Will you just keep funding the marketing bridge to no-where?

28 07 2009
Will you just keep funding the marketing bridge to no-where? (reviewed kb)
A common objection that arises in dealing with marketing executives is the ‘social media’ budget allocation. Social Media is still in the ‘mis-understood zone’ even though we’re making progress at light speed (thank you and not so thank you twitter). Euh, what? “we’re going to spend 20-30% of our marketing budget for social media, are you kidding?”. Obviously, they think it’s too much, they can’t see the value or they decide to throw a youngster at it…hmm. Let’s also remember that it costs at least 5x as much time to find a new customer than nurturing current ones (according to the American Marketing Assoc.). What part of the picture are they missing here? Let’s try to break it down:
Reduce waste, try the long tail: If you invest $200,000 in marketing or 10x this, proportions given to marketing activities will usually stay pretty much the same. A good 50-60% will be allocated to create stuff that won’t last. The impact of traditional marketing has a short life cycle. Worse, people aren’t fools; “infomercial” type articles just reduce their trust. Unless you are in the instant gratification purchasing cycle, relationships matter. There is now a direct bridge to your customers called social media which is relevant in both B2B or B2C environments. Use it. We know that referrals from a friend or someone in your circle of influence (professional or personal) has a stronger influence on consumer choice. It’s important to realize that any work in social media brings double benefits: First, content coming from an organization or person can be shared limitlessly (e.g. youtube video); once it sits there, it will not go away. The Internet has a bridge to the garbage, you can’t delete it anymore. More importantly, someone, somewhere, is crawling the internet to find content related to your industry (like this blog for instance) so be sure that this continue. It’s called the “long tail”. Someone will find it in 10 years. Time is an important factor in calculating a marketing ROI.
Invest in your customers:
Zappos was just sold to Amazon.com for doing just that: Personalization and customer service have been rooted within the company since 1999, no wonder why they are an acclaimed social media power house. It fits them like a glove. Your customers are still your biggest asset. I know you’ve closed them already but they have way more value than they used to have. Your customers are certainly the strongest link of your long-tail strategy. I feel it should part of any social media plan to find engaged customers and work with them. Word-Of-Mouth has finally been given adequate tools and this works both ways 🙂 Positive Mentions: good for you, find your brand ambassadors, generate more buzz about it. Negative Mentions: Learn from it, engage with them, turn it to your advantage. No mention on social networks: Your biggest nightmare, you’re fading away.
Relevancy VS Propaganda:
As a consumer or a business customer, we accept to be marketed when the time is right. Agreed? Let’s face it. How much of an average marketing budget is spent creating lead-generation ‘floods’ with lots of propaganda in it e.g static websites? As Jeremiah Owyang puts it: “The corporate website is an unbelievable collection of hyperbole, artificial branding, and pro-corporate content. As a result, trusted decisions are being made on other locations on the internet” ? Most traditional marketing is usually ineffective after it’s been used or because it missed its target. A brand should be relevant to the more-of-the-same customers, THINK COMMUNITY. The long tail strategy relies on the 80/20 rule, 20% of your customers will generate 80% of your revenue. Focusing on being relevant to those 20% will gain you more of the clients you need.
Build relationships: I found this analysis interesting this week as it mentioned that “60% of the companies were using search to generate leads, not all were satisfied with the results.” (search here mean Search Engine Marketing or Search Engine Optimization. Yes, if you apply old thinking to a new problem, it won’t get any better. Why would someone refer your business if they feel you’re short term driven? People will refer you if you treat them like human beings throughout the total experience: before, during and after sales, keep empowering your users.
Marketers prefer black magic.
If they can claim high traffic or lead generation, they won’t get fired. Conversion to customers is someone else’s problem: “We’ve brought you the customers to the door step, why can’t you close?” Same goes for SEM (“60% of the companies were using search to generate leads, not all were satisfied with the results.” http://www.emarketer.com/Article.aspx?R=1007177#)
Now, does spending 20-30% of your marketing budget on Social Media & Community Building look like a lot? Let’s do this 🙂

A common objection that arises in dealing with marketing executives is the ‘social media’ budget allocation. Social Media is still in the ‘mis-understood zone’ even though we’re making progress at light speed (thank you and not so thank you twitter). Euh, what? “we’re going to spend 20-30% of our marketing budget for social media, are you kidding?”. Obviously, they think it’s too much, they can’t see the value or they decide to throw a youngster at it…hmm. Let’s also remember that it costs at least 5x as much time to find a new customer than nurturing current ones (according to the American Marketing Assoc.). What part of the picture are they missing here? Let’s try to break it down:

Reduce waste, try the long tail: If you invest $200,000 in marketing or 10x this, proportions given to marketing activities will usually stay pretty much the same. A good 50-60% will be allocated to create stuff that won’t last. The impact of traditional marketing has a short life cycle. Worse, people aren’t fools; “infomercial” type articles just reduce their trust. Unless you are in the instant gratification purchasing cycle, relationships matter. There is now a direct bridge to your customers called social media which is relevant in both B2B or B2C environments. Use it. We know that referrals from a friend or someone in your circle of influence (professional or personal) has a stronger influence on consumer choice. It’s important to realize that any work in social media brings double benefits: First, content coming from an organization or person can be shared limitlessly (e.g. youtube video); once it sits there, it will not go away. The Internet has a bridge to the garbage, you can’t delete it anymore. More importantly, someone, somewhere, is crawling the internet to find content related to your industry (like this blog for instance) so be sure that this continue. It’s called the “long tail”. Someone will find it in 10 years. Time is an important factor in calculating a marketing ROI.

Invest in your customers: Zappos was just sold to Amazon.com for doing just that: Personalization and customer service have been rooted within the company since 1999, no wonder why they are an acclaimed social media power house. It fits them like a glove. Your customers are still your biggest asset. I know you’ve closed them already but they have way more value than they used to have. Your customers are certainly the strongest link of your long-tail strategy. I feel it should part of any social media plan to find engaged customers and work with them. Word-Of-Mouth has finally been given adequate tools and this works both ways 🙂 Positive Mentions: good for you, find your brand ambassadors, generate more buzz about it. Negative Mentions: Learn from it, engage with them, turn it to your advantage. No mention on social networks: Your biggest nightmare, you’re fading away.

Relevancy VS Propaganda: As a consumer or a business customer, we accept to be marketed when the time is right. Agreed? Let’s face it. How much of an average marketing budget is spent creating lead-generation ‘floods’ with lots of propaganda in it e.g static websites? As Jeremiah Owyang puts it: “The corporate website is an unbelievable collection of hyperbole, artificial branding, and pro-corporate content. As a result, trusted decisions are being made on other locations on the internet” ? Most traditional marketing is usually ineffective after it’s been used or because it missed its target. A brand should be relevant to the more-of-the-same customers, THINK COMMUNITY. The long tail strategy relies on the 80/20 rule, 20% of your customers will generate 80% of your revenue. Focusing on being relevant to those 20% will gain you more of the clients you need.

Build relationships: I found this analysis interesting this week as it mentioned that “60% of the companies were using search to generate leads, not all were satisfied with the results.” (search here mean Search Engine Marketing or Search Engine Optimization). Yes, if you apply old thinking to a new problem, it won’t get any better. Marketers prefer black magic.Why would someone refer your business if they feel you’re short term driven? People will refer you if you treat them like human beings throughout the total experience: before, during and after sales, keep empowering your users.

Like in the Matrix movie, “there is no bridge” but the interconnectedness of your community and customers. Now, does spending 20-30% of your marketing budget on Social Media & Community Building look like a lot? Let’s do this 🙂

Off you go,

@YannR

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WOM-ophily: Why does social media marketing matter?

19 08 2008

I really wish this was a word. Internet might make it to be but I doubt it . WOMophily. Okay, think “homophily”. Wikipedia explains…..“Individuals in homophilic relationships share common characteristics (beliefs, values, education, etc…)”

Word Of Mouth (WOM) marketing has been around for ever and since commerce was invented. There is now a few more people on the planet and the internet is slowly becoming more effective in serving your information needs. WOMophily then is people who share common characteristics (beliefs, values, activities) sharing ideas and spreading the word about your product or services. There are few characteristics to bear in mind, however….

SMM uses Social Channel Capacity: We cannot physiologically stay in true contact with more than 150 connections, you, your friends, your relationships, their relationships (c.f. Blink, M. Gladwell) – The others just don’t have our attention like those 150 (primary and secondary connections). This is where Twitter and all the “what are you doing now?” features come in. They help us keep track of more people easily. Last week I was talking about “Saturation Points” and “Information Immunity”? If you don’t suffer from those, you are a rare indeed. Or maybe you just watch TV! There only 200 million blogs out there. Patterns of influence have changed and traditional marketing channels are just not cutting it anymore. BUT you CAN rely on your close trustees and their close trustees …etc, in terms of letting you know what services you may like, what products you should buy, what brands may matter to you. Social networks and social media have allowed the 200 most viral million of us to stay connected at this micro-level and filter out all the other marketing noise. The “You can now stay in touch and follow at the ‘micro’-blog level” is where a ton of stuff is going. The influence of micro blogging is increasing every day. Think PEOPLE LIKE ME.

SMM puts your customer to work(finally): if you connect with them PROPERLY and RESPECTFULLY through social platforms, they will value your words and spread them for you. Give them extras tips, info, cut them some smart discounts, help them understand you better, like they would a good friend. You may think, “well who’s going to keep up with all that?” Extanz might, but remember, it’s not about increasing your marketing budget but about reallocating your priorities. The ROI will be substantial because you’re dealing with hyper-targeting and word-of-mouth techniques that will carry your marketing message much further for less $. Think PEOPLE LIKE ME.

SMM is cheaper than any other form of marketing – the cost of acquiring new customers is enormous compared with growing current accounts. Social Media allows you to connect with individuals who have homophilic relationships with you current customer. The cost of acquisition is now only a fraction of traditional marketing. Think PEOPLE LIKE ME.

SMM reveals your true colors: “Do you care about me?” asks any customer. Your “blink” impression of anyone, any service, any brand gives you information that you always put back into your wallet for later. Social media forces your brand to actually connect with customers and prospective customers – not spam them like any other form of (wasted) marketing. If you don’t want to connect and stay remain aloof, you’re just falling behind. Consumers are very well informed and rely on others like their friends to use their purchasing power. Think PEOPLE LIKE ME……or maybe in this case, WE LIKE PEOPLE.

SMM doesn’t play well with control freaks and big spenders: Again last week, I was talking to a VP of Marketing in the Denver area. They focus on consumer services and their consumers are extremely passionate [hence my motivation to talk to them]. The biggest obstacle for them in terms of using Social Media Marketing was ” We would like to control the conversation….be able to ‘respond’… be able to ‘manage this internally'”. Ah right. Have you ever tried to follow 100 stocks on Wall Street at the same time? Have you ever controlled every conversation at a dinner party? Seriously, people. To think this conversation is not happening because you are not participating in it is a figment of your imagination. These conversations are happening anyway, WITHOUT YOU. Any marketer who thinks they’ll save their company by not engaging in social media will just have to try to play catch up in the next five years… it’ll be too late. Think PEOPLE MAY NOT LIKE ME ANYMORE.

SMM does not do WOT, it does WOM: WOT = WASTE OF TIME. Notice that these are the same marketers spending fortunes in surveys, market research, competitive assessments, marketing firms [not us:]. All to find out what their customers want or how to beat their competition. Yeah. OLD SCHOOL. That’s WOT busyness. You need WOM busyness. Just open up, your customers will save you millions. Then those happy customers will make sure their friends know about your product and services. They’ll become fans of yours on Facebook. The not so happy ones and therefore, most valuable in terms of your learning, will give you 2 GIFTS: The truth (that your CEO, product development and operations teams need) and the importunity (important opportunity — those new words keep popping up, don’t they) to show that you carethe very best marketing weapon you have against consumer apathy these days. The costs of ignorance and invisibility are far more expensive than any marketing budget. Think WHERE ARE THE PEOPLE (WHO) LIKE ME?

Do you care?

Do you care?