The Missing Piece(s) of Social Media
NEW YORK, August 4, 2010 — What's the difference between social media and the telephone? How can we measure social media return on investment (ROI)? Do social media deserve their own genre within the customer relationship management industry? A panel of executives from industry-leading social media platform vendors answered these questions among others on on Day 3 of CRM Evolution 2010 here at the Marriott Marquis in Times Square.
[Editors' Note: For more coverage from the CRM Evolution conference, please click here.]
The panel comprised the following four executives:
- Sanjay Dholakia - chief executive officer of Crowd Factory, which offers a social marketing platform that enables companies to run social marketing campaigns;
- David Alston - vice president of marketing at social media monitoring company Radian6, which was named a Rising Star in the 2010 CRM Market Awards announced at the conference and in CRM magazine's August 2010 issue;
- Chris Morace - vice president of products at Jive Software, which offers services that span the entire life cycle of social business software implementations; and
- Katy Keim - chief marketing officer at Lithium Technologies, which offers social CRM software geared toward getting customers to innovate, support each other, and to promote and sell for companies.
The rather lighthearted and friendly conversation among industry rivals was moderated by Marshall Lager, founder and managing principal of Third Idea Consulting, a social media consulting service. Lager served as master of ceremonies and de facto humorist during the 45-minute discussion on how companies can best use social media to drive CRM initiatives.
The discussion began with examples of best uses of social media. Executives praised HBO.com, McAfee, Logitech, and United Kingdom–based mobile carrier GiffGaff, for their ability to listen to customers, generate sales, and implement better business processes.
"The [GiffGaff] community decides what gets offered, what gets serviced, and how the community defines the brand," said Keim, of Lithium Technologies. GiffGaff's motto, she said, is "the mobile network run by you."
The conversation quickly shifted from best use cases to why the social media space confounds executives and what businesses need to know about social CRM before venturing into the field. The panelists seemed to unanimously agree that companies continue to seek measured value for social media initiatives; in the panel's opinion, however, executives should view social media less about numbers and more about relationships.
"This space is confusing for people just getting into it," Jive's Morace said. "One of the biggest shifts this year is figuring out how to connect functionality to value. That's been the missing piece."
Dholakia, of Crowd Factory, seemed exhausted by the question of how to find ROI in social media. No matter where he goes, he joked, the first question he fields is about ROI. Dholakia said that, while he finds great value in the conversations generated by social media, direct mail and email are still the obvious generators of ROI.
"We're now embarking on a path where you can actually see what social activity is generating for you so that you can see what the value is," Dholakia said. "We're well into the ‘It's Cool' period but now we have to find the ROI."
Perhaps the most insightful comment of the discussion came from Radian6's Alston, whose argument about the connection between ROI and social media was simple: What is the ROI of the telephone? Alston's claim is that the telephone (like social media) is a tool that all businesses use to build relationships and to sell better, so why don't companies ask what revenue it drives?
"Social media is the same as the telephone," Alston said. "Instead of us trying to look for that magical ROI that covers everything, ROI has to be broken out to the different departments." How each unit applies social media, he said, will shape the framework for measuring its ROI.
The discussion shifted from one of jocularity to friendly debate when Morace questioned whether social media should be given its own separate CRM designation. "Social CRM," he argued, "is a terrible label" — as social media is just one piece of the overall CRM equation. Rather than creating a social media department, which adds another silo to already-fractured businesses, Morace urged executives to think about how to use social to connect all aspects of the business.
The other three panelists agreed that social media should be but one part of an overarching CRM strategy, but a friendly debate began when the conversation shifted to how social media provides value to the end customer.
"[Social has allowed] customers to expect different things," Keim said. "They expect businesses to be open and immediate — things they weren't able to demand in a different age."
Alston argued that social media forces brands to be more human. "If you think about marketing in the past 30 years all marketers did was yell, yell, yell about how good they were," he said. "If we can somehow move businesses back to being human...those businesses are going to really rocket up."
Dholakia, however, rejected Keim's and Alston's notions. "I don't know that it's any of those things," he said. "The customer doesn't give a 'bleep' about their relationship with the company." The customer, he asserted, ultimately wants to achieve something with each of her interactions with a company, and the social phenomenon is about empowering customers to get information from their peers.
"Nobody trusts the brand," Dholakia added, "even if it's more human. If a customer is empowered to talk to more people to get information from a more credible place, then that's value. Social is, at its root, you and I connecting as peers."
Morace found a perfect end for the discussion by asserting social media's true value: that it forces businesses to be more authentic.
"Businesses didn't suddenly become good," Morace said. "[They became good] because they had to."
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