Business Insight Zone

John Wilshire, writing at Feeding the Puppy, offers an excellent overview of the marketing appeal of social media:

Dell and Twitter; thousands not millions

I encourage you to read the whole piece, not least for its engaging graphics. The upshot of it is that marketers used to target millions of potential customers/consumers to reach the thousands who would actually be interested and consider buying. But social media channels allow a radically different approach:

. . . the cost of communication, sharing, and conversation is now so low that companies (and their agencies) have available to them the approach that they arguably would have wanted in the first place. Just talk to the thousands.

Wilshire focuses on the example of Dell’s @delloutlet account on Twitter, which I discussed at length last week. He’s particularly acute in discussing (1) the low cost of time and effort to make @delloutlet a success, and (2) the longer timeframe you have to give to social media as you build up a genuine audience.

The whole piece is well worth a read.

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.

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.

I gave a little summary of the Dallas IMS last week while the event was still going.

My pal Richie Escovedo went considerably further in summarizing the sessions of the IMS that he was able to attend — to the point of embedding slide decks. Very good stuff:

Dallas Inbound Marketing Summit — From the Back Row

But now my friend John Johansen has taken the cake, writing up bullet-point summaries of nearly every session at the two-day event, and then handily indexing them into this single post:

Inbound Marketing Summit Wrap-up #IMS09

Posts like these do a real service to the community of marketers who can put this material to immediate use in their businesses, but aren’t able to attend the Summits.

Check out these posts to see what you can learn from some of the cutting-edge thinkers of the social-media world.

TORN from the comments on “Key lessons from the Inbound Marketing Summit”:

“If we can measure it, we are responsible for making it better.”

That’s from my friend John Johansen, citing the IMS presentation given by Mike Moran of Converseon. It offers a nice counterpoint to the blunt assessment of Stephanie A. Lloyd in her comment on “Social media and the acid-bath of ROI”:

“Trying to measure ROI of social media is stupid. It’s like measuring the ROI of sending emails or talking on the phone.”

Where do you come down on this issue?

It’s been a great two days at the Dallas edition of the Inbound Marketing Summit. Here are some bullet points on things that have caught my attention.

• The audience presents an interesting split. As I type this, I’m sitting next to Greg Cangialosi, CEO of Blue Sky Factory. His firm does amazing things integrating e-mail and social media in ways that boost e-mail marketing performance. So, in sum, he knows a little about using social media for business. By contrast, during my panel session yesterday, an audience member asked me “What’s RSS?” So there are a lot of opportunities for novices to learn from veterans, and for veterans to understand what the level of knowledge is among newcomers to social media.
• My friend Aaron Strout of Powered made many good points in his talk, but two stood out: (1) Some companies are actually making more money by using social media intelligently. Radical thought, huh? (2) If you’re trying to sell better social-media use within your organization, be ready to convince your CEO and CFO of the business case for it. In other words, show them the money.
• Chris Kieff of Ripple6 gave a well-received talk (and later picked up the tab for my dinner — thanks, Chris!). One key point: “Beware the creepiness factor.” He and I talked about this more at dinner; I gave him the example of a Blackberry app that broadcast my GPS location even though I had (tried to) turn off that function.
• Whole Foods has been a gold-standard example of the corporate use of Twitter for a while. Now they’re upping the ante by building their Twitter presence in geographic locales, e.g. with their account for Whole Foods in Houston.
• In their panel, Blake Cahill of Visible Technologies and Amber Naslund of Radian6 made great recommendations for convincing senior executives of the value of social-media monitoring. Blake suggested that you show an exec how monitoring works on some non-business passion of theirs (cooking, motorcycles, whatever), then show them the parallel to business. Amber suggested that you could reinforce this by showing the monitoring results for a competitor.
• A good lesson from Greg Matthews of Humana, who has the challenge of getting people interested in a health-insurance provider: he says that instead of taking healthy stuff and trying to make it fun — which doesn’t work — “We’re trying to take fun stuff and make it healthy.”

There’s a lot more I could say — this conference has given me plenty of ideas for follow-up posts. But for now, I’m still learning as much as I can while the IMS sessions are still running.

Regular blog readers (or followers of our Twitter feed) will recall that I attended the Inbound Marketing Summit in San Francisco a few weeks ago. Thanks to the Summit’s co-organizer, Justin Levy, I can now bring you the video of the panel in which I took part — “Innovative Marketing Programs Using New Media” — which also featured these fine folks:

• Bernie Borges, CEO of Find and Convert
• David Reske, CEO of Nowspeed
• Jamie Dickin, EVP of Sales at Brickfish

Here’s the video — 45 minutes-plus:

By the way, I liked my co-panelists and got to talk with a couple of them after the session, but I want to single out Paul Gillin for doing a great job moderating this panel. I’ve pulled that duty more than a few times, and I know it’s tough to listen closely and interact with panelists while also keeping up a good flow for the session as a whole. I thought Paul nailed it.

Oh, and I should note that this week I’ll be a panelist at the Dallas edition of the Inbound Marketing Summit. If you’re attending, please be sure to find me and say “Hi.” If you’re not, stay tuned to this blog and to our Twitter feed for updates from the conference.

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Related:

• Justin Levy’s post on this session.

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My humble contribution to the Cluetrain Plus 10 project . . .

The Cluetrain Manifesto contains 95 theses intended to challenge old ways of thinking about how companies relate to their audiences. The thesis in the title comes in this context:

36. Companies must ask themselves where their corporate cultures end.
37. If their cultures end before the community begins, they will have no market.
38. Human communities are based on discourse—on human speech about human concerns.
39. The community of discourse is the market.
40. Companies that do not belong to a community of discourse will die.

We’ve come through a long period when MASS was everything in marketing. Marketers have concerned themselves with exposing their products to the most viewers, the most households, or the most eyeballs, often with limited regard — or limited ability — to target that exposure very well.

The Cluetrain invites us to get past eyeballs . . . and past “targeting.” If I have something to offer you, I’m going to talk with you about it — emphasis upon both TALK and WITH.

Look at the picture of the vegetable souk above. People, food, a marketplace. “How fresh are these melons?” “Can you get oranges this month?” “How’s your sister’s baby?” It’s easy to understand why, say, Coca-Cola has taken a different approach for 100 years . . . but that doesn’t mean it’s the ideal approach, or the ideal approach for every product, or the ideal approach for your company/product/cause.

If what you’re offering is a good thing, people will want to talk about it. They should talk about it. You should talk about it. Sure, some people won’t get what you’re doing, or they’ll reveal that they’re soreheads in general. No doubt the vegetable vendor runs into that, too. But the vendor — the old-fashioned face-to-face merchant — also knows that you can’t ignore the conversations going on around your offerings. So embrace those conversations.

One more thing: the explosion of the social media in the past few years means that it’s easier and cheaper and better to do this sort of talking — more so than the Cluetrain authors could have known ten years ago. (That said, they did a pretty good job of foreseeing the future.) Today more than ever, you can identify your market niche, the people who want to talk about and buy your vegetables, be they ever so far-flung around the world.

Those people talking about your wares — they are your market. Find them and talk with them.

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Photo by Verity Cridland, used under a Creative Commons license.

A thought experiment:

What would you do if you could no longer use your main channel of communication to reach your customers?

• If you’re used to selling to them in person, could you do it over the phone in a pinch?
• If the phones in your call centers all went on the blink, would customers have any other way to get your attention? E-mail? IM? Twitter? Facebook?
• If you normally rely on drumming up business with mass advertisements in magazines or television, how would you replace those venues if, say, they became irrelevant?

(It’s with that last question that we leave the world of pure hypothesis and get right down into the messy kitchen of the consumer-goods companies and retailers. There’s water all over the floor.)

Why you should do this thought experiment:

It might help you think your way out of a cul-de-sac.

The easiest thing in the world is to keep doing what you’ve been doing . . . because it’s what you’ve been doing. To scrutinize your behaviors, especially the durable ones, is a hard thing to do. Which is why so many of us avoid it.

So make it safe. Pretend it’s just a thought experiment. Figure out what other channels you could use to put yourself “in harm’s way” with your customer — right out there where they couldn’t help but interact with you and give you their unvarnished opinion.

You might be surprised. You might find that your your emergency backup channel becomes a new express route into your customers’ lives.

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Photo by Lindsey T, used under a Creative Commons license.

I’m looking for advice. One of my strengths is being full-to-bursting with ideas; it’s also a weakness, though, since there are way too many ideas to ever implement. We’ve touched on this before.

This came to mind again yesterday after reading this post from Jim Storer:

Pulling for You

Jim was looking for ideas for social-media-driven marketing promotions in line with “Join the Fiesta Movement,” which Ford is using to drum up interest in its Fiesta model. In the comments, I wrote this:

What if a bunch of local restaurants put together a sort of group scavenger hunt that led teams of people from one place to the next, sampling some specially-prepared micro-meal? Like a cross between a tasting menu and a pub crawl, with the unusual twist that it would be coordinated between restaurants that might be seen as competing with one another? What if the whole thing were coordinated by tweets?

Now, who knows whether this would work or not? Surely it would work better in a food-crazed town like Austin or San Francisco or New York than it would in Podunk, and surely it would need better organization than it could ever get from me. (I’m long on ideas, short on implementation of fine details.)

But how could this idea be implemented? Who would do it? And more important, how to get the word out — not just about this idea but any idea?

There’s this blog, which has a modest (but growing!) readership. There’s Twitter. There are other social-media outlets. But these venues rely a lot on serendipity, and if the right people from the restaurant business don’t happen across them . . . then what?

Now that I think of it, maybe part of my inspiration comes from the 999 business ideas recently posted on the SAMBA blog. That post had the advantage of a very big megaphone — Seth Godin’s blog — talking about it.

But that’s only one post, like this is only one post. What about all the other little potentially useful ideas that you and I and your neighbor and that smart woman in Purchasing may have? Do they just die on the vine?

So . . . what would YOU do to promote an idea like this?

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Photos: fridge by Kathleen Franklin, megaphone by Michael Douglas Bramwell, both used under Creative Commons license.