Social Media ROI – You’re looking in the wrong place
Sep 10th
About two years ago, I forecast that the real value of social media would be in applying it across the enterprise for INTERNAL uses that would break down barriers, speed communication, and enable collaboration.
It just makes so much sense. Employees already enjoy using fun applications like social networks and wikis and the power of these tools in the external environment to unleash creativity, collaboration, and productivity is proven. A new report from McKinsey validates this premise and places an actual number value on the potential savings of using similar tools internally.
The real ROI of social media
The report states that the speed and scale of adopting social technologies by consumers is unprecedented, yet companies are far from capturing the impact of these platforms. Almost any human interaction that can be conducted electronically can be made “social,” but only 5 percent of all potential uses now take place through social networks.
The consulting firm identified 10 ways in which social technologies can create savings across the value chain. They estimated that between $900 billion and $1.3 trillion in value can be unlocked in the U.S. alone from these technologies:
- Social networks
- Blogs and micro-blogs
- Ratings and reviews
- Social commerce
- Wikis
- Discussion forums
- Co-created content
- Crowd-sourcing
- Media and file sharing
- Social gaming
Spanning across all these categories is social analytics to enable better-informed decisions.
Two-thirds of the projected value comes from improving communications and collaboration across the enterprise. It gets at this idea of organizing a company around problem-solving instead of silos. For example, in a large company, the expert company employee to solve a problem in the U.S. might actually be based in Australia. Social platforms can make employees aware of these problems and unleash their skills through social technologies. McKinsey estimates implementing internal social systems could raise the productivity of knowledge workers by at least 20 percent. What a revolutionary opportunity!
Social influence may change the way we sell
One of the most fascinating predictions in the report is that the ability to identify the social influence of employees might “disintermediate commercial relationships and upend traditional business models.” In other words, the power to deputize all of your employees for marketing, sales, and service can change the way you sell. I reported on an example of this in a post a few weeks ago about using social scoring measures to assess the “Internet impact” of employees. Quite interesting that McKinsey is already picking up on this as a global organizational trend.
As you can imagine, realizing these financial gains wil require significant transformations in management practices and organizational behaviors — HR will be leading the way toward social media success. As in most cases involving transformational change, the technolgy is the easy part!
What’s keeping companies from moving ahead with these ideas? Fear of risk. There are undoubtedly legitimate risks involved, including potential loss of intellectual property, violations of privacy, abuse, and potential PR problems. Also, social technologies can disrupt traditional business models, creating internal resistance from bureaucracies.
However, competitive pressures will eventually drive companies to overcome these risks. Companies that fail to invest in social technologies will fall behind.
Are internal social media platforms right for you?
The industries most likely to benefit from integrating social technologies have these characteristics:
- A high percentage of knowledge workers.
- Heavy reliance on brand recognition or consumer perception
- A need to maintain a strong reputation to build credibility and consumer trust
- A digital distribution method for products or services
- An experiential (hotels) or inspirational product or service (sports products)
Particularly fit for the social overhaul are consumer goods companies, education, professional services, media, and software companies, which have a high number of knowledge workers and a high reliance on brand recognition.
The report concluded that social technology is not an IT issue and will depend on multiple factors for success, including an ability to create trust in the platforms, a critical mass or participation, and positive community cultures.
But I think the McKinsey report only hits the tip of the iceberg. The value calculations are based on an ability to improve or replace existing communication structures. But I think the most exciting aspects of the potential benefits are not found in the bottom line savings, but the unknown creativity that will be ignited when you turn these tools over to the hands of employees who will use them in ways we cannot even imagine!
I would love to hear about your experiences. Are you beginning to use social platforms internally at your company?
Study shows social media usage surging at large companies
Sep 2nd
The University of Massachusetts released its annual survey of social media usage at Fortune 500 companies and the trend continued to heat up, although these mega-companies continue to lag INC 500 companies, non-profits and universities in their application of social media to marketing efforts.
In the past year, these business giants have increased their adoption of blogging by 5%, their use of Twitter for corporate communications by 11% and their use of Facebook pages by 8%.
The 139 corporations with blogs come from 54 of the 71 industries represented in the F500. The industries that blog the most are Telecommunications, Banking, Specialty Retail, and Utilities. The 17 industries with no companies blogging include Forest and Paper Products, Railroads, Tobacco, Toys/Sporting Goods, Real Estate, Building Materials/Glass, Trucking and Waste Management.
66% of the F500 are now on Facebook, an 8% increase since last year. Eight of the top 10 companies (Exxon and Berkshire Hathaway do not).
The use of Twitter surged by 11% in 2012. 73% of the F500 have active corporate Twitter accounts with a tweet in the past thirty days.
Last year, 31% of the F500 had neither a Twitter account nor a Facebook presence. This year that number has dropped to 23%.
For the first time, the university looked at YouTube and Pinterest. 62% of the F500 had YouTube accounts and 11 companies {2%) had Pinterest accounts. Companies with Pinterest accounts: General Electric, Lowe’s, Starbucks, Nordstrom, Whole Foods, Bed Bath & Beyond, Dollar Tree, Dillard’s, American Family Insurance Group, Eastman Kodak, and Live Nation.
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While we’re on the topic of data, I wanted to remind you that time is running out to purchase the discounted package of the new research from The Social Habit. This affordable, cutting edge research will uncover topics such as …
- How Facebook, Twitter and other social networks impact buying decisions
- Customer Service expectations and preferred channels in social media
- How social media affects other media consumption
- What people pin on Pinterest–and why
- What kinds of content people expect from brands and companies
- Social media behaviors and expectations associated with food brands, restaurants, financial services companies and more
Friday September 7 will be the end of early bird pricing … it’s $297 until then, then it goes up to $347.
There is a package for every company budget. Find a package for your business here.
Social Media ROI — Not just for the big companies
Aug 2nd
I don’t think I’ve ever given a speech, conducted a workshop, or taught a class where the “social media and ROI” question has not come up.
So it was not entirely surprising when many of the suggestions to the Social Habit Research Project focused on measuring the value and relevance of social media marketing. Last week, you’ll recall Edison Research announced a major initiative to distill the statistical truth behind social media trends and announced an invitation for anybody to submit a question to a national research project.
The three winners were announced yesterday by Edison and “measurement” was a distinct theme.
Rhonda Hurwitz‘s winning entry is a great example of the need that businesses of every size have to explore this topic. Rhonda has been a long-time {grow} community member and is an independent consultant helping companies leverage inbound marketing principles. Her question was,
For me, it always comes down to figuring out how to connect social media usage or activity to revenue. I would ask “have you ever bought a product or service due to a social media interaction” … “have you ever recommended a product or service to others via social media?”
For Rhonda, the standard “guru” answers just aren’t good enough any more. “One social media thought leader says that when someone questions social media ROI, a unicorn dies,” she said. “Another says, ‘what’s the ROI of your mother?’ Well, I love those quips, and I am a true believer … after all, the majority of my own business comes from social media … but in business, I need a better answer.”
“The perfect way to connect the dots doesn’t seem to exist yet … for the little guy, anyway,” she said. “But I keep looking. That’s why The Social Habit caught my eye. To me, the next stage in our profession has got to be finding a better way to use all the data we have at our disposal to prove value. In my world, that is revenue and topline sales growth.”
I think Rhonda’s views reflect a lot of our frustrations. I’ve expressed some pretty strong views on the topic of social media measurement and I am really psyched that through this study, we are going to have a lot more actionable results, statistically-valid data, and meaningful insight to work with.
Get your business on board NOW!
The best thing about this project is that companies of ANY SIZE can gain access to game-changing social media research and I hope you’ll jump on board, too. Becoming a Social Habit member provides access to exclusive quarterly research reports that include:
- A demographically weighted/balanced online survey of 3,000 US social media users, 12+
- Approximately 100 pages of proprietary information about the state of social media
- More than 50 easy-to-use, impactful charts and graphs
- Valid, statistically significant answers to the most pressing social media questions
- White paper summary, including actionable recommendations and insights for companies
You can get all of this for just $297. In the immortal words of John McEnroe, “Are you kidding me?” That is an incredible bargain that every business — any person — can afford. Find out more here!
There are other packages available that include exclusive events and consulting opportunities with myself, Tom Webster, Jason Falls and Jay Baer. Probably the most valuable and distinct offer from this new venture is the ability to leverage the powerful capabilities of Edison Research to create CUSTOM questions for your business — for under $2,000!
I hope you’ll help support this research and become involved in our movement to find social media truth. From time to time we’ll ask for your input and maybe next time your question will help make social media research history.
Disclosure: I am an adviser on The Social Habit Project.
Social Media, Conflicting Data, and the Search for Truth
Jul 24th
A few months ago, I hired an SEO company to do some work on behalf one of my clients. After just two months, there was an indeed a tick up in traffic to the site and the SEO company was using this data point to claim victory and justify a second phase of the program that would run my customer upwards of $10,000 a month.
I asked the SEO company, “How do you know that this was truly a result of your effort and not seasonality or normal variation in web traffic?”
“Well, you have to understand,” they said, “we have been doing this a long time and we have a feel for these things.”
“Did you use an appropriate statistical test to sift out variability? Did you compare this to historical data to see if there is a 95% probability that this result came from your work and not something else?”
They just looked at me with blank stares.
The lack of real data in this business is shocking.
This scenario is not uncommon. I am amazed at the shoddy state of research on the social web and what people are trying to pass off as “science.” Not a day goes by that I don’t see conflicting information about the value of Facebook “Likes,” the correlation between online conversations and buying behavior, whether blogging is going up or going down, and whether small businesses are adopting social media marketing or rejecting it, to name but a few.
Even the most “trusted” sources are taking shortcuts with the data to rush consulting services to market. One recent “research report” drew a conclusion from a 15% positive response rate from their sample population. If you looked at the numbers, that meant they were basing their new claim on the opinion of TWO PEOPLE! And yet this new insight was tweeted and reported and posted as fact thousands of times.
This is irresponsible. We are building our social media plans on a foundation of quicksand.
No place to turn
I realize that in our time-crunched, info-overloaded state, perpetually-stressed state of being, we need shortcuts and trusted sources and we don’t have the time to even question whether something we are reading is accurate or not.
But if you are trying to run a business, you cannot take shortcuts by taking a guess on data. Data is the heart of marketing, the soul of strategy.
It was time to stand up and do something about it. I’m part of a new project called The Social Habit and I’ve teamed up with three other folks who are also fed up with the state of data crap on the web: Tom Webster, Jason Falls and Jay Baer.
Here is what we are going to do: Change the game of social media research. We are bringing you real, actionable data backed by Edison Research, the company trusted by NBC, ABC, CBS, CNN, FOX and the Associated Press to be the sole providers for U.S. Election Exit Polling, and the authors of some of the most widely cited media research in the world.
In other words, they kick data ass.
Although The Social Habit has already put out its first free social media research, we are officially kicking off our website and new service offerings today.
This is a solution for us all
Whether you are a small business with no budget, an agency looking for a keen competitive edge, or a company sorting out the true value of its social media efforts, The Social Habit has something for you:
Free stuff. That’s right. free research! We will publish regular reports free for all to use, share, and enjoy. We are taking aim at the data hucksters and infusing data-backed conclusions and reasoned interpretation into the field of social media science.
Affordable research packages. By leveraging an experienced, highly-trained staff of Edison field researchers, we can conduct the type of quality research for you that used to be within the reach of only the largest companies and agencies. This valuable research can serve as a base for decision support for any organization seeking to optimize their social media efforts.
Custom questions. A truly extraordinary opportunity to tap into one of the world’s best research teams to solve problems, capture valuable brand insight, and discover powerful consumer attitudes and behaviors that translate into competitive advantage. This exclusive research will also provide brands and agencies with enormously valuable insights on where social media is going, and what they need to do to capitalize on both present and future trends. Examples of research topics would include:
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Usage of various platforms and how users interact with your brand.
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Interactions between brands and social influencers
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eCommerce and social shopping
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Mobile trends and usage patterns
- Correlations between specific social media behaviors and awareness, trial, purchase intent and brand advocacy
- Inputs for practical ROI calculations
You can be involved!
Now here’s the fun part. You can be part of our next research report. If you had one question to ask about social media that you could have answered in a national research program, what would it be? All you have to do is click here to become part of Social Habit Research
It’s going to be fun to watch this grow and evolve, but most of all, it will be refreshing to have a conversation about social media based on FACTS. I hope you’ll let me know if The Social Habit can help your business find the truth about your social media marketing efforts and your customers.
Illustration courtesy BigStock Photo
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