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Jun 27

Why Do Corporations Struggle with Social Media?

June 27, 2010 • 9 Comments • Social Media and Society

I see a lot of larger companies who don’t seem to get how social media makes things cheaper and well, just better. It’s a direct communication tool, like a cell phone. Big companies seem to just snuggle with Web 2.0 rockstars and then call it a day. That’s lame. That doesn’t make me want to throw you my money. I just want to know that you aren’t going to hose me or my friends and then we are cool.

Here are some tips for large companies on how they can cut costs, improve their products, and well, make the world a better place by using social media:

1.) It sounds harsh, but evolve or die.
Look folks, I’m not making this stuff up. Social media and in particular Facebook is a global revolution. Imagine a country that grows to 400 million people in six years. That’s Facebook. Twitter was founded in 2006, and studies show that 37 percent of journalists already use it. 59 percent of them already blog.

Yes, it sprung up on you, but that doesn’t mean you can’t take it seriously. If 37 percent of journalists are on Twitter, how easy is it for pissed off customers to hit them up with a juicy story about your company?

What am I saying here? It means 1.) Your communications people need to do their homework, 2.) Your senior leadership needs to do their homework, and 3.) You need to come up with a plan and a budget, and you need to revisit them frequently. Don’t just ignore it because the word “Twitter” sounds kind of dirty.

2.) Social media is not a marketing tool. It can be used by your entire company.
Social media tools like Twitter are merely communication tools. When I advise people about them, I use a term from the movie “The Matrix”:
There is no spoon.

This means you can use Vimeo not just to spam people with ads, but to instruct them how to use your product. You can use Twitter to follow potential business development opportunities or get feedback for your product teams. There really is no rigid “use” for social media. If you give it to the marketing team, you are essentially telling the world, “The only way we would like to communicate with you is to sell you something”. I suppose that’s within a company’s right, but there are many more useful ways to use social media to cut costs and make things happen in a short period of time.

3.) You are playing with fire when you outsource it to someone else.
Your customers are going to ask you all sorts of things.
Can I get a job at your company?
Fix this issue or I’m calling my lawyer.
Why hasn’t this tech support rep answered my email?

Can you really trust some 24-year-old at a marketing agency will get a tweet from a journalist or a very angry customer and is going to represent your company in a way that doesn’t get you in trouble with the SEC or the press? I don’t really understand this model of using social media. I’ve tried it and it doesn’t work. Agencies can create good marketing campaigns using social media and can provide guidance for sure (see this and this), but they shouldn’t really represent your company’s presence online.

Again, trusting it just to the marketers means you are missing other opportunities to save money, like using these tools for tech support or product development.

4.) You let the lawyers take control even though they think “blog” is a drink you have on Christmas.
People seem to think lawyers know everything about the law. Here’s a secret: THEY DON’T. The law is very expansive and constantly changes. No lawyer knows everything about it and if they do, they are just big lying liars.

Lawyers should not be able to set policies on tweeting and blogging if they don’t have any familiarity with the mediums and in particular, the concept of Creative Commons. It just makes employees nervous and distrustful and then they do their own thing on the side anyway. Just like senior leadership should do due diligence to learn about social media, so should the legal department.

5.) People aren’t convenient numbers. They are people. Now they can form a “corporation” of their own, for you or against you.
This is perhaps the point where big companies struggle the most. You’ve got the bean counters who expect certain amounts of leads, profits, etc, whatever. They are used to a Cold War game, where you just outgun your opponent with huge shock and awe figures.

The game has changed. This is not a trend. This isn’t a fad. That game is gone and lost forever.

What the Cold War mentality isn’t considering in a new media world is that these numbers can all ban together and decide you rock. They can ban together and decide you suck. They now have easy access to each other. You can’t just hose a bunch of people and think they don’t know any better. It’s not the way it used to be. They are all talking about your company and comparing notes.

In a new media world, you just have to be honest and reduce your risk for IEDs, snipers, and the like. You have to win the hearts and minds of people and then ask them to spread the word.

It’s not that corporations can’t be agile enough–it’s that often the people in charge simply don’t get it. They didn’t get where they are at using it so there is no use dropping what works for some “fad”. A little research and a holistic strategy about social media could mean wonders for them. I don’t how you can look at social media tools and figure that consumers will ever stop using them to reach out to each other. They just help people make informed decisions.

Frustrated because your company fits this bill? Leave a comment for how big companies can improve what they are doing. You can use a fake name like Awesome McAwesomePants or something outrageously cool like that so as to not incriminate yourself.

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Jun 24

When Closing More Leads Can Actually Hurt You More

June 24, 2010 • Leave a Comment • Social Media and Society

Marketing. It’s often considered a spin doctor-ish, slimy profession intended to deceive people into buying something they don’t need.

Marketing as it should be done is actually a very noble profession that can improve people’s lives. However, not only is pursuing “anyone and everyone” at the expense of their happiness unethical, it is stupid and costly to your business.

Bazaarvoice is a company that allows companies to increase and measure reviews about their products. Here are some stats they’ve gathered about word-of-mouth:

*The average consumer mentions specific brands over 90 times per week in conversations with friends, family, and co-workers. (Keller Fay, WOMMA, 2010)
*90% of consumers online trust recommendations from people they know; 70% trust opinions of unknown users. (Econsultancy, July 2009)
*Users put great trust in their social networks. One-half of Beresford respondents said they considered information shared on their networks when making a decision—and the proportion was higher among users ages 18 to 24, at 65%. (eMarketer, October 2009)
*Consumers trust friends above experts when it comes to product recommendations (65% trust friends, 27% trust experts, 8% trust celebrities). (Yankelovich)

Why are these statistics relevant? These along with reputable game theory studies show that people trust other people they know more than they’ll trust you. If you are doing the slimeball marketing tactic by focusing on sheer numbers and quotas, you aren’t focused on who is actually buying your product and if these people would actually enjoy using it.

LET’S DO THE MATH:

Let’s say that your manager wants you to meet a quota, and so you sell 10,000 widgets like you were asked. Because widgets are rather obscure, you sort of fudged the benefits of the product and now only 25 percent of the people who use them are happy with the product. That’s 7500 people who now hate your widget and probably you for selling it to them. According to a study cited by the social network DoctorBase, if these are social media users, a negative review from them will reach 130 people. That’s:

7500
* 130
975,000 people who now think you deceived them

Now let’s say you do this more responsibly. You ignore your manager’s quota and you say, “I won’t get 10,000 sold now, but I will have 3000 sold in six months, and 75,000 sold in a year, and I will do it in a way where we can spend much less in marketing and much more improving our product for the future”. How do you do this?

1.) Understand what your widget is, how customers use it, and how it compares to other products like it in the industry.
2.) Instead of figuring out how you can preach your product far and wide to everyone, figure out how you can get it to 3000 who would be insanely happy with it. This is a lot easier to achieve than finding 10,000 happy customers but requires a bit more homework.
3.) Make those 3000 people insanely happy with your widget. This may or may not cost money in product development, but that’s often what it takes to make people insanely happy.

Let’s be very conservative here. If you make people insanely happy with your product, asking them to tell their friends about you is actually quite easy. They feel like they are doing their friends a favor. So let’s say those 3000 people only reach out to an average of 25 people and convince them that your widget will totally change their lives.

3000
* 25
75,000 people bought your widget and love it.

That’s 7.5 times what your General Manager asked you to sell.

By marketing to those 10,000 instead, you now have to do damage control for your brand’s reputation. You have to spend more money sustaining growth because people aren’t talking about how awesome you are. You have to spend money on customer acquisition and retention. That means less money for product development. This hardly seems sustainable.

By being a marketing sniper versus a cannon, you can trust your community of users to do the marketing for you. Plus you can sleep at night, which is always a plus. ;)

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Nov 01

Game Theory and the Use of Social Media

November 1, 2009 • 20 Comments • Social Media and Society

I’m reading a book called The Origins of Virtue: Human Instincts and the Evolution of Cooperation by Matt Ridley. I found it on Trey Ratcliff’s book list, which is quite good and I recommend highly.

The book features a perfect study to point out when someone says “Why should I waste my time with Twitter or blogging?” In the study,

“Adam is given £100 and was told to share it with Bob. Adam must say how much he intends to give to Bob and, if Bob refuses the offer, neither will get anything at all. If Bob accepts, then he gets what Adam has offered. The logical thing for Adam to do, assuming he thinks Bob is also a rational fellow, is to offer Bob a derisory sum, say one pound, and keep the remaining £99. Bob should rationally accept this, because then he is £1 better off. If he refuses, he will get nothing.

But not only do very few people offer such a small sum when asked to act Adam’s part, even fewer accept such exiguous offers when playing Bob’s part. By far the commonest offer made by real Adams is £50. Like so many games in psychology, the purpose of the ultimatum bargaining game is to reveal how irrational we are and wonder at the fact. But Frank’s theory has little difficulty explaining this ‘irrationality’, ven finding it to be sensible. People care about fairness as well as self-interest. They do not expect to be offered such a derisory sum by someone in Adam’s position and they refuse it because irrational obstinacy is a good way of telling people so. Likewise, when playing Adam, they make a ‘fair’ offer of 50:50 to show how fair and trustworthy they are should future opportunities arise that depend on trust. Would you risk your good reputation with your friends for a lousy £50?”

Ridley continues by explaining this simple truth: when experimenters try the same exercise but each party suddenly becomes anonymous to each other, the person in the giving role more than often gives £1 to the other party.

Why is the simple acknowledgment of identity so important in fair dealings between two parties? Why are we so much more giving to those we know than we are to strangers?

Identity introduces the concept of accountability. Social media tools allow us to bring our identity and our networks’ identities to the forefront. Basically if you hose somebody, they can now call it out to your friends and followers, which they would not be able to do in the often anonymous world we used to live in.

So you can say you “don’t have time for social media”, but bear in mind that you may end up receiving £1 when you could be getting 50.

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Apr 22

If Your Customers Could Automatically Hear Your Product’s Story, What Would They Hear?

April 22, 2009 • Leave a Comment • Social Media and Society

As cool as the concept is of new media, there are still some really great shows on old media. As of late, I have been fascinated by the NBC Show “Heroes”. A little late to the game I know, but hey, it’s better late than never.

On “Heroes”, there is a psychopathic killer named Sylar who kills other characters that have special abilities just so he can have them for himself. One of the abilities he acquired is the ability to sense an object or person’s history just by touching it.

Think about walking into a store and knowing where food was grown, where a garment was made, and who put it on the shelf. Think about your computers, cars, houses or antiques. Think about touching a person and knowing all the good and the bad he or she had ever done. If you could have this at your fingertips, would you even want it?

Every product and service has a story somewhere. As more and more information about these products and services comes out on the internet, you won’t have to be Sylar to figure out if it’s good or bad. You’ll know that your Puma shoes were made by young women working long hours for very little money. You’ll know that while the CMO of Unilever preaches about how marketers no longer own their brands, Unilever still produces “food” with trans-fat, which chemically isn’t a food at all and is a huge cause of cardiovascular disease. Whoops.

Some of these stories will be excessively harsh and sensationalistic. Some won’t be harsh enough. Eventually, there get to be enough stories to help you form a clearer idea of the truth. For in the words of Friedrich Nietzsche, “Perspectival seeing is the only kind of seeing there is, perspectival ‘knowing’ is the only kind of ‘knowing’, and the more feelings we get about a matter which we allow to come to expression, the more eyes, different eyes through which we are able to view the same matter, the more complete our ‘conception’ of it, our ‘objectivity’ will be.”

This isn’t speculation and is based on empirical evidence. Statistics show that there are more and more people participating on the web in every region and demographic. Internet and social media usage is going up in every single age demographic according to a Pew Research report. In just eight years, internet usage has increased over 1100 percent in Africa and 1296 percent in the Middle East. Twitter is a great way to find trends and opinions, and has gone from one million users to over ten million in one year.

Look around you. If you could hear the story of items around you by touching them or reading about them on the internet, would you like what you heard?

*P.S. Hopefully NBC won’t ask me to take this post down. Watch “Heroes” on Mondays at 9 PM EST/8 PM CST.

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