Technology, Cloud

Rethinking social media: customers 'unlike' brands that do not deliver value

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CRM and Knowledge Management strategy?

In his recent HBR online Article “Social Media's Impending Flood of Customer Unlikes,” author Brian Solis points out that “Brands are furiously creating profiles in social networks such as Facebook and Twitter in the hopes of building engaging communities with customers and giving people what the brands think they want.” “But are these companies developing effective campaigns to build engagement and give the people what they want?” “If businesses are unable to change course, a very real — and likely very painful — lesson lies ahead. Once-willing consumers will soon become reluctant to connect with brands or will completely sever social ties to brands once they deem the connection fruitless”.

Social Media has been able to generate much buzz over the last 16 months. The upper part of the CIO’s that I speak with have a spoken out strategy for Social Media would they be required to spell one out if needed.

In order to address to the subject of Social Media effectively we need to define the scope, that is to build a conversation with customers or clients as well as to some extent facilitate the exchange of information / knowledge within the enterprise.

Now that we have a demystified scope that includes Marketing, CRM and Knowledge Management, we can address the “how to”. Applications that support the identified activities can be 1) owned and hosted on an external server (data outsourcing) Facebook, Salesforce and box.net would be among a few examples, 2) owned / leased but hosted on an external cloud (bundle of servers outside the firewall), 3) owned / leased on an internal cloud (bundle of servers inside the firewall).

Return on investment (ROI) and Total Cost of Ownership (TCO). Where most advocates of Social Media refute the idea of ROI, models exist for ROI for the identified activities. Marketing and CRM are revenue generating activities and models would include increase in market share, idea generation pipe, increase in sales, visibility etc. Knowledge Management is both revenue generating (the speed to answer to a proposition and win due to shorter time to market) and promotes organisational effectiveness as the workflow is improved and time to market hence shortened.

TCO, it is imperative for the CIO and the IT deparment to understand total cost of ownership for Social Media as there will be an impact on the IT budget, that could be charged back to the department that have commanded the service (or not). The business case to validate ROI would also require a clear cost model.

 

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Discussion
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pcalento
Paul Calento 256 Points | Tue, 10/11/2011 - 23:02

For social media to work, there needs to be a clear value proposition ... the "what's in it for me" factor. Starting a Facebook page or adding social media links to existing pages/apps/etc. doesn't work unless there's a clear benefit to the customer/user. That's why so many social media projects fail (or, more likely, fade away). Specific to the CIO, one way to ensure success is to enhance already successful enterprise apps with social media front ends. As for ROI and TCO, monitoring the impact of increased engagement will likely make a strong case and perhaps even drive a social x-factor.

--Paul Calento

(note: I work on projects sponsored by EnterpriseCIOForum.com and HP)