Summary of Lecture 2 – Part 2, 14/08/2012

In part 1 of the summary, I briefly discussed the case study on SAP. In this part I will focus on 5 Cs of social media – community, conversations, content, channels, and collaboration (co-creation).

Before I describe the 5 Cs, I should clarify that these 5 elements of social media are neither original nor all-encompassing. There are, of course, several other aspects of social media strategy that one should take into account. However, as a guideline these five suffice in most cases.

There isn’t a clearcut mapping from the traditional 4 Ps of marketing–product, price, promotion, and place (distribution)–to the 5 Cs of social media marketing. Social media marketing gives a lot more importance to the community. It is partly because in many cases a community is already in existence and the businesses want to join it. This differs from the traditional “segmentation analysis.” A community is not a segment with characteristics of its members statistically identified by a marketer. Instead a community is a much more cohesive group of individuals who have some common intrinsic motivation for being a part of the community. Such communities can be described just by this motivation and nothing else. No other identifying characteristic may be attributed to them. For example, the popular financial blog www.zerohedge.com is an example of a completely anonymous community. Most of the blog posts are written under the pseudonym ‘Tyler Durden’–the unforgettable and legendary ‘Fight Club’ community leader played by Brad Pitt in the movie Fight Club. (If you haven’t watched this movie, the only advice I can give you is “Stop reading this blog and watch Fight Club, now!”) I was never an active member of Zero Hedge but I used to read their posts and the comments by members very regularly. During the financial crisis of 2008-2009, we were all driven by the same motivation–to read about and discuss the corruption on Wall Street and the dirty nexus between the banks, government officials, and politicians in the USA. Beyond that there was nothing you could know about us. This underscores the problem faced by a traditional marketer in the digital world.

A risky solution is to create your own community. That’s what SAP did. It’s risky because you would never know whether it will capture the attention of your target members, whether they will participate, engage, and contribute, and whether they will spread the word to grow your community. It takes a lot of time and effort (and also a great bit of luck) to organize and manage a successful online community.

The next 4 Cs–conversations, content, channels, and collaboration–will be discussed in detail as we progress in the course. Conversations are a must in social media marketing. The question is how you do it. There is always that temptation to get carried away and be condescending, witty, smart, and sometimes brutal because brands think that they are the leaders. But that’s the recipe for disaster. The conversations must be driven by empathy and honesty. In my opinion, these are the only two things that make conversations meaningful, thereby leading to long-lasting relationships.  Channels consist of different platforms and services on social media such as Facebook, Twitter, Youtube, and Foursquare. Again, I will talk more about this when in Lecture 5 and 6 we start working with the tools directly. Content is an essential part of social media marketing. In case of SAP, the content was the blogs by the developers and SAP employees, as well as the presentations created by SAP. They hold tremendous value for the community members. On August 23, we will dissect content strategy of an Indian business Ayojak in a case study (read the 4th abstract). Finally, collaboration (and co-creation) is the final component of social media strategy. More on this in lecture 3 summary. I had asked students to read ‘Unselfish Gene‘ and 1st chapter from book ‘Share This!

Composition of Corporate Social Media Team

I referred students to the survey results published by Altimeter. According to Altimeter, the typical size of a corporate social media team is 11 employees. Out of these 3 are the heart of the team–the community managers–who engage with customers. Their primary objectives are to create brand awareness, acquire customers, retain them, create the bran culture, and provide customer service. The social strategist, who is sitting at the top of the hierarchy, makes sure that the performance of the entire team is in line with the objectives set by top management. You can read more about the role of corporate social strategist here. The two guys on the left side of the chart, the education manager and the business unit liaison, hold inward looking positions. They chiefly interact with various business units internally, train people, and make sure that everyone uses a consistent strategy. Social media manager is in-charge of the operations. He/she decides the nature of interaction, gamification, what offers to provide, etc. Web developer is a part-time role and technical in nature. Finally, social analyst tracks various social media metrics. The last part of my course is focused on the metrics and crises management issues.

For a small business, 11 social media team members are meaningless. The suggestion from Altimeter is to use the proportions from their compositions. For example, is you want to devote 40 hours for social media in a week, roughly 11 hours (40 x 3/11) should be assigned to community management. Of course, if you hire one person it is impossible for that person to do everything. A person who is good at managing a community not necessarily will be good at doing analytics. A solution is to train your existing workforce to carry out part of these jobs. A person who is good with numbers could be trained to be social media analyst. Further, some of these functions could be automated or outsourced. You may not require an in-house web developer, for example.

Data: Composition of a Corporate Social Media Team

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Does Social Medium Liberate Marketers?

What’s the most critical strength of social media? Freedom! Pick any reasonable book on social media marketing and you will find in them that freedom to communicate and bond with your consumers is the core benefit of social media. Marketers are no more bound by the one-way mode of communication. They can reach their consumers freely without bounds, seek their opinions, engage in conversations, and provide the offering (product or service) while earning brand loyalty and profits.

Now let’s come back to reality! Social medium is not turning out to be the marketing utopia in which many would like to live. When I read Tara Hunt‘s amazing book, The Whuffie Factor, I realized that there will be soon a bunch of great writers and content creators who will hold the power to influence people’s minds. Their reputation will be built over the period and the reputed bloggers (or social media celebrities) will be able to promote products with a much higher success rate. This model is now well established. However, where is the freedom that was promised to the marketers by this social media revolution? Marketers have been using celebrities such as NBA players for a long time to endorse their products and reach these players’ huge fan bases. Now they have a choice of using these micro celebrities (bloggers, etc.) and target smaller consumer segments. However, the marketer is still not directly talking to the consumer. For example, look at the technology blogs such as TechCrunch, Gizmodo, or Engadget. They review and rate consumer electronics products all the time. But does that help a marketer to reach the consumer “directly”? Similarly, you can extend this example to any type of blogs and you will see that there is a layer in between the marketer and the consumer.

Talk about Facebook, Twitter, and other social media. I don’t have ready statistics here (it’s late Friday night folks!) but my guess is that most businesses that have a Facebook page don’t handle it themselves. Social media efforts are outsourced, similar to the advertising campaigns and marketing research. But note that both advertising and marketing research require skill sets that are cheaper to get from specialized agencies rather than developing in-house (marketing strategy students, this is an explanation from transaction cost theory).  On the other hand social media, which enable two-way communication, should be handled in-house in order to exploit this benefit. Imagine a firm communicating with its consumers via social media marketing agency. I will be surprised if such an agency doesn’t add noise to the communication. However, social media experts are now available dime a dozen. You get to see more blog posts about how to choose social media consultants than how to engage consumers using social media.

I find this model a sort of cheating. This is nothing but the old model of celebrity endorsements and/or advertising agency. And this also means that marketers are still not liberated by social media. But we shall wait!

Social Business Forecast 2011

Earlier I had shared a report by Altimeter’s Jeremiah Owyang. Below is the presentation from the same report. It will help you in understanding the key points if you don’t have time to read through the entire report. My students should look at slides 19 and 20 carefully where the priorities in social media domain are depicted. Not surprisingly ROI calculation is the most critical issue.

After the spring break, we are going to spend time in understanding social media and web analytics. The students will be setting up dashboards to monitor and evaluate the performance of their social media campaigns. Personally I am quite excited about this because performance metrics is my research area!