Dec 2, 2011 | Customers, Marketing, Social Media, Strategy
How do you calculate the value of an investment in social media?
Any investment attracts the need to try to quantify the returns, both to measure the success of the investment when it is too late to do much about it apart from ensuring the same mistake is not made again, and to prioritise competing investment options against a limited pool of funds available.
Accountants love the discounted cash flow, and real options type analyses that prevail, but how do you do these on an investment in media, social or otherwise?
It makes sense to start to consider “data chains”.
Cause and effect;
Influence and action;
Believable and buy;
These are all examples of the chains of connections that are on the surface largely subjective, but lead to an outcome that can be measured. The task of measuring the return on the exposure that can accrue from a presence in Social Media, and even conventional media, is fraught with challenges, but with systemisation of the pools of data generated from your sales, customer retention, prospect identification, web analytics, and all the other data collection options now available, you can start to see the patterns emerging that can be used to calculate a return, even if there is a “fudge factor” present.
At some point you simply have to acknowledge that behavioral patterns are not easy to quantify, and even harder to predict, but by explicitly acknowledging the chains of cause and effect that exist, you can start to anticipate, if not predict, the returns
Dec 1, 2011 | Branding, Communication, Customers, Marketing, Social Media
Marketing on line is no longer the “next new thing” it was just a few short years ago, it is mainstream, a major consumer of marketing resources, and source of huge marketing value when done well. As with all new things, you get better with practice, and we are just at the beginning, learning how to use the tools now becoming available to build an experience for our customers they relate to, and can value, building the relationships they have with our businesses in the process.
In past blogs, I have noted the success of Tesco, particularly in Korea with their virtual shops, and the astonishing range of innovation that can be generated using QR codes.
In this link to what is in my view the best curator of web marketing topics, the Businessgrow blog, there is an accumulation of the best on line campaigns done to date. It avoids the usual suspects, and concentrates on those that are pushing the boundaries, and is therefore a valuable glimpse into the opportunities emerging. The web may be a free medium, but it is one where content is king.
Being different takes creativity, guts, foresight, and resources help, but are not a substitute for the other three. In the end being effective on the web is way more than just being there, because almost everyone is there now, you have to stand out, be relevant, engaging, and useful.
Nov 24, 2011 | Customers, Marketing
The case for employing intelligent people, and letting them get on with their jobs exercising common sense has been made again and again. In this lovely example of the hubris of rules, Safeway in Honolulu ensured they stuffed up by following a voluminous rule book, the substitute for trust in the common sense of your employees.
What damage has this stupidity done to the Safeway brand, and will any amount of advertising about how they care for their customers and their families wipe out the lasting impression forged by the news story of their stupid insensitivity and lack of care.
Nov 9, 2011 | Customers, Innovation, Marketing
Every product manager I have ever seen sees his/her pack change, flavor extension, or new size as an innovation, and every marketing manager who lets this mediocre stuff take up valuable time, the only resource that is really irreplaceable, is culpable.
Sometimes, just sometimes, a genuine innovation emerges, and the common feature is that they almost always emerge from a culture that values their own resources, and that of their customers to the exclusion of all the usual puffery. What is left is the genuine hyping of something new, that needs at least some explanation, as it does not fit into any existing, neat categories.
Apple, Ideo, Cisco, Toyota, and a few others do it, others try and copy, change the look, but the value proposition is a copy. There is a new calculus of innovation easy enough to see if you know what to look for, really hard to do.
Oct 19, 2011 | Customers, Marketing
Peter Drucker often condensed seemingly complicated concepts into pithy quotes of the blindingly obvious.
One I came across the other day is “There is only one profit centre that counts – customers”
It seems this statement of the obvious is often lost in the razzle dazzle of bullshit and self serving, non value adding nonsense that inhabits many organisations.
Next time you are faced with a pile of the aforementioned internal stuff, ask yourself a few simple questions:
“what would a valued customer think about all this?
“Would my customer see this as an activity that they are prepared to pay for?
“How does this impact on my customers experience with the product and organisation?
Pretty simple questions, but answering them and acting accordingly will radically increase the productivity of your marketing expenditure.
Oct 18, 2011 | Change, Customers, Management
One of my clients is in a pretty difficult spot.
Having lost a major contract, simply on price from an offshore based competitive supplier to his supermarket customer, he finds himself in the position where his overheads will eat him alive quickly without very painful commercial surgery.
Over a period of time we have been discussing the Quality of his sales Vs the Quantity of sales, but assembling and allocating the resources to execute a change in the customer base has proven easy to say, very hard to do.
It is fine to obsess about the sales revenue line, but rather than just consider the quantity of sales, the quality is just as, if not more important. Had the volume he did with the supermarket been spread around 3 customers who were less likely to go offshore looking for a better price, even accepting the higher transaction costs, he would today be far better off.
Many businesses, particularly service businesses like insurance and Telcos factor in customer churn, and spend lots of marketing dollars to replace the customers they will lose through poor service, pricing, competitive deals and so on. Directing a small percentage of those dollars to better engaging with and servicing existing customers to reduce churn would be far better.
It is the quality of sales that should be measured, not just the quantity.
