Posts Tagged ‘Social’

Trouble Justifying the Social Business Impact to Organization

October 4th, 2010

If you are like most business executives, you are struggling to justify the value of all this social business stuff in your heads let alone across the table from the rest of the management team. Don’t get me wrong, there are folks getting some good wins from the social media marketing on Facebook, LinkedIn, etc.; but we all know that mainstream business isn’t buying the “build it and they will come” in a recessionary economy. Most senior executives bought the farm on the “web” and realize that much of the hype needs to settle before setting sail on the good ship “social business”.

All true… however, justification is the least of your problems. See, the customer isn’t waiting for your organization to figure it out. The problem for your organization is that the customers are still figuring out what the social business impact is on their buying process and how that will translate to their customer experience and perceived value. The savvy ones are already leveraging the social technologies to become “smarter” and to club the crap out of brands that provide crappy service. But, this is still in the realm of anecdotal. When buyers punish a major brand with rapid market share loss, then we will all wake up to real value of social business. The problem is that it may take your organization a while to do something about it.

I don’t think behavior changes well based upon fear. I believe that change comes from real desire of the perceived benefits. Let me share the opportunity side of this equation. Social business, if done right, has the potential to bring large numbers of customer opportunities at a fraction of the cost of traditional customer acquisition. You have the ability to significantly lower costs throughout the customer delivery process, and drive a huge impact to the bottom line in terms of organizational productivity. The web gave a huge boost to organizations. Remember how many administrative assistants used to run around organizations?

Here are some of the areas of impact as examples:

  • Customer Acquisition - if your cost of customer acquisition via traditional marketing run in the $XXX per customer, we can assume that number is based upon a large number of false leads along with a large number of abandoned ones along with the fact your staff can only handle Y amount of leads comfortably. The challenge is that you cannot figure out who is a shopper who will lead to a buyer versus a browser who will lead to nowhere fast. The problem is we can’t tell which is which. We also assume that we can’t, but what if we could? What if they were encouraged to self-identify? What if we spent very little money until they did? Would your marketing and customer acquisition costs become much more streamlined?
  • Distribution Channels- there are only a few real reasons to partner with a distribution channel; 1. cost of acquisition can be much lower because they already have a relationship and 2. see #1. So, the problem most organizations have with channels is that they are inefficient and not aligned with our mission. They carry multiple products (many of their own) and don’t have the same level of training and expertise as our own. For many channel organizations, the partners still bring more sales and better market positioning. Many organizations are struggling on how to drive more leads through channels, convert at a higher rate, and train their people to do better. A little fix could go a long way to producing better channels. Social has the opportunity to build better channels if done correctly; better, faster, cheaper, and easier.
  • Customer Experience – Conventional wisdom is that it is less expensive to maintain customers than to acquire new ones. Unfortunately, for many organizations they do such a mediocre job of managing the customer experience, you have to wonder. I suspect that 20% of calls into a call center account for 50% of the costs. When a customer gets off the script, there isn’t a computer system smart enough in the world to solve that problem. However, what if you could go to a semi-automated system that could cost 20% of your costs? What if you could improve the customer experience at the same time? What if you didn’t require them to log into your website or sit on hold for 20 minutes? I know the customers are saying “bring it on.”
  • Organizational Collaboration- a lot of organizations are trying to make themselves more productive – say just 5% savings in resources has a huge boost to profits and market value. Unfortunately, many organizations are trying to work harder by doing what they are doing a little more efficiently. But, the fix isn’t do what we are doing better, but rather starting with “why are we doing it?” Many of our current business systems are designed to make the organization scalable, but not necessarily make the customer experience better for the users or the customers. If your systems are 5-10 years old, much of the latest generation of business systems are rethinking the idea of collaboration. Many of the latest business systems have moved to reuse-able, re-purpose-able components that enable users to assemble solutions in real-time based upon their needs. Social business systems; social networks and online community applications have the ability to allow organizations to bring the right information to people based upon their needs, not a generic web template. How much time is spent looking for information or the right people who know an answer? How many business processes have been broken by a frustrated customer? How many exceptions do you have to allow?
  • Hiring and Maintaining the Right People -Anyone who has gone through a hiring process lately knows that the recruiting process is broken; job boards, applicant tracking systems, deluge of resume cramming recruiters, managed service providers, resume services, etc. all are seeing the commoditization of the hiring process. When did hiring the right people become a commodity? When we move away from getting our people to find and connect with the right employees to protecting their time from the volume of crappy candidates; you know that the systems are broken. Used to be that hiring was a competitive advantage and that hiring the right people was seen as a “must do”, now seen as a luxury. What if we could screen out the masses and allow our people time with the right potential hires? What if we could empower our employees to bring in other people who share their values and work ethic? What if we got the organizations to support employees the right way by empowering them as individuals and not “risks” and “costs.”

Social business isn’t about social media. Just like the web wasn’t really about HTML. The real value is in the humanization of business. Social is about swinging the pendulum back towards the center. We automated our businesses for growth and efficiency, but we gutted the hearts right out of them. Nothing I described above is new in business, but is impossible in large businesses today. Or at least not consistently and beyond the exceptional; ie the employee who goes out of his/her way to satisfy a customer, a colleague who stays late to help you find the right information, the hiring manager who connects with a seemingly unqualified candidate, but who has the intangibles they need.

I am not into squishy business feel-goods, but I do believe that the social technologies will humanize business and I do believe that the organizations that can leverage these technologies to improve the customer, partner, and employee experiences effectively on an efficient basis will receive tremendous market opportunities.

We saw that 62 of the top 100 businesses get caught and passed from behind in a 10 year span from 1989 to 1999 in large part due to the web’s disruptive impact in distributing information more efficiently. I believe that we are in the current 10 year cycle that will see similar impact with the ability for the web to deliver better collaboration experiences at a fundamentally lower cost of delivery than traditional means. Those who can leverage these technologies to lower the costs of transactions and relationships will receive higher market share and valuations.

Call it “feel-good with an edge.”

Where are we in the Social Business Maturity Spectrum?

July 30th, 2010

I posted a discussion thread last week in the Social Executive Council and contiued with a blog post that outlines my belief that we are seeing social saturation in many markets. Nukes aren’t valuable if everyone has them and isn’t afraid to use them. The same with tweets…

I an not complaining, rather I think this is a part of the normal evolution of technology lifecycles. If you look at the web, we saw the same evolution from:
* Pioneers
* Evangelists
* Adopters
*Adapters
* Commoditizers

I think we are seeing the end of “first mover advantage” for many markets and seeing the transition to the adopters phase. We have had to tell several CEOs that we cannot broadcast message our way to awareness in their market as there are too many players creating too much noise. We have to do a different approach.

The analogy is that you are in the back of a tradeshow with a 1000 booths and 100,000 attendees with a rented 10X10 booth. How do you get attention when the front booths have rented Bon Jovi for their booth. Screaming doesn’t work, flashy colors seems great until you realize that the 9 other guys in the back with you are copying you. It now looks like a wall of color versus eye appeal. What do you do? We work on making sure that awareness, credentialling, and a relationship happens prior to the prospective customer reaching the floor.

Different stages require different strategies. What worked last year may be commoditized this year in terms of marketing or customer expectations; especially in fast moving technology maturity cycles.

Think about the web: 1994 and 1995 was a hyuge explosion for consumers, but 1996-1997 was big for first mover wave of companies. By 1998 and 1999, companies we moving into niches and adapting the technology for their markets and innovating new unique technologies. This has continued through the last decade. But when you have $29.99 ecommerce ready store front website – much of the basic website development is now a commodity and nas been for a while. On the other end of the specturm, social media spawned out ot his wave and is nolw on its own arc.

What do you think? Am I too early to declare some markets saturated? If you believe that your market is saturated, what are you doing differently to break through the noise? How are you integrating this back into a larger corporate strategy around managing customers, employees, and partners?

Or are you wondering how I can declare something saturated when you haven’t even started? Well, my suggestion is that if you look at your market and see everyone else doing the same thing over and over again, think outside the box and don’t just do it too. You are contributing to the noise, not adding value…. from a customer’s perspective, which would I appreciate?

Are Your Social Network Groups Democracies or Dictatorships?

March 20th, 2010

We recently started a group on Linkedin called Social Executive Council, SEC. The stated purpose:

Social Executive Council (SEC) is a Invitation-only, Executive Officer (CXO) or senior executives with social strategy or social media responsibility (Director and Above). The purpose of the group is to explore the definition of social market leadership; the social transformation of the various enterprise lifecycles; customer, operational, product, information, and employee that drive the market success and corporate valuation of an organization. This group will be focused on social enablement of the organization from a strategy perspective. We propose the exchange of ideas around development of social strategy, social execution, and social measurement with associated ROI. By opening the discussion to social strategy executives and their respective internal customers, we hope to empower a more substantive dialogue about how to leverage social media, web 2.0, online community, and collaboration technologies.

Our thinking was that we wanted to create a forum for executive level thought leadership to get away from the social media monitoring tools discussions that we found prevalent out on the web and almost every social media event that we go… Not that I don’t think that tools are important, but I have people on our team that work with them on a daily basis. My focus is working through the business strategy to enable organizations to take advantage of the social technologies to create competitive advantage.

When we launched the group, we knew that there were a lot of social media “groups” out there, but very few targeted to Social Strategists and the Executive Teams they service. We thought by keeping it to a VP level that we would keep it strategic. We knew that many of the Enterprise Social Strategy thought leaders were still at the Director level.

The good news is that it has exploded. The bad news is that it kicked off an interesting dilemna that I thought I would share. See, my partner, Judy Mod, is running the online group, soon to launch the non-profit organization and begin recruiting chapter presidents. I am staying “home” to run Social Gastronomy and make sure that we deliver on our promise of socially enabing the organization. We are consultants who run a business of consulting.

I have been helping out with the membership and requests for invitation to the group until the board can be formed. The toughest thing that I have found is to say “no” to potential members who don’t qualify. It is real simple… if you are a CXO/EVP/SVP/VP of a major company, many of the Fortune 500, you want to engage with your peers and rockstar social thought leaders. If I am going to invest my time in a group, I want a return on that investment. I also want to engage with people who look like me or who can process at my level.

So, I made the mistake of letting in some social thought leaders who were not Director level. Best of intentions as they did have some really good backgrounds, but we got called on it from a couple of organizations that complained that their teams were not allowed in. They were right. You make a rule, you have to uniformly enforce it. One manager was extremely upset when I had to revoke membership. I can’t blame them. I personally apologized. I felt horrible and it still bothers me. I openend a discussion thread in the group to discuss whether the level defined was the right one.

We set up the group with an expressed position that for it to work, we needed to open it up to Senior Execs or Social Strategists to have a forum to engage with peers and rock-star strategists. To get that caliber of player, we needed a combination of exclusivity in role in organization, but inclusivity in terms of competitors. It wouldn’t be appropriate for me to bring in my blogging or my business in that forum because it would be seen as self-serving.

It brings an interesting point; which now I am getting to… where is that line of opening the community up to the market and maintaining the stated focus for your business. On our end, we started the group because we wanted the credibility and a forum for our thought leadership. We are not completely altruistic as we need to eventually translate our IP and thought leadership into paid consulting services.

On the other hand, we know the audience would not tolerate ANY sales messages. They want education. If they need you, they now know about you, AND they will let you know if they are interested in talking with you. In essence, we created a democracy within the group to foster an open communications platform. We get to participate and influence as founders and members at large.

We made a delineation from the activities in running the group from our business as a compromise and recognition of the need for demonstrated integrity. This blog is my company’s to write more extensively and to share my thoughts on trends and situations that come up in our business. Interesting to the group, maybe, but they will need to come visit our website to read our blog. We wouldn’t do anything that smacked of inequality versus the other consulting firms in the group as we would lose credibility towards the stated purpose.

Additionally, the feedback from the senior execs in the larger companies is that they want a balance of peer discussions, but welcome consultants as long as it doesn’t turn into a sales pitch or they get hounded. They recognize they need consultants, but want to be able to choose when to engage with them and how.

This is pretty consistent with what we are seeing in the market. Almost any market that you go into, you can see a wide spectrum of communities, forums, groups, blogs, lists, etc. hosted by vendors, publications, associations, or enthusiasts. I think that the best of the lot understand that they can’t be extreme on either end of the spectrum… too wide open where the core target is disenfranchised with the noise or selling, but also where it is open enough to promote free and engaging discussion.

The problem with static websites is exactly that… someone said “where on your website do you post which projects that you screwed up?” No one does… The value of social media is that peer validation and credentialling that comes from broader, free discussion.

The other side, is that companies don’t create these forums or groups for completely altrustic reasons. At some point, thought leadership and engagement needs to convert to leads and pipelines. Even non-profits need transactions.

My recommendation in setting up communities is really take a look at the competitive landscape, your real objectives, and the key players in the market to determine what is the appropriate level of “openeness” that makes sense. A public group is more open by nature than a private, branded community.

If I invite you into my home, make sure to take your shoes off…. house rules. Well, actually my wife’s… but you get the point…

Enterprise Social Architecture: Need My House Jack?

January 21st, 2010

We spend a lot of time with larger enterprises discussing how to integrate these newer technologies; web 2.0, community, social media, collaboration, etc. into their existing environments.

There are similarities to owning an older home. Learning a lot lately about how older homes were constructed. Our house was built in the 1950′s and they used a center beam and wing construction model. Think of a ship, center beam and wings fanning out from there. Over time, the center beam begins to sag a little, not very flexible so you put in house jacks, bracket the beam, and put in supports, etc. In older homes, you always find that the previous owners have added their improvements; rewired electricity, added a bathroom, added an addition built on a different foundation, etc.

If you think about many of the larger enterprises, they have the same challenges. Centerbeam for support which isn’t very flexible and sags. The center beam is the ERP system and the wings are the other systems that hang off of it; payroll, onboarding, content mgmt, crm, business Intelligence, supply chain, logistics, intranets, portals, various biz apps, email, etc.ERP. Added a lot additions; business intelligence, CRM, content, web apps, intranets, supply chain, etc.

 We spend a lot of time with enterprise organizations and their domain experts talking about how to socially enable the core business systems and processes custom lifecycle management. We hear all the time from CIO’s that they don’t want to make any major system changes as they are still paying for it; with all of the additions and changes, they still have a hefty residual mtg payment or amortization and  would like to get more life out of the systems without having a payment.

 The good news is that the home remodeling busness has advanced with new technologies, techniques, and implementation processes to retrofit an older home with the latest green and or backbone and foundation strengthening and life extending techniques for older homes.

Same thing for larger enterprises looking retrofitting their social backbone for their organization to gain effiencies, competitive advantage, or keep up wth their customer requirements. They can implement a social architecture without requiring them to rip out existing systems or do major infrastructure changes.

 We have begun to develop social program and system implementations with the variuos partner organizations to take advantage of enterprise class social for lead generation, customer lifecycle mgmt, business intelligence, new product development, project collaboration, and emploee engagement as just a sampling of initiatives that we are seeing.

Retrofitting a home is harder than new construction in a lot of ways, but for many homeowners who want to keep the charm of their home intact or who cannot afford to major home repair, it is an attractive option.

Retrofitting older information infrastructures to take advantages of social and collaboration can provide similar life extending and or cost reducing alternatives to upgrading without disruption.