Blog Throwdown:
Show me the money! No, wait…’Give me followers or give me Internet marketing death’. No, no…’I just posted to say, ‘please buy now’ (set to Stevie Wonder’s I Just Called To Say I Love You).
With the every growing adoption of social media for business use as part of today’s corporate and marketing strategy, the objectives behind this move are often unclear, or even, follows after the fact.
With each organization, the motive and goal behind the use of social media and social networking tools varies from the ‘direct revenue’ and ‘engagement’ ends of the spectrum. Thus the dilemma around the return on investment versus return on influence.
The gazillion dollar question that came up during a recent Marketing Technology Summit in Phoenix – Is social media about creating new revenue or supporting influence/sentiment?
The Internet and the subsequent digitization of marketing analytics has made us greedy for numbers; we hone in on direct, measurable indicators of performance. Consequently, most organizations want to see and measure the success of social media and how it impacts sales. However, other marketers believe that social media is more about building sentiment within the online communities to help elevate brand awareness and engaging with their communities.
An official blog throwdown was issued to me, Mike Abrams and Chris Hewitt by by Cindy Kim. This blog throwdown will debate the following:
* Social media is about driving sales to achieve greater return on investment.
* Social media is about driving sentiment to achieve greater return on influence.
Team Influence | Abrams & Kim
Mike Abrams | Influence
I’m joyriding on the blog throw down issued between Cindy Kim Van Horne and Amanda Vega at the Marketing Technology Summit in Phoenix several weeks back.
The conference speakers kept coming back around to two key questions within social media. They are:
Is social media a great way to drive sales and achieve greater return on investment,
or
is social media a great way to drive sentiment to achieve greater return on influence.
I let the ladies know that I’m firmly in the camp of driving sentiment to grow influence. Before I launch into why, let’s take a look at each of these two key questions.
SOCIAL MEDIA DRIVES SALES
You tweet, blog, connect with clients and suppliers via social media. Your network grows, more people know about your service and you are able to deliver great product information to potential clients, fast! Not only that, but man oh man, this social media stuff is cheap right? No….well..mostly no. You certainly can leverage social media purely for transactional value. The cost of using twitter, facebook, ning.com, linkedin, friendfeed is worth the price, but your price isn’t in software costs, its in time spent building relationships and loyalty. In order to sell, you need a large audience connected to you, then you need them to listen to your sales pitch, lastly you need them to make a purchase.
In the pure sales model, the return on investment is what….say it with me now…sales. Of course. You must get sales, revenue, moolah in order to quantify the value of your time spent building the network in the first place. Once the sale is made, you’re golden, on to the next client and hope that one comes back to purchase again. As long as people are buying, your valuable time is well used. But…what happens if for some reason people stop buying. Either your pricing is no longer market competitive, or your quality slips, or the economy drops and orders are no longer coming in. If social media is no longer “paying off” in terms of direct sales, then a smart manager would expect you to stop spending time…rather wasting time…doing that social media thing with reduced results.
Social media…isn’t simply a sales engine. That’s reducing it down to a single component. Social media is much more rich and robust for just sales.
SOCIAL MEDIA DRIVES SENTIMENT/INFLUENCE
You tweet, blog, connect with clients and suppliers via social media. Your network grows, more people know about your service and you are …oh wait, we just did this. Your network of social media connections grows, people are aware of you…awareness…aye there’s the good stuff. Having an audience of people who are set to listen to you, to share your thoughts with their networks, to carry your message on to other networks is a very powerful situation. What’s that old saying “a bird in the hand if greater than two in the bush?” Really? What if the birds in the bush have the locations of several other bushes with lots more birds very willing to tweet your message and find even more birds in other bushes. Hmmm…sorry birdy, I’m gonna need to get to know your buddies here.
Yes, sales are good…sales are required for business to function. Sales is the input, service/product delivery is the output…happy customers all around…repeat process until tired.
But as any good sales training will tell you…”people love to buy, but hate to be sold.” By creating a sphere of influence and positive awareness and sentiment for your product, you are increasing the number of people who WANT to buy from you. By increasing the pool of people who WANT to buy from you, you are increasing the number of people who actually will. On top of that, I believe you drive a much more loyal customer base because you took the time to give first, to foster the relationship first rather than ask quickly for the sale and move on.
SOUNDS SOFT and SQUISHY…WE WANT METRICS
Yes, yes of course. If we aren’t going to use sales as the direct measurement of our social media efforts, we still need to measure something. Here are some simple ideas without having to implement a bunch of software to track metrics.
1. Establish a baseline of how many followers you have in your network, your newsletter, RSS feeds, etc…
2. Track the change to your followers week by week. Increase or decrease
3. Track how many people link to you or re-tweet or repost a blog item you wrote.
4. Track the impact of announcing a new blog post via twitter. How many people responded within the first 10-30 minutes. How many people responded after a day or so.
5. Track how many calls you received in response to something you wrote online.
6. Compare the changes in your followers with the traffic to your blog, website, youtube, podcasts, etc… You want to eventually see a direct relationship between these two. As one goes up so does the other.
7. Track how many times you released something into your network…a new video, podcast, blog post, etc…you want to ensure you are not reducing the time spent releasing new content over time.
8. Track how many social media requests for help came in versus phone calls or emails. Moving requests to the social network can potentially reduce the time to respond and increase sentiment to your quality of service.
9. Lastly, summarize all of this on a monthly basis (at least) to see how your social network is growing in relation to real interaction with clients. Your interactions should increase as should your publishing efforts.
In the end…the great news is…if you are growing your network, your sentiment is increasingly positive, your influence becomes strong, you will be seen as a relationship builder..a connector. People absolutely LOVe doing business and purchasing from people they trust and have great relationships with.
BAM…there’s my offering.
Cindy Kim | Influence
George Beckenstein of Digital Media and Social Marketing Strategist recently wrote an interesting post on how business used to be conducted. He noted that anyone you did business with lived in your immediate community. There was no such thing as advertising, marketing channels and brands. You did business with people you knew. It was not an “information economy,” and nothing was mass produced. It was a Trust Economy. In a Trust Economy, your market is your community or network. Trust is mandatory, and influence is king.
Recently, I was at a marketing event where I engaged in a heated discussion about social media with a senior account rep from a local marketing agency. I asked her why they were one of the few agencies not engaged in social media. Her response: “We don’t do social media because there is no ROI.” She also mentioned that it was more appropriate for B2C not B2B. Ironically, we are one of their clients and happen to be B2B, not to mention heavily into social media. -I said social media is not always about ROI – it should be first and foremost about sentiment and driving influence, which could eventually lead to ROI.
This leads me to this blog throw down with Amanda Vega, founder and CEO of Vega Consulting; Mike Abrams, VP of Business Development for TBD Consulting; and Chris Hewitt, senior director of marketing operations at Lumension. Amanda once tweeted to me that whenever her clients come to her about social media, their main driving factor is ROI (return on investment).
Social media by no stretch of the imagination has become an important part of a business’ overall corporate strategy. While many companies may understand the importance of social media, some are misguided in the notion that social media is about directly driving leads and increasing sales. This is understandable given how businesses today face greater economic pressures to perform and show quantifiable metrics to validate their investment. Adding social media to the marketing mix is no exception.
Figuring out ROI on social media continues to be a hotly debated topic. I am a firm believer that social media is a critical asset to a company in terms of building a brand, monitoring customer attitudes, gathering ongoing business intelligence and growing your influence. However, using social media to drive sales shouldn’t be the main focus of engaging in the first place. It’s nice to get those results, but we need to set the right priorities when it comes to using social networking tools. In a world where businesses no longer have control over what people are saying about their brand, products or services, social media gives us the opportunity to quietly monitor and listen to the conversations. If we choose, we can even engage with the broader community and participate in conversations around our brands in hopes of providing a positive brand experience. Why? More than being focused on driving sales as the main motivator, influence is king. Influence drives trust. Trust can lead to powerful Word of Mouth. Powerful WOM could lead to sales and deeper engagement.
There is no question that social media can be a dynamic tool. However, an organization cannot be successful in social media without building brand awareness and engagement first. Without establishing this all-important foundation, one cannot be successful in social media or drive sales. The whole point of social media is the ability to participate in a conversation that’s taking place around your brand or your industry. A company cannot build a social media strategy simply to drive sales without first building trust within its community. This takes a lot of effort in building sentiment, not to mention a lot of time. Once you’ve established trust around your brand, then the community will take the next steps to listen to what you have to say, follow your conversations and get to know your brand.
@tdhurst said to me: “Social media is always about sales.” True – most companies want you to justify their investment, but it’s up to the social media experts to educate them on what the purpose of social media is and what the overall objective is for that company. This way, you can better align corporate objectives with social media strategy.
I had the opportunity to listen to @GuyKawasaki at the recent BOLO 2009 event where he demonstrated different levels of social media successes – monitor, watch, sell, support and engage. Companies such as Starbucks use social media to monitor what people are saying about their latest promotion and their brand while others such as Dell and Kogi use social media to sell their goods. Another good example is Comcast, which uses the platform to provide customer support direct. While major brands like Dell and Starbucks may have the luxury to choose what type of engagement they want to have with the community, it’s still about understanding and measuring brand awareness and driving positive brand engagement before pushing promos. If you don’t have these in place, when it comes to driving sales, you’re SOL.
Let’s face it, whether it’s social media, marketing campaigns or PR, if you don’t have brand awareness, brand trust and positive brand engagement to drive influence, your results would be the same – lackluster interest in your company and products. Social media is another medium where you get the privilege to first monitor and listen to the overall sentiment around your brand before you look to integrate other objectives, such as driving sales.
Team Revenue | Hewitt & Vega
Chris Hewitt | Revenue
Social media: influence or revenue? A question of growing popularity and heated debate, with compelling arguments for both sides.
For me, social media success, as a component of a marketing strategy, is best measured by its ability to generate revenue.
I know…it sounds a bit cold…maybe I’ve been lapping up a little too much of the ‘ROMI’ Kool-aid. I once thought, however, that social media was different. I thought social media had a ‘higher purpose’; to enlighten each and every one of us in marketing to create something better and to triumphantly carry forth a new era of a ’softer sell’…making the world a better place.
The reality is however, that our marketing efforts carry a serious responsibility to generate real results. We are accountable to our Board, boss, teams, and colleagues; that responsibility becomes even more serious for small businesses and individuals when those key stakeholders are ourselves and our families.
The key to generating direct revenue is relevance and value; social media is another tool for us to take the right message and bring it to the right audience.
Almost every message has a relevant audience. This is especially true in our highly customizable, highly portable digital word; a trend Chris Anderson highlighted in his book The Long Tail. Do you find those multi-level marketing Tweets annoying; blocking and ignoring the follows from Twitter users that can make you $300 a day for doing nothing? Well it’s not that their message is wrong…it’s just that they reached the wrong audience.
This is why social media is such a powerful tool for generating revenue; people have segmented themselves. It is now our responsibility to reach them with the right message, offer, etc. and constructively engage them in dialog. There is no reason why we cannot tie our efforts directly to revenue generation.
Additionally, we have to consider the fact that ’social media’, as an Internet marketing strategy, is in its infancy. And while many of us social media ‘insiders’ are being to ask hard questions about sustainability and business value, the vast majority of the population is still wondering how these tools, this whole concept, really applies to their life/job/goal. As a result, it’s easy to lean on metrics like ‘influence’.
A little bit of an industry secret ‘return on influence’ is the kind of nebulous metric that we, as marketers, cozy up to at night; our comfortable, loving teddy bear that lets us know we returned value today. Me? Sure I have a Teddy. Hey, don’t judge, the late 90s were especially rough…I may have wound up on a few email ‘blacklists’, angered email recipients around the word, and generated little to no direct revenue, but Teddy and I always shared in the success of our ‘impressions’ and ‘open rates’.
All stuffed animal metaphors aside, ‘influence’ is a valid measurement of marketing activity…and, in certain circumstances, success. I believe, however, that the actionable nature of social media requires us to apply hard metrics to our efforts and track them back to dollars. We can’t accurately track the influence of a well planned and authentic charity on an organization’s revenue. We can, however, track our links, activity, referrers, etc. in our social media efforts.
So yes, for now, focus hard on using social media to drive revenue. Let’s get back to our roots of sales and marketing; create dial with your message and leverage social media to find the appropriate audience. Track your efforts (’cash for clicks’ and ‘clicks to cash’), continue to enhance your message, and return value. In doing so, maybe you will use social media to make the world a better place…well…maybe for your happy, newly acquired customers anyway.
Amanda Vega | Revenue
For corporations, social media is about “show me the money”
There is little doubt now that social media is a necessary piece of any corporate marketing mix. As practitioners in the space for many years now, the importance of social media has been a conversation we have daily with clients and colleagues alike. The bigger question these days seems to be “how do we monetize social media?” In this blog throw down between three industry trenchers, we are discussing different points of view and answers to this same question. My take on the question: social media is about the money more than anything else.
Of course it goes without saying that there is value in social media that goes far beyond revenue. Brand extension, reputation management, connecting with your clients in a real way, and the immense on-the-spot market research you gain when actually engaging in social media (beyond having a Facebook fan page, people…) are incredible and should certainly be assigned a value. And we can all argue that extension of reach and visibility drives profitability – at least in theory. But that’s just not enough.
When we are sitting in front of the decision maker at a client who has to answer to his or her boss, or worse, a board of directors, the only thing that matters is whether or not you can assign actual monetary gain to the engagement. Businesses are responsible for generating profit, period.
Our social media management engagements simply have to be tied to a revenue stream – one way or another. And all of the fluff explanations about branding are of no interest to the stockholders or the CEO. They may say so in nice little PR snippets, but when you peel away the onion, it’s about the money. So how do you tie social media to revenue? There are a few things to consider.
1. You can tie your efforts into trackable things like custom URLs, coupons, and actions such as submittals of receipts from purchase for prize. This ties directly into sales.
2. You can use social media to drive people into stores. And more importantly, if you are product who is at the hands of a distributor or chain, you can use the reports on reach you gain in social media to vie for better shelf space or position in the stores – which drives sales.
3. The proper use of real social media can cut market research prices way more than half – which decreases your overall spending – allowing for more profit margin.
4. If you engage real zealots for your brand on a daily basis you can create the same (or better) reach and frequency than most ad campaigns which cost far more that engaged social media…adding to the bottom line and ROI measures.
5. Social media doesn’t have the same costly fees associated with it that changing a print campaign or TV ad does if your message is failing – and as a bonus, they don’t require as much in terms of revenue to test or create the original messages to begin with.
At the end of the day, you can monetize social media. It’s not as hard as you may think – actually social media is more trackable than most traditional media. And while the added benefits of social media (brand extension, share of voice, etc.) are important, they are not the MOST important – at least not to the CEO, or our paying clients. If I can’t associate an ROI with real numbers, then they aren’t going to buy. At all.
