How Will Social Media Impact Your Business

by Eric Tsai

I saw a video on the State of Social CRM post on Web Strategy by Jeremiah Owyang in which Paul Greenberg talks about how companies are having difficulties with cultural changes internally to execute against the new bread of customer, the social customer.

In case you don’t know what CRM is, it’s Customer Relationship Management as described in Wikipedia as a “technology that allows companies to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service.”

What an ear full!

My version would be just an application that keeps track of customer facing activities so you can find the gaps in your service and make adjustments to be more efficient.

The point both Jeremiah and Paul are making is that businesses are still figuring out how to integrate CRM and Social Media so the combination provides meaningful business value.

The shift in how customers use social media is forcing companies to add the social element into their CRM system. They’re both spot on.

It also raises the question that if you’re not in the business of generating value and serving to keep the customer, then what are you in business for?

Social media encourages interaction which leads to generating a new type of intelligence that CRM system were not tracking before. Data such as reactions, activities, sentiments, locations, behavior and preference are converging providing a never seen before clear picture of each customer.

So how does this change the dynamics of your business moving forward?

Well, for one thing you have more leverage as a result of having more available data to target your niche and identify your prospects. In fact, as social CRM matures, I would expect to see companies shift their corporate strategy to ensure that every aspect of customer touch point is aligned with their marketing and sales strategy.

And this is the reason why it requires a true “cultural” change, a mindset really, for businesses to not just think from the perspective of their customer but to become their customer, to feel and empathize with them.

Furthermore, this would mean that the employees may have to do the same by constantly thinking and enhancing the customer experience to the fullest. Instead of just using tools to do sentiment analysis by listening in on what customers are saying, companies can anticipate what customers will say and do before they’ve done it.

Checkout how Salesforce is making their CRM social with Twitter.

This would probably be the ideal desire outcome for most businesses: to proactively facilitate prospects and customers toward a market funnel and minimize customer frustration as problems are addressed before they happen.

Imagine a prospect is interested in finding out more about your product before a purchase, not only would you be able to answer questions using social CRM data to anticipate them, but to personalize your communication and create real-time offering to increase the rate of conversion.

By delivering relevant communication crafted with exactly what the customers want at the right place at the right time, this will be the next phase of effective social influence marketing.

The take away: It is important to recognize this emerging trend in CRM and social media. Even though a cultural shake out would be necessary for companies to fully utilize the benefits of social CRM, it would be wise to start making some basic evaluation of how going social may impact your operations and bottom line.

What’s needed to make that jump and if you’re already using a CRM system, think how you can rally your staff to start thinking about new marketing processes and research more on how you can streamline social media into your CRM.

Why Social Media Can Improve Your Business

by Eric Tsai

After my last post on “How to use Google and Twitter to Find your Customers,” I’m following up on how to abstract value to improve your ideas.

Whether it’s for your marketing research or product innovation, the intention for gathering these data should NEVER be for spamming but to help integrate your value proposition into what people are truly interested in.

If you can become part of what people are interested in, you will have a better chance of connecting. Therefore it’s best to utilize permission marketing when executing your communication strategy.

Getting more data is great, but it’s not intended so you can just add more people to your weekly email blast.

Making quantitative analysis can help you create interesting ideas that differentiate your brand and drive actions.

So how can social media create opportunities for you?

Understand The Social Network Ecosystem

First, learn how each social network ecosystem works and the habits of the emerging “social consumers.”

Think of each social network as a town and the ecosystem is basically the infrastructure of the town.

Knowing how each social network is used is like having the map of the town.

Once you have knowledge of the streets around town, the next step is to find and connect with your customers.

This is where my last post comes in handy, if you can identify a social consumer online, he or she is more likely to have multiple social networking accounts which can help you to further profile your target audience.

This is especially helpful if you use a CRM (Customer Relationships Management) system such as GoldMine, Dynamics CRM or Salesforce.

Let’s look at B2C (business-to-consumers) social consumers; these are people that are willing to share their personal information on social networks engaging in activities such as updating their Facebook status, displaying their locations on Foursquare, leave their product reviews on Amazon or restaurant reviews on Yelp.

If you apply the Pareto principle or the 80/20 rule, you can expect the power users represent 20% of the users that’s generating 80% of the activities.

Accordingly to the latest study by Chadwick Martin Bailey, “consumers who are Facebook fans and Twitter followers of a brand are more likely to not only recommend, but they are also more likely to buy from those brands than they were before becoming fans/followers…The study also uncovered perceptions among consumers that those brands not engaging in social media are out of touch.”

Facebook_Twitter_consumer

The idea is to focus more on the power users that command influence within the social networks. Keep in mind connecting with “medium” and “light” users also helps to earn social proof and trust via the long-tail.

For B2B (business-to-business) the leading examples are LinkedIn, BusinessInsider, StockTwits, OpenForum by AmericanExpress and BusinessWeek’s BusinessExchange to see how businesses building communities that connects and shares information.

They represent how social network can be utilize to build a community by providing practical value whether it’s a piece of software, platform, resource center or networking destination, they give back in return to what participants put in.

I recommend doing some in-depth research to get useful data on demographics of your target audience.

Then identify the appropriate social network(s) that fits your demographics to go after.

The key to success will be your understanding of how your target social consumers think, act and make decisions.

What and who influence them?

How much research was done prior to the purchase?

What was the second or third option?

social_consumer_decision

Implementing Accountability and ROI

Now that you’ve got your customer profiles and social network(s) identified, what’s next? For businesses serious about ROI (return on investment), it’s time to increase accountability of your marketing efforts.

You can do this by using existing data or the customer insights from your research (profiling, surveys, CRM) to create campaign projections, a realistic goal that you aim for.

Then create a mix of financial and nonfinancial metrics that you NEED to measure, not what you can measure.

This is to help you understand how your marketing activities impact the bottom line and how you can optimize them by doing more of what works and less of what doesn’t.

Make sure you track your marketing cost as well as where the money is coming from to justify true ROI and conduct performance analysis.

How much does it cost to run a local campaign vs. national campaign?

What results are you getting targeting moms instead of kids?

Can you compare the effectiveness of your marketing investments in direct marketing and affiliate marketing?

Share Your Insights

Another great use of these valuable customer data is to share the insights with your customer service representatives, sales staffs, product development engineers, design teams, or anyone that will benefit from them.

If the sales staff knows what words or questions your target audience used most frequently when talking about your product, they can craft a better sales pitch.

If product engineers realize how many different ways people actually use the products they create, they can improve and create better products.

If the design team identifies how your customers come to visit your page and where they clicked, perhaps they can increase the conversion rate on your next campaign.

You can also involve them in the insight generation process to help increase the adoption and with regular distribution of these insights, everyone will take part to improve your business incrementally.

Ultimately you want to have a holistic view of your customer data so not only do you know what they’ve purchased, but also what they think about your industry, how they talk about your brand, and why they react to your campaign a certain way.

Simply put, it all comes down to keeping up with the shifts in how people think and act as well as the technologies used.

If you’re unable to keep up then outsource part of your social media efforts to marketers, consultants or agencies; but make sure you understand the implications.

Here is an short and excellent report on how social media influences paid search by GroupM Research.

The Influenced: Social Media, Search and the Interplay of Consideration and Consumption

The take away: The key to effective marketing communications is to have a solid brand strategy.

It’s indicative that social media must work together as an integrated whole of your brand strategy because your brand lives day-to-day in communication platform such as sales presentations, company brochures, product packaging and now the semantic web.

Synchronizing these efforts assures consistent communication of your brand’s strategy, helping to create brand awareness and recognition of who you are and why you matter.

Moving forward, there will be an increase demand for marketing ROI as more data becomes available and new measuring tools are developed.

As always, focus on the signal instead of the noise, maximize the value of social media to improve your business beyond marketing.

What do you think?

Love to hear your thoughts and feel free to share your ROI metrics.

he study also uncovered perceptions among consumers that those brands not engaging in social media are out of touch. When asked the question “What does it say about a brand if they are not involved with sites like Facebook or Twitter?” they said the following:

What Should You Consider When Integrating Social Media

by Eric Tsai

As we progress into 2010, the rapid growth of social media has allowed more access to information, consumers, communities, and experiences.  This new medium has enabled a new way to communicate and share, from B2C to B2B marketers are all trying to figure out an edge.  Many brands start to focus on the hybrid approach which I believe will be the next phase of digital and web marketing.  The question is what role will it play in the marketing arsenal?

Here are 3 steps to consider when integrating social media to your marketing practices:

Brand Strategy Reassessment

Understand the changing habits of your customers should be the focus of your brand.  Use the 80/20 rule to segment your customers and identify the difference between your old customers and new customers.  The recession has permanently altered the way people think of value and the concept of trust.

According to Decitica’s new study, “Marketing to the Post-Recession Consumers,”

  1. The effects of the Great Recession on consumer behavior are so profound that many of the assumptions underpinning consumer segmentation are no longer valid; and
  2. Marketing strategies that do not fully recognize the diversity of consumers’ recession experiences won’t have the desired potency in the post-recession world.

Business owners should reassess existing brand strategy to gauge the shift in their industry ecosystem.  Although the above report focuses on B2C, for B2B marketers, you can expect similar shift in behavior from a high level perspective.

The key is identifying the new trends in how your customers think, feel and act.  Your customers may be part of the fastest growing mobile user groups or have adopted new ways to find and share information before they buy.  Every person and their sphere of influence were affected by this recession, reevaluate your existing customer segmentation should be a priority.  It’s time to make adjustments as to how you view your customers.

Smart companies will always shift their brand strategy to focus on customer retention by maintaining a high level of value perception.  Your customers expect you to keep your brand promise and that’s just the beginning, only those that are over delivering will earn the trust over time.

Integrated Marketing and ROI

Social media’s growth is undeniable, it seems like every company has a Facebook fan page and a Twitter account not to mention all the early adopter consumers.  For example, according to a report from BabyCenter, “The number of moms who use social media regularly (e.g. Facebook, MySpace, BabyCenter Community) has significantly increased from 11% to 63% since 2006; a change of 46%. 44% use social media for word-of-mouth recommendations on brands and products and 73% feel they find trustworthy information about products and services through online communities focused on their specific interests such as parenting.”

So does this mean if you sell to moms, you must get into all the social networks?  Should social media marketing be your priority?  Not so fast.

According to a study from MomConnection, The Parenting Group’s nationally representative research panel of 5,000 moms, “the role of social networks in moms’ lives is still largely for entertainment and personal communication; it’s not a channel where most moms are receptive to gathering product information. Only 24% of respondents have used Facebook for product information and buying advice, while 5% have used Myspace for product info, and 3% have used Twitter.”

Social networks is still growing and evolving because it’s mass media, it’s crowdsourcing and it’s here to stay. However, instead of being hype it’s moving towards ubiquity and part of the everyday mix that works alongside email and search marketing.  People will continue to search for answers online and offline regardless of B2B or B2C.  Every chance you get to optimize your brand’s search ranking is an opportunity to leave a bread crumb for your prospects.

Moving forward, the challenges will be to monitor, measure and manage a fully integrated campaign due to the amount of resources and time it takes to pull together the overall picture. This is precisely the reason why you don’t need to be on all the social networks or even be on it all the time.  Some companies use social media as a platform for effective one on one engagement while others utilize it as a PR tool.

Whatever the role social media plays in your organization, you have to really understand how social media is driving your business.  If you’re doing social media, do you know how many sales you got out of your social media app?  Are you measuring the actual incremental sales from your e-commerce store?  Or is social media primarily a driver for your brand value?

Both print and digital advertising costs have come down dramatically, this presents a new opportunity for a dynamic approach to hybrid marketing.  You can simultaneously capture your audience via print and web advertising but the key is to identify which channel they come from to rapidly and accurately aggregate customer and prospect data.  Perhaps most of your new customers reside on the internet while your existing customers still favors the traditional channel.  Regardless of how you integrate your marketing campaign, remember to benchmark them so you can gauge the ROI to improve your sale funnel and lead generation capabilities.

If you goal is to build a customer engagement program, consider incorporating it with existing and new CRM (Customer Relationship Management) tools that can be customized for each individual consumer.  This helps to improve the ROI with more measurable data against the deliverable.

Here is “2010 Digital Marketing Outlook,” an excellent report from the Society of Digital Agencies (SoDA).

Two Thousand and Ten Digital Marketing Outlook

Business Alignment

Businesses will emerge from the recession looking to further strengthen engagement and interaction with their customers.  But what does “engagement” really mean?  How much does it cost? And what will it take to engage a customer? If you have already done the first two steps by reassessing your brand strategy and integrate social media into your marketing campaigns, your next focus should be to develop a social media policy to protect your company and make incremental changes to improve every aspect of your business.

I’m hardly surprise when I read the new consumer poll by CMO Council and InfoPrint, that “consumers today are deluged and overloaded with a plethora of unwanted direct marketing and promotional messages that are blasted out via email, or mass-produced and mailed in vast quantities, ending up choking mail boxes and filling recycling bins. In most cases, recipients ignore, or have become immune, to standardized commercial overtures. And with the advent of the Internet, consumers are seeking product information and affirmation from trusted sources and referral networks online.”

That’s the path social media is on right now.

Instead of email and mass-produced mailers, it’s spam tweets and uninvited LinkedIn notifications.  Marketers are forgetting that consumers and prospects are real people like you and me.  At the end of the day when we go to the grocery store or eat out at a restaurant we want to be treated like a person not a prey.  It’s shocking to me that “staying relevant, valued and connected to customers has become the number one challenge for marketers today” according to the report.

The biggest adjustment brands must realize is that in social media you’re no longer in control of the conversation instead you will turn over the brand experience to the community and let them define it.  If you want people’s opinion they’ll give it to you the way they want how they want it.  Social media will NOT fix a bad product or negative customer experience.  What it will do is to force you to reveal your brand’s true persona, allow additional means for your customer to reach you, and capture relevant analytical data for product and service improvements.

If you read my previous post “The 12 Principles of Brand Strategy,” you’ll know that principle number 2 states that your brand is your business model.  Well, if your customer’s behavior is changing, shouldn’t you adjust your business too?

Checkout these challenges to social marketing effectiveness, and you’ll understand why it’s not so simple to integrate social media into your existing marketing practice.  Is it worth to invest in obtaining a large number of Facebook fans or Twitter followers?  How do you convert them into sales?

There needs to be a transition and I believe hybrid marketing on a single integrated platform will be the next trend to emerge in an attempt to leveling the playing field across all social networks.

I hope you find the information helpful, share your thoughts what do you think? Have you integrated social media into your marketing strategy?

5 Keys to Incorporate Social Media in Your Business

by Eric Tsai

Last week BusinessWeek published its 100 Best Global Brands 2009 and to no surprise, financial brands were largely untrusted which dragged down all brands across the board with them.

Moving forward, brands are rethinking how they can win back the trust focusing on the psychological aspect of marketing and advertising in an attempt to rebuild its relationship with customers.

You can see from the gradual shift in magazine ads and TV commercials using regular everyday people to lead advertising campaigns instead of celebrities with messages such as the “we’re here for you in this economy” (Hyundai guarantee programs, Subway’s $5 foot long, Gieco’s money saving tips), or the “we stand by our product and services” (GM’s may the best car win, Carl’s Jr.’s value comparison with McDonald’s Big Mac) that centers around authenticity.

Serious Trust Issues

What’s interesting is that with more marketers embracing social media, the actual adoption bottleneck are brands themselves.

I’m not speaking about the Fortune 500s but mainly the small-to-midsize businesses (SMBs).

Why is this important?  Because small businesses represent 99% of all employer firms and employ nearly half of all private sector employees, small businesses span all aspects of our economy.

Digital marketing is no longer a fad and has a solid track record of proven success even in this economy but what brands must realize is that building trust takes time and innovation. 

It’s nice to see marketers are quickly to embrace social media such as Twitter, Facebook, YouTube, blogs, creating their own online community focusing on customer acquisition and retention.

I’m a big believer that social media is in the process of reinventing PR, marketing and advertising by integrating some of these processes into one multi-functional, all encompassing vehicle to engage consumers.

But this is not the answer to earn back the trust, in fact as I’ve mentioned before, these are simply tools and tactics that has evolved due to the shift in consumer behavior and technology innovation.

Companies should re-evaluate their brand strategy to focus on ROI and profits by doing something tangible that align with their core mission while demonstrating ethics and transparency.

Social media is like the hot new gadget that you just bought but haven’t quite figured out what all the buttons can do and the hidden features beneath it.

To some brands, they’re uncomfortable with having conversation with their customers, while others simply refuse to hear the negative comments from the community. 

To marketers, some are starting to figure out how to integrate it with their existing offering, while others are grasping the idea to demonstrate ROI to their clients.

One thing is for certain, social media can help brands in accelerating its reputation (good and bad) and the real question is how to best leverage it to improve an organization as a whole.

Social Media and Business Intelligence

It’s no longer difficult to collection data on customers, data such as conversion rate, click-through rate (CTR) and eyeballs (page views) are nothing new.  The real challenge is to identify useful data to help drive business success.

Analytical data are only as good as developing a strategy and execute against it not to mention taking into account broader factors such as advertising ROI, media weights, distribution, in-store activities, promotions and even closely examining competitors’ brands.

It takes an enormous amount of effort to aggregate meaningful data to build a case for cause and effect correlations between buying and not buying.

Web 2.0 and social media practices is actually a narrow focus in evaluating ROI unless your business operates primarily on the internet.

Social media marketing can certainly build influence and trust, but they should be part of a business intelligence initiative.

Businesses should consider integrating social media tactics with CRM (customer relationship management) tools in a collaborative effort to improve business processes visibility while helping customers in the process of buying.

This kind of business strategy, supported by a technology platform, business rules, processes and social ROI, will invite the new generation of social customers (particularly Gen Y, 18-27) into the conversation (that they will own anyway).

Integrating social media into traditional channels of engagement requires risk and change management, but that’s exactly what innovation is all about – taking calculated risks, implement unconventional approach to create a trusted and transparent business environment to drive exceptional customer experience.

The goal is to streamline business processes to give the customer a voice, bounce ideas within the organization, leverage crowdsourcing to cultivate an authentic community.

Done right, this can ease the transition for organizations (new and old) into the growing social media-centric business environment that will continue to test the boundaries of trust.

And trust is what drives pricing power, profit margin and customer retention.

It is what your community thinks and shares with one another. Growing trust will be more important than growing the customer base.

transitioning

5 Keys to Incorporate Social Media

1. Transition into hybrid business model by integrating social media with existing marketing strategy that aligns to business initiatives both online and offline

Drive print/radio/TV traffic to your social network that can spark conversation with your team, or leverage hyperlocal blogs/media for regional advertising/promotional campaign to drive traffic to retail locations.

2. Identify an internal social media administrator candidate to spearhead social media strategy that can examine the processes for failures at the moments of truth

Preferably someone that truly cares about your brand that gives real feedback, not someone from an agency or an consultant that just get paid by the hour to care.

3. Provide analytical capabilities to capture customer insight and purchase processes with CRM tools to enhance visibility into key business processes performance

Cross reference social media statistics/dialogues/behaviors with CRM telesales or retail sales data to find correlation in campaign effectiveness, tie it back to ROI and resource allocation.

4. Leverage crowdsourcing to drive product and service innovation by providing a platform for ongoing engagement, evaluate customer retention

Combine email campaign, direct mail campaign and events to encourage call-to-action feedback with incentives to reward participants, identify the fans and new sources of expertise within the community for word-of-mouth marketing.

5. Pinpoint fact-based data related to more areas of the business decisions and take action to increase the success of change initiatives, create pilot programs, let the customer take control of the purchasing experience

Say one of your product sells really well during a specific time with a specific demographics, figure out why and where it’s coming from; conduct a survey to abstract relevant data on buying pattern and the source of sales reference to improve the purchase experience.

Organizations looking to transition into the social business model will need to think outside the box, get out of the comfort zone and adjust current models to find the right balance of people, process, and technology to fully realize the benefits of this emerging medium.

Are you transitioning your business into social media? 

Are you experiencing success or having issue?