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.

 

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

View more presentations from Bruce Pharr

Another Crack in the Bell Curve

“For decades, teachers, managers and parents have assumed that the performance of students and employees fits what's known as the bell curve—in most activities, we expect a few people to be very good, a few people to be very bad and most people to be average. New research suggests, however, that rather than describe how humans perform, the bell curve may actually be constraining how people perform. Minus such constraints, a new paper argues, lots of people are actually outliers.” – Put Away The Bell Curve: Most Of Us Aren’t ‘Average’ by Shankar Vedantam

In a November post, Risky Business (Part 2), I described how quantitative financial analysts, so-called “quants,” had applied Browian motion from physical sciences—visually described as a bell curve—to market prices. I further described how Benoit Mandelbrot observed that the behavior of prices in financial markets frequently demonstrated huge leaps to the outer edges of the bell curve. When plotted on a chart, the curve produced bubbled out on both ends, and became known as “fat tails.” According to Mandelbrot, the standard bell curve was not applicable to model financial markets because, “Large price changes are much more frequent than predicted.”

Now comes research from Ernest O'Boyle Jr., of Longwood University's College of Business and Economics, and Herman Aguinis at Indiana University's Kelley School of Business that challenges the long-held assumption that the bell curve describes how humans perform. An abstract for the research titled, “The Best and the Rest: Revisiting the Norm of Normality of Individual Performance,” published in the Spring 2012 issue of Personnel Psychology, states, in part, that:

“We revisit a long-held assumption in human resource management, organizational behavior, and industrial and organizational psychology that individual performance follows a Gaussian (normal) distribution. We conducted 5 studies involving 198 samples including 633,263 researchers, entertainers, politicians, and amateur and professional athletes. Results are remarkably consistent across industries, types of jobs, types of performance measures, and time frames and indicate that individual performance is not normally distributed—instead, it follows a Paretian (power law) distribution. Assuming normality of individual performance can lead to misspecified theories and misleading practices. Thus, our results have implications for all theories and applications that directly or indirectly address the performance of individual workers including performance measurement and management, utility analysis in preemployment testing and training and development, personnel selection, leadership, and the prediction of performance, among others.”

An excerpt from an NPR report titled, “Put Away The Bell Curve: Most Of Us Aren’t ‘Average’,” states, "We looked at researchers, we looked at entertainers, we looked at politicians, and we looked at collegiate as well as professional athletes," Aguinis said in an interview. "In each of these kinds of industries, we found that a small minority of superstar performers contribute a disproportionate amount of the output." 

If the research is correct, it has huge implications for organizational behavior and human resource management (OBHRM), industrial and organizational (I-O) psychology, and other related fields.  Again, quoting from the research:

“Quite simply, if performance is not normally distributed, theories that directly or indirectly build upon individual job performance and its prediction may need to be revisited. In addition, popular practices (e.g., utility analysis of preemployment tests and training and development interventions), which also rely on the assumption of individual performance normality, would also need to be revisited.”

 

The above graph on the left shows a Gaussian (normal or bell curve) distribution, and the graph on the right shows a Paretian (power law) distribution. The Gaussian distribution indicates that the majority of people in a random sample will be average performers, while a relatively equal minority of people will underperform and overperform the average. The Paretian distribution indicates that a small minority of people, in the random sample, will far outperform the majority.

 

A Recipe for a Winning Webinar

Here are the essential elements of a webinar that outperforms the norm, with case study results from a recent one that followed the recipe.

 

1. Address a Hot Topic - The more relevant and timely the topic, the higher the attendance and level of interest will be for the webinar.
2. Partner with a Respected Third Party - Partnering with an analyst group, professional organization, or respected publication can improve the quantity and quality of attendees in a couple of ways.  First, co-sponsorship with an independent, respected third party implies that the webinar is more balanced and less biased than one sponsored by your company alone.  Second, the third-party will usually publicize the webinar to their membership or readership, which can significantly increase your reach, registration and attendance.
3. Use a Third Party Moderator - A third-party partner can usually provide an analyst, editor or other unbiased expert to moderate the webinar.  This adds greater credibility than you or someone from your company moderating the webinar.
4. Have a Customer Present a Case Study - Similar to partnering with a respected third party, a real customer reviewing a real process, decision and result is much more credible and interesting than you doing it yourself. 
5. Try and Limit Your Involvement to Answering Questions - Answering a question is much more powerful and effective than making a statement.  First, you know the audience, especially the person asking the question, is interested in what you have to say.  Second, people listen more closely to answers than statements.  Have the person most knowledgeable about the webinar subject answer the questions, and stay on topic.  This is not the time to try and broadcast your marketing message.  Just answer the questions clearly and concisely.
6. Follow Up with Next Step Options - A few days after the webinar, contact attendees with options for them to learn more and take the next step.  Make sure that there are options for each phase of the buyer education and decision process: awareness, discovery and validation.

 

A Webinar Case Study and the Results

Symyx Technologies recently conducted the most successful webinar in its history: one that significantly exceeded average webinar metrics and produced an exceptional return-on-investment.

Symyx partnered with the American Chemical Society to present a webinar on the electronic laboratory notebook (ELN), a fast-growing software technology that is moving from early adoption to mainstream acceptance.  The webinar was promoted by Symyx through direct marketing, its website, and its social media channels, and by ACS to its 160,000 members.  Rick Mullin, a senior editor at Chemical & Engineering News (an ACS publication) moderated the case study presentation by Gabriel Weatherhead, Ph.D., Lead Systems Engineer at Millennium: The Takeda Oncology Company.  Gabriel described the process Millennium used to select an enterprise ELN for chemistry and biology disciplines.  A Symyx Vice President of Product Management and Strategy was available to answer questions after the presentation by Gabriel.

ACS co-sponsors and conducts webinars with companies every couple of weeks.  Based on its metrics for these events, the Symyx webinar generated 3 times more registrations and attendees than the average, and it generated 145 questions.  Also, the co-sponsored webinar generated 10 times more registrations and attendees than webinars publicized and conducted by Symyx alone.  The average cost of attendee acquisition was about $20, well below the average cost per inquiry from other demand generation activities. 

Attendees were contacted after the presentation and directed to an ELN microsite where they can access a pdf copy of the Millennium case study, as well as other ELN marketing assets that allow respondents to learn more and take the next step in the buyer education and decision process.  
Symyx, in turn, can nurture and track prospects going forward, and eventually provide sales with a well-developed profile of a well-qualified prospective buyer: the definition of a sales opportunity. 

Metrics that Matter: Market Share and Dynamics

If you don’t measure your marketing performance, you can’t improve it.

Marketing metrics are measurements of trends, dynamics and characteristics that can help you focus on more rewarding market opportunities, allocate resources appropriately, and determine the effectiveness of your strategies and tactics.

Market share is the percentage of your company’s sales (in units or revenue) divided by the total sales within a specific market. Its value is apparent when viewed in the context of market dynamics such as market share growth (or decline), market growth (or decline), and relative market share.

Take a market share of 30%. Is this good or bad? It depends. If last year’s market share was 25%, it’s probably good. But if it was 35%, it’s probably bad.

What about next year’s sales forecast of 15% growth? Whether it's good or bad depends on market growth. At 20% market growth, 15% sales growth means you’re losing market share. That’s a problem. 15% growth means you're just holding your own. This may be acceptable in the short-term, but not in the long run. And while 15% sales growth in a market growing by 10% will increase your market share, it means that 33% of your growth depends on capturing competitive market share. This is usually more difficult to achieve than simply matching market growth.

Relative market share is a measure of your company’s market share as opposed to that of your largest competitor. Some studies suggest that companies with high relative market share tend to be more profitable than their competitors. So a 30% market share is good if your largest competitor’s is 15%, but not very good if it’s 50%.

Relative market share and market growth rate are key variables in determining competitive strength and in allocating resources within a company’s business units or product lines. The BCG Matrix developed by the Boston Consulting Group is one of the more popular analytical tools for this purpose.