Archive for the social media strategy Category

Why brands should ignore ROI in online and social media for now.

Posted in Bill James, roi, social media, social media engagement, social media marketing, Social Media ROI, social media strategy, we engage with tags , , , , , , , on April 23, 2011 by monozygote43

Management seems confused about why they need to deal with social media.  Most of those with responsibility for profit performance are missing the point when it comes to new media and ignoring the history of past media revolutions.  Consumer markets are going through a transition phase regarding their media preferences.

Right now, ROI isn’t necessarily about new revenue and new sales.  It’s more likely to be measured as the market share a company doesn’t lose.

All other things held constant, the rise of online and social media hasn’t created new markets or consumers (with the exception of those buying and selling stuff needed to engage in social media).  Social media is a new communication preference for existing customers in existing markets to engage, assess and choose the brands with whom they will transact business in future.

Future being the key word.

One facebook account may take over 4 hours a week from the available time of a mother of 2 children.  That’s 4 hours a week less one mother has to spend in other communication channels in future.  Less time in stores, magazines, newspapers, TV and radio.  The same goes for the mobile platform and the sms/mms channel.  Time is a finite resource.

So, not only are we moving into new online and social media, we are moving out of pre-existing communication channels.

Spare us all the engagement and authenticity romanticism.  Spare us all the finger wagging and pious recrimination over brands being unable to demonstrate concrete ROI from social media.  It’s all either pseudo ethical or pseudo academic drivel.

The reason brands must market and engage in online and social media is that the customers they already serve are shifting their preferences as to how they will engage with all brands in future.  If a brand’s existing customers arrive in online and social media and find the brand they have been dealing with is absent, alternative brands with comparable offerings will take future market share.  End of story.  That’s why every media revolution is an opportunity for new brand start ups in mature consumer goods and services markets.

This always starts off sounding like a distant cry until marketing programs through traditional communication channels start showing reduced ROI.  By then, the damage is already being done.

It must have sounded like a distant cry in the early 1950’s when TV appeared on the horizon with few channels, limited broadcasting schedules, little content and small audiences.  I still remember watching the ‘test pattern’ as a kid while waiting for the screen to come to life in the early 1960’s. By 1979 there were 300 million TV set in operation.  By 2001 there were an estimated 1.75 billion TV sets worldwide.  The most notable observation we can make here is that the move into online and social media is much faster than was the revolution into TV.

TV broadcasting licenses and advertising must have seemed expensive and unsupportable investments for some time in comparison to radio, newsprint and cinema.  But look at how market share changed hands after the transition phase to TV got going, and look at the monumental consumer brands that were forged from advertising in the early years of television.  The curse is on the laggard.

That’s the catch with social media ROI.  During this transition phase between traditional, web 1.0 and web 2.0 communication channels, ROI in social media isn’t necessarily measured in new sales revenues.  It’s significantly measured in avoiding the loss of existing market share as existing customers shift their communication preferences to new media.

For new brands, it’s an opportunity to take share from established brands lagging behind in the transition.

If you decide to stay largely out of online and social media until clear evidence of ROI is on the table, you are making a mistake.  You’ll pay for it with lost market share.

The next phase of this revolution will be the competitive phase where the fight for market share will be between those who have entered social and online media.  Then we will see a more relevant and conventional assessment of ROI from within new media channels.

Until then, as the song says, “don’t count your money while you’re sitting at the table”…especially when other players are moving to new tables.

Advertisements

Social Media Strategy: The Principal Reason for Failure.

Posted in social media strategy with tags , , , , , , on August 16, 2010 by monozygote43

The most common reason for the failure of good strategy in social media is the failure of implementation.

Of course there is a lot of bad strategic thinking out there as well, but no strategy is better than its implementation.

The most common reasons for the failure of implementation are:

1. The failure to align brand goals, strategy, tactics and tasks with action;

2. The failure to align action plans with forecast costs and returns;

3. The failure to manage the process of implementation with a short interval focus on the metrics of financial ROI (the only type of ROI that is real).

 Let’s talk about number 1.

Like it or not, the following words have specific meanings and are interrelated:

Goal

• Strategy

• Tactic

• Task

• Action

There is an incredible amount of ‘lore’ floating around in the ether on the subject of Social Media Strategy.  Mention the words “strategic goal or strategy” and everyone falls prostrate before the God of intellect and sublime insight.  Companies spend a fortune for advice on ‘strategy’.  People who can allegedly ‘facilitate’ strategic thinking programs are managing $2,000-$5,000 a day in consulting fees.  With no exception I am aware of, none of them will take responsibility for implementation and delivery of ROI.  Tell me if you know of one who is 100% contingent billing (charging for delivery of results only).  It’s so easy to say you can’t be held responsible for the quality of implementation.

What about the other words: Tactic, Task and Action?  These words fall more to the action oriented among us…the people who cross the line between thinking and doing.  How often is the task of implementation short changed, and pushed down to levels of management where $5,000 would pay the mortgage for 3-6 months?

Let’s face it, strategy is much more sexy than putting rubber on the road, and often the first step of implementation is totally assumed to have been undertaken by senior mangement.

The first step of implementation is to translate brand goals into tasks.  Task is the precursor of action. 

 Take this simple example of a restaurant called the ‘Cheesecake Temple’:

Brand Goal:

• Lift share of the weeknight dinner market by 50% before end 2010;

Brand Strategy:

• Become the preferred restaurant of patrons eating in company of children;

Brand Tactics:

• Target customers of competitors, ‘Trixies’ and ‘Rainbow Cave’ in Twitter and Facebook;

• Text discounts and promos to clients;

• Provide kids web based games at tables;

• Use Foursquare to reward frequent use;

• Giveaway hosted birthday & play credits via FB wall.

 Brand Tasks:

 For the tactic: “Target customers of competitors, ‘Trixies’ and ‘Rainbow Cave’ in Twitter and Facebook”:

 Tasks:

  • Offer promos to their followers in Twitter and fans on Facebook; 
  • Search negative mentions of Trixies and Rainbow Cave in real time, 24/7;
  • Create and use Standard Response Procedures (SRP). Position in company wiki;
  • Create and use discount table to calculate discounts. Position in company wiki;
  • Create and use daily available capacity charts. Position in company wiki.

Simplistic?  Go to the groups who are supposedly implementing your newest social media strategy and ask each one to tell you what they are doing and how it connects to goals strategy and tactics.  Get ready for the disconnects.  My guess is they will be doing ten things that aren’t called for and only half the things you would want them to do.  Ask them if they have any idea of the underlying cost versus benefit projection for the work they are doing.  Love to hear how you go out there.

More detail?  Sure, there is heck of a lot more detail, especially in moving from task to action or project planning.  But you don’t have to go much further than this to highlight where most social media programs fail to deliver the goods, and why most programs managers think  (albeit very socially unacceptable for them to rubbish ROI in public) measuring ROI is difficult and a waste of time.