Tagged by: Success

10 Business Lessons from Carlos Slim

What are the secrets to Carlos Slim Success

As I write this, Carlos Slim Helú is the second richest man in the World, according to Forbes, following Bill Gates by a ‘mere’ $2 billion dollars. Carlos was number one in 2010 and 2011. Everyone knows how Bill made his fortune, as the founder of Microsoft, and much has been written about him. But what drives Carlos Slim’s success, and what are the strategies that make his companies so successful seem to be more of a mystery.

When companies struggle, they usually blame increased competition and unfavorable economic conditions. Carlos Slim seems to thrive on downturns and recessions.

Slim’s business portfolio, under the holding company Grupo Carso, is much more diversified: it includes real estate, retail, telecom, mining, financial services, tobacco, aluminum, tires, copper, insurance, restaurants, oil and gas, paper, hotels, and more.

People in Mexico say you can’t live a day of your life without somehow giving money to Slim’s empire. He has also made significant investments in the US. In 1997, Carlos purchased 3% of Apple for $17 a share. He has made significant investments in Saks and the New York Times and in business that have gone south like Prodigy and CompUSA.

Carlos is 75 but he has been very aware of technology advances and has positioned his companies to take most advantage of them: “Technology is going to transform people’s lives and society everywhere in the world. My main task is to understand what’s going on and try to see where we can fit in.

As I write this, Carlos Slim Helú is the second richest man in the World, according to Forbes, following Bill Gates by a...

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The 9 Delusions of High Performance in Business

What if the leading business authors are wrong?

What if we have been following ideas that have made the wrong conclusions?

The Halo Effect is an aura that surrounds companies, people and strategies that are successful. Once a person or a company achieves a certain status, the halo effect will touch everything they do. This often leads many to the conclusion that it was the company culture, or their leadership, or their personal traits and values, or their customer obsession that made them successful.

As important as it is, the Halo Effect is only the first of 9 delusions that cloud the path to success in business. The 9 delusions are beliefs that impact strategy and business decisions every day, detailed masterfully by Phil Rosenweig in his book properly named The Halo Effect.

In this book, Phil Rosenzweig debunks Good to Great, In Search of Excellence and other classic business books and research reports. These publications and their conclusions fall in the trap of one or many delusions. Following these conclusions as proven formulas carries the risk of disastrous effects.

Let’s look at the nine Delusions and the real driver for high performance in organizations.

 

1 – The Delusion of The Halo Effect

Many of the things experts think contribute to high company performance are often attributions based on performance. Many studies like Fortune’s Great Places to Work studies multiply the halo effect. Often a great company culture is a result of success. We think as successful companies as innovative. We think about CEOs as powerful leaders.

 

2 – The Delusion of Correlation and Causation

The author points to many examples: Bain and Co claims their customers outperform the market 4 to 1. The assumption is that hiring Bain caused high performance. We need to consider the possibility that companies who are outperforming the market have the time and the money to hire Bain.

What if the leading business authors are wrong? What if we have been following ideas that have made the wrong conclusion...

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Marketing Leader Interview with Sam Decker

CMO Interview with Sam Decker

I had the opportunity to work for Sam at Bazaarvoice, where he was the founding CMO, and I learned a LOT from him. Today, Sam Decker,  is the founder and CEO of Mass Relevance, a company that recently merged with SpredFast to create one of the most advanced social engagement platforms.

Sam helped Dell.com become the largest eCommerce site in the world. Sam is probably the most creative marketer I know and one of the smartest. He has a great sense of humor, and most importantly, he is a great person. You will surely learn a thing or two from his answers to the interview:

I had the opportunity to work for Sam at Bazaarvoice, where he was the founding CMO, and I learned a LOT from him. Today...

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Marketing Leader Interview with Crimson Marketing’s Glenn Gow

Glenn Gow founded Crimson Marketing, a technology marketing firm, in 1991 which became one of Inc 500 fastest growing companies. You can get his book Revenue and the CMO via Kindle. I particularly enjoy his posts on #BadMarketing which play fun at common mistakes we marketers often make, which mirrors some of my own posts on this blog.

What company is an example of good marketing today? Who do you admire?

Cisco. They are extremely focused on understanding their buyers and making it easy for them to buy from Cisco. They are constantly studying their buyers and what is important to them. In addition, they track the buyers’ journey to an exceptional degree. Impressive.

Glenn Gow founded Crimson Marketing, a technology marketing firm, in 1991 which became one of Inc 500 fastest growing co...

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No Excuses. The Ball is in Your Court.

During a leadership meeting at Rackspace this week, Jo Dockery, one of the smartest Rackers, was presenting. She had a slide with a great quote:

Never Gets Easier You Get Better

I loved the quote. What made it special is that it puts the ball on your court. Stop complaining about external circumstances. It encourages you to stop blaming external factors. They are just excuses. Life is hard, deal with it.  

You might have heard Have you hear a story about the guy who gets shot. As he is lying in the ambulance, he is smiling. The paramedics are puzzled as to why someone who has been shot might appear happy and ask him about it. He said “I have been shot, there is nothing I can do about it. I can choose to be happy or sad. I choose happy.  ” You don’t control the circumstances but you control how you will deal with them. 

The grass always seems greener o the other side.  If feels like other people had it easy: They are lucky,  they inherited money, are liked by the CEO, were at the right place at the right time, etc. – and you didn’t.  Maybe that’s why you are not successful. I have thought about this myself, maybe even more than once. Let’s call bull. Life is hard, maybe even unfair. Work is hard. Everyone has problems.

Stop blaming the environment. Stop blaming others. Stop blaming your situation.  You won’t change the world around you, You won’t change your boss. But you can change you.  The ball is on your court. You can do something about you. You can change your attitude, your behavior and your skills.

The alternative is to sit tight, delay success, and wait, hoping things will improve and everything will be easier. It never happens. Life is now.  

You just get better. 

You become clearer on your goals. You figure out how to win. You acknowledge your limitations. You ask for help. You learn. You plan. You study.  You spend time and effort to improve.  You get more resilient. You work harder. You get smarter. You practice.  You ask for help (yes, again). You keep trying. You keep getting better, and better, and better.

How are you getting better today? 

People say I am lucky. But a funny thing happens: the harder I work, the luckier I get” – unknown

Picture courtesy Brian Hindle via Flickr under Creative Commons – http://www.flickr.com/people/dryrot/

During a leadership meeting at Rackspace this week, Jo Dockery, one of the smartest Rackers, was presenting. She had a s...

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The Modern Marketing Leader – A Manifesto

cmoBookA couple of months back, my friend John Ellett gave me a copy of his book, ‘The CMO Manifesto‘ which I thoroughly enjoyed. The book is the outcome of 50 interviews with CMOs to identify the best practices for the first 100 days of a CMO joining a new company. It turns out, The CMO Manifesto ends up being a very complete and modern description of the role of a modern marketing leader.

Establishing the role of marketing, a manifesto for a modern marketing leader, and best practices for marketing leaders in new roles is  important because of four reasons:

  1. The average tenure of a CMO is around 24 months.
  2. Marketing is becoming more complex.
  3. Most of the organization, including the leadership team, have a distorted, inaccurate or unclear understanding of the marketing role.
  4. Leaders are realizing how fundamental and strategic Marketing is for the success of any business. As Peter Drucker said “Marketing is the distinguishing, unique function of the business.”

Some of the more interesting points in the book I especially agree with:

  • Marketing leaders are change agents for the company
  • As leaders they impact strategy, revenue and the overall success of an organization
  • Focus and clarity (clear priorities) are especially important for a marketing team
  • Customer insights should guide all decisions
  • Vision, optimism and resiliency are essential traits of a good marketer

John organizes the book in 12 best practices for a marketing leader:

  1. Lead positive change
  2. Bring clarity and inspiration
  3. Build Relationships and trust
  4. Channel the voice of the customer and Insights
  5. Focus leads to greatness
  6. Drive agility and accountability
  7. Build capable, committed, collaborative teams
  8. Find the balance between chaos and process
  9. Do plan but focus on action
  10. Continuously measure and optimize
  11. Leverage new tools and technologies
  12. Remain resilient in front of challenges

Another thought leader, Ashley Friedlein, from eConsultancy recently published an update to his Modern Marketing Manifesto, which also happens to have 12 points. This manifesto has a slight digital marketing bias but is quite compatible with John Ellett’s point of view: There are many similarities and a few points that can be complementary :

  1. Strategy. Marketers should sit at the board table and set strategy. Strategy is shaped by knowledge of markets, products, customers and positioning. Digital needs to be part of every strategy.
  2. Revenue. Marketers must be accountable for revenue, have a common point of accountability with sales, and must understand P&L.
  3. Customer experience. Improving CX for the most valuable customers must be the relentless focus of modern marketing.
  4. Integration. Customers do not understand the distinction between mobile and desktop, online and offline, above and below the line. Marketing must focus on providing an integrated customer experience.
  5. Brand. Consumers control the message, forcing brands to be authentic and transparent.
  6. Data. Marketers must turn data into insight and action – hence the importance of research, marketing automation, predictive analytics, etc.
  7. Personalization. Relevance and optimization to each customer and his context.
  8. Technology. Marketers will have increasing ownership if the technology tools.
  9. Creative. We need creativity just as mush as we need technology.
  10. Content. Content marketing and the focus on owned and earned media.
  11. Social. Social is not a choice.
  12. Character. The modern marketer must be accountable, ethical, customer focused, agile, collaborative, innovative, brave and passionate.

What is obvious by reading both manifestos is that the marketing function is getting more complex, is evolving to play a more strategic role and becoming more and more interesting.

It’s a good time to be a marketer.

A couple of months back, my friend John Ellett gave me a copy of his book, 'The CMO Manifesto' which I thoroughly enjoye...

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The Best Career Advice is to Follow Your Passion

Do what you loveMentoring others gives me deep satisfaction. One of the most common mentoring topics is the question of how to be successful: how to orient one’s career, what is the right job to take, what to do with your professional life.

The Secrets to Success According to Richard St. John’s

One of the top Ted talks (4.6 million views as of today), Richard St Johns talks about the 8 secrets of success, which he developed after 500 interviews of highly successful people. I have to completely agree with these 8 “secrets”.

The second, third and fourth are hard work, focus and practicing until you get good. Simple words, sure – yet working hard, being focused and practicing are difficult to do on a daily basis. Focus is tricky, because there are always distractions and other interests that pull you aside from the road. This is why focus is best defined in terms of what you will not do anymore.

Focusing tirelessly, practicing every day and working hard should drive your life. Many consume more than one self-help books and try to build the discipline to get them done. But they come naturally, almost effortlessly, if you have the first one of Richard St. John’s secrets: Passion. You will need to watch the Ted talk for the other four. (it’s worth it, it is only three minutes).

Developing Passion

You can’t just decide to get passionate about something. Passion is not commanded intellectually. Passion comes from the heart.

Or maybe passion comes from DNA: Marcus Buckingham leads a philosophy that suggests every one of us is ‘strong’ in certain areas or activities that we enjoy: activities that give us satisfaction and make us feel better when we perform tem. His philosophy is that the people that pursue their strengths are happier and that companies that focus on aligning their people with the activities that leverage their strengths are most successful.

What are you Passionate about?

Because you can’t decide to become passionate about something , you must find what you are passionate about and then focus your work on that.

One of the things I am most grateful to my dad is that he exposed me to many things allowing me to discover my passions. He made it possible for me to try many things that I did not like – or that I liked but was not good at, like musical instruments. One day, when I was in middle school, my dad showed up with a  book ‘Positioning. The Battle for your Mind’ . I devoured the book. Right then I knew I wanted to be a marketer. That’s my calling. What’s yours?

My point is that you can’t find your passion unless you spend some time exploring. A few months ago I blogged about my story of passion for Coffee and how knowledge is a requirement for love . You can’t love what you don'[t know. I probably would not be a marketer today if my dad had not exposed me to that book.

Be The Best You Can

You should aspire to be the best you can in whatever area you are passionate about. Note that being the best you can is about your performance relative to your potential. It is different to being the best in the world, which measures your ability relative to others (more ego driven).  but even while you should measure your success in terms of your own capabilities, it is important to understand your level of ability or competency relative to the rest of the world.

In his book Quitter, Jon Acuff tells a story of when he really wanted to be a copy writer at a large agency. One day, an exec at a prominent agency receives him and gifts him the experience to read all the portfolios that had been submitted for consideration by copy writing candidates. The experience allowed Jon to understand where the bar for good and great was, and in his case, to realize that he was not made to be a copy writer.

Passion Makes You Work Hard and Become Great

When you are truly passionate about something you focus, you aspire to learn and get better every day. You work hard and practice until you become good. You try to be the best.

When Mark Cuban got his first job as a software sales person, he read all the software manuals he could get a hold on. He read a manual every single day after getting home no matter how late, and he enjoyed it. “I could not put them down“. Mark quickly became an expert, and a valuable resource for is clients. He pulled away from the rest of the salespeople in software Dallas and found success. The rest is history.

Just Do it

A few months ago, a friend asked me for career advice. He told me he really wanted to be a writer and he was looking for a break. I asked him to show me examples of his work. He did not have any. If you are passionate about writing, you surely have a blog, or a manuscript for a book in a drawer, or poems in napkins, right? I asked. He did not.

How come? He really wanted to be a writer. But he did not spend time on his passion. Maybe he was afraid of not being good. Maybe he was busy. Maybe he never took the time to think about a path to become a great writer and where to get started. Unfortunately, this is a common scenario.

You have to follow your passion. You have to spend the time to explore the world and find what you are passionate about and then you must make time to practice and get better. ‘I don’t have time’ is not an excuse if you spend an hour every day watching TV. Get up 30 minutes earlier. Eliminate distractions. Unsubscribe from 10 email newsletters and a few RSS feeds. Cut back on Facebook. Otherwise, you will be in the same place 10 years from now.

Applying the Hedgehog Strategy to Your Career

In his book, Good to Great, Jim Collins describes a “hedgehog strategy” for organizations that can be very slightly modified to become a very simple but powerful tool for career planning. The concept is based on a VIN diagram with three intersecting circles:

  • One circle defines what you can be really good at. Your strengths and natural skills.
  • One circle defines the activities that you enjoy doing, your passions.
  • One circle defines the activities that fulfill your financial needs. Where you can make enough money.

The area where the circles intersect are the most interesting:

  • I enjoy and am good at things like photography that won’t make me enough money to provide for my family, so they are hobbies.
  • I am also good at things that I don’t necessarily like, I could perform these activities and even make enough money but I will not be happy and probably won’t be very successful. I am a very good salesman, and I know I could make a ton of money in this career – but I would be miserable because I don’t like working on a quota and probably could not deal with the pressure.
  • There are also things that I like,  such as playing the piano, but I am not good at and I won’t get good at. I am delusional is I think I will be a professional piano player, I simply don’t have the coordination not I would be able to develop it.

The place where these circles overlap is the ideal spot for your career: an area you are passionate about, you are good at it, and you can make money. Again, it may sound like a simplistic concept, but I have seen it used as a tool by people in all stages of their career to make smart decisions.

Skills and Passion VIN diagram

 “Love. Fall in love and stay in love. Write only what you love, and love what you write. The key word is love. You have to get up in the morning and write something you love, something to live for.” — Ray Bradbury

 “You never achieve success unless you like what you are doing.” — Dale Carnegie

Mentoring others gives me deep satisfaction. One of the most common mentoring topics is the question of how to be succes...

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The Adaptive Marketing Organization

Successful companies must be able to evolve at the speed of change.

Companies that don’t adapt to the changing world disappear quickly: Blockbuster is a prime example; today we are witnessing RIM (who makes Blackberries) following similar steps.

Technology is the disruptor: cloud computing is empowering entrepreneurs and businesses with computing power that was inconceivable just a few years ago. Mobile devices are making information ubiquitous. Social technologies are enabling sharing of ideas and knowledge in real time. As a result, today’s customer is very different from that of 10 years ago:

  • Smart – Buyers are armed with knowledge. More than half of all online purchases are influenced by online research.
  • Connected – Customers have the ability to research, share, comment and buy anywhere, anytime. The ability for customers to compare online and nearby prices while in a retail store is forcing unprecedented price transparency.
  • Socially Influenced -The new buyer is not alone. He or she is empowered and influenced by the collective knowledge of friends, influencers and online reviewers.

It is all to easy to react tactically to the latest trend or to go for the new buzzword. Only a few years ago companies were racing to build facebook marketing and f-commerce plans, today everyone is talking about how to build a Social Business. Instead marketers should think about Customer Interaction Strategies, and understand how the new tools (Pinterest, Twitter or whatever comes next) support your business strategy.

The new Dynamic Customer Journey, as the Altimeter Group calls it, forces marketing leaders to build a dynamic, adaptive marketing team and to lead the company in its pursuit of being an adaptive organization. Their focus on these two themes is what inspired this post.

This need to continuously evolve and adapt as marketers is the reason why In February 2011 I renamed my blog The Adaptive Marketer. In that post I shared this quote from management guru Peter Drucker, who back in 1968 in The Age of Discontinuity wrote: 

“Businessmen will have to learn to build and manage an innovative organization. They will have to learn to build and manage a human group that is capable of anticipating the new, capable of converting its vision into technology, products and process, and willing and able to accept the new.”

How to build an adaptive marketing organization? I don’t have the complete answer, but I can share a few ideas:

  • Don’t get blinded by shiny objects: Web 2.0, Pinterest, Twitter, Facebook, Google + and the new tools that will appear in the near future, are just that: tools. Think of them in the context of how they can affect your customer engagement strategy and how do they support your business objectives.
  • Hire multidisciplinary marketers: Don’t hire a Pinterest expert or a Twitter guru. To be adaptive, your team must understand multiple marketing tools and tactics and how they interact with each other. Else, you end up with siloed, tactical activities. As an example, your twitter tactics can support your content marketing strategy which can combined can support your lead generation and revenue goals. Hire marketers that understand how all the pieces work together, and who can understand new tools fit this framework as they are invented.
  • Build a continuously learning organization. Change is hard. It took us years to begin to understand the internet affected businesses. Then we had to learn about SEO. Next was social media. Content marketing is important again (it has always been). The only constant is change. Build learning into your organization’s DNA. Hire curious people. Encourage experimentation. Build a training plan. Stay up to date.
  • Keep the customer at the center – Amidst all this change, there is one constant: the customer. While the interaction tools and the buying behavior are constantly evolving, customers should stay at the center of your strategy. The first step is to really understand who is (or should be) your customer, understand what they need and how they need it (including how they want to buy) and design your selling process around the customer experience.
  • Focus – it is all about the business. Marketers must be increasingly accountable for results. Not only leading indicators like website visitors or facebook followers – actual results. I am talking revenue growth, increase in customer lifetime value, customer satisfaction, loyalty and advocacy. This is what I mean: if you build great products that your customers love, you will probably do alright.

What do you think?

Successful companies must be able to evolve at the speed of change. Companies that don’t adapt to the changing world dis...

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Facebook Marketing – What Makes Sense?

This week Sucharita Mulpuru wrote a blog post about Facebook commerce that turned out to be quite controversial. Sucharita’s previous post on the topic was aptly named 500MM users.. so why can’t they show you the $$. A bold quote from the post “No one’s revenue will come from Facebook”, along with a recommendation to stop wasting time chasing F-shiny objects, and focus on fixing the basics (like search and ratings & reviews) which have proven results.

My thoughts are pretty aligned with Sucharita, in the sense that no one seems to be making money from Facebook other than Facebook, Zynga and a few agencies – in the gold rush the money was made selling picks and other mining tools. I see brands confused about how to even think about Facebook and chasing meaningless metrics such as number of fan “likes”. When marketing leaders share their goal for social marketing this year is to get to 100K or 1 million likes, I ask them what they will do with the customers that have liked the brand, usually resulting in blank stares and confusion.

So I want to share my humble opinion on the role of Facebook for marketers.

One of the principles I feel strongly about is that social media is only a set of tools to help you achieve business objectives. Then, let’s start with the basics and think about how can interactive marketers leverage Facebook to achieve business and marketing goals. “Social media goals” don’t count, unless they are leading indicators in the context of a broader strategy. Think about it: the main reason marketers care about Facebook for one simple reason: there are over half a billion potential customers using it every day. As I wrote in a previous post, you have to fish where the fish are – but you have to bring them home (your site) to cook them (make money). It was the same with video and other new tools available to marketers.

Sounds logical, yet, brands continue spending millions of dollars in media sending customers to Facebook. The traffic should flow the other way around.  Getting customers to respond to an ad is difficult enough to send them to a site where you have little control with the hopes they will “like” your brand and maybe someday somehow and up on your site or buying your product.

A couple weeks back I saw an online ad for Sierra Mist Natural, curious to learn more about the new drink I clicked on the ad, which took me to Sierra Mist’s Facebook page. Not only was this not the experience I was expecting, I was unable to learn more about the product, learn what makes it natural (is it using Stevia for sweetening, natural flavors or something else?) and landed on a Facebook page where a couple customers had quite negative comments on the product.

To sort through all the confusion it could be useful to think about Facebook as four discrete opportunities:

1. Encouraging fans to advocate your brand on Facebook

This is the most basic, but also the most powerful Facebook tactic so far and it’s free. I have blogged about this extensively. People trust recommendations from their friends. Chances are their friends are on Facebook too.

 If your brand has 50,000 fans (Sorry Facebook, “likes” does not work as well), and if you can get one of every five to tell their friends how much they like your brand, you would have 10,000 people advocating personally to an about 1.3 million potential customers about your brand. 1.3 million customers you probably can’t reach through your traditional marketing efforts. Your customers can advocate on Facebook without even having to “like” your brand. You don’t even need a brand page on Facebook – customers can advocate directly from your website.

2. Your brand’s presence on Facebook (brand page) and “Likes” associated with it

Most brand pages on Facebook are quite boring and expose visitors to customer service issues or provide irrelevant information to customers. It’s time to get creative and map a proper brand experience on Facebook. The possibilities are endless, but don’t create siloed microsites or just copy your website in the Facebook iFrame.  Do something useful like providing reviews, Q&A, links to your site and resources that will engage customers in a social context. There are so many things a brand can do here that it would be impossible for me to provide best practices, so I won’t try. This is an area where a good agency can help.

3. Facebook commerce

To clarify, with F-Commerce I mean not only adding your product catalog to your Facebook page but actually enabling transactions within it: you can complete an order without ever leaving Facebook. I think it makes sense for a few select use cases: buying tractors on Farmville, buying a song using iTunes credits, etc.  However, I am really skeptical this will be mainstream – ever. For a couple of reasons:

  • Leaving Facebook to complete the transaction on the brand’s main site is easy. It takes seconds and can be completely transparent for the user.
  • The user experience will probably be better on the main site. Brands have invested millions on content management systems, search capabilities, interactive features, social capabilities and other elements that give customers a better on-site experience than what is possible on Facebook.
  • Many consumers probably consider most brand sites to be more secure and reliable than Facebook. With the news about Facebook security and privacy issues I guess people would rather share their credit card number with an established business than with a social network that has no good track of protecting personal information.

Alvendia (now 8thBridge) shared the total sales on Facebook across all the brands they serve peaked at $100K in December. That’s less than $3 million per month, a number that is largely insignificant for their client base. Brands should still make their product catalogs available on Facebook to encourage advocacy and sharing, with an easy link to the product page on the main site.

4. Advertising on Facebook

In the end, Facebook is not a social company – it’s a media company that makes money by selling advertising. Advertising on Facebook should be evaluated like you would consider advertising on any other media outlet: based on audience profiles, advertising formats, targetability and ultimately, click-through rate. I am not an expert, but it is common knowledge that CTRs for Facebook are pretty low compared to industry averages. Maybe because when customers are in “social mode” they are not so interested in ads. The risk is that customers start mentally ignoring the ad space on the right most like most of us ignore banner ads on most web sites.

Then again, for the right reasons, with the right strategy, advertising on Facebook may be the right thing to do. Back in 2004, I was one of the first to advertise on Facebook when we were promoting the Imagine Cup. That particular campaign yielded decent results.

Conclusion

In conclusion, if you start with your business goals in mind (and not with “let’s do something on Facebook”) then go on to evaluate the four ways you can leverage Facebook for your business in the context of a customer experience journey, Facebook can be a really powerful tool that produces top-notch results.

 

This week Sucharita Mulpuru wrote a blog post about Facebook commerce that turned out to be quite controversial. Suchari...

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How can CMOs Build an Effective Social Media Strategy

This post was first published in the American Marketing Association blog.

Bazaarvoice and the CMO club recently published a report about how CMOs think about social media and how they are finding ROI (or not).  You will find a number of stats and details in the report itself. I want to share my own perspective on what I think are the implications made evident by the research.Crossroads

Social is Important. Every marketer knows it. Customers have shifted the way they buy. Social is here to stay, there is no question about it. Every CMO knows they need to have a social marketing plan. This should not be a surprise to anyone, the report simply confirms it.

Measuring results is harder than expected. The report shows social media is harder to measure than what CMOs expected. By looking at last year’s report, it is clear most of them thought by now their social marketing efforts would have matured enough to have a good measurement framework. Today, most marketers are measuring engagement, not actual business impact. Many are still chasing shiny objects. Consider how many companies are trying to grow their Facebook fan pages without a clear reason why they are doing it or a strategy to convert fans into business value.

Social Marketing is too tactical. Without an indication of results, CMOs can’t make investment decisions on social media. As a result, most companies are still in experimentation mode. Only two years ago, social marketing meant blogs and wikis. Last year it has been about Facebook and Twitter. Now GroupOn (which is not even social, IMHO) and Foursquare join the category of shiny objects. Small and large businesses are jumping on the GroupOn mania, getting 25 cents on the dollar, often without thinking through a strategy.

Sadly, without a framework for results, CMOs have a hard time deciding how much to invest in social. According to research by Altimeter, the average large company is investing only $830K per year in social marketing. This budget can cover salaries for a team of three people, maybe a community platform to run support forums and a listening platform.  The amount of resources, budget and results in social marketing is insignificant relative to overall marketing efforts. The danger is that a CMO hires a social strategist, two people to “man their Facebook and Twitter pages”, start a blog and ‘check’ – they have a social strategy, they can move on to more important stuff. 

CMOs know they need to shift their investments from traditional advertising to social and digital efforts, but they can’t do it blindly. Even if a CMO wanted to shift $20 million dollars to social, they would have a very hard time finding where to spend it.

Reading the results from the research can be heartbreaking. The obvious question is: How to build an effective social strategy? There is no easy answer, however, I want to offer four ideas to help you build social into your marketing strategy:

  1. Social is not a Strategy. Eventually, the word social will go away. Humans are inherently social, most human activity is social. We don’t talk about digital computers or electronic calculators, it is assumed. Companies are in business to make money. According to management guru Peter Drucker, the only valid business purpose is to create a customer. That is a paying customer. Social is not a goal, it is a means to an end. Should you experiment with social? Sure. What I am suggesting is to always think about how each social marketing activity will support your business goals.
  2. Social as a marketing tool. Social tools can help marketing, innovation, customer support and other functions. But this is a blog for marketers. Yesterday I was having lunch with a friend who asked me if he should hire a social media strategist. To his surprise, I said ‘No’. I suggested he should hire a marketer that understands how social media can support the organization’s marketing goals. A marketer that understands how social marketing efforts can work together with ‘traditional’ marketing efforts to create more customers. To make money.
  3. Smart social metrics. In any business functions leading indicators are important. For years, online marketers have measured page views as a leading indicator for customer engagement that then can be converted into paying customers. In the same way that email newsletter subscribers are an engagement metric that companies can leverage to do permission marketing to drive sales, the number of Facebook fans are also an interesting metric that enables permission marketing to drive sales. But you have to think through the experience: from leading indicator to business impact. Build a model that uses social media tools, to drive engagement and activity that then impacts business goals. Take a look at the model in this slideshare from two years ago, and at a more evolved model in Jeremiah Owyang’s Social Media ROI Pyramid
  4. Social drives Advocacy. Social Marketing can be used by marketers in many ways: to build confidence in customers, to learn from customers and monitor your brand to make your organization more customer centric, etc. If you are looking for a quick win, I suggest consider using social media to drive advocacy: tap into Facebook , customer reviews and other forms of social media to empower your customers to sell for you. Word of Mouth is nothing new, it has been around forever. Social Media online makes it easy for happy to customers to drive advocacy and makes it scalable – and often measurable – for marketers.

Good luck with your social marketing efforts. Have fun. Be authentic. Experiment. And learn.

This post was first published in the American Marketing Association blog. Bazaarvoice and the CMO club recently publishe...

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