Sign up to get full access to all our latest content, research, and network for everything customer contact.

Why Are Some Companies Better Than Others at Social Media?

Add bookmark
Joakim Nilsson
Joakim Nilsson
12/15/2011

What makes certain companies better at social media than others? Do they have any secrets into Facebook Fan acquisition or do they have a master social ninja guarding their e-reputation? Ultimately what’s the secret sauce to achieving success with social media? The answer: there are no giant secrets.

Within this post, I attempt to explain and clarify two things:

  • Will hiring a social media manager (or ninja, guru, expert, evangelist, etc.) automatically help your business flourish?
  • What exactly makes some companies better than others at social media?

To illustrate this, I’ve used two stereotypical businesses, as described by Philip Kotler. One of these operates as businesses did in the Old Economy, while the other has transitioned into organizing and operating around the New Economy.

Fig1. Table from Marketing Management – Eleventh Edition, Jan 2002, Philip Kotler

How Old Economy businesses approach social media

Old Economy businesses tend to approach social media tools and technologies in a straightforward, tactical manner rather than a strategic one.

During the past few years, we’ve seen businesses rushing into setting up a presence on Social media networking sites. Most often this setup looks much like a hub and spoke (not to confuse with Altimeter’s hub and spoke model for internal organization of social media). The objective given to the hub and spoke social media setup is to 1) Grow each social media network profile as large as possible and 2) Then convert as large percentage as possible into transacting customers.

Recognize your own business here?

Fig2. Replace "Website" with your retail store or any other point of sales you may have.

Now you may ask yourself, "What is wrong with this model?" At first look, it seems like a smart and simple tactic, easy enough to sell to anyone in the company and get funding.

Now the problem is simply that unless you’re already a very big brand, can afford to spend a lot of money or will invite the whole of your customer base to join these channels, growing your social network presence and achieving any profitable results will prove very difficult.

Here’s why:

  • Your focus is on profitable transactions, not on nurturing your community. As the latter is still, with numbers, hard to prove profitable, it will not be given the resources needed.
  • It becomes a numbers game where you "spray and pray" all your promotional content and hope it will reach its potential target audience.
  • You’re working in a silo, marketing does the marketing so social media handles the social media channels.

There are, however, some upsides to the hub and spoke model—let’s look at them:

  • Easy to track, measure and report on success. It keeps the social media manager of the program somewhat "safe" for a while.
  • Any gains in terms of leads and direct sales can be traced back to the model and the various accompanying SEO strategies.
  • Can make a great "content in-bound marketing" program.
  • It will fast track the company into understanding the need of social media tools & technologies as a strategic asset.
  • Given the above, a long-term effect of that may be that an organization new to social eventually translates into New Economy business.

There are examples of companies that have had great success with the hub and spoke, though. Dell setup a Twitter Outlet back in 2007 and has since generated millions in direct revenue. (Dell, however, is not really an Old Economy business)re already a very big brand, can afford to spend a lot of money or will invite the whole of your customer base to join these channels, growing your social network

Here’

  • Your focus is on profitable transactions, not on nurturing your community. As the latter is still, with numbers, hard to prove profitable, it will not be given the resources needed.
  • It becomes a numbers game where you "
  • You’

There are, however, some upsides to the hub and spoke model—

  • Easy to track, measure and report on success. It keeps the social media manager of the program somewhat "
  • Any gains in terms of leads and direct sales can be traced back to the model and the various accompanying SEO strategies.
  • Can make a great "
  • It will fast track the company into understanding the need of
  • Given the above, a long-term effect of that may be that an organization new to social eventually translates into New Economy business.

There are examples of companies that have had great success with the hub and spoke, though. Dell setup a Twitter Outletback in 2007 and has since generated millions in direct revenue.

The reason Old Economy businesses shapes a hub and spoke model is because they view social media as just another set of communication channels. Another set of channels needs another team and another manager. Teams needs objectives, and since these teams most often sit in something like Marketing/Communications, the same departmental objectives are going to adhere to the social media channels as well.

I call this "social media marketing" or just having a "social presence," and I believe that it is the most an Old Economy business can achieve with social media. It may be sufficient for the time being, but smart businesses will be keen on exploring all the other opportunities present.

Facebook created the huge hype, but Social Media tools and technologies aren’t new

If we go back and look at Fig 2 above, it’s worth noting that I’ve copied this table from my Marketing Management bookI had in university 2002. But no one was talking about "the power of social media" back then, why is this relevant now? It’s true that Facebook didn’t have 850M active users in 2002 (well, it wasn’t even founded), so there wasn’t much for the mainstream press to create headlines about.

Nevertheless, what we today classify as social tools and technologies where already flourishing in the late 90′s. Here are a few examples:

  • ICQ made Instant Messaging mainstream
  • Web chats to be seen on every other website
  • Forums has been around since the birth of the www
  • Lunarstorm, Swedish social network founded in 1999 which was popular by my age group (failed to scale and grow out of the baby stage. Something facebook was more lucky with 5 years later)

As we all know, change doesn’t happen over a day. The current rush to anything social media didn’t just come out of nowhere, it has been slowly building up post 2001 dot-com bubble, and where are probably right now seeing one of its peaks. Just like in pre dot-com bubble where everyone rushed to have an Internet presence, businesses are now rushing to have a social media presence. And, of course, the shiny-new-object-syndrome plays a part in this, which is dangerous because what you do is quickly becoming a distraction from what really matters.

On the other hand, companies that turned customer centric, and back then started strategies around how to best operate in an online landscape where customers have a growing voice, are the ones leading today (referring to "the social space"). The rest, which have been struck by the social media hype only in the last year and panic over what to do on Facebook, will have at least a few years in front of them: 1) going through the hub and spoke with just maintaining a social presence 2) unless something radical happens to the media landscape, re-organize as a New Economy business.

How Do New Economy businesses use social media tools and technologies?

These companies will be able to integrate the use of social media tools and technologies in a much more profitable way. Most likely, the businesses will probably already have a well-defined and integrated social media program.

There are a few essential points to why a New Economy business will succeed better with social media (marked as bold in Fig 1):

  • Everyone does the marketing
  • Build brands through behavior
  • Focus on retention and growth
  • Underpromise and overdeliver

Why are these so important factors for social media? First of all, "everyone does the marketing" is so true today. They also sometimes do the un-marketing. You know all the examples already where nasty customer complaints ended up having viral exposure--the guy who spat on the pizzaand the famous broken guitar. Although these are somewhat unlucky examples, there will just not be any room for bad products and services going forward. Now your Customer Service rep is in charge of marketing as much as your guy with the budget over display media.

Your product expert is now also a marketing guy; his blog about product XYZ may become more popular that your corporate website. Just look at SAAB’s dull newsroomwith zero comments and compare to their enthusiastic blogger Steven Swade, who ran Inside Saab(and ended up getting hired after a while). Rest assured that Mr. Swade is neither being told to measure, nor being or measured on, increased foot traffic in Saab’s showrooms.

Brand management is essential, but just like marketing, it is not just something you craft up in a Powerpoint and ship to your agency. The way you and your employees act as a business, and the way your socially connected customers respond, ultimately shapes your brand.

Whilst focusing on retention and growth will supposedly make your customers happier, it is crucial to focus on connecting your customers with each other? Compare this to a acquisition focused organization with high churn rate; what kind of things would you think that company’s name is associated with on a Google search or in the twitter stream?

Underpromising whilst overdelivering is also a strategy focusing on what online footprints your customers will leave. Saying that you’re better than you are and disappointing customers may have worked when you could feed them TV-commercials all day. But today’s customers researching each purchase may need a different strategy. I know Zappos is a clichê example by now, but look at the mission statement which says, "deliver WOW through service." Though making that statement is, in fact, making a pretty bold promise, as long as Zappos remains committed to actually letting its service do the talking, it will remain successful.

5 proven strategies to social media tools and technologies

If you’ve been reading my blog in the past you also know that I’m a big fan of Forrester Research’s approach to social media; we call it the 5 key areas in social media.

In a New Economy model, your organization will want to operate in accordance with these principles; that is not the case for Old Economy organizations.

Here are examples and illustrations of tactics for the 5 key areas:

  • Listen– Advanced monitoring tools will be installed and integrated into a vast amount of areas in the business. Customer Service center/Community managers monitor for brand mentions, the company measures brand sentiment and share of voice, the SEO team looks for link-building and content opportunities and the product team may be following certain industry keywords on the web.
  • Talk– Anyone in the organization technically has the possibility to speak on behalf of the brand. This ranges from branded content you publish in social channels, to the example above regarding Saab’s Steven Swade blogging. IBM has thousands of employees blogging, and Best Buy has trained thousands of employees in the use of social media. They key here is governance, not policing.
  • Support– Today your customer service department is responding to inbound calls. But what about the negative brand mention around the web? Do you assess and engage with these? Are there ways you pro-actively can do customer service outreach? Is closing your eyes for what people say on the web the best strategy, or should you start to fire-fight it? Everyone does the marketing
  • Energize– If a large amount of your customer have a presence on social media sites (some of Facebook’s 850M users must be your customers), is there then anything you can do to make them talk positively about you? Asking them may work, creating the WOW-effect may work even better.
  • Embrace – Can your focus group be found online? Can you actually invite a selected number of customers/prospects into your business? Blackberry did so with their super user program by recognizing key individuals on their customer support forum. Customers felt appreciated and could show their expertise, Blackberry equally happy having outsourced the job for free.

    There’s nothing wrong with the hub and spoke model above. It’s a great start of a social media program. The problem is the mindset of your business is that of an Old Economy business, you will have a tough life and probably never ever see any light beyond the marketing sales silo.

    CMIQ Advisor Joakim Nilsson's blog: How to achieve results through social media

RECOMMENDED