Buzzgain » Enterprise

The 5 biggest challenges of social media and enterprise adoption

Mukund — Wed, 15 Jul 2009 13:39:59 +0000

Yesterday we tracked SAP TechEd08 using BuzzGain and had a very interesting set of discussions on twitter that were spawned. I mentioned clearly that social media is more than Twitter and the main reason I did not discuss the other metrics was due to the length of the post. Still, there are a series of questions that our metrics did bring up that raised new questions about enterprise adoption of social media. Here are the biggest challenges that I foree in any social media monitoring solution.1. Tracking the right people: It is about the people not keywords (stating the obvious). Most social media solutions track “keywords” which are not ideal. Why? There were about 15 other people in the SAP conference who did not talk about SAP TechED, SAP, or any other keyword you’d normally associate with the conference. The ideal solution would track key individuals (pre determined) who are the “market makers” and can be counted on to influence opinion regardless of their use of key words and phrases. We missed a few (MonkChips or James Governor for one) who is a very key analyst, he was tweeting, but not on either the hashtags or keywords. I am sure we missed several others.

2. The firewall issue: Our (unofficial) metrics track 4-7% of enterprise employees blog. In the Fortune 1000 itself, there are only ~70 companies with external blogs. The rest are behind firewalls. To give you a magnitude of that number, the F1000, employs 935,000 employees. so there are about 50,000 bloggers at the minimum and over 100,000 behind the firewall, which we will never be able to track. I think this is a low estimate BTW.

3. Tracking the wrong keywords: We already talked about this, but if you choose the wrong keywords or ones that are too broad, or too narrow, you get limited, narrow and inconsistent results. The better approach is to follow thought leaders or influencers in the space, but the current approaches (white-listed blogs or heavy traffic blogs) fall way short in identifying up and comers or selective influencers.

4. Perception (and reality) of the time-sink: I heard from 3 folks via email that their company considers their participation in social media (twitter, delicious, etc.) as a massive distraction. They get no credit or brownie points for them. So many shy away from sharing their copious notes taken on their laptop.

5. Broadband or lack of it during events: The major constitent theme I have heard from the last 10 conferences we have tracked is – the bandwidth is limited. So people tend to use their iPhone or blackberry more. Which a) is limiting and b) makes it a pain to share in a social way quickly.

I know we are working on (1) and (3). Jeremiah points out that you need a GPS rather than a dashboard for social media. I am not sure I can give a better analogy right now, but something about the GPS makes it insufficient in describing what’s needed. I cant place my finger on it, but if you can please help me out.

Cartoon credit. Geek and Poke.

What else do you think I a missing? thanks to Lee, Mike and Marilyn for ideas about this post.

Social Media has no financial ROI. Anyone that claims it does is lying

Mukund — Wed, 15 Jul 2009 13:24:08 +0000

Social Media ROI

Lets define ROI first as the simple return on the money or time invested in an activity. There are 2 kinds of returns – financial and non financial.

When they ask for financial returns they use certain metrics to track it, including:

Payback Period. The amount of time required for the benefits to pay back the cost of the project.

Net Present Value (NPV). The value of future benefits restated in terms of today’s money.

Internal Rate of Return (IRR). The benefits restated as an interest rate.

Non financial benefits include “intangibles”, “soft”, or “unquantifiable” benefits.

Leveraging social media to provide better customer service, get product feedback, etc. is great, but the financial impact of those is not easily measurable.

Why do we say that? Lets take just one example of using social media for customer service. Since social media for marketing is a big mess anyway.

1. Having customers help each other: For any large enterprise, less than 2% of customers actually use twitter, get Satisfaction or multiple other tools for customer service. The ideal scenario for a customer service organization is if customers help each other without the organization even being involved.

There are some implications for that unfortunately, especially if customers provide the wrong information or incorrect solutions. So if your customer service organization is going to monitor social media for support this is yet another channel which incurs costs for the organization.

2. Allowing customers to manage a Wiki for support. There are many situations when you realize your customers who use your product on a daily basis know more about it than your company does. Ideally they can form an extension of your “documentation” to leverage the wiki. Similar to the argument above though, the time and resources required do not go away because you have a wiki. A new channel for communicating now is opened, which brings with it, costs with no clear financial ROI.

3. Using social media to reduce escalations. Everytime an issue gets escalated the cost of the issue goes up dramatically. If you can provide a solution using social media to reduce escalations by proactively pushing out information to customers on potential issues, instead of reacting to the issues as they come though, your cost of customer service goes down. The problem with proactive outreach is one of reducing signal to noise ratio. What’s good for one customer scenario is not useful for most. If it were, then it would be documented anyway.

Does this mean you should not leverage social media for customer service? Absolutely not. Dont expect to show a financial ROI towards it that is justifiable to senior management, is the point we are making.

Image credit http://www.solutionmatrix.com/return-on-investment.html

Top 5 changes newspapers will adopt in 2009, and how to use it for your benefit

Mukund — Wed, 15 Jul 2009 12:59:23 +0000

Its no secret that newspapers and print publications are having a rough time adapting to social media and citizen journalism. Its fairly simple to see the equation to get better (but a whole lot difficult to implement) from a business standpoint. Thanks to market forces the revenues are lower and expenses are higher.

How does a newspaper get revenues higher? – diversify sources of it -besides advertising (print or online) and classifieds.

How do you cut costs? – remove print and reduce staff (journalists).

So what changes can we expect in 2009? Newspapers will:

1a. Partner with bloggers (experts) to create highly specific content for niche reader and layoff reporters / journalists. The bloggers themselves will be initially “paid” for with increased “readership” and a “platform to create their personal brand”. I expect it will be 2011 or 2012 before these bloggers they recruit will actually be paid for in cash.

1b. Create regional networks of citizen-reporters ( a-la About.com circa 1999) to source local content from local providers. This is a no brainer. The outsourcing of local content is already taking place to highly sub-regional or mini-metro self-employed or unemployed citizen reporters.

2. Abandon the print edition for subscribers and make print only for off-the-rack purchases (albeit more expensive). Print is on its way out. I expect more publications to abandon print (citing green credentials, high costs, etc). The ones that will print will take their “best of online content OR create a custom bind for racks – which will be distributed primarily to airlines, hotels, etc. for off rack purchases.

3. Remove wire service (AP, Business Wire). This also already happening in the “cut costs” bucket.

4. Use their “objective” nature to rate local providers and adopt the “Angie’s list” type model for recommending local services. This falls in the increase revenue bucket. Another example of such a service is Yelp (restaurant recommendations). I expect newspapers to start partnering with crowd sourcing content providers to generate hyperlocal “community of interest or location” type services.

Really understanding what services are required by “local” users that they are willing to pay for and provide those. “Pay per action” model will be a big beneficiary.

5. Be a provider of demographic data and detailed local information to marketers. Newspapers will be more willing to sell their treasure-trove of information about local readers and help marketers in their campaigns.

What do you think? Am I a missing something?

Image credit: J Fortune on Photobucket

How much to pay consultants for Social Media expertise?

Mukund — Wed, 15 Jul 2009 12:21:50 +0000

The 2nd most vexing topic after “How do I measure social media ROI” is “How much do I pay for social media?“.

Friend and social media consultant, Chris has started a new company. His website display’s their pricing. B L Ochman has had a similar practice for years, displaying her pricing upfront. Its a pretty open and upfront policy which I think is very different from the many consultants who will answer the question with a standard “It depends”. Regardless of whether you think the pricing is too high, or its just right, its a starting point.

I know many consultants are loathe to price by the hour, since it means you have to work “that many hours” regardless of if you are efficient or not. Also pricing by the hour opens you up to competitive pricing – because clients want to compare prices between service providers. This is the vexing problem for most. If a consultant is highly efficient, they get more work done in quicker time, they expect to charge more. But since differentiation is so difficult for most consultants in social media, they have to bid “competitively” – thereby reducing their “rates”.

I have contracted with 3 different agencies for Social Media services before and paid very different rates for their services.

Here’s the myth of social media consultant pricing:

You get what you pay for.

Not at all.

The reality is

You get what you set the objectives for.

If you are clear about what you need to get done, great! You’ll get exactly what you asked for. The objective could be to come up with a strategy, execute some campaign or just get your folks trained and ready. Any of these comes at a price. So how about some examples:

Granted these projects were all different, but to give you a quick sense of pricing:

1. Introduction of blogging hands on class: We did this in 2006 to 15 people at our company. Most knew about blogs, but were not sure how to go about getting started with blogging. The trainer was a social media practitioner and was a pretty good blogger in his own right. We paid $4800 for two days of training. This included a “get to know the team dinner (the previous night of the training). We also reimbursed expenses (airfare, 3 days of hotel and dinner). The objective was to get people comfortable with blogging and get them to actually start to post.

2. Blogger relations: This was included as a part of our PR agency’s monthly retainer. Our monthly retainer was $9600 and they added another $3500 per month for this project. The objective was to engage with the top 15 influencers in our space. This project included identification of the blogger, engaging with them and building a relationship between them and our product teams . We identified this to be a 3 month effort at the minimum.

3. SEO optimizing our blog content. One of our objectives for the blog was to provide content that would appear higher up in the organic search rankings. Now there are folks that wont call this social media, but our objectives were to drive traffic to our site by all means and our own blog was one of them. Our SEO consultant charged us $50 per post to a maximum of 20 posts per month or about $1000 per month. This was just for SEO and cleanup NOT writing the posts in the first place.

I’ll explore which of these gave us the biggest bang for the buck in a later post, but this should give you some ball park estimates.

What have you paid for social media consultants? Did you get what you paid for? What would you do better / differently?

Image credit: David DMuir

Freemium is dead. Long live Freemium

Mukund — Wed, 15 Jul 2009 12:14:14 +0000

Freemium

There are multiple types of Freemium models ranging from a free version of the product to a free trial period for your products. In metrics we track for Freemium products we talked about conversion ratios.

Given the recent downturn we noticed more companies abandoning their Freemium model.

1. Jott has ended its free version (officially Feb 2): “The free version of Jott is going to end on February 2, CEO John Pollard told me today. The terrible advertising market, he says, means every customer has to pay their own way from now on. Customers will need to pay $4/month to continue the service, the current price for a premium account. This includes users of the Jott iPhone application.”

2. Sprout has also given up on free version of their product. “We are focusing our product and sales on professional creative designers, agencies and publishers. Being a full software as a service model, we need to make sure we price the product at its true value.”

In a related discussion at Ycombinator there was a question if any startup is not charging users money and still making a profit? The intention was to see if you could monetize the user base in another way (which means via ads, or selling analytical data or charging some other person in the food chain.

In my opinion, the movement towards charging users versus providing free service is a good one for the startup economy. It increases barriers for the competition, requires you to have actual capabilities in the product instead of just putting 3 features together and calling them a beta version and finally makes the startup model sustainable.

We do offer a 2 week “free trial” to kick the tires of the product, but cannot sustain a free version of our product. Your thoughts?

Any other type of try before you buy model you’d suggest?

Image Credit.

The dumbest advice I have received from many social media experts

Mukund — Wed, 15 Jul 2009 11:34:23 +0000

“Be authentic. Be transparent. Be you.”

First, let me tell you something you know already. Most companies are way beautiful on the outside than on the inside.

Outside: Your website – fabulous. Your investors – blue chip. Your customers – love you.

On the inside - website: multiple bad links, daily duct tape and band aid. Investors – demanding daily (or hourly) updates on your leads, conversions and financial numbers. Customers – reporting bugs like they are going out of fashion.

So why is “Be authentic…” the most useless piece of advice?

Because no one wants to know the real company they are dealing with.

1. Prospects dont want to know that the “cancel anytime with no repercussions” policy will make your financial projections (and hence your ability to service them) go nuts.

2. Customers dont care that the bugs, if fixed, will still not solve the fundamental architecture issue your product has.

3. Investors wont hear you plead that if you hire that rock star developer; the rest of the team will a demand wage hike which will increase your burn rate.

To them its like a hot dog - Let me eat it, don’t tell me how its made.

What they are really trying to tell you is:

“Change your policies so you can be a better you. Then be authentic, transparent and honest”.

Until then just keep posting stuff that you’d rather be.

Unless most companies fundamentally make a cultural change to be more customer friendly, less focused only on the bottom line and more on lifetime value of a customer and their brand, they’d rather not be authentic.

Update: Read another post on this topic by Rachel Happe.