The Smart Way to Tap Social Media
May 26th, 2009 | Posted by innovO.K. In our last column, we hope we persuaded you that you need to add social media—things such as Twitter, blogs, LinkedIn, and Facebook—to your innovation quiver.
But not only do you need to add social media but also commit to using them. Just experimenting with the idea is unlikely to produce any significant impact. A far better course to take is to concentrate on an objective—what do you want to have happen as a result of employing social media?—and then measure progress toward that goal. Without focusing on measurable objectives, it’s difficult to justify further investment. Or as the philosopher George Harrison put it: “If you don’t know where you are going, any road will take you there.”
Then again, just because you can measure something doesn’t mean it matters. Sure, you can discover that 436,315 young women have commented on your blog posting about the latest in skin care, but if that activity isn’t moving the sales needle, it isn’t helping you. The only metrics that matter are the ones that support your objectives. Typical goals include increased brand awareness, increased sales, accelerated new-product adoption, enhanced organic search ranking/visibility, customer retention, and real-time insight.
Now, these metrics don’t exist in a vacuum. Your competition will be using social media as well, so you want to be smart about which you use. If you want something important to measure, you should gauge where you stand compared with the competition in context. You need to see who has the advantage based on positive/negative brand perceptions, organic search-term content/ranking, visibility, and their observable overall social strategy.
We have two suggestions. First, you want to identify the key social media most used by your customers and then evaluate their choices by not only popularity but also how believable your customers think they are. A case study will show you what we mean.
We were hired by a cosmetics company that wanted to start employing social media in a big way. Because you want to fish where the fish are, we began by finding out what social media their customers—and potential customers—used on a regular basis. By surveying a representative sampling of people, we discovered there were a combined 17 places (which included Facebook and certain other Web sites and blogs) they visited most often.
Now, 17 places are far too many to target effectively. So we dug a little deeper and found that the cosmetic company’s customers did not view all 17 equally. Some Web sites were seen as places that were trying to sell them something. Some blogs were seen as entertaining but not reliable. Others were seen as purely social places, so any sort of commercial message there would come off as jarring. Armed with this information, we were able to prioritize our efforts accordingly and align the right outlets with our strategies and tactics. The results were an increase in reach and, more important, quality of reach.
Nicholas Kinports, our firm’s digital integration manager, has a wonderful way of thinking about implementing your social media strategy. “It isn’t about making content go viral—though that would be a wonderful byproduct, should it happen—or creating the next great Facebook application,” Kinports says. “It’s about structuring, and in some cases restructuring, how a business views and interacts with its customer base. The modern consumer is savvy, aware, and fully able to make informed decisions, thanks to a wealth of information freely available on the Internet. The consumer of the near future will make purchase decisions based on information gleaned from unbiased peers and influencers. Social media is the latest tool through which these interactions occur.”
If you think of social media as that—a social consultant—the results can be remarkable from both a bottom-line and competitive standpoint. But to be in the game, you first need the desire to be social and the strategy to do it authentically. Then you need strong team members to execute ongoing core competency and follow it through. As you can plainly see, there’s a big difference between a brand that behaves like a dabbler and one that behaves like a master when it comes to social media. Where does your brand fall?
Consumers’ Irrational Exuberance?
May 26th, 2009 | Posted by stockStocks rallied on May 26, and a surprising jump in consumer confidence is getting the credit.
The May consumer confidence reading hit 54.9, quite a jump from 40.8 in April. It’s another data point that suggests the economy is stabilizing a bit.
But, it’s troubling that the report’s optimism contradicts other economic indicators.
1. Slightly more people said jobs were plentiful (though still just 5.7% of those surveyed), and slightly fewer said jobs were hard to get. This despite the fact that more than 600,000 Americans continue to file initial jobless claims each week, and many economists expect the unemployment rate to rise from 8.9% in April to 9.2% in May.
Nick Kalivas of MF Global Research suggests both can’t be right:
It is either signaling that the labor market is stabilizing or Conference Board [consumer confidence] data will display weakness in the coming months.
2. Inflation expectations fell in the report, from 5.9% in April to 5.6% in May. That’s a surprise given the rising price of gasoline. The price of fuel for Memorial Day travel was 30 cents per gallon higher than just a month ago.
Still, consumer attitudes actually are consistent with the talk lately from some economists, politicians and especially investors. The S&P 500 is up 21% from Mar. 9, reflecting hopes that the economy is stabilizing and may recover later this year.
Clearly, some consumers have gotten this hopeful message. Their retirement accounts are fatter than two months ago, but they also believe the current momentum will continue.
Expectations for more jobs in six months jumped from 14.2% in April to 20% in May. Expectations for increased income moved from 8.3% to 10.2%
Unfortunately, these raised expectations could be dashed.
Ryan Sweet of Moody’s Economy.com summarizes the problem:
The surge in expectations corresponds with a rebound in stock prices. […] However, a major concern is that if the economy does not improve as expected, consumers might react to the disappointment by cutting spending even more, which would delay the recovery.
Even if job losses slow, new hiring could take longer to materialize. Trends in the automotive sector — including worries about General Motors (GM) — could exacerbate the situation.
As Deutsche Bank (DB) chief U.S. economist Joseph LaVorgna noted last week:
While we are optimistic that the labor market’s rate of decline is poised to slow, any significant turnaround could be stymied by further pain in the auto sector.
Since the beginning of the recession, the economy has lost 5.7 million jobs, a number that could hit 7 million by the end of the year. That’s the most of any downturn since World War II, LaVorgna says.
Meanwhile, many Americans might not fully realize how much the dismal housing market is hurting their net worth. The latest S&P/Case-Shiller Home Price index, released May 26 and based on March 2009 data, shows prices continue to plunge.
And Felix Salmon notes:
The length and severity of the drop in house prices is still just a fraction of what we saw on the way up: we had a ten-year boom from 1997 to 2007, and there’s no particular reason why the bust should last just as long — especially given the natural stickiness of house prices on the way down.
Consumers may be feeling a bit better these days. That’s a good sign for retailers in the short term. But the fundamentals don’t yet support optimism about Americans’ buying power over the long term.
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