Measuring the R.O.I. of your Social Media Programs

If you have twenty minutes and want to understand the fundamentals of R.O.I., business measurement, Social Media business planning, Vertical vs. Lateral Engagement and F.R.Y., it’s all right here. This might be a good video to send to the CMO, CFO, COO and even the CEO, if you have that kind of relationship with them.

Video courtesy of Andy Sernovitz and GasPedal. Filmed during the 2009 WOM Supergenius Conference in Chicago.

And yes, I had Rocky II hair back then.

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And on the eighth day… (A word-of-mouth primer)

So as it turns out, WOM (word-of-mouth) is at least twice as effective at influencing purchasing decisions as most forms of marketing (from PR to advertising). (Source: Nielsen)

And the beauty of Social(ized) Media platforms like blogs, Twitter, Facebook, Myspace and Seesmic, is that – as connection and conversation engines, they enable, accelarate and amplify WOM.

So a) WOM is important, and b) WOM is also at the core of the crucial lateral action (peer to peer engagement) we discussed a few weeks ago. (Go here to get a recap. It’s worth the five minutes.) So even though it hasn’t been a buzzword in a couple of years, let’s bring back some much needed (and deserved) focus on it now.

Okay, here’s roughly how you create WOM out of thin air:

Step 1: Create or do something great. Not good. GREAT. (Seth Godin would call it remarkable. My kids would call it awesome. Some of my triathlon buddies would call it sick. Fred would call it rad… but he’s… well, Fred. Or Barney. Or something.)

It could be a widget. It could be a dish. It could be a work of art. It could be an act of rebellion or courage… or both. It could be a book or a song or a speech. It could be the way your customer service reps answer the phone, or how quickly your technicians can fix a problem for your customers. It could be new packaging for ketchup or a new all-natural zero-calorie sweetener. It could be a smart and edgy TV show. It could be a completely selfless act. It could be nothing more than a simple, subtle, five second memorable experience at a drive-through or at the checkout or when you walk into a public restroom. It could be a new flavor, or an old, forgotten one. It could be a social program. It could be that extra smile or one percent effort. It could be simply acknowledging customers and conversation participants on Twitter. It could be anything… as long as it is remarkable. Awesome. Sick. Rad.

As long as it is better than anything else that remotely comes close to its category – assuming there is one yet.

As long as anyone who gets to experience it is so amazed, pleasantly surprised, or otherwise affected by what it did for them that they’ll get excited about telling their friends all about it… and the cycle will repeat itself over and over and over again.

The more unique it is, the better. The more iconic, the better. The more revolutionary… um, okay. You get the idea.

People don’t get excited about boring and mundane and same-as-always.

Safe, good enough, okay and not bad don’t live in WOM’s zip code.

Step 2: Oh… wait. That’s it. Never mind. There is no step 2.

Technorati Tags: word of mouth, WOMMA, WOMBAT2, marketing, WOM

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Engagement Paradigm: Focus on Lateral Action

So we’ve been chatting about engagement these last few days, and particularly vertical action (essentially brands addressing their communities from the top-down, and creating mechanisms through which their communities can communicate vertically with them using the same channels). When you look at corporate blogs, Twitter accounts and most branded community sites, this is mostly what you see: Vertical engagement between companies and their customers/fans/friends/users.

Likewise, the breadth and depth conversation we had last week also relates to vertical action: Brand managers, Community managers and/or Social Media managers finding ways to engage customers from a brand-to-community perspective. Even when dialog exists, even when the communication channels are truly 2-way, most of what happens is vertical: Brand-to-customer and customer-to-brand. And that’s nice, but it is only half the story: In order to understand the power of the social web, the power of communities and the power of truly engaged fans, you also have to tip your hat to lateral action.

What is lateral action? Simple: Lateral action is simply peer-to-peer engagement that happens within or across communities. A brand or community manager may have planted a seed along the way (a tweet, a blog post, a comment, a promotion, etc.), but once it has hit the community, the message/info/conversation is spread from customer to customer without having to be prompted by any official brand representative.

Another example of lateral action is WOM (word-of-mouth): Peer-to-peer recommendations are classic examples of lateral action. Rumors are examples of lateral action. Community tweetup invitations are examples of lateral action. RT’s on Twitter tend to be examples of lateral action.

Lateral action is what happens when the brand, the company, the official presence of a business gives its community the opportunity to BE a community by taking a step back and letting people share what is important to them with peers.

And lateral action is often the answer to the question raised last week about breadth and depth of engagement: Once a brand has managed to scale its community to several thousand or tens of thousands (or hundreds of thousands, even), how can a team of community managers possibly engage so many people properly? It’s impossible, right? (This being the logic behind some Social Media directors’ decision to focus on depth at the cost of breadth.) Truth: Vertical action alone cannot serve the purposes of engagement (breadth mostly, but depth also) in the Social Media space… or even when it comes to fostering vibrant brand-centric communities in the “real” world. Lateral Action is the yin to Vertical Action’s yang. Lateral Action is how community engagement actually scales and transcends any breadth-related engagement limitations.

And though Lateral Action is nothing new, it is not a typical strategic mode of thinking for most Marketing professionals who have spent most of their careers working in traditional media (yes, even in the world of the web). This is why MANY Marketing folks still talk about the challenge of creating “content” even in the Social Media space. This is why advertising, messaging and marketing products are still among the first things marketers try to “plug in” when it comes to leveraging Social Media “channels.” This is all top-down thinking. Vertical Action thinking. And though it has its place here, it cannot succeed in the Social Media space without an equal (and in many cases greater) measure of Lateral Action.

Brand managers, Social Media managers, Community managers – whatever their designation may be – need to understand that their job isn’t just to produce content and constantly stimulate vertical engagement. There is only so much they can accomplish this way. What they must also do is empower their communities to manage themselves to a great extent and generate conversations and motion from within. Community members have to reach out to each other. They have to reach over to other communities. They have to share and discuss and debate and organize themselves. Brand Managers in the Social Media space have to learn how to be good hosts and patrons and supporters without being mother hens 24/7. This lateral action has to be fostered, nurtured, and built into their online and offline communities.

This is a crucial point for all brand managers to understand if they want to be successful in the age of Social Significance and Community Marketing. I hope the video and this post help you understand the difference between vertical and lateral action… and their importance our ongoing discussion of community “engagement.”

Tomorrow, we will bring our engagement discussion to a close with some far less strategic yet much more valuable advice than what we’ve touched on so far. 😉

Have a great day!

Bonus Footage: Oui, en Francais! (For my Francophone readers, a question: Since I can, should I also start shooting videos in French?) And since a few of you have asked me if I would say my name in its original French so you can hear what it sounds like – Two birds, one stone. You ask, I deliver. (And yes, I take requests.) Check it out:

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Hitler’s Twitter woes

Pure friggin’ genius. 😀

Click on the image to play the video.

Hat tip to Dan Hollings.

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Viral Marketing Review: Design Patterns in Viral Marketing

Interesting (and entertaining) piece by Mike Laurie over at Ship’s Biscuit this month. Mike gives us a pretty complete list of design/thematic/strategic categories in ‘viral’ campaigns, complete with video evidence. Very well done.

The point of the review isn’t so much to argue whether or not “viral marketing” is effective as a tactic, but simply to suggest that certain thematic patterns are emerging from this relatively new marketing tactic, and that each one has its own place in our cultural psyche:

There are exactly one hundred million billion new viral marketing campaigns seeded every 10 minutes – the vast majority are completely dire and destined to fail. So what separates success from failure? Well, the best appear to exhibit similar patterns and by using these patterns in your own campaigns you could be on your way to a free buffet and a drunken snog at next Summer’s Revolution Awards.

If you’re smart you’re probably thinking this is all very formulaic and un-creative. Well, consider the following. The drumming gorilla is just a remake of an ad for a shop called West49 in the US. The director Juan Cabral simply used a pattern where he recognised potential and executed it beautifully. The true genius of this idea is his audacity in linking it to something utterly random like a cheap chocolate brand. Juan got a black D&AD pencil for his efforts.

Mike splits up his categories thus:

1. The Brand master/slave bond
2. Brandophilia
3. Doomsday Branding
4. Brand Halo Effect
5. Super Hot Product Demo
6. Hot unobtainable product demo
7. Infovert or stunning visualpresentation of a truth which everyone sort of already knew but needed someone in advertising to tell them with nice pictures
8. WTF? How do they do that?
9. Empowerment branding
10. Nice big juicy hits (“Hits.” With a “h. Come on!)
11. Out of character celebrity
12. Animal personification
13. Weird Science
14. Where’s the dignity?
15. It’s business time
16. Super delusional weirdo
17. Shock tactics
18. Violate a stereotype
19. Irritating catch-phrases
20. Objects doing things they weren’t really made for
21. Connect video games to real life

This is blogging at its best.  Go check out the full post here, enjoy the videos, and suggest new categories for an upcoming “part 2” follow-up post.

Have a great Thursday!

Hat tip to eydryan.com.

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On Remarkability and the true spirit of WOM

Let’s travel back to 2005, when Word-Of-Mouth (WOM) hadn’t yet been hijacked by clueless and myopic marketers looking to make a quick buck off the promise of this strange but powerful thing called authenticity:

From a two-year-old post by John Moore on his Brand Autopsy blog:

“My advice to clients is to spend dollars to make the product more remarkable, not to make the word of mouth tactic more remarkable. Otherwise, all people will be talking about is what your company did and not what your company does.

When working with clients, I stress the importance of TELLING THE STORY and not Making Up a Story.

TELLING THE STORY is about designing marketing communications to deliver on the promise all the while being clever, savvy, authentic, and true to the brand. It’s about treating consumers as being interesting and interested.

While, Making Up a Story is when marketers engage in outrageously gimmicky attention-grabbing antics that over-promise and woefully under-deliver. These marketers treat consumers as being boring, indifferent, and brainlessly gullible.

To me, the Subservient Chicken, Ugoff, Dr. Angus, and The King are diversionary marketing actions designed to get consumers to focus on the kooky creative Burger King did and not on the food Burger King does.”

Next time a marketing firm or ad agency comes to you with a WOM strategy, do yourselves and your customers a huge favor by making sure they aren’t just talking about messaging or creative.

Spend dollars to make the product more remarkable,
not the word of mouth tactic more remarkable.

Can we officially make this one of the ten commandments of Word of Mouth Marketing?

Pretty please?

Have a great Thursday. 🙂

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The value of Social Networking Sites, and some findings on WOM

From Francois Gossieaux’s brilliant Emergence Marketing blog this week:

Reveries.com conducted a survey on the potential of social networking sites like Facebook, LinkedIn and Myspace as media for marketing activities (pdf download of survey summary results and analysis are here). The main finding seems to be that marketers are in the very early stages of truly understanding the potential of these new networks – with only 18% of the respondents calling the potential of online social networks as a medium for marketing “huge”.

Other interesting tidbits from the survey include the fact that marketers see “word of mouth” as the most promising aspect of social networking sites, and that many pointed out that marketers should participate in the conversations that take place on those sites without interrupting them.

Unfortunately, the reality is that many spammers have already invaded Facebook, Myspace and other similar sites. Go check the walls of the most popular interest groups in Facebook to see for yourself – many are littered with posts that are total sales pitches or with information that is totally irrelevant to the group’s conversation.

Speaking of Word-of-Mouth, EM has an interesting post on the subject as well:

The latest issue of the Harvard Business Review has an article on how to calculate the value of customer referrals (article not online yet).

They conducted two studies – one in telecom and one in financial services. Some interesting findings from those calculations include:

• People refer way less than they say they do
• The customer referral value is higher than the customer life-cycle value
• The people with the highest customer life-cycle value are not the ones with the highest referral value

The importance of these findings are twofold. First you need to segment your customers along the customer life-cycle value axis, but also along the customer referral value axis. That will enable you to target your incentives to groups to either increase their usage or increase their referrals, or both. Second, this research shows that customers will low customer life-cycle value can in fact have a higher value to your company through referral value than those with high customer life-cycle value.

Read more stuff from Francois here.

Good stuff to chew on. Have a great Tuesday, everyone. 🙂

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