Social media: new marketing tools – or a fundamental change for business?

Presentation prepared for the Social Media Branding & Marketing Strategies 2011 Forum, Johannesburg, 24th November 2011.

Background

• There is no doubt that social media has impacted the way we do business faster and more fundamentally than anything else since the advent of information technology. – Yet, whereas information technology was an inside-out phenomenon, the social media

era is an outside-in phenomenon. It enables consumers more than it enables business. – Whereas many companies called themselves “customer-centric” before, mostly paying

lip service to it, social media has put the consumer in the boardroom, whether companies like it or not. They cannot avoid it, hence they need to deal with it.

Background (cont.)

• Yet, in my experience, hardly any company is prepared for this. If companies were unable or reluctant to be truly customer-centric before, the new era will be suicidal for companies that cannot dramatically reform themselves. – In this presentation, I will outline the ways in which I believe social media will most impact

business, and suggest ways for companies to not only cope with that but that to leverage it to their competitive advantage. • This is as much a strategic as an operational argument.• It is much more than a marketing argument. • It is certainly not only about new media being available to business. • It will elevate quality of delivery as a critical success factor for business more than ever before, as

non-delivery will be transparent to all. • Paradoxically, it will re-balance the traditional marketing equation where marketing

communications became the central marketing tool for most companies. – Product will once again become central. – If anyone disagrees with this statement, just compare the low levels of customer

satisfaction in most industries and for most companies. » Customer satisfaction is fundamentally a response to product or service

delivery, not to marketing.

SO:

Do not see social media as a marketing tool, that is a fundamental mistake.

It is a business imperative.

It is not your decision as to whether you engage that way. That decision has been made for you.

My belief is that social media now needs to be central to the business argument.

This makes it a strategic issue, not merely an operational one.

Is this the end of the lipstick on the gorilla?

For many years companies could get away masking bad quality or service levels with good marketing… no

longer…

Social media is now WHAT people do with their spare time…

Source: Nielsen

Regular users are also active in society…

Hence they are engaged & vocal!

Source: Nielsen

Just to remind us all: what are the key changes we are facing?

• Universal access to information.• Independent sources of information dominate.• Most decisions are now mediated.• Facts and opinions gets equal weight in the consumer dialogue. • Companies are now “naked”. • Industries blur more than ever before. • A total change in the competitive mindset of consumers.• An equalisation of companies and consumers. • An equalisation of large and small companies.• A loss of control by companies. • A shift from a money based marketing model, to a person-based marketing

model. – It is not how much you spend, it is how much quality “person-time” goes into it. – Added to this is how “good” a company is, in all ways. Sincerity & honesty is vital.

What does this era mean to us in business?

• We don’t know! The advent of social media brought about huge amounts of uncertainty for business. Business have more often faced the negative consequences. – No-one can be exactly sure how it will impact business. Not even the most informed are

100% sure. Business do not like uncertainty - on top of the uncertainty of dealing with emerging economies and the global financial turmoil, this is the most challenging time we ever faced.

– It is fair to say business in general is not ready for social media. – Yet it requires change: this is not a “passing phase”.

For a company: DO

1. Review your business & marketing objectives relative to your social media objectives.

2. Review how you view/ engage the consumer in your company. Listen more

than you talk. Become really cUstomer-centric.3. Re-align your people, company structure & operations. Now the consumer is

king/ queen, with all the volatility that comes with that. 4. Check & manage your product & service integrity. This will become the “P”. 5. Marketing as a discipline to marketing as a way-of-life. 6. CONTENT RULES! Unless content engages, it is irrelevant and will simply go

unnoticed. This implies a shift away from sheer scale or money dominating marketing.

DO: 1. Review your business & marketing objectives relative to your

social media objectives.

We engage in social media selection & implementation - before we consider why.

• Consumers do not WANT to engage with most companies: they are either not liked enough or important enough to them.

• The result is a “corporatisation” of social media: websites simply go onto Facebook; followers on Twitter are mostly staff; Youtube posts are of advertising or other marketing content of interest to the company; requests & compliments are often posted by staff.

• So we treat social media like we treat traditional media. This is fundamentally wrong. Unless we simply do not know what to do with it!

Strategic questions you need to ask before you act:

• What is the purpose of your social media engagement? • How does your social media objectives fit into your business objectives?• Whom are you trying to communicate to and/ or engage with? What segments of the market are

they? Why are you communicating with them? • What are the prevailing attitudes & perceptions of these segments?• What are you trying to communicate to them? Is that important to them & will that differentiate

your company/ brand? • What format will be best for that type of communication or engagement?• What “content quality” will best serve this engagement? Will that appeal to consumers? Will it

generate viral expansion of the content? • What are the product & service quality, people, structural, operational & marketing implications

of that?• How will social media channels amplify or compliment your marketing & other marketing

communications activities? Are they all objective related? • How will you measure success?

(Source: an expansion of the Shimamoto, Hawaii-based social media strategist views on Slideshare.)

Business objective/ purpose

Relevant segment targeted

Example formats

Create awareness. Youth, 21 – 24, non-users of banking products. Users of transaction accounts at competing banks.

Youtube with exceptional content.; exceptional blogging; wide networking media presence (i.e. Linkedin profiles of all directors); emails to contacts.

Personal networking/ expand networks.

Existing A+ income customers.Existing small business owners with a turnover of between R5 and R10 million.

Facebook; twitter; Flickr; Youtube; Q & A’s in Linkedin; RSS feeds from blogs; check the blogs in your industry through Google.

Engagement/ communication with customers.

Facebook; twitter; emails; cellphone messaging; applications for phones and tablets.

Expertise/ thought leadership. Existing small business owners with a turnover over R10 million.

Blogs; twitter; websites; Linkedin and other expert discussion groups; Podcasts; Webinars; Slideshare and shared blogs; Youtube; contribute to Wikipedia.

This should, amongst more strategic issues, result in a decision-matrix such as the following example.

DO: 2. Review how you view the consumer in your

company. Listen more than you talk.

There are two sides to any marketing engagement, regardless of the communications tool used.

The company The consumer

The company with the intention to engage with the consumer:• To sell.• To manage relationships. • To build reputation.

The consumer who may - or may not - want to engage with the company:• On existing business.• On potential business.

A paradigm shift is needed: FROM.

The company connects with the

individual

TODAY COMPANY ENGAGEMENT ARE CORPORATE.

The company connects with the

individual

• Social media usage are extensions of websites/ corporate profiles. • No consumer needs-based engagement.• Not of natural interest to the consumer.• No immediate benefit to the customer.• Largely defensive, unlikely to ever become a serious tool of engagement – or even marketing or sales.

A paradigm shift is needed: TO.

The company connects with the

individual

The individual connects with the company

CREATE NETWORKS & TAP INTO NETWORKS OF INFLUENCERS & CONSUMERS.

CONNECTIONS START FROM A CORE OF COMMON INTEREST.

The company connects with the

individual

• LISTEN more than you talk!• Links are consumer issues/ needs based. The company needs to identify these and link into them to create engagement. This must be an honest and transparent engagement. The benefit must be reciprocal, not one-way.• Links are natural extensions of issues, people, content, needs, entertainment. • Of benefit to the customer, even if just to inform, entertain or engage them. • Links into existing consumer networks.

Whereas the company “pushes” in traditional marketing communications, we need to get the consumer to “pull”.

The company push is created

through relevance of

content matched to consumer

interest

The consumer pull is created through: • Needs.• Relevance of information or content. • The visibility and impact of content. The consumer wanting to “send-it-on” to his/ her contacts.”

Create the “link” of reciprocal benefit and leverage the best tools to engage.

Understand consumer needs well enough to find meaningful and honest ways to engage.

The way the tools seem to be used best.

The company The consumer

• Websites.• Profiles.• Newsletters. • Online brochures.

• Linkedin profiles.

• Blogs.

• Facebook profiles.

• Youtube.

• Twitter.

• Discussion groups and forums.

Line of greater engagement.

Where involvement is now. One-way.

Where engagement must go – and where the opportunity lies. Two-way.

How do you listen more? Some tips that may help.

• Interpret your competitive space wider. View it as consumers will. • Create consumer networks.• Create influencer networks.• Create staff networks.• Conduct formal research.• Read widely and see what make companies and brands work.• Observe what people do.• Trust your intuition. • Use supplier networks.• Use your own structures like Call Centres, customer service departments,

staff and salespeople. • Monitor & measure. Learn.

DO:3. Re-align your structure & operations.

Now the consumer is king/ queen, with all the volatility that comes with that.

The shifting paradigm & its resultant marketing & operational implications.

The consumerThe company

Ongoing engagement: assessing needs; consumer as part of the decision-making about new products & services; ongoing interface

& feedback; consumers as partners in the growth & expansion process by linking with their networks.

Ongoing interpretation of consumer needs; adjusting product & service development to be responsive to

consumer needs; nimbleness of performance at all levels; customer value delivery central to the company structure &

operations - hence a more efficient delivery machine; systems and operations adjusted & flexible to adapt;

marketing processes enabled 24/7.

Organisational implications.

• The marketing department has to change to marketing as a way-of-life for everyone in the company.

• How is the consumer represented in the boardroom & within the company processes?

• How is knowledge about the consumer gained? – By whom and how?

• How far into the organisation does it permeate? • Is consumer research enough? Most certainly not but as such research is

now critically important (as it should always have been anyway). – If not, what else will be done to include consumers centrally? – How will ongoing meaningful engagement be created? – What “checks & balances” are put in place?

What role does the following play?

• Why you gain or loose customers?• The Call Centre? Online commentary. • Customer Service?• Day-to-day operational staff?• Sales staff? • Suppliers and partners?• Mediators & influencers in society?• Objective panels of customers and non-customers.• Important “communities”.• Social media commentary monitoring wherever it occurs.• Company responses and the reactions to that. • Pro-active company engagement initiatives. • Engaging in areas like CSI.

DO: 4. Check & manage your product & service integrity.

Nothing will be more important now.

The Chinese symbol for integrity.

Quality is now paramount. A return to the fundamentals of marketing: satisfying consumer needs.

Flash-era of business & marketing.• Believe what the marketer says. • One-way. • The dominance of flash over

substance.• Marketing budgets rule.

Substance-based era of business.• Quality of products & services.

Does it deliver for customers?• What the consumer actually sees

and experiences (what the product does and looks like).

• Fact and substance-based. • Yet, amidst emotional consumer

volatility!

“Design is not just what it looks like and feels like. Design is how it works.” (Steve Jobs)

DO: 5. Marketing as a discipline to marketing as a way-of-

life.

Marketing now becomes a matrix function that permeates all other functions.

• How social media integrates with other marketing & communications tools. • How to structure for credible, empowered and ongoing engagement, 24/7. • How to turn all executives and staff into marketers.• For me, it is translating the company and brand values into the operations

of the company – its systems, people, processes.

• How must the company operate to satisfy consumer needs in its company-specific way? This means “unpacking” how customer needs & brand values impact operational standards.

Some companies have always operated this way,

even though they may not be perfect:

“The Virgin brand (philosophy) is builtaround an idea — being the

‘people’s champion”’.

Virgin finds gaps in how other brands service or

under-service their customers…and then

jumps in…

How do we unpack how consumer needs & brand values connect with our operations?

• Take every department in the company.• Assess what consumers expect.• Interpret that in terms of how your particular company will deliver “on-brand”.• With the operational staff in that department, assisted by the executive, unpack

how the intersection of these areas impact:– Structure & hierarchy.– Constraints to customer delivery.– Systems.– Processes. – Staff recruitment. – Staff training. – Decide clear standards of performance, i.e. how will customers be greeted, what happens if systems are off-line; how

are complaints dealt with; how are exceptions handled. Standardise & indoctrinate staff. Apply the principles of franchising.

– Set clear staff KPI’s.

• Portray that visually.• Launch, train and institutionalise. Carry on doing it, never stop.

DO: 6. CONTENT RULES!

Unless content engages, it is irrelevant and simply goes unnoticed. Only then is vehicle important.

• A great photograph of the Phoenix that stranded on the KZN north coast recently, posted on Facebook, received 17 000 hits in less than 24 hours!

• Within one day, Susan Boyle became a global sensation.

• Yet, most content goes largely unnoticed. Creativity/ relevance vital.

Frank Marquardt (Mashable)

Guidelines for great content engagement:

• Know your voice (who you are).• Time well.• Know your audience.• Solve problems.• Be truthful.

I think it is fair to say that the bulk of social media usage is more obsessed with the channels used, than what are done with it.

The iconic uses of social media are rare relative to the number of uses overall. This needs to change.

We cannot bore people into submission. Where we could still spend a lot of money on a mediocre advertising

campaign and get noticed, ONLY valuable content will engage consumers today.

Compare how little money worked virally for brands like Old Spice.

The Virgin Atlantic “still red hot” campaign (2009) started a viral explosion.

“… it energized and engaged a whole new constituency out there…”

Steven Ridgway, CEO of Virgin Atlantic.

You also need to decide how you will engage 24/7: what content and channels.

• Decide: internal or external structures: I believe both are required.• Two things require management:

– Operations:• Structure to manage & engage.• 24/7.• Select, train, institutionalise consumer needs and the brand values.• Empower to act. • Monitor & measure.

– Content:• Manage internally in conjunction with the operations.• A mix of internal & external resources.• Use a network, not only dedicated resources. PR & other agencies as useful as traditional

advertising and social media agencies. It is about great ideas encapsulating messages, regardless of where they come from.

• Use diverse resources. • Use unusual resources like Vega/ architects/ editors/ university lecturers.

Conclusions.

• Do not see social media as “a marketing thing” that may simply impact some aspects of how we market.

• It is a fundamental change that puts the consumer central in the boardroom. This is a HUGE change for most.

• It has implications for:– How we listen to consumers.– How we create products and services of quality & integrity.– How we stop using social media as an extension of our corporate profile. – How we structure and operate to make the consumer central and turn the company into

a marketing company. – How we select, train and empower staff to operate this way 24/7. – How we turn our companies into market-driven organisations. – How we ensure that the content of our engagement is interesting and challenging

enough to engage consumers.– How we structure ourselves to manage the engagement.

We will need to make the rules as we go along - with the mistakes that come with it. Best practice is still rare. It is truly up to each one of us. This is the most exciting time in marketing ever. And a return to marketing as central to business.

Thank you & good luck!