Archive for cost reduction

social media: what should you outsource?

Posted in outsource social media with tags , , , , on August 19, 2010 by monozygote43

To answer the question, let’s lay out an imaginary continuum from brand ‘goals’ to brand ‘tasks’.  The path from defining a goal to delivering the goal must pass through these stages :

Brand Goal

Move the restaurant brand share from 30% of overall market to 70% of market in 12 months.

Brand Strategy

While the above goal is a total business goal, the strategy for social media might be “to contribute 20% of the overall growth goal from marketing, promotional and customer service initiatives within social media”.

Brand Tactics

The Brand tactics for the social media strategy might be to lift the utilization of individual restaurants in the chain by raising the average occupancy of seating (‘covers’ for those in the trade) to 89% from its current low of 52% by offering a combination of promotions and discounts.  This could break into three elements:

  1. A campaign to target competitor customers (especially disaffected ones), in specific social applications including Twitter, Facebook, Foursquare and Friendfeed with promotional offers and discounts (33% conversion goal);
  2. A campaign to create brand advocates by offering a combination of exemplary customer service and promotional offers to fans and followers (33% conversion goal);
  3. A game based loyalty campaign where frequent check ins through Foursquare , Gowalla and Facebook (yes, Facebook is location capable now too) are rewarded with promotional offers and discount (33% conversion goal).

These tactics would rely on a pre-calculated pricing for lowly utilized capacity in specific restaurants which takes into account improving the overhead absorption.  In other words, the tactics would rely on a type of variable pricing model that would change the value of promotional and discount offers as capacity was filled (much like the airline model of pricing seats).  Promotions and discounts would be very attractive at the outset of the campaign and would tail off toward the end.

Brand Tasks

Clearly, the work needs to be planned and laid out in a critical path with allocated resources and clear accountability and responsibility.  Hence the need to break down the tactics into tasks.  Tasks for just one of these tactics could be numerous:

Let’s imagine just some of the tasks required to apply tactic number one (1):

  • Monitor in real time all competitor accounts in specified applications and all generally accessible customer comments where there is dissatisfaction with service or quality;
  • Develop pricing/promotional model indexed to available capacity and existing bookings system;
  • Develop Standard Response Procedures defining the manner and etiquette of approach to customers;
  • Respond to competitor customers with a promotional offer within 15 minutes of them expressing dissatisfaction on-line.

So, what should you outsource?

If you are thinking “Oh God, I haven’t defined this strategic continuum, or distilled the tasks supporting the goal” and “what exactly are my people doing out there…and how does it support the goal?”, you may need first to outsource the process of distilling tasks from goals in order to arrive at a project plan for social media.

You don’t need to give up ownership of Brand Goals and Strategy to seek assistance with the process of distilling action plans, metrics. structure and accountability for engagement.  It makes sense to drive through this with external help and a sounding board.  Additionally, provided you are enabled to manage your external providers effectively, social media engagment can be more effective and less costly than internal engagment.

Distilling the goal to task continuum will help you to see the big picture of what has to be done and over what timeframe.

If you don’t have brand goals and strategies, don’t outsource anything.  You need to have the goals and strategies worked out before you engage…whether under your own steam or by means of an outsourced provider.

You will notice that at each level of the continuum, there is a measurable goal.  This is essential for getting at the plan and actual ROI of the strategy.  The reason most campaigns fail is that goals don’t connect to tasks and the metrics required to plan and measure ROI aren’t incorporated into the various levels of the Goal to Task continuum.  If you don’t understand ROI or the application of Conversion rates in comparing action and reaction, you may also want to outsource the entire metrics and reporting aspect.

If you are satisfied pouring water into sand by having no particular measurable goals in mind, don’t outsource. It will simply result in the blind leading the blind.

If you are thinking “the reason I haven’t done this preparation is that I am too busy trying to remain in control of the actual minute to minute engagement in Social Media, you may need to outsource the implementation.  Don’t forget, you are committing to responding and approaching people in real time all day long.  Sure you can hire and train people, bring in the necessary technical platforms for monitoring and response, make space available in the office and define all those procedures protocols and pricing models and guidelines.  But how long will that take?  Do you have that time to spare?  Shouldn’t you be focused on the big picture? What utilization will all those assets achieve if applied only in your organization? How productive will internal implementation be?

Could an outsourced specialist working with higher utilization of those same assets, deliver the same outcome more effectively, and with less expense than you could internally?  Could a tight analysis of essential tasks result in identifying activities which are adding no value to the goal?

In conclusion, assessing the outsourcing option requires you to evaluate the comparative cost and effectiveness of internal versus third party provision.  That assessment often requires consideration of the timelines involved in putting rubber on the road.  It also requires you to assess some of the risks associated with outsourcing.  One thing is for certain.  You need to know the goals, strategy, tactics and tasks of social media engagement before you decide what to do and who should do it.