The anti-social organisation

Good article. Couldn’t agree more that the social interface needs to come from within silos. Biggest barrier is finding the relevant people within those silos, second biggest barrier is convincing the executive that some of their ‘real’ employees need to be at the social coal face, and hence need to have a certain amount of head hours per week set aside for this. Then these siloed staff should be connected with the data-driven team in real time to qualify and quantify the individual reaching out to the business.

Good social media is the antithesis of advertising.

As soon as marketing gets its hands on the latest platform, its decline is virtually assured.

And the cycle repeats.

I’m not convinced that I am much more than a straw man. My existential doubt might diminish if people talking about me and my peers produced empirical rather than anecdote. Nevertheless, in spite of my putative youth and inexperience, I agree that [social] media’s value cannot be simplistically established.

Short version.
Teach customer service people how to use the internet as well as the phone.
Social media are another source of data that may or may not be useful.

“The fact that CEOs are setting the bar for upfront metrics so much higher for one communications channel over another demonstrates a serious lack of understanding of social media at the senior executive and board level”

er, no. It demonstrates a serious concern for the massive reputational damage caused by the mere fact of social channels, which are just a big stick for disgruntled keyboard warriors to hit you with – as your own example proved, Jonathan

“when it is properly engaged, social media can be the richest data source on customer preferences and customer trends that has ever existed”

er, no. It may surprise you to learn that for many years,established methodologies have been employed by marketing depts to glean this information. The whinging and nattering served up through social channels is no substitute for proper market research

Surprising in mid 2014 to read this kind of breathless, juvenile “social changes everything” hype. It’s so 2010.

the social emperor has no clothes and has been outed as just another complaints channel. People don’t want to engage, or have dialogue. They just want to whinge, by and large.

Tell me which companies suffer by having little to no social presence.

NONE

@Neville; in 1987 one of the biggest earning bands in the world was ‘The Grateful Dead’; a bunch of acid-drenched musos from the sixties. Why were they so successful twenty years after their ‘peak’ despite no albums or singles on the charts? Because they inadvertently developed a database of fans willing to see them again and again. That model still holds. You’re using pretty limited preconceptions of the social interface.

You want a modern model? Kogan.
You want a company that’s suffered in the face of this? Harvey Norman.

I think it’s totally fair for CEO’s to ask “What’s the ROI on Social?” and if Marketers had first asked themselves this question, they’d be well prepared to answer it.

(Sidebar: Marketers have for too long asked for budgets without substantiating what the return on investment might be and how the value (from this investment) would be recognised.)

The idea that ROI for e-mail and telephone isn’t calculated is farcical (somewhere, they have done this calculation), likely why you’re currently sitting in the seat you are in and being paid to answer the calls and action customer requests and enquiries via e-mail.

I agree that many CEO’s are setting a higher bar for metrics as the general business pressure to justify any expenses is now more stringent from front line staff to CEO.

I think a key point omitted from many ROI conversations is the customer experience, retention and business process improvement that forms a part of the return (the other major challenge is having someone to monitor and implement the feedback, changes and process suggestions), often uncovered when customers are engaged directly.

I understand Jonathon has flagged this as a benefit. What Marketers need is to deliver a road-map to CEO’s of how the feedback will be disseminated, allocated and resolved in a responsive and effective manner.

The business case for Social (or any sort of customer interaction/feedback) is tied up in the question “What are you going to do with the data?”

If you’re not going to use it – Don’t bother collecting it.
As for ROI, prepare for the question, it’s only going to become more important.

@me you’ve done nothing but demonstrate your very limited understanding of business. Harvey Norman isn’t “suffering” because Kogan uses social media better. Harvey Norman is “suffering: because Kogan is a pure e-retailer with no minimal fixed overheads (stores or ATL marketing). Kogan uses PR and social because it’s cheap and fits with his brand (the disruptive upstart sticking it to the establishment-who’ve-been-ripping-you-off), his products and his target customer.(in fact, Kogan’s PR efforts have a lot more to do with his success than social)

If Gerry Harvey suddenly “does social” better, it won’t make a shred of difference to his bottom line. But we don’t need to cry for him – he’s worth 10x Ruslan Kogan.

@Neville. A product sold is a product sold. Gerry Harvey’s legacy wealth has nothing to do with it. Kogan still needs contract manufacturing and assembly, warehousing, a distribution system and admin office space; all real-world business requirements. He has demonstrated that ATL is not as necessary if you have the correct social engagement. His example is admittedly extreme, but it still prevails. That Gerry tried and failed the online game is proof of what Jonathan writes; treat this facet with lip-service and keep falling behind. Every parenthetical aside in your statement just affirms this. The future is now, homeboy.

I was once in a role where we noticed that the younger demo was switching off the brand. We pretty much went to straight to the social channels and directly asked remaining young customers why. The response was instant and honest, and earned plaudits for even thinking to ask. Recommendations were implemented and the bottom line improved. Those couple of hours on Twitter and Facebook would have had a better ROI than any focus group research. Pity it’s so hard to measure.

The problem isn’t ROI, it’s the speed of response to social cues.

Taking in to account economic costs of production and opportunity costs of failure to adopt, as well as standard metrics on actual sales/conversions/actions, ROI is actually very simple to measure. I acknowledge that most marketers have absolutely no idea about econometrics, but that is easily fixed with a little training.

The biggest issue though is that ROI is a moving feast; timeliness of response impacts on conversion behaviours. The slower the company is in engaging audiences and responding to queries, the more it negatively impacts consumer trust. So Barouch is correct to note that there are serious issues with a corporate communications department having control of customer engagement without having the time to execute the task. ROI is dwindling for every moment that customers are not being served.

Telling senior management and CEOs that they need to stop asking about ROI is unnecessary and actually rather naive (although I am not sure if this is something Barouch wrote, or a sub-editor’s flourish). But demonstrating how ROI can be weakened by a poor social strategy, and how it can be boosted by organisation-wide implementation, is unarguable.

Damn this discussion is good. Really nice stuff Joanne and Chris. I think the point of Jonathan’s statement re: phone and email is that social is now (or will be very, very soon) another ‘point of entry’ element for any business. The ROI may not be measured by gains so much as measured by mitigation or prevention of loss. The same sort of loss your business might have experienced without phones fifty years ago, or without emails fifteen years ago.

If your business can’t harvest data and capitalise on real-time understanding of and response to exactly what the customer is ‘asking for/might not even know what they need’, and your opposition is doing exactly that, then you’re going to lose. I think I just said what the two of you (and Jonathan) are saying.

This goes way beyond marketing or corp comms. Extrapolating this in the absence of genuine case-studies (apologies for the Kogan sidebar), it seems to me that the interface will become the function of the majority of employees as those that enter the workforce bring mature (not nascent) social skills along with their silo competencies. And that little understood, but increasingly massive, haystack called data will be harvested with the right magnets to find the needles.

I think the ROI will be the sustenance of that old-fashioned thing called a business’ goodwill.

@me. Stop trying to confuse the discussion just because i’ve highlighted the flaw in your ‘argument’. You assert that Kogan’s success is due to his social media marketing. That is patently absurd. Kogan doesn’t carry the overhead of 300 stores, irrespective of how much admin office space he needs. This is the ‘real world’. He has demonstrated that if your target customer is utilitarian, brand agnostic or low budget, it makes sense to digitally market to them because you won’t have the enormous wastage of say, FTA TV. That Gerry Harvey ‘failed’ equally reflects the difficulty in making the move from traditional physical to online businesses – the same problem that has plagued Fairfax, Barnes and Noble etc etc. The major difference with Kogan is that he can be competed into extinction by a similar business. Why don’t you ask Wotif about the defensibility of online business models? They are all only a couple of months away from being replaced by the next hot start up. AltaVista, anyone?

Hi Joanne and me,

Lifetime value of the customer is a tough measure and one I think we’ve all inferred in different ways through our comments.

The challenge for executives, managers and staff with lifetime value is how they manage this alongside year on year profitability.

Personally I think it’s values driven to a large extent, it is possible to make more money now at the cost of longer term revenue retention – not doing this and making even more over the long term is also a choice. We have all heard stats about the cost of acquisition being 2,3,4,5 times compared with retention but how do we actually implement strategies for it?

Lifetime Value of Customers is anecdotal to some extent because unless you have the underpinning values that seek to continually address your customers needs, develop your product/service offering and retain them, you can’t demonstrate the difference, there is no graph for ‘what would have been’.

Social and Responsiveness are like a nice wine and cheese (they work best together), leave them alone for too long and they tend to sour. The social interaction is useful, in addition to Social media it is also important to engage socially (invite your top customers to dinner, learn about them, genuinely care, don’t always sell them) and they will assist in retaining themselves (wouldn’t you prefer they call you when there’s an issue rather than your competitor?).

ROI is a important business measure from stationary to social.
Lifetime Value of the Customer takes tenacity, passion and discipline.
Decide how the data will help you,
What you will do with it,
and if it’s worthwhile.

Be responsive, take steps to measure the ROI and use Social (if and where it adds value).

@sven or Neville. Kogan sells TVs and Gerry sells TVs. Look at the TV market at the moment. They can’t get any bigger, and the resolution is more than enough. 3D is a dud as will be curved screens. Margins have been slashed.

As TVs move from discretionary item to commodity item, retailers like Kogan have capitalised on this by putting out own-brand TVs. The cost-to-benefit ratio for ‘famous name’ brands doesn’t really make sense, so people are increasingly willing to buy a bit cheaper because (a) the product isn’t crap and (b) the social interface – including updates, service, delivery, etc – makes the whole experience worth it.

Gerry didn’t fail online because his e-commerce model was wrong, he failed because he didn’t know how to treat the online aspect holistically. Kogan does. It’s not just about a Paypal-friendly portal. It’s as much about his personality and how he projects it. And how he services it.

Yes, I agree Kogan will be subject to better competition as time moves on, nothing exists in stasis and the flux is getting ever more fluxy. But if he heeds what Jonathan, Joanne, Boogie and Chris are saying (and he probably already knows this), then maybe he will be able to keep ahead of the curve by using increasingly sophisticated real-time econo- and behavio-metrics, satisfying a widening customer base as he expands his brand into other categories.

As I have already admitted, this comparison is an extreme one. But if a siloed bricks and mortar business has a siloed bricks and mortar competitor, the principles put forward by Jonathan will still apply.

Your first response was to dismiss a very credible piece of work with your own disgruntled keyboard warriorship. At last count there were 13 comments to this article, with only three pieces of disgruntledness. You are your own self-fulflling prophecy.

@me, your rapid descent into total bullshit started at ‘holistically’ and ended at “you are your own self-fulfilling prophecy’

this kind of fluffy, fuzzy nonsense is why most marketing types can never make it into real business disciplines