10 Reasons Market Research is Critical to Social Media

I continue to be surprised at how many companies keep the Market Research department in some back hall closet collecting dust and reams of paper reports.  It happens in all industries, but lately I’ve seen retail companies keep their “Consumer Insight” group focused on traditional insight like mall traffic patterns and planograms. Consumer segmentation models are typically owned in these groups, and often they are leveraged for behavioral patterns that help with the proverbial 4 Ps – Product, Price, Place and Promotion.  That stuff is important to the business, no doubt.  But those same companies need to leverage, not ignore, that insight available when fusing social media into the marketing mix they already have.

Brian Solis has a terrific series starting this week on the changing marketing, advertising and communications, where he adds a 5th P: People.   People are the fuel behind social media, which is really just tools and tactics. Here is a quick list of reasons to get Market Research engaged early in order to give social media (People fueled) initiatives the best chances of long term success.

10.  Knowing Customer Behaviors

What internal group knows more about your customer’s behaviors and acts?  The web analytics team knows about what customers do with your own web assets, not about what customers do – in the real world and in online social channels where you don’t own the assets.  Do they share opinions?  Do they care what kind of car they drive?  Are they fickle with the brand of toothpaste they buy?  Do they use social platforms and if so, how often and why?  While we’re at it, how do our customers use social media vs. the mainstream population?

9.  Understanding the Effectiveness of Current and Historical Marketing

This applies to branding initiatives too. They (should) know how effective every ad, campaign, point-of-sale item, direct mail, email, tagline, product and other marketing investment has performed.  Wouldn’t you want to leverage that insight to avoid a misdirection in using social media?

8.  Tried and True Methods to Solicit Customer Feedback

Industries are changing rapidly, and the need to conduct focus groups, surveys and gather feedback is too.  The more traditional/offline methods still apply, though – and chances are market research departments are already exploring alternatives to get those things accomplished more quickly, more effectively and cheaply.  Either way, the market research team should be established pros at getting feedback from existing and target customers.

7.  Understanding the Current and Future Market Conditions

Market research is a core part of any business strategy – in this case meaning researching markets.  Will there be future demand for products?  How is our market share today vs. a year ago, and how will a new program help influence that?  It’s this team that businesses leans on to get hard data on what will happen.  Talking to customers in these markets in social channels increases the need to understand the market overall and correlate initiatives to marketing directives.

6.  They Have the Ear of the CMO

There are many arguments on who should own social media, but the research arm of the company usually rolls up to the CMO.  The CMO is the one managing brand perception, and if you believe social media initiatives impact branding, marketing or communications, the CMO will want to hear about it.  The CMO will also want to know the data.

5.  Understanding Customer Needs and Wants

Customer needs are different than behaviors.  Do your customers have a need for community, convenience, or collaboration?  A customer who is ill needs and wants a safe, effective means to get relief – understanding that need will lead to understanding that customer’s motivation.  Social media tools provides customers new ways to hear about, research and talk about their needs.  Market research teams can share that insight and inform the folks “doing the talking” on what content makes sense to share and discuss.

4.  They Have the Best Contextual Insight

Bruce Temkin, former Forrester Research analyst on customer experience, wrote a post a few months ago about how market research needs less statistical analysis and more contextual analysis.  He shared this formula:

“Actionable insight” is one of my all-time favorite terms, and if market research can provide that, they need to be in the mix and weighing in an any new initiative.

3.  “We’ve got data!”

New businesses are being formed to help fuse social media into more traditional business intelligence disciplines.  Market research has a P&L that includes funds to buy that data, and the skills to sift through it to make meaningful hypotheses about it.

2.  Understanding the Competitive Landscape

When deciding to build a strategy for social media, it’s clearly important to know what your competitors are doing.  The market research team is typically the best equipped, since they a) know who your competitors really are, and b) likely keeps tabs on them already for other campaigns, pricing, promotions and events.

1.  Insight is Critical Before Starting Anything New

Simply put, many types of social media (as emerging technology) are rapidly moving past the Trough of Disillusionment and into the Slope of Enlightenment.  More and more case studies of successes in social channels are popping up.  Social media may still be new – and perhaps some approaches will be new to even the biggest organizations.  When Pepsi put big budget dollars to social media, I think many people in the industry finally woke up.  I guarantee that Pepsi didn’t make this decision without their market research team in the mix.

Social media tactics touch many other parts of the organization too, but having Market research up front in the design and decision process will help make initiatives more effective.  What did I miss?

Photo credit: pagedooley via flickr

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7 Inputs to a Social Media Strategy

seedsBuilding a social media strategy is not something that can be whipped together overnight.  For context, any company that is looking to develop a strategy for leveraging social media should first check out the POST methodology from Forrester Research.  The “People” part of the approach (followed by Objectives, Stategy and Technology) has a short description:

Don’t start a social strategy until you know the capabilities of your audience. If you’re targeting college students, use social networks. If you’re reaching out business travelers, consider ratings and reviews. Forrester has great data to help with this, but you can make some estimates on your own. Just don’t start without thinking about it.

This is smart, practical advice.  Yet it doesn’t go deep enough.  Here are seven inputs that need to be considered before defining objectives and developing a strategy to leverage social media tactics.

  1. Social Media Monitoring. There are many self-service tools out there beyond Twitter search and Google blog search.  Two that work well are Radian6 and SM2.  No software is perfect, especially when it comes to analyzing sentiment of what customers are saying, but “hunting and pecking” using point-in-time search tools isn’t going to give you the broad array you need.  These tools also can review data back in time to compare tone and conversations year over year or before and after a key event like a product launch.  It takes time to sift through the chatter, but there are gems in there that constitute unfiltered customer feedback worth paying attention to.
  2. Market research. Survey your customers and ask them what tools they use.  If you are a large company, consider leveraging a segmentation that addresses the needs, wants, attitudes and behaviors of your customers.  This can be a significant source of insight to drive marketing strategies – not just social marketing ones.
  3. Forrester’s Social Technographics. Forrester has a great tool to stratify how your customers are actually using social media.  Do your customers heavily index against the average for Creators or Critics?  Perhaps a user-generated content idea or approach would be more suitable.  While the tool doesn’t give you the answer of what to do, it does provide some data points that help justify approaches down the road.  If you know some basic info about your customers, you can get useful data easily using this tool:

  4. Competitive Analysis. What are your competitors doing? Are you behind the pack or leading by deciding to engage in social technologies to drive your business?  It’s important to know where you stand – better yet to know where you want to be.
  5. Stakeholder Interviews. Some tactics in social media will require different departments to work together – perhaps some that aren’t used to collaborating.  Talk to the following groups: Marketing, Market Research, Innovation, Product Management, IT, Legal, Customer Service, PR and HR.  Chances are they will all have something to say about social media and what they would hope to get from it.
  6. Corporate Objectives.  What is your company’s marketing objectives in 2010?  Are you undertaking a brand refresh?  Have some major product launches teed up in Q2?  Any seasonal or cyclical impact to plan around?  Don’t think you can develop social tactics without considering what is going on in the company.
  7. Corporate Culture. Does your company thrive on innovation or on chopping down new initiatives?  Social media tactics can be measured, effective and game-changing – yet the industry is not as mature of a marketing tactic like pay-per-click search marketing.  “Making the leap” requires top down executive support and a bottoms up desire to make initiatives successful from the teams that will own the strategy going forward.  (Or fail quickly and learn from it, as I’ve heard Todd Defren say – this space is still new).

Frankly, I don’t see how the rest of the POST methodology – Objectives, Strategy and Technology – can be developed without these inputs.  Do you agree? What did I miss?

Photo credit: h-d-k via Flickr

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The Basics of Social Media ROI

registerToday I sat on a panel at the IBM Websphere Commerce Leadership Summit, with panelists Brant Barton, co-founder of Bazaarvoice, Duke Marr, VP of Product Management at 1-800-Flowers.com, and Stan Payson, VP of Interactive Media at David’s Bridal, moderated by Forrester‘s Sean Corcoran.  The panel was called Answering the Burning Question of Social Commerce ROI. I enjoyed the discussion, especially with the varied perspectives of the participants.  There were lots of lessons learned shared – in particular Duke and Stan had terrific insight at different ends of the social media maturity perspective.  Stan’s company is just getting started, building a strategy, while Duke’s team has a foothold in just about every social and new technology (especially mobile) tactic out there working hard to be first.  1800Flowers.com was the first to do commerce on Facebook, for example.

Some key thoughts about ROI shared on the panel:

  • Measurement and ROI are not the same. Use measurements to calculate ROI (Return on Investment).
  • Practical experience shows that sometimes ROI doesn’t come right away.
  • When just getting started, it’s helpful to be able to attribute web traffic through links shared in social networks, promotion codes, specific landing pages, etc.  But that is just the tip of the iceberg for measuring ROI.
  • Longer term, lifetime value of a customer is a key metric to understand the net results of leveraging advocates.

What’s clear: businesses can measure ROI, they are focused on the long term, and there is much room for education of marketers in this space.  With my mind on ROI I spotted this presentation shared on Twitter today (feed readers may need to click through to the post to read).  Between the panel and the presentation my mind is overflowing with social media ROI goodness.  Yours will be too after going through this – Olivier Blanchard captures the essence of ROI from social media in a humorous, easy-to-understand way.  Worth browsing through.  While you’re figuring out who Olivier Blanchard (aka TheBrandBuilder) is, you may also want to check out his post today debunking social media myths.

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People

The New Marketing Funnel

(Jointly authored with Rosetta‘s Director of Social Media, Gargi Patel)

The world has changed. We are in the midst of an unprecedented shift of power to the consumer fueled by the virtual megaphone handed to them through social media outlets. When a customer is angry or has a bad experience with a product or service, the old rule of thumb was that they told an average of 10 people about it. In today’s world some could easily be telling 10,000 (or more!). On the flip side, happy customers can be telling many more than the old average of 3 people about their good experience. Marketing executives just need to design initiatives that enable and activate them to do so. That shift can be represented through adapting one of every marketer’s favorite marketing conceptual frameworks, the funnel.

Infusing Engagement into the Marketing Funnel

With the expansion of the marketer’s toolbox to include social media, marketing is no longer about pushing out one way communications. The marketing world is no longer defined solely by impressions; it’s now a world of interactions. Today’s marketing includes the customer’s voice throughout the process, whether it’s intentional or not. Customers will talk online and comment on a brand’s marketing campaigns, products, services, and even how a company treats employees. It’s not enough to think about how companies communicate outwards; it’s just as important to think about how customers can communicate back, with each other, and arguably most importantly, with new prospects.

Rethinking The Funnel

A few years ago, Forrester Research published a report on “engagement” and suggested that the marketing funnel has become much more complex in today’s environment.  (See image.  Former Forrester analyst Brian Haven wrote about the complexities impacting the funnel in 2007).  While the influencing factors are more complicated, the same simple, visual framework as the traditional marketing funnel can be leveraged to show this complexity. The design needs to account for engagement throughout the process rather than looking at it through a lens of static messages we push out.

For example, traditionally, marketers look to create awareness by placing carefully planned messages across appropriate media outlets. Today, customers can create and spread their own messages about a brand through user-generated content and social networks. Traditionally, marketers would hope to influence customers in the “consideration” phase through strategic promotions and sales tactics. Today, user-generated ratings and reviews are frequently enough to convince a customer to make the purchase. Building loyalty is no longer just about loyalty points programs for repeat purchase or sending regular emails to customers. Building loyalty now means entering into a dialogue with them and letting customers participate in more meaningful ways than static customer feedback surveys or a constant barrage of emails announcing special promotions.

Extending the Marketing Funnel

The old marketing funnel generally followed some version of this pattern:

  • Awareness > Research/Consideration > Purchase / Conversion

With the widespread adoption of Customer Relationship Management (CRM) in the 1990’s, marketers began focusing more on loyalty or customer retention and brought the funnel one level deeper. The customer’s voice was considered important, but only in the context of customer service and a closed feedback loop. The old thinking was that sending customers regular emails would keep the brand top of mind and that special offers would keep customers from switching to competitors.

As mentioned before, today’s marketers will need to build a more authentic, deeper relationship with customers by truly engaging them to earn their loyalty—and this is how companies can begin to cultivate advocates.

Figure 2: The New Marketing Funnel

It’s time to extend the marketing funnel one level deeper to account for advocacy. There are two reasons that cultivating and enabling advocacy is critical in today’s world:

  1. People trust other people more than they trust companies. A recommendation from a friend or family member is still the single most important criteria in making a purchase decision and recommendations from strangers online also hold more weight than marketing messages.
  2. With the growing voice of the customer online and the “power” (virtual megaphone) handed to them through social media outlets, it’s important to help make sure the voice of happy customers is louder than that of the few unhappy customers.

Cultivating and enabling advocates will generate authentic word-of-mouth, bringing the best new customer prospects into the marketing funnel. The ROI on that? Priceless.  (Rosetta does in fact have a framework to measure ROI on advocacy programs.)

What do you think?  Is this old news?  Would this help you construct a framework to measure social media initiatives or sell the concept of driving advocacy to executives?  How would you change it?

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Gearing up: Marketing and Advertising Thought Leaders Summit

On Tuesday, May 12, the first annual Marketing and Advertising Thought Leaders Summit will be held in NYC.  I have the pleasure of joining Rosetta‘s CEO Chris Kuenne to attend what is looking to be a very compelling gathering of industry leaders.  From the MATLS website:

“This one-day summit will present a series of dialogue-driven forums on the changing trends in innovation, technology and consumer behavior and their impact on the marketing and advertising industries. Join us and our line-up of more than 25 industry leaders for a compelling day of insights, information and networking.”

Chris will be speaking on a panel moderated by Forrester‘s Interactive Marketing analyst Sean Corcoran on the topic: “Next Generation Digital Agency” along with C-level leadership from iCrossing, Initiative, Innovation Interactive, and Resource Interactive.

I’ll be there both on Twitter and posting here with thoughts and commentary – it looks to be a valuable gathering of CEOs, CMOs and private equity leadership.  The attendees have a heavy hand in shaping the future of our industry, it should be intriguing.

Will you be there? Please reach out, I’d love to connect.

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Slideshare: The Future of Social Networks

Charlene Li, one of the authors of Groundswell, pulled together a very thoughtful presentation on the future of social networks.  She continues to be a visionary in the social networking space.  I’ve been using LinkedIn for nearly 5 years, and Facebook for 2 – envisioning these applications and predictions coming true are not as far fetched as they may seem.  What do you think?

 

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