Back in 2000, I. along with several others here in the Washington area, started a group called Wired for Business. It was one of those vibrant business technology groups that came about right around the millenium, one that had members enthusiastically discussing the future of business as we saw it happening. Our focus was primarily on BtoB and telecom.
By our second event, we had 200+ people attending, potnetial sponsors calling us showing us that they were willing to drop as much as $3000, and speakers with titles such a VP of Importance Division lined up. We rocked. We got a prestigious Board of Advisors and also top notch organizations involved.
Then the dot.bomb era struck in full force.
We struggled to get sponsors. Previous ones that spent $2000 or $3000 a few months earlier were no longer in business. VPs of Important Divisions could no longer travel. Some had been let go by their companies. And the attendee number was down around 75, an unenthusiastic crowd worried about their jobs…if they sitll had one.
At a board meeting in 2001, one of our key members was a guy named Bill. He was with a formerly “hot” company, one that would be a leading light. At this point, however, they’d been through five rounds of layoffs. Bill had surived. But he warily said something that struck me. In a conversation with a pontential client, he said the guy told him, “Forget about strategy, Bill. We’re only concerned about ROI.” In other words, strategy was dead.
Bill was laid off later that afternoon. A short time later, the company he worked for folded.
That whole scenario struck me then and has stayed with me since.
Forget about strategy. It’s now about ROI.
Yesterday I came upon C. B. Wittemore’s post where she interviewed social media stalwart Mack Collier. Reading it made me think back to my old friend Bill and the no to strategy, yes to ROI mindset of businesses during tough times. And it wasn’t that I disagreed with anything Mack said. He was spot on.
What hurt Bill’s company back then was the newness of their business models; their technologies and strategies from those technologies were very promising yet unproven. Just like social media is today. Meaning on a large scale.
Now, to be sure, there are difference between the social media of today and the BtoB technology of seven years ago. Back then it was mostly software, something that had to be purchases. Social media is often driven by consumer usage OUTSIDE of a company. But still I’ve got some pretty serious concerns.
First of all, let me say that I think we are in for a real deep and long recession, one that will be deeper and longer than most. That means more intense budget battles, more focus on what’s proven, more relying on inside marketing forces or those that have longer term relationships. For the most part, social media agencies and consultants have yet to estalish those relationships, shown long term ROI over several campaigns, and have earned an automatic place in the mindset of those who are writing and approving budget requests.
I cover some of this in Part 3 of my series “How Social Media Will Get Screwed”. Part 1 is here and Part 2 is here. In it I point out how most social media agenices are still subcontractors to traditional agencies when it comes to larger clients. If there are any cutbacks, it may be on our backs, with social media taking lesser of a role or being absorbed haphazardly by the traditional agencies. With midsize and smaller clients, those that may feel an even greater cash crunch, we may be on the outs as they try to bring their social media efforts in house.
Social media types, thus, may get burned in two directions. We could be one of the first cutbacks because we are unproven over the long term, and what we do may get highjacked by traditional agencies that become territorial and try to usurp what we do. Getting around that might be tough.
The last Q&A between C. B. and Mack was what got me going on this:
CB: Any other thoughts to share about the effectiveness of social media in forging stronger relations with customers.
Mack: It sounds cliche, but you really do have to care about people. I think a lot of companies right now are excited about social media, because they see it as a cheap (time is often the biggest commitment) way to reach their customers. IOW, they want to find out how they can monetize the interactions they have with customers via social media.
Here’s why this doesn’t work; because people aren’t using social media to be monetized by companies, they are using social media to connect with other people. We use social media to create and share information with each other. We become friends and share our thoughts and feelings. We connect as ‘real people’.
So if a company wants to utilize social media as an effective way to reach their customers, they have to shift their mindset and use the tools in the same ways, and for the same reasons, as their customers do. They have to use these tools as real people trying to connect with their customers (real people). If you approach social media as a new channel to ‘sell more stuff’, then your efforts will likely fail miserably.
But instead, if you use social media as a new channel to connect with your customers and create valuable content for them, to give them information that they can use, then you are giving them a reason to connect with you. You are creating value for them. And a byproduct of doing so, will be that these customers will help promote your efforts, which results in the online conversation about your company increasing, and becoming more positive.
Which ultimately, will probably help you ‘sell more stuff’. But that only happens when you enter into social media with the mindset of ‘what value will our efforts create for our customers?‘, and not ‘what value can we extract from this space?‘ It’s all about shifting your mindset to using social media as a way to create value for your customers. If you can do that, you win!
The italics are from the interview, the words in bold were done by me.
Companies – escpecially during a recession – are going to look for “cheap ways” to monetize their customers and they see social media as a means to do this. This, as Mack points out, will ultimately fail because that’s not what social media is about. Then I go back to the Forrester study that showed 15 of 16 community building efforts on online network faltering because they were too company centric and not enough community member centric. And that was before we knew we were really in a recession.
Now we are in one and the executive suites aren’t going to be interested in nice sounding, soft, feel good strategies that we espouse. They want results NOW, dammit. This, again, may be shortsighted, but it the likely hand we will be dealt with. Companies, in hard times, become almost selfish in their outlook. Creating value, oddly, becomes subserviant to monetizing NOW.
In the comments section of C. B.’s post I mentioneed in a much shorter version what I’ve written above, to which C. B. responded:
I’m intrigued with your observation about greater pressure to extract value/demonstrate ROI given a recession. As social media strategists, we need to demonstrate positive ROI – but don’t we also have the opportunity to broaden the definition of ROI? As Mack mentions, most companies consider social media a *cheap* way to reach customers. So, if the investment is low, and we are providing truly valuable content that meets the needs of our customers, we will hear about it from our customers. Which gives us a tangible return on that investment.
I partially disagree with some of this. Often, it’s not us who get to define what ROI is – it’s the client. We may try to position exactly what ROI is, but they may not accept it, especially if they’re looking at it through their monetizing eyes. And that’s if we manage to get an audience with decisionmakers.
And if they to continue to view social media as a “cheap” way to monetize customers and not listen to us orif if we essentially allow them to feel this way without challenging them, then we’ve lost the battle. It won’t work.
That’s because, like my old friend Bill, we offer strategy, while they’re often blindly hyper concerned with immediate ROI.
This says to me that we have to carefully work with clients and show them how social media offers a way to strengthen a company during an economic slowdown and all the more powerful to burst out of a recession when it ends. At that point, we let the client see the value in what we have to offer and so they can redefine the ROI that we believe in.
{ 0 comments… add one now }