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Twitter: One step closer to a business model?

Published November 12, 2008 Strategy Leave a Comment
Tags: monetization, sustainability, twitter

Top story in today’s Section 2 from OnlineMediaDaily:

Twitter Eyes Charging Firms As Startup Valuations Drop

Yes, the darling application of the microblogging world comes one step closer to a real (e.g. sustainable) business model. Don’t get me wrong, I love Twitter; it’s been the jumping point for a lot of my recent work, including my posts at the Touchbase blog. However, the dependency on VC dollars is something that wouldn’t last, especially in this economy. In particular:

Twitter, the wildly popular microblogging service with no business model, may be forced to charge companies for access to its users, founder Evan Williams told Bloomberg News. Williams, who recently replaced Jack Dorsey as CEO, said he wanted to start weaning the company off venture capital, especially as the economic climate sours.

Adopting a sustainable model may become a priority for other start-up firms:

According to Michael Patrick, a partner at the law firm Fenwick & West, startup valuations have fallen at least 20% in the past year. Bloomberg noted that the fall in valuations comes at a time when many young Silicon Valley firms need to raise more capital just to survive.

The lessons here:

Sustainability is more than a good idea, it’s a business necessity.
Twitter established microblogging, but Yammer and Qikcom are perfecting the model for private networks.

When life gives you lemons… make orange juice?

Published November 6, 2008 Marketing Leave a Comment
Tags: message targeting

I found this sign in the grocery store this evening:

Whoa… lemons are perfect for orange juice?

What are you telling your customers?

ROI and Social Media

Published November 3, 2008 Strategy , Uncategorized 2 Comments
Tags: intangible measurement, ROI, social media

Name one of the most overused words in business today. If you said “Web 2.0,” you’re right, but there’s one even more insidious: ROI. Many have posted about it, but when asked “show me,” most remain silent. So is there any tangible return on investment, or is it as much or a mystery as our friend here.

When does ROI work for social media? The type of use must be easily measurable within a quantified framework — in plain English: use must correspond to numbers, such as views or sales. Take a promotion or sales presence, such as http://twitter.com/delloutlet. The manager of the account would be able to link site sales directly through user activity. A telesales center would be another good candidate for such financial measures.

So what about other forms of use?

Measurement is indirect and based on “human capital;” if you’re looking for a definition, check out the work by Drs Kaplan and Norton at The Palladium Group. Social media is based on engagement — a measure that doesn’t lend itself well to measurement for either the employee or the audience. Engagement is also asynchronous – activity doesn’t always immediately result in a sale or greater satisfaction. This difficulty isn’t limited to social media: public relations is another profession that isn’t well suited for ROI. I don’t believe engagement can be measured adequately (why: take a look at chaos or complexity theories).

My suggestion: create a new class of measurements called strategic return on activities (SROA). Following the work of Kaplan and Norton, activity of staff would be measured in terms of alignment to strategic goals of the organization. Following the work in Strategy Maps, social media would be folded under the appropriate internal, customer and financial perspectives. The greater an employee (e.g. Web or community manager) is prepared and motivated to perform the job, the strong the impact on the organization and it’s customers.

Now I’m interested in numbers as well. Unless social media can directly impact revenue or costs, it’s a financial liability. To counter this, activity would be quantified in terms of time (as a percent of salary plus overhead), along with any investment in information technology. This is measured against the internal and customer perspectives: is better intel going to product development, or are customers indicating a greater satisfaction with social resources. Most importantly, does this change over time and correspond to investment in social media operations?

Coming up next: what activities will yield the greatest results.

Twitter Spotlight: Engagement is Key

Published October 31, 2008 Strategy Leave a Comment
Tags: best practices, twitter, use

I was cruising around on Twitter earlier this week when I ran into the following account:

http://twitter.com/sqftqueens

As you look at this account, you’ll see a few things wrong:

Lack of URL or profile
URLs not tracked (Services, such as bit.ly, provide tracking to one extent or another)
limited by small number of followers
no personal engagement

This is for a New York real estate broker of some kind. For those of you not familiar with this market, it’s insane (perhaps not as much with the economic downturn) and anything to help differentiate yourself from the competition is critical.

How can this be fixed?

Complete your profile. Who am I dealing with? Do you have a Website I can find more listings on?
Use a URL tracker to find out what works (when to tweet, descriptions, et al)
Engage with users!!!

The lesson here is to leverage the platform to the greatest extent possible. Just because Twitter is free doesn’t mean you should disregard effective practices.

Associations and Social Media

Published October 23, 2008 Marketing , Operations , Strategy 2 Comments
Tags: alignment, associations, engagement, non-profits, social media

I’m attending an event at the ASAE Executive Education Center in DC today. The subject: “What Associations Must Know About Social Networking.” Themes for the seminar:

When to have resources open or closed

When to have hands on or off

When to integrate with other tech

Speakers:

Rob Miller, EVP of Avectra

Andy Steggles, Risk and Insurance Mgt Social Networking & Social Media Association

Theodore (Ted) LaBarra, Web Editor, Association of American Advertising Agencies

Maddie Grant, Blogger, Founder of Social Fish

Maddie Grant gave an overview of social media — there were some glazed eyes in the room, not having to do with her presentation tho (imagine if you just heard about Twitter for the first time). She mentions that socmed is a tool for engagement. Yes folks, it’s not tech for tech’s sake – Get started by defining goals. Grant gave many examples across the socmed spectrum: blogs (American Anthropological Association), NTEN (Twitter) and The Association Social Media Wiki. Integration with the Web site is driven by the platform (MOSS — sharepoint for you Luddites:P)

Ted LaBarra discussed the aaaa.org Web site — built on sharepoint and integrated with AMS (association management system). Future projects (now under development) include community blogs, wikis, video, book corner (ratings of books of interest) and networking/collaboration tools. Some internal resistance to Web 2.0 concepts — long standing groups within the organization. Closing a network was driven by antitrust concerns. Issues: who is blogging, what are they saying.

FS: However, what about the potential impact to membership and current monetization? While socmed proponents want to make it all open, should it be?

Andy Steggles established a line between a group and association. Associations are formal (by laws, dues) while groups are informal and are more nimble. He also defines engagement -

Traditional Metrics (Chapter participation, annual conferences, educational events, volunteering, members) – synchronous
Social Everything (Blogs, Wiki’s, eGroups) – asynchronous

What guides both sets of metrics? Member-to-member interactions. Social-related enagements are much more efficient. Give instance resource (by categories) a value on a 10-point scale. Member activity is assigned a value as well (blog author gets more points than a commenter)…. this can tie in to member rewards. Wikis are ranked by the number of characters added. All activity is dropped into a point bank — points are earned for MVM status = Most valuable members. Aside from this level of recognition, one could also offer renewal credits.

Andy indicates the importance of differentiating between members and non-members! Blogs should be public, but social media tools must plug into a site and be available to members. Members may also define access to content, ranging from private to public; adopting member moderation to this vertical is outstanding. Who can be engaged?

Speakers
Authors
Exhibitors
Chapter Leaders
Officers
Blog Authors
All members

Of particular note is Steggles comments about platform: select one that wil integrate with an AMS and is not tied to one in particular.

FS: Andy hits the association value proposition extremely well — although I disagree with an automated point system for a wiki (e.g. if someone adds content of great value, but not a lot of words, this is an exception to his approach).

How to promote social features to members (especially those who may not be tech-savvy)? Put it in terms that they can understand! Instead of Wiki, call it a glossary. Use collaboration in place of social media or Web 2.0. Make things easy for the user — not only in the labeling and description, but in what is rolled out and offered to members.

The subject of monetization came up — Andy Steggles gave a great example. The focus was on email advertising in listserve/forum traffic – $1K per day. The use was described as non-intrusive. Initial advertising content is focused on organizational products and services and evolved to sponsors. Another example offered by Steggles was putting organizational advertisements before each uploaded video.

Should facebook, linkedIn or another resource be the single social community? No! Steggles indicates that this is important to have in place as a placeholder for the community at your site. By bringing members to your site, you can avoid issues where the aforementioned are blocked by corporations. You can also define the engagement with your members.

Forrester and the social technographics came up — I’m glad that this is the center piece of my own recent product plan.

Powerpoint and survey provided after the seminar — very nice. This type of followup is often missed by presenters. (none that I’ve seen lately:-)

The Problem with Social Media

Published October 19, 2008 Operations , Strategy 2 Comments
Tags: measurement, ROI, social media, strategic flaws

Business use of social media is coming into fashion. Leaders like Dell, Zappos and Comcast have embraced the highly-social Web to drive value for their organizations and shareholders. Countless others now sport a blog, tweet, stream video and look to engage their customers. What’s wrong with this picture?

For most organizations, this activity is not tied to strategic goals and is not adequately measured in a meaningful way.

Proponents of social media proclaim things like:

Social media/networking offers high ROI & business value, individual or organization; traditional organizations can’t see it.

The value of good press and reputation helps, but shareholders want to know more. Let’s start with strategy – most organizations don’t try to connect activity to goals. I read an article in a leading legal marketing publication that proclaimed the value of social networking. Maybe the author should have checked if user behavior makes this a good move — and if pushing such a measure would actually connect users to an organization’s goals. Next, measurement. This is another important step people may forget, but what to measure is perhaps more important than the act itself.

Valeria Maltoni @ Conversation Agent makes a distinction between short and long-term measurement:

One is the micro measurement you use every day – how many community members, how many readers, how many visitors. This is akin to the strategy partially attached to Web sites. Web sites, newsletters, email copy are still important for conversion. Blogs and social media are important for conversation – there is also a viral component to them in addition to the community dynamic.

The longer term measurements are about engagement and impact on retention. These take up to two years. Is the company brand seen as relevant, for example? These are movements in awareness and they need to be tied back to the activities you have undertaken and the value of those activities to customers.

I even found an ROI calculator. On a side note, I like how this was put together, even if a usability headache.

So what’s the problem?

Most social activities lack focus. Organizations with a board of directors, shareholders or strategic management groups publish endless documents addressing important segments. Social activities must be mapped to these goals in order to maximize value for an organization.
ROI calculations – even the long term concepts mentioned above – need to be established after the critical jobs and activities are identified. Social media is based on intangible assets – skills, knowledge and values of employees. Defining jobs aligns activity to strategic goals.

Tom Davenport, in a recent post on HBR, directs his attention on the “2.0″ vapor:

And that was even before Web 2.0–a platform for everyone to share their ideas, opinions, favorite tunes, and relationship statuses with each other. It was all a lot of fun, but I occasionally wondered whether it was really good for economic productivity.

He’s right to the extent there’s a lot of clutter and fluff. As budgets shrink, executives will look for value in social media. The good news is there is a way to determine value, starting with strategic alignment.

Change Management: Law firms must drive value

Published October 7, 2008 Law , Shameless Plug , Strategy Leave a Comment
Tags: ACC Value Challenge, business, improved management, model

One disclaimer: This post addresses a project I’ve been working with; if you’re looking for impartiality, keep on going.

The meltdown in the markets have touched every segment of business. It used to be said that law firms can profit in any environment… there is after all, restructuring, litigation and a host of other issues that arise during difficult financial times. Conversations I’ve had with unnamed colleagues at biglaw firms indicate the ride is over.

As I worked on the ACC Value Challenge, it became clear that law firms must change their 25 hour day billing practices and focus on providing clients with value. During my time at Skadden, I had heard about client grumblings from senior partners. Perhaps it was the stories on Above the Law about foolish summer associates.

Now that the economy is tanking, several firms actually have to provide returns from their marketing and business development efforts. A host of legal marketers, several of whom garner my respect and admiration, focus on SEO, blogging and improved site development. Not to diminish these important tasks, there is a fantastic tool to help market your firm and differentiate yourself from competitors: provide value!

I had a conversation with Michael Roster (formerly of MoFo, Golden West Financial and Stanford University) concerning alignment of outside counsel with corporate needs. What a concept! As a managing partner or business manager, wouldn’t you look to cut overhead and recruiting costs and return better results for your clients? I spent a lot of time at various agencies; one of my key mentors, a former litigator, hammered into my head the importance of service. Perhaps profit-per-partner clouded their business judgement?

Future posts will cover how (imo) law firm’s can change their model, be profitable and market themselves based on value-driven reputation.

Interested in social media? Make sure you’re in alignment.

Published September 19, 2008 Strategy 2 Comments

Many organizations are seeking to deploy social apps; some might look to facilitate internal communications while others are interested in connecting with customers. An often missing component?

Alignment of technology to the needs of your community.

Many socal properties are able to align services to needs very well due to the fact they know how to listen. Active and passive listening techniques enable business managers to deliver products that their customers will use. Traditional organizations aren’t always so savvy; solutions are provided based on assumptions from staff members. Such a move is disasterous for several reasons:

In producing products that only a small subset of customers will use, the cost of generating this customer value is astronomic. This, in turn, puts pressure on other elements of an organization to accomodate the inefficient appropriation of resources.
Customers may realize you’re not listening. While this could push some to a competitor, it may impact your reputation in ways a press release cannot fix.

How can one avoid this situation? Measure. Think. Relate.

How to Not Use Twitter

Published August 26, 2008 Strategy 5 Comments
Tags: fail, The Guardian, twitter

I spend time on Twitter every day keeping track of the latest happenings and news. Once in a while, there is a tweet that makes me chuckle. When it provides a good lesson on social media use, I have to share.

Take a look at this post by Charles Arthur, Tech Editor of The Guardian. I had noticed some comments directed to a few people I know/follow on twitter (Richard @ Dell and Pistachio) and responded with my own $0.02. To the credit of most people, engagement with Amanda was very respectful. I chuckled at the tweets from that day, including Charles’ suggestion that Amanda go “have a wank.”

There four points that are worthy of mention:

First one is: ignore the trolls. And in social media, it’s helpful to tell others who the trolls are.

Second: for the benefit of Google and not-yet-informed readers, Amanda Chapel does not exist. “She” is a construct.

Third: I still don’t get the mindset of wilful trollers. To keep it up for years on end suggests to me a personality that I’d really not like to know: a bit lacking empathy, a la Blade Runner.

Fourth: social media makes it really hard to know anyone you haven’t met in the real world.

Now let’s rewind for a second and look at each of these points:

1. Ignore the trolls. Here, it’s important to define what is a troll.

From Wikipedia: “An Internet troll, or simply troll in Internet slang, is someone who posts controversial and irrelevant or off-topic messages in an online community, such as an online discussion forum or chat room, with the intention of provoking other users into an emotional response^[1] or to generally disrupt normal on-topic discussion.”

I’ve been involved in car-enthusiast forums (and before that, listserv’s) for years. We all know who wants to push the topic from intercooler performance to why another make owns all. However, challenging the status quo is hardly troll activity. Why is twitter here? What true business use are we presented? According to the definition and application by Charles, Patrick Henry would have been a troll as well.

2. Does Amanda Chapel exist? Who knows. I have a silly cartoon character on my profile, yet I exist. Enough existential examination.

3. Mindset: See point #1.

4. This has always been a problem with the Web. I have met a good number of people online, but distance & time will make a face-to-face unlikely. So should I stop tweeting, blogging and participating?

Dissent is a difficult thing to fathom for some people. My primary interest in the Web is not making friends or getting to know people, it’s pushing the envelope of value generation. This could be shareholder value, or for a socially-based business, a more intangible resource like environmental awareness. There is the possibility that people don’t care about this and that is certainly within their right. However, if the CFO can’t find a compelling reason to fund a program, that belief could change.

And who do I support in these arguments? The customer.

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