If Mark Carney ever needed confirmation that building a social media following for HCC Medical Insurance Services LLC was a good investment, the 2010 earthquake in Haiti proved it.
The Haiti earthquake caused substantial damage to the infrastructure of capital Port-au-Prince and nearby areas. Cell phone and fiber-optic service was affected and radio stations were knocked off the air for a week in what is one of the poorest countries in the hemisphere.
“We had a number of individuals and groups who were insured members,” says Carney, president and CEO of HCCMIS. “We had provided insurance products to a number of missionaries in Haiti.”
As a result, it was nearly impossible to get through to the members. Fortunately, HCCMIS had in place a social media outreach strategy that included multiple Twitter accounts, more than a dozen Facebook pages and a number of blogs.
Twitter with its short message service of up to 140 characters per tweet was particularly important in reaching policyholders via smartphones to respond to their questions and concerns and disseminate information.
“The tweeting during that period of time provided a great value to our policyholders, and even with the damage to the infrastructure, we were able to communicate and get the message out,” Carney says.
“Unfortunately, the world has seen a number of crises since then, and I think clearly your social media strategy has got to be part of what happens during a catastrophe. So we had a significant earthquake in South America, we had the 2011 tsunami in Japan, there have been earthquakes in China, there have been railway shutdowns in India, the list unfortunately goes on. It's about once a month.
In the past three years, HCCMIS’ innovative effort using online marketing and outreach has helped the company to triple all online revenue and total premiums for 2011 reached $60 million. Here’s how Carney enhances his customers’ experience through social media.
Decide the goal of your presence
Google has reported that as many as 97 percent of U.S. consumers search for products and services online. That fact alone has spurred many companies to join the online bandwagon. But before you make a knee-jerk decision to do that, give some thought to what will be your most effective online presence.
Carney says that even in his own company the launch into the social media field didn’t come out of a well-calculated process. But the dedication and enthusiasm of his marketing people carried the day.
“To begin with, it was, ‘I heard this and we should do that,’ and unfortunately there was not much thought into why we should begin a social media presence, and I guess maybe that's the way these things start out,” he says.
One of the best approaches is to avoid the temptation to be all things to everybody. Instead, stick to your niche. Re-identify it if you have to.
“From our perspective, the broad goal was to try to enhance the insurance experience through our staff by the way of a process that was personal and timely. That process was social media,” Carney says. “I think that is one of the reasons why the social media aspect of what we are doing has been recognized by the industry.”
By providing technologically advanced solutions to customers, HCCMIS has earned a spot as a leader in its niche: the travel medical insurance industry.
“We went about early on looking at simple tweets regarding our business, and our leadership in the marketing area helped us pull together a process by which we could really impact our business through social media,” Carney says. “Those would be all of the brands that you would expect: Twitter, Facebook, LinkedIn and so on.
Broad concepts can be proliferated through an online vehicle that has a small-town feel.
“You should try to take advantage of those community-style relationships that are online,” Carney says. “For instance, it is evident that it is positive when it comes to travel. You'd be surprised at the number of people who post, ‘I'm traveling to India next week.’ They are posting to their community and issues invariably come up regarding ‘What happens if …’ and ‘Has anybody bought one of these types of products?’
“Those are the issues that you should try to take advantage of. Again, if you can assist someone in the purchase process, if you can make sure from an experience standpoint that it is positive, even if it is not as positive as hoped — can we get it addressed? Can we get it addressed quickly? Can we be seen as getting it addressed? Those are all the broad concepts that you should be trying to accomplish through the social media strategy.”
Get on board
Above the surface, a social media presence looks simple, engaging and easy to use. Below the surface, there are many intricate segments that have to work in harmony and take time and effort to develop.
Any new venture is going to cost money. That’s why it is critical to get buy-in particularly at the upper levels for a social media strategy. A financial commitment will also show the lower levels how you see value in the strategy.
“You have to understand the value and how you translate that value at some point to a product sale,” Carney says. “You also have to have a strong financial model that's supportable, because a technology strategy can be expensive.”
Once Carney realized that a rationale had to be developed to support a major technology upgrade at his company, he crafted it in terms that all employees would understand.
“We updated the systems that handle the transactions and then most recently we upgraded the back-end systems in order to be able to address on an online real-time basis our key stakeholders and their needs,” he says.
“So if think about our stakeholders being our policyholders; our brokers that help sell our product; our providers that provide services; and our vendors that support those services, we figure out how we can address as much of that online as we can in order to meet the needs of someone who is sick in a hotel room in China and does not speak Chinese.
“It's a bit troublesome when you take your child to the doctor in the United States, so you can imagine if you were a missionary in Africa trying to take your child who is with you to a clinic where you really don't understand the language and you know your child is ill. Taking those examples and thinking in terms of your ability to help folks out ties together the mission with the project.
In addition, you should be prepared for a mindset adjustment when your social media policy is being developed and initially launched.
“I think part of this is that you need to grasp that it is sort of unfolding right before your eyes,” Carney says. “And you’ve got to be nimble enough to have an IT organization behind you that can make adjustments as necessary. It is not really very static.”
For the overall technology strategy to be supportable, the pieces of the puzzle have to fit together.
“So you're talking about a customer service component of what you do, you're talking about a marketing piece of what you do, you are talking about a sales piece of what you do,” he says. “All of those roll up into an overall technology strategy.”
Under the surface, there are also technology concerns that your IT department will have to work out.
“So ease of use, accessibility of web browsers being able to address all of the various tools, be it Google Chrome, be it IE 7, I mean you can just go down the list of the opportunities,” Carney says. “And dealing with technology issues around the world, I mean 40 percent of our search comes from outside of the United States. So from our perspective, it becomes a question of localization and where we have our servers. Our organization has a firm footprint in the United States and in Europe. How do we take advantage of our brand in those markets and how do we expand into other markets in order to take advantage of the burgeoning markets of Brazil, Russia, India and China? Those are really critical issues for us as we go forward.”
Finally, be aware that your social media strategy can impact you and Google and Yahoo.
“As you look at search engines and how search engines determine relevancy for websites, the social media strategies deployed by companies are playing an increased role in determining the relevancy of the webpage,” Carney says.
In other words, how much you and your followers use Twitter and Facebook and text about your company affects your placement on a search engine page.
“Where your website shows up in a search engine really depends on how much activity that you receive,” he says. “There are obviously lots of reasons why you do what you do with social media, and one of those is in order to make sure that you appear on the first page whenever you can.”
Be driven to improve
It is often the involvement of employees with the process and the technology that will help lead to successful outcomes.
“We’ve grown the company since its acquisition in 2008 by HCC Insurance Holdings, even while upgrading all the systems, by almost 50 percent,” Carney says. “For the domestic travel market, it has probably grown by 7 percent so even with that I think we are doing things right.”
Of the various ways to keep the 100 employees motivated and engaged, an online suggestion box is especially fitting for a company that uses technology.
HCCMIS deployed a process called “Driven” this past year which is a website internal to the organization and is part of the operating system improvements.
“We created a process to reward employees based upon suggestions to improve our efficiencies that end up being implemented,” Carney says. “We have a specific process in place. A group evaluates the suggestions and selects the best ones. The people who made the suggestions are rewarded based upon the impact the organization undergoes as a result of those suggestions.
“It's all part of the equation for us. It should be an important piece of what you do to recognize people who cared enough about your organization to make the suggestion. For instance, printing can be a big issue. People like to have fulfillment documents with them when they travel. Can they download them themselves, or do they want the company to send them?”
You should ensure that a process to reward employees for suggestions goes across the entire organization.
“It has to be obviously because when you have a company that is so dependent upon technology, you are always worried about unintended consequences,” Carney says. “So what happens if you change this, and how does that translate into other departments? The process for the most part involves trying to invest in and improve the workflow — minimizing steps along the way to allow as much of the work to be done upfront as possible so it is not adjusted later.”
How to reach: HCC Medical Insurance Services LLC, (317) 221-8037 or www.hccmis.com
The Carney File
Birthplace: Indianapolis, Ind.
Education: Bachelor’s degree in science from Purdue University
What was your very first job?
Serving in the Marine Corps.
What was the best business advice you ever received?
Learn how to sleep on an airplane.
Whom do you admire in business?
L. Ben Lytle. He was the executive who was the catalyst for the transformation of Blue Cross Blue Shield in Indiana into WellPoint, one of the leading health benefits company in the United States. Lytle understood very early the significant role information systems and the Internet would play on a health care company’s ability to compete.
What is your definition of business success?
Success in business can be succinctly summed up as creating value for stakeholders.
Carney on maximizing customer services: We want to make sure that we can provide interactions on a more broad basis: making sure that the call centers that we provide behind-the-scenes for us are able to handle multiple languages, that we are able to do online chat, and we look at all those strategies in order to try to maximize customer services.
Over the past couple years, Carmine Izzo has seen social media play an increasingly bigger role in how companies do business. One of the latest uses of social media is occurring inside human resource departments and how companies are researching candidates during the hiring and recruiting process.
Izzo, who is president of Amotec Inc., an executive search and staffing solutions firm, has seen firsthand a number of poor social media practices ruin job opportunities for qualified candidates. One that sticks out in his mind was a photo a girl posted on Facebook.
“There was a young lady that we placed at a large chemical company and she passed her pre-employment physical and was offered the job,” Izzo says. “Then they took a look at her Facebook page and there was a photo of her smoking marijuana on her Facebook page and they went back and withdrew her offer.”
Today, companies are embracing social media more and more and human resource professionals are researching potential job candidates on LinkedIn and Facebook to make sure that person is a good fit for their company.
“LinkedIn really jumped in and took a forefront from the professional side, and before any interview, you’re going to LinkedIn and you’re taking a look at people and seeing their social profiles,” Izzo says. “At the same time, Facebook has evolved to not just friends and families trying to keep in touch, but it’s a part of how we are recruiting and how hiring is being done.”
Smart Business spoke to Izzo about what companies and individuals should keep in mind when using social media to find a job or a potential employee.
If a company decides to use social media in the recruitment process, they’ve got to make sure that they’re doing it at the same point in the process every single time. If you don’t do that, there’s a chance that there’s some bias being brought into the interviewing and hiring process. We recommend that you talk to them and bring the candidates in first, interview them and then take a look on their social media site. Then there’s no bias in there and there’s nothing you can say one way or the other.
If you’re going to do it prior to (talking) then you’ve got to take a screen shot so people know what you looked at. You’ve got to assume that the majority of the candidates for these positions all have Facebook accounts, they all have LinkedIn accounts so it’s all on public domain. Each company should have their own social media policy in line to what the hiring practice should be.
Candidates have to make sure that the images that they are trying to portray are professional images. When I look at somebodies Facebook page or LinkedIn I’m looking at how they communicate in writing. We’re going to look at them and critique how they communicate with us. I’m going to look at, depending on what the position is, are they creative? What do they have on their page that says that they’re a good person? At the same time they shouldn’t have any pictures of themselves doing a beer bong, or pictures of themselves doing crazy stuff at a party.
If you’re embarrassed to let your mom, dad or grandparents see or read anything on your Facebook, LinkedIn or Twitter account, then you shouldn’t have that on it. That’s a pretty good rule of thumb for filtering out information that will tarnish your professional reputation. It’s the same for what people put up on their Facebook wall and how they post communications and links and you have to watch the photos that could possibly portray you in a poor light. If you’re out there aggressively looking for a job, you’ve got to maintain a professional presence at all times and if you’re working in a professional environment your page should be professional.
Make your social media page presentable
If you’re on LinkedIn, you should have a professional headshot. You’re LinkedIn page should almost be your resume sitting there. It gives you a spot to communicate what your successes are in your career so far and you can put in there what you’re looking for or if you’re open for opportunities. It is an electronic resume that you have on file and it should stay 100 percent professional at all times.
Facebook, on the other hand, is more social. Your friends are going to be on it and you’re going to be communicating. I would still keep that and maintain it, not necessarily a professional looking page because it’s supposed to be for when you’re off work, but it still has to be professional enough that you’re not seeing derogatory comments and pictures.
What makes a good Facebook page? It’s how it’s laid out. What they have on there. They’re not mad that they saw that Carmine went to a concert or Carmine went to Cedar Point, but if they see Carmine passed out drunk at the Cleveland Browns game and there’s crazy things going on around him, that’s not the image I would want anyone from my company to see on Facebook.
When I have these talks with high school students we talk about the dos and don’ts of social media. The dos are: express yourself, talk to your friends, but you have to keep a grasp on what’s out there and who’s reading it.
The don’ts are: don’t put anything on there that you wouldn’t want your mom or dad to see and don’t communicate in vulgar language. Remember this is public, so keep your personal business to yourself. Don’t complain on Facebook. I understand it’s an area that you want to vent, but post more successes rather than negative things. Anything you put on there electronically is there for life. You can delete it, but it’s still out there somewhere.
What we’re seeing is social media becoming the norm now in how we do business. If you learn to police yourself in a professional manner you’ll never have any issues. It’s important to remember you’re a brand and you represent yourself on Facebook and LinkedIn.
Your good reputation is your company’s most significant piece of equity. Are you monitoring and protecting its value?
Most brand detractors won’t go to your corporate website, Facebook page or Twitter account to complain. Instead, if aggravated enough, they’re going to tell anyone willing to listen why they should stop doing business with you. Word of your brand’s perceived inadequacies can travel at the speed of light and can destroy your good reputation within nanoseconds.
One in every five people is likely to speak their mind and bash brands through online channels. Research shows that people do not practice as much self-control in their online behavior as they would in person, or through other channels.
One negative social media comment can cost your company 30 customers. Conversely, a positive social media review could lead to 30 new customers.
A study by Convergys cited bad reviews or comments on a social network sites reach an average of 45 people. Of these, two out of every three never rebroadcast or play into the discussion. Instead, they silently commit to avoiding the brand being slammed. It is estimated that companies are losing about 12 percent of their customers that way. This can spell the difference between a company’s success and failure.
Cherry Tree also did research that found that while 22 percent receive a poor experience, only 2 percent actually complain, 98 percent of dissatisfied customers never complain with 55 percent of those customers at risk and 45 percent actually defecting.
The Convergys research focused on the impact between pre-purchase informational browsing by prospective customers, and its correlation to lost business. The study reinforced that the consumer experience now begins when the consumer logs on.
Don’t kid yourself into thinking that poor service, defective products or manufacturing glitches aren’t dissected in the social space. Tens of thousands of social sites with review mechanisms exist and more launch each day. Check them to see what’s being said about your company.
Think about it: One bad tweet can equal 30 customers lost. That means, with social media, great customer service is essential to the preservation of a company’s reputation.
Each second a dissatisfied customer is bashing a brand online, are they bashing yours?
If someone posts bad news or misinformation about your brand, how many of the people reading the post will then share it with their contacts? How many people reading the re-posting will then rebroadcast it themselves? The reposting or retweeting possibilities are both frightening and endless.
Think about the impact all that broadcast reposting and retweeting has on your company’s bottom line.
How much is your average sale? Multiply that number by 30 to determine revenues lost by each negative review you receive. How many times have you Googled a company, brand or individual prior to your doing business with them? How many times has your search influenced your purchasing decision?
Before doing business with you, potential business partners and customers are going to want to learn as much as possible about you. In the eyes of the potential customer, what appears in the search results on Google, Yahoo and Bing define your company. False, erroneous or misleading postings found in search engine results cost corporations hundreds of thousands of dollars each day.
It doesn’t matter whether the negative comments are from a competitor, a news site, a message board, a blogger or disgruntled employee – their impact can lead to devastating financial challenges. What will they find when they search?
Perhaps it’s time for you to begin formulating a plan to protect your good reputation.
Adrienne Lenhoff is president and CEO of Buzzphoria Social Media Marketing and Online Reputation Management, Shazaaam PR and Marketing Communications, and Promo Marketing Team, which conducts product sampling, mobile tours and events. She can be reached at email@example.com.
There are more than 900 million active users on Facebook, the equivalent of nearly three times the population of the U.S.
“The challenge with social media is that employees are constantly posting comments regarding their work and personal lives on their own time as well as during work hours,” says Laura Fleming, Shareholder with Stradling Yocca Carlson & Rauth. The line between public and private life often is blurred, which complicates the situation for employers.
Smart Business spoke with Fleming about the lawful use of social media in hiring, firing and other workplace situations.
Can employees be fired for using social media?
Most employees are ‘at-will,’ meaning they can be fired for any reason as long as it’s not discriminatory. As of now, there’s no law that explicitly prohibits firing an employee for behavior on social media sites.
However, some social media activity is legally protected. For example, civil rights laws protect employees based on their race, religion, disability, gender, sexual orientation, etc., so it could be unlawful to fire an employee for writing about religion on Facebook.
In addition, the National Labor Relations Board (NLRB) recently has targeted employers for firing employees who criticize working conditions on Facebook. The National Labor Relations Act (NLRA) was established to protect employees’ rights to engage in group activities to improve working conditions, especially through unionization. The NLRB has taken the position that employees complaining about working conditions on social media could be protected as if they were engaging in union activities. While a single employee on Facebook grumbling about an employer is not protected, if other co-workers join in — two or more, whether virtual or in real life — they may be protected under the NLRA.
Should employers conduct Internet searches to discover more about job applicants?
It’s prudent for employers to know who they are hiring and a social media background check can give you useful information. The problem is that embedded in this information are details irrelevant to the position and potentially protected. It can be a challenge to ensure that protected information doesn’t bleed into the hiring decision.
If you conduct an Internet search on an applicant be careful not to base any of your hiring decisions on information protected by civil rights law. In fact, some background check agencies will perform social media checks for you and screen out protected information so you don’t see it. You want to avoid creating any record that would show protected information was used in a hiring decision. In general, employers should avoid discussing any protected-category information during an interview and definitely avoid emailing such information to colleagues. Otherwise the applicant, having been denied the position, could claim that he or she was unlawfully passed over based on protected-category information discovered on a Facebook page or other social media site.
Can employers ask applicants and employees for social media passwords?
Right now, there are no laws specifically prohibiting employers from requesting personal social media passwords. However, Facebook has come out strongly against this practice, claiming it is a violation of its statement of rights and responsibilities to share or solicit a Facebook password. Also, in several jurisdictions, including Illinois, Maryland and California, there are movements to get laws passed to protect social media privacy. Regardless, any company that requests personal social media passwords risks lowering employee morale.
In addition, if an employer is trying to hack into an employee’s personal account without that person’s knowledge or coerce an employee to give up his or her password that could be a violation of the employee’s privacy rights or the Stored Communications Act.
Can an employer claim ownership of an employee’s Twitter followers?
In one high-profile case, an employee amassed some 17,000 Twitter followers and then tried to take the account with him upon his departure. There is an ongoing lawsuit to determine the rightful owner of the account, as well as the monetary value of the followers.
Because it takes time for the law to catch up to technology, there is not much legal guidance on how to determine ownership of social media accounts that are used for blended — work and personal — purposes. Thus, employers that engage in social media marketing should be careful to document their ownership of social media accounts. The employer should maintain and pay for the accounts, and prohibit personal use of the accounts.
How can employers protect themselves from social media-related claims?
All employers should have a social media policy, which safeguards several important interests. First, the policy should limit personal social media activities during work time or on work equipment. A recent survey found 64 percent of employees admitted visiting websites unrelated to work during work hours. Although it may be unrealistic to attempt to eliminate this activity entirely, to maintain a productive workforce employees must keep personal social media activity to a minimum. Second, the policy should prohibit employees from disclosing confidential and proprietary information online. The policy also should prohibit the use of social media to engage in any type of harassment of other employees.
Also, if a company is engaging in social media marketing, its marketing guidelines should comply with Federal Trade Commission regulations. For example, if employees are posting reviews of their employer’s products, they must disclose their relationship, among other requirements. Highly regulated industries, such as financial services and pharmaceutical/medical device, have additional restrictions on online advertising.
Laura Fleming is a Shareholder in Stradling Yocca Carlson & Rauth’s Labor and Employment Practice Group. Reach her at (949) 725-4231 or firstname.lastname@example.org.
Insights Legal Affairs is brought to you by Stradling Yocca Carlson & Rauth
Emanuel Rosen is the author of the national bestseller “The Anatomy of Buzz” (Doubleday, 2000) and “The Anatomy of Buzz Revisited: Real-life Lessons in Word-of-Mouth Marketing” (Doubleday, 2009). Prior to writing these books, he was vice president of marketing at Niles Software where he was responsible for launching and marketing the company’s flagship product, EndNote. He holds an MBA from the University of San Francisco. In this interview, he brings us up to speed on the techniques for generating buzz that every small business owner must master.
Q: Going back to fundamentals, why do people talk about products and services at all?
A: Buzzing is in our genes. We are programmed to share information with friends about where to find our next meal and about the tiger who’s about to have us as his next meal. We talk to connect, so when my daughter tells her friends about the new sweater she bought, she’s also establishing and maintaining her social ties. We buzz to talk about ourselves. If I tell you about a 10-day dog sledding trip in Alaska, I’m also telling you how adventurous I am.
Q: Which comes first, buzz or ink?
A: Usually it starts with some buzz that is followed by press coverage, which can take the buzz to a whole new level. Grassroots support can actually help you get ink — sometimes buzz is the best press release because it gives journalists this warm and fuzzy feeling that your story is for real and that there’s true excitement for it. Don’t get me wrong, if CNN calls you before your product is out, don’t tell them that you’re waiting for some grassroots buzz to build, but usually it doesn’t happen that way.
Q: Which comes first, buzz or sales?
A: There are some highly anticipated products — Halo 3 comes to mind — that get tons of buzz before a single sale. This is the exception. Since product recommendation usually starts with product experience, you need to have some people out there who use the product and hopefully get excited about it. How do you get these early customers? Part of it comes from word-of-mouth marketing methods, like seeding and sneak previews, but it also comes from traditional sales and marketing techniques. If your product is contagious in some way, then these early users will start buzzing about it.
Q: What are the essential elements of seeding a product?
A: The key point to understand is that although we’re all connected to each other, information about new products rarely spreads like a wild fire. Information tends to get stuck because we live in somewhat isolated social clusters. To accelerate buzz, companies seed their product in many different clusters. The ideal seeding campaign is done on a large scale and lets people have a firsthand experience with the product. You want to reduce the price barrier as much as possible, so the product is given for free or at a reduced price.
Q: How do you seed a website or free service?
A: The good news is that the price barrier doesn’t exist. The bad news is that the thing you’re seeding is less tangible. The basic idea is the same. You identify clusters of people by geography, area of interest, by academic discipline or whatever other classification makes sense in your case. You then approach some people in each cluster trying to engage them with the service. This is a challenge that is shared by other products. The fact that a publisher seeds the market with advance copies of a book doesn’t guarantee that people will read it. But with some follow up and encouragement and some buzz from fellow users, some more people eventually try the product and start buzzing about it too.
Q: What are the characteristics of a contagious product?
A: The best buzz comes not from publicity stunts but rather from the product itself. A product or service that makes you say, ‘Wow!’ when you use it for the first time is the classic contagious product. Other examples: products that evoke strong emotions — “The Blair Witch Project” — or reward you for talking about them — Facebook.
Products that are visible can be contagious as well — think of the first time you saw someone with an iPod. Even abstract ideas can become contagious this way. The idea of living with cancer was translated into the LiveStrong yellow wristband, which started millions of conversations about the topic.
Q: What can stop the spread of buzz?
A: Since I just mentioned LiveStrong, let me tell you about an interesting study. A research team at Stanford sold LiveStrong wristbands to students who lived in one dorm on campus. A week later, they started selling these wristbands in a neighboring dorm that had a reputation as a ‘geek’ dorm with a stronger academic focus.
What happened once the ‘geeks’ started wearing the wristbands? A week later, the research team measured a 32 percent drop in students wearing the bands at the first dorm. So sometimes, when we detect that ‘the wrong people’ are using your product, we stop using it and buzzing about it. This is true especially for products that have to do with our identity.
The most common forces that block buzz are noise, inertia and forgetting. We’re distracted by competing messages, we like to stick to ‘the good old way’ of doing things, and we forget what our friends told us. It is one reason why buzz needs to be accelerated. Even delighted customers might forget about your product and run out of opportunities to talk about it.
Q: What should you do if someone who has never used your product is bad mouthing it?
A: One of the things that surprised me most as I was working on the new edition of my book was that this type of negative buzz is quite common. One study found that 30 percent of negative word-of-mouth was by people who never owned the product. If you can identify the person who’s bad mouthing your brand, you might want to let them try the product. The problem is that you usually don’t know who they are, which brings us to another reason for why word-of-mouth marketing is so important. You have to counterbalance this constant trickle of negative comments with honest, positive recommendations from happy customers.
Q: What should you do if someone who has used your product is bad mouthing it?
A: First, listen to what they are saying. Our natural tendency when we’re attacked is to fight back, but negative comments may come from an actual bad experience. This gives you an opportunity to do two things. Solve that customer’s problem, which will often turn her from a detractor to a promoter. Even more important, it may help you identify a problem in your system, fix it and reduce negative buzz from others.
Q: Who is more likely in these Internet days to talk about your product: someone who’s had a good experience or a bad one?
A: There are two types of bad experience. There’s ‘I didn’t like this hotel too much,’ and there’s ‘The guy at the reception insulted me when I asked for towels and then sent up a dirty one.’ Frustrated customers are very likely to share their experience. However, it turns out that most buzz among consumers is positive. This may seem like a contradiction, but it has some simple explanations. One of them is that most of our experiences as consumers are actually positive.
Q: What is the role of old-fashioned advertising these days?
A: It is fashionable to say that advertising is dead, but I don’t agree. Very few products can live on buzz alone. Advertising can help a lot — at least good advertising can help a lot. First, in creating awareness and building the pool of people who can buzz about the product. Second, a good ad can prompt me to tell my friends about the product. Third, a good, authentic ad that brings in real people can stimulate buzz.
Q: How has technology changed buzz and word-of-mouth marketing?
A: It hasn’t really changed what we talk about. We still talk about ourselves, we brag, we seek advice, we gossip, we connect. The Internet’s biggest effect is that it accelerates buzz. In addition, it doesn’t only let us tell our friends about the products we use, but also lets us show them these products through videos and photos. It has enabled aggregation tools such as Yelp or TripAdvisor. In essence, it gives more people more opportunities to share information with others, which directly translates to more buzz.
Q: How can a company effectively measure the buzz it’s generating?
A: The simplest method is to ask your customers how they heard about you. You can measure the daily mentions you get on blogs and on Twitter. You can supplement this with traditional marketing research to learn what customers who don’t use these services are saying. Whatever method you choose though, you need to measure on an ongoing basis, if you want to detect any effects. Companies such as ChatThreads, The Keller Fay Group and Nielsen Online provide buzz measuring services. WOMMA, the Word-of-Mouth Marketing Association, offers lots of resources on the subject.
Q: Do you believe that there are key influencers who companies should focus on because of their insight, power and prestige — that is, an ability to lead a market as their wisdom trickles down?
A: The importance of influencers varies by industry. I suspect that they are more important in the pharmaceutical industry than in the yo-yo industry. Regarding the ‘trickle-down’ theory — this is not the way that buzz flows — especially today, buzz flows in all directions. I use the term hubs to describe people who talk more than average, and I make a distinction between social hubs and expert hubs. Both can definitely help a company spread the word, but companies should encourage everyone to talk, not only hubs.
Q: Where do you draw the ethical line on generating buzz and word-of-mouth marketing?
A: One key idea here is disclosure. Word-of-mouth marketing is not about tricking people. It’s about openly inviting them to try the product and talk about it. WOMMA offers a code of ethics that can help. When you’re trying to build buzz, you want to push the envelope and think outside of the box. And when you look for original ideas, you can’t police your thoughts. But after the brainstorming, you have to change your attitude dramatically. This is best done the morning after — over some strong coffee. Think again about your wild new idea. Ask other people what they think. Ask your customers and people in the community if you are crossing the line.
Guy Kawasaki is the co-founder of Alltop.com, an “online magazine rack” of popular topics on the Web, and a founding partner at Garage Technology Ventures. Previously, he was the chief evangelist of Apple. Kawasaki is the author of 10 books including “Enchantment,” “Reality Check” and “The Art of the Start.” He appears courtesy of a partnership with HVACR Business, where this column was originally published. Reach Kawasaki through www.guykawasaki.com or at email@example.com.
Let’s face it: We all want to be liked. But when it comes to being liked in the social media space — specifically Facebook — many companies make the mistake of measuring the quantity of the “likes” they receive as opposed to the quality.
The reality is that the quality of the likes is often much more important and relevant than the quantity of likes. That fact was driven home to me by the case of one of our clients.
Recently, the client told us that it want to gather more than 1 million likes on its Facebook page. The client’s page receives a steady viral increase of 500 to 700 weekly new likes, and the likes are “quality” likes with relevance to its company. They are coming from individuals who have a special interest in the company, who want to participate in conversations and are actively sharing our client’s posts on their personal Facebook pages and within their social contact spheres.
Looking at the analytics of the individuals who like our client’s page, we’re finding that in addition to being highly activated and engaged, they are also target-market and geographically relevant. The likes are happening because customers are actively sharing the content, pushing new people to discover the page, engaging in relevant discussions and are coming from people specifically seeking the company online in order to socially connect.
Thus far there have been no ad buys and there have been no contests launched to also supplement growth efforts. Their collection of likes — now in excess of 50,000 — has come through social networking efforts.
But internally, our client is facing the same struggle that thousands of companies currently face when it comes to evaluating their social media ROI. Managers within their organization feel that in order to justify the relevance of social media in their marketing mix, they have to obtain as many likes as possible. But getting people to simply click the “like” icon on a Facebook page is not difficult.
There are many ways to quickly inflate page likes. Contests spike likes but most of the entrants are only interested in winning the prize and not in making a purchase. You can buy packages of page likes but the majority of “purchased” likes are typically not buyers and are not geographically relevant.
Facebook ad campaigns, which are similar to Google pay-per-click advertising, can also help drive new likes. Facebook ads allow an advertiser to drill down to target potential brand loyalists and customers by a variety of geographic and psychographic denominators.
The issue is that once you stop the contest or the advertising campaign, your number of new likes will drop off considerably. You potentially will see an exponential increase in likes during the campaign period.
But what good are these new likes if people liking you possibly only visit your page once? If they initially like you and then never come back, they aren’t paying attention to what you’re saying, they’re not engaging with you and they have no interest in buying your product or service — or telling others to buy your product or service.
The relevancy in social media is to have people talking about you and with you, and ultimately becoming your brand evangelists. Statistics have shown that 90 percent of consumers trust peer recommendations and 70 percent of consumers trust recommendations online.
Companies need to turn their attention away from trying to use likes as a popularity contest. As a company leader, you need to realize that if you have a Facebook community of 1,000 consumers who are actively engaged, with analytics showing huge impression rates, it is much more valuable than a community of 10,000 who visit your page, click “like” one time, then seldom — or never — come back.
Adrienne Lenhoff is president and CEO of Buzzphoria Social Media, Shazaaam PR and Marketing Communications, and Promo Marketing Team, which conducts product sampling, mobile tours and events. She can be reached at firstname.lastname@example.org.
Five years ago the economy was humming along, and Service Foods was humming right along with it. The Norcross, Ga.-based gourmet food supplier was growing steadily throughout its five-state Southeastern base. But CEO Keith Kantor was uneasy, because he felt his company was vulnerable. Many of Service Foods’ customers regarded the company’s home-delivered fare as a luxury. If the economy were to turn sour, some customers would start cutting their household budgets — and luxuries would be among the first things they would cut.
“Several years ago, I started to feel like we were headed toward an economic downturn,” Kantor says. “I thought the boom would still continue for a period of time, but with all the signs we were seeing — debt going up, oil prices going up, prices going through the roof, especially in real estate — I didn’t feel like it would last. The bubble was going to burst.
“So I got our leadership together and I said, ‘This is what I think is going to happen, and this is why I think it’s going to happen,’” he says. “And everybody basically agreed.”
Service Foods’ leaders had to do something to reduce the company’s level of vulnerability. After a series of brainstorming sessions, they concluded that Service Foods had to radically change how customers perceive its products and services. It had to change the perception of its offerings from luxury to necessity.
“The overall strategy we came up with was we had to change how customers regard our products and services from a ‘want’ to a ‘need,’” Kantor says. “What I mean by that is, while we’ve always sold mainly all-natural foods, before we made this transition, we simply marketed it as the highest-quality, best-tasting food you could get. And even though a lot of the food we sold was all-natural, we weren’t pushing that aspect of it. That wasn’t one of our key points.
“So we decided we had to switch how people think of our offerings from a ‘want’ — you know, to want high-quality, great-tasting food — to a ‘need’ — where all of the food we offer is all-natural, and it’s needed to maintain a healthy lifestyle. And we knew we would have to create a lot of new services to back that up.”
Break it down
Making the transition from “want” to “need” would be a laborious undertaking for Service Foods. The company’s leadership broke it down into several strategic components, each one an extensive, time-consuming project of its own:
- The company would have to ensure that all of its food offerings were all-natural, and it would have to get them certified as such.
- It would have to hire and train a team of health professionals — nurses, dietitians, chefs, fitness experts — to educate its clients about nutrition and related aspects of healthy living.
- To reflect its new identity as a purveyor of all-natural foods and healthy lifestyles, Service Foods would have to become more tech-savvy in its use of social media, and it would have to overhaul its website and its marketing program.
- To be able to effectively lead this new kind of company, Kantor, who at the time held an MBA and a bachelor’s degree in biology and chemistry, decided he would need to obtain two more degrees: a master’s degree in nutritional science, followed by a doctoral degree in the same field.
“To make the transition, we had to do a huge number of things, and we had to do them fairly quickly,” Kantor says. “We had to resource all of our foods and make sure we got them certified by the USDA as all-natural. That in itself was a big project. You rarely see the USDA all-natural seal, and now it’s on all of our foods.
“It was a long, time-consuming process,” he says. “First we had to get the USDA’s approval to label our products all-natural. Then we had to get the approval of the All Natural Food Council of North America and the Natural Products Association.”
At the same time Service Foods was moving through this certification process, Kantor, in his early 50s, decided it was time to go back to school.
“Although I already had my master’s, I went back and I got another master’s in nutritional science,” he says. “Then I went on to get my Ph.D. in nutritional science. I knew I needed to do this in order to make sure I had tool and skills I would need to head up this program.”
Get the right people
The staffing component was central to Service Foods’ evolution from purveyor of high-quality, great-tasting food to a company that would be able to guide people on how to lead healthier lives.
“We had to hire a team of registered nurses, registered dietitians, all-natural chefs and fitness experts,” Kantor says. “Fortunately, I have family in some of those fields, so that made it easier in some ways. My wife is a nurse. And my daughter is a fitness expert. So she set up that part of the program for us.
“Adding all these health professionals to our staff has greatly increased the value of services we can offer our clients,” he says. “It makes it clear that healthy living and mitigating disease are central to our company’s mission.
“Now, if you’re one of our clients and you want to talk to a dietitian, you can do it virtually 24/7, online and through all the social media. The same thing with a nurse; the same thing with fitness experts. And we even have some doctors and dentists that do this for us.”
Another component of the transition is that Service Foods now accepts referrals from doctors and insurance companies.
“We get a lot of referrals through a company called Vital Healthcare Group, which has about 7,000 doctors in their group,” Kantor says. “What they do is, they’ll tell us this patient has this particular health problem, so please put them on the proper diet. So if somebody has diabetes, we’re able to put them on the proper diet for diabetes, with the proper food. And if somebody has a history of cancer in their family, we can put them on the proper diet for that. Heart disease, et cetera, all those things. So now, you can get the great-tasting, super-high-quality food, but the reason you’re doing it is different. You’re doing it for healthy-living reasons, for the health of your family, versus because it tastes good.
“In addition to that, we’ll send to the doctor in electronic form a list of what we’re giving the people, and they actually break it down into grams and milligrams of cholesterol, carbohydrates, protein, et cetera, and then the doctors can actually put this information into their patients’ medical records, electronically. So this helps them with the diagnosis and treatment of their patients. And we also do this with supplementation — vitamins and minerals. We’re the first company in the United States to do this.”
While Service Foods was converting to all-natural products, getting them certified, and hiring staff, the company also advanced its use of technology to deliver its new message, its new identity and its new services to its clients.
“We totally redid the website, making it very interactive,” Kantor says. “Now we not only list every product, we also include the nutritional breakdown and any allergens the foods contain, such as gluten, peanuts, MSG, et cetera. And we now have special calculators on our site so clients can see the breakdown of products they buy at stores or in restaurants. And we also had this all done on a mobile site to make it easier to use on the go.
“In addition, we developed our own supplement line called Purely Natural Supplements, and our site has videos on the products and a questionnaire so clients will know what they need. And we researched and had articles written on almost every major disease and on what foods and supplements will help.
“Lastly, with the help of my son Ryan, we became active in all the social media — Facebook, Twitter, LinkedIn, Flickr, YouTube — so we can keep our clients informed and make it easier for them to communicate with the health experts.”
As he has led Service Foods through its transition from a company whose products and services are regarded as luxuries to one whose offerings are considererd necessities, Kantor says the key thing he has learned that he would recommend to CEOs facing a similar situation is that it’s crucial to listen to your staff and to trust them.
“The most important thing you need to know is you have to listen to your people,” he says. “You know, you may be the CEO and the head of it, but all the ideas don’t have to come from you. You’ll just want to make sure the ideas are properly implemented. We broke everything down into teams and let them feel free to help and make suggestions and plan goals. That is by far the best way. You have to really listen closely to the feedback you’re getting. Ninety percent of it may be off base, but 10 percent of it will be good stuff — and stuff that you never would have thought of yourself.”
Kantor has one other piece of advice to offer CEOs looking to make a major transition in their company’s mission: “It’s going to take way longer than you think and cost way more than you think, so you’d better be prepared for that.
“If we had come up with this plan further in advance, it would have been much easier,” he says. “We did it in response to what we foresaw as a financial crisis coming on. But if we had been able to do it just as if it were a change in marketing strategy, we would have had more time to ease into it. That would’ve made it a lot easier.”
Turning the corner
Overall, Service Foods’ conversion took between three and four years to accomplish, and the company has at last begun to see tangible results.
“What happened is that mostly because of this transition, during the real recession we didn’t dip much at all, which was a huge thing for us,” Kantor says. “And we started gaining some market share. But at the same time, we were spending a lot more money to do a lot of the same things, and some new things, with a different purpose in mind.
“The volume stayed the same for a while. Then it started increasing, but the profit didn’t increase — in fact it decreased some because of the extra money we were spending making the transition: the sourcing, the labeling, the certifications, the marketing, the education. So the results we saw were that we didn’t lose market share, then we started to gain market share, but we lowered our profits to do it. Now that’s starting to turn, where we’re still gaining market share, and the profits aren’t deteriorating anymore. They’re starting to stabilize and slowly going up.
“The transition took us a number of years, but it obviously worked pretty good, because we’re now the No. 1 healthy living company in the country,” Kantor says. “But it took a long time and a lot of effort.”
HOW TO REACH: Service Foods Inc., (800) 872-3484 or www.servicefoods.com
THE KANTOR FILE
Name: Keith Kantor
Company: Service Foods
Born: Bronx, N.Y.
Education: B.S. biology and chemistry, City College of New York; MBA, Chapman University; master’s degree, nutritional science, Kaplan University; Ph.D., nutritional science, Corllins University
What’s the most important thing you learned during your years as an officer in the Marine Corps Reserve?
If your people feel like you’re truly loyal to them and will go to bat for them, you will get that back tenfold. If you have the trust and loyalty of your people, you can do almost anything. Of course, as a Marine, I always relate it to battles and things like that, but of course it’s not quite that bad in the corporate world. It’s more petty and less deadly.
Do you have an overriding business philosophy that you use to guide you?
I’m very pro-American and pro-veteran. A lot of my employees are veterans or are in the reserves, and we do a great deal of stuff to back those efforts, like Toys for Tots. If any of my people are activated, they get paid in full. Not just the difference — they get paid in full plus whatever they get when they’re on active duty.
What trait do you think is most important for a CEO to have?
Loyalty. And, you know, sometimes loyalty can be a fault, when you don’t change things up quickly enough out of loyalty, but most of the time I think it’s a positive attribute.
What’s the best advice anyone ever gave you?
You can give somebody fish and they’ll eat for a day, or you can teach them to fish and they’ll never be hungry again. My dad told me that when I was little. I didn’t understand it very well then, but I do now.
How do you define success?
Leaving your mark on society in some form or fashion. That’s why we’re so excited about the new direction our company has taken. If we can truly make a dent in the health care crisis, that’s a legacy that any company or organization would be proud of.
The ubiquitous nature of technology allows businesses to acquire and share information nearly instantly across multiple platforms. And while this can be a great thing for networking, marketing and gathering information, it can be potentially devastating for a business if the technology is used inappropriately by an employee, says Todd Roberts, a partner at Ropers Majeski Kohn & Bentley PC.
Smart Business spoke with Roberts about the risks of electronic media and steps you can take to mitigate them.
Can an employer use social media to screen candidates during the interview process?
As time has gone on and as the labor market has become tighter, employers have been more aggressive in their efforts to screen prospective employees. One way they are doing that is to ask for not only the username of the applicant’s Facebook page but also for the password so that they can see what’s been posted and get to know that applicant in an unfiltered way.
Before employees were more sophisticated about the security settings of Facebook, it was not uncommon for the information that they had posted to be able to be viewed publicly, and for those who were hiring to access those web pages. Apart from the legal issues that are implicated, many prospective employees are completely put-off by what is perceived to be coercive and intrusive conduct.
There’s a clash between the privacy rights of prospective applicants who are looking for a job and business owners who are looking to hire them. There is legislation that is now pending both in California and at the federal level that would restrict, if not prohibit, employers from asking for Facebook account information that includes passwords.
Until the legislation is enacted, however, employers are free to ask for an applicant’s Facebook password, and if the prospective employee doesn’t want to give it, he or she can’t be forced to do so. However, declining may disqualify them for employment under the circumstances. There is definitely a move afoot to prevent that type of perceived invasion of privacy.
Is a business owner able to censor social media use by employees?
There is example after example of employees who have been terminated for acts of disparagement against the employer or other misconduct posted on their Facebook page. There is some movement at the federal level through the National Labor Relations Board, which has stepped in on behalf of workers who are members of a union. Those workers have contended that disciplining an employee for complaints about the employer on a Facebook or other social media page is unlawful conduct in violation of the National Labor Relations Act, because it’s protected concerted activity. These are laws enacted in the 1930s that the NLRB is trying to apply in the digital age.
How can business owners protect their company from improper use of social media by employees?
Some employers prohibit the use of Facebook at work and restrict access to other websites that are not reasonably related to the business. More recently, employers have been forced to adopt social media policies that restrict employees from making statements about the company, that appear to be on behalf of the company, or engaging in any use of social media that would cast the employer in a potentially negative light. There is no ‘First Amendment’ issue because private employers have the power to restrict the speech of their employees in the workplace.
The first step is to draft an electronic privacy and social policy, but the key really is in the implementation and the followup. You can have a 100-page manual consisting of all these regulations, but if an employer isn’t doing anything to enforce the policy, it becomes less likely that a court is going to enforce it, either.
The next step after the adoption and implementation of these policies is to widely disseminate it to employees by way of training sessions. Each person should also be asked to sign off that they have read the policy, understand it and agree to comply with it. Where most employer’s trip up is in the enforcement phase. If an employer becomes aware of misuse or violations that are occurring but turns a blind eye, it becomes more difficult to justify discipline over time.
How can employers address email, cell phone usage and other forms of electronic media?
There’s some overlap, not only with social media, but also with the use of new technologies — email and text messaging are most prevalent — where employers and small business owners can get into trouble or be exposed to liability.
There are also multiple cases in which someone is using their cell phone for work-related activities even if it’s on their day off or otherwise on their personal time. In this instance, the employer could be sued for an accident in which the employee is involved, because the actions involved circumstances arguably benefitting the company at the time of the accident.
Having an electronic and social media policy in place outlining the responsibility of the employee in regard to use of these programs and devices, and then policing and enforcing the policy, is vital to protect the company from unwanted lawsuits or damages.
Todd Roberts is a partner with Ropers Majeski Kohn & Bentley PC. Reach him at (650) 780-1601 or TRoberts@rmkb.com.
Insights Legal Affairs is brought to you by Ropers Majeski Kohn & Bentley PC
The risks for companies using social media are plentiful, from employees who reveal trade secrets to being held responsible when outside users post copyrighted material to company-operated web pages. To avoid legal ramifications and lost business opportunities, you need to be aware of potential pitfalls.
“Social media increases the ease with which information is communicated and it does it in a permanent and attributable way,” says Robert Sieg, a Partner with Fay Sharpe LLP. “This can make it easier for confidential information to be leaked out of a company and create a potentially more harmful situation when such a leak occurs.”
Smart Business spoke with Sieg, as well as Fay Sharpe attorneys Mark Rogge and Sean Weinman, about how social media can impact your company’s intellectual property and image.
What security issues can arise with the use of social media?
With many people conditioned to post almost anything on the Internet, confidential company information such as upcoming product releases and acquisition plans are more at risk. With information posted online, that creates a record that can be found by a routine keyword search and that is directly attributable to an employee of the company, giving it more credibility. This can give the media a much stronger lead to dig into what is going on in your company. Information could also be posted that would compromise a company’s ability to obtain patent protection on new inventions or that reveals trade secrets.
As a safeguard, make sure that only those authorized to do so post to your company’s web site and social media sitesthat your legal department reviews posts before they go live and that patent attorneys review materials to make sure confidential technical matters aren’t being released.
What ownership issues arise in the context of social media?
While the ownership of a tangible item such as a company car can be clear, when it comes to social media, the distinction becomes blurry. In many cases, employees are creating pages on sites such as Facebook for company purposes using their own names and information.
That is something that you need to monitor. If you really want that site being used to represent your company, you need to make sure that it’s clear that you own that site. This can mean opening the account in the company’s name and having documentation, such as an internal social media policy, that describes ownership and proper use of the site, as well as addressing contingencies such as severance issues.
However, sites such as LinkedIn can make it difficult to distinguish between work and personal use, as many companies encourage employees to set up accounts to network with and build business contacts. But if an employee leaves for a competitor, he or she may take that LinkedIn account upon departure, and all of those contacts created as a result of employment with your company go with the employee.
While a company can argue that the account was created on company time as part of the employee’s assigned work, this can be difficult to prove, so you need to proactively set up policies to establish guidelines to ensure employees don’t walk out with your property.
What should be considered in deciding what can be posted to a company’s social media site?
If you allow visitors to post to your site, consider that it could open you up to liability. The Digital Millennium Copyright Act offers some protections against copyright infringement by providing a 'safe harbor' notice and takedown procedure in some cases in which owners of copyrighted material ask for posts to be removed. Companies should be familiar with these policies and have someone monitor posts to the company’s site to ensure that improper material is not posted.
Many companies have a dedicated employee policing their site, but with that approach, you might already be in trouble before that person becomes aware of an issue on the site. To prevent this, companies can implement a moderated system, which allows the host to queue comments for review before they go live.
What are the dangers of using social media for promotion?
While social media can be used to drive awareness and generate sales, you need to avoid misleading and deceptive advertising such as false blogs that appear to be independent but that are actually operated by someone working for the company.
In 2009, the Federal Trade Commission established guidelines concerning the use of endorsements and testimonials in advertising, which require the disclosure of connections between advertisers and endorsers. If you have third-party endorsers rating products on your web site, but they’re misleading the public, your may be liable for that false or misleading practice. But beyond any legal considerations, it's just not good advertising for your company if people discover that you’re misleading them.
How can social media impact the branding of a company?
The growth of social media has brought with it problems that can affect trademark management and the preservation of goodwill associated with a company’s brand. Practices such as cybersquatting, which involves parties purchasing Internet domains related to brands or company names, is a rising trend. Cybersquatters hold companies hostage and try to sell them those domain names for a price. In other cases, squatters may post explicit material under the brand name or company banner, or using your good name to drive traffic to their own sites.
Registering your company or brand trademark can go a long way toward stopping a cybersquatter, but the problem is exacerbated as new social media sites continue to appear. As a result, once a brand new social media network arrives, register whatever space you can that could be associated with your product to make sure that no one else does so.
Robert Sieg, Mark Rogge and Sean Weinman are attorneys with Fay Sharpe LLP. Reach them at (216) 363-9000 or email@example.com, firstname.lastname@example.org or email@example.com.
When it comes to social media, many businesses now have Facebook pages, Twitter accounts, blogs and YouTube channels, yet they are left wondering, “What’s it all worth?”
Measuring the return on investment from social media is as challenging if not more challenging than measuring traditional marketing for a number of reasons.
Brand impressions differ
First, let’s face it. Many aspects of marketing are difficult to measure. A common quote in advertising states, “I know that half of my marketing dollars are being wasted. I just don’t know which half.” Marketing and public relations, two of the most common functions involved in social media, are notoriously difficult to quantify.
Time-proven metrics for measuring marketing don’t work well in social media. In traditional media the success of a television ad is determined by multiplying a score of how effective the ad is by the reach or number of people who see the ad.
This doesn’t work well in social media because brand impressions are not all the same. For example, there is a vast difference in the level of brand engagement of an individual who passively reads a tweet versus someone watching a two-minute video.
The true reach from social media is also elusive. A study from PageLever showed that only 3 percent to 7.5 percent of brand fans on Facebook actually see branded messages. So while many brands will claim to reach the 5,000 people who have liked them on Facebook, they are in fact only reaching a small percentage of this audience.
That being said, there are a number of strategies that can help assess the potential value from social media marketing:
Direct marketing return
This is the most obvious type of return from social media. It involves looking directly at indicators that social media is driving business. This may include areas such as website traffic, redemptions of coupon codes, leads generated or e-mail addresses obtained.
Customer retention return
Many angry customers don’t get satisfaction from traditional customer service, so they take to the Internet. It is a growing expectation that businesses respond to customers on social media sites.
In working with a company recently, an executive asked me, “We aren’t going to make everyone happy, so what’s the point?” I asked him what the lifetime value of a customer was, and he responded that it was a few thousand dollars. Next I asked how many customers they would have to keep as a result of social media efforts for it to pay out. The answer was one per month.
By using this logic, we can determine if it is reasonable to expect the social media efforts to keep one customer happy and prevent them from leaving.
Similar to the customer retention return, a return on word of mouth can be calculated by looking at the lifetime value of a customer and assuming that because of making the effort on social media, a certain number of incremental referrals were generated from customers. It usually doesn’t take very many of these to start paying off.
Awareness and exposure
Awareness and impressions do have value in marketing online. An old marketing principle known as the Rule of Seven states that it takes seven interactions or impressions with a brand before someone chooses to do business. By having a presence in social media brands can increase the general awareness and impressions of a brand.
The items above are just a starting point. The key to success in judging the return from social media is to fully understand the goals and objectives and then measure your campaign against your objectives.
Don’t hold social media too highly
When evaluating social media, be sure that you aren’t holding it to a higher bar than other media. I spoke to an organization recently and the VP of marketing asked how they should judge the return from social media. I told him to measure it the same way they measure the rest of their marketing. He gave me a funny look and said, “Well, we don’t really measure the rest of our marketing.”
Just because you can measure clicks and traffic, doesn’t mean that those are the only things adding value in your social media.
Be sure to think comprehensively about your social media efforts and set goals up front.
Krista Neher is the CEO of Boot Camp Digital, author of the bestselling “Social Media Field Guide” and an international speaker.