In these days of gender equality, we can rephrase this quote as “The consumer isn’t a moron; he/she is your spouse”, but the fact remains that a customer is the most important person for any business, more so in a competitive economy where customers have many choices. You may ask what that has got to do with Social CRM? Let me explain:

The sole reason any business, be a mom and pop store serving a small community or a multi-national corporation (MNC) having tens of thousands of employees across several countries with thousands of products and millions of customers, exists is to serve its customers. All business decisions and actions undertaken by every employee are aimed at satisfying needs and wants of customers, starting right from understanding customers’ needs/wants, designing a product, manufacturing the product, distributing and marketing the product and post sales support. Any action not aimed at making customers happy is fruitless or is counter-productive.

Heavy up-front investments are made (fixed costs incurred) in the process of creation and delivery of a product or a service with the assumption that the customer will like what is being offered and will purchase the product. Any active customer involvement in product design, manufacture and delivery process is ‘minimal’ at the best through market research. This results not only in costly product failures/increased risk for the business but also higher sales and support costs.

In ‘Social Age’, it is not only possible, but incredibly easy and inexpensive for business to collaborate with customers and work together irrespective of physical location and other barriers. Thanks to social networking technology, business has an opportunity to engage customer and prospects in ‘real-time’ at every stage of product design, manufacture and delivery process in order to minimize risks and maximize value delivered to customers.

Question is not how business can afford to engage customer on social media, it is how business cannot afford NOT to engage customers on Social Media channels. Social CRM, which has been defined as the business strategy of engaging customers through Social Media with goal of building trust and brand loyalty is the way to go for business (for more, see this).

To quote David Ogilvy again, “the consumer isn’t a moron; she is your wife”. Wouldn’t you want to engage your spouse or significant other (customers in this case) on an ongoing basis? And we all know the costs if we don’t engage significant people in our life, don’t we?

In “Social” age, customers are empowered like never before as they can share their experiences and opinions about brands/products on Social Media channels and marketers have no control over what customers are saying about their brands/products. This discussion is visible to all including other customers, potential customers and competitors.

The best any marketer can do is to Listen and Learn from what customers are saying and Engage them in meaningful conversations. In other words, Social Media channels are the new front-end of CRM system and CRM system should be designed in such a way that it captures all relevant information from Social Media channels and uses Predictive Analytics and Knowledge Management tools to derive insights and help in decision making.

Here’s how five key technological trends are driving evolution of CRM into next generation Social CRM systems:

1) Cloud Computing/SaaS CRM:

Social Media channels (like Twitter and Facebook) generate tremendous volume of user generated content created by millions of users. Not possible for CRM system to import/store the data “locally”. This is unlike “traditional” CRM, where data was generated by few users and stored in “local” database. SaaS Model makes it possible to store information in the “cloud” (shared space) and access it from (Social) CRM application “on-demand”

Social Media space is changing and evolving rapidly. Very difficult, if not impossible, for any CRM vendor to incorporate all new channels and feeds “locally” for every installation of CRM system. Under the SaaS model, it is not difficult to add new Social Media channels/feeds to the “hosted” (Social) CRM application and make it available to users “on-demand”

2) Service Oriented Architecture (SOA):

Service Oriented Architecture and Cloud Computing not only make it easy to integrate applications, but also facilitate “plug and play” modules and add-ons that can dramatically reduce time and cost involved in extending functionality of the application. SOA design is of great help in Social CRM as new social media tools and functionality can be added without expensive customization or upgrades as was the case in traditional CRM systems.

3) Real Time “In Process” Analytics:

Predictive analytics has made it possible not only to analyze past customer behavior, but predict future behavior too based on statistical models. Predictive analytics logic/modules can be “embedded” in Social CRM work-flows to analyse and predict customer behavior from “real-time” social network data feed and take corrective action by triggering appropriate work-flows based on pre-defined business rules. For example, if a customer (or a group of customers) tweet about their dissatisfaction with a product or service, predictive analytics can help in identifying who among them are most likely to defect so that company can take corrective action before it is too late. Better still, if they happen to be customer(s) of a competitor, company can make an attractive offer and win them over. And thanks to SaaS model and SOA, this level of real-time “In Process” analytics functionality is available to small and medium sized companies with no large scale investment requirements upfront.

4) Smart Phones and Tablet PCs:

Mobile phones have evolved from “simple” telephones to mobile multi-media communication hub connected to internet via “always on” wireless broadband connection. This is going to be one of the big stories over the next couple of years that will fuel exponential increase in Social Networking Sites and their user base. It is estimated that currently more than 650 million people worldwide, or 13.4% of mobile subscribers, use the Web via a mobile device at least once a month (see this link). This number is all set to skyrocket as inexpensive smart phones continue to flood the market.

Similarly, Tablet PCs, given their large hi-resolution screen with multi-touch input, Accelerometer sensor for UI, touch-sensitive controls and high speed internet access via 3G/4G or Wifi/WiMax have the potential to change the way we use Social Media tools and take Social Networking to a whole new level.

Current Social Media tools such as Twitter or Facebook are “text” or “web-page” UI based. NextGen Social Media tools will leverage full range of functionality available in Tablet PCs and make media consumption for information & entertainment or playing online games a truly Social experience.

5) Enterprise Application and Data Mashups:

In any large or medium enterprise, we have a diverse range of applications such as “on premise” CRM or SaaS CRM, BPM, MDM, ERP etc. to name just a few. Adding Social Networks to Enterprise Application landscape increases complexity of integrating and managing all the applications exponentially not only because of amount of data generated by users on Social Networks but also the need to monitor and respond in “real time”. Enterprise Application and Data Mashups can solve this problem by combining data or functionality from multiple applications and presenting information in the required format in a seamless manner.

In a Social CRM system for example, Enterprise Application and Data Mashups can be used to combine data/functionality from multiple applications such as CRM, MDM, ERP etc. and new services can be created “on the fly” or specific work-flows can be triggered based on pre-defined business rules in a user friendly way.

All the five tech trends discussed above, namely Cloud Computing/SaaS CRM, Service Oriented Architecture (SOA), Real Time “In Process” Analytics, Smart Phones/Tablet PCs and Enterprise Application/Data Mashups are now converging and are set to transform how marketers engage their customers through social media with goal of building trust and brand loyalty!

What do you think? Please do share your thoughts and opinion:

Thanks to Social Networking technology, now it is quite easy to connect online with not only family and friends, but with other like minded “strangers” (whom we wouldn’t know otherwise) and exchange information, opinion and views, such that it is visible to all in our network. In other words, sharing and exchange of information or opinion about products or services is truly social in nature.

Startups like Groupon have leveraged not only the innate urge of people to share information about good deals with family and friends using online social networks, but also the potential of Social Media for collaboration among “strangers” for group buying discounts.

Contrast this with the fact that established retailers, both online and brick & mortar, have been slow in embracing Social Media despite the realization that it has the potential to disrupt traditional retailing model (for more, see my earlier post titled How Social Media will disrupt the traditional “Retailing” Model). Most initiatives so far by retailers were limited to either offering social sharing options on their websites or limited shopping cart functionality on their Facebook page.

J.C. Penny, the Plano, Texas based retailing giant took a great stride in this direction by moving their entire product catalog to Facebook, meaning one can buy all their products from their Facebook page just as on their website (for more, see this and this). Imagine number of clicks or free publicity this is likely to generate through Facebook sharing. I expect other retailers to follow J.C. Penny’s example in this direction.

Retailing industry as a whole has suffered over the past few years because of global recession. One of the ways retailers can improve their performance and make up for lost opportunity is to start using technology in innovative ways leveraging full potential of social media, location based tools, smart phones with high speed internet access and social gaming. Only those retailers who are successful in this will see their sales and margin grow at the cost of retailers who are slow to adopt new technological tools. In other words, success of retailers will be determined by their effectiveness in using new tech tools such as Social Networking.

I want to end this post by sharing this CNN video from National Retail Federation’s annual event, the NRF 100th Annual Convention & Expo that concluded earlier today in New York. Note the emphasis on Social Media in this year’s event.

Enjoy the video and do share your thoughts and comments:

But given recent growth in Social Networking on the internet and our ability to precisely track outbound Word of Mouth (WOM) and its impact on customer behavior, it is time for business to look beyond Loyalty Programs that reward repurchase and consider having Customer Advocacy Program instead. In a recent research study titled Effects of Word-of-Mouth Versus Traditional Marketing: Findings from an Internet Social Networking Site, findings of which were published in Journal of Marketing (September 2009), it was found that “Word of Mouth (WOM) referrals have a strong impact on new customer acquisition. The long-term elasticity for WOM referrals is approximately 2.5 times higher than the average advertising elasticity reported in the literature. Part of the reason for the high long-term effect of WOM relative to traditional marketing is that it has a much longer carryover period.”

Given the impact of Word of Mouth (WOM) on purchase decisions and our ability to track outbound WOM on Social Networking sites, Marketing Managers should design programs to track and reward Customer Advocacy behaviors such as WOM on Social Networking sites. This will not only help marketing managers in promoting their products or brands on Social Media channels, but will also help in building trust and loyalty among target audience.

What do you think? Do you agree that Loyalty Programs are Passé and companies need to have Customer Advocacy Programs instead? Please do share your thoughts:

Even retailing giant Walmart seems to be taking note of Groupon’s success and has launched a Facebook deals app called CrowdSaver, which unlocks a discount once enough consumers opt in (for more, read this AdAge article titled Walmart Takes a Page From Groupon in Facebook Promotion). I think this is a step in the right direction for Walmart and other retailers should (and will) follow suit.

Traditional retailing involves buying in bulk from the manufacturer (or distributor) and selling one piece at a time for a mark-up. This model has served both the manufacturer and retailer well – so far. This is about to change, thanks to Social Media.

Customers are increasingly going to leverage power of Social Networks to connect with other like minded customers who want to buy a particular product or service. Collectively, this group of customers is a force to reckon with and manufacturers (or distributors) can directly sell to them breaking the hegemony of major retail chain stores. To counter this, retailers can leverage the power of Social Networks and offer deeply discounted prices to customers if a certain volume of sales is achieved – what Walmart seems to have done.

Whichever way you look at it, Social Media will disrupt the “traditional” retailing model for good. And customers are going to be winner as they can exercise group buying power and buy products/services at lower prices or at better terms. If retailers don’t innovate and leverage Social Networks, their margins will be under increasing pressure and they will lose customers to those who leverage the effectiveness of Social Networks and offer great deals.

What do you think? Do you agree that Social Media will disrupt the traditional “Retailing” Model? Please do share your thoughts:

Why can’t more businesses, especially small and medium ones, think outside the box and start leveraging the reach and effectiveness of Social Media channels for engaging customers and prospects the way 4food has done?

It is not only a great way to build trust and loyalty, but can also lower marketing costs significantly – something very important in today’s economy. What do you think? Please so share your thoughts:

They are Enable, Empower, and Engage – what I call 3Es and they play a very critical role in Social CRM success. Let me elaborate on the 3Es.  

1) Enable:

Enable refers to enabling free access to Social Media tools and technology among all the employees (not just select few) and allowing employees to use Social Media freely within well defined Social Media usage guidelines. (for more, refer to my earlier post titled Should Companies restrict Employees’ Social Media use?

2) Empower:

Mere enabling is not enough. You must empower your employees, especially those in customer facing roles to engage customers and prospects on Social media channels. And employees should feed “empowered” to do so. For more on employee empowerment, see these excellent articles titled Empowered and Empowered Customers Need Empowered Employees Need Empowered IT.

3) Engage:

Lastly but not the least, Enabling and Empowering is of no use if your employees don’t engage customers and prospects on Social Media channels, as engaging customers via Social Media for building trust and loyalty towards the brand will determine winning brands in Social Age (for more, refer to my earlier post titled How Customer Engagement will determine winning brands in Social Era).

It is critical for organizations to Enable and Empower their employees and Engage their customers and prospects for success in Social CRM.

What do you think? Do you agree that 3Es are key to Social CRM success? Please do share your thoughts:

I think the biggest argument in favor of Social Media is that it provides great tools for “engaging” the customer. Unlike traditional media channels where the information flow is one way, one to many – where consumer or target audience group is “passive”, Social media communication is not only two-way, one-to-one, but consumer is active participant and “owns” the conversation.

Moreover, conversations over Social Media channels are public – visible to all. And customers and potential customers are discussing about products and brands on Social Media channels whether the marketer is participating in the discussion or not.This is why it is utmost important for marketer to have a Social CRM strategy and invest in Social Media tools for effectively engaging customers and prospects. Gone are the days of one way “passive” advertising, thanks to Social Media (for definition of Social CRM, see my earlier post titled What is Social CRM?)

Level of customer engagement will determine mind-share and market-share for a brand. Those marketers who effectively engage their customers and prospects will emerge as winners and those who are not good in customer engagement will lose market share. If any one wants proof of importance of Social Media engagement to performance, here it is!

Engagementdb has published a study that shows strong evidence that Social Media Engagement correlates to Financial Performance (see report on The world’s most valuable brands. Who’s most engaged?)

According to this study “”Engagement via social media IS important — and we CAN quantify it. There is statistically significant correlation between social media engagement and the two most meaningful financial performance metrics – revenue and profit”. This study further states that:

• It pays to engage meaningfully in social media. Emphasize quality, not just quantity.

• Engagement is more than just setting up a blog or Facebook profile and letting viewers post comments,  it’s keeping your content fresh and replying to comments; it’s building your friends network and updating your profile status.

• To scale engagement, make social media part of everyone’s job. You must do something, else risk falling far behind other brands, not only in your industry, but across your customers’ general online experience.

• Engagement can’t be skin-deep, nor is it a campaign that can be turned on and off. True engagement means full engagement in the channels where you choose to invest.

This clearly illustrates the importance of engaging customers via Social Media for building trust and loyalty towards the brand – the essence of Social CRM (for more see What is Social CRM and why it is important and Dear CMOs, Wake up to Social Media challenge).

What do you think? Are you convinced that customer engagement will determine winning brands in Social Era? Please share your comments:

There are three important reasons for the phenomenal growth and popularity of Foursquare as compared to rivals such as Gowalla or Yelp.

• Technology: Although just one year old, Foursquare has stayed on top of technological aspects and made sure that its app is user friendly and efficient in leveraging location based info from mobile devices. Its latest release, Ver. 1.7 features many enhancements such a new design, faster check-ins besides an easy way to view check-in history.

• Ease of Use: Foursquare is very intuitive, easy to use and the latest release is a big step in this direction. (see this CNN video on how easy it is to use Foursquare)

• Creative Design and Promotion Strategy: Foursquare has been very creative in its design – badges for example and the way you earn them. Also important is how Foursquare (and participating establishments) have promoted the service. For example, Starbucks recently teamed up with Foursquare to offer customer rewards (for more, see this link). And when other companies have spent hundreds of thousands of dollars on marketing to reach target audience, Foursquare has relied on buzz generated by creative promotion strategy. At the  South by South West (SXSW), 2010 taking place in Austin, Texas, Foursquare had people lined up to play this game of four square with one of its founders, Dennis Crowley, outside SXSW venue, with people walking by and talking about it. This is great buzz for Foursquare, with total investment of around $5.99 for a box of sidewalk chalk, that other companies paid tens of thousands of dollars to generate inside the venue! Isn’t that cool? (watch the following video)

To summarize, Foursquare is the hottest Social Network on the web because it is technically efficient, easy to use and creatively brilliant in design and promotion.

What do you think are the reasons for Foursquare’s success?

Few other examples of successful Social Media initiatives by Ford include Summer of Taurus, the2010Mustang.com,  WeddingRoadTrip.com and FiestaMovement.com (See this excellent blog post by Lee Odden for more).

To learn more about Ford’s Social Media success, watch this interview by Lee Odden with Scott Monty, Head of Social Media at Ford.

According to Scott, even the CEO of Ford understands how important Social Media is to the success of the company! Scott also emphasized the importance of having a good product, listening to customers and providing them with necessary tools for engagement.

Great advice in my opinion and a success story that other brands should try to emulate.

• Johnson & Johnson (J&J) – Baby Center.com
• Procter & Gamble (P&G) – Home Made Simple
• Walmart’s Money Saving Tips on YouTube
• American Express Small Business Blog Network
• Geek Squad YouTube channel
• Charmin Enjoy the Go

This raises an important question: Should Marketers behave like Media companies when it comes to Social Media? If yes, what additional skills will be required by those in the marketing department for this new task. And what is the role of an “agency” in this new “set-up”?

In my opinion, marketers should take on additional responsibility of content creation with the help of agencies and professionals/SMEs in the area. Marketers should also provide necessary tools and platform for their customers to discuss about their brands, share content and exchange ideas. Agencies should use their expertise to help marketers connect with customers.

Listen to what Jonah Bloom, former Editor at Advertising Age, has to say on this subject:

What to you think? Should Marketers behave like Media companies when it comes to Social Media? Please share your views and opinion:

• 65.6% In House
• 15.6% Interactive Agency
• 9.4% PR Firm
• 9.4% Social Media Agency
• 0% Creative/Ad Agency

Why majority of respondents preferred In House Agency rather than entrusting the work to outside firms?

Answer lies in the fact that Social Media is still a very new subject and unexplored medium – constantly evolving. More importantly, Social Media/Interactive/PR/Creative/Ad agencies have not done a good job of defining their offerings and articulating them well to clients. And in absence of any well defined service offerings from agencies, clients prefer to do Social Media in-house.

What Can agencies do to remedy the situation?

• Come out with well defined service offerings
• Articulate their service offerings well to clients
• Offer a result oriented approach to induce clients to try out Social Media
• Hire best available talent who understand Social Media well and how to leverage it for Brand Promotion

Agencies will have to take a lead on this and guide their clients. Early birds will get the best returns! What do you think?

Well, listen to what he says about why he uses Twitter (@JeffreyHayzlett) and how Kodak’s management reacts to his use.

In my opinion, Jeff is a great role model for other CMOs to emulate on how to use Social Media. Dear CMOs, are you listening?

Panelist include:

• Jamie Daves, Venture Partner at City Light Capital
• Tom Arrix, Vice President of Sales at Facebook
• Peter Land, Senior Vice President of PepsiCo
• Joe Marchese, Co-founder and President of SocialVibe
• Seth Sternberg, CEO and co-founder of Meebo

Some key points of discussion are:

1. Pepsico marketing in Social Media
2. New Era in Media Advertising
3. Advertisers utilizing Facebook user experience
4. Monetization models and revenue streams
5. Monetization from communities, not brands
6. Evolution of Social game experience
7. User experience: International Vs. Domestic

• Scale of Asia: China, India, Japan, Indonesia, Korea – to name just a few countries.
• Diversity: Culture and Languages
• Usage of Internet: Access to Social Networking sites via Mobile devices, not a PC
• Monetization models

Watch this excellent video interview with Thomas Crampton, Asia-Pacific Director, Digital Influence at Ogilvy Public Relations Worldwide, followed by a Slideshare presentation by him.

I guess competition will be much tougher in 2010 as many more companies will be on Facebook and with rapid increase in number of Facebook users.

So what is Social CRM and why those in Social Media and CRM talk passionately about it.

What is Social CRM and why it is important:

Social Networking sites have seen a phenomenal growth in number of users in the last one year. Brian Solis has estimated that for August 2009, Facebook recorded 110 M unique visitors from US and 370 M globally. Similarly, Twitter registered 24 M unique visitors from US and 66 M worldwide.

This offers a unique opportunity to marketers for engaging their customers through Social media channels. Social CRM is the business strategy of engaging customers through Social Media for building trust and brand loyalty. Research has shown strong evidence that Social Media Engagement correlates to Financial Performance (see report on world’s most valuable brands – Who’s most engaged?). According to this study “Engagement via social media IS important — and we CAN quantify it. There is statistically significant correlation between social media engagement and the two most meaningful financial performance metrics – revenue and profit”. This study further emphasizes quality of customer engagement through social media by concluding:

• It pays to engage meaningfully in social media. Emphasize quality, not just quantity.

• Engagement is more than just setting up a blog or Facebook profile and letting viewers post comments, it’s keeping your content fresh and replying to comments; it’s building your friends network and updating your profile status.

• Engagement can’t be skin-deep, nor is it a campaign that can be turned on and off. True engagement means full engagement in the channels where you choose to invest.

• To scale engagement, make social media part of everyone’s job. You must do something, else risk falling far behind other brands, not only in your industry, but across your customers’ general online experience.

This clearly illustrates importance of Social CRM – engaging customers via Social Media for building trust and loyalty towards the brand.

Why NOW is the time to invest in Social CRM:

There has been lot of discussion on whether Social Media revolution is for real or is it some passing fad that will die down eventually. Well, those who have any doubt should read findings of a recent survey by Forrester. In this survey of 204 marketing executives across industries, it was found that recession is accelerating shift to interactive, mobile and social media.

Marketers were most optimistic about social media, online video, SEO, mobile, paid placement in social media, email and paid search, in descending order. Near the bottom were outdoor, telemarketing, radio and newspapers. As per Forrester’s Interactive Marketing forecast, Interactive marketing will approach $55 billion in marketing spend in 2014 benefiting from search, social media and mobile marketing.

It is important to note that in the past two years, time spent by consumers online has grown from 29% to 34%, but advertisers spend only 12% of their budget on Internet marketing. Forrester predicts that by 2014, spend will increase to 21% of budget. Forrester further predicts that both social and mobile will have the biggest compound annual growth rate (CAGR) — 34% and 27%, respectively through 2014.

So, there you have it! Consumers are spending more time online, interacting with their friends and contacts through Social Networks. TV and Print Media have seen their Viewership/Readership fall significantly. This is the right time to allocate (or should I say “shift”) resources for investment from “traditional” media to “new” media and engage customers through Social Media for building trust and loyalty.

What is the secret of Dell’s Social Media Success? Watch this excellent interview with Richard Binhammer, Senior Manager, Corporate Affairs at Dell to know more about Dell’s Social Media strategy:

Well, one just needs to consider following facts to realize importance of Social Media:

• Customers and potential customers are discussing about brands on Social Media, whether business is paying attention or not
• These conversations are happening online every minute and are visible to any one with access to internet and Social Networking sites
• Customers and potential customers are influenced more by advice and suggestions from friends than by advertising
• If brand managers don’t pay attention to these conversations, they not only risk losing a golden opportunity to listen and learn, but also to participate and influence.
• If current trends are any indication, reach and impact of Social Media are going to increase exponentially in the next 3-5 years as smart phones and mobile devices with internet access become cheaper and more popular.

Neville Hobson of WCG, London has a great SlideShare presentation on Ten key trends and observations on Social Media for Business. Please take a look at it and see for yourself if Social Media is for real or is it hype. Please share your views, more so if you think it is more of hype. I would love to hear from you.

Any organization that is in the process of developing a new product or improving an existing one should consider leveraging Social Media for this. Please watch this video and leave your comment on what you think:

But objective of this post is not to discuss about Tiger Woods as a person. What I want to highlight is how the Tiger Woods “brand” crisis has played out in “social media” and its impact. Tiger Woods’ story has dominated Social Media right from the moment news broke about his car accident. Most of us learnt about this accident and much more from Social Media and this has generated a lot of negative publicity for Tiger Woods brand in Social and Mainstream Media. So much so that sponsors who once lined up at Tiger Woods’ door are fleeing en masse (see Woods Gone From Accenture Web Site; P&G Pulling Ads and Gillette limits Tiger Woods’ role in marketing programs). The speed with which information has spread is astounding and Twitter beat established news outlets such as CNN in breaking the news.

Few other examples that come to mind while talking about Social Media brand crisis are United Airlines, Domino’s Pizza and Taco Bell.

United Airlines broke a guitar. This led to brand trashing on Social Media and the Youtube video titled United Breaks Guitars has registered more than 6.5 Million views. It is estimated that this cost the company $180 million in company valuation. (see COI: Cost of Inaction United Breaks Guitars)

In another incident of Social Media brand crisis, two employees of Domino’s Pizza filmed themselves breaking the hygiene standards in one of Domino’s Pizza store kitchen.The video was posted on YouTube and received more than one million views before it was pulled down. (see Viral Brand Crisis and Strategy). This incident received a lot of negative publicity in Mainstream and Social Media.

Taco Bell experienced Social Media brand crisis when a video of rats running around a Taco Bell’s store in New York was posted on YouTube and became an instant hit on the internet. This incident too received wide local, national and international media coverage.

All the above incidents of brand crisis underscores the importance of having a Social Media Crisis Management Plan. It should clearly highlight roles and responsibilities, procedure and protocols to be followed in the event of a brand crisis. Because the first step in solving any crisis is to identify and respond to it, and respond FAST when it comes to Social Media.

So here is a question for you. Do you have a Social Media Crisis Management Plan for your organization? If there is a crisis, will you handle it effectively or be caught napping and search for excuses? The Choice is yours!

Marketers were most optimistic about social media, online video, SEO, mobile, paid placement in social media, email and paid search, in descending order. Near the bottom were outdoor, telemarketing, radio and newspapers. As per Forrester’s Interactive Marketing forecast, Interactive marketing will approach $55 billion in marketing spend in 2014 benefiting from search, social media and mobile marketing.

It is important to note that in the past two years, time spent by consumers online has grown from 29% to 34%, but advertisers spend only 12% of their budget on Internet marketing. Forrester predicts that by 2014, spend will increase to 21% of budget. Forrester further predicts that both social and mobile will have the biggest compound annual growth rate (CAGR) — 34% and 27%, respectively through 2014.

So, there you have it! Consumers are spending more time online, interacting with their friends and contacts through Social Networks. TV and Print Media have seen their Viewership/Readership fall significantly. This is the right time to allocate (or should I say “shift”) resources for investment from “traditional” media to “new” media and engage customers through Social Media for building trust and loyalty (see my earlier post on What is Social CRM and why it is important). It is time for CMOs and Marketing Executives to wake up to Social Media challenge and lead from the front.

What do you think? Should CMOs & CIOs wait any longer before deciding to allocate $$$ for Social CRM Program?

Chris Brogan, President, New Marketing Labs, Author, Trust Agents (Panel Moderator)
Richard Binhammer, Senior Manager, Corporate Affairs, Dell
Matthias Luefkens, Associate Director, Media, World Economic Forum
Fred Raillard, Founder, Fred & Farid
Steve Rubel, SVP, Director of Insight, Edelman Digital
Brian Solis, Founder & President, Future Works
Seth J. Sternberg, Co-Founder & CEO, Meebo

(you can read more about it here)

It is important to remember that Social Media is just a medium for connecting with people (or customers if you prefer that term). It provides necessary platform or tools to reach out to millions of people instantaneously across time-zones in a cost effective manner. But since “Social” is just a medium, it doesn’t have any ROI of its own. ROI will depend on how well this medium is used for attaining a well defined objective. So ROI is for the “usage” and not the “medium”. Many people associate ROI with the medium and that is incorrect.

See this excellent interview with Lee Odden on Social Media Marketing and ROI. According to Lee, measuring ROI as a direct result of Social Media is not the right question. Social Media is a platform, not a tactic.

Moreover, Social Networks as a medium for connecting with Customers for branding and engagement is a very new development and unlike marketing through traditional media such as Television, Print or Radio, we are yet to fully understand how Social Media marketing affects consumer behavior. To borrow famous words of former Defense Secretary Donald H Rumsfeld, we don’t know what we don’t know about how Social Media influences consumer behavior. And in the absence of this understanding, it is prudent to say that those who understand Social Media don’t talk about Social Media ROI.

Rather than trying to measure effectiveness of Social Media campaigns through ROI, it is better to use other KPIs (for a good list, see 35 social media KPIs to help measure engagement).

So beware, next time some one talks about Social Media ROI, it is very likely that person is trying to sell Social Media Snake Oil.

• A List of Social Media Marketing Examples

• Wiki of Social Media Marketing Examples

• Social Media Case Studies SUPERLIST

This collection provides several days (should I say weeks) worth of material to evaluate and understand how leading brands are using Social Media. Happy reading!

Given statistically significant correlation between social media engagement and financial performance metrics – revenue and profit, one would expect CMOs to be busy making elaborate plans about engaging customers through Social Media, Right? WRONG!

According to a survey of 124 chief marketing officers by The CMO Club and Hill & Knowlton, more than four out of five (84 percent) chief marketing officers (CMOs) allocate less than ten percent of their budgets to experimenting through social media and non-traditional communications channels, with more than half (55 percent) allocating just five percent or less.

To the question “Does your brand have a web 2.0 communications policy?” almost half said either they don’t have or are currently developing one. Only 14% CMOs said that they were “proactive” about creating external brand advocates and leveraging them (detailed findings of the survey here).

This lack of involvement on the part of CMOs contradicts with the growth of Social Media, not only in terms of users but time spent on it as well (see excellent post by Brian Solis on growth stats).

In another study by Weber Shandwick for evaluating how effectively Fortune 100 companies used Twitter to its full potential as an engagement platform, it was found that “for the majority of Fortune 100 companies, Twitter remains a missed opportunity. Many of their Twitter accounts did not appear to listen to or engage with their readers, instead offering a one-way broadcast of press releases, company blog posts and event information. This falls short of the opportunity that Twitter offers as a valuable communications channel and strategic social network.”

As per findings of two studies quoted above, we can see a major “disconnect” given the phenomenal growth in Social Media usage on one hand and lack of involvement of CMOs on the other. CMOs need to wake up to Social Media challenge NOW and lead from front, else they risk falling far behind other brands, not only in their industry, but across customers’ general online experience.

What do you think? What should CMOs do to engage their customers through Social Media for building Trust and Loyalty?

Engagementdb has published a study that shows strong evidence that Social Media Engagement correlates to Financial Performance (see the report on The world’s most valuable brands. Who’s most engaged? http://www.engagementdb.com/downloads/ENGAGEMENTdb_Report_2009.pdf )

According to this study “”Engagement via social media IS important — and we CAN quantify it. There is statistically significant correlation between social media engagement and the two most meaningful financial performance metrics – revenue and profit”. This study further states that:

• It pays to engage meaningfully in social media. Emphasize quality, not just quantity.

• Engagement is more than just setting up a blog or Facebook profile and letting viewers post comments,  it’s keeping your content fresh and replying to comments; it’s building your friends network and updating your profile status.

• To scale engagement, make social media part of everyone’s job. You must do something, else risk falling far behind other brands, not only in your industry, but across your customers’ general online experience.

• Engagement can’t be skin-deep, nor is it a campaign that can be turned on and off. True engagement means full engagement in the channels where you choose to invest.

This clearly illustrates the importance of engaging customers via Social Media for building trust and loyalty towards the brand – the essence of Social CRM (http://hkotadia.wordpress.com/2009/10/17/what-is-social-crm/

What do you think? Are you convinced that brands have to engage customers via Social Media or SM is just a passing fad – will go away in the next couple of years. Pls share your comments: