KTG w/ Sean McDonald 3.9.10- "Social Media--Is it Good for Business?"

McCombs Knowledge To Go

March 9, 2010

Social Media…Good for Business?

Sean McDonaldBBA ‘86, MBA ’95

seanmcd@antseyeview.com@iamseanmcdonald

Thesis 1: This is not Al Gore’s Internet

The Web has gone Social1995

Today

1. People want to connect and create

2. Technology is the global enabler of scale

3. Economics have changed the funnel, its about influencers

1 person writesa blog postor tweets

9 peopleread/comment orlink back to other

sites

90 people read from multiple

sourcesacross the web

New Customer Funnel

Adapted from Forrester Groundswell 1:9:90 model

Three Forces have Aligned

Social Web 101

Thesis 2: Humans have changed faster than Business

It is a Global thing

20% of China population is online, 2 years ago 10% I have a Voice: Universal appeal is ability to learn, share, explore

beyond my local network Customers not waiting for products to reach them, instead search/find

and make decisions

(source: Internet World Stats)

China , 298M

U.S. , 220M

Japan , 94MIndia , 81M

Brazil , 67M

Germany , 55M

UK, 43M

France , 41M

Russia , 38M

Korea , 36M

Canada , 28M

Italy , 28M Mexico , 27M

Spain , 27M

Turkey, 26M

Indonesia , 25MArgentina ,

20MPhilippines, 20M

1.3 Billion Online

Thesis 3: Your company’s message is noise

Less people are listening to your messages

65% of all marketing spend in 2007 had NO EFFECT on consumers

Source: Fournaise Marketing Group’s 2007 Global Marketing Effectiveness Report

Trust in companies is at an all-time low

Edelman Trust Barometer 2009

Too many messages

Thesis 4: Humans value Relationships; Businesses value Transactions

We measure what we value

Thesis 5: Social is not just for Marketing

Social touches every department (almost)

R&D

Marketing

Sales

Customer support

Operations

Listening: Gathering customer insights as input for innovation

• Brand monitoring• Research communities• Innovation communities• Competitive listening

• Insights gained• Usable product ideas• Faster development speed

Talking: Using conversations with customers to promote products

• Communities & social networks• Video & Blogs• Influencer recognition

• Better market awareness• Word of mouth• Increased sales, revenue• Reach and efficiency

Energizing: Identifying passionate customers and bringing them closer to the sales process

• Social networking sites• Evangelism programs• Communities

• Community membership• Word of mouth• Increased sales, revenue

Supporting: Enabling customers to answer or solve one another’s questions or problems

• Support forums• Communities• Third-party outreach• Influencer recognition

• Number of participants• Volume of questions answered, self service• Decreased volume of support calls, costs

Managing: Providing employees with tools, access to collaborate with each other and customers, partners

• Social networks (internal/external)• Communities• Guidelines & playbooks

• Number of participants• Increased operational efficiency• Decreased email volumes

Department Objectives Strategies Metrics

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• Collaborate with Stakeholders

What can a company do?

Dell didn’t know how to react; so we did

nothing

Dell didn’t know how to react; so we did

nothing

20052005

Jeff Jarvis & “Dell Hell”

Customer Satisfaction: 56% to 74%

Negative Brand Sentiment:

49% to 22%

ResultsResults

20072007

Dell case study

Customer Satisfaction and Brand Sentiment in negative territory

20062006Dell Finally Takes ActionDell Finally Takes Action

CustomerSvc

PR

Marketing

What about small business?

threadless

B2B

6 social principles1. Social Media is a means to an end, not a solution

2. The act of being “social” requires you to give first and expect nothing in return, this rubs some of us the wrong way

3. Human beings still value relationships, Social Media can put relationships on a steroids program

4. Technology is an enabler, not the solution or substitute for relationships

5. Marketing has always been about conversations, the mediums did not always support it

6. Change Management is necessary to operate social media alongside rest of the enterprise, not to replace it

• Human Beings talk with each other – a conversation

• Traditional business communications are a one way communication – easy to ignore

• Social Web opens up ability to have conversations – to participate, and to be relevant

© Hugh McLeod

Parting thoughts

Social Media…Good for Business?

Sean McDonaldBBA ‘86, MBA ’95

seanmcd@antseyeview.com@iamseanmcdonald

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