I recently interviewed Karen O’Brien, Partner in charge of Web Strategy & Social Media at Crimson. The topic was Social Media Analytics. Here is the “one minute” highlight from our conversation:
 
In general the kind of data you can expect to get in a social media report includes:

• Top topics of conversation
• Topic trends
• Sentiment around a topic, product, program, etc
• River of News (being able to drill down into spikes in activity around a specific topic)
• Identify top influencers
• Share of voice (overall how much “buzz” did a company or a product have vs. others)
• Examples / quotes that exemplify conversation trends / opinions

Social Media analytics data is about conversations and therefore is by nature qualitative. I find it is most useful when applied to very specific KPIs or objectives - for example you can do a monitoring of top conversations around a specific product and then do a comparison against messaging and see where the gaps are.  (e.g. compare what we want people to be talking about vs. what they are actually saying.) It is also useful to layer other analytics data to validate and exemplify a trend (layer with regular web analytics or sales data for example).

What are you looking for from Social Media Analytics?

(A summary from a recent WSJ article by Martin Roth and Richard Ettenson)
 
Advanced economies have a particular way of dealing with downturns, which often include hunkering down and waiting it out. However, lessons can be had from emerging markets where economic uncertainty is the only certainty. So, what can we learn? Here are some quick lessons.

• An office products company in South America offers good service in good markets, and great service when the economy sours. For example, they might make more follow-up calls after servicing a product. And, they might make calls on customers without trying to sell them anything, but rather focus on issues of importance to the customer that might be helpful in solving customer problems at a later date. Imagine that — a sales call without an attempt at a sale. I can see how that customer might engage in more conversations with that vendor than with other vendors. If they have conversations that truly benefit the customer and not just themselves, they will build customer loyalty.
• Two telecom companies (one in South Africa, the other in India), are beating Western companies by offering tremendously flexible mobile phone usage plans. For example, they allow people to buy minutes over their handsets, on the Internet, through ATMs, and through specialized kiosks. The point here is that companies have to be willing to change their offerings quickly and often (see Responding Competitively during a Recession) to address market changes. And these companies are winning business with these flexible approaches.
• Another suggestion comes from the mobile phone industry. A telecom provider in the Dominican Republic outsmarted its competitors by looking beyond typical measurements of success such as ARPU and churn rate. They conducted scenario planning including key macroeconomic factors such as inflation, unemployment, exchange rate fluctuations and others. This scenario planning process enabled them to move quickly with new offerings when the market moved in a particular direction – and win new business from their competitors.

What are you doing to learn from companies that have thrived in turbulent economies?

(McKinsey writes a good article, I write a better – and more entertaining — summary for you (subscription required, so I can’t link to the article).
 
Of course, we have to do more with less. That’s the new world we’re living in.  But what is really new about this world besides lower expectations across the board?

Segmentation plans made in 2008 are probably outdated. Re-examine the market opportunity of different market segments depending on how those key segments have been affected by the downturn. Furthermore, examine microsegments as differences may be significant. For example, affluent young professionals in the financial services sector have been impacted differently than other microsegments and will act differently today than they did a short time ago.

B2B marketers should look even more closely, by drilling down to the account level. For example, an account that may have been highly profitable, and that rated preferential treatment may now require renegotiated discounts, closer adherence to standardized orders, etc.

Amazingly, McKinsey agrees with me by saying across the board cuts may not make sense in this environment (see How can you control your marketing spend if you don’t know what your marketing spend is?). They go on to state that understanding reach and cost enables marketers to make better informed decisions as to where to invest marketing dollars.

As it relates to sales, one should examine your sales coverage model to establish the optimal mix of sales and sales support for the given markets and accounts you’re pursuing. In addition, it may be even more important now to conduct win-loss analysis to understand the changes that are happening in the sales process.

This downturn requires constant analysis on the changes happening in your markets and your accounts. What do you think?

We are working with a client that is very focused on driving down their global channel costs, but wants to see a simultaneous increase in channel revenues. So, how is that going? Amazingly, it’s going well.
 
What I will share with you is partially the strategy of our client and partially input from us. The program hinges on two major points:

1. Developing and nurturing a Partner Ecosystem,
2. Providing an outsourced concierge service.

(I’ll use “we” here, and acknowledge that many third-parties can play the role of “we”. My objective with this post is to show you what can be done.)

Like most of our clients, they have thousands of Partners already. They even talk about an existing Partner Ecosystem. What we are doing is building out this ecosystem so that they have what they need to really work well together. It’s quite easy to have a Partner program that you call an ecosystem, it’s another thing entirely to have a real ecosystem. By that, I mean Partners who can, and do, work with each other and with the vendor to create a 2 + 2 = 5.

How are we doing that? Via the concierge service.

The concierge service profiles, matches and connects (via social networking) a global group of Partners. The service manages the planning, execution, management and reporting of:

• Co-development, funding and execution of demand generation programs,
• Partner business plan creation,
• Consultative guidance on brand usage, partner program benefits, offerings, promotions, etc.,
• Partner-to-Partner enablement via social tools,
• Revenue creation through connecting Partners and our client on opportunities (where the rubber meets the road).

 How are your channel costs and revenues doing?

If your CEO wants to cut costs across the board, then you will see cost reductions in all departments. This is an interesting way to cut costs as it assumes the ROI on dollars is the same. Some companies do this and this is a mistake. Most companies don’t do this, however. Instead they cut budgets by certain amounts for certain departments.
 
We have found that many of our clients have been told to reduce budgets by a certain amount in marketing. The assumption is that an analysis has been done as to what value is derived by marketing vs. other activities and that X% is the right percent for marketing. The challenge is that very few large companies really understand what their marketing spend really is.

How could this be? We have a CMO! They control the budget, don’t they? Well, usually not, and therein lies the problem. The CMO controls a significant portion of the budget, but in fact may only control 60% - 70% of the corporate marketing spend. Here are some examples of places where marketing dollars are spent, but not spent under the control, scrutiny and ROI analyses of the CMO:

• Field marketing (local mailings, tradeshows, events, etc.)
• MDF (often buried in channel operations budgets)
• Country or theater-specific marketing (taking corporate work and repurposing it)
• Division-specific marketing (your support group that is marketing services, your finance group that is developing creative financing, your skunk works group that needs some research, your professional services / training group, etc.)
• Product management (how much of this work is marketing vs. development?)

The implications of not understanding your marketing spend are significant. If you believe you understand the ROI of your marketing spend (irrespective of how hard it is to measure), you’re not applying that ROI model to all the activities to which it should be applied. So, you are likely to cut too much in one area and not enough in another simply because of where that budget sits, not because you understand the ROI of that spend. For example, you may cut your web marketing budget 20% and only cut your professional services marketing 10% (because those budget dollars are in professional services, not in marketing), even though your ROI on web marketing is greater than the ROI on your professional services marketing.

Furthermore, it’s very likely that your CMO (they really should understand how to best allocate marketing spend, don’t you think?) doesn’t know the ROI on all the marketing spend. Now that’s a scary thought. If I were the CMO, I’d make the case that even if I can’t win control of all marketing budgets, I should at least know what they are so I can analyze and determine the ROI for the greater good of the company.

What would you do if you were the CMO?

We are all looking for great ideas while dealing with this economy. Here are three you can take to the bank:

Drive into the opening left by your competitors.
Your competitors are pulling back and leaving opportunities on the table (I wrote in more detail on this in “Responding Competitively during a Recession”). As an example, Adobe is pulling back on their investment in web design software. What opportunity does that leave for Adobe’s competitors? Who’s going to step up and take business from them? If you competed with Adobe, how would you leverage this opportunity?

Do everything you can to focus on your best customers.
Zappos, thinking about how to focus where they can make the biggest difference has created a higher level of service for repeat customers. For example, for the most part, they don’t promise overnight shipping, but they surprise you with it. However, now, they’ve shifted this surprise to only repeat customers. Notice, they keep the surprise (and customer delight factor), and they’ve reduced their costs. Yes, they may lose a tiny percentage of new customers who are merely satisfied (not delighted) with Zappos service, but they ensure repeat customers get outstanding service. Furthermore, they are now providing their most loyal customers early access to sales, to new merchandise, etc. Excellent focus on the customers most valuable to them.

Leverage your customers - They’re smarter than you think.
With budget cuts in development, Intuit was forced to think out-of-the-box as to how to offer more value to customers for less. The idea they came up with was to enable user-generated content (UGC) in Intuit’s tax software. As you might imagine, there was substantial organizational resistance to the idea of people who aren’t experts in tax, answering tax questions. However, they tested the concept and – lo and behold – it works. Users now ask questions and other users answer questions and, perhaps most importantly, other users vote on the answers, so the best answers rise to the top. Not only is leveraging UGC smart, but it this case, it increased customer satisfaction while reducing Intuit’s development and support costs.

Do you have other examples of great downturn marketing ideas?

While sales are down overall for most companies, we’ve seen a shift toward sales via the web for many products. Given that, why would a company invest in distributor relationships now? In a McKinsey article “Rethinking high-tech distribution”, the authors make several good points I’ll summarize here.

• Distributor revenues in emerging markets have grown 33% annually for the last 5 years,
• Distributors control 42% of all distribution to the SMB market,
• Emerging markets have more SMB than large clients,
• Distributors have strong channel partners (VARs) that know the local market,
• SMB companies often prefer to buy from VARs,
• VARs are better at assessing credit risk than the vendor (this is a big deal in today’s climate),
• Vendors can offer credit to distributors to help them distribute credit where the return is safest

What other reasons do you see for using distributors, especially now?

While it was envisioned 15 years ago by none other than the inventor of the web (Tim Berners-Lee), very few marketers understand the implications of the semantic web. The semantic web ties each data item on the web to other data items of like kind, regardless of their location. So, instead of having to wade through search results, the semantic web will automate the assembly of data items that are somehow tied together.

For example, if you’re interested in how to best sell a car, today you will receive thousands of search results. In the semantic web, those data items and documents will be assembled in a single, convenient collection of all relevant references.

The question for marketers is – how will this impact how and where you market? The semantic web could (hypothetically) eliminate / replicate the benefits of social networks and cut them out of the equation by enabling your personal information to be available to others without someone having to be “a friend”. It will certainly change online search, and likely change the market share of the current leaders as new players emerge.

If you run a website, and/ or use your website for marketing you need to envision a world of open, linked data – linked in a way that you haven’t anticipated or designed your site for. At the very least, you should be aware of this oncoming change in the web so you aren’t caught flat-footed.

Have you thought about the implications? Do you have an sense for how soon it will impact us marketers?

I listened to Steve Ballmer’s earnings call yesterday. (MSFT is a client of ours – so I care about them). I was quite intrigued with a hypothesis he put forward. The point he made was subtle, but significant. Steve said something like “the economy doesn’t rebound, it builds from a lower base”.
 
Whoa! That’s a very different perspective than I’ve heard from any economic pundits … and I’ve heard from a lot of them.

What are the implications of his hypothesis – if true?

1. Things as they are today just might stay the way they are for a very long time. We should not develop plans assuming a recovery, but rather a non-growth scenario for quite some time.
2. That means that competitive differentiation becomes much more important. (See Competitive Advantage via Customers and Competitors) Much, much more important. Why? Because the same companies are now fighting for the same size (or shrinking) pie and will continue to fight for that non-growing pie.
3. This makes new products, risky products, much more challenging to market. Customers are much more likely to bet on what they know than something new until they see growth happening again. They do this for practical reasons and to protect their jobs as well.
4. Positioning and messaging must contain a mix of realism (it’s not going to get better very soon) with optimism and hope (we can help you grow (or feel better) with this solution).
5. Everyone will not only make less but will get used to making less. This means lower margins for the provider of the solution, and lower margins for all their partners as well.
6. Understanding the way people buy (See Technology Buying Processes - Participation is Up!) becomes very, very significant. Why? Because how people buy is now very dynamic and those companies that follow the changes will prosper.

What are some of the other implications you see?

You may have suffered personally during this downturn. You may suffer more because it’s not going to be over soon. However, things are different in this downturn – different from the last one we experienced in 2001 – 2003. Because of these differences, we can take advantage of at least opportunities we now have that we didn’t have before.

Opportunity #1 – Better data and data analysis tools  

We have the opportunity to really, deeply understand our customers and target markets in ways that simply weren’t available to us before:

• Incredible, insightful web analytics to direct our web marketing efforts,
• Access to micromarket data (See my post on microsegment promotions for more detail), enabling companies to be highly detailed in their understanding of not just countries, but counties, cities and (in the U.S.) zip codes. This data can be very interesting when looking at key geo-specific issues such as housing prices.
• Overall improvements in data analysis technologies enabling more users to have better access to sophisticated methods of analysis.

Opportunity #2 – More ways to reach the prospect

We can get access to influencers and buyers in ways that weren’t available to us in the recent past:

• Social networking sites. Millions and millions of users now spend considerable time in places that didn’t exist before, and you can get access to them in ways you could never get access before.
• Social media. Now, you can participate in all types of online communications (blogs, product-focused sites, user-focused sites, twitter communications, etc.)
• Mobile devices. Most of us are mostly always connected. It’s now possible to reach your audience more times during the day in more ways than before.

I’m confident there are other opportunities as well.  I’d love to hear which ones you see that I’ve missed.