Social Media Lowers Failure Costs & Risks

Failures in a new product launch, new process or software implementation can cost both small and large businesses a fortune. Hence there is a lot of analysis before heading into such initiatives. It’s called risk mitigation and that’s sensible. Today, Social Media can have a measurable impact on reducing those costs of failure and provide more opportunity. Such approaches could be very useful in a down economy.

So how then? Social Media can reduce the cost of failure in the areas of marketing, sales, software implementations and product development best. By employing the right tools, a company can “float” ideas for a marketing campaign internally (i.e. via a Wiki) or externally via Twitter or a blog or newsgroup discussion. It’s key to remember that in these cases it’s not about a large volume of participants; it’s about the right size group that makes it viable to gather feedback.

If a company is looking to launch a new product feature and has cultivated a core group of loyal customers through a blog, Wiki, Twitter or newsgroup, then it has a ready source of fast feedback participants. A few questions can be floated and feedback monitored. The result may be realizing the new feature is not necessary or recommendations may result in reducing manufacturing or development costs. This is a measurable and impactful way to using Social Media tools and groups to reduce the costs of failure.

Internally, a company might use similar tools to float general questions and queries. Responses can be gauged. In terms of a sales initiative, production can have input to an upcoming planned sales initiative. This way, the production team is aware that a ramp-up might be necessary, or they can suggest additional features that may make a product sell better. Either way, the cost of failure is reduced, and there is greater cross-team functionality put in place.

In this current economic climate, the costs of failure will be weighed even more before decisions are made on expenditures. Social Media tools and practices can help avert those failures much earlier, likely leading to improved products and productivity and best of all, better bottom-line impact.

Listen Up! And Listen Good Before You Engage

How often in sales training do the experts tell sales people “listen to what your prospect is saying. Repeat back what you heard to confirm you understood the question.” It is a fundamental principle in good selling – understand the prospect to be able to provide the solution. This practice applies well to Social Media engagement for business.

An excellent blog post from Washington DC communications firm Livingston talks about this. We have the step of “listening” as our very first element in working with clients. The difference in Social Media is that you don’t begin by vocally asking your “prospect”, in this case your market, what they want/need. You listen to them talking in various Social Media channels.

We work with clients to frame the questions for which they need answers. Then we do a lot of listening using our own set of proprietary tools. There are many On-Demand services that can do this listening from radian6 through to Buzzmetrics. Regardless of what tool is used (they all have good and bad elements) the act of listening is a critical first step towards engagement with Social Media on a business level.

While a company blog may be useful, it’s not where to start, for that is “telling” as opposed to “listening”. Through listening first, a business can understand the shape, tone, style and nature of the conversations taking place, or not taking place, in the Social Mediasphere. The insights from this “listening” will help form a better strategy for how a business deals with Social Media. You will be able to better determine budgets, resource requirements, technologies to use and more.

If you want to close the sale, you need to listen and understand the prospect, provide the right solution…and then ask for the sale.

(Author: Giles Crouch, Managing Partner)

On Social Networks for Business

Should you build a Social Network for your organization to use in-house? Can you leverage existing services like LinkedIn, eCademy or FastPitch? Could you build a Social Network for your customers? Here’s a llok at our take. For a company to build a Social Network we call that Internal and for building for customers, we call that External.

Internal Social Networks

The short answer is “yes”, in fact there is some move towards using Twitter in the Enterprise. Most larger Enterprise organizations today view Twitter much like they viewed IM services in the late 90′s – as distracting and too hard to control and being mostly for kids. Yet many Enterprises later went on to adopt modified IM services from the likes of AOL and MSN. We suspect the same will happen to Twitter (should it survive the current economic climate), in a modified way.

Twitter in an Enterprise environment is but one module of an overall Social Network. Applications like Facebook come closer to adding value. The issue becomes provisioning such a service in a large organization; how to ensure levels of privacy, the right productivity tools, security, VPN or similar outside firewall access, file management etc. So while we see the value, smaller businesses will likely be first to engage Social Networking tools inside the company.

Another issue internally is that Social Networks are designed to be more “fluid” and non-heriarchical; this is anathema to corporate structures, which are top-down organized and compartmentalized – hence the “provisioning” question. We say that while it makes a lot of sense, there are many issues to be considered.

External Social Networks

Some clients we’ve met with (large and small) have thought of creating their own Social Network and getting customers, suppliers, shareholders and other stakeholders engaged inside such a service as managed by the company. Our view; it will become your worst nightmare. Again this comes down to the whole basis of Social Media and Social Networking – it is fluid. Groups form around issues and topics.

Aside from provisioning, approvals and such, consumers are not likely to remain deeply involved in your brand to bring in friends and family. Sorry, as good as your brand is, it’s not the level consumers want to engage at as some major brands have discovered. A company/brand will find better opportunity engaging within existing Social Networks. This also allows for fluctuating engagement and is less costly.

Summary:
Once organizations have adopted the concept of “project working” with less heirarchy, then both Internal and External Social Networks will become more viable. Consumers will engage where they can decide how, when and where they participate. This is a stark reminder that no company creates a brand, a “brand” is a concept created by the market place.

As Chris Brogan wrote in his blog, there is a case for individuals to build powerful networks in the coming year. Eventually, the Enterprise will be able to leverage these tools internally and some companies are building these tools, though our experience has been they are not quite there yet. Some of these companies are Clearspace, OneSite, and Brandstation, although we anticipate some of them will struggle with larger implementations in the coming months.

(Author: Giles Crouch, Managing Partner)

Surveys, Focus Groups and Social Media: The New Mix

The standard tools of marketing research for years is being shaken up with Social Media. For years the key research tools to obtain the views of possible customers have been focus groups and various types of surveys, from phone to on the street and then to Web-based. With the advent of so many monitoring tools for Social Media, are focus groups and surveys even useful? Some argue they aren’t. We argue they still serve a purpose, but Social Media monitoring and analysis should be included in the mix.

Why? Because in Social Media you can gather opinion and insight through observation and then draw conclusions – a more “qualitative” approach. Focus groups and surveys imply a greater level of bias, simply because there is an end objective reflected consciously or not in developing the questions or guiding the focus group. In Social Media analysis, you have the ability to simply “monitor” from afar.

Here are what we see as downsides to focus groups:

- A vocal participant can hold sway over the group
- In group settings, individuals are influenced by others in the room
- Participants “know” there is someone behind the darkened window, watching and listening
- A focus group has a structure that brings inherent bias
- One on one interaction is very difficult
- The desire for reward may not produce the right results
- You’re not really inside the consumers head

The downsides of surveys:

- There is an inherent bias to the type and structure of questions
- People do not have to be so honest
- There is the inherent knowledge of being “surveyed”

So how do you leverage Social Media services for research? There are over 60 Social Media monitoring tools for the marketing sector (including our own mediasphere360 base version) that can be used to look at trends and discussions. A company can look at competitors or their own product or spark conversation in various Social Networking applications and monitor the subsequent feedback. Are there downsides? Certainly there are;

- Some inability to assess gender and age
- Behaviours can be unpredictable
- Sometimes you need to control the frame of the research
- It can be difficult to “end the conversation”
- There are challenges in guiding the discussion
- Almost current monitoring tools are poor at understanding “sentiment”

The Conclusion:

All forms of marketing research have their good and bad points; including Social Media analysis. Some pundits have said that Focus Groups are dead, but we think not. Marketers now have an additional tool at their service. Focus groups and surveys have the ability to focus the research and set a framework, where Social Media research can capture more “emotional” aspects of research providing a more robust analysis that provides a meeting spot for “quantitative” and “qualitative” to give marketers, ostensibly, a better picture for decision making than ever before.

Perhaps most interesting with Social Media analysis and monitoring, is the ability to come as close as possible to getting inside the head of your consumer. That’s a little scary, but invaluable as well.

The Social Media Challenge for Traditional Agencies

Many traditional ad agencies are starting to offer Social Media services. But traditional agencies face the danger of falling into the same trap as Interactive Agencies – it’s all about the Big Bang. It’s Campaign Central time. Pricey microsites, lots of SEO, intersticials, banner ads everywhere, a little PPC advertising, because the more expensive the campaign, the more money the agency makes.

additionally, a number of traditional agencies have added Web designers and a few coders and heralded the arrival of a Web design side. This is good, and in many ways is a natural progression for an agency. The challenge however, is that Social Media turns the Big Bang model on it’s head, not just in money terms, but in length of engagement and the results, along with measurability.

Added to the challenge is that Social Media quickly becomes more than a marketing campaign. As a company gains experience in Social Media, they discover opportunities for product research and product management, operational benefits and implications for corporate strategy.

Big Bang marketing campaigns can be good in Social Media, but implementing one-off campaigns can do far more damage than good. It becomes “obvious” that it is just a marketing ploy and this turns off the consumer.

Traditional agencies will face the challenge of not only understanding the broader implications of Social Media on a client, but as well the business model changes and longer engagement cycles not driven by campaigns.