More things you need to know.

We’ll resume our Deathbed Confessions series next week with Part 3. In the meantime, here are a few insights from people far smarter than me that might come in handy:

On innovation, grabbing life by the horns, and not pissing your life away:

“Do things that are gaspworthy.”

That was one of the main messages delivered by Tom Peters, the influential business thinker and management [expert], in a speech at Epsilon’s Integrated Marketing Symposium 2006 at the Quail Lodge in Carmel, CA.

“Do cool stuff that make people gasp,” said Peters, who looked older and angrier than in his “In Search of Excellence Days” (the book he co-authored with Richard Waterman in 1982 that was hailed by NPR as one of the Top Business Books of the Century). “Don’t piss away your life.”

He changed his speech at the last moment after having learned that one of his best friends had a terminal illness.

Also noted:

“Innovation comes not from market research or focus groups, but from pissed off people.”

- DM News

On remembering what creativity really is:

“Creativity is an act of open disobedience against the norms. Creativity is an act of courage.”

- Chris Bailey

On passion and work:

“Whether you are Jack Welch or the Dalai Lama, it is dangerous not to do what you love. If you don’t have a level of passion that drives your thinking about what you’re doing day in and day out, there will be others out there who are passionate who will overtake and outrun you. People who care will take the initiative away from those who are half-hearted. So loving what you do is a competitive imperative, not simply a nice thing to have.”

Knowledge @ Wharton interviews Mark Thompson and Stewart Emery, co-authors along with Jerry Porras of Success Built to Last

On retaining talent:

“One of my favorite cliches is “there is no such thing as indentured servitude”. I use that line to talk about the fact that talent can’t be bought and sold. It must be retained with something more than money.”

- Fred Wilson

If you want to share this with someone who needs the encouragement, I won’t turn you in to the SOPA police.

Cheers,

Olivier

*          *          *

CEO-Read  –  Amazon.com  –  www.smroi.net  –  Barnes & Noble  –  Que

SOPA, PIPA and bills like them want to kill this blog. And yours.

If you like this blog and others like it, don’t support SOPA or any of its variants.

If you hate this blog and others like it, support SOPA and all of its variants.

It’s that simple.

1. None of it effectively impacts piracy.

2. It throws the baby out the window but doesn’t do a whole lot to throw out the bathwater. It’s backwards.

As much as I’ve loved writing here for the last 7 years, if SOPA or any future incarnations of SOPA pass, I will have to shut down this blog. Here is why:

http://mashable.com/2012/01/17/sopa-dangerous-opinion/

As for the reason why supporters of SOPA are wrong about it, there’s this:

http://matadornetwork.com/change/infographic-why-the-movie-industry-is-so-wrong-about-sopa/

SOPA doesn’t just completely miss the mark when it comes to making it harder for digital piracy to take place, it also basically puts the internet under Taliban rule.

Call or email your representatives (or post to their wall on FB) and tell them not to vote in favor of the bill or any other bill that addresses online piracy in this way. Thanks.

PS: This blog post is in violation of SOPA/PIPA. This blog has over a thousand posts just like it. Nobody wants to end up like this:

Deathbed Confessions – Part 2: You are not your job.

Part 2: Fear, career potholes and the weight of social shame.

“I’m afraid to tell people that I am closing my business because I’m afraid of what they’ll think,” was one admission from a panelist.

“My identity was so tied to my job/title that now that I am on my own, I’m not sure how to handle that,” was another.

One acquaintance in the audience seemed a little hesitant when he told me that he had jumped back into the corporate world – as if I might think that was a bad thing because… I might see it as a failure on his part, somehow. (Why would I? People change jobs all the time. people open and close businesses too. It’s a natural cycle.)

Weird how all these different situations had one thing in common: Fear. There was far more angst in that room than I had anticipated. Lots of private thoughts along the lines of “what will people think?” and uneasiness about the stigma that comes from having perhaps failed at something. Lots of people not quite comfortable with lying about it but not quite comfortable admitting it either.

Why? The term social shame comes to mind. Almost everyone in the room seemed traumatized by having been fired, laid off or having failed at building a successful business.

More than a few people in that room worried about what admitting to having failed (or being fired or downsized) might do to their personal brand too. That’s a hell of a burden to carry around, and an unnecessary one at that.

And you know what? I get it. Most of us have been there or are there or will be there at some point. Case in point: In almost 20 years of being an adult, I’ve been fired twice. Not laid off: Fired. For a long time, I was ashamed to admit it. I thought people would hold it against me, that they would assume I sucked at my job or had done something horrible to lose my job. I assumed it would be a double black mark on my employment record. Then one day I realized that was ridiculous. The failures were not my own.

The first time I was fired was a simple case of a CEO being a bully. Dignity and self-respect won. The job lost. As much as I enjoyed the steady paycheck and the job itself, it was an easy choice to make. The loser in that short conflict was the company, not me. (I went on to better and greater things. They didn’t.)

The second time was because my boss wanted me to sign off on fraudulent invoices and bonus manipulation, among other things. I refused to take part in it. The choice was again simple for me: I didn’t need a paycheck that badly. (I’m not going to federal prison for any employer. Not my idea of a good career move.) I was fired within days of refusing to join the scheme. Again, guess who was the loser in that instance? For the second time in my career, I went on to better and greater thing. They didn’t.

As it turns out, getting fired was a great move for me: None of the jobs I had until I went off on my own involved flying to Sydney or Amsterdam or Dubai for business. None of them gave me the opportunity to speak in front of big crowds or meet so many interesting professionals from all over the world. None of those jobs ever gave me the flexibility to spend 2 months in France in the summer with my wife and kids (and dogs) and work from there if I wanted to. None of them would have allowed my life-long dream of publishing a book (and now there are more on the way). I don’t have to work with assholes or shady people if I don’t want to. I don’t have to kiss anyone’s ass to get a promotion. I don’t have to deal with back-stabbers or mean, jealous petty people anymore. Nobody micromanages me. I don’t have to lie to anyone. I have the freedom to succeed or fail on my own terms. There’s also the risk of failure. I have to live with that, but it’s worth it. I love what I do. I love my freedom, however short-lived it may be.

None of these things would have happened if I hadn’t been fired. Getting fired was the best thing that ever happened to my professional career. I was lucky that it’s happened to me not once but twice. The fact that I only get fired once per decade tells me I’m still playing it way too safe. Imagine if I had been fired more often: I would have gotten to this point in my career a lot sooner. What I wouldn’t give for that. (This might be a good place to point out that both of these jobs were in South Carolina – a “right to work state” – where anyone can be fired for pretty much anything at any time for any reason with complete impunity.)

The folks at IDEO are right: Fail early and often. The faster you fail, the faster you work out the bugs. It’s a process. If there’s anything I wish I knew how to do better, it’s this: Quitting. If I knew how to quit, how to walk away, I would save myself the trouble of getting fired at all. (I’m still working on that.)

The thing is, I know this will fail too. What I am doing now won’t last forever. I’ll eventually fire myself or fail outright. Maybe I’ll take a job with an agency or with a company on the client side. Or maybe I’ll just decide to go open up an adventure-racing school in South Africa or a photo studio in Antibes. Why not? Life is an adventure. Don’t fight it. Roll with the punches. Go with the flow. See where the currents take you.

So here I was in this room, surrounded by people who felt pretty bad about having been fired or having (at least in their minds) failed in some way. Some were visibly ashamed. Others were mostly just confused about whether or not they should share what happened to them. Many were scared to some extent about what it meant, about what people might think, about how it would hurt their image or their chances of landing another good job in the future. I’ve been there too, and it’s not a great place to be in your life. No matter how clear your conscience may be, you still feel small, vulnerable and dejected.

For many of us, it goes far beyond fear and shame. There’s anger too: You feel betrayed by the people you served. You gave so much of yourself and made so many sacrifices for them – missing your kids’ soccer games, working late, often dealing with abuse or harassment, enduring ever-shrinking benefits and the annual insult commonly referred to as the annual “raise” because it was the right thing to do, because your believed it would eventually be worth it. You thought that if you could endure it long enough and jump through enough hoops, you would eventually see the light at the end of the tunnel, maybe even make a real difference. Well, that didn’t happen. Someone pulled out the rug from under you. All of the time, energy, love and hope you invested in that company, in your job, it all just evaporated. It’s an awful feeling. It’s traumatic. There’s no way to walk away from that unscathed. I guess the first thing to realize is that even though it’s happening to you, it isn’t just happening to you. It happens to pretty much everybody. It’s a lot easier to handle that kind of trauma and disappointment when you realize it happens to almost everyone. In fact, it happens to the best of us.

I wanted to make a point so I asked everyone in the room to raise their hands if they had ever been fired or laid off from a job. Almost everyone (including the panel) raised their hand. It was fascinating to see the looks of surprise on some people’s faces at the sight of all of those hands in the air. You could literally see the stress melt from a few of them just from knowing they weren’t alone. It helped, I think. At least I’d like to think so. You have to start somewhere.

Now… People in transition (moving back into the corporate world or moving out of it) could focus on personal branding and Klout score optimization. They could focus their energy on trying to become gurus and experts and ninjas, on raising their professional profiles by speaking at events and writing e-books… But none of that will really free them from the fear that will always hold them, their careers and their lives hostage. They’ll just be trading one prison for another, one dysfunctional professional path for another. And because that fear of social shame will be 1000x greater now that their career is “public” than when it was behind the corporate firewall, every potential failure along the way will carry with it a much greater burden. If you think that’s smart, go for it. If that sounds not so smart, you’re right. There’s more important inner work that needs to be done before launching into campaigns of self-promotion. Ask any political candidates whose campaign imploded about that. Ask any rock star or actor in rehab about it too. Ask any banker or accountant in federal prison the same question: How did you get here? Why did this happen? If they’ve given it any thought, they’ll all have the same answer. We’ll probably talk about that in Part 3.

What I want to focus on today though is fear: The fear of not only failing but admitting that you did. Now that I see how much damage and pain that kind of fear causes, I feel like sharing a few insights that our panel touched on with the rest of you. Some may apply to you. Others may not. You may disagree and that’s fine. I just hope that they will help somebody. Anybody.

So if you’re feeling bad about closing up shop or leaving a job, don’t. And if you know someone who’s having a really hard time with this right now, feel free to share this with them.

Here are a few takeaways from our panel on career transitions:

1. If you haven’t been fired at least once or twice in your career, you might not be doing it right. And if you haven’t failed once or twice at making a business successful, you probably aren’t thinking big enough. Go for failure #3 as soon as you can. Look, unless you’re insanely lucky, failure is part of the success equation. If you haven’t known any yet, chances are that you’re coloring inside the lines maybe a little too well. You might have even stopped moving forward and testing the limits of what you could do. If you’re 100% happy with that, great. If not, getting fired from a job that wasn’t right for you or not biting off more than you could chew with a big idea might not be the worst thing that’s ever happened to you. Sometimes, life has a weird and painful way of doing you favors. Try, fail, repeat. Try, succeed, repeat. Don’t ever stop. No matter what.

You might have heard it a thousand times already, but here’s the name I always think about when people wonder if they (or their spouse) can take one more failure: Thomas Edison. The guy tried and tried and tried to make his light bulb idea work until it did. Imagine if he had quit after 3 tries? 10 tries? 100? here’s what he had to say about when asked about his successive failures:

Young man, why would I feel like a failure? And why would I ever give up? I now know definitively over 9,000 ways that an electric light bulb will not work. Success is almost in my grasp.

Try again. It doesn’t matter how many attempts it takes. Don’t quit just because it’s hard or people look at you funny. What have they ever done? You’ll never regret having tried and failed. I guarantee though that you will regret having quit or given up on a dream. There’s no question about it. Failure is necessary. Failure is good. It teaches you everything you didn’t think to ask.

It’s okay.

2. If you’ve been fired or downsized, if your business has ever failed or run its course, you aren’t alone. It isn’t just happening to you. People get fired and laid off all the time. Companies fail or just get stuck. It happens. Every job ends. Companies close their doors. Departments lose their funding. Assholes who hate you get promoted and fire you just out of spite or fear or jealousy. Learn whatever you can from each experience and move on. As painful and embarrassing as failure of any kind it may be, it is never truly a failure if you’ve derived a valuable insight from it and try again. Dust yourself off and try again. Every pioneer went through the same thing. What put them in the history books is this: Where others would have given up, they didn’t.  If you’re going to fail (and you will), you’re just like everyone else. If you want to get better results than everyone else, make every failure count.

3. Failures in your career hurt as much as failures in love. But pain is just pain. It wears off. Get a head start on the healing. Getting fired is like getting dumped by your boyfriend or girlfriend. It stings. It makes you feel like an asshole. It puts your self-worth in question. We’re just wired that way. If you feel bad about getting canned or laid off, welcome to being human. It’s healthy. Mourn, take a week off. Then get going again. Don’t take any of it personally. See #2.

4. This one is important as it relates to social shame: Nobody holds it against you that you’ve “failed” at anything. Seriously. Nobody is going to talk about you behind your back and peg you a failure. (Okay… perhaps your enemies will, but who cares what they think? They’re assholes anyway.) People in your community will never hold it against you if you’ve lost your job or if your startup failed. No one will ever peg you a loser or damaged goods or a liability as long as you learn from the experience and move on.

Think about it: Do you sit around and make fun of people who’ve been laid off? When Apple fired Steve Jobs back in the day, did we all have secret parties to make fun of him? No. If we even cared, we wondered what he was going to build next. It was exciting. And you know what, if he hadn’t been fired from Apple when he was, Apple might not have become what it is today. Worst case scenario: People are indifferent to your successes or failures. They’re just too busy with their own lives to notice or care about yours as much as you think they do. The rest of us want the best for everyone around us. We want people to succeed and be happy. So… if you’re feeling bad about where you are, chin up: A lot of us are rooting for you.

This whole notion of social shame in regards to failure is an illusion. Don’t fall for it. Your bakery or web design company failed after 14 months? That’s too bad. You’re still everyone’s hero for trying. People will miss that bakery or web design firm, sure, but they’ll only care about one thing: Now what? If you took a job at XYZ Manufacturing, people will be glad you did. If you’re launching a startup in the spring with a few investors, they’ll be thrilled too. Everyone wants you to do well. No one will ever hold it against you if you tried and fail as long as you keep trying. Chin up, kid. You don’t have to apologize. You don’t need to spin it or put on airs. Everybody runs into hurdles. Nothing to be ashamed of. Ever. Don’t do that to yourself. It’s a waste of energy anyway.

5. To quote Tyler Durden, “you are not your job.” You can say that you are your profession, sure, but you are not your job.

For starters, being a brand manager isn’t the same as being VP of Brand Communications at SCB Telecom*. If some douchebag at SCB Telecom gave you the pink slip because you didn’t support his horrible program three years ago and now he can get even with you, go be a brand manager somewhere else. (Hopefully somewhere that will value your contributions a little more than SCB Telecom did.) Being a designer is more important than just being the lead glove designer at Gucci or Chanel. You’re a designer no matter who you work for or what you design. If your company fails, if your label gets sold off, if your boss chases half your team away, it doesn’t change what or who you are.

Whenever a job ends, your profession doesn’t. Hop to another island. It may take six months to find one. It may take ten years of island-hopping to find the right one. You might not ever be happy until you discover your very own island. It doesn’t matter. What island you live on doesn’t change what you are. A job is just a job, no matter how cool it is.

* (Made-up company.)

More than that, you are more than just your profession. You’re also a lot of other things: A parent, a brother or sister, someone’s child, friend and neighbor, a sports fan, a foodie, an artist, a runner, a kite surfer, an equestrian… whatever your interests are. You aren’t just your job. You’re also your interests, your hobbies, your passions, your relationships, your life experiences and more still. Chances are that who you are is far more rooted in all of these things than to your job. So does your value as a human being.

Remember those 5 most common regrets people talk about on their deathbeds? That.

6. Don’t take failure so seriously. In fact, don’t take yourself so seriously either. Relax so you can learn. Learn so you can solve. Solve so you can adapt. Adapt so you can overcome.

Fear is the enemy of innovation. It’s the enemy of design, the enemy of progress. Fear of embarrassment, fear of failure, fear of rejection: They’re all working against you. Whenever fear tells you to back off from an idea or a goal, that’s when you know you’re onto something.

One way to kill fear of failure dead is to not worry so much about the shame and embarrassment that you’ve attached to that fear. Laugh more. Have more fun with what you’re doing. Don’t let stress get in the way. Whether you’re winning or losing, have fun. Ever listened to an 80-year old tell an embarrassing story from their youth? As mortified as they may have been then, they can look back on it now and laugh. That doesn’t suck.

If you’re going to crash and burn, do it with style. Don’t slink away. Crash, burn, get up, take a bow, then go laugh it off. If you can ever learn to laugh at failure and carry on, no one and nothing will ever be able to break your will. Ever.

Look around. Almost everyone around you has failed at something. They may hide it well, but they have.

7. Put it all in perspective: Nobody is shooting at you. You aren’t being targeted by enemy artillery. You didn’t just lose a leg or an arm in a roadside I.E.D. attack. You don’t have cancer. There’s no giant tidal wave about to crush and drown you, no nuclear power plant a mile away about to melt down. That shit is bad. Losing your job or closing down your company isn’t. Get over the fear and embarrassment. They’re a waste of energy. You’re going to be fine. Okay? This is small stuff.

8. Every job has a beginning and an end. Period. One way or another, the job you have today will end someday. Could be tomorrow. Could be next week. Could be in twenty years. How it ends or why might not even matter. What matters is that the inevitable is… well, inevitable.

If you’ve never seen The Kingdom, there’s a great scene in which FBI Director James Grace (played by the always brilliant Richard Jenkins) is being pressured to act against his conscience by the Attorney General (his boss). It’s clear in the scene that the AG won’t take no for an answer. James Grace knows if he doesn’t play nice, his career at the FBI is over. Instead of caving to pressure just to save his own ass, he shares with the AG what he learned long ago about the nature of jobs. After a brief pause, this is his answer to the threat:

You know, Westmoreland made all of us officers write our own obituaries during Tet, when we thought The Cong were gonna end it all right there. And, once we clued into the fact that life is finite, the thought of losing it didn’t scare us anymore. The end comes no matter what, the only thing that matters is how do you wanna go out: On your feet or on your knees.

I bring that lesson to this job. I act, knowing that someday this job will end, no matter what. You should do the same. 

There’s a lot of wisdom in that answer. A lot of courage too, but a lot of wisdom. Heed it.

Every company runs its course. Every job ends. When you remember that you are far more than your job, that life is about more than the title on a business card, the necessary failures you’ll encounter along the way won’t seem so big anymore.

Do the best you can. If you trip and fall or life punches you in the face, get back up. Lean on your family and friends. Banish embarrassment to the curb. Don’t bear the burden of fear, shame or sadness alone. Do whatever you have to do to get back on your feet as fast as possible and just start putting one foot in front of the other again.

Someday, when you’re on your deathbed too, you will regret every minute you wasted feeling sorry for yourself. You’ll wish you had a way to erase every day that you “waited” to try again and do them all over again.

I’ve rambled long enough. Stay tuned for Part 3. We’ll be talking about the danger and ultimate price of bullshit. In the meantime, put your own work aside and go help someone kick ass today. You’ll be amazed how rewarding that feels.

Cheers,

Olivier

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The social business building textbook for executives. Now available everywhere:

CEO-Read  –  Amazon.com  –  www.smroi.net  –  Barnes & Noble  –  Que

Deathbed confessions – Part 1: Fear, Bullshit and Truth

Three completely unrelated things came together this past week that individually weren’t all that fascinating but together formed a something  I think needs to be given form to.

1. Fear. I was a guest panelist at Greenville’s Switching: Leaving Freelance for the Corporate ladder and vice versa event. My fellow panelists and I shared insights about the pros and cons of working either inside the corporate machine or outside of it. (Really great topic, by the way.) Because many of the folks who attended were in the midst of a transition – some going back into the corporate world and some coming out of it – one of the themes during the event’s discussions was the role that jobs and job titles play in our self worth. Some of that can be pretty negative so we’ll talk about that in Part 2.

2. Bullshit. Discussions about my last 4 posts (The Last Year, R.I.P. Personal Branding, and the last two bits on how to avoid becoming a cog in the social media / marketing bullshit machine) started to sound very similar: There’s what’s real and there’s what’s made-up. We all increasingly feel pressure to keep up with our peers, to put on appearances and to appear more successful and happy and normal than we really are: Everyone’s a best-selling author now. Everyone’s an award-winning expert. Everyone has worked with Fortune 500 companies and major brands. Everyone is launching startups and raising millions of dollars in funding. Right. Except no. A lot of that is just smoke and mirrors. It’s spin. But because so many people are doing it and because it is amplified by the 24/7 onslaught of self promotion, link-bait SEM content and personal branding on Twitter, Facebook, Google+, Youtube, Quora, Foursquare, Klout, blogs and five dozen other overlapping platforms, every little bit of spin and bullshit gets amplified to the point where it becomes not only believable but overbearing.

We’ll talk about that and the impact it is having on all of us, on the business world, on politics, right down to the state of the economy. Bullshit affects everything, and never in a good way. Look around. It’s like someone’s open the floodgates. How’s that been working out? If bullshit helped get us in this mess, do you really think more bullshit will help dig us out?

3. Truth.

This: The top 5 regrets people make on their death beds. Read it. (It’s short.)

When it all falls away and there’s no one left to impress, when you would give anything for another few hours of life or maybe a chance to do it all over again, all that will be left to contemplate is the truth. You want a glimpse into those last few hours of your life when you’ll look back and consider what you really spent your life doing? Here is a stripped down version:

1. I wish I’d had the courage to live a life true to myself, not the life others expected of me.

When people realize that their life is almost over and look back clearly on it, it is easy to see how many dreams have gone unfulfilled. Most people had not honoured even a half of their dreams and had to die knowing that it was due to choices they had made or not made.

2. I wish I didn’t work so hard.

This came from every male patient that I nursed. They missed their children’s youth and their partner’s companionship. [...] All of the men I nursed deeply regretted spending so much of their lives on the treadmill of a work existence. [...] By creating more space in your life, you become happier and more open to new opportunities.

3. I wish I’d had the courage to express my feelings.

Many people suppressed their feelings in order to keep peace with others. As a result, they settled for a mediocre existence and never became who they were truly capable of becoming. Many developed illnesses relating to the bitterness and resentment they carried as a result.

We cannot control the reactions of others. However, although people may initially react when you change the way you are by speaking honestly, in the end it raises the relationship to a whole new and healthier level. Either that or it releases the unhealthy relationship from your life. Either way, you win.

4. I wish I had stayed in touch with my friends.

When faced [with approaching death] [...] it is not money or status that holds the true importance for them. They want to get things in order more for the benefit of those they love. [...] It all comes down to love and relationships in the end. 

5. I wish that I had let myself be happier.

Many did not realise until the end that happiness is a choice. They had stayed stuck in old patterns and habits. The so-called ‘comfort’ of familiarity overflowed into their emotions, as well as their physical lives. Fear of change had them pretending to others, and to their selves, that they were content. When deep within, they longed to laugh properly and have silliness in their life again. When you are on your deathbed, what  others think of you is a long way from your mind. 

Hat tip to Zsofia Tallai for sharing that link. We’re going to talk about that article as well.

Those three pieces are connected, and this week we’re going to talk about all of that. No ROI discussions. No social business focus. Just this. Because the problems we are dealing with right now, the reasons why the value of social business is still not clear to so many executives and decision-makers (let alone ROI), the reason why world economies are in shambles, the reason why so many people are divided and out of work and stressed out of their minds is this: We’re addicted to both fear and bullshit. We’re stuck in cycles of fear and bullshit. Everywhere we go, it’s there and we can’t escape it, and it’s a serious problem.

Stay tuned for Part 2.

*          *          *

The social business building textbook for executives. Now available everywhere:

CEO-Read  –  Amazon.com  –  www.smroi.net  –  Barnes & Noble  –  Que

How to publish a proper list of Social Business ROI examples.

As valuable as it may be to peel back the layers of a poorly put-together list of social business ROI examples, let’s now talk about how to do it right. Below is a quick 5-step guide in case you ever want to publish your own report or list of social business ROI examples:

1. Do your research.

This means talking directly with the company or agency involved with the campaign or program, not just bookmarking Mashable  articles and collecting a few white papers. Actually talk with the program or campaign lead. Have a discussion about what worked and what didn’t, what was done and why, etc. Obtain financial data, not just digital and marketing metrics. Without this data, you will not be able to add this campaign or program to your list.

2. Know the difference between writing a list of social business case studies and a list of social business ROI examples.

- Case studies may focus on a breadth of criteria for success or failure. Some may focus on the impact a campaign had on consumer perceptions while others may focus on customer acquisition or nipping a PR crisis or any number of things.

Case studies can focus on ROI but they don’t have to.

Case studies tend to be written in sections: Objective/problem to solve, theory, strategy/plan, tactics/execution, what happened, what we learned. The formula isn’t rigid but for a case study to be written properly, it has to actually study a case, hence the name. It has to have a beginning, a middle and an end. It has to show the connection between intent and outcomes.

Case studies can’t only be about what worked. They also have to be about what didn’t work. There’s value to that as well. Report on both.

- A list of social business ROI examples focuses on just one thing: Listing social business programs or activities with quantifiable ROI.

There are three parts to a social business ROI report: An explanation of the activity’s purpose and nature, the cost of that activity, and the ultimate financial benefit to the company.

The focus here is much more specific than that of a case study.

3. Format your reporting properly. 

Here is an example of how not to format an example of social business ROI:

Electronic Arts. EA was 2nd UK brand to use promoted tweets and trends to promote FIFA 12 video game. Trend engagement level was 11%, well above Twitter’s average ‘benchmark’ for trends, of 3% to 6%. Promoted tweet engagement averaged 8.3% over two-week campaign vs. Twitter benchmark of 1.5%. (Marketing Magazine, 2011) Source: Peter Kim.

Note that in spite of the short formatting the above example does not  include any ROI data whatsoever. It focuses instead on trend engagement levels and promoted tweet engagement. This not what you want your ROI reporting to look like.

Here is an example of how to properly format an example of social business ROI:

Joe’s Pie Factory. JPF wanted to increase QoQ sales of carrot cakes by 25% by the end of Q4-2011. Leveraging its Facebook page, Twitter account, Youtube channel and blog, JPF launched an awareness campaign for its carrot cakes at the start of Q4-2011. Total cost of campaign: $27,391 (for video production and content & community management). Outcome: A 23% boost in QoQ sales resulting in $59,782 in net new revenue. (Add link to case study in case readers want to learn more.)

Note that this example focuses on campaign objectives and includes both cost and net revenue data for the activity. These are the three ingredients needed to properly qualify an example for a social business ROI list or report. (See item 4.)

You could stop there or you could do the math for your readers:

Joe’s Pie Factory. JPF wanted to increase QoQ sales of carrot cakes by 25% by the end of Q4-2011. Leveraging its Facebook page, Twitter account, Youtube channel and blog, JPF launched an awareness campaign for its carrot cakes at the start of Q4-2011. Total cost of campaign: $27,391 (for video production and content & community management). Outcome: A 23% boost in QoQ sales resulting in $59,782 in net new revenue. ROI of campaign: 118%. (Add link to case study in case readers want to learn more.)

4. Make sure that all of your social business ROI examples always contain these four pieces of information:

1. A brief synopsis of the campaign or program.
2. The cost of that program.
3. The financial outcome of that program.
4. A link to the case study / your source for the ROI data.

Anything other than those three pieces of information is unnecessary. Remember that you are writing a list of social business ROI examples and not a list of social business case studies.

Failure to include all four of these pieces of information will result in incomplete reporting.

5. Make sure that your documentation is in order.

Do not rely on anecdotal information to compile your list or report. Ever.

This means: do not assume that because a social business program was in place during a period of lift in sales revenue, the social media program was the cause of that lift. Don’t assume that if a digital marketing manager tells you that he knows customers responded positively to a campaign, they actually did. In fact, don’t assume anything. Back up every hypothesis and assertion with data. Disprove alternative cause-and-effect relationships where they may exist. Make sure you aren’t being sold a big fat lie.

If you cannot prove that a company’s social business program or campaign resulted in positive ROI, do not include that program or campaign in your list or report. Period.

Just to be sure, always document the source of your data so the rest of us can check it for potential errors or foul play.

Three more tips:

Don’t worry about gimmicks. If your list only gets to 23 examples, then that’s fine. Don’t try to stretch it to 25 or 75 or 101 just to have a catchy number that will score good SEO. Just stick to the facts. Everyone would much rather have 23 solid examples of social business ROI than 101 bad ones. Substance before flash. Always.

If you don’t understand how ROI and social business fit, you might not be the best person to compile and publish reports on the subject. If that’s the case, don’t feel bad. Life goes on. Publish stuff you actually understand for now. Someday, when the ROI thing isn’t such a mystery anymore, you can come back to it and give it another shot. Until then, just do yourself (and all of us a favor) and do your homework. Come prepared. Lead with what you know.

If you want to get better at this though, here is a primer on how to calculate ROI in 4 easy steps:

What you’ll need:

• Campaign cost data and financial outcome data.
• The ROI equation.

Here is the ROI equation in its most user-friendly format:

ROI = [(Financial outcome of program - Cost of program) ÷ Cost of program] x 100

Step 1: Calculate the financial outcome of the program – the cost of program.

Step 2: Divide that number by the cost of the program/campaign.

Step 3: Multiply that number by 100.

Step 4: Add a % at the end.

That’s it. So simple an 8-year-old at a lemonade stand can do it.

Now go forth and be a force for good and credible business reporting in the world.

Cheers,

Olivier

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In case you haven’t yet, you might want to pick up a copy of #smROI. 300 pages worth of stuff like this in there. A full pound of knowledge.

And if your favorite social business “expert” doesn’t seem to get this stuff yet, don’t feel bad about sending them a copy. Knowledge is never a bad gift.

CEO-Read  –  Amazon.com  –  www.smroi.net  –  Barnes & Noble  –  Que

101 success stories: yes. 101 examples of ROI: no. Here’s why.

How do I write this piece without making Peter Kim hate me? I guess I’m just going to have to give it a shot and hope for the best. It’s important to remember that this post isn’t about him. It’s about a piece of content.

None of this is personal. I even think I like the guy. (We’ve never met in the real world, so I don’t know for sure.) I have a lot of respect for him and for what I think he does. (We’ve never worked together so I don’t know for sure either.) But I have to be honest, the 101 Examples of Social Media ROI list he published this week is crap seriously flawed. Here’s why: Most of these 101 “examples” don’t show ROI at all, “social” or otherwise. Either the title is wrong or the list is wrong for that title. One or the other.

Before I get into specific examples and illustrations of where I think the list fails, let me give you four basic problems I have with it as it stands today:

1. Many of the examples on it could potentially show positive ROI but – as presented – only reference selective gains from social activity and not actual, factual, empirical ROI. If that made no sense, that’s okay. Let me explain:

For something to be ROI, you need two ingredients: The cost of the activity and the gain from that activity. (That cost is the investment. The gain is either revenue or cost savings.) It’s math. Really really really simple math. ROI is an equation and it generally looks like this:

($ Gain – $ Cost) ÷ $ Cost = ROI

or

($ Revenue – $ Investment) ÷ $ Investment = ROI

(You can also multiply the result by 100 to get yourself out of the decimals, but that’s a personal choice. You can do that in your head.)

Anything that isn’t the result of the ROI equation is not ROI.

Note that a gain is just a gain,like cost is just a cost. Neither gain nor cost is ROI on its own. Ever. Not in any known universe.

Put another way, bread and ham  may individually be part of the ham sandwich equation but ham alone is not a ham sandwich. Ham is just ham. The problem we face today: This list pretty much mistakes ham for a ham sandwich. Good thing it was free or we would all be asking for a refund (or a word with the chef).

Take this example:

61. Paramount Pictures. #Super8Secret Promoted Trend created a tremendous spike in conversations: Tweets of the hashtag reached nearly nine million impressions in less than 24 hours and mentions of the movie skyrocketed to more than 150 per minute. Receipts for the sneak preview exceeded $1 million, and Paramount said weekend box office surpassed expectations by 52%. (Twitter, 2011)

Cool story, bro. What was the cost of the campaign?

Yes, this is an example of a successful use of social media (through a “promoted trend” media buy). Awesome. But where’s the bit that compares the $gain and the $cost? That would be an ROI example. This isn’t.

What’s sad is that there is probably an ROI piece hiding in the background but instead of focusing on that, the example dishes out a healthy helping of random gain data: Impressions. Mentions. Tweets. Retweets. Sales too, which is nice but no cost data… so thanks for playing but no. Without the cost piece, you don’t have an ROI example.

Your example needs to include this information or it doesn’t belong on that list:

($ Gain – $ Cost) ÷ $ Cost = ROI

Tip: If you can’t measure ROI or adequately prove it in this instance, that’s okay. Just don’t add it to a list of ROI examples.

(Speaking of proving cause & effect, let’s not forget that Super8 was a well anticipated $50M summer fare from director J.J.Abrams and producer Steven Spielberg. Not exactly a grass-roots indie phenom that would have flopped without a promoted trend on Twitter. Let’s not go crazy over the role that social media really played in opening weekend ticket sales. A little perspective goes a long way.)

More examples of this disappointing absence of actual ROI metrics later. In fact… almost the entire list suffers from this single basic flaw. But hey, at least this type of example makes the effort of including at least a portion of the data that goes into an ROI discussion. Not all examples on the list do.

2. Many of the examples on the list don’t even reference financial gain at all, let alone ROI. I list more later in the post but these will get things started:

“68% of respondents said they were “much” or “somewhat” more likely to purchase post-project.” (Subaru. 80.)

“32,000 video views, 25% regular return visits to the site, and average of almost seven minutes spent on the site per visit.” (UPS. 96.)

“Community drove a +20 NPS increase.” (Sage Software. 69.)

“58% higher engagement rate than people coming in from other channels.” (TurboTax. 91.)

These are very cool little successes, great things to celebrate and be happy about, but as valuable as they may be they are not ROI. Not one part of any of those numbers even fit in the ROI discussion. At least other examples on the list make an effort to list one element of ROI: Money saved or money earned. These don’t. Sorry but that’s a little perplexing.

Here’s an example of my own to illustrate how far these examples are from ROI: I love carrot cake and when people compliment me on my impeccable taste in carrot cake, that isn’t ROI either, no matter how much of those interactions happen online.  I could call it ROI and score the number 102 spot on the list, thus:

102. Olivier Blanchard. Increased engagement with carrot cake enthusiast community by 37%. (The BrandBuilder Blog, 2012)

Except… no. It doesn’t work that way. Just because something is a success doesn’t mean it qualifies as ROI. Did my example mention that I even sold carrot cakes? Did I factor in the cost of making them or selling them online? Did I save money in any way by talking about carrot cakes with my twitter friends? Nope, I didn’t think so either.

Again, your example needs to include this information or it doesn’t belong on a list of ROI examples:

($ Gain – $ Cost) ÷ $ Cost = ROI

3. Some of the examples could have been bunched into one but legitimate examples were somehow omitted. Case in point: Cerner’s three examples (15, 16 and 17) are really one program / one example, but IKEA somehow didn’t make the list. (For more details on that particular program, click here.)  Maybe scratching Giffgaff (32.) and replacing it with IKEA would have made sense?  But okay, I’ll back off from this particular point. Lists tend to be incomplete. Someone always gets left out and sometimes you have to stretch yourself a little thin to get to the magic number. It’s no big deal.

4. Because of the source (Peter is well respected in this industry as far as I can tell), a lot of people will naturally accept this list as fact. It will become a template to be shared and passed around and referenced for the next couple of years. When marketing execs and digital agencies look for examples of ROI in social business, they will pull this thing from the Googlenets and use it as a resource for all sorts of things: Training of new social business recruits, client pitches, presentations at conferences, etc. They will do so without questioning the validity of the information they are not only ingesting but also sharing because they trust that Peter vetted the list before publishing it. That’s the unspoken contract of being a respected leader in the social business world.

Except… what if this one time, the information wasn’t properly vetted? What if much of it wasn’t even properly presented (using the right metrics, for instance)? Or what if the title is so wrong for the actual list that you end up confusing “value” with ROI for another 3 years as a result? Then what? No thanks. We can do better.

If you have 10 minutes to really get into it, read on. If not, you get the idea. (By the way, the list isn’t all bad.) Feel free to skip ahead to the end all the same.

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Let’s look at a few of these examples a little more closely.

We’ll get to more obvious cases of “no, this isn’t ROI at all” a bit later. I want to start with some of the more subtle “maybe this could be ROI” examples first because a) they’re tricky and b) they illustrate pretty well some of the common traps people fall into when trying to establish ROI too quickly:

1. Aflac. Community drove online payments increase of 3% led to $95,000 in savings. (Lithium Technologies, 2011)

Q: What’s the problem with this one, Olivier? It looks legit to me. What’s your deal?

A: Yes it does look legit. And it might be. But do we know anything about other activity from Aflac that might have contributed to that 3% increase in online payments?

Could a concurrent email or advertising campaign have triggered a significant portion of that shift? Could the addition of a flyer in the mail to existing customers prompting them to make online payments have been the real cause of the shift? We can’t attribute the success of “the community” until we have ruled those out. If we know for a fact that this was 100% the result of community engagement, great. Roll on. If not, we need to find out before we high-five the community management team.

Lesson #1: Assumptions are dangerous and attribution is tricky. If you are going to present an ROI example, make sure it is rock solid. Don’t assume that social business was the biggest (or sole) cause of your success.

A better way of presenting this one would have been to maybe connect the 3% lift in online payments to the $95,000 in processing costs (context here would be nice so we know how the two might be connected). Tying these metrics to a specific campaign or activity on social channels wouldn’t be a bad thing too. Connect the dots a little bit: +3% in online payments isn’t ROI unless it results in $x savings. None of it is an outcome of social business unless you also show how “the community” helped you get there.

Not saying this isn’t a potential ROI win, but as presented, we can’t know for sure. Not yet. We’ll give that a cautious MAYBE. Just watch those assumptions though.

*          *          *

2. Alberta Common Wealth Credit Union. Blog, YouTube, Facebook – 2 million impressions, 2,300 new accounts, and $4 million Canadian in new deposits. (Forrester, 2008)

First, scratch the 2 million impressions bit. It’s a distracting metric and not super reliable (or even relevant to this discussion).

$4 million in new deposits sounds like a great outcome for the program though. Here are the three problems with that:

- Assumptions again: How do we know that these 2,300 new accounts and resulting $4 million in new deposits were tied to the social media program (Blog, Youtube, Facebook) and not a combination of social and other factors (traditional marketing, advertising, PR, etc.). Can ACWCU realistically assign the 2,300 new accounts and $4M in net new deposits to the social media program?

If the answer is yes, great. They’re on the right track. Time to back that up. Show me how that happened.

If the answer is no, then we have a problem right off the bat. Remember that thing about assumptions.

- What about costs? What was the cost of the program? This example (and many others) don’t mention cost at all. They only mention gains. The ROI equation also factors in costs.

Here’s why this is kind of important in an “ROI examples” discussion: if the program or campaign cost $4,000,001 and the net new deposits amounted to $4,000,000, then your ROI was actually negative. Just sharing the gain from the campaign or program doesn’t give us any idea of what the ROI actually was.

Lesson #2: Don’t confuse ROI with gain. ROI is the ham sandwich, not just the ham. (Google the ROI equation, print it and tape it to your office wall. Before you tag something as ROI, make sure it fits the definition of ROI.)

- No benchmarking: What the example doesn’t tell us is what the time period for this gain was, and how the credit union normally trends for similar time periods. What if ACWCU usually sees the same amount of new accounts and deposits for the same time period even without social media? Say that ACWCU saw 2,300 new accounts for the exact same period preceding the start of their social media program? Wouldn’t that mean that the social media program might have had no impact at all? You have to factor in time frames and set up benchmarks before you can weigh gains before and after the launch of a program.

Result: As presented, we have no way of knowing if the program perpetuated a trend or brought in new business above and beyond normal performance trending.

Lesson #3: Without adequate benchmarking, your ROI “reporting” is incomplete and doesn’t stand up to scrutiny.

File that one under MAYBE. (As presented: An incomplete report of gain but not an example of ROI.)

Way too many of this kind of anecdotal “example” on this list to make me comfortable with it. Sorry.

*          *          *

8. Blendtec. Viral videos increased company sales +700%. (Barnraisers, 2010)

That one actually does stand up to scrutiny. BlendTec’s hilarious videos (and live demos at trade shows) a) became such a hit and b) demonstrated the effectiveness of the blenders so well that orders for the blender increased almost overnight.

The reporting here is still pretty incomplete though: 700% over what time period? What else could have caused the increase? That’s a gain but not an ROI figure: What was the cost of the program vs. that 700% net gain in sales?

File that one under YES: ROI but with reservations. (As presented: another report of a successful gain but not an example of ROI.)

I really wish the legitimate ROI examples on this list actually focused on ROI instead of using disjointed metrics.

*          *         *

10. Bonobos. Exclusive sale on Twitter generated 1,200% ROI in 24 hours on promoted tweet. (Twitter, 2011)

First, proceed with caution if the list is about Social Business and you are just talking about a one-time media buy on a social channel. Social business is a little more elaborate than buying the odd promoted tweet for a one-day promotion.

Second, we have absolutely no idea how that 1,200% ROI figure comes from. What is it based on? Could the figure erroneously reference a 1,200% increase in sales rather than ROI? As presented, we don’t really know. Red flag.

Third (and perhaps most important) we have no idea what the cost of that promoted tweet was in relation to the gain in net sales.

Knowing nothing about this one, I want to give it the benefit of the doubt. Filing it under MAYBE. (I can’t believe I am being so nice. This would never pass muster during a legitimate business audit.)

*         *         *

13. Burger King. Subservient Chicken video increased chicken sandwich sales 9% per week a month after launch. (Adweek, 2005)

Again: At a cost of…?

If the 9% increase in chicken sandwich sales amounted to less revenue than the cost of the campaign or program, then the ROI was negative. This example (like most on the list) mentions gain without factoring in cost. This is the list’s biggest problem.

Footnote: Subservient chicken wasn’t just a social media campaign. Subservient chicken was an advertising campaign with interactive digital components. This is very different from a business like Best Buy or Ford engaging with people via social channels to grow mindshare, improve the brand’s image and ultimately increase preference in the minds of x% of car buyers. When looking at this type of hybrid model of social and traditional media, you cannot legitimately talk about the ROI of “social”.

Lesson #4: When a campaign (note my choice of the term campaign and not program) is as much social marketing as it is traditional marketing, you cannot attribute its success to “social media” or even “social business.” An advertising campaign, even with social channel components is still an advertising campaign.

Effective, sure, but still just advertising.

File that one under a cautious and suspicious MAYBE. (As presented though: No ROI was actually demonstrated here. Value: yes. ROI: nope. Again.)

Let’s move further down the list.

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Let’s leave the gray area of “maybe” for a minute and look at a few examples that don’t fall anywhere near ROI (as presented):

15. Cerner. Community resulted in 13% fewer customer support issues logged. (Jive Software, 2011)

16. Cerner. Community resulted in 70% decrease in internal HR issues logged. (Jive Software, 2011)

17. Cerner. Community resulted in shorter approval cycles for writing technical documentation, from 2-6 weeks to hours or days. (Jive Software, 2011)

19. Charles Schwab. Online community drives 56% increase in Gen X customer base versus year ago. (Communispace, 2007)

20. Cisco. Community deflects 120,000 support cases each month. (Lithium Technologies, 2011)

24. Electronic Arts. EA was 2nd UK brand to use promoted tweets and trends to promote FIFA 12 video game. Trend engagement level was 11%, well above Twitter’s average ‘benchmark’ for trends, of 3% to 6%. Promoted tweet engagement averaged 8.3% over two-week campaign vs. Twitter benchmark of 1.5%. (Marketing Magazine, 2011)

25. Elsevier. Wiki drives 80% reduction in interdepartmental e-mail volume. (Socialtext, unkn)

28. FICO. Community: 850k customers served, resulting in 10% improvement in call deflections annually. (Lithium Technologies, 2011)

30. FONA International. Wiki eliminated almost 50,000 e-mails a year from one specific process. (Socialtext, unkn)

32. giffgaff. 100% of questions answered by community members in average time of 93 seconds. (Lithium Technologies, 2011)

34. Hershey’s. House party: 10,000 parties, reached 129,000 people, and say their campaign was seen by 7 million people. (Forrester, 2008)

35. Honda. Friending Honda campaign increased Facebook fans from 15k to 422k, generated over 3,500 dealer quote requests. (RPA, 2010)

36. HP. More than 4.6 people have told HP that the forum solved their support issues which HP says makes customer happier and saves the company millions in support costs. (Forrester, 2010)

42. Intuit Quickbooks. Business owners engaged with rated ProAdvisors 555% more often than unrated counterparts. (ratings and reviews). (Bazaarvoice, 2011)

No ROI in any of those examples whatsoever. There are more but I will let you find them all on your own.

Lesson #5: If it isn’t a $cost vs. $gain equation (or whatever currency you need it to be), it isn’t ROI. Customer base, leads, referrals, links, clicks, retweets, HR issues logged, email volume, estimates of future sales, deltas in NPS, quote requests, parties reached, impressions, engagement, etc. = not ROI.

Note: Too bad HP (36.) didn’t lead with the “saves company millions in support costs.” That looked like a legitimate ROI example. (Right company, wrong metrics to illustrate the ROI piece.) It matters that 4.6… wait. 4.6 people?

Maybe it was 4.6 million? Or 4 out of 6?

Anyway, whatever the number is, it matters but it is irrelevant to the ROI discussion. What would have been relevant would be how many millions in savings HP enjoyed as a result: The cost of implementing and managing the program vs. the $x million savings would have been a perfect way to illustrate ROI here. Missed opportunity #36 on the list so far.

Speaking of how to properly present ROI “examples,” here are a few quick tips on how to turn these examples into legitimate ROI stories:

It would have been great for the three Cerner examples to talk about actual cost reductions from the drop in customer service and HR issues, for instance, but they didn’t The metrics used had nothing to do with ROI. Financial gains (either via revenue or cost savings) were never mentioned. The cost of implementing and managing the program(s) was also never mentioned. Why? Those are far more relevant metrics than the ones presented.

Same with Elsevier: An 80% reduction in email is great but what is the impact on operational costs? That would be a potential ROI story.

Honda (35.) would have a great ROI story to tell if it could show the net number of sales from those 3,500 dealer quote requests and then scrubbed from that list every buyer who was going to buy a Honda anyway, regardless of the company’s social media activity. Presenting the example with “likes” and “dealer quotes” as the two principal KPIs (key performance indicators) instead of net sales (for example) puts the example squarely outside of a legitimate ROI discussion.

Intuit is another example of a company listed here with a legitimate ROI story to tell, but the description references a KPI that has nothing to do with ROI whatsoever. “555% more engagement resulting in net new $… versus a cost of $…” would have scored a bullseye. “555% more engagement” alone doesn’t.

Is it too much to ask for a list of ROI examples to actually use cost vs. gain numbers? As in… the actual ROI equation? Because that would be simple, clear and nice… and relevant. Instead of…

19. Charles Schwab. Online community drives 56% increase in Gen X customer base versus year ago.

… try this:

19. Charles Schwab. Online community cost: $X. 56% YoY increase in Gen X customer base attributable to online community resulted in net new revenue of $Y FY2011. ROI: $Z.

Simple. That’s how it’s done.

Perhaps there is an ROI story hiding somewhere in the background of every single example here. In fact, there probably is. But these examples, as presented, don’t talk about ROI at all. They reference non-financial gains without establishing any link whatsoever to ROI. So… Sorry, that’s a big zero on all of those.

Filing these under: NO ROI ANYWHERE (except for the vague afterthought in number 36).

My thinking: Far too many of these on this list as well.

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Okay… I’m starting to feel bad about this so let’s look at a legitimate example on the list. #22: Dell.

22. Dell. @DellOutlet on Twitter generated $2 million direct sales, influenced $1 million addt’l (2007 – 2009). (Direct2Dell Blog, 2009)

Yes. Tweets linked to offers were tracked and a direct path of tweet-to-purchase was clearly established. Empirically.

File that one under YES: ROI. (But it would have been nice to see it as an ROI example and not as just another example of gain.)

Cost of program vs. $ in net sales from the program. Simple. Another missed opportunity to demonstrate ROI properly.

Moving on…

*         *        *

27. Epson. Reviews drove 98% higher revenue per visitor for Epson. (Bazaarvoice, 2011)

First, I have absolutely no idea how one leads to the other. How do we know that “reviews” drove higher revenue per visitor? Show me how you came up with that figure.

Second, what does that have to do with ROI? (Gain from reviews – Cost of reviews) ÷ Gain from reviews = … oh wait. What was the cost of those reviews again? #Fail. Value: Yes. Correlation between A and B: Maybe. ROI: Nope.

Sorry but I have to file this one under NO. Interesting but not ROI.

*          *          *

Dancing back into ROI territory now. (I still feel guilty about pointing out the problems with this list.)

See? It isn’t all bad.

37. IBM. developerWorks community saves $100 million annually from people who use this resource instead of contacting IBM support. (Forrester, 2010)

38. IBM. Crowd-sourcing identified 10 best incubator businesses, funded for $100 million, generatiung $100 billion in total revenue for a 10-to-1 ROI with a 44.1% gross profit margin. (Barnraisers, 2010)

Now we’re talking. ROI can come from cost savings, not just net new revenue. Well done, IBM.

Filed under YES: ROI.

*          *          *

45. Jewelry TV. Customer reviews boost mobile sales by 30% (ratings and reviews). (Bazaarvoice, 2011)

Aside from the obvious problems already encountered with previous examples, this one introduces us to a new one: The 30% boost in mobile sales. Is this 30% net new sales or simply a shift from non-mobile sales to mobile sales? Whether someone buys from a mobile device or their land line, is there really a difference? Does it have anything to do with ROI?

53. Mattel. Despite product recalls, online community helped support Q4 2007 sales increase of 6%. (Forrester, 2008)

How do we know that the online community helped support a Q4 2007  sales increase of 6%? isn’t it more likely that back in 2007, advertising, product placement and good PR might have been more responsible for that 6% increase than an online community?

Also, 6% versus what? Is this YoY or QoQ? Was it normal for Mattel to expect 6% growth in Q4 of 2007 with or without an online community?

Too many unanswered questions = too many assumptions.

Filing these and others like them under NOT SURE WHAT THAT WAS. MAYBE.

Another reason why benchmarking matters. Just throwing numbers around without establishing a context for them doesn’t really tell you anything. Data can be manipulated to tell wonderful stories when no one is there to ask hard questions like “prove it.”

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I want to end on a positive note, so here are several examples that either have potential or are clear examples of ROI (in no particular order):

11. Bupa. Community drove £190,000 savings through collaboration, online events. (Jive Software, 2011)

100. Vistaprint. Community tracked $30,000 in social revenue in 2009. (Lithium Technologies, 2011)

23. Domino’s Pizza. Foursquare drove 29% pre-tax profit through promotions. (Barnraisers, 2010)

71. SAP. Community drive 5% increase in partner sales. (Jive Software, 2011)

57. National Instruments. Community resulted in 46% of all support questions answered by peers instead of support. (Jive Software, 2011)

84. TomTom. In one month, community handled 20,000 cases resulting in $150k of savings. (Lithium Technologies, 2011)

65. Precyse Technologies. $250,000 savings in crowdsourcing new product design. (InnoCentive, 2010)

92. TVG. Community members spend 36% more than average. (Lithium Technologies, 2011)

67. Rhapsody. 50% decrease in support costs and 53% decrease in weekly support contacts via sCRM solution. (GetSatisfaction, unkn)

60. Orange. Listening: saved a few million euros in support costs and helped avoid several potential PR problems. (Forrester, 2010)

75. Secret. Among women viewing the video, 57% said their impression of the Secret brand improved and purchase intent among women who participated on Facebook went up by 11% (33% for teens). Clinical sales increased 8% despite a 70% decrease in TV support. (Forrester, 2010)

85. Toshiba. Saved $213,000 by adding online component to 5 events, doubling attendance. (Jive Software, 2011)

95. University of London. Internal social network allows students to collaborate remotely, expected to deliver future savings in the region of £300,000 per year in print, courier and administration costs alone. (IBM, 2008)

While examples like Secret (75.) and SAS (71.) require you to make leaps of faith (as presented) and don’t actually give us ROI data (not just gain but relative cost of the new activity vs. traditional spend), you can see an ROI story forming in the background. It’s still vague but you can tell it’s there.

Let’s file those in the “PROBABLY ROI (if we dig a little more)” folder.

Examples like Orange (60.), Precyse Technologies (65.) and TomTom (84.), on the other hand, are cut and dry: The cost savings are empirical. You can tie the cost of the activity to the financial gain to the company.

We’ll file those in the “YES: ROI” folder.

Special mention for actually listing both gain and cost:

88. TransUnion. Estimated $2.5 million in savings in less than five months while spending about $50,000 on a social networking platform. (Socialtext, 2009)

If only all 101 had done that.

*        *       *

(If you skipped ahead, pick up the post here. You’re almost done.)

Conclusion:

If you look at the list from the perspective of “these are 101 examples of where social business has benefited or added value to a company” then it is solid. Kudos to Peter and his team. Great title, lots of value there, please share with the world. Just make sure you scratch out the title or petition Peter to change it.

If you look at the list as a collection of “101 examples of social business ROI,” then the list is almost entirely wrong. Back to the drawing board. Sorry. It doesn’t work.

I don’t want to just point out the flaws without offering Peter a way to fix it, so here are the only two options:

1. Change the title to something along the lines of “101 examples of successful Social Business campaigns”. (Remove the ROI bit from it if you aren’t actually going to focus on ROI.)

2. Include actual ROI numbers for each of the 101 examples. (Those can just be the cost and the gain from activity figures. Real simple.) Even if some of those ROI numbers turn out to be less than impressive, the list will still be factual and valuable.

Oh, and 3. Include IKEA. It deserves a nod.

*         *        *

I almost forgot…

Lesson #6: Ask the hard questions. Don’t assume that information (or insight) from anyone in any industry that touches marketing in any way is accurate. Not even mine. Put everything through your own stink test. Use your noggin’. Challenge everything that raises a red flag. Learn the definition of business terms too. They matter. Worth keeping in mind next time a list like this pops up (and there will be more like it).

Or your could just Google “R.O.I. calculation” for crying outloud. Every kid with a lemonade stand grasps that math. Why can’t social media gurus? It boggles the mind.

Cheers,

Olivier

CEO-Read     -     Amazon.com    –     www.smroi.net    –     Barnes & Noble    –    Que

PS: Everything in this book could also be dead wrong. It could all be pure BS. Scrutinize it as well. I’m not immune to the occasional wrong conclusion either. You never know.

R.I.P. Personal Branding

May 2012 finally sound the death knell for all things “personal branding.”

Here’s the thing: People are people. They aren’t brands. When people become “brands,” they stop being people and become one of three things: vessels for cultural archetypes, characters in a narrative, or products. (Most of the time, becoming a brand means they become all three.) Unlike people, brands have attributes and trade dress, slogans and tag lines which can all be trademarked, because unlike people, brands exist to ultimately sell something.

That core need to build a brand to ultimately sell something is at the very crux of the problem with “personal branding.” Can you realistically remain “authentic” and real once you have surrendered yourself to a process whose ultimate aim is to drive a business agenda?

Perhaps more to the point – and this is especially relevant in the era of social communications and the scaling of social networks – is there really any value to turning yourself into a character or a product instead of just being… well, who you are? And I am not talking about iconic celebrities, here. I am talking about people like you and me.

Think about it. Those of us who truly value attributes like transparency and authenticity (and that would be the vast majority of people) don’t want to sit in a room with a guy playing a part. If I am interviewing an applicant for a job, the less layers between who he is and who he wants me to think he is, the better. Those extra layers of personal branding, they’re artifice. They’re disingenuous. They’re bullshit. I am going to sense that and the next thought that will pop up in my head is “what’s this guy really hiding?”

You know what we used to call people with “personal brands” before the term was coined? Fakes. So here is a simple bit of advice for 2012: Don’t be a fake. Drop the personal branding BS. You don’t need it.

If you really want to brand something, focus on your business, on your blog, on your product. If your product is you, I hope your name is Lance Armstrong, Tom Cruise or Lady Gaga, because otherwise you aren’t thinking clearly about this. A brand is ultimately an icon. Are you an icon? No. You aren’t. And if you ever become one, you won’t need to worry about building a personal brand.

Have I seen your face  pop up on billboard ads for Nike, Ford or Chanel? Are you on Wheaties boxes? Do you have your own action figure? Do designers call your agent asking if you would wear their clothes to award shows? No? Then you aren’t a product or a brand.

Let’s walk away from the professional navel-gazing industry for a minute recalibrate things just a tad. If what you’re after is improving your image and your odds of being successful in whatever your endeavor is, drop the personal branding nonsense and give these little tips some thought:

1. Talk less, do more. Let your work speak for itself. Michael Jordan didn’t spend all his time trying to build a strong personal brand. He practiced his craft. He trained. He worked his ass off to be the best basketball player he could be. It doesn’t mean you should stop blogging or granting interviews or making videos. It just means that the ratio of doing vs. talking should clearly favor the former over the latter.

2. Be relevant, not just popular. I know Klout is all the rage these days, but nobody gives a shit. No, really. What was Steve Jobs’ Klout score again?

Go solve a problem. Go cure cancer. Go create jobs for people in your community. Go fight against modern day slavery or spousal abuse or childhood homelessness. Go help Nike or Microsoft or the small bakery across the street build or do something remarkable. I guarantee that the closer you get to doing something relevant, the farther your mind will be from the latest popularity metric.

3. Reputation is more important than image. With a little work, anyone can create an online persona that exudes success and brilliance. Anyone. Image is nothing more than marketing. Here’s something you need to know: The people who will actually be in a position to help you in life understand this. You won’t fool them with superficial image design. They don’t care about it and know how to see right through it. Be what you say you are. Build a reputation for yourself. See #1.

4. Speaking of image, find a good tailor. You want to look good in person? Take whatever money you were planning on throwing at personal branding seminars or webinars and spend it on a good tailor instead. You don’t have to spend a lot of money on clothes to look put together. Believe it or not, most of the time, H&M and Target will do just fine. The trick is in getting whatever you buy altered to fit you properly. A good tailor can make a $75 sport coat look like you spent $750 on it, so spend the $25 extra bucks on the alteration. Nobody cares how much you spent on your clothes, but they might care that you have sense enough to know how to wear them like an civilized adult.

What you should have tailored: Pants, dress shirts, jackets. Always. No exception. For men, everything you need to know about this can be found in Esquire’s Big Black Book of Style (usually released twice per year – in the spring and fall).

5. Just be yourself. If I have learned anything from Facebook’s new Timeline feature, it’s this: It’s fun to be yourself. It’s easy to forget that, especially when the “personal branding” industry would have you shift your focus away from the little flaws that make you… well, you. Remember that thing about authenticity and transparency earlier? The more you have of the first, the more you can get away with the second. If you’re an asshole, the solution is simple: either work on that, learn to be a funny asshole, or spend less time on Facebook. If you’re a kind, pleasant, remotely interesting person though, just be that and everything will be okay.

If you’ve ever interviewed applicants for a job or held open auditions, you know the drill: Some people walk into the room and show you only what they want you to see. Others walk into the room and show you something real about themselves. Guess who stands no chance at all of getting a callback. Fakes need not apply. Trust is far too important a thing to gamble away on personal branding schemes. The more honest about who you are around people, the  more they will respond to you. It’s that simple.

The worst thing you can do for your career (and your relationships) is to try and build a personal brand.  It will get in the way of real success, of real connections with people, of real opportunities. It will distract you and divert your focus away from work that matters. It will warp your sense of self worth. It will flip your values upside down until what you care about the most is what you should be caring about the least.

If you really want people to know your name and take notice, go build something. Make something good happen. Create. Invent. Help. Rescue. Solve. Improve. Apply yourself to any of those endeavors and in time, you will earn some measure of respect and even perhaps notoriety or fame. That’s how it works. Jules Verne is known for his stories. Steven Spielberg is known for his films. Richard Branson is known for his success in business. Author. Film maker. Entrepreneur. Compare that to “online personality” or “social media expert.”

So here is wishing “personal branding” safe journeys and a heartfelt farewell in 2012. Thanks for visiting. Don’t let the door hit you in the ass on your way out.

So what are you guys working on this year already? What’s your next project? What will this next 365-day chapter be about for you?

*          *          *

Oh, I almost forgot: Social Media ROI is now available in German! Check it out.

For the English-language Social Media ROI portal, click here. To buy it directly from Amazon, click here.

For the German edition of Social Media ROI, click here.

I’m kind of psyched about that.

The Last Year.

What if 2012 were your last year, your last chance at leaving your mark or doing something great or crossing out every item on your bucket list?

This has nothing to do with the Mayan calendar or the financial crisis, mind you. It’s just a simple what if question.

What if you went another year without writing that book you’ve been thinking about for a decade? What if you went another year without taking that trip to Paris or Moscow or Sydney you’ve been dreaming about your whole life? What if you went another year waiting to launch your startup?

What if you only had 365 days left and that’s it?

Here’s what I’ve learned in the last few years: There’s no such thing as the right time. All we really ever have is now. Now is the right time. Tomorrow is bullshit. Tomorrow turns into next year and then someday and finally never. Tomorrow and next year will be too late. Whatever needs doing, do it now. Today.

Early in my career, I wasted years – precious years – doing what I was told, trying to fit in and often playing it safe when every instinct in my body told me not to. You have no idea how much I now regret having thrown those years away. I lost so much time waiting for opportunities and “the right time” to do something, it makes me ill just thinking about it. Never again.

So the lesson here is simply this: Ask her out. Book that flight. Graduate. Take the job. Write the damn book. Get your funding. Finish that triathlon. Launch your startup. Carpe Diem isn’t a slogan on a T-shirt. It isn’t an abstract philosophy. It means get off your ass and do the thing that needs doing. Today. If it fails, it fails. If it works, it works. So what? Either way, the sooner the better.

That’s it. You have 365 days. Show me what you’ve got.

*           *           *

And if that wasn’t enough, there’s also this:

Success is blocked by concentrating on it and planning for it… Success is shy – it won’t come out while you’re watching.
Tennessee Williams

“If you want to achieve things in life, you’ve just got to do them.”
Juliana Hatfield

“When I stand before God at the end of my life, I would hope that I would not have a single bit of talent left, and could say, ‘I used everything you gave me’.”
Erma Bombeck

“Until you value yourself, you won’t value your time. Until you value your time, you will not do anything with it.”
M. Scott Peck

“Most people give up just when they’re about to achieve success. They quit on the one yard line. They give up at the last minute of the game one foot from a winning touchdown.”
Ross Perot

“The measure of success is not whether you have a tough problem to deal with, but whether it is the same problem you had last year.”
John Foster Dulles

“Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life. Because almost everything – all external expectations, all pride, all fear of embarrassment or failure – these things just fall away in the face of death, leaving only what is truly important.”
Steve Jobs

Merry Christmas & Joyeux Noel from the Brandbuilder blog

Chiquita, Chico, Cholula and I wish you all a very merry Christmas.

Cheers,

Olivier

Beware the Social Business Siren Song

The problem with assumptions is that they always come with blind spots.

The friendlier and human a company is, the more potential for success it will have. This goes back to the theory that the company with the least amount of assholes wins. I think it goes without saying that unfriendly, emotionally disconnected, self-interested employees (and managers) always act as hurdles to internal collaboration, process improvement and the adoption of new ideas. They build walls. They create silos. They are agents of “no.”

Friendly companies are created by friendly employees and friendly management. Great customer experiences (whether they come in the form of great customer service or simply pleasant shopping adventures) begin with a culture of “we give a shit.” These customer-centric companies understand the need for fluid internal collaboration and the continuous improvement of process that affect, somewhere down the line, consumers’ perception of the brand.

But is that enough?

Consider the following two lists, and ask yourself which company you would rather buy your products from:

Company A:

• It’s a great place to work.
• I read an article about how cross-functional teams brainstorm to develop new products.
• They offer trainees $5,000 to quit their first week. No one ever takes the money.
• They have awesome customer service.
• Returns are never a problem. They treat you so nicely.
• I love shopping there.
• Their CMO seems like a really cool guy on Twitter.

Company B:

• I’ve heard it’s kind of a revolving door there.
• Made in China, I think.
• They have horrible customer service.
• Have fun getting them to send you a replacement.
• The lines at their stores are a pain.
• I have no idea who their CMO is. He sure isn’t on Twitter.

Obviously, Company A probably has a market advantage, right?

Maybe. What if Company B makes much cooler products?

What if Company B’s products are equal in every way to Company A’s but at a much lower price?

That changes the equation a bit, doesn’t it? Now, Company B might become far more competitive (and successful) in spite of all of the negatives listed above.

Now let me throw in a twist: What if, against all logic, Company B’s process actually requires an antisocial environment in order to produce cooler products? What if it requires a quasi-tyrannical leadership and hermetically-sealed silos in order to be successful? What if becoming a “social business” actually ended up hurting it?

Under Steve and Walt, Apple and Disney weren’t exactly examples of what a “social business” should be, and yet they became, in spite of many of the things that the social business model preaches, enormous successes. They changed technology. They changed entertainment. They changed culture. They changed the world for the better.

How can this be?

Would Apple and Disney have been better off with a stable of bloggers and community managers on their payroll? Twitter accounts? Facebook pages? Youtube channels? Foursquare promotions? Would they have been better off if Steve and Walt had been avid proponents of “social business” ideals, flat organizations and cowdsource-driven product design? Really?

I want you to think about that for a minute, before you go back to reading blog post after blog post about the coming “social business” revolution and all the good it will bring to the world. It just isn’t that simple. Becoming a social business doesn’t necessarily help a businesses create more value for anyone or become better at what it does.

Becoming a more social company is not the same as becoming a better company.

I am not at all suggesting that companies are better off ignoring the social space. I wouldn’t dream of ever advising a company to stay off Twitter and Facebook. It would be irresponsible of me to drive a wedge between an organization and the amazing potential that social media has in store for them. BUT, it would be equally irresponsible of me to suggest that trying to become a “social business” is always going to be  in their best interest.

If you are a CEO, ask yourself why you really want your business to become “more social.” Is it because you really love your customers? Is it because you are looking for better, faster, cheaper ways to gather consumer insights? Is it because becoming “more social” allows you to increase your reach into social channels? Is it because industry experts told you it’s the thing to do this year? Why are you really focusing on this?

Here’s a better idea for you: Focus on building a better company, not just a more social one. Identify key areas of potential improvement and make those your focus. If social media can help you in this endeavor, then by all means find out how and do it:

Use social technologies to improve your customer service and reduce purchasing barriers.

Use social networks to help more people discover your great products or recommend wonderful employees.

Use social platforms to give your customers a reason to be loyal and act as good will ambassadors for you everywhere they go.

Improve internal collaboration and organizational efficiency.

Infuse your product management groups with insights and ideas from followers and fans.

Use social monitoring tools to identify new opportunities and spot potential threats.

The sky is the limit when it comes to how social media can help you become a better company.

But “being more social” doesn’t, in and of itself, amount to a whole lot. What does that even mean in a business context? Paying someone to hang out on Twitter all day and push out links to marketing content? Write formulaic blog posts to hopefully attract visitors to your website? Hire an agency to manage a Facebook page for you so you appear to be “more social?” Hire a ghost blogger to pretend that your CEO is committed to the social web? What’s the point of any of that? Why waste so much time and energy on pointless bullshit that isn’t benefiting anyone?

Now consider these two questions:

1. Will adopting a “social business” model really help patent-driven, data security conscious companies like Michelin, 3M and Pfizer become more competitive, more successful, and better at what they do?

2. Would adopting a “social business” model have helped Apple and Disney accomplish what they did? Or might it have gotten in the way by creating too much of a distraction or altering internal focus? Might an effort to become more “social” instead of generating brilliant products have worked against Apple and Disney?

Before you answer, consider this: The value of social media adoption and social process integration comes in degrees. Because every company is unique, every company will become more or less “social” based on its needs, capabilities and the dynamics of their internal cultures. Each of them will decide to what extent, and in the service of the improvement of what function, “social” will become part of its process. And guess what: There is absolutely nothing wrong with that.

So again…

Question: Should Michelin, 3M and Pfizer, Disney and Apple become more “social?”

Answer: Only to the extent to which they and their customers will benefit from it. That could be a little, a lot, or not at all.

There’s a why question hidden in that Q&A, and a how question as well. You need to help companies answer both if you really want to help them.

Recap.

1. The “social business” ideal doesn’t apply to every business. That’s the problem with ideals: Ideally, they’re great. In reality, the world is messy. Things don’t always work the way we wish they would. “The road to hell,” as they say, “is paved with good intentions.” The road to epic screw-ups is as well. Proceed with clear purpose, and caution will mostly take care of itself.

2. Beware the salesmen of utopia. Selling ideals is one thing. Adapting them to your company’s needs is another entirely. Good consultants should be able to successfully put their advice into practice, not just suggest unrealistic goals and then watch you fumble at an impossible play.

3. If you focus less on “being social” and more on becoming a better company, you will be much better off by the end of the coming fiscal year. If social platforms can help you become that better company, great! Get working on it. If not, don’t sweat it. Focus on what matters, not on the flavor of the moment, no matter how many consultants and tech bloggers come to you carrying buckets of freshly brewed Koolaid.

Now stop reading blogs and go kick ass. Cheers.

Explaining “social media ROI” AGAIN. And again. And… again.

Maybe I should just republish this post every day for the next ten years (or however long it takes for content bloggers, social media “gurus” and marketing authors/speakers to get this).

With a little repetition – and surely with enough time – even the dumbest and most obtuse of them will eventually get it.

Maybe.

As annoying and curious as it was, back in 2009, when so many so-called “experts” and “gurus” couldn’t figure out how to explain, much less determine the ROI of anything relating to social media, it is inexcusable today, less than a month from 2012. We’ve talked about this topic how many times? I and others have presented on the topic in how many countries? On how many continents? For how many years now? How many times has this simple business 101 topic been explained and explained and explained? Even if somehow, some social media “experts” have managed to miss the presentations, the conversations, the podcasts, the interviews, the decks on slideshare and the blog posts, there’s a book now that spends 300 pages on the topic. At the very least, they should have heard a rumor that the “question” had been answered. Right? Bueller? Bueller? Anyone?

What else can we do? Take out full page ads in the New York Times? Take over Mashable for a month? Buy a banner ad on Klout’s home page? What will it take for the asshats pretending to be experts to stop talking about ROI as if it were some arcane mythical metric?

Seriously, you have to be either completely disconnected from the channels you claim to be an expert participant in, or purposely avoiding this stuff to still get it wrong. Is social media ROI to be the the clitoris of the “guru” world then? Will some so-called “experts” really live out their lives without ever finding it? If so, isn’t that a sign that perhaps they need to go try their hands at being experts in another field?

It makes you wonder about these people’s qualifications, doesn’t it? What makes them experts again? A few hundred blog posts and some keynote presentations? A “personal brand?” A lot of followers? Is that all it takes now?

Here’s a simple litmus test for you: Experts know their shit. A self-professed expert who doesn’t know his shit is just a windbag. If you don’t want to be categorized as the latter, immerse yourself in the field you aim to be an expert in. Commit to it for years and years and years. Writing a few blog posts about something doesn’t make you an expert in it, no matter how hard you want to believe it does.

Utterly ignorant nonsense: The battle-cry of new religion of digital windbags?

First, this gem from @CopyBlogger‘s CFO, Mr. Sean Jackson. (A few of my favorite quotes from that post):

“Marketing ROI has become so important that no one questions its validity, but the truth is, marketing will never produce an ROI. [...]  The problem for marketing professionals is that marketing activity is not an investment. An investment is an asset that you purchase and place on your Balance Sheet. Like an office building or a computer system. It’s something you could sell later if you didn’t need it any more. Marketing is an expense, and goes on the Profit & Loss statement.”

WHAT?! Are you kidding me?!

And yet in the same interview, Mr. Jackson continues with this:

“Sales generate revenue. Marketing generates profits.”

WHAT?! Sure, it sounds pretty, but how does that work, exactly? How do you calculate profits if… Oh, never mind…

“Marketing, including social media marketing, is about efficiency. Marketing is a process of decreasing the time, money, and resources required to communicate with customers and make it easy for them to buy products and services. The more efficient your marketing is, the more profit you make. That’s what you want to optimize for. By defining marketing as a function of profits, you create a new perception within your organization about the value of marketing.”

Since Sean is a CFO, I have to assume that he knows how to calculate profit on a balance sheet. … The very balance sheet as the one on which Marketing is nothing but “an expense”?

Look, if marketing can’t produce ROI, then it can’t generate a profit. A profit is a function of ROI. Profit is the very manifestation of the expectation of ROI: You invest in something, use it, and hope it generates enough revenue to cover your investment and other operational costs, and… wait for it… turn a profit.

This is Business 101 stuff. Seriously, it is. Little kids running lemonade stands know this.

If you are going to claim that marketing is about profits, then you have to concede that marketing plays a part in cutting costs or generating revenue. Once you realize that, ROI becomes obviously relevant to marketing spend. Marketing does generate ROI, and it doesn’t take a genius to figure that out. And yet, shit like this gets published. (Yes, shit.)

Example #2: David Meerman Scott’s piece entitled “Social Media ROI Hypocrisy.”

The post’s elegant tag-line:

“New research – published here for the first time – proves that executives who demand that Social Media ROI be calculated are hypocrites.”

Nice. Here’s more:

“It’s ridiculous that executives require marketers to calculate ROI (Return on Investment) on one form of real-time communications: Social media like Twitter, Facebook, or YouTube. Yet they happily pay for other real-time communications devices for employees like Blackberrys, iPhones, and iPads without a proven ROI.”

And my favorite:

“My recommendation to you when faced with executives who demand that you prove social media ROI is to point out the hypocrisy by asking them to show you the ROI of their Blackberry.”

Here’s my recommendation to you: Don’t answer an executive who asks you about ROI with “what’s the ROI of your blackberry?”

Why? Because it’s rude, unprofessional, and it only serves to prove two things: 1. You’re an asshole, and 2. you have no idea what you’re talking about.

Here’s a better way: If an executive bothered to ask you a question that matters to his or her business, answer it. If you can’t, recommend someone who can. It’s the least you can do. The idea being to help the client, not show him how much of a smug smartass you are.

Speaking of questions: Either answer them or go home.

I have heard it suggested that many corporate executives use the ROI “question” as an excuse to object to social media spend. Let’s talk about that for a minute.

Corporate execs have very busy schedules. Believe it or not, they don’t waste their time listening to your sales pitches knowing, before they walk into the room, that they are going to turn you down. Do you really think they sit around all day hoping someone will come in to talk to them about social media just so they can use their favorite “ROI objection” trick on them? They have companies to run. Either  produce a way to help them do that or stop wasting their time.

Here’s a double dose of reality for you: When corporate executives ask you about ROI with respect to social media, they are motivated by 2 things:

1. They want to know how social media spend will benefit them so they can justify the expense. Understanding the potential value of an investment is pretty basic business practice, and a sound one. What did you expect? A blank check and a 5-year consulting contract just because you spoke at Blogworld and your Klout score is awesome? What world do you live in?

2. They want to know if you know your shit or if you are just another windbag blogger “guru” with no business management acumen. They get pitched by two dozen bullshit social media experts per week. This is their test. Either pass it or fuck off.

Four final thoughts:

1. When business executives take the time to meet with you, reward their time investment by not being an asshole. (i.e. Not asking them about the ROI of their blackberry is a good start.) Answer their questions. That’s why you’re there in the first place.

2. If you don’t know how to answer an executive’s ROI questions, guess what: You aren’t qualified to advise them on the matter. Sorry. Admit it and carry on.

3. Whether or not you believe that ROI is a relevant topic of discussion when it comes to integrating social dynamics and platforms into a business doesn’t matter. You are mistaking a philosophical discussion with a practical one. Explain the principles first. Answer their questions. Help them get through that first phase (justification). Once the ROI question has been laid out and everyone gets it, THEN discuss with them the positive intangibles of building a more social company (see #6 below). They are testing your knowledge, not your religion. Stop evangelizing and start getting down to brass tacks.

4. If the same executives aren’t measuring the ROI of other things (like advertising campaigns, product development, websites, or even marketing in general,) show them how. It’s a hell of a lot more valuable than calling them hypocrites for not having done it until now. Be a positive agent of change, not just another smug asshole trying to weasel his way onto their payroll.

Doing something a lot teaches you how things work and don’t work. So do more. Talk less. You want to advise companies on how ROI fits into the social media world? Learn how to connect spend to outcomes (results). Once you grasp that the way a baker grasps the baking of bread, then you’ll be qualified to advise companies and other professionals on the matter. Not before. This isn’t theory. It isn’t about opinions. It’s practical everyday business knowledge. You either have it or you don’t.

Moving on…

The rest of this post won’t make you an expert, but it will at least give you the basics.

If you are still having trouble explaining or understanding the intricacies of social media R.O.I., chances are that…

1. You are asking the wrong question.

Do you want to know what one of the worst questions dealing with the digital world is right now? This:

What is the ROI of Social Media?

It isn’t that the idea behind the question is wrong. It comes from the right place. It aims to answer 2 basic business questions: Why should I invest in this, (or rather, why should I invest in this rather than the other thing?), and what kind of financial benefit can I expect from it?

The problem is that the question can’t be answered as asked: Social media in and of itself has no cookie-cutter ROI. The social space is an amalgam of channels, platforms and activities that can produce a broad range of returns (and often none at all). When you ask “what is the social media or ROI,” do you mean to have Facebook’s profit margins figure in the answer? Twitter’s? Youtube’s? Every affiliate marketing blog’s ROI thrown in as well?

The question is too broad. Too general. It is like asking what the ROI of email is. Or the ROI of digital marketing. What is the ROI of social media? I don’t know… what is the ROI of television?

If you are still stuck on this, you have probably been asking the wrong question.

2. To get the right answer, ask the right question.

The question, then, is not what is the ROI of social media, but rather what is the ROI of [insert activity here] in social media?

To ask the question properly, you have to also define the timeframe. Here’s an example:

What was the ROI of [insert activity here] in social media for Q3 2011?

That is a legitimate ROI question that relates to social media. Here are a few more:

What was the ROI of shifting 20% of our customer service resources from a traditional call center to twitter this past year?

What was the ROI of shifting 40% of our digital budget from traditional web to social media in 2011?

What was the ROI of our social media-driven raspberry gum awareness campaign in Q1?

These are proper ROI questions.

3. The unfortunate effect of asking the question incorrectly.

What is the ROI of social media? asks nothing and everything at once. It begs a response in the interrogative: Just how do you mean? In instances where either educational gaps or a lack of discipline prevail, the vagueness of the question leads to an interpretation of the term R.O.I., which has already led many a social media “expert” down a shady path of improvisation.

This is how ROI went from being a simple financial calculation of investment vs. gain from investment to becoming any number of made-up equations mixing unrelated metrics into a mess of nonsense like this:

Social media ROI = [(tweets – followers) ÷ (comments x average monthly posts)] ÷ (Facebook shares x facebook likes) ÷ (mentions x channels used) x engagement

Huh?!

Equations like this are everywhere. Companies large and small have paid good money for the privilege of glimpsing them. Unfortunately, they are complete and utter bullshit. They measure nothing. Their aim is to confuse and extract legal tender from unsuspecting clients, nothing more. Don’t fall for it.

4. Pay attention and all the social media R.O.I. BS you have heard until now will evaporate in the next 90 seconds.

In case you missed it earlier, don’t think of ROI as being medium-specific. Think of it as activity-specific.

Are you using social media to increase sales of your latest product? Then measure the ROI of that. How much are you spending on that activity? What KPIs apply to the outcomes being driven by that activity? What is the ratio of cost to gain for that activity? This, you can measure. Stop here. Take it all in. Grab a pencil and a sheet of paper and work it out.

Once you grasp this, try something bigger. If you want to measure the ROI of specific activities across all media, do that. If you would rather focus only on your social media activity, go for it. It doesn’t really matter where you measure your cost to gain equation. Email, TV, print, mobile, social… it’s all the same. ROI is media-agnostic. Once you realize that your measurement should focus on the relationship between the activity and the outcome(s), the medium becomes a detail. ROI is ROI, regardless of the channel or the technology or the platform.

That’s the basic principle. To scale that model and determine the ROI of the sum of an organization’s social media activities, take your ROI calculations for each desired outcome, each campaign driving these outcomes, and each particular type of activity within their scope, then add them all up. Can measuring all of that be complex? You bet. Does it require a lot of work? Yes. It’s up to you to figure out if it is worth the time and resources.

If you have limited resources, you may decide to calculate the ROI of certain activities and not others. You’re the boss. But if you want to get a glimpse of what the process looks like, that’s it in its most basic form.

5. R.O.I. isn’t an afterthought.

Guess what: Acquiring Twitter followers and Facebook likes won’t drive a whole lot of anything unless you have a plan. In other words, if your social media activity doesn’t deliberately drive ROI, it probably won’t accidentally result in any.

This is pretty key. Don’t just measure a bunch of crap after the fact to see if any metrics jumped during the last measurement period. Think about what you will want to measure ahead of time, what metrics you will be looking to influence. Think more along the lines of business-relevant metrics than social media metrics like “likes” and “follows,” which don’t really tell you a whole lot.

6. R.O.I. isn’t always relevant.

Repeat after me: Not all social media activity needs to drive ROI.

Technical support, accounts receivable, digital reputation management, digital crisis management, R&D, customer service… These types of functions are not always tied directly to financial KPIs. Don’t force them into that box.

This is an important point because it reveals something about the nature of the operational integration of social media within organizations: Social media isn’t simply a “community management” function or a “content” play. Its value to an organization isn’t measured primarily in the obvious and overplayed likes, followers, retweets and clickthroughs, or even in impressions or estimated media value. Social media’s value to an organization, whether translated into financial terms (ROI) or not, is determined by its ability to influence specific outcomes. This could be anything from the acquisition of new transacting customers to an increase in positive recommendations, from an increase in buy rate for product x to a positive shift in sentiment for product y, or from a boost in customer satisfaction after a contact with a CSR to the attenuation of a PR crisis.

In other words, for an organization, the value of social media depends on two factors:

1. The manner in which social media can be used to pursue a specific business objective.

2. The degree to which specific social media activity helped drive that objective.

In instances where financial investment and financial gain are relevant KPIs, this can turn into ROI. In instances where financial gain is not a relevant outcome, ROI might not matter one bit.

Having said that, you still need to understand these mechanisms in order to make good business decisions, so learn them.

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By the way, Social Media ROI – the book – doesn’t just talk about measurement and KPIs. It provides a simple framework with which businesses of all sizes can develop, build and manage social media programs in partnership with digital agencies or all on their own. Check it out at www.smroi.net, or look for it at fine bookstores everywhere.

Click here to read a free chapter.

Brand management: The asshole effect

Every doctrine has to start somewhere. Even this one.

Want to boost your repeat business, get tons of free referrals, acquire bunches of new customers and get lots of positive buzz for free? There’s a pretty simple way to do it that doesn’t have to cost you a whole lot. Can you guess what it is?

Simple: Purge your company of assholes.

In fact, let me share item #1 in my Better Business Doctrine with you real quick. Are you ready? Here we go:

The customer-facing organization with the fewest assholes wins.

That’s it.

A simple example, from the friendly skies.

Does this seem like common sense? Of course it does. And yet here we are, routinely forced to endure a passive-aggressive or plain argumentative jerks who would rather exercise their “authority” than provide customers – even stressed out customers – with pleasant experiences. Why is that? Let me answer that question: Because companies are still hiring assholes.

Let me give you a few personal examples:

1a. The Continental flight I was on a few months ago

Flight Attendant (sternly) to a passenger in the process of turning off their iPad, just not quickly enough: “SIR! I need you to turn that off right now!” (Stares angrily at passenger until the device is turned off, and walks away, visibly annoyed.)

This probably happens to flight crews 20+ times per day. Every time a plane pushes off from the gate and prepares its approach, passengers in the middle of a song, of a paragraph, of a game of Angry Birds or Brick Breaker take an extra 10-30 seconds to “comply” with the “please turn off your electronic devices at this time” announcement on the PA. I get it. It probably gets annoying after a while. But guess what: You’re a flight attendant. Asking people to turn off their electronic toys comes with the job. You don’t have to be an asshole about it. Case in point:

1b: The Delta flight I was on the following day

- Flight Attendant (with a smile, jokingly) to a passenger so absorbed by what he was reading that he missed the “turn off your electronic devices” announcement and kept his Kindle going: “Good book?”

- Passenger, sensing that he was the object of the flight attendant’s attention, looks up from his device: “I’m sorry?”

- Flight Attendant, nonchalantly points at the Kindle: “Good reading?”

- Passenger, smiling back: “Yeah. Very!” (Gets it. Laughs. Starts to look for the “off” button.)

- Flight attendant: “You can turn it back on as soon as we’re on the ground.” (Walks away. Stops. Turns around.) “The book. What is it?”

Passenger answers. Flight attendant repeats the title as if to remember it, nods as if interested, and returns to his station.

The difference between the two isn’t training or pay. It isn’t corporate policy or procedure. It isn’t even company culture. The difference between the two occurrences is this:

One of these flight attendants, at some point during the course of her day, week, month, year or career, decided to let her asshole flag fly. The other one didn’t.

The basic impact of an asshole on your customers

How every asshole on your payroll affects your brand equity and impacts your business on a daily basis.

The impact of just one asshole’s behavior in a customer-facing role doesn’t stop with the one customer they treat poorly. Ten rows of passengers witnessed the exchanges on both flights, and I can guarantee that the ten rows on the Continental flight (30 passengers) were not impressed, while those on the Delta flight surely were. The ramifications of this are simple:

Whatever shot Continental had at influencing these 30 people to develop a preference for flying its friendly skies, for being more loyal, for looking to book future flights with them first, just flew out the window, not because of price, not because of delays, not because the plane was dirty. The price was great. The plane left on time and was impeccable. Continental did everything right except one thing: Someone there allowed an asshole (and probably more than one) to take on a key customer service role. Delta, on the other hand, scored some points.

And just to be fair, I’ve run into my fair of assholes working for Delta too. Few domestic US airlines seem immune to this phenomenon these days, except for perhaps Alaska Air, whose service and hiring practices, to my knowledge are still impeccable.

That said, my experience with Delta flight crews recently has been stellar, and not just because of this little anecdote. (Expect another post about what else happened very soon.) The difference between the two airlines for me was limited to my experience, as it is for all of us. Before the recommendations and the word-of-mouth and the marketing, our own experience shapes our bias.

Every positive experience creates positive associations with a brand, while every negative experience creates a negative association with a brand. More positive than negative = positive bias, preference, even loyalty. Consistent negative experiences (especially those that repeat themselves, like frequent delays, rude employees, apathetic managers, or being talked down to by an unprofessional asshole) = negative bias, preference for your competitors instead of you, and cynicism towards your brand.

The wheels of this mental equation – more emotional than empirical – start turning every time the thought of your brand comes up, and you need to understand it isn’t linear. The way we process the negative and the positive isn’t as balanced as you might think. For whatever reason, until you have grown into a loyal fan of the brand, the equation tends to be heavily weighed towards the negative: What you did right six months ago – or for the last thirty years,- doesn’t matter nearly as much as what you did wrong yesterday or just last week. That’s part 1 of how the mental math of brand experiences work. Part 2 is this: People will easily forgive incidents and accidents: Lost luggage, no available upgrades, long lines at the counter, mechanical problems, etc. Those things are out of your control, and once the anger and frustration subside, they’ll get it. Those negative impressions will evaporate. But one thing customers won’t forgive of any company: Being deliberately treated badly by an asshole.

Just as being an asshole  is a choice, – especially when dealing with a customer – hiring an asshole and keeping them on staff is also a choice. Because of this immutable fact, every company bears its part of responsibility in the hiring and promoting of assholes. Customers instinctively understand this, which is why when they run into one of your company’s assholes, they don’t blame the asshole for treating them poorly, they blame you. They blame the brand. The negative association they take home with them isn’t with that person (whose name and face they will forget inside of a week), but with you. Your assholes are faceless. All customers remember is the context: You. Your company. Your brand. The asshole just goes on being an asshole day after day, happy to have a job that pays him – even rewards him – for being a complete raging asshole all day long.

At the end of their shift, what you have to understand is that assholes in your employ don’t lose customers. You do. You spend your resources bringing them to the cash register, and every asshole on your staff spends all day making sure they never come back.

For this reason if none other, choose and evaluate your employees carefully.

The impact of just one asshole - amplified by social media

The real cost of letting assholes poison your brand from the inside.

If you are in business and have employees, let me be VERY clear about this: You are always only one asshole away from losing your best customer. The more assholes you have on staff, the faster and more often this will happen.

Not only that, but assholes tend to turn off, not only the one customer they happen to be unpleasant to, but everyone within earshot as well.

And today, ladies and gentlemen, “within earshot” isn’t just the ten rows on the plane or the ten people in the store waiting to check out. It is also potentially the hundreds of thousands of Facebook and Twitter users who might get a glimpse of that negative experience and be turned off in turn. Even millions, for that matter. (See previous 2 images, inspired by David Armano’s “Influence Ripples” theory (Edelman), below:)

David Armano's "Influence Ripples" (Edelman)

Let me give this a financial angle for you: Over the course of a year, one asshole on your staff, just one, can invalidate every dime your company has spent on advertising, marketing and PR. That’s the real liability of assholes. For small businesses, an asshole might only cost you $10,000 in wasted marketing, messaging or brand positioning. If you’re a bigger company, the same asshole (or a whole army of them, which is more likely) could cost you hundreds of millions of dollars in wasted marketing and brand management dollars.

That was part 1 of that equation. Part 2 is measured in lost revenue from disappointed customers taking their business elsewhere (your competitors thank you), lost revenue from all of the net new customers delighted customers would have recommended you to (but didn’t, because your assholes chased them away), and so on.

As a result, the higher the proportion of assholes to caring professionals a company has on staff, the more likely it is to have to spend more and more on marketing (with increasingly diminishing returns), while customer retention falls flat and even starts to dip into the red. Assholes aren’t just bad for customer service or your brand’s image. Assholes are bad for business. They are a counter-current to your hopes and dreams. They are the cancer that first weighs you down, then eventually makes your brand begin to fail, then wither, then die.

So let me repeat today’s lesson: The customer-facing organization with the least amount of assholes wins.

Don’t believe me? Ask Zappos. If you have never heard of Zappos, they sell shoes on the internet. That’s it. Well… LOTS of shoes. So many in fact that Amazon bought them for a pretty penny. Not only that, but Amazon decided not to make any major changes to Zappos’ leadership or culture. They left Zappos alone because the model works well just as it is. What’s Zappos’ secret? The customer experiences they create are stellar. Why are they stellar? Because Zappos pretty much has a “no asshole on staff” policy. Their hiring practices focus on this, and for good reason: They know that a happy customer is a loyal customer.

The simple truth (and we all know this) is that happy customers are good for business. In fact, no. They are GREAT for business: The happier a customer is, the more likely it is that they will come back, spend more, spend more often, and recommend you to all their friends. This is what you want. This is what makes businesses insanely successful. This. You don’t have to invent the iPad to be a huge success. Zappos just sells shoes on the internet. Virgin Airlines just flies people from airport to airport. Intercontinental Hotels (disclosure: client) are basically just… hotels. We’re not talking space walks or time travel, here. Your favorite restaurant, your favorite coffee shop, your favorite mechanic, none of them necessarily reinvented the wheel, right? They didn’t win a Nobel prize for revolutionizing their industries. No. What they did was this: They figured out that a happy customer is good for business, so they focused on that. They earned your trust, your respect and your loyalty. Want to know how they did that? By giving you theirs.

Let me let you in on a little secret: An asshole doesn’t think that way. An asshole doesn’t think about happy customers. He doesn’t care about happy customers. An asshole only thinks about himself: His own mood, his own frustrations, his own personal dramas, his own power trips. An asshole doesn’t give anyone their trust, respect or loyalty. Assholes just don’t think that way. And that is precisely the rub: No matter how well you pay them, you can’t make assholes give a shit. And that is bad for business. Very bad.

A fork in the road for every organization:

Do you know one way to make sure your customers are always happy? Only hire people who want your customers to be happy too. People who want to be helpful, who want to fix problems, who take pride in making someone’s day better instead of worse. People who genuinely want to see the company do well. People with pride and self respect and ambition beyond their own bank account or advancement. Do you think this is too hard? It isn’t. Just hire better.

Want to guess how to guarantee that your customers will not be happy? Hire assholes to take care of them. (It works every time.)

That’s your choice: Door A or Door B.

Door A: Hire super nice, helpful people and your business will soar.

Door B: Hire assholes, and your business will forever struggle to stay afloat.

Every time you run into one of your employees (or candidates) and he or she acts like an asshole, I want you to think about that. I want you to think about how much harder you want to have to work to make your business successful once they start pissing off every customer and client they come in contact with.

Taking a step back so you can see your entire business now, how many assholes do you really want on your payroll, and how many customers do you want to put them in front of? Pull out a piece of paper and write down a number. Do it. Write it down. How many assholes do you want on your payroll?

Next to that number, write down how many assholes you have on your payroll now. Go through your mental org chart, and start counting them in your head. When you’re done, write down how many assholes you know are in your company right now. If that number is higher than the first number you wrote down, you have some cleaning up to do.

In closing, let me leave you with the top 5 ways to make sure that your company starts becoming asshole-proof.

Top 5 ways of asshole-proofing your company:

1. Don’t hire assholes. They are bad for business, and they breed inside organizations like weeds.

2. Don’t promote assholes. The only thing worse than an asshole is an asshole with authority (including the authority to hire and promote assholes when you aren’t paying attention).

3. Give your current assholes the “opportunity” to go work for your fiercest competitor. Do this immediately. Make sure the door doesn’t hit them in the ass on their way out.

4. Once removed, replace your former assholes with nice, smart friendly people. (They’re out there and they want to work for you, but your assholes probably already turned them down. Go find them and invite them back.)

5. Reward all of your employees for NOT being assholes.

That just about takes care of it for today. Any questions?

Inspired (in a good way) by conversations with Julien Smith, Geoff Livingston, Keith Burtis, Chris Brogan, Kristi Colvin, Tyler Durden, Jeffrey Jacobs, Peter Shankman, among others.

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And in case you haven’t picked one up yet (or your favorite client seems to be having trouble figuring out how to bring social media into their organization), you can pick up a fresh copy of Social Media ROI at fine book stores everywhere. If you have sworn off paper, you can also download it for iPad, Kindle, Nook or other e-formats at www.smroi.net.

Tip: Leave it sitting conspicuously on your desk when your boss does his rounds. It seems to be a good conversation starter.

(Click here for details, or to sample a free chapter.)

11.11

That’s the original Olivier Blanchard up there – my grandfather and namesake – in 1915 Paris, shortly after joining the French cavalry and just days before being sent off to fight the Germans. Cavalry units still rode actual horses during World War 1. They charged with lances and sabers. Sniper rifles and machine guns were still new. Tanks and combat aircraft were just beginning to emerge. Germany hadn’t yet deployed chlorine gas around the Ypres salient.

That kid fought in the trenches and endured horrors of war that we cannot imagine today. He went on to survive combat not only in World War 1 but in World War 2. He never talked about any of it, but his medals told us all we ever needed to know.

Millions weren’t as lucky as he was. Not everyone comes home whole, if at all.

Here’s to our veterans. All of them.

Cheers.

PS: Buy a vet a drink today. Or better yet, hire one.

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A little bit of family pride: 3 Generations of Blanchard military officers

Olivier Blanchard - Cavalerie

Alain Blanchard - Artillerie

Olivier Blanchard - Fusiliers Marins

Can Ferrero Rocher get out of its rut?

Filed under Opinion.

I want to share a head scratching moment with you for a sec. See if you can figure out what’s going on over at Ferrero (the makers of my beloved Nutella).

First, this article/press release found in The Drum from 6 November 2011:

Ferrero is to launch a £6m campaign to promote both flagship brand Ferrero Rocher and the Ferrero Collection.

The 30 second ad, by RKCR/Y&R will launch today (6 November) during Downton Abbey on ITV1, with a second standalone film also set to launch on 21 November.

Entitled ‘Food of the Gods’ the new campaign aims to change consumer attitudes to the brand, to make its range more social, having established the brand as one of quality for special occasions.

> UPDATE (11/30/11): A Ferrero representative contacted me today to let me know that the above statement (“Entitled ‘food of the Gods’”) was removed from the article published by The Drum. The email suggests that The Drum made an error in regards to the campaign’s name. This change affects certain elements of this post as it was written before the change.

Both campaigns will run until Christmas.

Mauro de Felip, marketing director for Ferrero, said: “The launch of these new creative advertising campaigns provides us with an excellent platform to exhibit our market leadership in special sharing and gifting. Both creatives capture the ‘new’ special that is relevant to consumers, and demonstrates our ability as a business to adapt to current market conditions and understand shifting consumer attitudes.”   (Source.)

Let that soak in for a minute.

Now… I am a very big fan of Ferrero, and have been since childhood. As a little French boy, I remember their ads, I was raised on their products (my allowance went almost exclusively to Kinder Surprise eggs for many years), and if you have been following this blog and its twitter feed for the last few years, you know how much I dig Nutella – one of Ferrero’s signature products/brands. So you can be assured that I am not writing this post to bash the company or throw them under the bus. I want them to do well. In fact, I want them to do VERY well. Perhaps that is why I notice their mistakes more than  mistakes made by companies I don’t really care about: As much as it sucks to see companies do the wrong thing over and over again when you don’t care of they succeed or fail, it is terribly frustrating to watch a company you actually care come off the tracks again and again and again.

Okay. Now that we’ve gotten that out of the way, read Mauro de Felip’s statement again and let’s look at some of the things keeping Ferrero from being a lot more successful than it already is.

Note: If you are in a hurry, skip 1-4 and go straight to 5 and 6.

Error 1: Brand Identity Disorder.

The folks at Ferrero still think Rocher needs to be  a luxury or prestige brand.

Let’s think about what qualities are innate to luxury brands: One is price. The other is exclusivity. You can’t just go to your local CarMax and buy a Bentley. Target doesn’t carry Cartier timepieces. K-Mart doesn’t have a Gucci section.  The bakery at Publix, BiLo or Piggly Wiggly doesn’t sell Lenôtre confections.

See where I am going with this? Luxury brands don’t place their products in convenience stores and grimy old grocery stores. Where do I find Ferrero’s products? In the case of Nutella, between the peanut butter and the grape jam squeeze bottles. In the case of Rocher (the gold-wrapped nutty chocolate balls Ferrero considers ), somewhere between the beef jerky and the nail clippers, right by the cash register, or in the chocolate aisle at your local CVS.

Ferrero Rocher is no more a prestige brand than Toblerone. The emphasis of their marketing should be on letting consumers feel like treating themselves to something delicious (and as often as possible) rather than making them feel like they only deserve to enjoy them mostly on special occasions, or when they can afford to spend more on chocolate products than they really want to.

The lesson here is that when you position your product as a luxury product (especially when it isn’t), you screw yourself in 3 ways:

1. You create a socioeconomic disconnect between your market and your product. People can’t relate to it as well as they might a more “down to earth” alternative. That creates a barrier between your product and your market. Your job is to break down barriers between your products and your customers, not erect them.

2. Because your premium pricing can’t bridge the gap between image and actual value, it teaches consumers to look for more budget friendly alternatives. In other words, it makes them buy from the competition instead of from you. This is how you guarantee that your market share will remain stalled for years.

3. Even if your pricing is competitive, too much of an emphasis on building a premium image will give consumers the wrong impression. If consumers believe – before they even walk into a store – that they can’t justify the expense of buying your product, they will stick to more budget-friendly alternatives.  This is how you ensure that your consumers’ buy-rate will never increase.

Error 2: Chasing very bad assumptions.

Someone at Ferrero Rocher still seems to think that people feel better about themselves when they spend more money on chocolate than the average consumer. This is true of some consumers IF you are a boutique chocolatier or confectionary, but the moment you a) begin selling your products alongside commodity products in everyday grocery stores and b) try to appeal to the average consumer rather than an exclusive clientele, you’re in the weeds with that theory.

There was a time when it was cool to blow cash on flashy sports cars, mansions and champagne breakfasts just to show off. Here’s the problem: The 80′s are long gone. The average consumer is looking to satisfy a need for the best price possible. Strangely though, Ferrero Rocher ads are still clinging to the same outdated narrative as if the 80′s were still going strong. Only now, we have moved Rocher from the manor house to the outer reaches of Mount Olympus.

Here is a dose of reality the folks at Ferrero probably need to hear: Nobody cares that you are serving mounds of Ferrero Rocher at your house parties, just like the fantasy millionaire models in all of their commercials. It’s a chocolate and nut ball you grabbed at the local Walgreen’s, not caviar from Caspian Sea belugas.

This outdated world view has to be hurting the Ferrero business, especially in a market like the United States, where 99% of consumers look for value and flavor rather than the notion that a chocolate treat will make them look or feel like a billionaire.

As for that billionaire market, the 0.o1%, how many boxes of Ferrero Rocher is it really buying?

Ferrero should be focusing on fighting for relevance and wallet share rather than perpetuating an image that is no longer relevant in today’s world.

I am struck by Mr. de Felip’s admission that the company wants to change perceptions about the brand. That’s terrific. If Mr. de Felip has any hopes of changing perceptions, increasing both market share and boosting monthly sales volume (objective indicators of that change), he and his team need to drop their internal assumptions, go out into the world, and look very closely at how they position the brand from the perspective of 2011 consumers.

Error 3: Holding on to outdated business dogma.

Because it has always been strong for them, the folks at Ferrero Rocher still think the Christmas season is the key to boosting sales. Even today, Ferrero Rocher still places its bets on Christmas season campaigns.

Here’s the problem: Teaching consumers that your product is a seasonal treat is the best way to make sure they won’t think about you for the other 11 months of the year.

The term you are looking for is strategic myopia.

Fortunately, this is an easy fix. Even if Ferrero executives aren’t yet ready to focus on boosting sales for Rocher year round, other holidays can help spread the sales load to all fourquarters instead of just one: How does Ferrero leverage chocolate-rich holidays like Easter, Halloween, Mother’s Day and Valentine’s Day? Not well, if at all. My question is why? Time to spread the advertising budget to other holidays and look for alternatives in terms of consumer engagement. (If only someone were to invent digital social networks where consumer communities could be… oh, never mind.)

As for the other 7 months of the year, it isn’t so hard either. With Rocher being pretty much everywhere now, the problem isn’t one of availability or distribution. So what is it?

The answer might be found in the context of the brand’s narrative. It is still so deeply rooted in the Christmas season that Ferrero is simply not top of mind for consumers at any other time during the year.

Think of this process as an internal Google search. When you think about Easter in the US, you think Cadbury eggs and Peeps. Valentine’s Day: Russel Stover, maybe even M&Ms. Halloween: Reese’s, Kit-Kat, Snicker’s, M&M’s again, etc. If Rocher is not top of mind, your marketing isn’t working. It’s that simple.

Shifting to year-round relevance wouldn’t suck. What’s strange is Ferrero already knows how to do this with their other brands: Nutella, Kinder, and the ubiquitous Tic-Tac. Why not do it with Rocher as well?

Error 4: Thinking that buzzwords and wishful thinking will save you.

Ferrero Rocher doesn’t need to “make its range more social.” It just needs to actually connect with its market. I am referring to this:

Entitled ‘Food of the Gods’ the new campaign aims to change consumer attitudes to the brand, to make its range more social, having established the brand as one of quality for special occasions.

Both campaigns will run until Christmas.

I have no idea what that first sentence is supposed to mean, so let me try to paraphrase it. Here we go:

Blah blah blah blah blah blah blah blah blah blah blah social blah blah blah blah blah blah.

Ferrero, let me share a few very important market insights with you:

1. Just because you use the word “social” in a sentence or attach it to a campaign doesn’t mean anything you are doing is actually social. Say no to buzzwords. If indeed you have something social to offer your consumers, great. If not, don’t pretend you do.

2. Nobody cares how much money you blew on your upscale advertising campaign. This is especially true now, during a global recession. People are too savvy to be impressed by that, and far too cynical right now to find it charming.

3. The gods of Olympus don’t make your brand narrative more social. In fact, they do the exact opposite: How much more exclusive can you get than the gods up on their mountain, looking down on us mortals? Are the gods not the prefect metaphor for the super rich? At a time when income inequality in Europe and the US is at its highest, when movements like #OccupyWallStreet illustrate a growing disdain for the super wealthy, is it really intelligent to align your brand with that 0.01% of the population that the other 99.9% isn’t all that happy with? (Especially if your market is that 99.9%.) More to the point, can someone explain to me how the penultimate aura of exclusivity embodied by Mount Olympus makes a brand’s range “more social?”

4. You don’t have to be a trained Jungian analyst to understand that Ferrero Rocher’s ads are 100% about ego projection. They have nothing to do with the reality of the market, which is to say the experiences of the consumers they aim to influence. Whomever is signing off on these ads and the direction of the brand’s marketing might consider walking out of the palace gates, coming down from the mountain and hanging out with average mortals, if only for a few days. A recalibration might be in order. These choices are not happening in a vacuum. Someone’s ego is driving this trainwreck.

Back to the “social” thing: Being “social” is not the end game. Connecting with your audience, with your market, with the people who will make you part of their lives for the next 50+ years, THAT is the goal. Focus on creating that connection.

Making a brand’s “range more social” means nothing and accomplishes even less. Buzzwords can’t take the place of results.

Error 5: Believing your own spin.

Denial cripples brands and erodes their relevance with every passing day.

“The launch of these new creative advertising campaigns provides us with an excellent platform to exhibit our market leadership in special sharing and gifting. Both creatives capture the ‘new’ special that is relevant to consumers, and demonstrates our ability as a business to adapt to current market conditions and understand shifting consumer attitudes.”

No.

- Advertising campaigns don’t provide brands with a platform to exhibit market leadership. They’re ads, not annual reports. Market leadership is exhibited by numbers. If you really want to talk about market leadership, let’s see the numbers. What makes you a market leader? What does that mean?

- There is no “new special,” and even it there were, it can’t be “relevant to consumers” if those consumers have no idea what it is or what it means. If you really want to talk about the “new special,” it has to be understood by the market. It has to be real. It can’t just be the product of an internal memo.

- Spending £6,000,000 on an ad campaign in 2011 doesn’t demonstrate a company’s ability to “adapt to current market conditions and understand shifting consumer attitudes.” In fact, it demonstrates the exact opposite.

But none of what we have talked about so far is as tragic as my next point:

Error 6: Allowing bullshit to pile up in your front yard.

New is new. New is not old. When a concept has been at the core of an ad campaign for 4+ years, it cannot be refered to as “new.”

Here is the quote again:

“Entitled ‘Food of the Gods’ the new campaign aims to change consumer attitudes to the brand, to make its range more social, having established the brand as one of quality for special occasions.”

“The launch of these new creative advertising campaigns [...]. Both creatives capture the ‘new’ special that is relevant to consumers, and demonstrates our ability as a business to adapt to current market conditions and understand shifting consumer attitudes.”

So the assumption here, or the message being conveyed by Ferrero, is that the brand is doing something new with these ads. They are “new campaigns” with “new creative” that aim to capture the “new special” and change consumer attitudes. One might expect, then, that these ads would be nothing like Ferrero’s previous ads. Right?

Let’s see what Ferrero’s ads looked like in 2010:

(If the video doesn’t play, go watch it here.)

Wait a second… Aren’t those… gods? Isn’t the ad about Ferrero Rocher being the food of the gods? Wasn’t the ad campaign actually called “Food of the Gods?”

I’m confused. What’s so new about this year’s campaign then?

Here is another one, also from 2010, which features not only the gods but mythological hero Ulysses:

(If the video doesn’t play, go watch it here.)

Okay. Let’s go back a little further. Maybe that was just a glitch. Here is a 2007 TV ad from Ferrero:

(If the video doesn’t play, go watch it here.)

#Facepalm

I really want to ignore the fact that this 2007 ad is about the gods of Olympus inviting their “Nordic cousins” (Norse gods AND Mr. Santa Claus himself) to share with them their “Food of the Gods”. I really do. I really, really, really do.

Now you see why I find myself scratching my head at what Mr. de Felip is talking about:

What precisely is “new” about this £6,000,000 ad campaign?

How will using the same narrative and imagery (the Gods of Olympus) that have been used since 2007 somehow “change” consumer perceptions or give the brand a more “social range?”

The myth you might be searching for is The Emperor’s New Clothes.

If nobody cares, nobody cares. But… what if someone actually cares?

No matter how off-target a company’s ads may be, no matter how poorly devised that company’s product positioning or how outdated its brand narrative may be, no matter how disconnected from reality its marketing executives may be, a good product is still a good product. Ferrero Rocher is pretty tasty, and Nutella is simply one of the most delicious chocolate-related products on the face of the Earth.

Those of us who have already discovered these products and love them won’t stop buying them just because their advertising misses the mark or the company’s marketing executives spout nonsense at journalists through their PR teams. We will continue to recommend them and help other consumers discover them. So… does any of it matter?

Yes, but only if someone at a company like Ferrero wants to become the market leader they claim to be. Only if someone there wants to see high double-digit growth in sales, an acceleration in market penetration and a real, concrete, sticky increase in market share.

If the powers that be at Ferrero are truly happy with the company’s performance as it stands, then this is all moot. If that were the case though, would Ferrero blow £6 million on an ad campaign whose aim is to “change” consumer perceptions? That tells me that somewhere at Ferrero, someone cares. That’s good.

Ferrero vs.  Apple by the numbers: The importance of relevance.

Now, with €6.6 billion in global sales in 2010 (an increase of 4.3% over 2009), the Ferrero group as a whole is doing extremely well. But I want to throw a couple of quick questions at the Ferrero folks:

1. If the Rocher brand were managed better, could that €6.6 billion look more like €8 billion? Wouldn’t that be better?

2. Strong balance sheets aside, is 4.3% YoY growth for the entire group really all that stellar?

Every company I have ever worked for would have fired me if I allowed my growth numbers to drop that low. The most anemic of  my employers limped along at 6% growth YoY before they hired me out of desperation. 6% YoY growth was considered horrible.

Much to my chagrin, the jump from 11% to 14% I managed in my first year at another company still wasn’t enough to uncork the champagne in the CEO’s office, even though they had been stuck at 11% for half a decade.

It has always seemed to me that somewhere between 18% and 20% was the magic YoY growth figure for most executives and investors. I certainly never received any significant accolades if my numbers fell below 16% YoY growth.

Here’s a sobering little bit of insight: Most years, 4.3% barely keeps up with inflation.

For some context, let’s compare Ferrero’s 4.3% YoY growth for 2010 to Apple’s numbers for the same period:

87.2% YoY growth for iPhone and 24% for Mac.

Granted, using the incredible 87.2% YoY growth figure for iPhone might be a little unfair since the product is fairly new and cool and relevant, but… that is precisely why it matters: iPhone is exciting and relevant. Rocher no longer is, for the reasons outlined in this post. 87% growth vs. 4% growth. The numbers don’t lie. Ferrero needs to take a long look at their business and be realistic about what is happening to it.

But okay. To be kind, let’s instead compare Rocher to Mac, since the product was launched in the 1980′s, which was Ferrero’s heyday:

In an economic downturn, Mac is still seeing 24% YoY growth. Ferrero is only seeing 4.3% YoY growth.

What is going on?

Ferrero vs. Hershey by the numbers: Why Ferrero should be seeing double-digit growth.

If you feel that comparing a candy/chocolate company to a technology company isn’t fair, fine. Compare Ferrero’s growth to Hershey’s for 2010, and what you will find is a near stalemate:

Hershey’s 2010 YoY growth was 7% (source, source).

Ferrero’s 2010 YoY growth was 4.3% (source)

Now consider that Hershey is a far more established brand than Ferrero, especially in the US. Let me illustrate:

Ferrero owns Nutella, Rocher, Kinder and Tic-Tac.

Hershey owns… well, all of the Hershey bars, Hershey syrup, Hershey’s Kisses, Twizzlers, Reese’s, Kit-Kat, Almond Joy, Mounds and Ice-Breakers mints.

When was the last time you bought or enjoyed a Hershey product?

When was the last time you bought or enjoyed a Ferrero product?

What does this illustrate? An enormous gap in market penetration and market maturity between Hershey and Ferrero, at least in the US. As an established brand, Hershey’s market is relatively saturated. People already buy Hershey products regularly. EVERYONE has heard of and tried Reese’s, Kit-Kats and Hershey’s Kisses. How do you squeeze 20% growth out of a fully penetrated, mature market? With a lot of ingenuity. (Probably more emphasis on Frequency and Yield than customer acquisition.)  I am amazed (as in impressed) that Hershey still manages to score 7% YoY growth, honestly. Someone over there deserves to be paid some big bucks.

Ferrero, on the other hand doesn’t have Hershey’s problem: Nutella, Rocher and Kinder are outliers in the US market. They haven’t really been discovered or adopted by the average American. Only Tic-Tac has seen real penetration. Ferrero still hasn’t connected with that market. Unlike Hershey, which finds itself forced to focus more on influencing buy rate and yield, Ferrero can focus on not only buy rate and yield but good old customer acquisition. The market is wide open for its products to be discovered, adopted and shared by delighted consumers. Once customer acquisition is in full swing,  it becomes a question of positioning products so consumers buy more of them and more often. Addressing the 6 mistakes outlined in this post would certainly be a good way to get things back on track.

If Hershey can manage 7% YoY growth with virtually no new markets to conquer or customers to acquire, surely Ferrero should be able to see double-digit growth in markets where most consumers are not yet their customers.

4.3% growth is indicative of one thing: A company running out of ideas and losing touch with its market. Time for a reboot.

PS: Start with the basics.

Here’s a little bit of analyst insight – based on the numbers rather than internal “brand-driven” assumptions – that Ferrero needs to pay attention to:

“Despite economic woes, Hershey sustained its top-line momentum with consumers preferring moderately priced candies compared to premium ones.” (source)

Ferrero, here’s hoping that you will start turning it around in 2012.

All the best,

A  fan.

7 Questions about social business integration: #mmchat episode 68

This week, I had the pleasure of being interviewed on #mmchat (episode 68). We talked about social media (social business) integration, which is a pretty crucial topic. Pushing content through social media channels and setting up monitoring practices is the easy part. Making it all work and flow across an organization is where the real difficulties arise.

For almost every company adopting social media, the biggest challenge is not a lack of great ideas or social media expertise, but rather a lack of change management planning and execution. (Theory, presentations and case studies are great, but making someone else’s stories actually work for a business, that’s where the rubber really meets the road – or doesn’t, for the most part.)

Here were the questions:

Q1: So our topic tonight is on Social Media Alignment in organizations, can you describe your view on what this means?

Q2: [In reference to social media] what are some of the negative consequences experienced by organizations that are not aligned?

Q3: How should organizations begin when it comes to aligning their social media efforts with the rest of the business? Who should lead this initiative and how?

Q4: Are there specific steps required to align social networking within organizations?

Q5: Once alignment is achieved, can it be easily scaled or are there suggestions you can male to facilitate this process?

Q6: Are there different challenges & solutions for trying to align around the world in global organizations?

Q7: How does a company know when they have succeeded in the alignment quest? What are some of the major signs and benefits?

Because of the short amount of time allotted to the chat and the limited 140-character format, my answers and ensuing discussion don’t get super in-depth, but that comes with an advantage: They are VERY accessible. Even if you are still unsure how to effectively plug social media into a company so it doesn’t end up being just a marketing add-on, you will understand the fundamental principles covered here.

To access the chat’s full transcript, click here.

For a far more in-depth look into how to actually plug social media into a business (large or small), grab yourself a copy of Social Media ROI: Managing and Measuring Social Media Efforts in Your Organization (Que/Pearson).

It isn’t a “social media” book. It is a management book that focuses on social media for business. Big difference. If you aren’t sure that it is for you, download a free chapter here, then make up your mind.

Very special thanks to @thesocialcmo and @karimacatherine for hosting the #chat.

Social Business vs. Social Marketing: Understanding the fight over “content”

The danger of content-centric strategies in Social Business:

Let me preface this short post with the catalyst behind it – this article by Sarah Shearman for Marketing.co.uk: “Content key to marketing in social media says P&G exec.” Let me throw a few bits and pieces of the article your way, and we’ll get started.

Content is the best currency in social media, according to Usama Al-Qassab, e-commerce marketing and digital innovation team leader at Procter & Gamble.

Speaking at a panel debate at the Social Media World Forum today (29 March) on the role of social media in traditional marketing strategy, Al-Qassab said: “There is a lot of talk about social commerce, but the average person is not yet there yet. On sites such as Facebook, the majority of people do not go there to purchase and still prefer their traditional online retailers. In order to monetise social media, it should not be seen in isolation and needs to be integrated into the wider marketing mix. But unless you have content, there is no point. The content you deliver and the investment behind that is key, much bigger than straight media dollars.”

And this (edited for brevity):

“To grab people’s attention in social media, you need to do something amazing and to do this, [what] you need is a function of how good your product is and how human you appear. The less good your product is and the less human you appear, the more spectacular, giving and generous the thing you do as an organisation needs to be.” - John Willshire, head of innovation at PHD

“There is so much content out there that is great and excellent, [but that] does not mean anyone will be able to even see it. The only way you can get people to see things and talk about things is by giving them a big push. Everything, whether it be business cards, letterheads, the website, the TV advertising, should all drive to one specific thing you want people to do. People don’t talk about things because they think they are great, they talk about them because they think they ought to, or because other people talk about them. Popular things get more popular, as a result of being in the public eye. It is about driving the content and hoping to get additional benefits, when people start getting involved.” - Nick Butcher, global head of social media and digital innovation at ZenithOptimedia.

First, let me begin by saying that I have absolutely no problem with what is now called creative/content, or even a proper focus on it. Content is important. It helps communicate to consumers the value and advantages of buying a product or service. It makes consumers discover, desire, crave, and develop a preference for a product. Now more than ever, content is easy to share, which ads to its value and power. Content also pulls people to websites, which is pretty damn important if you are trying to keep consumers interested and/or primed to visit websites and click on buttons. For these reasons, content is at the core of all things digital marketing, and great content is worth its weight in gold. You will get absolutely no argument from me there. All of this is true.

But here is where experienced marketing executives around the world – including pretty brilliant guys like John, Nick and Usama – fall into a common trap: Mistaking social media channels for marketing channels.

The problem is simple: Marketing professionals see the marketing opportunity in these powerful new channels – as well they should. Their reflex is to do what they know, which is to adapt their marketing thinking to the social space: shift some of their communications, strategies,creative and content to the Facebooks, Twitters and Youtubes of the moment. It’s their job after all. It’s what they know. “Push” has always worked everywhere else, therefore it will work in the social space as well. (And in spite of what social media purists claim, “push” does work quite well on social channels. Ask Dell and Old Spice, for starters.) The problem, however, is that digital social channels are not solely marketing channels. In fact, they are mostly not marketing channels. They are social channels (hence the nomenclature). As such, they favor dialog rather than monologue, which is to say actual conversations rather than messaging.

Publishing content and creative might be seen as a conversation starter, but it is not in any way, shape or form a dialog. It is a monologue through and through. And there is the rub.

At the root of the confusion between social marketing and social business are two distinct operational world views:

The easiest way to illustrate the problem is – as always – with a silly picture of old white dudes in suits sitting around a table.

Below is the functional view of social media channels as perceived (and expressed) by marketing professionals like John, Nick, Usama and thousands upon thousands of others around the world, including the majority of CMOs:

The problem with a unilateral functional view of SM channels

This begins a chain reaction of tactical thinking in which “content” – whose importance to the marketing function (on and off the web) is without question – becomes the core component of marketing-driven social media programs: If “content is king” for marketing on and off the web, then content must also be king for marketing in social media channels.

Logical, right?

If you have ever wondered why “content” was such a recurring theme and point of focus in the social space – when it clearly doesn’t need to be, this is why. What you are looking at in the above image, and what you are hearing from John, Nick, Usama and their peers isn’t representative of either social business or a social media program for business. What it illustrates is limited to social media marketing: The traditional marketing function adapted and applied to social media channels. This world view reflects a belief that social media management is primarily a marketing function.

This view point is of course a little too limited to work super well in a social medium, where people value non-marketing interactions at least as much (if not a lot more) than marketing-related ones.

Since social media channels and the social space are not inherently marketing-focused channels, the correct approach for a business looking to see both short and long term results, is one that is NOT primarily marketing-centric, and therefore NOT primarily content-centric. Here is what that more integrated social business model looks like:

Social Business favors multi-functional adoption across the org

The above image reflects the nature of social business. This multi-functional approach to social media, marked by the adoption of social channels by all functions and departments across an organization, stands a much better chance of yielding results in a space that is not inherently marketing-focused (and can be, at times, openly hostile to overtly marketing-focused exploitation by companies that haven’t yet thought things through).

This model does not focus on “content” as the key component of its social media program “strategy.” Instead, the model focuses on creating new types of value for consumers and stakeholders:

1. Pragmatically this is done to gain a competitive advantage, or – because the more value an organization creates for its customers, the more win becomes associated with its reputation.

2. From the consumer side, as long as the organization driving such a program seems to be genuinely interested in improving the lives or the experience of people it comes in contact with, as long as it seems to want to foster a relationship with them that isn’t automated, that is as truly human and genuine as an old fashioned handshake or a kiss on the cheek or a warm and honest hello, this business socialization activity won’t come across as one-sided and self-serving. This is important.

Sometimes, the best marketing isn’t marketing at all. It grows out of the personal connections that happen between the impression and the purchase, the thousand little personal interactions that happen between the purchase and the coffee shop, and the bonds consumers form with human beings around them. These human beings can be fellow customers of Brand x or employees or Brand x, or perhaps future customers of Brand x. For the purposes of this piece, let’s just focus on employees of Brand x.

Thus, having your marketing department push content all day long via Facebook pages and Twitter accounts and Youtube channels basically amounts to executing a simple social media marketing strategy. It doesn’t build anything. It doesn’t stick either. It’s just marketing spend at a lower cost and with a higher content velocity. Not bad, but that won’t get you very far in the social space.

Moving beyond “social media marketing” – A short list of business functions in social media that do not require content to create value and yield results:

We have seen how Marketing, advertising and PR all tend to focus on content in and out of social channels and why. (And again, there is nothing wrong with that.) Now, let us briefly look at a few other functions that can find a profitable home in the social space that require zero content creation, publication or curation.

• Digital Customer Service
• Business Intelligence
• Digital market research
• Consumer Insights Management
• Online Reputation Management
• Digital keyword and sentiment monitoring
• Digital campaign or program measurement
• Digital crisis management
• Community management
• Digital technical support
• Digital concierge services

There are more, but you get the idea. None of these are particularly “content” driven functions, are they. Yet… “content” is supposed to be at the core of social media programs, right?

An emphasis on “content” in social media and social communications is simply code for “we think of social media primarily as a marketing channel.” It clearly needs to be treated as far more than that.

Organizations whose executives come to believe that “content” is key or central to social media success, equity or potential are making a grave mistake: Content doesn’t in fact drive engagement, traction or success in social media. “Content” drives marketing and responses to marketing in social media. As important as that is, we all have to be realistic about the limits of this kind of approach.

Realistically, content doesn’t drive customer service, crisis management, reputation management or market research in social media, nor does it drive conversations about customer service, crisis management, reputation, market research or even shopping experiences about a brand in social media. Since these and other key business function are principal building blocks of every successful social media program (for business), you see how an emphasis on content can hobble an organization’s social media program right from the start if its importance is mistakenly overstated.

Content’s relation to old vs. new forms of media:

Old media was 100% about messaging and distribution. Marketing was a monologue, primarily because the media used by marketing didn’t give consumers a voice. Viewers didn’t talk back to brands through their TV. Listeners didn’t talk back to brands through their radio. Billboards, print ads, posters, point of sale displays, coupons and even Web 1.0 websites functioned the same way: You created the message and pushed it out. The channels were basically one-way pipelines with marketers at one end and consumers at the other, the latter being the receiving end.

Social media channels are very different. Dialog rules in the social space. Marketing is at best suspect, and tolerated only if it doesn’t come across as exploitation of the channel by a company. Moreover, marketing in social media is permission-based: Too much marketing, or the wrong kind, and social media denizens will disengage from an offending brand. The wrong approach in these social channels can even do more harm than good for a company that forgets to treat consumers like individual human beings.

Though occasional monologues and messaging can find their place in the social space within a healthy mix of engagement activity, an operational emphasis on any kind of marketing monologue doesn’t work. Put simply, companies need to stop shoving “content” through social media channels like sh*t through a goose for ten seconds, take a step back, and start placing as much – if not more – emphasis on listening to consumers in order to then respond to them and begin a process of socialization. That is at the core of true engagement, and the fuel that will drive companies’ loyalty engines in the social space. The recent emphasis on content creation and publishing isn’t helping companies engage better. Instead, it is creating a wedge between brands and consumers. A wall of noise, even. It has become terribly counterproductive.

Two more things to think about:

1. Engagement and buzz are not the same thing. Pushing content through social media channels to generate buzz is perfectly fine and it can work very well. But don’t kid yourselves: Generating buzz around content or a campaign isn’t engagement. Not by a long shot. So next time someone tries to tell you that content and engagement go hand in hand, ask them to explain the difference between engagement and buzz. Chances are that they have the two mixed up. (Beware: That kind of confusion can send organizations down the wrong road fast.)

2. Saying hello or thank you doesn’t qualify as content. By the same token, having a conversation with someone is not content creation or curation. Responding to customer service requests via twitter is not content either. In fact, the more your communications resemble a conversation or dialogue, the less your communications qualify as “content.” The flip side of this is that the more focused an organization is on content when it comes to its social media presence, the more anti-social it will appear to be.

Strike for a balance. Always. The social space is far too complex and filled with opportunities to put all of your operational eggs in one basket – even the one tagged “content.”

Cheers,

Olivier

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For more in-depth insights into how to properly build a social media program for your company, department or organization, pick up a copy of Social Media ROI: Managing and Measuring Social Media Efforts in Your Organization (Que / Pearson), the definitive business guide to social media program management.

(Click here for a sample chapter.)

Fan, Follower and Like Valuation: Truth vs. Bad Science

A few months ago, I shared with you the 5 basic rules of calculating the value of a Facebook fan (or like, tweet, share, follower, etc.). If you missed it, check it out here. This week, I bring you a little more on that topic.

Above (click on the image) is a short video that touches on many of the same topics:

- The $ value of a fan (or follower, subscriber, etc.) is based on transactions, either from that individual or from someone whose transaction behavior they can be shown to have influenced.

- These transactions are usually reflected in one of three ways: Net new transactions (new/recently acquired customer), increased buy-rate/frequency (existing customer starts buying more often), and increased yield (existing customer starts spending more, on average, per transaction).

- The $ value of a fan is therefore variable.

- The value of a fan changes from fan to fan.

- The value of a fan changes from company to company (or brand to brand).

- The value of a fan often changes over time. (Insight: This change is what your social media activities are supposed to be influencing.)

- Social media activity that is expressly intended to be connected to actual ROI should, as a principal aim, focus on increasing the $ value of the brand’s fans, followers and subscribers – either by converting them into new transacting customers, increasing their yield and/or buy rate, and/or having the same effect on peers within their circle of influence.

The video also brings up the danger of cookie-cutter equations or “values” for fans and followers, and the danger of mistaking costs for value (media equivalency equations).

If the video doesn’t play for you, go watch it here.

Production notes: The video was shot in London in July of 2011. I dug it out of the vault just for you guys. The background noise is a little high. Sorry.

*          *           *

As always, if you want to dive a little deeper into this and other social media program / social business topics, pick up a copy of Social Media R.O.I.: Managing and Measuring Social Media Efforts in Your Organization (Que/Pearson) at your local boostore (or just order it online through Amazon, B&N, etc.)

The book is a must-have for any manager or executive involved, directly or not with the development, integration, management and measurement of social media activities in their organizations.

Measurement and Social Media: A helpful discussion

click image to watch video

Too bad I can’t record every conversation I have about performance measurement and analysis, especially as they relate to social media and social business, and post them here. Granted, we’ve had some pretty solid ones on the #measuremob podcast (see archive here), but this time around, the discussion is a) accompanied by some video (which is nice) and b) not between people who fundamentally agree with each other.

In episode 83 of the Beer Diplomacy podcast, I discuss the differences between web metrics and business metrics with Marshall Sponder, author of Social Media Analytics (Mc Graw Hill).

What you will get out of this discussion:

- The limitations of looking solely to web/social metrics to determine the effectiveness of social media campaigns and programs.

- Why web/social metrics are merely intermediate data that help connect the dots between digital activity and measurable business outcomes.

- What measurable business outcomes are, vs. web/social metrics.

- How to think about business measurement when it comes to the effectiveness of social media.

- R.O.I. is not calculated in “likes” and “follows”.  It is calculated in hard dollars (or pounds or euros or yens – the same currency used in the investment part of the return-on-investment equation, in other words).

- The measurement biopsy: A simple method that any business – no matter how small or technologically-challenged – can use to test the R.O.I. of each and every marketing channel it invests in, social, digital, analog, and otherwise. This can be done as a one-time test or to monitor the effectiveness of activities and channels over time.

If clicking on the image above doesn’t take you to the video, go ahead and click here.

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And as always, if you want to learn more about how to…

 - properly build a social media program for your company

- develop a social business practice for your organization

- integrate social media across all relevant departments

- establish a social business structure for your department

- manage and integrate social media activity within an organization

- coordinate social activities with outside agencies and marketing partners

- connect social communications activity to business outcomes

- properly report your metrics and analysis to the CEO, CFO and other executives

- avoid traps and hurdles common to social media / social business in the first 2-3 years of integration

… then make sure you grab a copy of Social Media ROI: Managing and Measuring Social Media Activities in Your Organization (Que/Pearson) – the definitive social business guidebook for managers and executives.

Click here for the smroi.net site (where you can download a chapter for free and choose where you want to buy it).

Click here to buy the book straight from Amazon.com

10 Truths about Social Media & Social Business you need to know.

Translation: "don't drink the water"

If I were to start a social media blog today, I would call it simply “Stating The Obvious.” The types of topics we would cover would fall along the lines of:

1. “Social” is something you are, not something you do. If your company culture doesn’t focus on building relationships with your customers, then chances are that you won’t use social media to do it either. The “media” doesn’t dictate how social a company is or isn’t. It simply enhances its ability to be a social business – if in fact it is – or illustrates the extent to which it isn’t.

2. You cannot outsource customer relationships to an agency. Can you outsource your presence at Thanksgiving dinner to an agency? Do you send your PR team to social events and parties when you have better things to do than attend? Social media isn’t any different. Why? Because it is “social media,” not “delegation media” or “pretend media”. Research and intelligence, sure. That can be outsourced. Creative? That too. Implementing technologies and helping you with strategy? You bet. Marketing, PR and advertising? Of course. But the relationship part: Shaking hands, being there when customers ask your for help, participating in conversations, making them feel at home when they do business with you, none of these can be outsourced.

3. A blog is just a blog. It isn’t a magical trust and influence publishing converter for the web. Publishing propaganda or marketing content is just that, regardless of the publishing platform. Just because you publish marketing content on a blog doesn’t mean it magically morphs into something “authentic” that “engaged customers” will spread through “word of mouth.”

4. Marketing on social media channels isn’t “social.” It is just marketing. Just as publishing marketing content on a blog doesn’t make marketing content any less manufactured and biased, publishing content on social media channels isn’t “social.” Every time I hear a company proudly state that they have a social media program when in fact, all they have is a marketing program that uses social media channels, I feel sorry for its stakeholders and customers. This is one of two things: Delusion or spin. And by “spin,” I mean a lie. If you are a professional in this space, either build a real social media program – one that is actually social – or get out of the way because those of us on a mission to do it right are coming in hot.

5. Transparency isn’t just a word. If you don’t intend to practice it, don’t preach it. Transparency isn’t a flag you get to wave around only when it is convenient. Disclosure also shouldn’t be something your legal department needs to brief you about. You already know what’s right. And by “right,” I don’t just mean “ethical” or what you can get away with. I mean “right.” Do that. Treat your customers with respect and treat your program on foundations of integrity and professional pride.

6. Change management, not social media tools and platforms, is at the crux of social media program development. Because social is something you are, not something you do, most organizations cannot succeed in the social space by changing what they do and not who they are. A Director of Social Media can only do so much. “Social” speaks at least as much to your company’s DNA as it does to its business practices. If you don’t really care about your customers, social media won’t magically transform you into someone who does. You have to want to become this type of individual, and for your organization as a whole to follow suit, in order for the socialization of your business to be successful.

7. People are more important than technology. Hire people who care about other people. If you hire and promote assholes, your company will be full of assholes. It doesn’t matter how much Twitter and Facebook you add to your company’s communications or how many awesome monitoring dashboards you buy if you are a company of assholes.  Guess what: An asshole on social media is still an asshole. Start with your people, not your tools. They are what makes social either work or fail.

8. Social media should not be managed by Marketing anymore than your phones should be managed by Sales. 41% of social media directors are marketing professionals while only 1% are customer service professionals. Would you care to guess as to why it is that only 1% of social media programs seem to be yielding actual results (and I mean business measurables, not just web measurables)  while the rest are just making noise and turning anecdotal BS into “case studies?” (See item 9 for further insights into this.)

9. Shut up and listen. Everywhere I look, I see companies spending a good deal of their time (and budgets) focusing on producing content, blog posts, social media press releases, tweets, updates, events, and looking to “content strategy” to make sure it all fits smoothly together. That’s nice. Too bad they don’t spend at least as much time thinking about their listening strategy. Maybe they would actually get somewhere if they did. Listen to your customers. Listen to your competitors’ customers. Everything companies need to know is passing them by because they are too busy talking. Shut up, already. Nobody really cares what you have to say, and if they do, they don’t need to hear it all day long. Really. Just make great products, consistently create exceptional experiences for customers, and focus every bit of energy in making sure no customer of yours is ever disappointed, and you’ll be good to go. If your communications serve your marketing department more than they serve your customers, you are doing it wrong.

10. Any consultant, “thought leader,” agency or partner who doesn’t tell you these things isn’t fit to be consulted on the subject. Do big promises, miracle cures and fairy tales sound like reality to you? “If you buy X, your business will suddenly grow and improve?” Really? Does “we have the best secret formula” sound legitimate to you? It doesn’t matter where your new “advisors” have worked, who they have worked with or how many people follow them on Twitter.  Of course they are all going to have great stories to tell. It’s called “marketing.” Ever heard of it?

Or maybe I would call that blog “The Emperor’s New Clothes: Alive and well in 2011.”

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Chances are that you’ve already bought a copy of Social Media ROI: Managing and Measuring Social Media Efforts in Your Organization (Que/Pearson), but what about your boss? Have your clients discovered it yet? Have you shared it with your employees and coworkers? (It makes a great gift, and it will make your organization stronger.)

Get yours here or here.

Social Media and Return on Investment: Some clarity.

If you are still having trouble explaining or understanding the intricacies of social media R.O.I., chances are that…

1. You are asking the wrong question.

Do you want to know what one of the worst questions dealing with the digital world is right now? This:

What is the ROI of Social Media?

I know. Coming from me, the guy who literally wrote the book on “Social Media R.O.I.” this might seem like a strange thing to say. But hear me out. It will all make sense in a few minutes.

It isn’t that the idea behind the question is wrong. It comes from the right place. It aims to answer 2 basic business questions: Why should I invest in this, (or rather, why should I invest in this rather than the other thing?), and what kind of financial benefit can I expect from it?

The problem is that the question can’t be answered as asked: Social media in and of itself has no cookie-cutter ROI. The social space is an amalgam of channels, platforms and activities that can produce a broad range of returns (and often none at all). When you ask “what is the social media or ROI,” do you mean to have Facebook’s profit margins figure in the answer? Twitter’s? Youtube’s? Every affiliate marketing blog’s ROI thrown in as well?

The question is too broad. Too general. It is like asking what the ROI of email is. Or the ROI of digital marketing. What is the ROI of social media? I don’t know… what is the ROI of television?

You’ve been asking the wrong question.

2. To get the right answer, ask the right question.

The question, then, is not what is the ROI of social media, but rather what is the ROI of [insert activity here] in social media?

To ask the question properly, you have to also define the timeframe. Here’s an example:

What was the ROI of [insert activity here] in social media for Q3 2011?

That is a legitimate ROI question that relates to social media. Here are a few more:

What was the ROI of shifting 20% of our customer service resources from a traditional call center to twitter this past year?

What was the ROI of shifting 40% of our digital budget from traditional web to social media in 2011?

What was the ROI of our social media-driven raspberry gum awareness campaign in Q1?

These are proper ROI questions.

3. The unfortunate effect of asking the question incorrectly.

What is the ROI of social media? asks nothing and everything at once. It begs a response in the interrogative: Just how do you mean? In instances where either educational gaps or a lack of discipline prevail, the vagueness of the question leads to an interpretation of the term R.O.I., which has already led many a social media “expert” down a shady path of improvisation.

This is how ROI went from being a simple financial calculation of investment vs. gain from investment to becoming any number of made-up equations mixing unrelated metrics into a mess of nonsense like this:

Social media ROI = [(tweets – followers) ÷ (comments x average monthly posts)] ÷ (Facebook shares x facebook likes) ÷ (mentions x channels used) x engagement

Huh?!

Equations like this are everywhere. Companies large and small have paid good money for the privilege of glimpsing them. Unfortunately, they are complete and utter bullshit. They measure nothing. Their aim is to confuse and extract legal tender from unsuspecting clients, nothing more. Don’t fall for it.

4. Pay attention and all the social media R.O.I. BS you have heard until now will evaporate in the next 90 seconds.

In case you missed it earlier, don’t think of ROI as being medium-specific. Think of it as activity-specific.

Are you using social media to increase sales of your latest product? Then measure the ROI of that. How much are you spending on that activity? What KPIs apply to the outcomes being driven by that activity? What is the ratio of cost to gain for that activity? This, you can measure. Stop here. Take it all in. Grab a pencil and a sheet of paper and work it out.

Once you grasp this, try something bigger. If you want to measure the ROI of specific activities across all media, do that. If you would rather focus only on your social media activity, go for it. It doesn’t really matter where you measure your cost to gain equation. Email, TV, print, mobile, social… it’s all the same. ROI is media-agnostic. Once you realize that your measurement should focus on the relationship between the activity and the outcome(s), the medium becomes a detail. ROI is ROI, regardless of the channel or the technology or the platform.

That’s the basic principle. To scale that model and determine the ROI of the sum of an organization’s social media activities, take your ROI calculations for each desired outcome, each campaign driving these outcomes, and each particular type of activity within their scope, then add them all up. Can measuring all of that be complex? You bet. Does it require a lot of work? Yes. It’s up to you to figure out if it is worth the time and resources.

If you have limited resources, you may decide to calculate the ROI of certain activities and not others. You’re the boss. But if you want to get a glimpse of what the process looks like, that’s it in its most basic form.

5. R.O.I. isn’t an afterthought.

Guess what: Acquiring Twitter followers and Facebook likes won’t drive a whole lot of anything unless you have a plan. In other words, if your social media activity doesn’t deliberately drive ROI, it probably won’t accidentally result in any.

This is pretty key. Don’t just measure a bunch of crap after the fact to see if any metrics jumped during the last measurement period. Think about what you will want to measure ahead of time, what metrics you will be looking to influence. Think more along the lines of business-relevant metrics than social media metrics like “likes” and “follows,” which don’t really tell you a whole lot.

6. R.O.I. isn’t always relevant.

Repeat after me: Not all social media activity needs to drive ROI.

Technical support, accounts receivable, digital reputation management, digital crisis management, R&D, customer service… These types of functions are not always tied directly to financial KPIs. Don’t force them into that box.

This is an important point because it reveals something about the nature of the operational integration of social media within organizations: Social media isn’t simply a “community management” function or a “content” play. Its value to an organization isn’t measured primarily in the obvious and overplayed likes, followers, retweets and clickthroughs, or even in impressions or estimated media value. Social media’s value to an organization, whether translated into financial terms (ROI) or not, is determined by its ability to influence specific outcomes. This could be anything from the acquisition of new transacting customers to an increase in positive recommendations, from an increase in buy rate for product x to a positive shift in sentiment for product y, or from a boost in customer satisfaction after a contact with a CSR to the attenuation of a PR crisis.

In other words, for an organization, the value of social media depends on two factors:

1. The manner in which social media can be used to pursue a specific business objective.

2. The degree to which specific social media activity helped drive that objective.

In instances where financial investment and financial gain are relevant KPIs, this can turn into ROI. In instances where financial gain is not a relevant outcome, ROI might not matter one bit.

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By the way, Social Media ROI – the book – doesn’t just talk about measurement and KPIs. It provides a simple framework with which businesses of all sizes can develop, build and manage social media programs in partnership with digital agencies or all on their own. Check it out at www.smroi.net, or look for it at fine bookstores everywhere.

Click here to read a free chapter.