9. How To: Develop Your Facebook Era Plan and Metrics
With the conceptual frameworks and functional application ideas from Parts I, “Why Social Networking Matters for Business,” and II, “Social Networking Across Your Organization,” behind us, the remaining chapters are an action-oriented guide on how to get started. First, we need to develop a Facebook Era plan for your company, which will be driven by your business goals and the customers’ goals mapped against Facebook and Twitter’s capabilities and your organization’s resources.
Listening First
Before you dive into planning and execution mode, you should monitor and scan the social Web (and the Web more broadly) for what’s already being said about your company, products, and brands. You likely already have fans and critics somewhere—perhaps on Facebook, Twitter, LinkedIn, Yelp, Amazon, YouTube, Google Buzz, or blogs.
Understanding what is being said about your company and who is saying it provides valuable context for setting your business objectives and subsequently developing your plan. For example, if people are expressing a lot of negative sentiment about your company on social networking sites, then one of your top social media goals should be to address negative comments and elevate your brand. On the other hand, if people love your brand and are creating viral videos, writing glowing reviews, and posting photos of themselves in your stores, your social media goals might be to recognize and promote these individuals across your social Web properties.
A common situation that many large brands face is that by the time they get serious about engaging on social networking sites, fans have already beat them to the punch and created unofficial Facebook Pages, Groups, and Twitter accounts. An example is Ferrero, the European chocolate maker whose products are popular and loved around the world. In 2008, Ferrero executives discovered that a zealous fan had created a Facebook Page for Ferrero Rocher, one of their most popular products. And not only had a Page been created—it had actually become one of the most popular Pages on Facebook, with more than 2.5 million people who “liked” the Page.
Similarly, Coca-Cola execs stumbled upon a Facebook Page for Coke started by two passionate fans and worked out a deal to co-manage the Page with the two individuals. (For liability reasons, Coca-Cola made sure it’s the legal owner of the Page.) On Twitter, car-sharing company Zipcar has more than 30,000 followers but professes to largely be in “listen only” mode.
Without taking the time to research and listen first, brands might accidentally create redundant efforts or compete against their own fans. Instead, brands should, at a minimum, be monitoring and complementing or, in some cases, even working directly with grassroots efforts to best engage their community of fans.
To help separate official brand Pages from fan-created efforts, Facebook has introduced Community Pages to provide passionate customers with unofficial outlets for capturing the causes, topics, ideas, and brands they love.
Establishing the Business Objectives
As with any investment you might be considering for your business, you should always start by determining your strategy. What are your goals? These common objectives guide many of the early business forays into social networking sites:
• Conducting market research, such as identifying trends and recruiting early adopters for more in-depth focus groups
• Improving customer satisfaction by providing opportunities for engagement and for customers to help one another
• Promoting additional products and services to existing customers
• Expanding into new markets
• Encouraging word-of-mouth marketing
• Recruiting new employees
• Establishing or evolving your branding and positioning
Dig deeper. How would you ideally want your brand to be perceived? Which new audiences do you want to reach? Are they on Facebook, Twitter, or LinkedIn? Is your priority to up-sell existing customers or find new customers? Because of their expansive reach across different regions, age groups, and other segments, and their capability to target specific segments, social networking sites are a great place to test and expand to new markets. Think about not just where you are, but also where you want to go. Perhaps your business sees an opportunity to expand from adults to a children’s offering, or a new region, industry vertical, or audience personality type.
Use the top two or three goals as the basis of your strategy and decision making. When creating the prioritized list, it might be useful to evaluate goals based not only on importance to your business, but also on whether social networking is uniquely capable to contribute to a goal. Your social media investment will evolve and adapt over time, but it’s important to have a goal or set of goals, even if they change, so that you can justify the time and effort, mobilize internally, set expectations externally, and measure the return on your investment.
The following guest expert sidebar from R “Ray” Wang and Jeremiah Owyang of Altimeter Group summarizes common business-use cases for the social Web. This book has already covered most of these scenarios, so chapter references are also included at the end of each bullet for your convenience.
Social CRM Use Cases
R “Ray” Wang and Jeremiah Owyang
Customers continue to adopt social technologies at a blinding speed—yet organizations are unable to keep up. Why? Rapid adoption of social networking enables users to connect with individuals and communities who share mutual interests, increasingly leaving organizations out of the conversation. Companies need an organized approach using enterprise software that connects business units to the social web—giving them the opportunity to respond in near-real time and in a coordinated fashion.
Social CRM augments social networking to serve as a new channel within existing end-to-end CRM processes and investments. After months of study and interviews with over 100 organizations, Altimeter Group has identified 18 use cases for Social CRM, listed here:
• Social customer insights—Social customer insights form the foundation for all social CRM initiatives. The social Web delivers insights into the opinions about an organization’s products and services that help companies achieve a credible marketing presence. (Chapter 15)
• Social marketing insights—Listen before talking. Marketers must listen to what consumers are already saying, identify top influencers, rank top conversations, prioritize top channels, identify velocity of discussion, and gauge the tone of topics. (Chapter 6)
• Rapid social marketing response— Defending the brand. To be successful, brands need to identify what’s being said, the severity of the information, the influence of that person, and the context of previous interactions. (Chapter 6)
• Social campaign tracking— Optimizing in flight. Unlike traditional advertising, social marketing is constantly changing and requires constant attention and massaging. (Chapter 12)
• Social event management— What happens in person goes social. Marketers need a social strategy before, during, and after both online and physical events. (Chapter 6)
• Social sales insights— Finding your prospects’ and customers’ watering holes. To succeed, organizations must identify not only where their key prospects and customers interact, but also the key needs that a brand aims to fulfill. (Chapter 4)
• Rapid social sales response— Catching a lead in midair. Rapid social sales response monitors key channels for sales opportunities. Sales teams can target key buying communities and rapidly react to potential sales triggers. (Chapter 4)
• Proactive social lead generation— Using peer-to-peer lead generation. Proactive social lead generation reaches customers who want to be educated by the organization or its ambassadors. Referrals, online customer testimonials, and social recommendations are key for scale. (Chapter 4)
• Social support insights— Realizing that social smoke means a social fire. Social support insights provide organizations with the information needed to rank an individual’s level of influence, determine friend or foe status, associate the relationship with the organization, and select an appropriate response channel. (Chapter 5)
• Rapid social response— Discovering that real time isn’t fast enough. Despite the proliferation of channels, organizations must be able to triage support requests and customer feedback. (Chapter 5)
• Peer-to-peer unpaid armies— Harnessing your advocates. Smart organizations find ways to harness this collective expertise from customers and partners. (Chapter 7)
• Innovation insights— Catching innovation trends right under your nose. Organizations must capitalize on innovation trends that can range from product fixes and enhancement requests to feature and solution suggestions. The goal is to capture, organize, and prioritize ideas. (Chapter 7)
• Crowdsourced R&D—Real-time innovation and feedback. Crowdsourced R&D improves concept-to-delivery time frames. Customers, partners, and industry watchers can play a role to expedite requirements gathering, prototyping, and demo tests. (Chapter 7)
• Collaboration insights—Organizations must learn from different areas in the company to quickly respond to customers. (Chapter 7)
• Enterprise collaboration— Not everything lives in SharePoint. Departments must work together in a seamless way to get work done. Empower department and teams to work together across boundaries of functional fiefdoms through shared advanced programming interfaces (APIs) that often feed back into a centralized system. (Chapter 7)
• Extended collaboration— Help me help you. Extend collaboration to partners, channels, suppliers, and other stakeholders, providing a common collaboration tool for partners outside the firewall to interact and work with employees and other partners. (Chapter 7)
• Seamless customer experience— Customers don’t care what channel or department you work in. Presenting a consistent face to customers improves their comfort and satisfaction. (Chapter 5)
• VIP experience— Reward your best customers or lose them. VIP experience delivers premium programs to top customers. The goal is to ensure that your most profitable customers remain loyal.(Chapter 11)
R “Ray” Wang (@rwang0) and Jeremiah Owyang (@jowyang) are partners at Altimeter Group.
Defining Your Metrics
After you’ve decided on goals, it’s useful to create business metrics for these goals to help define what success means, determine the appropriate level of investment, and measure direct value to the business. For example, these are some common business metrics and targets from some of the companies I have worked with during the last two years:
• Identify X new trends.
• Recruit focus group of X early adopters age 14–18 to help us understand the teen market and design the next generation of our product.
• Improve customer satisfaction scores by X.
• Decrease customer support call center volume by X%.
• Increase existing customer average spending by $X this year.
• Acquire X new customers in a new region, such as Taiwan and Hong Kong.
• Achieve X responses to our word-of-mouth campaign and X% conversion rate into sales.
• Source X number of candidates for the recruiting department.
• Elevate company brand, as measured by a customer survey on how customers perceive our brand.
• Increase our net promoter score by X.
When you have your business metrics, determine which activity metrics correspond and begin tracking these. Consider these common social Web activity metrics:
• Number of fans and followers
• New fans and followers per week
• Facebook Page visits
• Number of brand mentions (positive and negative)
• Shared link click-through rate
• Mentions and retweets
• Number of fan posts, likes, and comments
• Ratio of new fans to fans who left
• Ratio of new followers to unfollows
• Ratio of fan activity to your activity
• Ratio of fan activity to fan number
Start with a modest level of investment and increase it as you see results. Set realistic goals and expectations. It probably took several iterations to arrive at your current Web site strategy. Coming up with an optimal social network strategy requires the same kind of learning by doing. Starting overly aggressively can set up companies for disappointment down the road and risk losing internal support for these initiatives.
Evolving Our Metrics
We shouldn’t be using only old metrics to value these new initiatives. Just as we had to “invent” new measures such as cost-per-click in the Internet Era, we need to develop new measures to capture the nuances of the social Web. Last decade, Yahoo! Overture and Google AdWords transformed the marketing discipline with online transactional data. For the first time, we could see much richer data about each transaction across the marketing funnel, from page rank and page views to clicks and conversions. Search marketing trained us to become obsessed with optimizing click-through rates and conversions. We became narrowly focused on optimizing for a single transaction at a time because that’s all the data that we had.
With the social Web, we are again gaining more insights—not about the transaction. but about the customer. Through Facebook personal profiles, Facebook Business Pages, Twitter, and behavioral ad targeting and retargeting (more on this in Chapter 12, “How To: Advertise and Promote on the Social Web”), companies are able to form and track actual relationships with customers on the Internet. And for the first time in online marketing, companies can take a longer-term view of the customer and optimize not for the click but for the lifetime relationship with a customer.
This is really big news—it means that companies need to be okay that any given online conversation might not click through to a sale today (gasp!) but will contribute to sales tomorrow.
Everyone on my book tour always asks about metrics and return on investment (ROI), so I’ve been thinking about this a lot. I don’t claim to have figured out the magic bullet, but I have developed a new metric, social customer lifetime value (described in the next section). Many of the companies I have worked with are finding it useful in allocating their social media investment, prioritizing initiatives, and calculating ROI.
Social Customer Lifetime Value (sCLV)
Customer lifetime value (CLV) is a popular marketing metric that approximates the business “value” from a customer. Traditionally, it has been calculated as the net present value of future cash flows from a customer relationship—how much someone will spend on your products or services across his or her lifetime as a customer. As a business, you wouldn’t want to spend more on marketing and selling to someone than their CLV minus the cost of goods sold, because then you would lose money.
CLV has been instrumental to the marketing discipline, but it is outdated. Traditional CLV assumes that people operate in a vacuum, which was perhaps more true before the Facebook Era. It’s definitely not accurate on the social Web, which is about influence and crowdsourcing.
As we saw in Chapter 5, “Customer Service in the Facebook Era,” a growing number of customer support questions are being answered by other customers on public social Web forums, such as Twitter and Facebook, instead of at the call center. As we talked about in Chapter 6, “Marketing in the Facebook Era,” friends and colleagues are the strongest influencers of purchase decisions, which means that companies need to place even higher value on existing customers because they are your most credible salespeople. Finally, as we talked about in Chapter 7, “Innovation and Collaboration in the Facebook Era,” some of the most successful and profitable products from companies now are originating from customers themselves on social ideation and voting.
I’ve combined these most valuable aspects of the social Web in developing a new way of thinking about CLV, which I call social customer lifetime value (sCLV).
sCLV = CLV + Sales from word-of-mouth + Customer support savings +
Product revenue from crowdsourced ideas
Let’s dig a little deeper into each of the components.
• Sales from word-of-mouth—This is roughly the size of your customer’s contact network multiplied by your customer’s level of influence among the network. For example, if your customer has a huge network but little influence, she might not materially affect your business. Same thing if she is highly influential but has a small network. But if the customer has a large network and high influence on friends and colleagues, then even if she doesn’t directly spend a lot of money on your products and services, her sCLV could be extremely high and this is a relationship your company should invest in and cultivate. Practically speaking, word-of-mouth sales are often backed out from retweets and custom URLs that are shared via Facebook status messages.
• Customer support savings—This is calculated from the number of customer questions answered by a customer expert that didn’t need to be answered by your support staff, and then multiplied by your average cost of answering a question.
• Product revenue from crowdsourced ideas—This is the dollar value of any new products that originated from a customer-suggested idea voted up by the community.
sCLV looks different for each company based on the business goals defined and initiatives pursued. For example, a company that uses Facebook and Twitter for customer support might want to focus on calculating that component in the formula. A business that creates a Facebook Page and Twitter account to rebrand itself as being more modern and technologically savvy might tweak this formula with a different component that represents brand value.
Mobilizing the Team
An important factor in developing your Facebook Era plan is the amount of available internal resources for social networking initiatives. If you have budget authority, this means reallocating from somewhere else to fund the additional heads, agency support, Facebook ad spending, or application development. If you don’t have budget flexibility, this means reallocating your own time and priorities.
Most larger organizations that need to juggle several different social media goals are hiring someone new or having someone internally focus on social efforts. Some large consumer brands have a team of people (usually a combination of in-house and agency staff), each focusing on Facebook, Twitter, YouTube, or Yelp. The initial level of resources required depends on how much your company is being talked about across the social Web and whether it makes sense to respond. Not surprisingly, the most labor-intensive social media efforts I’ve seen are in customer service and customer care departments in which companies try to reply to every tweet or Facebook Wall post.
Another very likely scenario in bigger companies is that multiple departments or business units will want to create, manage, or otherwise be involved on Facebook or Twitter. Although social media thrives on grassroots leadership within companies, it’s important that you establish executive consciousness and sponsorship of these programs. Individual business units and departments can own their social media strategy and execution, but you should create a companywide social media task force to make sure certain minimum standards are adhered to, such as brand and regulatory compliance. An informal cross-functional task force helps align incentives, best practices, resources, and vendor relationships across the company and realigns corporate incentives on the customer (more on this coming up in Chapter 15, “Corporate Governance, Strategy, and Implementation”).
If you’re a smaller or medium-sized business, it’s unlikely that you will have the luxury of being able to dedicate an employee, much less a team of people, full-time to Facebook and Twitter initiatives. The default seems to be asking a marketing person to take it on, which can be a very good solution.
For larger organizations that are already working closely with PR or digital agencies, it can be tempting to outsource your social efforts. But outsourcing completely might mean missing out on a crucial opportunity to connect with customers. In the following guest expert sidebar, Ben Smith from Dunkin’ Donuts explains how his team is approaching social initiatives and why they have decided to in-house the voice of the brand.
Stay Close to the Customer
Ben Smith
In recent years, many brands have realized that social media can be a cost-effective marketing and communications channel, and they have sought to define and implement a social strategy. Too often, these internal strategy sessions start with an internal debate about who should “own” social media. What department does it belong in? Is it marketing, PR, media, or customer service? We had some healthy debates about this but eventually agreed that the best approach for Dunkin’Donuts was a social engagement strategy that had a blend of PR, CRM, and media. It might sound cliché, but we believe that our customers are actually the ones who own these spaces, not us. And to effectively connect with them and engage in a meaningful way, every department needs a seat at the table.
Know your role. If everyone has a seat at the table, it’s important for roles and responsibilities to be clear. At Dunkin’, we have a multiagency approach to marketing. Although ideas are welcome from any agency partner, we’ve had success with our digital agency taking the lead on social strategy, creative, and technology initiatives; our PR agency being responsible for blogger outreach and word-of-mouth; and our advertising agency buying and planning any online media (such as Facebook ads).
Find your voice. The voice of the brand is something that should not be outsourced. It’s important to remember that every tweet or post represents the brand, and it’s critical that the conversation adds value and remains brand related. At Dunkin’Donuts, we are fortunate to have an internal resource (@DunkinDave) who is an ideal representative of our brand voice and personality. With more than two years of experience in our communications department, he knows what to say, what not to say, and who to go to if he needs more information. He is empowered to make the right decisions, respond in the moment, and speak on behalf of the brand.
In contrast, if an agency partner was responsible for this activity, client approvals would be necessary. It would be incredibly inefficient to run every tweet up the flagpole for approval. Not every brand will have an existing resource ready to take on this role, but if you can, I strongly recommend bringing this job in-house instead of outsourcing it.
Ben Smith (@bensmith32) is an interactive marketing manager at Dunkin’ Donuts.
Another emerging trend is that some senior leaders in companies of all sizes are starting to personally embrace Facebook and Twitter. Prominent CXO tweeters and Facebookers include Richard Branson (Virgin Chairman), Bob Parsons (Go Daddy CEO), Jacqueline Novogratz (Acumen Fund CEO), Dave Kellogg (Mark Logic CEO), and Jonathan Schwartz (Sun Microsystems CEO). Despite their busy schedules, these company leaders realize the strategic brand value in listening to the customer firsthand and sharing their thoughts through an authentic personal voice.
Framing Your Strategy in Terms of the Customer
Your company’s goals are important, but the foundation of all your strategies and tactics needs to come back to the customer. Why would they want to engage? What are their incentives, motivation, expectations, and thought processes? Generally, you can tap into one or a combination of these reasons:
• To express strong emotion. Perhaps they are overjoyed, overwhelmed, or frustrated. Your product has really been a positive or a negative in their life.
• To improve your product with constructive feedback.
• To associate themselves with what your brand stands for.
• To feel important in helping others answer questions.
• To benefit from selling peripheral goods and services, such as a vendor selling iPod cases on the iPod group page.
• To meet new people.
• To bond socially with friends through the experience of using your product.
At the end of this initial planning exercise, you should have a strategy that you are ready to execute:
• Prioritized list of objectives, including time frame, metrics, and targets
• Value you expect to bring to your business
• Level of resources you are willing to commit (you might even be able to calculate expected ROI)
• Means and frequency by which you will evaluate progress
• The person in your organization who will be responsible for carrying out this initiative
Getting Started on Facebook and Twitter
With a rough idea of your goals, metrics, and resources, and knowing things will evolve over time, you are now ready to get started on Facebook and Twitter. Companies use Facebook and Twitter in several ways. One or more of these might make sense for your business, depending on the objectives you laid out:
• Facebook personal profiles—You might need to help your sales reps and hiring managers either create Facebook profiles or make sure their existing profiles reflect well on them and the company. Develop employee social media guidelines and provide training. Chapter 10, “How To: Build and Manage Relationships on the Social Web,” walks through how to build and manage relationships on the social Web. Time required: 1–2 hours plus periodic updates.
• Facebook Business Pages—Facebook Pages are very similar to personal profiles, except that they are for a business. Facebook Pages are the logical first step for companies to create a presence on Facebook. Large companies with multiple products and audience segments might want to create separate Pages for each. Chapter 11, “How To: Engage Customers with Facebook Pages and Twitter,” explains the ins and outs of building and maintaining a Facebook Page. Time required: 1–2 hours to set up, plus periodic updates. You can have an agency create a Facebook Page for you for a few hundred dollars (I would pay no more than $1,000, but it also depends on how fancy you want to make your Page.)
• Facebook ads—Facebook ads take advantage of hypertargeting and word-of-mouth to help market to existing fans and customers and to reach totally new audiences, as discussed in Chapter 6. Chapter 12 talks about how to generate interest, traffic, and leads with social advertising. Time required: Several hours per campaign for setup and analysis. Most digital agencies now handle Facebook ads in addition to search marketing ads and take a percentage of ad spending as their cut.
• Facebook apps—You can custom-develop or choose from tens of thousands of existing games, polls, contests, and other apps in the Facebook Application Directory to enhance your customer’s experience on your Facebook Page or, more generally, extend the set of customer interactions with your company within the Facebook environment. Time required: Weeks or months to develop or outsource a custom application (depending on complexity) or hours to sift through existing app offerings and then install them.
• Facebook for Websites—As we introduced in Chapter 1, “The Fourth Revolution,” Facebook for Websites enables you to integrate your Web sites and Web applications with Facebook’s login system. Time required: A few hours or days, depending on level of integration.
• Twitter—Twitter is by far the simplest to set up. As with Facebook Pages, the key is to post high-value content on a consistent basis. Time required: A few minutes to set up, followed by periodic updates.
Before you actually dive in, you will likely need to consult your company lawyers, PR team, and IT department if you are at a large company. Hopefully, representatives from each of these areas are represented in your cross-functional task force. Chapter 15 delves into detailed corporate governance issues, but I recommend not getting bogged down early on. Test the waters with small grassroots initiatives before you get the whole organization involved.
In the following guest expert sidebar, social media agency CEO Dave Kerpen shares a few words of wisdom about common pitfalls to avoid when launching your Facebook Era plan.
Five Social Pitfalls to Avoid
Dave Kerpen
The social Web can help individuals and organizations grow and become more efficient in numerous ways. However, organizations have made mistakes and continue to make them as they try to harness new tools and sites to their advantage.
Avoid these five pitfalls:
1. Jumping in too quickly—Don’t get started with social initiatives until you’re ready to commit consistent time and resources to your efforts. Nothing is worse than a never-updated Facebook Page or Twitter community, what I call a “deserted island.” Instead, reserve your user-names, monitor and listen to what your customers and prospects are talking about, and then join the conversation—when you’re ready.
2. Not having a defined strategy and objectives—Building a Facebook Business Page or Twitter profile is not a strategy. Why are you doing a Facebook Page? Who is your specific target audience and how will you regularly engage them? What value will you provide to your community? What are your expectations for results and how will you measure them? Answer these questions (and more) before you get started and reexamine them along the way.
3. Falling victim to “Shiny New Object Syndrome”—It’s easy to get excited about the latest, greatest tool—whether it’s Twitter, Foursquare, or another new site that everyone’s talking about. However, it’s important to stay the course with your strategy and plan, and spend your time and resources where you know your customers are and will be.
4. Selling too much—Too many people and organizations jump onto Facebook or Twitter and immediately start making offers, sharing links to their sites, and showcasing their products or services. The social media sales cycle is much slower than a traditional sales cycle. It’s listen, build, engage, grow, engage, and (soft) sell. You must be authentic and share value along the way. The leads and sales will come.
5. Giving up too easily—Because social media does involve relationship building and a longer sales cycle, it can be frustrating to put time, effort, and money into a venture that doesn’t provide an immediate return. But as long as you’re providing value, sharing great content, and targeting your audience well, your patience will be rewarded, sometimes in ways you hadn’t even imagined.
Dave Kerpen (@davekerpen) is the CEO of theKbuzz, a social media and word-of-mouth marketing agency.
Your Facebook Era plan should be a function of your business goals, customer goals, budget and resources, and Facebook and Twitter capabilities.
Just as we saw last decade with the Internet, new metrics will evolve and be developed for the social Web.
Customer lifetime value (CLV) assumes that people operate in an isolated vacuum. sCLV tries to make the metric social by accounting for word-of-mouth, customer support cost savings, and new product sales.
A handful of executives and entrepreneurs, not just the marketing team, are starting to embrace Facebook and Twitter as strategic conduits for communicating with employees, customers, and the public.
Most companies are choosing to engage on the social Web in five ways: Facebook personal profiles, Facebook Pages, Facebook ads, Facebook apps, and Twitter.
> > > TIPS and TO DO’s
If you are at a larger company, assemble a cross-functional social media council.
Develop simple social media guidelines for employees.
Update and introduce training to include mention of Facebook and Twitter.
Create new business metrics and definitions of success based on your social media objectives and realistic expectations.
Before you start using Facebook or Twitter for your company, try using it in your personal life to get a feel for how it works.