Yesterday, we talked about the importance of being able to discuss real R.O.I. with a decision-maker who just doesn’t get Social Media yet. Instead of trying to “sell” them on the benefits of conversations and developing relationships, I suggested a more pragmatic approach: Basically explaining to them how Social Media can be used to increase sales (what they really care about) by impacting certain factors intimately tied to sales: Net customers growth, and depth-of-product transactions. (If you missed it, check it out.)
Today, let’s talk about another factor: Frequency.
In other words:
Frequency of interactions = Frequency of transactions.
(More of one usually leads to more of the other.)
One final note: For most businesses, reach seems like a more important factor than frequency, but what happens when acquiring more customers isn’t realistic? Or when it isn’t enough? For many established businesses (especially with a closed distribution channel), frequency is a more variable (and thus more viable) factor to impact: If they can’t acquire new customers, the next best thing is to get their existing customers to transact more often.
Food for thought.
So there you go: One more specific factor/objective and set of metrics to take to your favorite Social Media agnostic manager… or keep in your back pocket in case the need ever comes up.
Brand Building and Online Marketing Blog 
You know, I am thinking this series may just make a neat video primer for marketing execs wanting to understand the cross-over and opportunities of social media. Nice work!
Love the pink shirt! Regarding “Frequency of interactions = Frequency of transactions” I have found that to be true in my own business, which is tiny compared to a Big Brand. But the more I tweet with people, getting into both valuable and non-valuable conversations, the more inquiries and requests for quotes I get. If you are using social media, you really need to USE it to have, as you said “a constant presence online.”
I am a Whole Foods customer, I also happened to work for them as marketing director in one of their stores long ago, so I have a bond with that brand. I see @WholeFoods speaking to people all the time (on Twitter.) Before Twitter, I might have seen an advertisement for Whole Foods and then lost track of it/put it out of my mind. An ad is a one-shot deal, until you see the next ad. Seeing them over and over again where *I am* constantly (on social platforms Twitter or Tumblr in my case) offers a repeat factor of far greater magnitude than they could spend to get that many reminders in front of me using traditional marketing methods.
As far as increased transactions from this experience, in my case I am now over an hour away from the store, so I cannot satisfy my brand longings immediately. If Whole Foods had an online store, I’d use it constantly, in addition to visiting the store when I’m around it in Kansas City. I used to live less than 5 minutes from one – I think if I’d had them on Twitter at that time, I might have actually gone more when prompted by something I read on Twitter. (Akin to seeing an ad for ice cream on TV and wanting to go get some.) The TV ad costs a lot – Twitter is free. 🙂
Thanks to a less than 140 character post on a certain mini-blog site, I have just found this blog, (thanks Kris C.).
I have just viewed the video above and I must say that I am impressed. I run The Fullworx Network, which is a networking web-site bringing together business, professional and social networkers. I find my time really stretched between our own network, where customer service and engagement is most important, (and sometimes stifled by member inactivity), and other networking sites where I must go to “collect” future members and customers.
I have had some success since I started in September 2008 but my biggest challenge has been just the types of activities that you put over so well. Being, and being seen to be, present and active in all, (or, at least, many), on-line networking web-sites as well as on my own. It’s sort of ironic in a way, (or is it paradoxical?), that I spend most of my time trying to convince business owners to interact with their public, and trying to convince the public that it’s good to connect with businesses, whilst I strive and struggle to do the self-same thing myself.
I am coming round the ideas now though and have recommitted myself to the Twitterverse and I am becoming ever more organised in what I am trying to achieve. Even if MY public are not totally ready for the concept of communications between business and society at large.
I am thinking right now, (as I type), that part of the problem is that, traditionally, the only time a member of the public was in contact with a business was to complain about a certain service or product. At no other time during the purchasing process have customers been ready and willing to communicate with businesses. And, all businesses have wanted to do is to sell and move on. This has obviously changed, or is, at least, changing ever so slowly.
Businesses that are ready to ‘connect’ with their public are not sure exactly how to go about it, and the people that want commercial institutions to ‘listen up’ are not ready to lead by the hand, rather they want to vote with their feet. The result is that there exists the traditional gap or divide between business and public, and no-one seems sure exactly how to bridge the chasm.
Thankfully, there are people who are setting an example, not less than yourself, Olivier, Chris Brogan and Jeff Pulver. The trailblazers have pushed the boundaries in social networking and branding, and it is people like me that will listen up, not only to the experts, but also to the public, when they are ready to conceive of the idea that they might just be able to negotiate an equal relationship with the business community at large.
Wow. A G, that is the kind of comment that makes my heart skip a beat. I don’t even know what to say. You just made my day. 🙂
Great stuff – very simple way to bring the conversation back away from the coolness of SocMed and back to their reality – the bottom line.
Well done!
Jon
Olivier,
You are talking about something that is very dear to my heart: measurement.
This is the Achilles heel of corporations. For the most part, I would say as high as 92-93%, corporations tend to continuously use the same metrics ad-nausea. Of course, this is the way it was always done.
The problem, and how this relates to your very well done video, is that the metrics we track are not the ones that will give us ROI.
Which is why ROI exists: to simplify everything down to a chewable metric that executives can get behind. (but i digress)
I agree that frequency is a great input for ROI, but most companies have not way to tracking frequency back to its origins. For example, if we increase traffic by 10%, no one can figure out why or where it came from. This is because we can track the basic metrics (how many people), but not the complicated ones (where did they come from). This is where your post is interesting.
Unless you are advocating to take credit for any increase in frequency – how are companies that have no way of back-tracking the same going to measure the increased frequency and advocate it to Social Media? In other words, how are they going to justify the project with an ROI that is flawed and, more than likely, does not show reality?
This is the key question to ask, and to recommend to your readers (As I do with mine) to make sure that if you are going to justify a project with ROI, the numbers behind the ROI really do make sense. Make sure you have the right metrics in place, and they reflect reality and actions as they happen. If you do, and they do, then the ROI is mostly self-proven.
There is nothing worse that justifying a project on a flawed metric that will change later one, and compromise the continuity of the project.
Excellent points, Esteban. I am very aware that I am just giving you guys the “what” right now without getting into the “how.” 🙂
I will eventually get there though. No worries.
The best way I can address your comment is with this: At best, we are talking about correlations, here – and not absolute cause & effect. (Empirically proving causality isn’t realistic. Ask any statistician.) But the idea is sound, and I helped test it when I was working closely with Microsoft last year. We looked at a number of ways to impact/measure sales, and frequency was one of them. What we found was that more frequency of interactions (valuable quality interactions, that is) resulted in an increased frequency in transactions compared to control groups.
So… the nature of the interaction is as important as the frequency – but when talking with a social-media agnostic decision-maker, the question of value or nature of the interaction isn’t relevant. To keep things simple, the idea is to distill the conversation down to basics: 1. There is a correlation between Frequency of interactions : frequency of transaction. 2. Social Media ads tremendous velocity to the frequency of interactions.
By overlaying timelines (sales trends before a SocMed initiative begins compared to SocMed activity) you can see the impact of the engagement on sales as a whole. Now… By looking at specific pieces of the equation like net new customers, changes in breadth of product, frequency, etc. you can actually tie specific activities to specific results. Not 100% empirically, but pretty damn close.
I need graphics… But does that kind of make sense for now? 😀
As a one-time Greenville resident, I’ve been following you on Twitter for some time now wondering who the hell you are. I don’t recall Greenville being such a hotbed when I lived there briefly in the mid-90s. Regardless, I finally got here, and I think the notion of frequency of interaction is so obvious that it’s brilliant. Clearly you understand how to see things from the “management” point of view. I look forward to spending more time. Thanks for the insight.
Olivier, upon rereading my earlier comment it strikes me that because you don’t know me, the remark is probably not communicating what I intended. When I say I’ve been wondering “who the hell you are”, I mean that in the sense of “Wow, this guy is really smart, didn’t know they had him in Greenville.” versus in the rude sense in which it may have unintentionally come across.
Perhaps I should have read Mack Collier’s post on leaving good blog comments earlier in the evening 😉
Regardless, I do think both your reach and frequency posts and videos are brilliant. We all get so wrapped up in our social media “lingo” that makes those who don’t love it as we do glaze over. You’ve mastered the art of speaking their language, and it’s very instructive.
Thanks.
Sue Spaight
No worries, Sue. I got your meaning. And thank you very much for the compliment! 😀
I am 100% to blame for having stayed hidden all these years. I was too busy working for the man, figuring this stuff out, and learning how to work with “difficult” managers to really interact with my own local business community. (Which still seems very closed to all of this – and to me, by the way.) Six months ago, I didn’t even have a photo of me on my blog. Context: My last “boss” strongly suggested that I stop blogging altogether – and had to almost take this blog and my Twitter presence underground. (It was ridiculous.) So… getting to a place where I was free to come out in the open and share all this with you guys took a lot of work. 😀
Now that I am finally free to share all this and collaborate with business leaders, I am working hard to make up for lost time. I am really glad that we’ve connected this way. It’s a great start. By the way, I am not the only smart guy in the 864. There is a whole community of us now. It’s very exciting. 🙂
Hmmm… even quoting statistician, i like that.
I can clearly see what you are saying, and I am in no way doubting. Look, the bottom line here is that no matter what we try we will NEVER get cause-effect in probably any of what we do.
Pure and simple, the best laid plan will never survive meeting reality (badly paraphrased, I know – but true).
If I had to pick, I would welcome more frequency anytime. Frequency equates to engagement from customers. Just like publicity, there ain’t no thing as a bad engagement from a customer.
n’est-ce pas vrai?
Thanks for recording this. I like it a lot. If I did not have the weird accent going, I might even try to do some video.
Accents are great, Esteban. Everyone loves a cool accent! 🙂
Olivier,
Nice videos. Good smart posts.
I think it is also very important to mention not only the frequency and recency aspects of the Somed conversation, but that it is also critical to maintain the brand essence in this channel.
This is where i see a lot of companies failing in Somed. Too many messages sound the same. A Twitter post sounds like a Twitter post. Facebook pages look too alike and the content is weak and not “on brand”. Without hard and fast creative direction, SoMed content has a propensity to fall out of alignment with the larger marketing communications effort in terms of brand essence. And in the long run, that could weaken the brand.
Look forward to hearing more.
Cheers,
Barry
Yeah, the execution is still pretty weak and inconsistent for most companies. Starbucks does a pretty solid job of mixing one-on-one engagement, promo and PR though.
The great thing is that the opportunity to help brands connect with customers better than they ever have (and help them enjoy happy returns beyond loyalty and great relationships) is still HUGE.
The bad thing is that so many brands are doing it poorly (when at all) that it can be a little frustrating. 😀
I totally hear ya.
Thanks so much for the comment.
The issue of brand managers believing that they are doing a great job with their Social Media practices when they in fact are nowhere is also a pretty big problem. Nike is a perfect example of a brand that firmly believes that it gets social media since it has a number of active online communities and fan sites… But what are they actually accomplishing by creating these closed members-only communities, exactly? (Besides creating destinations and capturing contact info and demo data?)
Are they really having conversations? Deepening bonds? Are they attracting new customers? Luring back old ones? What’s the point of creating closed-loop communities that don’t scale when platforms like Twitter are already scaling? I am all for creating closed communities, but why not ALSO have an active presence on Twitter to a) participate in the conversation, and b) drive more traffic to their community?
The fact that major brands like Nike, Coca Cola, Pepsi (not to pick on them, but they come to mind) are doing this very poorly in this area is surprising to me. This is purely a brand management issue. The guys in charge of these “programs” who just haven’t figured out how to do this either won’t admit it or don’t know enough to realize that they are missing the boat.
For their sakes, let’s hope that changes soon. 🙂