A CMO's Guide to Social Media
How Social Media is Shaping Your Leadership Opportunity
I recently gave the following presentation to The CMO Club. The subject of CMO leadership through social media is so rich that I documented my notes and included over 45 links to relevant articles and data in the eight page article below (also available in .pdf).
Chief Marketing Officers (CMOs) have it rough these days. Recession marketing is always tough, but this recession happens to bring with it destabilizing forces affecting the market dynamics between many businesses and their customers. The socialization of the web is both a cause and effect of these changes and thanks to non-stop headlines about social media CMOs (and pretty much everyone in marketing) find themselves frequently responding to social media-related questions like "Do you think we should be on Facebook?", "Let's start a blog!", "Why aren't we Twittering - Tweeting... whatever you call it?"
By now, marketers know the best response to have ready to these questions, which is: "We go where our customers are and our social media channel strategy is no different, etc." This is the right answer, but it is not one that should leave a CMO, or their executive peers, feeling comfortable. Why isn't the best marketing response good enough? Because the speed of change in this market means that even a social marketing strategy that makes sense in the one quarter may be completely undermined by the end of the next quarter (for example, if last December you'd written off Facebook because 35+ year old users weren't prevalent there, by March you'd have had to rethink your strategy as that user base more than doubled in 60 days). And it's not just demographics that are shifting, in very short order, advertising has quickly begun to move to more efficient online channels at the same time that online advertising has itself become a search game where the best keyword bean counters win. Email, a long time B2B and B2C marketing staple, is proving less effective as open rates descend and email usage loses out to social networks. Though social networks are beginning to absorb a lot of web traffic, the social networks themselves turn out to be a poor advertising medium because people prefer to interact with each other (instead of ads) in these time-hog social venues. As a result, traditional online advertising formats aren't very effective on social networks and people aren't making purchase decisions there either.
In short, and despite interesting new experiments like Dell's SWARM, it's getting really - really - hard to reach your customers through both traditional and new media channels, and even when you do find the right marketing mix for your audience, it's highly likely that channel effectiveness will shift again before you build your next marketing budget.
Of course you have a job to do, so marketing through this crazy wave is what you'll do, making tactical adjustments to try to maintain and grow your customer and prospect base. But your executive peers need more from a CMO than tactical adjustments in the midst of this uncertain time; they need leadership. Leadership starts with the recognition that social media is - in fact - destabilizing traditional customer-business relationships because it is - in fact - more compelling than traditional marketing channels. Mastering this enticing engagement medium, however, will require more than just out-of-the-box marketing thinking; it will require marketing leaders to step up to broader business leadership challenges, helping their executive peers reshape their businesses around new relationship models with all their key stakeholder audiences, including customers, partners and employees.
Understanding what's really going on
Before you can use the new market realities to your favor, you have to understand the changes at a deeper level than the symptoms that show up in morphing marketing plan assumptions. The key takeaway here is that social media is much, much more than just another communications channel.
It's all about power shifts
The most fundamental change is a sudden power shift from the organization to the individual. Enabled by inexpensive, high-quality production tools and global reach, ordinary human beings - including your employees - can now produce compelling content to entertain themselves and their peers (sometimes by re-purposing others' video, audio and text), pass on juicy information or breaking news and become niche forces overnight. These people are just people, motivated by a wide variety of drivers, some of which you can impact and most of which you can't. But in all cases, you do not control them and they do hold potential market power over you, as Dell, Apple and a host of others have learned. As a result of this power shift, the professions of journalism, public relations and marketing are changing dramatically. Marketers in particular, can no longer get away with "megaphone marketing" and indiscriminate push marketing (especially through social media channels) because the public now pushes back (or yells back).
These power shifts offer your company opportunities too
Luckily the power shifts and tools that make your company more vulnerable are available for you to use in response, not just to market your wares but to build a stronger business. Your social marketing options go beyond advertising, poofy viral opportunities and word-of-mouth strategies. Marketers are catching on to the reduced effectiveness of advertising; a study at the end of 2008 showed that a majority of CMOs planned to lighten up on social network advertising (35% showing interest in ads on Facebook and MySpace) in favor of social media participation and content creation (well over 50% planning to create podcasts, webinars, forums and blogs). This is good news, because it means your peers are recognizing that commercial success in the social sphere is presaged by adding value of some kind. Why add value through marketing? Simply put, if you don't give people something that interests them enough to socialize around, they'll make their own entertainment and ignore you (which is what they're doing to social advertisers using traditional advertising formats like banner ads). While some of these content strategies are promising, the potential and impact of social technology goes much farther, reaching into the very core of your business model.
Three examples of this deeper business model impact are captured in the Crowdsourcing, Long Tail and Free Economy phenomena, all of which capitalize on the new economics of technology (including, but not limited to, social technology) to adjust the economics of business itself.
- Crowdsourcing enables a company to use social strategies to remove costs from the business model and (in most cases) increase customer loyalty and create word of mouth opportunities at the same time.
- Long Tail economics allows companies to aggregate (though increased reach) dispersed markets to run profitable businesses in previously untapped niches.
- The Free Economy speaks to the power of free services and the gift economy, often powered by social, to generate tangible revenue thanks to rapidly declining costs of service delivery.
So while with one hand new social technology is taking away stability in our markets, with the other hand it offers up new opportunities to create value and wealth.
The market demands more than transparent and authentic communication
As the head of marketing you are shaping your brand by how you respond (or don't) in the social marketplace. The market opportunities that come with new technology also come at the price of greater transparency, authenticity and accountability, the demands for which run deeper than public relations to the very core of your company's identity. In short, the public - which is now empowered to take you down or buoy you up - has become intolerant of "spin." Your audience now demands straight talk, and will penalize those who insult their intelligence by 'faking it', at the same time they reward authenticity where they find it. This pressure to "be real" is often felt most acutely by the marketing department, often the generator of the inauthentic "spin" messages in the first place. As tempting as it is to think of increased transparency and an authentic-sounding voice as tactics prevent PR disasters to and appease a vocal few, it's more accurately understood as one of many forces coming into alignment with broad consumer demand for social responsibility and increased accountability. The way in which you respond will shape your brand identity irrevocably in the eyes of your customers, employees and the media.
CMO's New Social Leadership Opportunities
Many of the shifts and changes mentioned above are understood in piece parts throughout your business and no doubt you and your executive peers are engaged in developing strategies to respond. The CMO has a special opportunity to contribute to this effort and lead the way forward in using the power of social technology to retool the company's key stakeholder relationships - prospect, customer and employee relationships especially - from transactional to relational. This transformation should take you from providing value through the product to providing value through the relationship (the product being a central aspect of the relationship). When customers perceive their relationship with the company as valuable beyond merely the utility of the product you sell them, they will provide value to you beyond the dollars they spend on your product, entering into a dynamic, interactive and co-creative effort to help you succeed.
Lead your peers in developing meaningful customer relationships throughout the entire customer lifecycle
It all starts with the customer relationship. None of the trends above can be addressed without a deep and intimate relationship with your market base and the CMO is the only executive other than the CEO tasked with understanding the market throughout the entire customer lifecycle, from lead to upsell/renewal. The successful CMO sees the customer as a whole elephant while their peers focus by necessity on a trunk, a tusk or a tail (e.g., sales on prospect needs, financial on billing/collections, and operations on customer service needs). When the CMO takes a holistic view of the customer, coaching and encouraging their peers to use social tools to deepen the customer relationship through an aligned set of interactions from prospecting to upselling, the company will become less vulnerable to these destabilizing macro trends and - perhaps more importantly - competitors who would dearly love that same close relationship. There is no formula for this holistic "whole elephant" approach, of course, because one company's elephant is another company's "pick your beastie". Companies and their customer bases are each unique. But here is some strategic advice to help you build on the learnings of others.
Most marketers (myself included) have been trained to represent the company to our audiences of customers, investors, partners, suppliers, employees and influencers. Sure, we understand the value of market research, target segments and customer feedback - and social media tools offer some unique new ways to research our customer base as well - but at the end of the day most of us have used research primarily as an input to our "real" responsibility, which has traditionally been to be (or manage) the voice of the company through a rich mix of brand, messages and channels we blare out at the "market". Generally this market has been fairly faceless, treating even segments of "one" as data to be mined instead of people to be engaged. But people are more than the data they generate and (as we see above) they now have the power to demand that we treat them this way.
By fixating on our external communications task as our main value to the company, marketing has ceded the responsibility for listening to and observing the customer to others, typically sales or operations. This creates a breakdown in the holistic customer relationship-building cycle because when we marketers are talking at the customer, we're just yelling at the elephant; as a result we don't see ourselves and our company in the customer's context and it becomes harder to find new ways to provide them value that will bring them naturally into a loyalty relationship with us. In this way, social marketing can act as an expansion of our qualitative market research strategy at the same time it helps create brand enthusiasts capable of using their market power to help us. The traditional focus group, which still serves an important function as the first step in quantitative research methodologies, no longer has to bear so much of the burden for qualitative research input.
Social marketing is more than a research tool, of course, and at a minimum listening to customers more carefully can make us better communicators in telling our own story. The American Red Cross learned this and was able to use social media to gain a more comprehensive understanding of their volunteers and donors. Armed with this information they adapted their communications to be more effective at the micro level of the vocabulary they used and the macro level of how, when and why they initiated customer communication, mitigating a tendency to over-communicate with blood donors.
Beyond listening, social media offers many places and ways for you to engage customers directly and involve them with your brand. The big sites like Facebook and LinkedIn offer places to put up an electronic storefront, but digging down deeper will reveal places your most enthusiastic customers hang out so you can find and engage the most active influencers in your market. When you get to these deeper levels of engagement, by listening and connecting to their personal interests, you put your company in relationship with them even before the sale. More and more in the future, marketing leadership will include actively devising strategies to put the company into relationship with your customers at every stage in the customer lifecycle - and even outside the product transaction relationship. These holistic relationships span transactional activities, including prospecting, qualified lead gen, customer service, upsell and renewals - so that the customer is constantly receiving value and your company is continually reaping reward (financial and otherwise) through the evolving relationship.
Well executed, a social participation strategy designed to engage customers at every stage of the relationship allows the CMO to provide holistic customer insight to their peers, culling the most important trends, insights and data their colleagues must know see their portion of the elephant most effectively. The CMO's strategic job is not to manage the entire social customer relationship but to understand it, monitor it (have your data!) support it and provide the compelling case for change on its behalf to their peers.
Manage the brand, the brand experience, and even the brand co-creation
One of the most exciting aspects of the underlying power shifts and market changes we find ourselves living through is the way social technology can help companies adjust their business models to become better adapted to the fast-paced, margin-squeezed economy. Many of these strategies involve deepening social relationships between the company and its audiences, engaging your audiences' energy in your success and, in the process, creating many more "touchpoints" through which you can affect the customer's brand experience (without annoying them). CMOs who have been proactive in employing the "whole elephant" customer engagement strategies discussed above can become natural leaders in helping their companies take advantage of social tools and evolve their business processes throughout the entire prospect/customer lifecycle.
Engaging your market in co-creating value - including them in helping create competitive advantage - is a very company-specific process or it wouldn't be so competitively useful. Although not exhaustive, here are a few B2B and B2C examples that demonstrate how companies are using social technology to bring their customer base into the business process itself, increasing customer loyalty while simultaneously (in some cases) cutting costs and (in all cases) improving customer satisfaction.
-
Co-creative IP Development: Bearingpoint uses wiki technology to engage its customer base in helping to evolve their open source data architecture model, opening their collective work to the public on the theory that it will lead to greater standardization. This strategy is designed to increase Bearingpoint's credibility and market awareness while building its competitive advantage on their deep understanding of the intricacies of the evolving standard. The fact that their customers collaborate with them in building this technical resource for the entire industry to use only enriches those customer relationships.
- Product Development: "Idea Sites" used by Starbucks and Dell to solicit and prioritize customer input are some of the best public examples of how companies can structure deep dialogs with their large customer bases and invite them into the product development process. Truly crowdsourced companies like Threadless, however, go even farther and outsource pieces of the development and design process to customers who participate free of charge or for non fee-based reward.
- Customer Support and Engagement: National Instruments' "Nerd Network" engages over 110,000 users to answer 46% of their customer support questions while also engaging them in new product discussions and student mentoring programs.
- Partner Collaboration: IBM uses social technologies, inviting its 100,000 partner network to collaborate with its employees and with each other to help grow their collective business success.
- Employee Engagement: Albeit slowly, Intranets are transforming into socially empowered centers of value creation, morale building and brand reinforcement. This is fantastically exemplified by Best Buy's BlueShirtNation. Not only are employee programs being transformed by the active social participation of the employees, but the very nature of managing a business is evolving.
No matter which audience you engage at this deep level and for what purpose, the principal is the same: invite your audience into helping you create your value to them. The payoff works on many levels, reflecting itself tactically through more reliable sales projections from more deeply engaged customers and better employee retention, and showing up strategically in greater brand loyalty, positive word of mouth and shareholder value. There are many proprietary software tools to support your deeper audience engagement strategies, but sifting through them requires a solid strategy and business plan. These plans go beyond the marketing department, but the CMO is the perfect champion for using social strategies beyond marketing because it is the CMO who is tasked with brand building and at the end of the day, brand building is the area of marketing that what social strategies have the opportunity to effect most deeply.
Nurture the dynamic brand identity - the brand consciousness and conscience - through customer relationships and company behavior
Just as many marketers have been trained to view the marketer's job as focused on outbound communication, we've also been trained to equate our brand with the visual and verbal aspects of the company's identity (i.e., a logo), in other words, the pieces of that identity that have been traditionally more controllable and easier to wrap a budget around. That day is past, too, and our brand is now a function of the customer's experience with our organization more than the visual and verbal elements that trigger memories of the experience.
Customer experience has always been core to customer loyalty, and it still is, but now that customers can talk about their experience with us so easily using the social tools at their fingertips, whether we like it or not, and whether they realize it or not, each individual customer is now a direct channel taking our brand messages to market. In this context "message control" is irrelevant and we have moved into yet another co-creative space where our interaction with our customer (often in public for all their eFriends to witness), and their dialog with others about that interaction through their own postings, actively creates our brand. As a result, every single customer interaction becomes part of our dynamic brand identity. And while it's tempting to focus reputation management strategies solely on turning around negative messages many companies have been pleasantly surprised to find that their more enthusiastic fans are already saying positive things. In the latter case, one of the CMO's first challenges is to keep the traditional infrastructure (especially the legal team) from quashing such enthusiasm before it can become part of the company's more formal outreach strategies. But beyond merely trying to protect it, CMOs must take the lead in figuring out how to enable it.
There are so many ways to participate in social media and building and maintaining true relationships of any kind takes time and energy, resources not always in overflow supply in marketing departments. Of course you have to make good judgments about where your team spends its time and resources, and you have to get smart about leveraging resources outside your department because resources are another reason the marketing department can't completely own the responsibility to manage the customer relationship on behalf of the brand. Luckily, today's technologies offer us tremendous ways to engage our entire employee base in our branding-through-relationship strategy. If the U.S. Air Force can do it, so can you!
But no one says it's easy.
Relationships are two way things. If the CMO successfully understands the holistic customer but doesn't place equal emphasis on shaping the companies' holistic response, the relationship is vulnerable. Organizations are not individuals, but in relationships with individuals they do have unique identities which, just like an individuals', are comprised of more than simply a bunch of disparate behaviors. This organizational identity transcends discreet transactions, going to the level of "brand consciousness," and includes the values and motivations inherent in the company's culture which reflects itself in marketing messages, sales conversations, customer implementation procedures, support activities and financial documentation (to name just a few) as the customer experiences them.
Brand building in the 21st Century means CMOs must take the lead in helping their peers see the linkages between the customer's brand experience and all the discrete company-customer interactions that go into building it. Despite our traditional education in brand-building as advertising, at the end of the day, the only aspect of your customer's brand experience that your company controls is its own behaviors. Thus "managing" the brand means managing what the company puts into the relationship with your customer, because it is your behavior as an organization which is what the customer will end up talking about to their friends, family and your competitors. Your brand is now what you do, not what you say you do.
Your best asset in the future of brand building is your employee base, the individuals who not only touch customers most directly but also have the greatest motivation to help your company succeed. How do you prepare your entire employee base to be effective brand stewards in this crazy madcap market? Again, relationships are key. If your relationship with your employees is an effective expression of your brand, then their relationships with your customers (and other important audiences) will be equally authentic to your brand. Because this link is indirect, however, it's easy for companies to overlook its importance and short-change the employee brand experience. As a leader who does understand these linkages, it's important for the CMO to become a strong advocate of internal branding.
And this internal branding path is perhaps the road down which the CMO has the greatest opportunity for corporate leadership. Because a brand that is authentic internally and externally, supports strong relationships throughout the customer lifecycle and excites employees, customers and stakeholders enough to talk about it with others and encourage them to become engaged - a brand that strong - has deep meaning to all those people beyond just the ad slogans and tag lines the marketing department (with its trusty ad agency compadres) usually cooks up. The strong brands that become both strategic and tactical assets for their shareholders are based on core values that resonate with their audiences, and they engage these audiences' hopes, aspirations and trust.
Vitalizing your brand with deeply motivational corporate Vision, Mission and Values statements that express shared meaning and value is challenging work and means taking on a certain responsibility for the "brand conscience", but it is vitally important and something a CMO is uniquely positioned to champion in the interests of the entire company's success. To step up to this level of leadership means that the CMO must not simply take responsibility for managing the face of the brand, but to be the "brand conscience" and to take on the responsibility for growing its soul as well. It is not a path for the feint hearted because sometimes it requires a company to confront uncomfortable realities where their principles and practices are out of alignment, but this makes it work even more worth doing. Because in today's market, if the company doesn't do it, it's customers may very well force the issue - in public.
The challenge of leadership
Of course, pioneering these strategies will take the CMO out of the strict marketing arena and involve them in initiatives to be run out of the executive suite, sales, operations, development and lots of other places the company may not think you belong. While I won't digress completely into a discussion of general leadership, I will say that this article is intended to demonstrate just how pervasive social strategies need to be throughout the successful business of the future. As a result, the entire executive leadership team needs to understand and embrace the forces that are already reshaping their business. No matter how tempting it is for you as a head of marketing to want to own all aspects of the brand-building and customer relationship efforts (and you're not alone if you want to own it) the key to success is not to "own" it, because you can't. You can't control it any more than you can control your customer's mind and blog entries.
What you can do is lead by example in the areas that do fall into your purview and educate your peers - especially the CEO who arguably does own the whole shebang - about what's really going on. Become a leading thinker among your executive peers about how to use social strategies in responding to these market shifts. Still not sure where to start? Focus on strengthening the holistic customer relationship and then use your deep customer insight, gained through active listening and engaging, to guide you. If you do it really well, your customers may not only give you the answer, they may do some of the work to help you succeed.
Download Article (.pdf)
How Social Media is Shaping Your Leadership Opportunity
I recently gave the following presentation to The CMO Club. The subject of CMO leadership through social media is so rich that I documented my notes and included over 45 links to relevant articles and data in the eight page article below (also available in .pdf).
Chief Marketing Officers (CMOs) have it rough these days. Recession marketing is always tough, but this recession happens to bring with it destabilizing forces affecting the market dynamics between many businesses and their customers. The socialization of the web is both a cause and effect of these changes and thanks to non-stop headlines about social media CMOs (and pretty much everyone in marketing) find themselves frequently responding to social media-related questions like "Do you think we should be on Facebook?", "Let's start a blog!", "Why aren't we Twittering - Tweeting... whatever you call it?"
By now, marketers know the best response to have ready to these questions, which is: "We go where our customers are and our social media channel strategy is no different, etc." This is the right answer, but it is not one that should leave a CMO, or their executive peers, feeling comfortable. Why isn't the best marketing response good enough? Because the speed of change in this market means that even a social marketing strategy that makes sense in the one quarter may be completely undermined by the end of the next quarter (for example, if last December you'd written off Facebook because 35+ year old users weren't prevalent there, by March you'd have had to rethink your strategy as that user base more than doubled in 60 days). And it's not just demographics that are shifting, in very short order, advertising has quickly begun to move to more efficient online channels at the same time that online advertising has itself become a search game where the best keyword bean counters win. Email, a long time B2B and B2C marketing staple, is proving less effective as open rates descend and email usage loses out to social networks. Though social networks are beginning to absorb a lot of web traffic, the social networks themselves turn out to be a poor advertising medium because people prefer to interact with each other (instead of ads) in these time-hog social venues. As a result, traditional online advertising formats aren't very effective on social networks and people aren't making purchase decisions there either.
In short, and despite interesting new experiments like Dell's SWARM, it's getting really - really - hard to reach your customers through both traditional and new media channels, and even when you do find the right marketing mix for your audience, it's highly likely that channel effectiveness will shift again before you build your next marketing budget.
Of course you have a job to do, so marketing through this crazy wave is what you'll do, making tactical adjustments to try to maintain and grow your customer and prospect base. But your executive peers need more from a CMO than tactical adjustments in the midst of this uncertain time; they need leadership. Leadership starts with the recognition that social media is - in fact - destabilizing traditional customer-business relationships because it is - in fact - more compelling than traditional marketing channels. Mastering this enticing engagement medium, however, will require more than just out-of-the-box marketing thinking; it will require marketing leaders to step up to broader business leadership challenges, helping their executive peers reshape their businesses around new relationship models with all their key stakeholder audiences, including customers, partners and employees.
Understanding what's really going on
Before you can use the new market realities to your favor, you have to understand the changes at a deeper level than the symptoms that show up in morphing marketing plan assumptions. The key takeaway here is that social media is much, much more than just another communications channel.
It's all about power shifts
The most fundamental change is a sudden power shift from the organization to the individual. Enabled by inexpensive, high-quality production tools and global reach, ordinary human beings - including your employees - can now produce compelling content to entertain themselves and their peers (sometimes by re-purposing others' video, audio and text), pass on juicy information or breaking news and become niche forces overnight. These people are just people, motivated by a wide variety of drivers, some of which you can impact and most of which you can't. But in all cases, you do not control them and they do hold potential market power over you, as Dell, Apple and a host of others have learned. As a result of this power shift, the professions of journalism, public relations and marketing are changing dramatically. Marketers in particular, can no longer get away with "megaphone marketing" and indiscriminate push marketing (especially through social media channels) because the public now pushes back (or yells back).
These power shifts offer your company opportunities too
Luckily the power shifts and tools that make your company more vulnerable are available for you to use in response, not just to market your wares but to build a stronger business. Your social marketing options go beyond advertising, poofy viral opportunities and word-of-mouth strategies. Marketers are catching on to the reduced effectiveness of advertising; a study at the end of 2008 showed that a majority of CMOs planned to lighten up on social network advertising (35% showing interest in ads on Facebook and MySpace) in favor of social media participation and content creation (well over 50% planning to create podcasts, webinars, forums and blogs). This is good news, because it means your peers are recognizing that commercial success in the social sphere is presaged by adding value of some kind. Why add value through marketing? Simply put, if you don't give people something that interests them enough to socialize around, they'll make their own entertainment and ignore you (which is what they're doing to social advertisers using traditional advertising formats like banner ads). While some of these content strategies are promising, the potential and impact of social technology goes much farther, reaching into the very core of your business model.
Three examples of this deeper business model impact are captured in the Crowdsourcing, Long Tail and Free Economy phenomena, all of which capitalize on the new economics of technology (including, but not limited to, social technology) to adjust the economics of business itself.
- Crowdsourcing enables a company to use social strategies to remove costs from the business model and (in most cases) increase customer loyalty and create word of mouth opportunities at the same time.
- Long Tail economics allows companies to aggregate (though increased reach) dispersed markets to run profitable businesses in previously untapped niches.
- The Free Economy speaks to the power of free services and the gift economy, often powered by social, to generate tangible revenue thanks to rapidly declining costs of service delivery.
So while with one hand new social technology is taking away stability in our markets, with the other hand it offers up new opportunities to create value and wealth.
The market demands more than transparent and authentic communication
As the head of marketing you are shaping your brand by how you respond (or don't) in the social marketplace. The market opportunities that come with new technology also come at the price of greater transparency, authenticity and accountability, the demands for which run deeper than public relations to the very core of your company's identity. In short, the public - which is now empowered to take you down or buoy you up - has become intolerant of "spin." Your audience now demands straight talk, and will penalize those who insult their intelligence by 'faking it', at the same time they reward authenticity where they find it. This pressure to "be real" is often felt most acutely by the marketing department, often the generator of the inauthentic "spin" messages in the first place. As tempting as it is to think of increased transparency and an authentic-sounding voice as tactics prevent PR disasters to and appease a vocal few, it's more accurately understood as one of many forces coming into alignment with broad consumer demand for social responsibility and increased accountability. The way in which you respond will shape your brand identity irrevocably in the eyes of your customers, employees and the media.
CMO's New Social Leadership Opportunities
Many of the shifts and changes mentioned above are understood in piece parts throughout your business and no doubt you and your executive peers are engaged in developing strategies to respond. The CMO has a special opportunity to contribute to this effort and lead the way forward in using the power of social technology to retool the company's key stakeholder relationships - prospect, customer and employee relationships especially - from transactional to relational. This transformation should take you from providing value through the product to providing value through the relationship (the product being a central aspect of the relationship). When customers perceive their relationship with the company as valuable beyond merely the utility of the product you sell them, they will provide value to you beyond the dollars they spend on your product, entering into a dynamic, interactive and co-creative effort to help you succeed.
Lead your peers in developing meaningful customer relationships throughout the entire customer lifecycle
It all starts with the customer relationship. None of the trends above can be addressed without a deep and intimate relationship with your market base and the CMO is the only executive other than the CEO tasked with understanding the market throughout the entire customer lifecycle, from lead to upsell/renewal. The successful CMO sees the customer as a whole elephant while their peers focus by necessity on a trunk, a tusk or a tail (e.g., sales on prospect needs, financial on billing/collections, and operations on customer service needs). When the CMO takes a holistic view of the customer, coaching and encouraging their peers to use social tools to deepen the customer relationship through an aligned set of interactions from prospecting to upselling, the company will become less vulnerable to these destabilizing macro trends and - perhaps more importantly - competitors who would dearly love that same close relationship. There is no formula for this holistic "whole elephant" approach, of course, because one company's elephant is another company's "pick your beastie". Companies and their customer bases are each unique. But here is some strategic advice to help you build on the learnings of others.
Most marketers (myself included) have been trained to represent the company to our audiences of customers, investors, partners, suppliers, employees and influencers. Sure, we understand the value of market research, target segments and customer feedback - and social media tools offer some unique new ways to research our customer base as well - but at the end of the day most of us have used research primarily as an input to our "real" responsibility, which has traditionally been to be (or manage) the voice of the company through a rich mix of brand, messages and channels we blare out at the "market". Generally this market has been fairly faceless, treating even segments of "one" as data to be mined instead of people to be engaged. But people are more than the data they generate and (as we see above) they now have the power to demand that we treat them this way.
By fixating on our external communications task as our main value to the company, marketing has ceded the responsibility for listening to and observing the customer to others, typically sales or operations. This creates a breakdown in the holistic customer relationship-building cycle because when we marketers are talking at the customer, we're just yelling at the elephant; as a result we don't see ourselves and our company in the customer's context and it becomes harder to find new ways to provide them value that will bring them naturally into a loyalty relationship with us. In this way, social marketing can act as an expansion of our qualitative market research strategy at the same time it helps create brand enthusiasts capable of using their market power to help us. The traditional focus group, which still serves an important function as the first step in quantitative research methodologies, no longer has to bear so much of the burden for qualitative research input.
Social marketing is more than a research tool, of course, and at a minimum listening to customers more carefully can make us better communicators in telling our own story. The American Red Cross learned this and was able to use social media to gain a more comprehensive understanding of their volunteers and donors. Armed with this information they adapted their communications to be more effective at the micro level of the vocabulary they used and the macro level of how, when and why they initiated customer communication, mitigating a tendency to over-communicate with blood donors.
Beyond listening, social media offers many places and ways for you to engage customers directly and involve them with your brand. The big sites like Facebook and LinkedIn offer places to put up an electronic storefront, but digging down deeper will reveal places your most enthusiastic customers hang out so you can find and engage the most active influencers in your market. When you get to these deeper levels of engagement, by listening and connecting to their personal interests, you put your company in relationship with them even before the sale. More and more in the future, marketing leadership will include actively devising strategies to put the company into relationship with your customers at every stage in the customer lifecycle - and even outside the product transaction relationship. These holistic relationships span transactional activities, including prospecting, qualified lead gen, customer service, upsell and renewals - so that the customer is constantly receiving value and your company is continually reaping reward (financial and otherwise) through the evolving relationship.
Well executed, a social participation strategy designed to engage customers at every stage of the relationship allows the CMO to provide holistic customer insight to their peers, culling the most important trends, insights and data their colleagues must know see their portion of the elephant most effectively. The CMO's strategic job is not to manage the entire social customer relationship but to understand it, monitor it (have your data!) support it and provide the compelling case for change on its behalf to their peers.
Manage the brand, the brand experience, and even the brand co-creation
One of the most exciting aspects of the underlying power shifts and market changes we find ourselves living through is the way social technology can help companies adjust their business models to become better adapted to the fast-paced, margin-squeezed economy. Many of these strategies involve deepening social relationships between the company and its audiences, engaging your audiences' energy in your success and, in the process, creating many more "touchpoints" through which you can affect the customer's brand experience (without annoying them). CMOs who have been proactive in employing the "whole elephant" customer engagement strategies discussed above can become natural leaders in helping their companies take advantage of social tools and evolve their business processes throughout the entire prospect/customer lifecycle.
Engaging your market in co-creating value - including them in helping create competitive advantage - is a very company-specific process or it wouldn't be so competitively useful. Although not exhaustive, here are a few B2B and B2C examples that demonstrate how companies are using social technology to bring their customer base into the business process itself, increasing customer loyalty while simultaneously (in some cases) cutting costs and (in all cases) improving customer satisfaction.
-
Co-creative IP Development: Bearingpoint uses wiki technology to engage its customer base in helping to evolve their open source data architecture model, opening their collective work to the public on the theory that it will lead to greater standardization. This strategy is designed to increase Bearingpoint's credibility and market awareness while building its competitive advantage on their deep understanding of the intricacies of the evolving standard. The fact that their customers collaborate with them in building this technical resource for the entire industry to use only enriches those customer relationships.
- Product Development: "Idea Sites" used by Starbucks and Dell to solicit and prioritize customer input are some of the best public examples of how companies can structure deep dialogs with their large customer bases and invite them into the product development process. Truly crowdsourced companies like Threadless, however, go even farther and outsource pieces of the development and design process to customers who participate free of charge or for non fee-based reward.
- Customer Support and Engagement: National Instruments' "Nerd Network" engages over 110,000 users to answer 46% of their customer support questions while also engaging them in new product discussions and student mentoring programs.
- Partner Collaboration: IBM uses social technologies, inviting its 100,000 partner network to collaborate with its employees and with each other to help grow their collective business success.
- Employee Engagement: Albeit slowly, Intranets are transforming into socially empowered centers of value creation, morale building and brand reinforcement. This is fantastically exemplified by Best Buy's BlueShirtNation. Not only are employee programs being transformed by the active social participation of the employees, but the very nature of managing a business is evolving.
No matter which audience you engage at this deep level and for what purpose, the principal is the same: invite your audience into helping you create your value to them. The payoff works on many levels, reflecting itself tactically through more reliable sales projections from more deeply engaged customers and better employee retention, and showing up strategically in greater brand loyalty, positive word of mouth and shareholder value. There are many proprietary software tools to support your deeper audience engagement strategies, but sifting through them requires a solid strategy and business plan. These plans go beyond the marketing department, but the CMO is the perfect champion for using social strategies beyond marketing because it is the CMO who is tasked with brand building and at the end of the day, brand building is the area of marketing that what social strategies have the opportunity to effect most deeply.
Nurture the dynamic brand identity - the brand consciousness and conscience - through customer relationships and company behavior
Just as many marketers have been trained to view the marketer's job as focused on outbound communication, we've also been trained to equate our brand with the visual and verbal aspects of the company's identity (i.e., a logo), in other words, the pieces of that identity that have been traditionally more controllable and easier to wrap a budget around. That day is past, too, and our brand is now a function of the customer's experience with our organization more than the visual and verbal elements that trigger memories of the experience.
Customer experience has always been core to customer loyalty, and it still is, but now that customers can talk about their experience with us so easily using the social tools at their fingertips, whether we like it or not, and whether they realize it or not, each individual customer is now a direct channel taking our brand messages to market. In this context "message control" is irrelevant and we have moved into yet another co-creative space where our interaction with our customer (often in public for all their eFriends to witness), and their dialog with others about that interaction through their own postings, actively creates our brand. As a result, every single customer interaction becomes part of our dynamic brand identity. And while it's tempting to focus reputation management strategies solely on turning around negative messages many companies have been pleasantly surprised to find that their more enthusiastic fans are already saying positive things. In the latter case, one of the CMO's first challenges is to keep the traditional infrastructure (especially the legal team) from quashing such enthusiasm before it can become part of the company's more formal outreach strategies. But beyond merely trying to protect it, CMOs must take the lead in figuring out how to enable it.
There are so many ways to participate in social media and building and maintaining true relationships of any kind takes time and energy, resources not always in overflow supply in marketing departments. Of course you have to make good judgments about where your team spends its time and resources, and you have to get smart about leveraging resources outside your department because resources are another reason the marketing department can't completely own the responsibility to manage the customer relationship on behalf of the brand. Luckily, today's technologies offer us tremendous ways to engage our entire employee base in our branding-through-relationship strategy. If the U.S. Air Force can do it, so can you!
But no one says it's easy.
Relationships are two way things. If the CMO successfully understands the holistic customer but doesn't place equal emphasis on shaping the companies' holistic response, the relationship is vulnerable. Organizations are not individuals, but in relationships with individuals they do have unique identities which, just like an individuals', are comprised of more than simply a bunch of disparate behaviors. This organizational identity transcends discreet transactions, going to the level of "brand consciousness," and includes the values and motivations inherent in the company's culture which reflects itself in marketing messages, sales conversations, customer implementation procedures, support activities and financial documentation (to name just a few) as the customer experiences them.
Brand building in the 21st Century means CMOs must take the lead in helping their peers see the linkages between the customer's brand experience and all the discrete company-customer interactions that go into building it. Despite our traditional education in brand-building as advertising, at the end of the day, the only aspect of your customer's brand experience that your company controls is its own behaviors. Thus "managing" the brand means managing what the company puts into the relationship with your customer, because it is your behavior as an organization which is what the customer will end up talking about to their friends, family and your competitors. Your brand is now what you do, not what you say you do.
Your best asset in the future of brand building is your employee base, the individuals who not only touch customers most directly but also have the greatest motivation to help your company succeed. How do you prepare your entire employee base to be effective brand stewards in this crazy madcap market? Again, relationships are key. If your relationship with your employees is an effective expression of your brand, then their relationships with your customers (and other important audiences) will be equally authentic to your brand. Because this link is indirect, however, it's easy for companies to overlook its importance and short-change the employee brand experience. As a leader who does understand these linkages, it's important for the CMO to become a strong advocate of internal branding.
And this internal branding path is perhaps the road down which the CMO has the greatest opportunity for corporate leadership. Because a brand that is authentic internally and externally, supports strong relationships throughout the customer lifecycle and excites employees, customers and stakeholders enough to talk about it with others and encourage them to become engaged - a brand that strong - has deep meaning to all those people beyond just the ad slogans and tag lines the marketing department (with its trusty ad agency compadres) usually cooks up. The strong brands that become both strategic and tactical assets for their shareholders are based on core values that resonate with their audiences, and they engage these audiences' hopes, aspirations and trust.
Vitalizing your brand with deeply motivational corporate Vision, Mission and Values statements that express shared meaning and value is challenging work and means taking on a certain responsibility for the "brand conscience", but it is vitally important and something a CMO is uniquely positioned to champion in the interests of the entire company's success. To step up to this level of leadership means that the CMO must not simply take responsibility for managing the face of the brand, but to be the "brand conscience" and to take on the responsibility for growing its soul as well. It is not a path for the feint hearted because sometimes it requires a company to confront uncomfortable realities where their principles and practices are out of alignment, but this makes it work even more worth doing. Because in today's market, if the company doesn't do it, it's customers may very well force the issue - in public.
The challenge of leadership
Of course, pioneering these strategies will take the CMO out of the strict marketing arena and involve them in initiatives to be run out of the executive suite, sales, operations, development and lots of other places the company may not think you belong. While I won't digress completely into a discussion of general leadership, I will say that this article is intended to demonstrate just how pervasive social strategies need to be throughout the successful business of the future. As a result, the entire executive leadership team needs to understand and embrace the forces that are already reshaping their business. No matter how tempting it is for you as a head of marketing to want to own all aspects of the brand-building and customer relationship efforts (and you're not alone if you want to own it) the key to success is not to "own" it, because you can't. You can't control it any more than you can control your customer's mind and blog entries.
What you can do is lead by example in the areas that do fall into your purview and educate your peers - especially the CEO who arguably does own the whole shebang - about what's really going on. Become a leading thinker among your executive peers about how to use social strategies in responding to these market shifts. Still not sure where to start? Focus on strengthening the holistic customer relationship and then use your deep customer insight, gained through active listening and engaging, to guide you. If you do it really well, your customers may not only give you the answer, they may do some of the work to help you succeed.
Download Article (.pdf)
|
Social Media is more than a communications channel.
Understand what's really going on:
- powershifts between individuals and organizations are underway and irrevocable;
- your company can use these shifts to its advantage and for more than the marketing mix; and
- market demands for authenticity and transparency are deeper than PR tactics can resolve.
Social Marketing requires business leadership
The CMO's social leadership opportunities:
- become the company leader in developing a holistic customer relationship strategy;
- don't just manage the brand, manage the brand experience and even its co-creation; and
- nurture the dynamic brand identity through customer relationships and company behavior (your brand is now what you do, not what you say you do).
Get out there and lead!
Social Media is more than a communications channel.
Understand what's really going on:
- powershifts between individuals and organizations are underway and irrevocable;
- your company can use these shifts to its advantage and for more than the marketing mix; and
- market demands for authenticity and transparency are deeper than PR tactics can resolve.
Social Marketing requires business leadership
The CMO's social leadership opportunities:
- become the company leader in developing a holistic customer relationship strategy;
- don't just manage the brand, manage the brand experience and even its co-creation; and
- nurture the dynamic brand identity through customer relationships and company behavior (your brand is now what you do, not what you say you do).
Get out there and lead!
|