MarketingMuses

Does “Like It” Mean They’ll Buy It?

Social media is now an essential element of many companies' marketing programs, but how should social media marketing and advertising be planned, executed, and measured.

Yesterday, I was at the San Francisco headquarters of Racepoint Group (RPG), a public relations agency that is very effective at combining traditional PR with social media. I’ve worked with RPG at a couple of my prior companies, and I was introducing a present consulting client and RPG to each other.

We all had heard a couple of reports about Facebook on NPR that morning: GM Will No Longer Buys Ads On Facebook, and Pizza Delicious Bought An Ad On Facebook. How Did It Do?  Both reports raised questions about the value of Facebook advertising.  A quote from the GM report, attributed to the Wall Street Journal, stated:

"Asked about the move, GM marketing chief Joel Ewanick said the Detroit auto maker 'is definitely reassessing our advertising on Facebook, although the content is effective and important.' Content refers to the unpaid Facebook pages many companies use to promote their products.

"GM, started to re-evaluate its Facebook strategy earlier this year after its marketing team began to question the effectiveness of the ads. GM marketing executives, including Mr. Ewanick, met with Facebook managers to address concerns about the site's effectiveness and left unconvinced advertising on the website made sense, according to people familiar with GM's thinking."

The report on Pizza Delicious details how Facebook advertising performed for a New York-style takeout pizza vendor in New Orleans.  After targeting people who had other New York likes failed to produce results, Pizza Delicious targeted New Orleans fans of Italian food.  As the graphic shows, Pizza Delicious got close to 20 times the number of Facebook fans it usually gets in two days.

Unfortunately, the new fans didn’t turn into new customers.  According to the report, “After a long night of asking every single customer where he found out about Pizza Delicious, not one said it was through Facebook.”  The report concludes, “Maybe at some point, the new Pizza Delicious fans will show up and buy some pizza. But social advertising is so new that nobody knows for sure. It's still unproven, untested and largely unstudied.”

After this interesting diversion, we returned to the specific question of how to use social media effectively in a B2B, rather than B2C, marketing program. Social media can be very effective in the first two stages of the three-stage B2B buyer’s process. In the first stage, buyers want to understand opportunities and gain more knowledge about solutions. Videos, podcasts and white papers that describe the opportunities and solutions can be effectively distributed through social media channels. In the second stage, buyers want to define their specific problem and evaluate different solutions.  Case studies that show how companies have used your solution to solve their specific problem can be effectively presented in different media (video, audio and print) through social media channels. Social media is less effective in the final stage of the B2B buyer’s process, when the buyer is selecting the best option and negotiating terms. 

Research by SiriusDecisions shows that while B2B buyers spend 80% of their time in the first two stages of the purchase decision process, and only 20% in stage three, sellers devote 80% of their marketing resources to stage three and only 20% to the first two, most formative, stages. In my experience, social media is best used in the first two stages of the B2B buyer’s process using the following guidelines:

A Social Media Strategy – Understand how social media can best serve as part of your larger B2B marketing strategy.  I described this in a previous post Groundswell: A Guidebook for the Social Media Journey.

Understand How Your Audience Uses Social Media – When developing a B2B social media strategy in 2009, I reviewed research from Outsell that showed while 50.8% of scientists and engineers had Facebook accounts, and only 28.0% had LinkedIn accounts, the target audience firmly segregated their use of the two: Facebook was almost exclusively for personal use, while LinkedIn was used for business. Although LinkedIn had lower overall use, it was, by far, the best choice for B2B purposes.

Think Like a Publisher – In The New Rules of Marketing and PR, David Scott Meerman describes the content that is best suited for social media, “What works is a focus on your buyers and their problems. What fails is an egocentric display of your products and services.  When you understand your audience, you can construct an editorial and content strategy just for them.  In order to implement a successful strategy, think like a publisher.”

Integrate Social Media into a Unified Digital Marketing Operation – A unified digital marketing operation integrates social media along with other new and traditional marketing techniques in a manner that aligns with the B2B buyer’s three-stage decision process and allows you to measure the effectiveness of all marketing and lead generation channels.

 

How to Create a New Technology Category with Gartner (Redux)

In January, I posted How to Create a New Technology Category with Gartner. It described a three-step process used to create a new online-security category:

• Use Specialty Analyst Firms as Advisors

• Develop a Market Model and Competitive Landscape

• Land a Marquee Account

I've developed a short eDoc that can be downloaded at SlideShare.

 

Creating a New Technology Category

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A Unified Digital Marketing Operation

 

A unified digital marketing operation can help small and mid-size B2B companies:

Compete successfully with much larger companies

Produce a better return on investment (ROI)

Generate incremental revenue

Increase enterprise value

This short eBook describes how a unified digital marketing operation can be designed and built to fully utilize new digital marketing and communication technologies and achieve optimal demand generation performance.  

 

A Unified Digital Marketing Operation

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Reading Steve Jobs

“I wanted my kids to know me.  I wasn’t always there for them, and I wanted them to know why and to understand what I did.  Also, when I got sick, I realized other people would write about me if I died, and they wouldn’t know anything.  They’d get it all wrong.  So I wanted to make sure someone heard what I had to say.” – Steve Jobs reason for having Walter Isaacson write his biography

 

I did not intend to read this book.  

I did not know Steve Jobs, but I know several people who did, including a few who worked with him.  Most described the experience of working with him as 1) priceless, and 2) one that no amount of money could get them to repeat.  I have heard many stories of his brilliance and brutality.  I have read several books about Apple (the early years and after Jobs returned), and watched an excellent documentary on Pixar.  And I don’t usually read biographies.

The fact that I did read the book is testimony to the genius of Steve Jobs (and Jeff Bezos) and the talent of Walter Isaacson.  I was in a hotel room one evening having trouble falling asleep, and downloaded the first few chapters of the Kindle edition (for free) to my iPad.  No one has approached Jobs’ genius for creating an immediate, exhilarating user experience in the digital age, and it’s hard to imagine he could have chosen a better biographer than Isaacson.  Within fifteen minutes, I was hooked.

Isaacson clearly did his research, and the fact that Jobs gave him complete access to his life, and encouraged friends and foes (in Jobs life, many people are both) to speak honestly about their relationships and experiences with Jobs gave him the detail he needed.  But his talent allows him to tell a richly textured, deeply affecting story from cover-to-cover (undoubtedly, an antiquated expression for a digital book). 

As a father of an adopted son, I was especially moved by the description of an incident when Jobs, at six or seven years old, told a neighborhood girl he was adopted, to which she responded, “So does that mean your real parents didn’t want you?”

“I remember running into the house, crying.  And my parents said, ‘No, you have to understand.’  They were very serious and looked me straight in the eye.  They said, ‘We specifically picked you out.’  Both of my parents said that and repeated it slowly for me.  And they put an emphasis on every word in that sentence.”

Throughout the book, Isaacson reports similar details that give the reader keen insights into the events that shaped Jobs, without injecting amateur psychological suppositions.  The result is great reporting delivered in a wonderful narrative.  As I read the book, I realized that my image of Jobs, while accurate, was a caricature.  By the end of the book, I had a fully formed picture of a brilliant, passionate, and deeply flawed human being.

Steve Jobs never read any part of the biography.  He gave Walter Isaacson complete control of the story, although, after seeing the initial design for the book cover, he threatened to kill the project, until he received complete creative control of the cover design.  Initially, I was amazed that someone who had guarded his privacy so closely would relinquish control of his life story.  But then I realized that he simply followed the process he had used in business. 

Jobs did not personally create technology, films, commercials, etc.  But he carefully selected incredibly talented people, provided them the resources to create “insanely great” products, and exerted absolute control over product packaging.  Steve Jobs, the book, is not insanely great, but is an informative, interesting, and worthy result of his and Walter Isaacson’s creative process.

If you prefer to watch, rather than read, I strongly recommend the 60 Minutes video story and interview with Isaacson.

 

Risky Business (Part 1)

In 2005 and 2006, I worked with a security software startup.  The company had a superb technological approach that passively monitored Web application traffic, compared user activity from the most recent session with historical activity, and alerted security personnel to anomalies in user behavior that indicated fraudulent access.  My initial goal was to focus the company’s marketing, which had been highly diffused, on the most promising market. 

My timing was fortunate, in that several high profile security breaches had led the Federal Financial Institutions Examination Council (FFEIC) to recently issue an update to its guidelines on online customer authentication by financial institutions.  This was the external driver that we used to focus our technical solution on a value proposition (fraud detection and regulatory compliance) for a specific application (online banking) in a highly regulated market (financial services). 

Researching regulatory requirements for financial institutions was my first real exposure to risk assessment and management.  It led me to the Basel Accords, specifically Basel II, which created an international banking standard that would guard against various types of financial and operational risks and protect the international financial system from the types of problems that might arise should a major bank or a series of banks collapse.  Little did I realize, at the time, that the types of risk management practiced by global financial institutions would be tested very soon, and would be found sorely inadequate.

Since 2006, I’ve read several books about risk, in general, and, specifically, how the theoretical basis of financial risk management was circumvented, adulterated, and simply ignored by major financial institutions leading up to the global financial crisis that started to show its effects in 2007 and continues through today.  This is the first in a series of posts that will review the books, and discuss the lessons I learned from each.

Against the Gods: The Remarkable Story of Risk

Any serious study of risk should start with this book.  As the video interview with the author, Peter L. Bernstein, notes, he was an “economist, historian, and strategist.”  All of these attributes are on display in this most interesting and entertaining historical survey of risk management, beginning with the invention of numbers and the writing of Liber Abaci, or Book of the Abacus, in 1202 AD by 27-year-old Leonardo Pisano, better known as Fibonacci.

The foundation of risk management is probability, or how likely or unlikely it is that a certain outcome will occur.  From 1200 to 1700, many of the advancements in the science of probability were driven by men who shared two traits: a deep understanding of mathematics and a strong affinity for games of chance.  In several cases, the latter trait manifested itself, quite clearly, as a gambling addiction.

But probability is only one of two indispensible (but, unfortunately, not inseparable) factors in risk management.  The other is the consequence of the various outcomes, especially highly unlikely outcomes.  For example, placing a $1 bet on a game of Russian Roulette, where your own head is the target, with a single bullet in a 100-chamber revolver for $100,000 has a 99% chance of success and only a 1% chance of failure (100000:1 return with a 99:1 probability of success).  However, the consequence of failure—most likely death or severe brain damage—is sufficient to dissuade most people from accepting such compelling odds.

The book proceeds from 1700 to 1950 by tracing intersecting advances that contributed to a better understanding of risk from numerous disciplines including philosophy, logic, heredity, economics, statistics, chaos theory, game theory, and linear programming.  Collectively, the various studies contributed to the following general understanding of risk management.

The essence of risk management lies in maximizing the areas where we have some control over the outcome while minimizing the areas where we have absolutely no control over the outcome and the linkage between effect and cause is hidden from us.

Surprisingly, at least to me, the field of investment risk management did not really start until June 1952 with the publication of a 14-page article in the Journal of Finance titled “Portfolio Selection.”  Harry Markowitz, an unknown 25-year-old graduate student at the University of Chicago, authored the paper.  His objective was to factor risk into the construction of a portfolio for investors who “consider expected return a desirable thing and variance of return an undesirable thing.”  This led to Markowitz’s key insight of the strategic role of diversification in investment portfolio risk management.

The subject of the penultimate chapter titled “The Fantastic System of Side Bets,” is derivatives—the most sophisticated of financial instruments, the most intricate, the most arcane, and the most risky.  To quote from the book, “This fantastic system of side bets is not based on old-fashioned human hunches but on calculations designed and monitored by computer wizards using abstruse mathematical formulas…developed by so-called quants, short for quantitative analysts.”

And this is the subject of the next book.

 

 

Developing a Whole Product Roadmap for Applications Software

“The point of greatest peril in the development of an emerging technology-based market lies in making the transition from an early market dominated by a few visionary customers to a mainstream market dominated by a large block of customers who are predominantly pragmatists.”

“Pragmatists evaluate and buy whole products.”

“Any company that executes a whole product strategy competently has a high probability of mainstream market success.”

     – Geoffrey Moore, Crossing the Chasm

 

Developing a Whole Product Roadmap for Applications Software

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The whole product concept, initially described by Theodore Levitt, plays a central role in Geoffrey Moore’s classic book on technology marketing, Crossing the Chasm: Marketing and Selling Disruptive Products to Mainstream Customers.  The whole product includes everything necessary for the pragmatic mainstream customer to derive immediate value without having to build or buy additional products or services. 

Application software poses special whole product issues, given its abstract nature. 

• Where does the whole application software product begin and end? 
• What are the complete dimensions of a whole application software product?
• What whole product capabilities should be built into the application software?
• What whole product capabilities should partners deliver?

While the whole application software product strategy includes documentation, training and services, it begins with a whole product roadmap.

 

Disneyland: The Power of Vision and of Story Telling

 

“To all you come to this happy place; welcome.  Disneyland is your land.  Here age relives fond memories of the past…and here youth may savor the challenge and promise of the future.  Disneyland is dedicated to the ideals, the dreams and the hard facts that have created America…with the hope that it will be a source of joy and inspiration to all the world.” – Walt Disney, July 17, 1955

 

 

This summer was our son’s ninth birthday, so mom and I joined him for five days at “The Happiest Place on Earth.”  Disneyland is a case study in user experience and brand management.  I believe its success is based, primarily, on two factors: The vision Walt Disney voiced 55 years ago, and the stories that differentiate the same or similar activities at Disneyland from those at a traditional “amusement park.”

Many of the “rides” at Disneyland are very similar.  You are conveyed from one point to another at varying speeds and with different degrees of undulation, geared to the age and size of the rider.  Our son is now tall enough to ride everything.  As a result, we stood in long lines to experience very similar forms of locomotion.  Space Mountain and Indiana Jones Adventure are, essentially, roller coasters.  However, each ride experience is unique because each occurs within the context of a different story. 

Disney has always been characterized by great stories.  The acquisition of Pixar, with the resulting appointment of John Lasseter as chief creative officer, has amplified that tradition.  (Improbably, Lasseter was fired from Disney Studios in the 1980s when he attempted to introduce computer animation.)  Pixar stories permeate Disneyland and California Adventure Park, and form the basis for rides such as Monsters Inc. and Buzz Lightyear Astro Blasters.

 

 

Stories aren’t limited to the rides.  We started most days with breakfast at the Storytellers Café (Chip and Dale are my son’s favorites).  One evening, I noticed a group of kids and adults watching a classic Disney movie in the lobby of the hotel where we were staying.  Nearby, another group of kids surrounded an adult reading a story in front of the fireplace. 

I first visited Disneyland in 1966.  My most vivid memory is not the rides, but sitting in a darkened theatre watching “Great Moments with Mr. Lincoln.”  As I sat in the theatre 44 years later with my son, I can attest to the realization of Walt Disney’s vision that, “Here age relives fond memories of the past.”

 

 

What I Learned in School: Making Marketing Relevant (Again)

 

Hamid Ghanadan, President of The Linus Group, is one of the brightest and most thoughtful marketing practitioners I know.  He and his company specialize in marketing to scientists, especially in the biotech and pharmaceutical industries.  I am attending a dinner and roundtable discussion this evening on “The Future of Science Marketing—Emerging Models for 2011 and Beyond,” hosted by The Linus Group, and I’ll post a review within the next few days.

The reason I mention Hamid today is due to a recent post by him on his blog, Linus Report, and how it intersects with a subject I recently covered as a member of the 2010 Strategic Marketing Management executive education program at Stanford GSB.  Here is a link to Hamid’s post, “Do We Know What’s Expected from Marketing,” and here is my comment (in italics):

 

"The business enterprise has two and only two basic functions: marketing and innovation. Marketing and innovation produce results, all the rest are costs."

Peter Drucker wrote the Practice of Management, which included this statement, in 1954. My 20+ years experience with scientific and technology marketing is that "marketing" has at least faded, if not completely disappeared from this statement for most companies. The five responses focus mainly on the role of marketing in product management. No one mentions marketing's role in generating demand and creating enterprise value.

In many science and technology companies, product management has been separated from marketing and placed in the R&D function with an emphasis on technology and product development. The rest of marketing is viewed, generally, as a service function providing tactical sales support and marketing communications. Unfortunately, marketing personnel have not done much to change this perception.

Most surveys of CEO's concerns list many "marketing" issues near the top, including identification and engagement with prospective customers and loyalty and retention of present customers. However, most CEOs do not look to marketing, but rather to sales, service and other functions, to address these issues.

Marketing needs to demonstrate that it can produce end-to-end results throughout the marketing value chain, and strategically assist the CEO in meeting his or her top priorities for customer loyalty and retention, revenue generation and enterprise value creation.

 

While the quote at the beginning is from Peter Drucker, I initially read it just over a month ago in, “From Marketing as a Function to Marketing as a Transformational Engine,” by Nirmalya Kumar, excerpted from his book, “Marketing as Strategy: Understanding the CEO’s Agenda for Driving Growth and Innovation.”  Here is a short description of the book:

“CEOs are more than frustrated by marketing's inability to deliver results. Has the profession lost its relevance? Nirmalya Kumar argues that, although the function of marketing has lost ground, the importance of marketing as a mind-set—geared toward customer focus and market orientation—has gained momentum across the entire organization. This book challenges marketers to change their role from implementers of traditional marketing functions to strategic coordinators of organization-wide initiatives aimed at profitably delivering value to customers.”

If marketers want the respect and responsibility so many say they deserve, they have to change their role in the enterprise.  If marketing acts like a service organization, that’s the way it will (and should) be viewed.  If you want to change the situation, expand your marketing vision, knowledge and goals.  Quoting from the book, “Transformational marketing efforts should focus on initiatives that:

• profitably deliver value to customers;
• require a high level of marketing expertise;
• need cross-functional orchestration for successful implementation; and
• are results oriented.”

Is Your Social Media Strategy Ready for 2011?

 

Yesterday, I attended a half-day forum presented by Tony Jaros (Research SVP) and Jim Ninivaggi (Research Analyst) of SiriusDecisions, titled Balancing Change and Results: 2011 Planning Assumptions.  SiriusDecisions provides research and advisory services focused on the operational intelligence sales and marketing executives in B2B companies need to maximize top line growth.  Each year SiriusDecisions looks at the top issues of its clients during the year, analyzes these issues, and presents its insights for the coming year.  This year the insights focused on three goals:

1. To improve the productivity of the sales organization
2. To build a robust, repeatable demand generation engine
3. To have communications make more of a defined, concrete contribution

For each goal, SiriusDecisions presented a progress report, a gap analysis and action items for 2011.  I was pleased to see that three of its four recommended actions for communications involve social media.

SiriusDecisions identifies five critical marketing tasks for generating demand.  The first recommended action for 2011 is to build a social media strategy that uses the most appropriate social outlet at every stage of the cold-to-close process.  Here’s a definition of the five tasks, and a modified reproduction of the graphic that accompanied the recommendation.

• SEED  The use of traditional and social media to set the stage for demand to be created.
• CREATE  The generation of “original” demand, with the focus on quality versus quantity.
• ENABLE  Helping reps move marketing-created demand, and to source their own demand.
• ACCELERATE  Efforts geared to help sales move deals more quickly through the pipeline.
• NURTURE  Care and feeding of prospects that have fallen out of the funnel.

  

TASK	BLOGS	SOCIAL SITES	COMMUNITIES	MEDIA SHARING	PODCASTS	WIKIS
SEED	X	X	X	X	X
CREATE		X		X	X
ENABLE	X		X	X	X	X
ACCELERATE			X	X	X
NURTURE	X	X		X	X

 

The second recommended action is that a balance of centralization and decentralization is necessary to enable functions to best leverage social media.  Many companies have initially placed social media in their marketing communication functions.  However, as companies better understand the role of social media and develop integrated strategies for its use, the communications function will retain centralized responsibility for policies and procedures, while content development will be decentralized throughout a broader range of marketing and sales functions.  This will enable more active involvement of subject matter experts and more timely creation and deployment of subject matter important to prospects and customers.

The third recommended action is to leverage social media internally for collaboration and knowledge management.  This could include:

• Wikis for content creation and offering roadmap collaboration
• Podcasts for product training of new sales reps hired
• A sales and marketing collaboration community
• Internal sales and marketing blog

Most current providers of marketing automation and CRM are working to integrate social media capabilities into their platforms.  While Jive, a relatively new company, is offering social business software they claim 1) fosters employee collaboration, 2) connects customers across disjointed channels, and 3) monitors social media.

My major takeaway from the forum is that companies are beginning to recognize the power of social media for business, and vendors are providing more capable and effective tools to harness and focus the power.  However, as with most marketing technologies and tools, the key to achieving measurable value creation and ROI is developing and executing a comprehensive marketing strategy that integrates social media with other communication and demand generation tools, rather than simply bolting it on to your present (and probably outdated) strategy.

Groundswell: A Guidebook for the Social Media Journey

“A social trend in which people use technologies to get the things they need from each other, rather than from traditional institutions like corporations.” – Definition of the Groundswell

Groundswell is, without a doubt, the best single book I am aware of for understanding the power of social technologies and learning how to use that power effectively.  It is full of data that supports its premise, and is a detailed guidebook that shows you how to successfully navigate the best path to reach your desired social media destination. 

There are several powerful tools described in the book.  The first is the Social Technographics profile, which is similar to demographics and psychographics but focuses on social technology behaviors.  The tool allows you to understand how social technologies are being adopted by a group of people, which, in turn, allows you to build an appropriate social strategy for that group (e.g., your customers). 

First, it segments seven levels of social technology use as shown below.

 

Second, it provides two simple Web-based tools: a consumer profile tool and a B2B profile tool.  The tools allow you to view the profile of your target group versus a benchmark reference group.  For example, the following profile shows the behavior of U.S. small-business owners relative to the behavior of [a representative sample of] all U.S. adults.

  

The profile of your target group is used in the first of a 4-step social media planning process called POST—an acronym for people, objectives, strategy and technology.  Answering these questions, in this order, is the best way to formulate a social media plan. 

People: What are your customers ready for?  This is determined from the social technographics profile.

Objectives: What are your goals?  Following are the five primary objectives that companies successfully pursue in the groundswell, and how they relate to business functions.

  

Strategy: How do you want relationships with your customers to change?  By answering this question, not only can you plan for the desired changes, but you can also figure out how to measure them once the strategy is underway.

Technology: What applications should you build?  After having decided on the people, objectives, and strategy, you can move on to select the appropriate social technologies—blogs, wikis, social networks, etc.

Social technology is a powerful tool with the potential to help marketing perform more effectively.  Unfortunately, many marketers are, “going about their strategy backward.  They start by thinking about technology.”  In Groundswell, Charlene Li and Josh Bernoff have given marketers a guidebook to avoid the pitfalls and chart a course to social media success.  Read it, absorb it, and use it.