3 Social Media Marketing Tips for Business to Consumer Brands

by Eric Tsai

I’ve been busy with end of the year work and now I’m back on track.  For those of you that follow the designdamage blog since the beginning, I want to take this opportunity to thank you for the support and hope I can continue to provide value for your time.

Although no new entries were posted for the past weeks, I continue to follow industry trends and send out useful content via my Twitter account.  You can follow me via @designdamage

Now back to work.

After reviewing some important data and content from 2009, I’ve come to these conclusions that in 2010 social media will follow the footsteps of SEO and other forms of digital advertising: on the path to commoditization. As I’ve mentioned in the post “When to Adopt Social Media for Your Business?” that social media is still in the early adopters stage, but it’s heading towards early majority phase as the concept of connecting and sharing information online are gradually accepted.

According to eMarketer’s report supported by research from Cone More than one-half of new media users (53%) believe brands should have a presence in new media, interacting with consumers as needed or by request only, while a further 36% demand a new media presence with regular interaction.” These type of users wants experience, dialogue and immediacy so if you want in on social media, you must provide a combination of those attributes.

So what can you do that’s different in 2010 that you haven’t try in 2009?  Here are some ideas to get you started:

Create New Brands & Co-Branding

The shift in consumer behavior will continue towards “value” even for luxury brands so private label brands and sub-brands will stand to benefit moving forward as we emerge out of the recession slowly.

For companies with strong core brand, creating a sub-brand or a new one that targets new customer base has been a popular strategy.

For businesses looking for cost-effective and fast-to-market ideas you can try partnering with other companies for a co-branding effort that creates exposure in other markets while extends your brand story.

Develop a Fascinating Story For Your Brand

The word-of-mouth marketing will continue to grow acting as trust agents providing top of mind reference for consumers.  Brands will shift advertising strategy to focus more on storytelling rather than push advertising.

This means developing a story that demonstrate the personality of the brand in campaigns such as supporting non-profit initiatives (social responsibility, cause marketing), co-branding to create unique content, or collect and promote stories about your customers.

The idea is to implement customer engagement strategies for the company to build a strong human connection that helps build brand loyalty.  Incorporating free resources to help educate your audience is another way to develop a story.

Another great way to build a rewards program around your social network fans by rewarding their participation. Another great way to ramp up your fans is to offer them something they can’t get elsewhere

Collect Valuable Customer Data

It’s time to review your customer data collection process especially if you’re going to use social media with traditional media.

Information such as where they are, what they spend money on, what are the key influences, and what content or applications they download can provide you some advantage for tailoring future product/service experiences to the individual.  Just knowing their demographic or what they buy will not be enough, leverage social media’s crowdsourcing feature and establish

The take away: It’s indicative from this past holiday shopping data that consumers simply wants more for less.  This is where smart companies find ways to cut costs so they can pass on the savings to the consumers.

It’s about keeping the customers coming back, allowing word-of-mouth to work in favor of value for money incentives, and maintaining a healthy relationship with your customers. Why would customers come back or past on your name to others when you didn’t provide value beyond what they paid for?

If you’re a small business, think of ways you can leverage technology instead of people and be creative with your marketing dollar.

Discounts, promotions, rewards programs are all vehicles to build a relationship with your customers.  You may see smaller profits and longer time to get the ROI (return on investment), but that’s all part of investing in your customer for the long haul.

If you want customers to be loyal to your brand, be prepare to deliver a consistent level of value and experience that they can come to expect in 2010.

The goal is to build and maintain customer trust, a key to gaining access to more profitable relationships with customers and competitive differentiation.

We’ll be looking at B2B ideas next to help with strategy planning in 2010.

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?

The 12 Principles of Brand Strategy

by Eric Tsai

In a situation where you’re selling to multiple personalities, it’s best to first connect everyone on a common ground then articulate clearly what’s in it for each of them.

The goal is to stimulate an engaging conversation that allows us to change perception, diagnose expectations and bring clarity to the dialogue.

That’s the essence of developing a brand strategy – the foundation of your communication that builds authentic relationships between you and your audience.

It is by defining your brand strategy that allows you to utilize marketing, advertising, public relations and social media to consistently and accurately reinforce your character.

Without defining the core strategy, all channels of communication can often become a hit and miss expense.

Here’s 12 brand strategy principles I believe to be the key to achieve business success.

1. Define your brand

It starts with your authenticity, the core purpose, vision, mission, position, values and character.  Focus on what you do best and then communicated your inimitable strengths through consistency.

There are many examples of companies acquiring other brands but only to sell them off later because they don’t fit within the brand and its architecture.

Microsoft acquired Razorfish in 2007 when it bought aQuantive, a digital marketing services company, for about US $6 billion then sold it a few years later for $530 million.

Simply put, Razorfish isn’t a good fit with Microsoft’s brand strategy.

2.  Your brand is your business model

Supports and challenge your business model to maximize the potential within your brand. Think of personal brands like Oprah, Donald Trump, Martha Stewart and Richard Branson.

These individuals practically built their business right on top of their personal brand; everything they offer is an extension of their brand promise.

3. Consistency, consistency, consistency

Consistency in your message is the key to differentiate.

Own your position on every reference point for everything that you do. President Obama focuses on one message only during his campaign, CHANGE. BMW has always been known as the “ultimate driving machine.

4. Start from the Inside out

Everyone in your company can tell you what they see, think and feel about your brand.  That’s the story you should bring to the customers as well, drive impact beyond just the walls of marketing.

That’s example how Zappos empowers employees to strengthen consumer perception on its brand.

5. Connect on the emotional level.

A brand is not a name, logo, website, ad campaigns or PR; those are only the tools not the brand.  A brand is a desirable idea manifested in products, services, people, places and experiences.

Starbucks created a third space experience that’s desirable and exclusive so people would want to stay and pay for the overpriced coffee.

Sell people something that satisfies not only their physical needs but their emotional needs and their need to identify themselves to your brand.

6. Empower brand champions

Award those that love your brand to help drive the message, facility activities so they can be part of the process.

If your brand advocate doesn’t tell you what you should or should not be doing, it’s time to evaluate your brand promise.

Go and talk to someone that works at the Apple retail store or an iPhone owner and you’ll see just how passionate they are about Apple.  It’s a lifestyle and a culture.

7. Stay relevant and flexible

A well managed brand is always making adjustments.  Branding is a process, not a race, not an event so expect to constantly tweak your message and refresh your image.

Successful brands don’t cling to the old ways just because they worked in the past; instead, they try to re-invent themselves by being flexible which frees them to be more savvy and creative.

Here is an example: when the economy tanked this year automaker Hyundai came out with an assurance program that lets you return your car if you lose your job with no further financial obligation and no damage to your credit.

The results?

As of end of February, only two buyers have taken advantage of this program but it has boosted their sales by 14% year-over-year in Q1, only one of the two companies increased revenue while companies such as Honda experienced a drop of more than 30%.

Follow by that campaign in July, as gas prices expected to push higher during peak summer travel months, Hyundai came out with another program that guarantees a year’s worth of gas at $1.49 per gallon on most models.

8. Align tactics with strategy

Convey the brand message on the most appropriate media platform with specific campaign objectives.

Because consumers are bombarded by commercial messages everyday, they’re also actively blocking out the great majority of them.

Invest your branding efforts on the right platform that communicates to the right channels.

Television may be expensive but it has a broader reach, wider demographics and can produce instant impact.  On the other hand, social media may seem cheap but it takes time, resources and may not give you the desire outcome.

9. Measure the effectiveness

Focus on the ROI (return on investment) is the key to measure the effectiveness of your strategies.

Often times it is how well your organization can be inspired to execute the strategies. It could also be reflected in brand valuation or how your customers react to your product and price adjustments.

Ultimately it should resonate with sales and that means profitability.  But don’t just focus increasing sales when you could be getting a profit boost by reducing overheads and expenses as well.

Give yourself options to test different marketing tactics, make sure they fit your brand authenticity and aligns with your strategy.

10. Cultivate your community

Community is a powerful and effective platform on which to engage customers and create loyalty towards the brand.

In an active community, members feel a need to connect with each other in the context of the brand’s consumption.

We all want to be an insider of something, it excites us to tell people which community we’re part of and what knowledge we posses.

In many ways it’s our ego that prides us to be part of a sports team or a professional group.

Guess what car would members of the Porsche club consider first when it’s time to purchase their next vehicle?

Brand communities allow companies to collaborate with customers in all phases of value creation via crowdsourcing such as product design, pricing strategy, availability, and even how to sell.

11. Keep your enemies closer

Even if you have the most innovative, highly desirable product, you can expect new competitors with a superior value proposition to enter your market down the road.

The market is always big enough for new players to improve what you deliver better, faster, cheaper. Call it hypercompetition or innovation economics, competition could be good for you believe it or not.

It challenges you brand to elevate the strategy and deliver more value.

Just look at how the Big Three (automobile manufacturers General Motors, Ford, and Chrysler) got crushed in the past decade by competitions from Germany and Japanese.

Not only do their competitors make a better product, they’re more efficient doing it and command a higher brand loyalty.

In 2008, Toyota overtook GM while Honda passed Chrysler in US sales.

12. Practice brand strategy thinking

IDEO’s CEO Tim Brown calls design thinking “a process for creating new choices.

Essentially it means to not just settle for the choices currently available but to think outside the box without being limited.

This concept actually applies to your brand strategy creation process that I called brand strategy thinking.

It’s always easier to execute tactics than coming up with a strategy because it implies the possibility of failure.

It’s much faster to emulate what worked for your competitor than to come up with something original and creative.

But the truth is, that’s not you and it violates the first principle of brand strategy.  Brand strategy thinking is about creating the right experience that involve all the stakeholders to foster a better strategy.

Leverage the ecosystem that includes your employees, partners and customers to help you articulate your brand strategy so they sync together.

The take away: Having a brand strategy will bring clarity and meaning to your brand so you can focus on making, creating, and selling things that people actually care about.

If you could do that, your brand would be unique and memorable on its way to become an esteemed brand.

Are there any you disagree with?

Let me know if I’m missing anything.

How Social Media is Transforming Business

by Eric Tsai

Lately I’ve been researching on how brands are using social media to improve their business.

While doing a bit of thinking on social branding, I recalled a conversation I had with a friend that just launched a web2.0 startup business.

The one advice I gave was to launch it as soon as possible without worrying too much on branding.

The idea is to deploy your initial idea and allow your users to tell you how to evolve the product.

That’s how majority of the new web startups utilize crowdsourcing with an emphasis on the power users then really listen to what they have to say.

The brand development aspect of a startup isn’t as important as the initial user experience.

It got me thinking about business models and how more and more companies are finding it necessary to transform their business model due to the economic crisis.

In addition, the shift in consumer behavior will cause brands to adjust to a fundamentally altered playing field.

In most cases brands will find it hard to transform themselves unless they’ve already got a flexible, dynamic long-term strategy that embraces change.

This means dismantling silo culture within the organization while fostering cross-functional collaboration to spark fresh thinking.

Brands that have this fluid approach are more likely to adapt to change through uncertainty.

Brand Fluidity Creates Advantage

In my previous article “The Emerging Trend of Hybrid Marketing Model,” I pointed out that hypercompetition is no longer allowing businesses to have a sustained competitive advantage, so the idea approach for brands is to have an agile business model.

This happens consistently in the tech industry where every 3-5 years technology evolves and often improves (1.0 to 2.0) leading to a need for adoption.

The key is to stay flexible and scalable because products, services, and business models will evolve over time as knowledge becomes ubiquitous which leads to the path of commoditization altogether.

Just look at the costs of electronics, web hosting, printing, or even internet bandwidth have dropped in price in the past 10 years. In fact, not only are they cheaper, you get more for less even with inflation.

By having an nimble business model, it’s possible to build brand momentum that has relevance in addressing consumer needs.

And relevance is a good predictor of short and long-term success.

However, more focus should be put on proven short-term tactics that aligns with long-term goals.

Short-Termism Is Not Sustainable

The eruption of social media has forced brands to incorporate this new tactical tool as part of the overall brand strategy playbook.

This is indicative of the validity from companies like Intel, IBM, eBay and Wall Street Journal that have moved quickly to publish social media guidelines for their employees.

In a structured brand ecosystem, social media is an unproven short-term scheme because it will continue to evolve as an ongoing, living tool that facilitates real time dynamic conversations.

I’m not denying the success that some brands are having in social media but in general most brands are still trying to figure out the arc of its trajectory in pursing the adequate usage of Twitter, Facebook, LinkedIn, and even blogs.

Brands that quickly jump on the bandwagon without defining the desire outcome are focusing on short-term solutions that are simply band-aids not cures.

Coupled with a lack of attention to the overall strategy, fundamentals, and conventional approaches to long-term value, it’s simply not a sustainable model.

What’s important is to create an unambiguous structure for brand fluidity while maintaining energy and involvement throughout the organization.

The transformation extends well beyond tactics. Brands must become more engaging by being more social, this means building meaningful relationships that resonates with their audience.

Social Media Accelerates Upstream Reciprocity

Every relationship has a purpose especially on the increasing social web. What social media demands is trust and authenticity.

I see it as doing what you promise and be consistent especially in transactional business. In a recent article “Altruism Repays the Best-Connected Individuals” from Technology Review published by MIT, stated that:

Unselfish behavior spreads through society in a way that most benefits the “hubs” in the network.

The article basically illustrated how being unselfish will benefit you at the end because those who have been helped will likely to go on to help others, then spreads through a group creating the upstream reciprocity phenomenon.

There is actually an entire study done with formulas to support the phenomenon and you can go read the “Upstream reciprocity and the evolution of gratitude” analysis from U.S. National Library of Medicine if you like.

reciprocity_stream
I found the information fascinating because it mimics the structure of a social network.

Apply this concept to social media and you’ll realize that you’re the red dot A and everyone else is dots B and C. Imagine altruism can be any form of your direct or indirect influence in social media.

It could be the content on your blog, tweets you’ve answered, or even products and services you’ve sold (ebooks, videos, webinars, web design, copywriting, consulting, etc).

The takeaway is social media accelerates both upstream and downstream reciprocity especially for reputable individuals.

In business, the act of unselfishness is another form of the Freemium business model. And this immediately hit home with me on how social media is transforming the way companies are doing business.

You can no longer neglect your reputation online because that’s where the conversation about you is taking place.

Social Transformation

Social media has evolved to be the hub for instant and viral reciprocation for any organization’s internal structure and external engagement.

The power of its reach and the openness of its platform commands the kind of transparency that challenges your core value proposition.

It really doesn’t depend on the wisdom of gurus or experts for its dynamism.

That’s the primary reason it will almost certainly withstand the “it’s a fed” challenge.

Social media is transforming businesses and it matters.

From Twitter to Facebook and every web2.0 tool in between, consumers are more and more concerned with the integrity and intent of the brands they interact with, while employees are less afraid to expose how companies work internally.

The challenge for marketers is not to merely appear engaged, but to actually be engaged – to live up to the promise and deliver.

I hope this is helpful in uncovering the implications of social media in business, it’s important to identify the fundamentals and rethink the overall picture.

I know I haven’t analyze any of the specific social media tools in detail, but you can simply conduct a Twitter or LinkedIn search to find every possible tactic and how-to’s out there by the so-called “experts.”

The Emerging Trend of Hybrid Marketing Model

by Eric Tsai

A day after my last post on how traditional media is deteriorating, Microsoft’s CEO, Steve Ballmer speaking at the Cannes Lions International Advertising Festival, argued that traditional media will not bounce back, all content consumed will be digital, we can debate if that may be in one, two, five or ten years.

In some respect the context of Ballmer’s statement is indicative of the fact that advertising revenues continue to shift to where the interaction is taking place – online.

There is definitely a shift in consumer behavior as the online experience, through social media, becomes more acceptable, accessible and affordable.

Keep in mind that social media in nature has low barrier to entry with the lack of gatekeeping process.

This is a double edge sword providing that content can be generated rapidly but the quality is dramatically reduced.

The message of social media is totally radical, pervasive, and decentralized while the content of social media focuses on the concept of crowdsourcing defined via Wikipedia as “the trend of leveraging the mass collaboration enabled by Web 2.0 technologies to achieve business goals.”

That’s what’s carrying out the new social media revolution because it’s basically an extension of our sense of voice with instant speed for community-based design.

During Jeff Pulver’s 140 Characters Conference, Chris Weingarten of Rolling Stone made a great point: Crowdsourcing kills art because crowds have terrible taste! If you let people decide then nothing truly adventurous ever gets out.

I couldn’t put it better myself.

People stop asking why information gets delivered and the quality of them.

Typically authorities have a quality assurance process in sequence and in concatenation to produce high quality, relevant content.

What we must do on the receiving side is to continue to question the legitimacy and integrity of the source.

Social media allows us to connect horizontally across each other with relative ease, but just as Jeremiah Owyang recently pointed out that human don’t scale which questions the authenticity of top social media bloggers and news blogs.

This is very true in a sense that because we don’t scale, we’re only able to consume limited amount of information combine with short attention span, it’s a race to absorb as much as possible in a short period of time.

This propelled the publishers to publish rapidly; furthermore the increasing competition has put a sense of urgency pressure to compete for the same audience.

Ultimately the brand that can scale and remains relatively authentic perception-wise will be the ones to profit the most.

Hypercomptition To Hybrid Marketing

Hybrid Marketing

There is no sustained competitive advantage anymore according to Richard D’Aveni, professor of business strategy at the Amos Tuck School at Dartmouth College. He argues that advantage is continually created, eroded, destroyed and recreated through strategic maneuvering.

I found this particularly interesting because that’s what’s going on with the traditional media landscape.

Traditional media rules and orders can’t be applied perfectly under the new regime of communication (social media) and thus formations of authorities are under attack from these new forms of expression.

Simply put, it’s not a technological argument but the outcome from social and cultural conditions.

Think how content is produced, reproduced, distributed and consumed – more people are adjusting to the “new way of doing things” abandoning the old ones which leads to the permanent shift in behavior.

However, marketer should not disregard traditional media altogether, but combine traditional media with social media to form an integrated strategy or the “hybrid marketing” model.

In the hybrid marketing model, it’s about drawing a business model that works within the ecosystem of your brand.

The key is to have a fluid approach in creating a meaningful dialog with your market. Instead of focusing on what marketing tactics to use strategize on aligning your brand strategy with your business goals and view social media as one of the arsenal to choose from.

I believe this is a more practical approach and allows for integrated efforts for companies with branding 1.0 infrastructure to transition into branding 1.5 strategies because there is no point in applying branding 2.0 strategies if the infrastructure is not ready for it.

The idea is that the marketing strategy will streamline with the resources creating the desire outcomes that are measurable. Brands must consider the costs associate with deployment, control, and management to sustain such strategy.

There is a place for the shrinking traditional media. It will continue to evolve based on how we act and react to technology.

However, it won’t be technology that drives the outcome of the new media, but the cultural value of intellectual property and how it gets produced and consumed.

What’s your marketing strategy?

Perhaps you’re already utilizing hybrid marketing in your business model, share your thoughts here.