The three-part litmus test, for social media and everything else.
Possibly I’m way off on this one — you tell me: I’ve been thinking that, apart from compliance with government regulations, there are only three reasons you should carry out an action — any action — within a company:
- Cultivate a customer.
- Build enterprise value.
- Differentiate your company in the marketplace.
That’s it.
Some actions will do two, or even all three, of these things at once. For example, you might spend a lot on employee benefits, but determine it’s worth it because it increases the value of the enterprise and differentiates your company among competing employers. But every thing you do should demonstrably link to at least one of these categories.
Why I’m thinking about this: these days, much of my time is spent working on Hoover’s efforts in social media. There’s a temptation, among some social-media devotees, to ascribe all sorts of magical healing properties to social media. Maybe these benefits (e.g. openness) really do accrue, and really do make a societal difference. Good. Awesome. I’m all for it.
But in the realm of commercial use of social media, the feel-good aspects of social media must pass the same test as anything else.
Consider some hypotheticals:
- Should we buy a better delivery van? Yes, because it (a) helps us serve customers better and (b) builds our enterprise value.
- Should we upgrade our servers? Yes, ditto.
- Should we do innovative advertising? Yes, because it cultivates customers while differentiating us in the marketplace.
- Should we selectively cut costs? Yes, because it improves enterprise value.
- Should we have a Twitter account? Depends. Are your customers on Twitter? (N.B.: we’ve found lots of Hoover’s customers there.) Does it increase the value of the enterprise? Does it differentiate you from other competitors (or employers, suppliers, etc.)?
- Should we have a corporate blog? The same questions apply, and the answers won’t be the same for every company.
What do you think? Are these three questions enough? And shouldn’t they be applied to social media as much as to anything else?
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Picture by David Goehring, used under a Creative Commons license.
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I see validity to your test. However, Are you suggesting if a company doesn’t pass your test, they shouldn’t participate in social media on any level? It may be a good amended to mention that the social media landscape is evolving at an astonishing rate. As new SM websites crop up, more opportunities exist for businesses and industries to develop a niche within this realm and potentially connect with their audience on a whole new level. If 1 in 20 people are on twitter now…expect that gap to close substantially in the coming months and years.
Good question, Ryan. I don’t deal much in absolutes, and in fact I’m in the middle of writing another post lambasting companies that DO try to over-simplify things, so I don’t think any company should be saying “We won’t do it at any level.” Blanket statements are dangerous precisely because they so often substitute simplicity for actual thought.
But there are plenty of companies that would be better served to pour energy into their existing customer-service avenues rather than try to provide customer service via social media. There are companies, believe it or not, that still use fax machines heavily. There are industries where business is usually conducted face to face — and should continue to be conducted that way.
My attempt at a 3-part litmus test is to provide a counterbalance against anyone who would try to say that companies *must* rush into social media. No company should rush into *anything* without testing it against standards like these first.
(By the way, we take your Twitter comment to heart — that’s why we’ve been cultivating a base of followers on Twitter for quite a while now.)
Great post, as always. I like taking the fuzziness out of social media (or anything else) by asking “what business goal does it serve”. You’ve provided a thoughtful framework for that here.
Ryan raises a great hypothetical – if the answer is ‘not quite yet’, you have to commit to revisiting the question frequently given the rapidly changing marketplace. ‘Not quite yet’ is a perfectly valid answer to a business analysis. In my Dell days I saw countless business cases asking “should we go into retail channels”, along with tests of the kiosk model. The answer in those days was ‘not quite yet’, but they kept asking the question. Today there are Dells on the Best Buy shelves.
Well said, Russ.
Change is the great constant of business, and it doesn’t often make sense to stick with a sweeping business decision forever and ever. “Not quite yet” could be a great answer to, say, starting a corporate program on Facebook. So could “not much yet.”
Plenty of companies would be well-advised to stake out their territory on the various social networks — simply by claiming the appropriate usernames — and then watching, evaluating, and planning. When the time is right, pounce.
Well said – the one point that I would throw into the discussion regarding ’social media’ (can we coin a better term?) is to look at it the same way you do any marketing.
Should you go to that tradeshow? Yes/No Because….
Should we buy that ad? Yes/No Because….
If you answerd ‘Yes’ for any of those three reasons listed above – perhaps that blog or twitter account will provide a benefit.
Elliot — You’re absolutely right: anything in business, whether it’s a social media program or a marketing campaign or a new air conditioner for your restaurant, should come under this kind of review. Sure, sometimes you’re limited to making educated guesses about the future, but you should at least be able to construct a rationale good enough to convince a skeptical observer — or else not pursue that course of action.
By the way, “social media” is here to stay, I’m afraid, for better or worse.
See, Tim, your delivery van analogy makes the 3-point test work for me.
A company can start blogging or tweeting, but if it’s not for a reason that’s covered in the 3 points, then they’re just doing ti “because everyone else is.”
Take the van analogy. If companies who deliver products with vans bought new vans and expanded their fleet just because their competition kept doing it then they take all the financial risk based on someone else’s decision.
It’s like driving a car taking directions from someone in a room who can’t see the road.
“Go!”
(but the light is red)
“Go!”
(um, I’m gonna hit that car, but if you say so…)
CRASH.
Is the list completely comprehensive? Who knows? It’s a good place to start.
Tim,
I think your questions are spot on. However, there needs to be room for experimentation, in keeping with the whole PDCA philosophy.
Companies can try something in the *hope* that it will cultivate a customer, build enterprise value, or differentiate the firm in the marketplace, even if they’re not sure that it will succeed. At some point, of course, the effort needs to be rigorously analyzed to see if it meets one of these goals, but there doesn’t have to be 100% accurate fore-knowledge (unless you happen to have one of Philip K. Dick’s precogs on staff).
Sparky — Thanks for a great comment; your thoughts mesh with mine, and I particularly like your last line. Just get STARTED.
Dan — By all means, I agree with you about experimentation. You make the best educated guess/projection you can about an action’s impact on customers, enterprise value, and differentiation, then test & learn.
Maybe the biggest, or at least most immediate, use of these questions is to test things you’re ALREADY doing to see if they achieve one or more of these three things.
Tim,
An old sage at GE once told me that there are only three reasons to do anything in a business:
1 – It will create revenue.
2 – It will cut cost.
3 – It will improve process to do both of the above.
Tim,
Anyone that does not agree with your three point test would be either in or heading very shortly to bankruptcy proceedings. The simple truth is that Social Media is a new way of engaging with customers via a conversational process using a conglomeration of tools (twitter, Facebook, Linkedin, etc.). If Social Media Marketing this is not anchored by a comprehensive strategy and plan the company that implements it is destine to spend money and not receive any sizeable return on the investment. When done right the rewards can be significant. Facebook currently has 200 + Million active members and is projected to have 500 million active users by 2011. Additionally, the fastest growing demographic on the platform are 30 years olds and up which make this a very interesting place to start the conversation or listen to the feedback of current and future customers. When you add Linkedin and Twitter alone, you are talking about a massive number of potential customers worldwide.
To me the message is simple to the person in the corner office regarding Social Media Marketing “Get a strategy and plan in place for Social Media Marketing that makes sense for your business or be devastated by the Social Media tsunami that is on its way.”
Tim -
Thank you for your timely post. My company is currently evaluating the pros and cons of getting involved in social networking sites. My questions would be if you would consider facebook a “professional” site. Things like Linkedin make sense to me, but facebook seems like it is geared toward a young audience. Is there anything else out there that is popular for businesses only other than Linkedin?
Kathryn — LinkedIn has a clear lead as the social network of choice for the corporate world. Many companies, however — and especially consumer-oriented companies — are finding good success via Facebook, too. My guess is this trend will become more pronounced over time as Facebook’s audience continues to expand rapidly among folks over 30 and over 40.
If you’re talking about your *personal* involvement as a business professional, I’d build out a LinkedIn profile without delay, and I’d take a good look at Twitter, maybe by following the advice laid out in my friend Adam Cohen’s post:
http://adamhcohen.com/how-to-show-the-value-of-twitter-in-2-minutes
Hope this helps!
Well, it’s a good discussion for sure. I’m wondering why we should even be considering litmus tests. It’s discussion, not commitment to war or some other diabolical thing.
Clearly one should consider the consequences, and there are (or at least should be) company policies about how and what to say, but setting some sort of standard (to me) flies in the face of the whole movement. The whole idea of SM is to spark conversation, any ideas are welcome. If we must always toe the line, then the democracy of it is lost. That’s not good for the company or the individual.
Consumers will run away if there are rules or too much censorship. Employees will see the SM effort as cynical at best. Why not do what the gurus like Chris Brogan say, and let it go? If the lawyers go crazy, well, go hire some better lawyers.
@John McTigue
I agree with you completely – there shouldn’t be any rules to discussions in SM. It drives me nuts when I read, “Ten Rules to Follow on Twitter.”
It’s like entering a bar and setting down rules for how people interact. Hey, where’s everybody going? Come back!
However, I think the idea for the litmus test is more of an internal thing. The basis of it comes form seeing companies that jump into SM without a clear direction of what they want to get out of it (or what they can bring to it).
Without defining the reasons for any decision in a company, you;’re just grasping at straws and you have no way of measuring success or failure (or the reasons why for either).
I also agree with you that it shouldn’t be about lawyers, it’s about making a decision that leads to more growth.
I’ll bet that if you ask Freshbooks or Zappos, who are both amazing at SM, why they decided to start having their employees tweet from their own accounts, they’ll tell you they had a discussion first that likely followed some sort of the litmus test.
It’s certainly not about censorship, because in both of those examples, the employees who tweet are 100% themselves and just tweet what they feel like. Sometimes it’s pretty weird, but that’s why I like them.
But I’ll wager it wasn’t a blind decision.
Curious: In the tripartite litmus test, where do people count? Internal people — owners, directors, managers, employees — are they “enterprise value?” People (internal) could help differentiate the organization but is that it?
Organizations undertake many things to improve people and place related processes, infrastructure, and the like. The goal is usually happier, more optimistic, committed, and productive people. Is that worth a piece of litmus paper?
Excellent questions, Woody. In my book (and, I’m happy to say, in Hoover’s), people count everywhere. Happy employees cultivate customers better, build enterprise value better, and differentiate the company in the marketplace. On top of everything else, they differentiate it as an employer — which can be a considerable enterprise advantage when it comes to hiring people of excellent talent.
[...] response to The three-part litmus test, for social media and everything else, Woody Williams left a comment today that hit home: Curious: In the tripartite litmus test, where [...]
@David Billings
I guess we need to make a distinction between decisions made on behalf of the enterprise, for example “what is the goal of the social campaign”, and decisions made by the blogger/commenter/tweeter on a daily basis, such as “what do I blog, comment or tweet about today”.
I’ll agree with you that the more long-term, higher level decision should pass the litmus test, but the latter comment or tweet must enjoy a certain amount of creative freedom. Otherwise, the content will likely suffer from being too contrived, too corporate. If we can’t shoot from the hip when we tweet, might as well hang up the tweeters.
Surely the Zappos crew were told what is inbounds and what is out-of-bounds in general, but I can’t imagine that big brother has much to say unless something really bad comes across the social monitor. I don’t think it can really work any other way.
Create a good strategy and plan, communicate with your social media team, and let them do the rest without much adult supervision. You hired them, now trust them. If you can’t do that, you made a bad hiring decision.
[...] The three-part litmus test, for social media and everything else. [...]
[...] The three-part litmus test, for social media and everything else. [...]