Wednesday, March 30, 2011

The objective of social media is a lifestyle, not initiatives

Social media is a new way for us to get back to what matters.  It is an opportunity for companies to become amalgamations of people rather than “corporate entities.”  At its best, social media is simply a way for people to engage with one another across the expanse of a big world. 
That is why I believe that organizations cannot succeed in social media until they have built a social media culture internally.  Employees are both the first target market and the drivers of social media strategy success; they learn to share more openly, listen more carefully, and engage more fully with the entire operation.  Then they can do the same with their customers and vendors and partners.
Most organizations today believe that they “have” to be in social media.  They are partly correct.  Success demands that organizations be more social, that they manifest the underlying reason for the success of social media. 
But most organizations seem to view social media simply as a new business tool for selling, or sometimes for lower cost customer service.  The statistics are overwhelming.  eMarketer forecasts a 55% increase in ad spending on social networking sites, from almost $2B in 2010 to over $3B in 2011.  SaleSpider found that 75% of small and medium business owners they surveyed planned to increase the percentage of marketing dollars allocated to social networking in 2011.  The statistics go on and on.   It’s like the moves from print to radio to television…bigger, broader, but with little change to the underlying operations or objectives.  Those results are short-term and need continuous spiking. 
Umair Haque said it in his article in The Harvard Business Review, http://ocvets4pets.com/archive21/From_Social_Media_to_Social_Strategy_-_Umair_Haque_-_Harvard_Business_Review.pdf   It’s good to go back to the basics.

Monday, March 28, 2011

The 3 Stages to Becoming a Social Media Enabled Organization

When social media “works”, it changes how an organization is governed, how people work together, how employees approach their jobs.  How do organizations achieve the necessary change?  How do they evolve? 
Most organizations already have functioning, and often successful, business models when they begin to consider social media.  Employees have roles and responsibilities that are defined and on which they are measured.  How do “old-line” companies shift their operating style?  Creating the new environment takes time and intent.
I have found that most organizations go through 3 stages of transition, evolving from their established cultures and structures to more open, engaged, “social media” organizations over time.  Companies start with limited experiments (like single seeds in pots), expand to larger and more formalized efforts (plots with rows and cultivation plans) to engaging a whole plantation (end-to-end enterprise changes).
·        Pots – This is the first stage, when organizations test and learn, experimenting with diverse and separate initiatives.  Everything is contained in a separate pot.  Investment requirements are low.  The focus is on distinct activities – a Facebook page, a live chat on-line support function, a blog…  What seems to fit best with the organization?  What drives results? 
·        Plots – At this stage, the new activities that individually fit best begin to be accepted, and management begins to include them in broader planning.  Formalized structures and processes, along with increased investment, begin to take hold.  Culture change becomes more deliberate through new hires, employee training, and shifts in roles and responsibilities. Performance measurement begins to include “social media” factors such as buzz and the impact of ambassadors. 
·        Plantations –Social media activities and thinking are integrated into the core business and aligned with the strategy; the organization has reinvented itself without losing the essentials of its business.  Social and digital media are no longer distinct from the overall strategy.  The entire plantation has evolved to a new way of operating.
Companies can and do change.   Test and Learn.  Formalize and Change.  Integrate and Reinvent.

Friday, March 25, 2011

6 Customer Benefits of Internal Social Networks – Disarming Road Warriors

“Road warriors” usually earn that name the hard way. 

I recently had a two-leg trip, flying first to Cleveland and then to New York.   I arrived 90 minutes before my flight, to see the big red Cancelled on the board.  It was the airlines last flight to Cleveland that day.  The airline wanted me to wait until the next day to fly, but I would miss my meeting.  So I bought another ticket on a different airline and requested a refund from the original carrier; and then the fun began.

My original ticket had been purchased through a “partner” airline.  The agent at Airline One, who really was trying to help, had to call the internal Help Desk to determine how to handle my one-leg refund.  The internal Help Desk was flooded with calls – all for the same issue.  Passenger anger visibly rose as the agents hung on hold, and the passengers could hear each in turn asking the SAME questions.   

I finally received an “authorization” for a refund, but the agent claimed the partner airline had to process it.  Partner Airline sent me back to Airline One.  And then back to Partner Airline.  I was getting lots of exercise, but not much satisfaction.

Then an agent at Partner Airline said he couldn’t process the refund, but ANOTHER agent there could.  I waited for him.  Good thing I had a long wait for my flight.  The agent again really was trying to be helpful, but he didn’t know how to handle the situation either.  Twice he disappeared for long periods behind a closed door to: Ask someone else? Look it up?  Call the Help Desk?

Same problem as Airline One.  Too much time holding for the Help Desk.  Agents were calling for each passenger (and the line was growing!).  I finally got my refund, and heard the agent tell the next person that they couldn’t process the requests; she had to wait and go on-line to request the refund.  They also called Airline One and told them to stop sending passengers over; Airline One could handle it themselves. 

The agents were angry with their “partner” agents; they were tired of being yelled at by weary passengers; they couldn’t get sufficiently rapid response from their own company.  They punted.  The warriors hit the war path verbally and on-line.

Wow.  The number of loud, angry passengers was impressive.  People were still angry when the flight I had snagged finally departed 5 hours later.

A fairly simple internal social networking platform linking the agents with the Help Desk staff would have done wonders.  The benefits:

§        A one-to-many communication model   

§        Quicker access to information 

§        Faster responses to not-really-one-of-a-kind problems  (maybe someone else had already encountered the problem!) 

§        Happier passengers who screamed less

§        Agents who were less frustrated   

§        Reduction in bad WOM 

Internal touchpoints cross over to affect customers.  When employees work smoothly together, customers benefit.

The next leg of my trip…my flight was Cancelled….

Tuesday, March 22, 2011

Internal Social Networks: Electronic Face-2-Face

Irwin D. Simon, Chairman, President, and CEO of Hain Celestial Group, could be the poster person for social corporate culture, at least based on an interview in the NY Times, http://www.nytimes.com/2011/03/20/business/20corner.html?pagewanted=1&_r=2 .

Given his comments in the article, however, I am betting that Hain Celestial Group uses social networks very sparingly internally.  Simon commented that he is “a big communicator by telephone and by person…I’m just big into communicating face-to-face, eye-to-eye and not through e-mail…we lose a sense of communication because everything is done electronically.”
I agree that personal communication is the gold standard.  It enables leaders to share their passion, to expand their vision, to grow.  But ongoing face-2-face communication with a broad and diverse group of employees is simply not feasible in a large organization. 
Hain Celestial reported a little over 2000 employees in June 2010.  How many of those employees ever actually talk to the CEO?  Communicating one-to-one with employees might be a high priority, but it’s not the only priority.  Establishing relationships with vendors and customers are also important for the CEO.  The FY2010 Hain Celestial annual report includes as one of its risk factors its dependence on the services of the CEO, and notes that “the loss of the services of Mr. Simon could harm our business.”
Internal social networks help create organizations that are not dependent on any single individual.  The team captain will always be important; leadership counts.  But the internal structures, culture and processes should both support the leader and enable the organization to operate without him/her. 
Internal social networks enable bigger organizations to maintain the open, engaged culture that Simon describes by:
·        expanding and enhancing the conversation 
·        enabling the CEO to engage with more people
·        forging stronger team bonds across a bigger team
·        opening doors and keeping them open
It’s about acknowledging and respecting that even the CEO doesn’t have all the answers.

Friday, March 18, 2011

Measuring What Matters – the 4 Big Buckets on the Benefits Side of Social Media ROI

Social media ROI:
 the measure of what matters (profit…revenue…mission…) versus the resources required to achieve it.
“What matters” varies by organization, and helps to create the unique culture, vision, and market positioning that distinguishes one organization from another.  Across organizations, however, 3 big benefit categories emerge:
·        Revenue
·        Profitability
·        Mission
While non-profits might not talk about “revenue” and “profitability,” the need to generate “funding” and to maximize “cash after operating costs” are equivalent when we are calculating ROI.
Leaving aside “mission” for the moment – not because it is less important, but because it is more variable – the critical issue is how to assign returns to social media activities.  Returns are rarely one-to-one, and are often viewed as the cumulative effect of many initiatives.
No question that synergies across digital and non-digital activities multiply returns.  ROI calculations should, then, prove to be conservative and attainable!
Generally, I use 4 categories of benefits when developing a social media business case:
·        New Direct Revenue
·        Impact Revenue
·        Cost Reduction
·        Brand Image and Fundraising
New Direct Revenue is the easiest to measure.  At times, new direct revenue results from social media activities opening new sales channels. 
Greater customer insight can also create new revenue opportunities.  iRobot, for instance, used a customer support forum to glean insights about how customers used the product.  To their surprise, the company learned that customers were treating their mini vacuums as pets and using them to play games.  As a result of that insight, the company started a multi-million dollar revenue stream selling paints and “skins” for the vacuums.
Impact revenue measures the incremental sales that social media activities drive through traditional channels.  Intuit established a community forum and monitored the conversations for lead generation.  The company was transparent, openly engaging in conversations when they thought an upgrade or alternative product would resolve a problem and inviting the customer to call if s/he wanted to pursue the option.  In the first year, Intuit realized a 4% increase in their share of market (a feat for the already dominant company!) and a 30% bump in sales. (For more on Intuit: http://www.businessweek.com/magazine/content/09_28/b4139066365300.htm and http://www.webpronews.com/social-media-lessons-from-the-big-brands-intuit-edition-2010-03 )  
Cost reduction, usually associated with a decline in customer service calls, is the most common go-to benefit measurement.  Every deflected call increases the bottom line.  Customer service via community sites, Facebook, and Twitter have often also improved customer satisfaction as a result of decreased response time and more knowledgeable “super users” providing insight and guidance.
Brand image and fundraising is the final big bucket of benefits, serving both financial considerations and mission.  In the non-profit world, I have seen greater interest from sponsors when the organization is actively involved in social media.  Corporate partners note that the digital activity provides greater reach and a more vibrant network. 
Examples of corporations using social media to re-position themselves are legion, illustrated by the by-now famous MyStarbucksIdea that enabled Starbucks to reconnect with customers and employees.  When Starbucks began to focus on digital and social media, the company realized its first gain in same store sales in 2 years.
Each of these buckets of benefits yields measurable financial return. 
Along with the costs discussed yesterday, the measures enable realizable ROI – the third of the 3 key actions needed to convince CEOs of the value of integrating social media into all aspects of the business.
1.       Get the executives personally involved
2.    Conduct show-and-tell education sessions
3.      Demonstrate the ROI


Thursday, March 17, 2011

The Cost Side of Social Media ROI

In yesterday’s post, I defined social media ROI as the measure of what matters (profit…revenue…mission…) versus the resources required to achieve it. 
Starting with the resources required, we can identify the specific costs associated with a social media strategy.  Costs derive from two major sources: technology and people.
Technology
The greatest difficulty generally lies in disentangling those technology costs that result directly from social activities from those that would – or should – occur “anyhow.”  I have found that the ROI for many organizations just venturing into social media can be so high that the distinction seems irrelevant to the decision to proceed.  But it is important for accurate tracking and decision-making down the road.
One large non-profit, for instance, realized that technical upgrading was necessary in order to reap the benefits of the new social strategy.  The failure to upgrade previously, however, was impeding their ability to operate efficiently and to grow even in the existing environment.  Regardless of the social media strategy, we agreed that the organization needed to add:
·        a public front-end website redesign, including development of a common portal that would unite the siloed units and help users to understand and navigate all of the benefits and offers of the organization
·        an e-commerce and customer feedback platform
·        a CRM system
While those costs were not a direct result of the social strategy, other costs were, including:
·        a social networking platform, which could be a simple add-on and link to the CRM or a dynamic user experience with community segmentation
·        digital marketing costs, covering content creation and digital marketing tools as well as an analytics platform
·        digital content delivery, which encompassed both a storage and delivery platform and external resources to help digitize current content
People
Personnel costs exceeded the technology costs, even though we found a number of social media savvy staff.  The use of existing resources helped to control the incremental costs ~and drove new excitement throughout the organization ~ but people costs were still the dominant factor in the investment.
Because we wanted to change the culture and embed a social strategy within all decision-making and activities, we did not set up a separate social media team.  Three categories of personnel expenditures, however, were still needed.
·        Digital strategy implementation assistance – governance, program management, ongoing education and training, and execution – imbuing social thinking into all activities – was the major cost for the first year.  Some of the cost was for external assistance, which ramped down as the internal skills improved and the culture began slowly to shift.
·        Digital Project Champion – a senior person to facilitate and pro-actively drive the social strategy going forward.  The Digital Project Champion is an internal subject matter expert, a facilitator to bridge across the distinct organizational units, a corporate strategist, and a clear-eyed “energizer” and non-conformist.  As the driver of a virtual center of excellence, the Digital Champion has a lot of dotted line relationships, but no direct reports.
·        One new staff resource, who brought expertise in a new revenue opportunity that the social strategy had created.
Detailed cost estimates and expenditure timing were required before forecasting the impact on revenues and mission.  For this organization, a conservative ROI was calculated at 200%.  WOW!  An easy decision to move forward, and to do so in the “right way.”
Tomorrow I will look at the other piece of ROI – revenue and other measures of what matters.

Wednesday, March 16, 2011

Without a demonstrated ROI, executives will not consider social media a serious game changer

The social business creates greater engagement with customers.  It helps to drive excellent customer service.  It has greater understanding and insight into customer behaviors and customer needs.  But these issues are important ONLY because they help drive both the top line revenue and bottom line profitability, and in some organizations also help to achieve a mission.
So the third of the 3 key actions to convincing CEOs of the value of integrating social media into all aspects of the business is crucial:
1.       Get the executives personally involved
2.    Conduct show-and-tell education sessions
3.      Demonstrate the ROI
What is social media ROI?  The old definition, “Your business will still be around in 5 years” (Erik Qualman), is still true.  But it is incomplete.  We need to add a second consideration: 
the measure of what matters (profit…revenue…mission…) versus the resources required to achieve it
What matters and the associated cost can be measured.  We will consider some specific examples in the next post.

Tuesday, March 15, 2011

The Comfort Level of Executives Drives Effective Use of Social Media

According to Socialcast and Web Analytics World (http://www.webanalyticsworld.net/2010/10/how-executives-use-social-media.html), over 80% of executives use social media sites every day.  Sounds good.  But digging a bit deeper, the data reveal that while 92% of executives use LinkedIn, only 5% have a blog, and only 3% access an internal network.  What’s going on???
Executives limit the value of social media by confining it to 3 main purposes:
·        Personal use
·        Checking backgrounds or contacts
·        Marketing and PR
Many executives fear losing control with social media, and even more simply don’t understand the detail or the potential of social media.  They didn’t grow up with it.  And they have had no compelling reason to become personally adept.
In a recent post, I identified 3 key actions to convince CEOs of the value of integrating social media into all aspects of the business:
1.       Get the executives personally involved
2.    Conduct show-and-tell education sessions
3.      Demonstrate the ROI
I previously discussed getting executives personally involved; now for show-and-tell. 
 Show-and-tell education sessions are often key to engaging executives, and Until executives are engaged, no one else will be fully engaged. I would like to say you can “teach it and they will come."  We know they won’t. 
I have found three great approaches to using show-and-tell to get executives involved and knowledgeable:
1.      When developing a social media strategy, devote the first 30-60 minutes of every meeting to sharing information on a single topic – social media policies, governance, technology, blogging…
2.      At each meeting, have staff develop and present live demos, show real on-line information about the company, make it about “here and now.” One executive team told me that they didn’t yet have a Facebook account.  They were wrong.  The company had one very active account with almost 1000 friends, and two moderately active accounts with their name.  TALK ABOUT LOSS OF CONTROL!!! 
3.      Work with the executives to use social media tools.  An executive at another organization planned to write an all-employee e-mail and hold a series of meetings to announce the new social media plan.  Instead, we used the e-mail to direct everyone to the new internal network.  The “town halls” were great, and then made available on an internal video channel and over podcasts.  More people “tuned in” than attended!
Social media might be transparent and more democratic in its respect for all opinions.  But organizational hierarchy still remains, and the comfort level of the executives drives effective usage.

Monday, March 14, 2011

Who Knows? Who Will Share?

A dozen years ago, I helped a major financial services company classify the skills and expertise of their employees.  Skills and competencies were identified, and employees had a rating for each and every one.  Those ratings could also change over time as additional education and experience kicked in.  A big database that was supposed to help managers, executives and peers identify the “right” expert for every occasion.
But it was hard to maintain. 
And it was just cold facts.
The problem?  John wondered what Anne REALLY knew.  Could she apply her knowledge to his problem?
Samantha reached out to Bert, but never got a return call from Bert.  Did he not like to share?  Was he just out for himself?  Or was he away or busy?
Today, the database we developed all those years ago has been bolstered with numerous social media tools, and now employees actually USE IT!  With wikis in place to drive cooperative conversations across and up-and-down the hierarchy, an individual’s willingness to help and his/her knowledge becomes apparent. 
Discussions on an employee forum and ratings of the value of answers and comments further spotlight those employees with both the knowledge and the willingness to share the knowledge.
17 months ago, an eon in social media time, The Wall Street Journal published a special report on finding in-house experts.  It’s still relevant.

Friday, March 11, 2011

Passionate Leadership

Forget the grass roots theories of social media.  Until the leadership of an organization believes in social media, it will remain a marginal marketing or PR or communications tool.  Employees might experiment with numerous, scattered initiatives, but without executive buy-in, little real organizational change occurs.   Worse, because the impact of the grass roots efforts is minimal, they can reinforce executive opinion that social media is not a major consideration. 
So how do you convince the CEO that social media is serious and should be integrated in all aspects of the business?
There are 3 key actions:
1.       Get the executives personally involved
2.    Conduct show-and-tell education sessions
3.      Demonstrate the ROI
Today, let’s consider executive involvement, and I’ll address education and ROI in later posts.
Connecting social media with a passion of the leadership positions social media as integral to the corporate objectives.  It becomes not just another technology channel, but a new means to achieve a vision or goal.  Personal involvement has been a key driver for many of the early successful companies. 
Bill Marriott, a great hotelier but not known for his technical expertise, loved the idea of engaging more directly with customers.  So he was enthusiastic when asked to write a blog.  He writes it himself as a way to talk with customers and employees. 
Not only did Marriott International use Twitter extensively to keep people updated at the time of the bombings at its hotels in Islamabad (2008) and Jakarta (2009), but Bill Marriott blogged to disseminate information, express sympathies, and ultimately share his perspectives and point of view.  Reaching out to people was important to Bill Marriott.  And dozens of people responded to the blogs. 
When Howard Shultz returned to Starbuck’s as CEO, he wanted to reconnect with customers.  MyStarbucksIdea was born, and it has become not only a major source of innovation and customer loyalty, but a major driver of changes to the internal culture.
Share how your leaders engage with social media – or how they don’t.

Thursday, March 10, 2011

“The Art of Enchantment” – What Would Happen if We Applied the Same Concepts INSIDE Organizations?

Guy Kawasaki has just written a new book called “The Art of Enchantment.”  In an interview on SocialMediaExaminer, he discusses what makes an enchanting person and what makes an enchanting product, both being necessary for full enchantment to occur.
I was struck with how much easier it would be for a company to create enchantment with customers if they would first create enchantment with employees. 
What creates enchantment?  According to Guy Kawasaki, an enchanting person and an enchanting product are both necessary.  These are defined by specific characteristics.  An enchanting: 
             Person is:                                                         Product is:
Knowledgeable                                              Deep
Competent                                                      Intelligent
Likeable                                                         Complete     
Trustworthy                                                 Elegant
                                                                          Empowering
Isn’t that what we want from the organizations where we work?  We want to work with people who are          
·        Smart 
·        Who know how to apply their knowledge             
·        Are people we enjoy and         
·        Trust
And we want the corporate culture to be
·        Enriching         
·        Focused on working smartly           
·        Concerned with our well-being          
·        Easy to engage with and
·        Make us feel competent and responsible
When first we use social media tools to bring together the right employees with the right culture, how much easier to then expand that enchanted environment to include customers.
You can see the SocialMediaExaminer interview with Guy Kawasaki at http://www.socialmediaexaminer.com/the-art-of-enchantment-how-guy-kawasaki-will-change-your-business/