days ago this report was joined by an interesting editorial in the WSJ that talked about the future that confronts the CMO. Put together they provide interesting guideposts for the path marketers need to be following.

When they asked marketers for the top three media most important to achieving their objectives, the response was 1) conferences and events 2) magazines 3) television. Online first shows up at number 6 and occupies positions 7 – 9.

When the question was changed to “in 12 month’s time” the change is stunning. Conferences/events remain in first place by a large margin. Television has moved up to second place! But look carefully; that’s because consumer/business magazines experienced a huge drop; trade magazines declined also. Newspapers continue to decline in perceived effectiveness. When you take that careful look, TV has declined in perceived effectiveness also—just less than their print brethren. Online content sites and search engine marketing experience huge increases in perceived important.

Think a year further on—what is this chart going to look like? More decline in traditional media? Probably. More increase in importance of online? Assuredly. If nothing else, the online media as less costly in shaky economic times. And, as we all know, online has a lot more to recommend it!

What are the marketing tools that support the shift in marketing? The WSJ lists five. I’ve changed the wording to make it more consistent with common usage and in the process reduced the number to 4:
1. From loyalty to attention. I’ve frequently pointed out that attention must be the first marketing objective in the new media world.
2. From audiences to community. Segmentation and audience targeting as we have always known it gets harder every day. The new media world demands communities whether they coalesce around brands, lifestyles, or ideas.
3. From advertising slogans (memes) to communications that people find worth sharing with others (bemes).
4. From siloed channels to integrated marketing. Channels—whether communication or ecommerce—must works together, not in the isolation of silos.

Each one of these, described in the article as Web 3.0 tools, represent a change in the way marketers think about and carry out their responsibilities. I'd stress that they aren’t tools for the future; they are requirements for marketing success today.

The CMO study has some important things to say about desirable marketing objectives in an age of globalization and consumer control. It’s also pretty clear that no one has a comprehensive model for changing the marketing organization to meet the new challenges and achieve the new objectives.

More about that tomorrow!

Customer Experience on the Social Web

Bruce Temkin at Forrester Research is a tough, thoughtful analyst of Internet strategies, especially as they impact customer experience. Many of us have enjoyed the Customer Experience Rankings he does for Forrester for several years now. Customer experience is critical to success, but in the world of social media marketers no longer control all the elements of experience. Bruce has recently set forth a set of “management laws” to aid in our social media journey. In this podcast, about 9 ½ minutes long, he talks about those management laws. The theme is “weave social media into marketing culture and decision making.” It’s worth listening to.
What lead me to his blog and the podcast was a reference to another set of “laws,” these for customer experience. You can download his white paper from the home page of the blog. I’d like to quickly summarize the laws:

1. Every interaction creates a personal reaction. Individuals have experiences, not segments or markets. How can we make experiences relevant to the individual?

2. People are instinctively self-centered. Whether customers or employees, everyone views the world through their own perceptual filters. They care about meeting their needs, not your business is organized and operates. You have to give them ways to satisfy their needs. See #4.

3. Customer familiarity breeds alignment. Share customer knowledge with your employees so they can be effective in meeting customer needs.

4. Unengaged employees don't create engaged customers. Enough said. The real question is how to engage your employees. See #5.

5. Employees do what is measured, incented, and celebrated. One of Bruce’s posts led me to a page on Tesco’s website; Tesco is my absolute favorite CRM example. Their “steering wheel” is a powerful summary of what they measure—and they are good at measurement!

6. You can’t fake it. And many of us should take a lesson from discredited politicians and remember that you can’t hide it either.

Openness and transparency rule! And thanks to Bruce for the reminder that building trust with our employees is just as important as building trust with our customers. Building trust in both areas should be Job 1!

Zappos - Powered by Social Media?

You may have noticed an article in today’s Ad Age by Pete Blackshaw about the corporate culture at rapidly-growing shoes site Zappos. Compete shows their traffic up more than 31%

against last year, so they must be doing something right. (I think the comparison is against all of Nordstrom, not just Nordstrom shoes.) According to Blackshaw, each year the firm publishes a “culture book” filled with employee testimonials about what a wonderful place Zappos is to work. Sounded interesting, so I took a look. What I found is a not-very-pretty, somewhat-edgy site that says it is "Powered by Service (TM)." There's a lot going on and much of it is social media based.

For example, when you click on the Naked People box (yes, I let myself be suckered) you get a product page.More to the point, they seem to have customer reviews on every page, beginning further down on the home page. The number of reviews seems infinite, but a quick scroll through some of them showed unanimous favorability on both products and service. Free shipping seems to be a real winner, plus they seem to have rapid fulfillment.

Zappos is also a major user of Twitter, led by its CEO Tony Hsieh. According to Twitterholic he is 42nd on their list with 10,917 followers. Barak Obama (his website, really) is first with 71,304. I don’t know that the senator twitters himself, but it does go to show that you can’t escape politics at the moment.This is a shot of the customer twitter feed; this morning employees were mostly twittering about Sarah Palin (politics again!) and I decided to skip that. But the point is that the employee section doesn’t seem scripted. According to Hsieh:

@zappos (Tony): We’re not really looking at Twitter as a way of driving additional traffic — it’s really just a great way for employees and customers to see that we are real people, and it makes the relationship a lot more personal, which is what we ultimately want people to feel about the Zappos brand.

@zappos (Tony): Our #1 priority as a company is our company culture. We believe that if we get the culture right, most of the other stuff (like great customer service) will fall into place on its own.

A site with a lot of shoes and a lot of social marketing moxie! I also don’t see anything to counter the “great place to work” argument. Put both together and it seems to make a powerful marketing machine!

Ubiquity of Content--Producers' Perspective

Your attention may also have been caught, as mine was, by a headline in AdAge MediaWorks (subscription required) a few days ago; “Consumers to Watch 25% More Video a Day in Five Years: Viewing on Computers, Mobile Phones Will Drive Increase.” We all know that video has become an indispensible part of the Internet landscape. This incredible rate of growth has implications beyond video itself to all types of content.

Users expect content to be “any time, anywhere, on any device” more than ever before. And that’s putting strain on marketers to meet their demands in ways that advance marketing objectives. A recent study of media and entertainment executives by Accenture sheds more light on the issue. Their results point to the importance of multi-platform distribution, an open model of content sharing, the importance of digital royalty (revenue) management and a common understanding of intellectual property.
The concept of an open model of content distribution deserves attention. It’s an enterprise concept, not free provision of content. According to a 2006 white paper by PricewaterhouseCoopers, “in order to create shareholder value, companies in the content, technology, and distribution sectors must adopt an open business model, eliminating internal walls between business units and external ones between the company, its partners, and other strategic business allies.” This clearly refers to the creators of content who have already begun to distribute content to users through various channels. To better understand the strategic implications for enterprises, the entire 62-page PWC report is worth reading.

Consider these charts from Compete on two major content creators for TV--NBC and Fox--and the growing share of some of their programming on video-streaming site Hulu. Interesting, isn’t it, that the share of comedy viewing on the Internet is considerably greater than for dramatic programs. Wonder what that implies? Demographic differences, certainly, but probably more.
The Accenture study suggests capabilities that are necessary to accomplish media convergence within the enterprise. The point








being that unless the internal barriers can be broken down, the “anywhere, any time, any device” needs of the user cannot be met. The content companies in the Accenture study believe they have organizational capabilities in place to meet those needs. How many product or service companies can say that they have organization-wide understanding of intellectual property rights, the necessary IT architecture, integrated management of their digital assets, the necessary customer data and insight and a way to track the revenue produced by their content? Accenture believes that content companies are not as far along as many believe they are in this difficult organizational transformation. I’d suggest that even fewer product/service companies are dealing with issues of how to use content to best advantage.

I’ll conclude this segment with a quote from a US media executive in the Accenture report:

“You must break the innovators dilemma and walk away from old paradigms…you must have a keen focus on determining what consumers really need and what makes their lives better.”

I’ll continue with an installment on what consumers really do want.

Read Part 2 here.

The Media Ecosystem and Marketing Relationships

Last week AdAge had a provocative video clip that talks about the way changes in media are affecting the relationships between advertisers and their agencies. That’s not a revelation; late last year I wrote about studies from Accenture and IBM that focused on the relationship issues. I’m still taken with both the title and the content of IBM’s “The End of Advertising as We Know It.” It’s worth a reread. View the video here.

But time moves on and so do the studies. The one referenced in the AdAge video was done by Booz Allen Hamilton for ANA and the IAB. They surveyed 250 marketing leaders and the full report is also worth a thorough read. Here are some of the key findings. The first one “advocacy trumps awareness” is a cogent summary of what I was trying to say in my recent post on customer acquisition.
Other summary points reinforce the difficulty many marketers have in convincing their organizations of the value of social media. The report suggests that media is, in fact, “the new creative.” Their summary will also reinforcethe angst in traditional agencies, which are having just as much difficulty adjusting to the new media world as are their marketer counterpoints. A recent post in Marketing Charts, reporting on a different study by ANA, suggests that marketers continue to try to recast their organizations to deal with change but are not entirely satisfied with results.

The report ends by saying that successful response to the new media environment requires:
•Improved customer insight
•Better choice of media and management of multiple channels
•Marketing organizations with the necessary talent and a supportive culture
•Partnerships in the evolving media ecosystem.

All of this represents a sea change in the way most marketing organizations think about and execute their marketing efforts. They must be data-driven and must cope with a bewildering array of media choices. As frequently noted, many of the media choices require putting some control of the marketing message in the hands of customers. Dealing with the both the internal and the external issues requires skill and vision.

It’s a big order. This blog continues to try to point out there are leading-edge companies/organizations and agencies that give us ideas. This week alone I’ve written about a politician with a wonderful viral message and an income tax preparer that’s discussing issues with tax payers.

It’s a wonderfully challenging environment with many opportunities to “shatter the barriers between marketers and customers.”
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Managing Multi-Authored Corporate Blogs

A couple of weeks ago some of my students at Harvard Extension got me thinking about the benefits and challenges of handling multi-authored corporate blogs. We were looking at the Direct2Dell blog, which I’ve written about previously. I made the offhand statement that you simply have to have an editor to make a corporate blog like it--which gives voice to many different executives on many different subjects—work as a positive communications tool. Students asked, “Why?,” and that started me thinking.

One of the students followed up with a post on our class blog that referenced an interview with the person who (in 2006) managed 38 corporate blogs for Google. As I started looking a bit more, I found multiple people identified as an editor on the Direct2Dell blog. So that’s two models already.

I looked around Debbie Weil’s site; she’s one of the most prolific writers on corporate blogging. She focuses mostly on CEO blogs. They can be highly useful, but they’re not the kind planned multiple authorship I’m talking about. I’m also thinking about blogs targeted to external audiences, not internal blogs as useful as they can be.

I’ve been involved in a couple of multi-authored blogs lately (the class ones don’t count; students are assigned to make posts and comments on those!), and I’d like to contribute a few words of wisdom.

An editor is essential. The editor motivates contributors, manages the flow of posts, and does all the back-end work like monitoring comments. If the blog is actively marketed, that task probably falls to the editor also.

A plan is essential. A blog is a marketing communications program and it requires the same kind of planning as other programs. I’ve used a simple strategy brief (agencies are more likely to call it a creative brief) to state the basics in a page or two.

Which comes first—the editor or the plan? The usual marketing answer,”It Depends!” If the internal champion (and there has to be one or we wouldn’t be having this discussion) wants to edit the blog, that person might prepare the plan. If the intent is to hire an external editor, that person will need guidance on what the blog is meant to accomplish and how it fits into the overall communications program. The external editor needs to understand who will contribute and how they are to be motivated or incented.

Give the editor the necessary tools and make the person accountable for achieving communications objectives. That means that one thing the editor will be doing is studying the blog metrics (constantly) and reporting to responsible executives (regularly).

The internal blog champion will probably have to be the person who navigates issues of corporate policy and legal requirements. Those issues need to be understood before the blog is launched because the last thing you want is for posts to be held up for endless checking and approval. Unless your blog is timely and fresh it’s going to do more harm than good—assuming anyone reads it at all! And remember that there’s lots of competition for the reader’s time, so it’s going to have to be not only good, but also relevant to the audience’s needs and interests.

The responsible executives should have RSS feeds for the blog to motivate them to keep up with what’s being said. It’s important for contributors to know the blog is being read internally as well as reaching the external audience. Executives should consider commenting occasionally on items of special expertise. That’s highly motivational.

Does all of this sound like it’s terribly time consuming? It absolutely is. That’s a strong part of the argument about careful planning for a corporate blog. You probably don’t have an internal person who is currently underworked and can take it on easily. Can you identify and are you willing to pay for an external person with the necessary skills and ability to work with your organization? Those are not small questions.

Here’s an interesting list I found—Fortune’s wiki listing blogs by the “500” firms. It’s a good place to see what some large organizations are doing and think about how it might apply to your situation.

While I don’t want anyone to think it’s easy, I’d recommend serious consideration of blogs as a corporate communication tool. If the goal is to get close to your customers, to interact with them instead of just talking in their general direction, a blog may be the way to go. And, in time, it may lead in other interesting social media directions.
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