See this chart?
This is the work of some brilliant people trying to tackle a big business question: does social marketing really work? And its corollaries: if it does, how does it work, how can I measure it, and how much time/talent/treasure should I spend on it?
Jeremiah Owyang, a good friend of mine who is now at Altimeter Group, and John Lovett, a former Forrester analyst who now co-owns Web Analytics Demystified, have come up with some business objectives to measure for:
· Dialog: involves starting a conversation and offering your audience something to talk about while allowing that conversation to take on a life of its own
· Advocacy: activation of evangelism, word of mouth, and the spread of information through social technologies
· Supporting: customers may self support each other, or companies may directly assist them using social technologies.
· Innovation: The business objective of innovation is an extraordinary byproduct of engaging in social marketing activity.
Jeremiah says his framework is only a common denominator, and if you’re already measuring converted leads, or actual sales that’s obviously best. However, the percentage of companies that can or do measure converted leads or actual sales is still small, smaller still in the world of startups and small businesses.
I would say more businesses could probably measure customer satisfaction and customer retention, because social media is now used so often for customer support and service. And if you know how much it costs you to get a customer, then you know how much it brings to the bottom line to keep one. right?.
The problem I have is that most of the small businesses I deal with don’t know how much it costs to get a customer, and only measure their marketing with a single business objective: does this help me get customers? Most of them don’t even get to the next layer of analysis: does this customer this help me make money?
Those are the fundamental questions the 95% of businesses classified as "small" ask. The Kauffman Foundation, by the way, has research to prove that 95% of businesses ARE small. The other 5% are "brands" that pay the fees of analysts. Brands are concerned with engagement and advocacy and second order terms that have been manufactured by marketing departments. Few small businesses know what a brand is all about, and fewer still can claim to have developed one.
I know analysts have to do what they are paid to do, and that making money is understood as a given in the enterprise– but it isn't that way for smaller companies. I’m frustrated when I see Altimeter and Web Analytics Demystified help the brands that can afford to make a few mistakes with such deep thinking about measurement and results.We marketing consultants at startups and smaller companies know intuitively that it is better to be "out there," but out where? How many people do we need to do this? How much does it cost? What budget does it come from? How do we explain this to a CEO who doesn’t have an MBA and wouldn't know a brand from a bag of potato chips?
In a world of scarce resources, what else do we give up in our current marketing plans to do this? How quickly will it work for us?I try to answer these kinds of questions every day, often for businesses with marketing budgets of under $25,000 a year. Should THOSE businesses be developing a social media strategy? How many hours are there in the day of a man who owns a pool cleaning business?
Until we can answer more fundamental questions, marketing of any kind, especially for small business, will continue to be the first item cut in the next recession and social media marketers will be the first marketers to be let go. Engagement and advocacy are nice but not necessary; however sales are nice AND necessary.
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Brilliant post. Truly. I had the same reaction when I read the report. Great stuff if you're Enterprise (and in fairness to Altimeter, that's their market), but the success metric denominator must be waaaaay less daunting for small and medium sized businesses. The problem is, there's no shortcut. There's no Nielsen or Arbitron or other bogus metric that we all agree to as a standard (well, maybe Facebook “likes”). But the reality is that your success measure depends on your business objective. Which makes IDing that metric just as important (if not more so) than the actual program and is implementation.
AMEN. What I don't see in the report is anything about Actionable Intelligence for the things businesses already need to do. You know, stuff like acquire customers, keep customers, understand what potential customers want from them (target market fit).
The fundamentals haven't change – so the question is, how does Social Media help me do the things I already need to do for my business?
That question drives my roadmap for justSignal… and I look forward to sharing our new features and tools as we roll them out in the coming months.
Brian
I tried to say that. I LOVE Jeremiah. But he doesn't write for the very
needy people I still try to help.
And there are a lot more of the folks you're trying to help.
Jay –
The only thing I'd add to what you and Francine have already said is that for the majority of Small Businesses the primary metric is survival. Old fashion incomes exceeding out-goes.
Once they get past that… it is all about acquisition. We've all seen startups go from “man I really need more customers” to “crap, now I have a bunch of customers… what do I do with them?”.
Acquire, Customer Loyalty and Delivering on the needs of your target market. 3 simple things for Small Businesses. Not a Social Media Strategy, but harnessing Social Media in the support of those 3 things.
Brian
I like what you're saying in this post, but I'm a bit conflicted. And here's why…
I like social media analytics…it's very important for businesses to use to find out what people are saying about them. I agree with Jeremiah's statement that when you're using social media analytics, you're going to need to find out the requirements/why you're measuring in order for it to be effective. I suppose it's like having web analytics. What are you going to do with the data you have that shows how many people visited your website and what pages did that visitor view while he/she was on your site.
However, I also agree with you in saying that Jeremiah's report is probably more focused on larger companies and probably wouldn't be applicable to the small businesses who only care about revenue and what's the amount of money I'm going to make from selling X number of products today as a result of the campaign.
So how can I rectify this conflict? I wrote a blog post today where I said that I think Jeremiah's steps on creating a standard is great and that it is important to tie your business objectives with what you're analyzing and I think that's spot on…not because I'm a fan of Jeremiah (because I am), but it makes sense and I think that the POINTS being made are something marketers should hear/read.
With respect to small businesses that you speak & work with…how can they leverage social media analytic tools like Radian6, ScoutLabs, etc effectively then besides what Jeremiah has said in his report? I think that all companies, large AND small should be employing some sort of web marketing strategy, whether it's email marketing, online advertising or social media. If social media, then they should have a way to measure the success of their campaigns, no? Whether that's through Google Alerts, real-time tools like Collecta, or Twitter Search or through more established software – isn't it valuable to them?
Your post misses the point entirely. What Jeremiah and John have tried to do is deliver a framework to help businesses understand how to apply listening data. Naturally the framework starts with business requirements and for each identifies the appropriate metrics. Surely SMBs can use the same approach. You make it sound like every SMB is just happy surviving and that this doesn't apply to them. Well, to those smbs that are just focused on survival i suspect social media is way down on the list and frankly they probably do more important things with their time than scour the blogsphere for posts by self proclaimed gurus.
The tools listed in the report are definitely big budget items, however, the framework itself is still applicable for startup/smb. Google Analytic is free and extremely powerful to to track SM if set up correctly. E.g. use URL shortener to hide your GA campaign tracking codes for every twitter/FB/Linkedin driving traffic to your site. Set up goal on your landing site to segment SM conversion. Look at how creative @avinashkaushik is using GA to track multi-channel marketing. http://www.youtube.com/watch?v=BmO8NHeJlFQ Then look at @andybeal offering up free SM tracking tools. http://www.marketingpilgrim.com/2010/04/free-so… His commercial Trackur is not too expensive either. :)
Really? I don't write for the 'needy'? Actually, there's a very important viewpoint that hasn't been taken into account.
If a startup is trying to reach enterprises to sell their wares, then I'm actually teaching startups how to think like enterprise companies.
If you plan to sell to enterprise companies your social media services, technology, or solutions, I've just laid out a complete framework for you to measure your efforts in the way they think.
Startups and small companies should align to this framework –even if you can't afford the big tools, it's a matter of process.
BTW: Both Altimeter and Web Analytics Demystified are small businesses :)
Couldn't agree more and just launched a company to address this problem.
Thanks, all, for your thoughts. I was not in any way trying to denigrate Altimeter or Web Anakytics Demystified, but more to ask how to translate this to less sophisticated audiences. I deal with those audiences every day, and I am the inter preter of sophisticated strategies to people with aspirations and no money for either tools or people.
Oh I agree with that 100%. The process and method scales up and down.
But as Hardaway mentioned in the post, it's tough to get small biz to
focus on process, when they're focused on keeping the doors open.
That's why I'm a mid-market guy. I find it provides best I both
worlds. Process adoption without enterprise scalability issues.
Thanks, all, for your thoughts. I was not in any way trying to denigrate Altimeter or Web Anakytics Demystified, but more to ask how to translate this to less sophisticated audiences. I deal with those audiences every day, and I am the inter preter of sophisticated strategies to people with aspirations and no money for either tools or people.
Oh I agree with that 100%. The process and method scales up and down. rnBut as Hardaway mentioned in the post, it’s tough to get small biz to rnfocus on process, when they’re focused on keeping the doors open.rnrnThat’s why I’m a mid-market guy. I find it provides best I both rnworlds. Process adoption without enterprise scalability issues.
The beauty of the “Web” era is how much it levels the playing field for SMB's to have access to technology/resources/strategies that were once well beyond reach. This goes for standards as well. Very few small businesses know what ITIL is yet they can leverage ITIL ( as implemented by service providers, SaaS, PaaS, et al) to make their businesses more successful.
What Jeremiah Owyang and John Lovett are doing here is setting a process in motion to create a standard. From there, bright entreprenuers will figure out a way to product-ize these standards. So, what may seem like rareified air enterprise speak can and will find it's way into the life of the SMB market.
Oh we're still friends Francine! We're not offended at all, but so glad you extended the conversation!
Ah, that's the most helpful point yet. For example, Flowtown is now aimed at
small business email marketing. Perhaps eventually the can add web
analytics.
This is a great conversation, because it points out another
opportunity/niche/need that can be filled. And I learned a lot, which is
always why to put one's self out there:-)
The beauty of the “Web” era is how much it levels the playing field for SMB’s to have access to technology/resources/strategies that were once well beyond reach. This goes for standards as well. Very few small businesses know what ITIL is yet they can leverage ITIL ( as implemented by service providers, SaaS, PaaS, et al) to make their businesses more successful.rnrnWhat Jeremiah Owyang and John Lovett are doing here is setting a process in motion to create a standard. From there, bright entreprenuers will figure out a way to product-ize these standards. So, what may seem like rareified air enterprise speak can and will find it’s way into the life of the SMB market.
Oh we’re still friends Francine! We’re not offended at all, but so glad you extended the conversation!
Ah, that’s the most helpful point yet. For example, Flowtown is now aimed atrnsmall business email marketing. Perhaps eventually the can add webrnanalytics.
This is a great conversation, because it points out anotherrnopportunity/niche/need that can be filled. And I learned a lot, which isrnalways why to put one’s self out there:-)
Learn from experts how to start or grow your business, even in this economy. Come to AZEC10 (http://www.azec10.com).
rnrn
I’d like to remind you that we have significant discounts for early registration at http://azec10.eventbrite.com
rnrn
AZEC10 is the premier Arizona conference directly geared to entrepreneurs, and people come from everywhere (even Canada) to attend.This year’s speakers include industry analyst and wen-strategist Jeremiah Owyang (@jowyang); Bay Area VC Dave McClure (@davemcclure), Flowtown co-founder Ethan Bloch (@ebloch), Infustionsoft founder Clate Mask (@infusionsoft), and entrepreneurial photographer Kris Krug (@kk).
rnrn
This is a personal invitation to you, to join me.
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rn
Learn from experts how to start or grow your business, even in this economy. Come to AZEC10 (http://www.azec10.com).
rnrn
I’d like to remind you that we have significant discounts for early registration at http://azec10.eventbrite.com
rnrn
AZEC10 is the premier Arizona conference directly geared to entrepreneurs, and people come from everywhere (even Canada) to attend.This year’s speakers include industry analyst and wen-strategist Jeremiah Owyang (@jowyang); Bay Area VC Dave McClure (@davemcclure), Flowtown co-founder Ethan Bloch (@ebloch), Infustionsoft founder Clate Mask (@infusionsoft), and entrepreneurial photographer Kris Krug (@kk).
rnrn
This is a personal invitation to you, to join me.
This email was sent to
You can instantly unsubscribe from these emails by clicking the link below:
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rn
Learn from experts how to start or grow your business, even in this economy. Come to AZEC10 (http://www.azec10.com).
rnrn
I’d like to remind you that we have significant discounts for early registration at http://azec10.eventbrite.com
rnrn
AZEC10 is the premier Arizona conference directly geared to entrepreneurs, and people come from everywhere (even Canada) to attend.This year’s speakers include industry analyst and wen-strategist Jeremiah Owyang (@jowyang); Bay Area VC Dave McClure (@davemcclure), Flowtown co-founder Ethan Bloch (@ebloch), Infustionsoft founder Clate Mask (@infusionsoft), and entrepreneurial photographer Kris Krug (@kk).
rnrn
This is a personal invitation to you, to join me.
This email was sent to
You can instantly unsubscribe from these emails by clicking the link below:
http://unsubscribe.flowtown.com/contacts/ce92f75d8c314cdcbf1320b334c1f9e934cabe48/unsubscribe
rn
Here’s my personal invitation to attend AZEC10 (http://www.azec10.com), the premier conference in Arizona to help entrepreneurs start and grow businesses. Here, VCs and entrepreneurs and resources meet and learn from each other.
rnrn
This year’s cast of characters includes Bay Area VC Dave McClure (@davemcclure), web strategist and industry analyst Jeremiah Owyang (@jowyang), Infusionsoft founder Clate Mask (@infusionsoft), legendary entrepreneur/photographer Kris Krug (@kk) and a host of Arizona companies and resources,
rnrn
Early Bird Registration is available at http://azec10.eventbrite.com, and I hope to see you there!
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rn
Here’s my personal invitation to attend AZEC10 (http://www.azec10.com), the premier conference in Arizona to help entrepreneurs start and grow businesses. Here, VCs and entrepreneurs and resources meet and learn from each other.
rnrn
This year’s cast of characters includes Bay Area VC Dave McClure (@davemcclure), web strategist and industry analyst Jeremiah Owyang (@jowyang), Infusionsoft founder Clate Mask (@infusionsoft), legendary entrepreneur/photographer Kris Krug (@kk) and a host of Arizona companies and resources,
rnrn
Early Bird Registration is available at http://azec10.eventbrite.com, and I hope to see you there!
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The post is so very true. I agree that social media analytics has huge potential and have written similar posts for potential of social media analytics in Asia Pacific market. Here are some more insights to the same topic goo.gl/lkIb