For the rest of the June 2009 issue of CRM magazine — The Social Media Issue — please click here.
Ever since word went out that marketing had to become more science than art, marketers have shown—well, let’s just say they haven’t exactly shown mastery at either one.
It’s not entirely their fault. Faced with too many channels, too much fragmentation, and too much data, the dreamed-of 360-degree view has always been just out of reach. Every time it gets close, that pesky thing called innovation always pushes it further away.
Now social media has entered the marketing mix, and its influence is undeniable, yet again generating a need for newfound creativity. Worse, the battle for quantifiable metrics is unrelenting.
Scared yet? Don’t be. It’s an exciting time. We’re on the cusp of something incredible: Customers are talking. Companies are listening. Questions are being answered. Customers are helping each other. We’re social beings who have long been told to check our personal lives at the office door, but the lines are blurring now—social interactions are (slowly) becoming critical to business operations. The world is bigger than the walls of our cubicles and we’re discovering that some problems might be better solved with the input of a few (hundred? thousand?) twitterers.
Social media is providing new means of acquiring and distributing information. More important, it’s facilitating relationships: Whether it’s with a high school crush or a favorite pizza place, people are connecting. These relationships stem from mutual interest and mutual gain, and that’s extremely powerful when it comes to building customer loyalty.
What’s the Rush?
“We’re still in the early stages of this,” says David Dalka, an independent marketing consultant. What Dalka ultimately fears is that the power of social media will go untapped if enough people fail to see its value, simply because it doesn’t yet meet the test of hard metrics. But marketing has always struggled with this requirement, Dalka says, suggesting that the changes aren’t really new: “Is it the same old ‘50 percent of marketing you can’t measure’?” he asks.
Unfortunately, social media is gaining momentum during an era that demands efficiency and results. “The economy is oversimplifying it,” Dalka says. Trivialization of the medium, he adds, discredits social media in the eyes of outsiders and true believers alike. Twitterers, for example, are sometimes judged simply based on the number of followers they have—remember Ashton Kutcher and his “race to a million” with CNN?—as if that number alone indicated whether they have something of value to say.
Are you following @TheMime on Twitter? If you’re one of the 9,703 followers the account had at press time, you know the joke: All @TheMime’s tweets are “…”—cute, yes, but not really valuable. Remember when the worst thing that could happen to your marketing message was that it might fall on deaf ears? Times have certainly changed: Now we have a social media channel with 10,000 opt-in listeners, and the message is literally silence.
Much Ado About Social
New social media tools are emerging, from site aggregators to wikis to blogs to photo sharing, but social media marketing hasn’t reached its tipping point yet. The massive amount of data floating through these channels goes largely unmined and individual users are loosely connected across multiple accounts.
“The point right now is that you’ve got to try everything, because you never know,” says Jeremy Farber, president and founder of PC Recycler. Marketers are being forced to think outside the box, and that requires the courage to experiment. As a small-business owner, Farber sees an even stronger imperative to draw upon social media as a competitive advantage. Enterprises have millions to spend on research and development, but for small businesses, he says, social media provides a platform that can be just as effective.
Farber says his confidence in social media is a direct reflection of its prevalence. “I’m not trying something nobody’s heard of,” he says. The problem, though, is that most people don’t recognize social media as a marketing tool. They subscribe to the flawed conventional wisdom that platforms such as Facebook are for younger generations or for personal use. As a member of Generation Y, Farber admits the value of social networking comes more naturally to him. “I’m on Facebook anyway,” he says. “It’s easier for me to justify the time investment.” PC Recycler’s decision to launch a Facebook strategy came as a result of the fact that its employees—most of whom are Gen Y—already have accounts and an established base of connections.
When social networking platform provider Pluck Enterprise launched in 2003, the social Web was in its early stages. (Facebook didn’t launch until a year later.) A couple of years passed before Adam Weinroth, Pluck’s head of product marketing, noticed an uptick in adoption.
“Brands we talked to actually started to embrace social media in their own lives,” Weinroth says. “There was broad recognition shared by the industry that this stuff’s not going away. It’s the future. It’s the new version of the Web.”
Whether companies like it or not, social media is impacting business. Consumers, and even competitors, are talking about your brand even if you’re not. It’s up to you to join the conversation and work it to your advantage.
Getting involved is only just the beginning. “You don’t want to be on Facebook and say, ‘OK, checked the “Social Media” box,’” Weinroth says. Unfortunately, the industry has yet to establish a method of calculating the perfect formula for social engagement.
That “X Factor,” Weinroth says, means that sticklers for hard returns are likely to be the most hesitant to adopt. “Across the board, everyone’s recognized that [social media] is relevant,” he says, “but sometimes the priority’s different.”
Erick Mott, communications director at marketing platform provider Lyris, recalls an instance when a customer posted a service issue on Twitter, to which Lyris responded within an hour. The customer conveyed his satisfaction across Twitter, influence Mott says Lyris would never have had with traditional methods. The free publicity may or may not lead to future sales, he says, but that’s secondary to the fact that Lyris has a responsibility. “[We] have to listen, to respond. This is our world now. This is not going away.” (See the sidebar “Talk Is Cheap, Unless It’s a Recommendation,” below.)
Paul Harris, an independent interactive marketing consultant, says that you’d better take any opportunity to connect. “You have to identify the trends in technology and…recognize those things that are going to happen with or without you,” Harris says. “When it makes sense…jump out in front and drive as much as possible.”
For the average marketer, says J.D. Peterson, director of products at Lyris, investing in a social media marketing strategy now is just a “nice-to-have.” (In fact, in an October 2008 survey by the Marketing Executives Networking Group, the top two benefits of using social media marketing cited by respondents were simply customer engagement and direct customer communications.) Many still struggle with marketing basics such as analytics, email marketing, and posting relevant content. Leading-edge marketers, on the other hand, need to get on board now, especially while it’s still relatively inexpensive.
Like any business decision, a social strategy requires a plan and a purpose. The social networks themselves are struggling to establish revenue models, which provides an opportune time for businesses to take advantage. “You can’t create relevancy later,” Dalka says. “You have to have [it] from the beginning.” Decide how social media fits into your entire digital strategy—that is, how it will affect brand-building, product development, marketing communication, and advertising.
Despite the uncertainty, early adopters are reaping the advantages. The sooner you get moving, the more likely you’ll be able to adapt when new channels emerge. At the first-ever User Generated Content Conference and Expo (UGCX) this past February, Richard Jalichandra, president and chief executive officer of Technorati, spoke to the advantages of early adoption: Those who started with social media early may not have it totally figured out, but they’ve done the test runs and are closer to knowing what fits with their strategies for social outreach and interaction.
The caveat is that merely being involved won’t save you. Companies that are early adopters of social media—and getting results—are also likely the ones that have been successful in their overall marketing strategies.
Responsibility for succeeding with social media goes beyond the chief marketing officer. A social strategy requires operational, technological, and customer service resources—all of which extend beyond the marketer’s control.
Typically, because social media is still considered exploratory, it’s often delegated to junior-level employees who have limited access to the necessary resources and support. “If you can’t take the time to open your own blog,” Dalka says, “maybe you shouldn’t be a CMO.” Point being: You can’t manage something you haven’t done yourself.
Matthew Fraser, co-author of Throwing Sheep in the Boardroom, argues that it’s not the senior-level executives who are against social media. Rather, it’s often middle management worrying that social media has the potential to usurp its responsibilities. (See this month's Required Reading for an interview with Fraser.)
Dalka has also worked with companies held captive by these “warped incentives.” Enterprises are notoriously resistant to change, he says, but it’s a mistake to assume social media will eliminate existing roles rather than enhance them. What companies need is “a culture that looks at things in terms of abundance instead of scarcity,” Dalka says.
Pamela O’Hara, president of small-business CRM vendor BatchBlue, says there’s nothing to be afraid of: Social media’s just another communication channel, another tool. What differentiates this tool is that it’s consumer-driven.
Let’s Be Friends
Customer expectations are rising, due in large part to standards set by innovative retailers such as Amazon.com, and an economy that’s forcing consumers to examine every dollar they spend. (See the May 2009 cover story, “Selling Out,” for more on the challenges facing retailers.) The confidence they require demands authenticity and transparency from the companies they transact with. By now, many feel entitled to talk to the brand, a phenomenon that will only intensify as Millennials drive the market.
A few years ago, social communication between customers and companies simply didn’t exist, says Samantha Skey, general manager and senior vice president of business development at social networking platform provider Passenger, Inc. Now, companies are expected to answer in real time. The challenge, of course, is maintaining a true conversation. “A closer dialogue with your consumer,” Skey says, “is going to yield deeper loyalty.”
For PC Recycler, the goal of social networking isn’t necessarily conversion, but providing valuable content—a free video, for example, on recycling cell phones—drives traffic, and hopefully sales. “That’s what I think is the real gem of social marketing,” Farber says. “Besides the connection between individuals, it’s the facilitating of information.”
In terms of engagement, social networking allows companies to provide an access point to engage in a meaningful discussion instead of a corporate pitch: What do you think about this? What’s something you want to see? What’s a mistake we’ve made? What problems are you struggling with? “There’s an art to channeling conversation into a meaningful activity for marketers,” Weinroth says.
By committing to—and participating in—some form of social engagement, companies are putting a face to their brands, and that face can be anyone from a customer service rep (such as Comcast’s Frank Eliason, @comcastcares on Twitter) to a social media manager (Ford’s @ScottMonty) to the chief executive officer (Zappos.com CEO Tony Hsieh, @zappos). There’s also Dell’s Lionel (@LionelatDell), @jetblue’s Morgan, @DunkinDonuts’ Dunkin’ Dave, and Sprint’s Justin (@JGoldsborough), to name just a few.
“The brand starts taking a backseat to the person representing the company,” said Brian Solis, principal of public relations and new media agency FutureWorks, in a panel discussion at the recent UGCX conference. “That’s the whole point of this,” he said. “Social media is about people [and the] personalization of content.” Where the dollars may be missing, Solis offers an alternative gain: “Social capital is measured in relationships.”
Automotive manufacturer Hyundai had long collected data through primary research, consumer feedback, new-buyer behavior studies, and a brand-tracking tool. What it actually needed, says Eileen Mahdi, manager of consumer insights at Hyundai Motor America (HMA), was a way to “listen directly to our customers.”
Relying on a social networking platform provided by Passenger, in November 2008 the automaker launched its “Hyundai Think Tank,” a community that hosts live chat sessions with top executives including John Krafcik, HMA’s chief executive officer and president. For an hour, Krafcik was on the receiving end of rapid-fire questions regarding products, strategy, even car-model names. “Everyone liked having access to the highest person in the company,” Mahdi says.
Social media has the potential to pick up where traditional marketing drops off. Most of the time, Dalka laments, interest wanes immediately after the sale. Reaching out to the customer to follow up on a purchase not only reinforces customer service but helps the organization better understand the life of its product.
In Weinroth’s opinion, insight derived from social media is much more powerful than any previous research because it’s unsolicited. “It’s more authentic, more on the customer’s terms,” he says.
Lawn-care specialist Scotts opened a social media site for its Miracle-Gro brand in February 2008. Aside from providing expert gardening and lawn-care advice, Scotts allows users to communicate with one another. One user uploaded a Google Earth image of a neighborhood where one lawn in particular was a noticeably richer green than those around it. The image was accompanied by the caption, “Which do you think is the Scotts lawn?” It was a piece of marketing Scotts never would have had otherwise.
The question that Weinroth says he’s most commonly asked is: “Am I fundamentally turning over my brand—which I’ve spent years building—to the crowd?” The answer, he says, is yes.
The upside is that companies have the opportunity to increase their transparency, increase trust, and empower the community to police itself. There are risks, and like trying anything new, it’s wise to understand them and have a back-up plan.
According to Adam Sarner, a research director at Gartner, community members want freedom, but they don’t mind ground rules. “They need direction,” he says. “If you’re all over the place, they don’t know why they’re there.” Tell them what you’re looking for and how they can benefit to create a sense of what Sarner calls “mutual purpose.”
When Social Media Strikes
That “purpose” can be to defend your brand—or to giddily join a mob intent on destroying it. In the old days, a corporate crisis-management team could take the time to strategize and respond deliberately when a brand was threatened by some material suddenly appearing in public. Those days are long gone. In the social world, companies need to have a crystal-clear strategy for mitigating any disasters—and, ideally, to help prevent them from occurring in the first place.
Social impact requires direct involvement—engagement within customers’ chosen social channels. People understand that there are often two sides to a story, Weinroth says. “It’s incumbent upon the brand to be there in conversations being had about it,” he says. “[Brands] must be able to facilitate productive conversation versus aimless criticism.”
Mahdi recalls a Hyundai Think Tank member who took allegedly unverified information out of the Think Tank and posted a negative blogpost on the automotive site Edmunds.com. “This is bound to happen when you’re building relationships,” Mahdi says. “You have to understand that information is going to spread.” All Hyundai could do was to provide the correct information and let the visitors decide for themselves.
Consider the fates of two companies that almost simultaneously found themselves at the mercy of social technologies earlier this year: online retailer Amazon.com and Domino’s Pizza.
Amazon.com found itself barraged by accusations of prejudice when it was discovered that certain books had been removed from the site’s sales rankings. Initially, the issue was met with corporate silence, allowing the online maelstrom to gather force.
Domino’s, on the other hand, reacted quickly when a now-infamous video popped up on Google’s YouTube, causing immediate damage to the national delivery chain’s brand. The company opened a Twitter channel (@dpzinfo), and posted two apologies online (one on its Web site and—ensuring the response fit the crime—one on YouTube).
There’s an opportunity, one that will significantly increase marketing relevance, for CRM vendors to integrate the intelligence from social media into their existing systems. The demand, however, has to come from the customer. “Users have to demand that,” Dalka says. “It’s not going to happen magically otherwise.”
Most companies treat social media and CRM as two distinct marketing silos, Dalka says. Instead of hiring social media specialists, what companies should focus on is training their existing marketing staff, who are better equipped to see the big picture. Demand for the two to merge, he says, is just not there. “I haven’t seen anybody that’s said, ‘I have this mandate to tie this Twitter account to my CRM system,’” Dalka says. Marketers may go as far as monitoring keywords, but in his experience, social media is “still a giant blob of data not connected to individuals.”
Pluck, for example, targets the concept of “social syndication,” attempting to piece together interactions and conversations between marketers and consumers in a way that seamlessly unifies the consumer’s social life online.
Both Lyris and BatchBlue have seen increased demand from customers struggling to keep up with conversations on the Web, but it’s still a rather manual process. BatchBlue offers social media “supertags” to organize contacts and track the social media content (e.g., tweets, blogposts) that prospects and customers are creating. Lyris enhanced its Lyris HQ integrated marketing suite with a social component that tracks the reach of email marketing campaigns using what Peterson refers to as “the Web 2.0 version of ‘forward to a friend.’” This adds valuable visibility to the extended performance of the original campaign—how it’s being scaled, shared, clicked—to understand where visitors are coming from and to locate new prospects.
Both solutions, however, require the user to self-identify. BatchBlue cannot find the personal blog of a customer unless the customer provides it, nor can Lyris know which Twitter account belongs to a Web-site visitor—only that the person arrived there via Twitter.
Soon, consumers will have a single online identity, such as OpenID. (See The Tipping Point, page 48.) Before they give that up to a marketer, though, they’ll definitely want to know what’s in it for them, Dalka says—and it had better be good.
An understanding of consumers’ social behavior will move marketers closer to that fabled 360-degree view, and enhance the ability to target. Social behavior, Weinroth says, could be a leading indicator of purchase intent, compared to the current emphasis on transactions. Catering to a “social reputation” will amplify the effects of viral, word-of-mouth strategies as campaigns reach into far-extending consumer networks.
Search and analytics may also play a role. Five years from now, Mahdi hopes the Hyundai Think Tank will reach 5,000 members and have the ability to incorporate text analysis for more in-depth discussion tracking.
Weinroth imagines that once we reach “content critical mass,” there will be “real power in searching the social, real-time Web”—a resource, he says, that will allow him to perform a Google-like search across years of online exchanges within his own network.
The beauty of social media, Dalka says, is that you can start right now. “Analysis paralysis,” he says, has long hindered progress. Social media doesn’t have to be another one of those hurdles.
“Engage every person, whether it’s a positive idea or a complaint, and show them you’re listening and reacting,” Dalka says. “You’ll gain fans. They’ll root for you to succeed.”
SIDEBAR: Talk Is Cheap, Unless It’s a Recommendation
A 2007 survey conducted by Powered, Inc., a provider of online community sites, gauged the effects of a user community on purchase behavior. More than 112,000 people responded to the survey six to eight weeks after being exposed to a brand’s “soft sell” (i.e., after engaging with the community of customers and experts).
[See image at the top right of the page.]
Assistant Editor Jessica Tsai can be reached at jtsai@destinationCRM.com.
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