Measure 2.0 return, not impact or influence

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The stormy progress social media have made and are still making in the world around us and in business in particular, has intrigued me to a great extent for a considerable length of time now. As I believe my earlier posts have underlined, I am a firm believer in its value in amongst others communications, market understanding, lead generation, recruitment and innovation. At the same time, I am often puzzled by the way corporations and professionals use social media. As a kind of 21st century goldrush, some people seem to think that as long as you’re on Twitter, LinkedIn and Facebook you’re cool and new crowds of people will instantly flock as followers in your path. I have spent considerable time on Tweetdeck or Hootsuite staring at the timelines and profiles of some companies and individuals that have either been set up months ago and show many a sign of degradation or standstill, or boast an impressive number of 20,000+ followers per individual twitter-adept. As if number of followers has new business meaning and value per se, as Social Media Today already reflected on in their post.

Surveys across the globe at the same time show business decision makers in marketing and beyond firmly believe in the value of ‘going social’. Social marketing budgets are constantly going up, says ‘The CMO Survey’.  At the same time, as my observations based on a daily perusal of various blogs, vlogs and other communities over the past several months or so show, businesspeople still do not know where to start their social journey, what good or not so good practices are, and what the actual return on investment looks like.

What would bring really differentiating quality to the field of social media marketing and how could one best assess its ROI?  End of 2009 this inspired me to testing the ‘PhD waters’ at my ‘old’ university, the State University in Groningen, the Netherlands. I was wondering whether one would be supportive of a PhD assignment in which to assess the ROI of social media in B2B. Prof.dr. Peter Verhoef and dr Jelle Bouma confirmed the market potential for a similar venture and applauded my initiative, yet equally stressed its long term nature and the many many hours away from loved ones, hobbies and family. These aspects and perhaps even more the dynamic nature of SMM & web 2.0 vis-à-vis the six or seven years of a PhD trajectory lead me to the belief this would not be my cup of tea – in this lifetime.

Yet the feeling the field of SMM/ social media marketing would benefit from further business-relevant study remained. Inspired by an intensive dialogue with people like Rijn Vogelaar, Frank Sibbel, dr Sonja Gensler and several other marketeers, business people and other 2.0 thinkers the foundation was laid for the first intensive SMM / Social Media Marketing ROI Benchmark Study, set up in close collaboration with Calibrero’s Ewald Jozefzoon.

The Study’s objectives are threefold and include a (proper) assessment of good (and not so good) SMM/ social media marketing practices, the establishment of a baseline per participating company as well as a proper assessment of the actual ROI over time. I will be happy to keep you abreast of relevant developments inasmuch as the participants allow us to publish to a wider audience.

As we expect the number of SMM early adopters per market segment to be relatively low, I  am curious about whether (which of) my personal hypotheses will hold true (and I would kindly like to invite you to add your views as well as add any fresh hypotheses of your own):

–         Despite the allegedly better potential in B2B, the B2C uptake will be biggest
–         Most SMM initiatives have started bottom-up thru the ranks or outside-in thru a 3rd partner or consulting firm
–         The approach is still relatively operational to tactical with much emphasis on tools and 1.0 publishing and ‘shout-outs’ rather than new listening and proper dialogue based on a SMM strategy, new insights and clear objectives
–         In those companies that have started their SMM roadmap small, with senior management and multi-disciplinary involvement rather than communications or marketing alone, both its sustainability and measurable ROI are bigger
–         Organisations with an Anglo-Saxon culture and background will be swiftest in SMM deployment, quite possibly also in reaping its benefits
–         Those organisations with a long term attitude to 2.0 will be better rewarded by their customers in terms of higher customer satisfaction rates and more (renewal) business
–         Although the Study itself will predominantly take a horizontal approach, it will be interesting to assess or view any vertical differences that may exist. To my mind, there will be no significant differences (yet) or (should I say like-for-like difference) in the kind of best practice that players across several market segments are in the process of deploying. However I do expect there to be clear front-runners per verticals or sector in terms of their approach and tangible ROI.

Time will tell. And hopefully you as well. I look forward to seeing your builds to these thoughts and a fruitful Study over the next several months.

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Social Media Marketing ROI – would the CMO settle for anything less?

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As Forrester researcher Nate Elliott indicates “Interactive marketers know they’re not good at measuring the effectiveness of social media. On average, they rate their own efforts to measure social initiatives at only 4.5 out of 10. Marketers fail because they focus on the metrics that are most easily available instead of the metrics that best correspond to the objectives they’re pursuing.”

Calibrero distinguishes between SMM (Social Media Marketing) events and SMM responses. In this dichotomy, the first category encompasses all kind of activities undertaken by a social community, triggered by or in (e-)dialogue with a brand such as comments, blogposts, (re)tweets, video messages and so on. However valuable this spin-off may be, it can never be an objective in its own right. The latter category of SMM responses comprises those responses with financial impact, i.e. commercial leads that can be nurtured and converted to contracts, into invoices and subsequently into revenue and cashflow.

Setting the Social Media hype aside for a moment and applying a healthy dosis of down-to-earth thinking to this fascinating topic, I wonder why social media bloggers, 2.0 gurus and the like only too often seem to dismiss the proven lessons of marketing and sales. As Forrester’s easy-to-understand POST approach stipulates, (social media) tools should always preceded by a clear definition of target audience (People), objectives and strategies. Yet some social media strategists prefer to talk the language of ‘number of followers, friends, comments’.

Now have a look at this CMO guide to the social media landscape. Granted, it provides a colourful insight into the relative benefit some of the most well-known social media brings, and therefore provides some indication of the weight the Marketing Director or CMO should place on leveraging these tools. Yet, the matrix fails to refer to real commercial objectives such as increased pipeline, conversion rate and enhanced sales. Social Media Marketing is expected to dominate this year — so much so that 81% of CMOs plan to link their annual revenues to their social media investment, according to a recent survey by The CMO Club and Bazaarvoice. I wonder though whether the CMO him- or herself will want to get down to the tool level in gauging the merits of ‘going social’. Furthermore, with this significant intended shift in budget, resources and commitment to occur, the CMO guide should ideally be leading the way to drive a tangible return or ROI.

Perhaps this explains why there’s still little awareness or understanding by senior executives as to the real benefits of Social Media Marketing. As my recent, non-academic and by no means representative (with a modest n= 22) LinkedIn poll suggests, none of the 55 & older respondents expect to benefit from social media this year yet. The B2B poll also suggests there is a relationship between company size and perceived social media benefit. Large companies apparently are represented by the 55+ segment, indicating they see no benefit yet. Mid-sized players expect to gain from social media deployment in terms of better knowledge management and innovation whilst smaller companies place their bets on lead generation thru the power of 2.0. Food for further social media thought.

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Beyond 011010: 121 in B2B

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Online business engagement just about ‘zeroes and ones’?!
On a binary day like today, January 10th 2010 or 011010 in short, it’s perhaps tempting to view the world in digital terms of just ‘zeroes and ones’. As people in the so-called 1st world are increasingly becoming digital citizens (whether born digitally or as ‘immigrants’), businesses do so too. Becoming digital however does not imply business or business(people) want to be treated in a binary fashion. It merely paves the way for authentic human, 1-to-1 interaction.

B2B networking the 2.0 way
My dutch friends, family and colleagues regularly question the value of social media in business, especially in B2B. They argue that building a relationship is done offline, face to face and not in the digital darkroom of Twitter, Facebook or LinkedIn. Nearly all B2B players of some size have recognized the need for BI and CRM. Yet social media still is being frowned upon as the latest fad from Silicon Valley, that is best left to facebook-loving teenagers or Hyves-exploring IT geeks. Others do intend to include social media in their marketing and communications plan for 2010, but quite often seem more inclined to policing their employees in saying and doing the right things on social media. Or merely want to leverage social media to shout more loudly to a wide audience.

Enriching business dialogue by going social
Here is where to my mind the social media paradox lies. In a world that’s drowning in information and data, a sustainable competitive edge increasingly relies on rich content stemming from as rich as possible a customer dialogue which in turn produces enriching relationships. Of course nothing beats good old-fashioned 1-to-1 conversation to really understand a customer’s actual motivation, wants and needs. Yet social media can help to mutually (!) find relevant insights, ideas and new contacts that in turn can be shaped into a valuable business conversation, qualified lead or otherwise. Business Intelligence and Customer Relationship Management will significantly benefit from the realtime, social insights generated by relevant communities. Furthermore, customers increasingly expect responsiveness by their business partners, off- and online. The reward for a quick and adequate response to customer queries and complaints will often be positive customer advocacy and customer loyalty, the biggest B2B pearl to cherish. As the 2009 Business Social Media Benchmarking Study which included 2,384 participants shows,  US-based B2B companies are also even more likely to use brand awareness, prospect lead quality and prospect lead volume as social media success metrics than are B2C companies. I look forward to seeing social media further mature and take shape, especially on this side of the pond. In my next blog I hope to present you some initial findings of my B2B social media poll and would appreciate your input as well.

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Social media: reflections

By now, 2009 is history in several time zones east of ours, the Central European Timezone/ CET. Time to briefly reminisce on the past year that’s brought great new insights, people, fun stuff and ideas within (my) reach – often thanks to the power of social media.

On the threshold of the launch into a new decade, we have the tendency to look in the mirror and reflect. At the same time, we look ahead at what great things the new decade has in store. Equally, our planet, economy and society face challenges that require us to be(come) more and more inventive. Leveraging the capabilities of the community, social media can act as a powerful mirror. A mirror to look ourselves in the eye. Who are we as professional, organization, community or nation? Is this really who we aspire to be? What is the perception of relevant stakeholders around us? In a world of ever-increasing complexity social media enable us to shed light and more transparency into the demands, needs and profiles of demand and supply; whether it’s professionals offering their services or businesses in demand of skilled people or offering their services and products to a global or national audience. And as if holding up a mirror to the sun, social media can also contribute to standing out from the crowd and being seen as differentiating or innovative.

Mirroring in psychology refers to 2 people mirroring each other’s gesture and body language thereby implicitly reflecting their positive attitude and empathy towards one another. The book Mirroring People by Iacaboni describes ‘The New Science of How We Connect with Others’ – isn’t this exactly what social media is all about?! I look forward to joint new reflections coming up in 2010 thanks to the power of the community, your comments and insights – best wishes to all of you!

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B2B Social media eVALUEated

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Valued
As mentioned in my previous post, the buzz around social media is also building a discussion regarding its soft and hard ROI. To my opinion, its measurable and financial value in B2B will further be recognized overtime yet is set to contribute to enhancing at least:

* Market | Customer | Competitive intelligence
* Branding
* Product development & innovation
* Customer support services
* (Open) innovation
* Lead / Demand generation
* Employee related benefits such as enhanced project collaboration and knowledge sharing, employee motivation, (management) development & retention

For political, lobby-intensive or CSR-related organisations social media additionally might bring value in terms of Return on Impact. Social impact therefore in terms of mobilizing citizens’ voice by organisations that target both other businesses as well as consumers such as @350, @WWF, @changents and others. But let’s focus now on businesses that need to satisfy their shareholders.

Speed, transparency & efficiency key benefits
Almost 1700 executives from around the globe took part in a longitudinal 3 year study by McKinsey on social media entitled ‘how companies are benefiting from web 2.0’. 69 percent of respondents report that their companies have gained measurable business benefits, including more innovative products and services, more effective marketing, better access to knowledge, lower cost of doing business, and higher revenues.

Scanning diagonally thru its key results, it seems that bigger speed & transparency as well as reduced (travel & communications) costs are seen as most significant business benefits. Increasing revenue is mentioned by some, yet this is the lowest percentage. Whereas ‘measurable gains’ were reported, the McKinsey researchers unfortunately did not explicitly state whether and in how many cases there actually was a positive ROI in financial terms – dollars, euros, rupiah, sterling or yen.

Me, myself and my community
The McKinsey research distinguishes between the deployment of social media internally to employees and externally to partners, suppliers and customers. Judging by the relative number of respondents as well as the relative biggest gains reported, internal at present seems to be the most popular category. The survey does highlight the relative usage of SM across verticals – not surprisingly high tech and professional services frontrunners – and reports a 35% gain in employee motivation.

With the relative loose connection in most western companies between organisation and employee, this is a significant gain that merits further study. Whilst in many cases the increasing individualization and economic downturn may cause low levels of employee-employer commitment, which in turn results in suboptimal retention – the need to build a powerful corporate community is as strong as ever.

The massive uptake of Facebook, Hyves and other social, friend communities reflects the need for human beings to belong and connect. Why therefore would a corporate environment not try to build a successful, happy community of (professional) employees? To my opinion, this should definitely enhance a firm’s capacity not just to attract, but also to attach the right workers to the right place at the right time. A ‘happiness factory’ – perhaps.

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