Business Insight Zone

There is a devoted slice of the social-media-marketing population intent on demonstrating the commercial value — and especially the ROI — of Twitter. For them, the news that Dell can credit something like $3 million in revenue to its @delloutlet Twitter account is very good news indeed.

But here’s my advice: don’t focus on the money.

In his post on the Dell news, Brian Solis quoted Richard Binhammer of Dell thus:

Like you say in your book Brian, this is about putting the public back in public relations where relationships are direct. The dedicated practice of connecting with customers generates real results on many levels. While this announcement focuses on revenue results and referrals to dell.com, they are also reinforced by the relationships and direct connections we have with customers everyday using the Web.

Just so. A similar point emerges from Marshall Kirkpatrick’s treatment of the subject — “Social Media ROI: Dell’s $3m on Twitter and Four Better Examples” — and especially in the “four better examples” Marshall gives at the end of the piece, which include much lower cost for customer-support interactions that take place through social-media channels.

So, great — there are many reasons besides raw dollars to like what Dell is doing. But why not focus on those millions of luscious, luscious dollars?

Because it’s too simplistic — for two reasons:

1. If I had an itty-bitty company and used Twitter to generate $3 million in revenue in less than a year, that would be amazing news. But Dell took in $61.1 billion in revenue in 2008. So $3 million, while a lot nicer than a kick in the teeth, represents about 26 minutes of revenue, based on what Dell made all-day-every-day last year. A lovely drop in the bucket, but a drop in the bucket still.

2. Let’s imagine that I bring the good news to my boss that a new social-media sales channel is bringing Hoover’s $100,000 per month. For extra fun, let’s imagine that I’m really wet behind the ears.

Me: Hey, our new XYZ program is bringing in $100k per month — and it looks sustainable!

Boss: Great! How much is it costing us to bring in these dollars?

Me: Not much at all! [Cites low-low figure.]

Boss: Awesome! And how much of this is incremental revenue?

Me: Excuse me?

Boss: Incremental revenue? New money that isn’t just being siphoned away from some pre-existing channel?

Me: . . .

You see what I mean.

So, Dell’s figures are excellent, and the more numbers like this we see, the more they flesh out the concept that selling via Twitter (and other social-media channels) can be valuable, not only in raw dollars but in terms of (a) the cost of doing business and (b) the additional benefits of enhanced brand interest and customer evangelism on a company’s behalf.

Great. But it’s not the same thing as three million new dollars falling out of the sky onto your company’s top line, or mine — or even Dell’s.

Last week I posted some thoughts from my colleague Chris Barton about the upcoming shift at eMusic, which will incorporate Sony‘s back catalog into its downloading service.

Since then I’ve learned a lot about how a company can tick off its once-rabid fans. At the same time eMusic is introducing the hits of Springsteen, Dylan, and many others, it’s rejiggering fees so that subscribers can download less music for the same monthly rates they’ve been paying. The backlash has been pronounced, as you can see by looking at the “#emusicfail” hashtag on Twitter — or by reading the comments on the original post.

Thing is, eMusic may not even suffer for enraging its longstanding customers. Colin Alsheimer laid out the logic well in the earlier comment thread:

Larger audience, more mass market appeal . . . it makes sense from a business perspective. Plus those new sign-ups will never be the wiser. That said, they risk severely ruining their brand positioning.

Used to be eMusic stood for Indie/Underground music and value. Now it’s . . . mass market appeal and middle-of-the-pack pricing?

Where’s the differentiation now?

Differentiation or no, eMusic CEO Danny Stein holds that higher prices (a) were inevitable, with or without the Sony deal, and (b) will benefit the indie labels, who have wanted eMusic to raise its rates for some time. You can get a heavy dose of his thoughts in this (sadly poorly proofread) post at the Wired Epicenter blog:

Q and A: eMusic CEO Explains Controversial Price Increase, Sony Deal

So, innovation on behalf of customers and indie labels, or a sellout to capitalize on the big Sony deal? Or maybe some of both? I guess we’ll know more when the big changes at eMusic have had a chance to percolate through the company’s subscriber base.

Last week someone pointed me to X.vu, which promises to be the shortest of the URL shorteners. I was happy to see it, because I shorten a lot of URLs for Twitter, LinkedIn, etc., and because my favorite shortener, IS.gd, has just tripped over into five characters behind the slash. (Like this: http://is.gd/106yp — and yes, this is a Twitter-geek thing.)

X.vu’s tagline is “Because Every Character Counts!” I’m sympathetic, because I can’t believe that people on Twitter are using all kinds of URL shorteners with names like tinyurl.com. I mean, TinyURL runs a good service, but its very name is several characters longer than the absolute minimum, which would seem to contradict the purpose of a URL shortener. X.vu also has an easy one-click way to post a shortened URL to Twitter. Nice.

But X.vu has apparently totally blown its own premise, based on what it puts after the slash. I just went to shorten an address, and got this result:

The service is new enough that, best I can tell, this really is the 1068th address it has shortened. But if it were really designed to make every character count, the new URL would be something like http://x.vu/gd — because it wouldn’t be counting up using only the decimal digits.

How many URLs can you shorten for each character length if you use only the digits 0 through 9?

• 1 character = 10
• 2 characters = 100
• 3 characters = 1,000
• 4 characters = 10,000
• etc.

How many can you shorten for each character length if you use the digits 0 through 9, the lower-case letters a through z, and then the upper-case letters A through Z?

• 1 character = 62
• 2 characters = 3,844
• 3 characters = 238,328
• 4 characters = 14,776,336
• etc.

You see my point, which is hardly arcane given that the other shortening services do this.

The moral of the story: it’s not enough to get a good little property (as the X.vu address is), and it’s not enough to build a nice little tool (which they’ve done). You still need to copy your betters where it makes sense to, and avoid designing anything in an avoidably stupid way.

Given its current bankruptcy, it might be easy to forget that General Motors was once the Colossus of the business world, and that Alfred P. Sloan (that’s him on the cover of TIME) was regarded in his own day not merely as a great executive, but as one of the greatest business leaders of all time. This has me thinking of a question that I’d like you to answer in the comments:

Who’s the best CEO in American business?

Related questions come to mind thanks to the Atlantic Monthly’s recent article, “Do CEOs Matter?”:

How much do the best CEOs matter to their businesses?

Why?

When do they matter most?

I look forward to having your thoughts on these questions.

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Image via Beth Kanter, shared under a Creative Commons license.

Here comes a rant, motivated by this TechCrunch article:

A Recipe Site Goes IPO, In Japan (Cookpad)

It seems that even in this downturn, there is still room for tech IPOs, at least in Japan. Cookpad [JP], the nation’s biggest site for sharing recipes . . .

SolarWinds was a true-blue “tech IPO” — they make software for enterprise network management.

But Cookpad, which is about to IPO in Japan, and OpenTable, which IPO’d on the NASDAQ last month, are actually consumer IPOs that do business via the Web.

This isn’t a nitpicky distinction. It’s a call for an end to sloppy thinking and reportage about non-technology-oriented companies that happen to do business online.

An easy example: Hoover’s has been doing business online for 15 years, and today we do the vast bulk of our business that way. That doesn’t make us a “tech company” like Cisco or HP or Symantec. We (and our parent company, Dun & Bradstreet) are a business information provider, and our peer group includes companies like Thomson Reuters and Dow Jones. The companies in our sector are increasingly technologically savvy, but that doesn’t make them “tech companies,” any more than Dell is a “financial company” because it’s long been savvy about investing its free cash flow.

Some companies — Amazon.com springs to mind — bridge consumer orientation and serious technology orientation, so it makes sense to talk about them in both contexts. But companies like Cookpad aren’t “tech companies” in any meaningful sense, and the fact that Cookpad — a profitable little outfit, from the looks of it — had a successful IPO doesn’t particularly speak to the prospects of the next SolarWinds or Rackspace to come down the pike.

Mind you: this isn’t to single out or pick on Serkan Toto, who wrote the TechCrunch piece that kicked off this rant. But Toto’s use of “tech IPO” reflects a broader anachronism that’s all too common in press coverage of the IPO market. This isn’t 1998, when the mere fact that a company did its business online was remarkable — and we need to get past that way of thinking if we want to take a clear-eyed look at the IPO market.

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Related:

• Hoover’s IPO Central
• A (relative) flurry of activity in the IPO market.
• Silicon Valley, the IPO drought, and the culture of innovation.

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Photo by Jacob Bøtter, used under a Creative Commons license.

Here it is:

Many, if not most, companies do nothing, or virtually nothing, to improve their workers’ reactions to stress. Given that stress impedes productivity, this is a huge missed opportunity.

Your thoughts?

(If you’re curious, this isn’t about me — no unusual work stress for me these days.)

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Related:

• Stress kills.
• Stress kills, redux: the best short piece I’ve read about stress.
• Give yourself the gift of calm.

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Photo credits.

I’m thinking about this question because I’ve just been reading back through the comments on yesterday’s post about the failings of e-mail in the workplace.

Setting aside my own replies, it’s 900+ words of insight (plus one short zombie joke) from veteran businesspeople coming at the problem of e-mail inefficiency from several different angles. Worth a read.

But hey, I’m a blogger, so I’m spoiled — the comment box is always right there, and anyway that’s what blog readers are supposed to do when they have thoughts on a post.

But you’re in business, right? So you also have an audience, even if it’s not as obvious. It could be your customers, your partners, your bosses, your peers, your suppliers, your end-users. But it’s somebody, because no business deals exclusively with computers or robots on the other end of the line.

I got a mini-tutorial in e-mail handling, office communication, and Lean management techniques from yesterday’s comment thread. What kind of education could you be getting?

Do this:

• For starters, go to Chris Brogan’s blog and read “Grow Bigger Ears in 10 Minutes.” Implement what Chris suggests — you really will be done in ten minutes, start to finish.
• Tomorrow when you get to the office, make a list of five people inside your company and five people outside it who might be able to teach you something about how your company works and how you fit into that. Call or e-mail or tweet or IM or smoke-signal these people.
• When the results of Chris’s bigger-ears method start flowing in, seek out the people who are talking about you or your company or your product or your competitor’s products. Find out everything you can from what they say online. Write it down. Connect it to action items that you will do within a week. If it’s appropriate, reach out to the people doing the talking. See if they’re willing to talk even more — especially if they’re reporting bad news to you.
• If your company doesn’t have a blog or a Twitter account or a Facebook page or a suggestions-and-complaints inbox, consider implementing all of them within the month. At this point, the burden of proof is on whoever inside your organization thinks you don’t need them.
• Don’t interrupt and don’t “correct” what anyone says — absorb it and learn from it, even if it’s invalid. People think what they think for some reason.
• Follow up, follow up, follow up.

The audience is ready to start talking to you. Don’t merely let them — empower them.

What are you waiting for?

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Photo by Adam Fletcher, used under a CC-No Derivative Works license.

Care to voice your opinion in our little poll?

Does your company use social media for competitive intelligence?(poll)

I’ll be blogging about the results later.

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Related:

• Using social media for competitive intelligence.

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Gini Dietrich, CEO of the P.R. agency Arment Dietrich, just blogged about the internal e-mail ban that her company instituted last month — and the many tonic effects that flowed from it. As it happens, I read her post as I was wrestling with the last stubborn mildew in my own inbox.

I praised Gini’s post on Twitter, and as we discussed it, I came forward with this thesis:

E-mail is the rotten beating heart of office inefficiency in the modern workplace.

Please discuss.

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Picture by Kreg Steppe, used under a CC-Share Alike license.

This Advertising Age piece by Jonah Bloom is well worth a read, even if you’re not in advertising — or, for that matter, in marketing at all.

Dedicated Social-Media Silos? That’s the Last Thing We Need

Here’s a key excerpt:

Social media isn’t a box to be ticked or a department to be manned or even a campaign to be launched. It’s about thinking differently about marketing, customer service, the entire company. It’s about realizing that consumers are running the biggest recommendation service in the world and that, as has been tiresomely often repeated, they define the brand (no, this is not new; yes, this is becoming more obvious and important by the day). All thinking about product, customers and communications, needs to take this into account — it cannot sit in a silo.

Emphasis added.

Not every social media tool will be useful to every company, so it’s possible that your company doesn’t need a blog in particular, a Twitter account in particular, a customer wiki in particular.

But thanks to the dirt-cheap cost of many social-media tools and their ability to help you link arms with your customers / users / fans / people-who-care, you’d be silly not to think about how social media could help your efforts to do more business.

Not just your marketing.

Not just your customer-service.

Not just your selling.

Not just your branding-and-community.

Not just your internal collaboration.

But ALL of your efforts.

All of them.

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Related Posts about Using Social Media outside the Silo of Marketing:

1. Social media across the enterprise.
2. Social media and the acid-bath of ROI.
3. The three-part litmus test, for social media and everything else.
4. Using Twitter for Business: my presentation to HIMA.

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Photo by the National Institute for Occupational Safety and Health, used under a Creative Commons license.