Social media has disrupted traditional marketing, advertising and even business models. In fact, tradiÂtional marketing is dead!
Internet expert Clo Willaerts offers us convincing practical answers to all these questions. Using her Conversity model and a number of inspiring case studies, she explains how conversations can be observed, influenced and transformed into conversions, resulting in the kind of return on investment everybody likes: lower costs and higher revenue.
www.lannoocampus.com 9 789020 995 7 2 5
Clo Willaerts
Ordinary people, millions of them, are using social media every day to solve their problems: coping with information overload, finding a new job or even a new boyfriend. Just as importantly, they collect information and opinions before deciding what to spend their money on. The people you used to know as your targeted audience, your consumers or even your prospects are now using Facebook, Twitter, blogs and YouTube to start and join millions of conversations, which can be both valuable and trivial.
But how can businesses learn to listen into and monitor these conversations without getting a headache? How can they successfully build and maintain a presence which allows them to ‘fish where the fish are’? How can they align their business objectives with their social media efforts? And what should they actually do now that social media has irreversibly changed the way that companies do business and hire people?
The Conversity Model
The Conversity Model Making Money With Social Media
The Conversity Model Making Money With Social Media Clo Willaerts
The Conversity Model
The Conversity Model Making Money With Social Media Clo Willaerts
cover design and interior layout Pascal Van Hoorebeke Š Clo Willaerts, Uitgeverij Lannoo nv, Tielt, 2011
LannooCampus is part of the Lannoo Group.
LannooCa mpus Publishers
Erasme Ruelensvest 179 bus 101, B-3001 Leuven (Belgium) www.lannoocampus.com D/2011/45/158 ISBN 978 90 209 9572 5 Nur 802
All rights reserved. Apart from the exceptions specifically foreseen by law, no part of this publication may be copied, stored in a computerised file or publicly circulated, by means of printing, copying, microfilming or any other medium, without the express written permission of the publisher.
7 Introduction
1 Please stop confusing social media with social networks 12 Social Networks 24 Social Media 43 On-line Communities 51 Viral marketing
2 Social media in business 56 Why invest time, money and resources in social media? 64 Customer focus tactics 73 Digital body language
3 The conversity model 86 Observation 108 Conversation 148 Conversion 159 Innovation
Introduction Most great projects start when someone either gets very annoyed or very excited about something. In my case, it was a little bit of both. From where I’m sitting, most of the business books and PowerPoint decks talk about how enormous the audience of social media has become, how hiring a Conversation Manager or Social Media Czar will show the world how ‘ready’ your company is for the next marketing age, and most of all: how you can only be the cool guy in class if you are the mayor of your home office, a member of the Twitter Elite, and have launched a ‘viral Facebook campaign’ that got you at least 10,000 friends. That is annoying. And so is this: social networks, social media, on-line communities and viral marketing are more often confused with each other than not. That is why in Part 1 of my book, I start with a number of definitions and a short overview of relevant social networks and social media for Belgium and the Netherlands. On the other hand, we do live in interesting times. Thanks to social media, we can hear people think aloud, and not only when they have just bought a certain product (and are vocal about being a happy or an unhappy customer). You can also hear them when they ask for advice about which products or brands they should consider, long before the actual moment of purchase and they actually take into account their peers’ opinions much more than traditional advertising. Or as McKinsey put it, we are being confronted with ‘the explosion of product choices and digital channels, coupled with the emergence of an increasingly discerning, well-informed consumer.’ This is what the second part of my book is about. The third part is all about what I have called ‘The Conversity Model’. This model consists of four layers: Observation, Conversation, Conversion and Innovation. All four help you to build meaningful interactions that allow you to reach your business objectives. Observation is, obviously, all about collecting marketing insights about who’s who in your market, where they hang out and what makes them tick.
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Conversations are meaningless without these insights. I will be using a lot of examples of how meaningful conversations can lead to Conversion. And last but not least, for those who think that social media is more of a cost centre than a revenue stream, I will show that – if done correctly – Innovation is the true return on investment for your social media efforts. Finally, I would like to thank a few people for nudging me into the writing of this book. Charlene Li, for making me see how running a business is defined by how you interact and engage with your employees, customers, and partners; Seth Godin, for taking the time to convince me that a book is the best way to get into somebody’s head; Gil Plaquet, for making me realise why authors always, always thank the people who put up with them while they are fighting writer’s block, doubts, delays and panic attacks; the readers of my blogs bnox.be and conversity.be, for listening to me think aloud about The Conversity Model and occasionally reminding me of Wittgenstein’s maxim: ‘Whereof one cannot speak, thereof one must be silent’; my boss, Hans Cools, for giving me the space and the confidence to write; and the publishers LannooCampus, for kick-starting this book with a tweet.
Clo Willaerts Diegem, Belgium, 1 oktober 2010
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Links for this chapter Charlene Li: Leadership doesn’t happen in a vacuum http://www.bnox.be/2009/12/charlene-li-leadership-doesnt- happen-in.html Seth Godin: ‘Yes. Why bother writing a book at all?’ http://www.bnox.be/2010/04/seth-godin-yes-why-botherwriting-book.html Ask Seth Godin 04/01/10 04:45AM @ ustream.tv http://www.ustream.tv/recorded/5873821 Blog posts labeled with ‘conversity’ http://www.bnox.be/search/label/conversity Conversity blog http://www.conversity.be/blog/ Tweet van Lannoo’s @johndewever on August 4, 2010 http://twitter.com/johndewever/status/20307636030
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part 2 Social media in business
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1 Why invest time, money and resources in social media? The non-stop festival of human interaction It is no coincidence that the baseline for the 1999 Cluetrain Manifesto is ‘The End of Business as Usual’. Today’s internet is a non-stop festival of human interaction, or, as they put it in Cluetrain: ‘a global set of conversations – people talking together, in their own voices, about what they care about. The passion of the web is remaking every social structure it meets, including govern ment, education, entertainment and, yes, business.’ Not every thesis from ‘The Cluetrain Manifesto’ has yet been proven, not even now, over ten years after it was written. Its main premise, how ever, has already been proven a hundred times over, and is now more valid than ever: namely, that the internet provided a new and unique forum for communication that would ultimately shift the nature of business communication and marketing. It is true that the majority of on-line marketing still refers to people (the intended buyers) as ‘users’ or ‘consumers’, or reduces them to eyeballs. Dynamics in the marketplace are still described as if it were a puppet circus, with bulls and bears, invisible hands, and seats to be filled. However, there is a silent revolution taking place, led by companies which reach out and ‘join the conversation’, building on core values like trust, consistency and reputation, instead of relying on media budgets and advertising reach. Why should companies listen in to these global conversations? Why should they drink from a fire-hose of status updates, blog posts and
Foursquare check-ins? Because however ‘trivial’ these communications may seem, there is some real value in them. For the first time in history, we are able to actually trace and hear what people think and do without being physically present. And from a business perspective, here is the really interesting part: sometimes they are thinking aloud about their buying decisions. Someone once said: ‘Status updates are the windows to your soul’. In their book, ‘The New Handshake’, authors Joan C. Curtis and Barbara Giamanco write: ‘Facebook allows you to tell your friends what you are doing each day or what you are thinking about that day. [...] These updates enable you to touch base with people daily. Imagine for a moment what this tool might mean to sales professionals. [...] When they see one another face-to-face or talk on the telephone, they might ask, “How’s your mom?” or ”Did you get your kids off to camp?” Or you can send birthday greetings, together with a special offer “just for her”. You can contact someone if you notice they have just changed jobs, or seem unhappy at their current one. The trick is not to appear to be a salesman trying to push your pro duct, but to become a real person to them, so that you can convince them that your product or service can help them to solve their problems and face their challenges.’ One of the things I will be focusing on in the following of chapters is how businesses can tap into these conversations with a single goal: to be(come) a key influence in the consumers’ buying decision cycle.
Why digital? I have been working in ‘digital’ for so long that I no longer think that we should call it ‘new media’. But if you ask me why companies should invest time, energy and resources in digital media, here are a few good reasons: 1 I remember a time when ‘digital’ meant ‘OK, so now we need someone to make some banners based on this tv ad.’ Today, digital is not just an add-on or an afterthought, but a fundamental part of the overall marketing strategy. st 2 Nevermind ‘Mad Men’: 21 century marketing energy and creativity focus on engagement, relevance and results that can be measured. Digital media provide more data and metrics than any advertiser could ever wish for.
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At a time when media usages and audiences are fragmented, digital offers a consistent way to keep in touch with customers. Newsletters, blogging or constantly tweaking your Google Ads campaign are just a few ways to keep communication channels open with your target group. If we focus on efforts in social media, there are, in my view, two major reasons to invest time, resources and money: the fact that social media are now the place where people prefer spending their time on-line; and the fact that the time is right to turn ‘doing business’ back into a social process.
User volumes and engagement In March 2010, InSites Consulting published their excellent Social Media Study 2010, based on respondents in 14 countries worldwide. The numbers speak for themselves: 20% of the on-line population are already users of a social network website and intend to expand their memberships. 90% of the 2,884 respondents claim to know at least one social network website. On average, users know four social network websites, while non-users know two. 28% of the internet population are not active on any social network site, because they do not want others to see their personal information. On average, social network users log in twice a day. 72% of all participants are a member of at least one social network website. On average, users have two memberships. Of all the different social network websites, Facebook was the one named most frequently by the respondents. In January 2010, research firm Compete reported that 11.6% of all on-line time in the United States was spent on Facebook, against just 4.1% for Google. These figures prove that not only is web traffic moving toward the social media, but so too is ‘time spent on site’. If you were wondering where your site visitors have gone or why they now prefer spending their time on-line, look no further: they are not on your site because they are busy tending their virtual pigs on Facebook or retweeting @Mashable on Twitter. This type of behaviour is fairly new. What is not new, however, is the fact that business is fundamentally human. Until recently, most businesses had forgotten this.
Business is fundamentally human When I was little, my grandmother gave me a few francs and sent me to another farmer down the road to buy eggs and butter. I put my grandmother’s money into the same hands that had picked the eggs from underneath the chickens and had milked the cows. There is no need to be sentimental about it, but it is clear that this era has long gone by. Nowadays, if the eggs are not fresh and if the butter contains someone’s hair, there is no way that you can work your way up through the delivery chain of supermarket, retailer and industrial dairy. This is because most of what we now buy is produced by an industry, not by craftsmen. Factories do not have relationships with their clients, and have no desire or intention to connect with them. This means that the whole transaction process has changed. A price used to be what you paid for something (or, in my case: what your grandmother gave you). The value rested (and still rests) in what you get in return for your money. Nowadays, the price is set by the sellers, and usually serves just the sellers’ interests. Consequently, this goes against the buyers’ interests: people usually want to get the most and pay the least for their choices. However, this also makes the selling of the proverbial eggs and butter a lot harder for the supermarket, since they have to use advertising and other forms of marketing to convince potential buyers to purchase this particular brand of eggs and butter from them (and not from one of the many other supermarkets). I believe that we are now entering a new era. People still buy eggs and butter, but they want to know who they can talk to when they have something to say about the quality or the pricing of these products. They no longer wish to walk through the fields and talk to an old farmer, but they do want to be heard. And they are using their own audience of Facebook friends, blog subscribers or Twitter followers to amplify their message. Until someone in the factory or the supermarket eventually stops to listen. Social media are therefore a logical extension of what people have been doing for centuries. The technology and the medium have changed, but the same driving need to connect, learn, express, share and interact has not.
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Social media marketing mistakes – lost in conversation Unfortunately, a lot of companies were so eager to jump on the Cluetrain that they fell off. If there is one common mistake that many companies make, it is the lack of a clear social media strategy. Most social media strategies seem as if they were generated with whatthefuckismysocialmediastrategy.com: Maximise buzz by driving word of mouth from relevant influencers. Encourage positive conversations to drive advocacy. Enhance customer experience by facilitating authentic conversations. Expose new and relevant communities to the brand by providing assets to encourage brand evangelism. In his book ‘Social Media 101’, Chris Brogan puts it this way: ‘Social media tools alone are not especially built to carve out more productive customers on their own. That still requires a strategy and surrounding marketing and products to help convert potential segments of the community into potential business customers.’ Bloomberg Business Week’s Mike Proulx mentions the five most common social media marketing mistakes in a June 2010 blog post. In short: Not (or barely) monitoring – or worse: not having clear defined kpis before you start. ‘Down-sourcing’ to interns or junior staff. Fast beats perfect – or as the saying goes: ‘Fast, good or cheap’. Pick two. Faking it. Having an ‘off ’ switch – or abusing social media just for campaign blasts. Social media are not free The following was once overheard at an advertising agency: ‘So this marketing managers tells me we should do a fanpage on Facebook. And he tells me not to ask for extra budget, because he knows that Facebook is free!’ Social media are, obviously, not free. Their development requires resources – real people spending real time and real money – for planning, creative insight and actual product management. These costs may be hidden costs, but they are costs nonetheless, and need to be calculated. Where does the budget for social media usually come from? Theoretically, there are two possibilities:
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From the marketing budget – the usual source nowadays. From an extra budget, as an incremental increase to the marketing budget. Where does this extra budget come from? Simple: it is either treated as a separate project budget, tied to a specific project or custom media programme. Or else it is moved from another budget. Once again, there are three theoretical possibilities: Agency fees Media budgets for mainstream media Advertising budgets This will obviously make a lot of people very nervous – which is why you will often find yourself having to build a business case for social media, including a calculation of the return on investment (roi) of your social media efforts. We will discuss all aspects of the roi of social media in the third and final part of this book. In the meantime, the following tool might help. DragonSearch has a ‘Social Networking Media roi Calculator’, based on the original model contained in the blog roi piece in Groundswell by Charlene Li and Josh Bernoff. This tool allows you to ‘fiddle’ with the numbers until they make sense. This does not mean that you can save a lot of out-of-pocket money by opting for social media instead of (for example) tv budgets. You get a long way with passion and plain hard work. During the BlogWell Chicago Conference in January 2009, Sharpie’s pr and Social Media Manager Susan Wassel presented a case study entitled ‘Social Media on a Shoestring: How Sharpie Engages and Grows Community in a Tight Economy’. In this presentation, which is available on Vimeo.com and Slideshare.net, Wassel explains how Sharpie ramped up its social media game plan on a shoestring budget, using passion and the power of social media as currency to meet brand objectives.
Any questions? Yes: What about b2b? I love speaking at conferences. Almost every time when there are questions from the audience, someone always asks: ‘What about b2b?’ Selling in a business-to-business environment is different from selling to consumers. One of the most striking differences, for example, is that the lead time is much longer. It is also true that b2b industries
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are generally not yet very active in social media – with the exception of advertising and marketing, and ‘tech’ industries such as software, it and telecommunications. In this latter category, companies like Microsoft, Oracle, Sun Microsystems, Cisco Systems and Intel are leading the way. Even so, some of the business principles are exactly the same for both a b2c and a b2b environment. In his book ‘Twitter Power 2.0’, Joel Comm writes: ‘Success on Twitter – in fact, commercial success anywhere! – is the result of a four-step process: Know me. Like me. Trust me. Pay me. People always prefer to do business with people they know, like and trust.’ In their book ‘The New Handshake’, authors Joan C. Curtis and Barbara Giamanco call this process ‘relationship selling’: ‘By relationship selling we mean creating a strong relationship before pushing products onto customers. Relationship selling characterizes business-to-business (b2b) selling.’ These relationships are between real people, not impersonal companies. At the end of the day, it is a person just like you who will make the final buying decision – not a structure or an organisation. Later in this second part of the book, I will zoom in on tactics to build up market insights, valuable conversations and trust. Many of these tactics also work for b2b. In the meanwhile, I recommend reading Netprospex’s ‘Fall 2010 social business report – a comprehensive look at the use of social media by business people across the us’.
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Recommended books David Weinberger, Rick Levine, Christopher Locke, Doc Searls, McKee Jake, The Cluetrain Manifesto: 10th Anniversary Edition, 2009. Joan C. Curtis, Barbara Giamanco, The New Handshake: Sales Meets Social Media, 2010. Chris Brogan, Social Media 101: Tactics and Tips to Develop Your Business Online, 2010. Joel Comm, Twitter Power 2.0: How to Dominate Your Market One Tweet at a Time, 2010. Links InSites Social Media Study 2010 in 14 countries worldwide: http://www.slideshare.net/stevenvanbelleghem/social-networksaround-the-world-2010 What the fuck is my social media strategy?: http://whatthefuckismysocialmediastrategy.com/ Top Five Social Media Marketing Mistakes by Mike Proulx: http://www.businessweek.com/managing/content/jun2010/ ca20100617_480316.htm Social Networking Media roi Calculator: http://www.dragonsearchmarketing.com/online-marketing-strategy/ social-media-marketing/social-networking-media-roi-calculator/ BlogWell Chicago Social Media Case Study: Sharpie, presented by Susan Wassel http://vimeo.com/9131715 http://www.slideshare.net/GasPedal/blogwell-chicago-social-mediacase-study-sharpie-presented-by-susan-wassel Fall 2010 Social Business Report – a comprehensive look at the use of social media by business people across the us’ by netprospex: http://netprospex.com/np/social
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