Re-thinking the value of social media consumers

I saw this fascinating chart on Silicon Valley Insider and wanted to share it with you because it represents a very different way to think about social media marketing.

Kim-Mai Cutler at VentureBeat looked at Facebook’s suggested advertiser bid price on per category basis. What she found is pretty interesting.

These “suggested bids” reflect what advertisers have most recently paid to reach a demographic group based on CPMs (cost per 1,000 impressions) or CPCs (cost for every time a user clicks on an ad).

Some trends make sense — older (and richer) users are more expensive to reach than younger ones, for example.

But there are some counter-intuitive trends, too.  Japanese users are less expensive to advertise to than Russian users, even though the Asian country’s GDP per capita is more than three times as large.

And while in the “real world” you might think it would cost more to advertise to a millionaire Wall Street banker compared to a Wal-Mart employee making an average salary of $20,000, on Facebook, the opposite is true. In the eyes of a social media advertiser, a Wal-Mart employee is worth nearly twice as much as a Goldman Sachs employee, according to Facebook’s suggested advertising bid prices!

The reason this resonated for me was because I’m constantly reminding my clients that what they thought about their target customers may no longer be true. In less than two years, there has been a cataclysmic shift in who is spending time on the social web, what they’re doing there and how they’re spending money.

If you haven’t re-visited your customer profiles in the last six months, a chart like this should make you think about it!

Did Mashable cross a line?

Yesterday, something happened on Mashable which illustrates one of the biggest threats to the social web, to business, and maybe even democracy.  I’m really interested to see what you have to say about this incident.  Let’s start with the lead paragraph from their post:

The Italian Windows website “Windowsette” somehow managed to get a hold of a super-secret, highly confidential PowerPoint presentation outlining many of Microsoft’s goals and plans for Windows 8. Apparently this sensitive data (complete with UNDER NDA watermarks) was just found sitting around the Internet.

If you haven’t been around the corporate world, NDA stands for “non-disclosure agreement.”  This means that whoever had these slides had signed a legal document to keep them secret.

The Windowsette site said it learned of this leak from “Andrea Martinelli.” I have no idea who that is but it seems unlikely she just found secret internal Microsoft documents “sitting around the Internet.”

So here are the questions I have for you:

  • Mashable has become the journal of record for the social web. Maybe they’ve been trained as journalists, maybe they’re not.  Does that make a difference?
  • Is it ethical for them to publish a “super-secret, highly confidential” internal document that could be extremely damaging to Microsoft?
  • Is it responsible to report on a document whose source was a single associate of an obscure website in Italy?  How can we even know these slides are real? Isn’t it easy to create official-looking PowerPoint slides?
  • The Mashable post was tweeted almost 1,000 times and included in about 500 Facebook sites.  For many people, this article has become “the news.” What are the implications when non-journalists create the news?

I’ll tip my hand here and say that my undergrad was in journalism and I believe this institution is essential to democracy.  What’s going on in most blogs today is not journalism.  Usually that’s OK.  But with the dramatic decline of the traditional press, whatever we have left on blogs is going to become our de facto news of record. Like Mashable.

In the end, this incident will have a shelf life of about one day and it’s easy to let a big company like Microsoft be our target. But what if this unsubstantiated piece of news was about your secret new product development?  Your company? Your congressman? A terrorist threat in your community?

What if it was about you?

Since when did blogging become elitist?

A communication industry site, ragan.com, picked up my recent post about why it’s “ridiculous to argue about ghost blogging.”  This was cool because it opened the topic to a new set of commenters and perspectives.

However, I was struck by some of the elitist views on blogging and wanted to address the issue here, instead of a long comment on that site.

What I mean by “elitist” is that some folks seem to uphold a narrow, sanctified view of blogging and dismiss those outside that view (i.e. “Blogs are by definition in their own class.”)

One person opined that blogs should be different than any other form of corporate communication because they “grew from people’s personal communications and because the audience for blogs expect it to remain personal.”

Another reader commented that “Blogs are designed to be be participatory and conversational, with a discussion leader and participants in the discussion.”

And, “To use a blog as a personal communication when it’s not genuinely personal is an assault on the purpose of a blog and an intentional deception of readers.”

Excuse me friends, but who is coming up with this definition of a “purpose of a blog?”

There can be MANY purposes for blogs …

  • For the highly-interactive, personal, and prolific Chris Brogan, the blog is an engine to build community and ultimately monetize services and affiliate advertising.
  • GE’s stellar corporate blog features product ideas and solutions but has almost no reader interaction or community. They rarely even identify a post’s author.
  • Caterpillar’s blogs serve as forums for technical problem-solving and have an extremely high level of community sharing.
  • The Red Cross blog tells stories of heroes and global crises with authors from all over the world.
  • There is a whole science around connecting blogs to keywords and SEO results. In that analytical world, blog content is derived from probabilities, statistics, and a sales funnel. Personality need not apply.
  • For my daughter in college, a blog is simply a way to journal and tell her life stories — no strings attached.

All of these blogs are relevant and serve a unique purpose.  They may or may not be personal. They may or may not nurture community. They may or may not be participatory.

And they may or may not be authentic. Here’s what I mean.  This challenge was posed to me on the Ragan site:  “How would people feel if the marketing/PR/comms guru types whose blogs they follow weren’t written by those people. What if Seth Godin ‘s blog wasn’t actually written by Seth Godin?  Would you be okay with that?”

Actually, I’m guessing Seth doesn’t write his blog all the time.  The fact that he keeps a busy travel schedule, writes every day, posts a short riff from a speech or book, and doesn’t allow comments (which would require a response) on his blog, indicates that it is probably ghost-written by an assistant, at least some of the time.  I don’t KNOW this. It’s a hunch.  But in any event, I am perfectly OK with that. It’s his advice. It’s his brand. It may even be him. Ghost or no, the blog provides value to me as a reader which is why I subscribe.

Bottom line, I believe it’s anachronistic and short-sighted to try to force blogging into somebody’s pre-conceived bucket of expectations.  Instead of trying to define and dictate what our blogs and communities should be, let’s celebrate the amazing diversity of writing, readers and missions on the social web.

Illustration: Comedy Central

Can the social web play a role in customer retention?

The recession has culled the weak from the pack but it’s likely that your competition is still fierce.  Is there a way to attract and retain B2B customers without lowering your price? And is there a way to leverage the social web to keep your customers … even in the extreme case of a commodity market?

Holding onto customers in a buyer’s market is one of the most extraordinary challenges in business, especially if you’re selling a commodity (Commodity = purchasers view suppliers as identical on all factors but price, i.e. common coal, steel, or chemicals).

There is usually only one winner in a commodity market — the lowest cost supplier — except in periods of high demand when supply falls short.  But there are ways to lock-in customers even in ugly downturns.  One strategy I used throughout my career was to create a systematic plan to raise switching costs. By this I mean create obstacles — through valuable benefits — to prevent a customer from leaving you for the competition.

A process to retain customers

This process starts with getting out to your most valued customers and listening. And I mean REALLY listening. We would sometimes have half-day sessions to explore un-met and under-served customer needs that would …

  • Improve their competitive position
  • Enhance profitability or productivity
  • Eliminate waste
  • Lower risk
  • Increase speed to market

One strategy that uncovered potential points of differentiation was to ask customers what they hated about their job. This always seemed to get people to open up about an idea we could implement to make their life easier!   Some other potential approaches to this challenge:

  • Solve a customer problem (reporting, data-gathering, analysis/testing) that might add slightly to your cost, but establishes enough value to create a hurdle to switching
  • Create a specialized service that would be difficult for competitors to match (we did a specialized truck-return recycling program, for example)
  • Work actively with customers to influence specifications and terms that could advantage my company or disadvantage a competitor
  • Focus retention efforts on most profitable customer locations
  • Look at eCommerce integration options to enhance retention

Notice that all of these ideas go beyond the basics of price, quality and service. Those aren’t strategic initiatives. Those are competitive tablestakes these days.

When customers don’t play nice

This process of listening, reacting and renewal must be continual and integrated through an effective CRM system. But it doesn’t always work.

In the middle of all this great creative marketing work I just suggested is another dynamic. Purchasing may not want you to implement your ideas – even if there is an advantage – because it reduces their flexibility with suppliers.  They may even force you to hand over your innovations to competitors. I witnessed this in the automotive market in the 1990s.  This ended up hurting customers because when there is no reward for innovation, innovation ends.

Now what about the social web?

Is it possible to develop some distinct value through social media that could create a switching cost? My answer – probably not. The social web might be a tool to listen and tune-in to possible innovations and market needs but I don’t see how social networks can create sustainable switching costs in this part of the sales cycle. It’s free to everyone and easily duplicated by competitors.

However, I do think you can create PRIVATE information networks and communities that create distinct value. For example, one idea that worked really well was a private, unique market information hub for customers who remained in our top tier in revenue.

What are you doing to hold onto your best customers in tough economic conditions?  Can you think of any way to leverage the social web for DISTINCT value in a commodity market?

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