Raj Agnihotri, PhD

There’s no better place to get a sense of the potential downside of social media for business than in B2B sales environments.

Sales managers are under a lot of pressure to get their reps to exploit interactive online technologies to the max, but that’s a lot easier said than done. Simply telling sales professionals to start blogging or to jump on LinkedIn or Facebook has been shown to alienate customers, sap employee motivation, and undermine sales productivity. To avoid those pitfalls, managers need to spend time and money providing training, direction, encouragement, and feedback in a field that is changing constantly. But according to Brian Fetherstonhaugh, CEO of OgilvyOne Worldwide, only 9% of salespeople responding to a recent global survey reported any such efforts. Even if companies do make these investments, and the effort results in reps’ being better able to negotiate social media’s chaotic terrain, there still might not be much to show in terms of higher sales.

So it’s no wonder that there’s a lot of uncertainty about and even fear of social media in B2B sales departments. Nevertheless, my research with Prabakar Kothandaraman and Rajiv Kashyap of William Paterson University and Ramendra Singh of IIM Calcutta shows that with the right managerial support, sales departments can use social media to create significant value for customers. The key is to focus not on direct benefits such as profits or sales volume but on the indirect benefits — better market knowledge and increased customer engagement.

There’s been a lot of grumbling in sales departments about social media, for understandable reasons: It challenges reps’ familiar role as information brokers and threatens to interrupt traditional, tried-and-true approaches to communicating with customers, such as phone calls and in-person meetings, to some extent replacing them with forms of communication that can be disconcertingly transparent.

For example, customers visiting SAP’s Community Network talk openly about thorny issues ranging from product complexities to technical errors, and prospective customers can read every word. That kind of forum can be unsettling for sales reps who came of age before social media.

But social media isn’t going away, and that’s a good thing, because its upside is impressive. It can help reps build trust with customers and prospects; it can foster the interactivity that leads to deep customer engagement; it allows reps to hear customers’ praise and gripes and to scout competitors’ strengths and weaknesses; it gives reps a platform for educating customers, showcasing testimonials, and countering competitors’ claims; it helps salespeople generate leads; and it facilitates the capture of important data about customers, ranging from their opinions to their birthdays.

A basic social media strategy should involve helping salespeople specify their objectives, engage customers, and monitor competitors; in addition, companies should assess reps’ performance. Beyond that, social media can be used in the service of two very different approaches to sales: relational and transactional. The relational approach is exemplified by IBM’s social media strategy, which emphasizes individual interactions as a way of building relationships and drawing customers in. Xerox also maintains numerous blogs that connect salespeople, prospects, customers, and product specialists.

The transactional approach was exemplified by Groupon’s venture into the B2B area. It worked with a consulting firm, Ajilitee, that was willing to offer a discount for a data-analysis service to attendees of a cloud computing conference.

The approaches aren’t mutually exclusive — a company can incorporate both into its overall strategy. But whatever the overarching strategy, there are certain capabilities that reps need to learn. Here are a few:

Generating content. Whether it’s on blogs or Twitter, salespeople need to learn to position themselves as experts and provide valuable information for customers and prospects. That might mean offering suggestions and solutions on a continuous basis, or it might mean conducting live Q&A sessions on Facebook with customers. Generating useful information not only makes the company top of mind and educates customers, but it also sends a signal that the rep really cares about the buyer’s bottom-line goals.

Monitoring. Salespeople need to learn where users are congregating on the web and monitor their discussions in order to gain critically important information on what customers think about the company and its products and competitors. But reps need to be careful about intruding in these forums. “You have to earn the right to ask for leads,” SAP senior VP Mark Yolton says in a “Social Media Best Practice” seminar. At the same time, reps can use platforms such as Twitter to follow customers and learn what they’re thinking and what they’re interested in — information that can be useful to reps in providing a personal touch.

Developing leads. There are many ways to do this via social media. For example, a salesperson for an OEM, having learned through monitoring LinkedIn that a civil engineering firm has secured a large account, might send a congratulatory tweet to the firm and initiate a discussion of tools that the firm might find interesting. A salesperson can also ask for a LinkedIn recommendation from an existing client from the same industry to enhance credibility.

Salespeople obviously aren’t born knowing how to do these things, so managers need to provide support in the form of training and in the hiring of technical staff. A seminar in writing for social media can be an effective way to help reps overcome any nerves about forms of online writing, such as blogging. Managers also need to shift resources in order to adjust to the new demands on salespeople’s time.

Companies, moreover, should be willing to shift a significant piece of the marketing budget to social media and to the creation of positions with specialized responsibilities, such as virtual community manager, social media strategist, social network moderator, and social marketing specialist.

When it comes to metrics, companies should develop measures that reflect strategic priorities and the importance of social media’s indirect benefits — for example, customer engagement rate (the number of clickthroughs or the volume of posts or comments on a blog) and digital audience growth (the number of Facebook fans, Twitter followers, or LinkedIn connections). These results should be monitored on a weekly or monthly basis.

One caution: Don’t be too reliant on metrics. Many of the benefits of social media, such as customer engagement, can’t be easily quantified. But that doesn’t make them any less important.

For more articles like this one, download the Harvard Business Review report: Putting Social Media to Work.

*Reprinted with permission from Harvard Business Review.

Dan Zarella, Social Media Scientist at Hubspot

Over my decade working in web marketing, I’ve spent a ton of time at various marketing conferences, and I’ve read countless books and blogs about new media. I’ve noticed a disturbing trend over the past few years in the social media end of the communications world. Much of the advice and strategy I hear boils down to little more than “unicorns and rainbows” superstitions like “engage in the conversation” and “be awesome.” Not only has much of the industry ignored hard metrics and dollars-and-cents ROI math, but there also has actually been a vocal opposition to measurement and accountability.

Effective marketers expect to see clear-cut, positive ROI for every other channel of online marketing, including email, search, and display advertising. But for some reason, many seem to forget about return when it comes to channels like Facebook and Twitter.

At HubSpot, the inbound marketing software company where I work, we’re obsessed with hard data and metrics for every inch of our business. So it seemed like a no-brainer to me that we should understand exactly what the value of each social networking connection is to our bottom line. It was out of that love of numbers that I began work on the value of a like (VOAL) formula.

The VOAL formula ends up looking like this:

L / UpM • (LpD • 30) • (C / L) • CR • ACV = Value of a Like

L (Total Likes): The total number of audience members connected to your social media account. On Facebook these are “likes” of your page, and on Twitter these are followers.

UpM (Unlikes per Month): The average number of fans who “unlike” your social network account each month. On Facebook this is an “unlike,” and on Twitter this is an “unfollow.”

LpD (Links per Day): The average number of times you’re posting links and potentially converting links driven from your social media account. On Facebook this is the number of posts you’re making per day that lead to a page on your website. On Twitter this is the number of times per day you’re tweeting these kinds of links.

C (Average Clicks): The average number of clicks on the links to your site you’re posting on your social media accounts.

CR (Conversion Rate): The average conversion rate of your website, from visit to sale or visit to lead. This can be an overall average, but for increased accuracy, use the conversion rate measured from traffic coming from the social network you’re calculating.

ACV (Average Conversion Value): The average value of each “conversion.” In this context, a conversion is the action you’ve used to measure CR for. It could be average sale price or average lead value. For increased accuracy, use the average conversion value of traffic coming from the specific social network.

It is relatively easy for any marketer with decent analytics software (like Google Analytics or HubSpot’s Marketing Analytics) to track the traffic from social networks and assign lead or customer acquisition values. It becomes more difficult when we want to understand how much time or money we should feel comfortable spending to build our reach.

The first part of the formula uses UpM and L to calculate a churn rate for your social media following. This will allow you to derive the average length of time an individual user is subscribed to your social network profile.

The rest of the formula calculates the VOAL metric for each follower using the number of links they’re exposed to over the length of time they follow your brand and the values from your conversion funnel.

To make this calculation easy for any marketer to do, I’ve built a calculator tool. Simply enter these six values for your business into ValueofALike.com, and the math will be done for you. The tool itself offers explanations about how to find the numbers needed. You can also adjust each value up or down to see the impact each metric has on the value of your followers and likes.

For more articles like this one, download the Harvard Business Review report: Putting Social Media to Work.

*Reprinted with permission from Harvard Business Review.

Now picture a modern classroom equipped with the latest technology, like SMART Boards and high-end laptops. If you were a teacher and you had the option of choosing between the two, wouldn’t you select the digitally advanced learning environment for your students? Likewise, today’s marketers need to evolve their campaigns to stay relevant and engage their customers like a teacher engages her students.

“Consumers are demanding faster, better interactions from the brands they choose to engage with, and that’s changing the way businesses need to think about their marketing and technology strategies,” said Lori Bieda, Executive Lead of Customer Intelligence at SAS. “Today’s consumers have unparalleled choice, with the power of mobility in the palm of their hands,” she elaborated, during the marketing panel discussion at the SAS Global Forum Executive Conference.

Armed with their mobile phones and tablets, consumers have access to more information about price and products than ever before, which they can use to make savvy buying decisions. With a plethora of information at their fingertips, they now have an expectation in today’s always-on world that they can get anything, anytime, anywhere.

To test this claim, I pulled out my iPhone, went online and found a cute pair of sandals. I did a quick price comparison between retailers, scanned through some customer reviews and picked the company that had the best offer for me. In seconds the sandals were mine. (Or they will be tomorrow: free overnight shipping for preferred customers – score!) It appears that Bieda was right … much to the dismay of my husband, who can expect a visit from the UPS man with the latest addition to my shoe collection.

Jim Davis, SAS

When it comes to marketing, “we’ve got to look at how we can do things differently, how we can monetize and use new data sources,” said Jim Davis, Senior Vice President and Chief Marketing Office at SAS. “It’s not just about being good enough, it’s about being much better than your competition and making sure that the experience you provide your customer exceeds that of your competition.”

Today, 46 percent of people around the world use social media to make purchase decisions. That’s a staggering number, and it’s only expected to rise. As the social network shapes consumers’ beliefs around brand perception, it’s also shaping their buying preferences. The result – it’s increasingly hard for traditional marketing to work. So what’s a marketer to do? Use social media to your advantage.

Social media is opening new avenues for marketers to learn about how their companies, products and services are perceived. “Social media represents the new focus group,” continued Davis. “You no longer need to pay a group of people to come in and tell you what they think about a new concept. Instead, you can just tap into social media and find out things in real time.”

Bieda explained that the key to marketing is about being relevant down to the second. Marketers around the globe are using analytics to reach the “moment of truth,” when customers receive their offers. “Creating a superior client experience starts with innovative marketing management,” she said. “Take connections a step farther in the social network.” For example, marketers can use analytics to understand contagious churn, influencers and detractors of the brand.

One powerful tool for a marketer’s arsenal is SAS Customer Link Analytics, which equips marketers with the know-how to create more cost-effective campaigns to reduce customer attrition and improve cross-sell and up-sell rates. With this solution, marketers can recognize social communities based on relationships between customers, and measure and segment them on social influence. Ultimately, customers get more personalized offers they’ll actually care about.

John Strain, CIO of Williams-Sonoma, explained that the key to his company’s marketing strategy for their brands (Williams-Sonoma, Pottery Barn and West Elm)  is finding ways to make all the various channels – stores, mail order and e-commerce – work together. As he put it, “Brands are the intersection of lifestyle merchandizing and analytics.”

“We have point of view embedded in everything we do,” Strain continued. “When you take a look at our catalog and the inspirational images, all of those really define who we are and what we do. It reflects our point of view around lifestyle merchandising. And those images really become a huge competitive advantage.”

And Williams-Sonoma doesn’t stop there. Images of its products in idyllic settings aren’t just used in the context of stores, catalogs and websites. They’re also playing a key role in social networking channels, like YouTube, Pinterest, Instagram and Facebook.

“The more channels we see, the more we like, because it’s a way for us to be different from a competitor,” explained Strain. “We can take that customer insight and market to them in an integrated way, so when you bring this all together, it enables us to provide a personalized experience via different channels that is very much cohesive.”

Marketers have the power to shape the lifestyle aspect of a brand and create a greater experience for the customer. After all, today’s customer expects the best. And if you don’t give it to them, they’ll find it somewhere else.

Learn more about the new SAS Customer Intelligence. 

SGF Executive Conference Panel on How Digital Marketing Drives the Omnichannel Experience

What does the future hold for digital marketing? If you looked into your crystal ball, what would it reveal to you? Where will you spend scarce marketing dollars for maximum impact? Will you allocate the bulk of your marketing budget to traditional campaigns, or to digital channels? We gained an interesting view into the future from a panel discussion with a national clothing retail executive and two digital marketing experts at SAS Global Forum Executive Conference.

The best way to summarize this fascinating discussion is that the future holds three important ways marketers will focus their efforts to maximize the potential benefit of digital marketing:

1. Personalize
   We will increasingly make the effort to personalize offers. Just as marketers keep getting more data about their customers’ preferences, the customers are aware that marketing is getting all the data. In most cases, this is driving a realistic expectation that we do something useful with that data. And “useful” to the customer is something that benefits them – it’s meaningful to them, and it’s personalized.
   .
2. Reciprocate
   Just as customer data is useful to marketers, it’s equally useful to the customers themselves. We will serve up customer data right back to them in the most effective channel/device. While we’re at it, we will show customers that we’re using their data to better serve them. We will increasingly face a need to foster trust on the part of the customer that we’re safeguarding their data but also putting it to good use. One good example of this idea in the works today was cited by the panel: the loyalty program app at Starbucks.
   .
3. Collaborate
   Marketers will need to foster collaboration across all channels for maximum effectiveness. The best way to show the customer that we care about them will be to engage with them according to one cohesive profile, regardless of channel. As customer awareness of the power of their data becomes more prevalent, more and more frustration will result when they deal with your organization on different channels and it’s not a coordinated experience. Frustrating your customers is not a good business practice today, and it certainly won’t be tomorrow.

I welcome your reactions to these three predictions by commenting below, and as always, thank you for following!

I recently asked marketing expert Wilson Raj (SAS Global Customer Intelligence Director) for his top tips for CMOs. Check out the short video below to hear his thoughts on integrated marketing management and harnessing big data and predictive analytics for more effective marketing.

Eric Williams, former Executive VP and Chief Information Officer, Catalina Marketing

Did you know that more than 5 billion people are calling, texting, tweeting and browsing on mobile phones worldwide? And that Facebook now handles the interactions of 1 billion users with more than 900 million objects (pages, groups, etc.) every day?

Clearly, marketers can’t afford to ignore the data coming from all these channels, or the demands from what Eric Williams, formerly of Catalina Marketing, calls the “me” generation. Today’s customer has her own music, her own personal trainer, her own Facebook page where she invites her own friends – she may even have her own personalized coffee flavor.

“You have to take that into consideration,” said Williams during a recent Loyalty 360 webinar. “As you begin to build out your marketing campaign, consumers have an expectation that offers, advertising and promotions will be customized uniquely for them.” Accomplishing this is not trivial, Williams added. He shared these six tips to help loyalty leaders understand how to do it well.

Tip 1 – Drive Results with Relevance
To entice and keep customers, Williams said, marketing has to be consistently targeted and relevant. One organization surveyed consumers to ask how they would like for businesses to talk to them. There were five key points:

• Keep it short and to the point; tell me quickly what I want to know.
• Let me choose to see it when it’s convenient for me.
• Make sure it’s personally communicated by trusted friends or experts.
• Give me information about price discounts and other special deals.
• Customize it to fit my specific needs and interests.

 Tip 2 – Use New Channels to Yield Better Insights
To reach consumers, marketers continually expand their reach into new, popular channels. With mass marketing, like TV ads, there’s usually no way to know which customers came from that particular promotion. “You’re better able to understand the effectiveness of the new channels than you are the old channels,” Williams said.

For example, the only way to get an offer that’s placed on a Facebook page is by going to Facebook – so it’s easy to find out who is using that offer. With this level of visibility, marketers can easily understand how effective their programs are, said Williams. “The challenge is that you don’t have all your customers [in any single channel]. So you can’t spend all your money on any one area.”

Tip 3 – Find New Customers Using Customer Analytics
Traditional marketing revolved around products – marketers simply looked for the best customers to purchase their product. That approach doesn’t work anymore, said Williams.

Today, Williams said, “The customer is queen.” You have to find the products that best suit her, and then prove why they’re relevant. If you can keep the customer happy with each shopping experience, you can be fairly certain that she’ll keep coming back to buy more.

 Tip 4 – Optimize Customer Incentives
Once you know which customers you should target, you’ll need to select the ideal offers. But how do you figure out what offers to make to each customer? A retailer could have between 10 million and 20 million consumers, Williams said. A grocery store could have 500 or more offers at any given time. You might want a customer to qualify for at least three offer groups in order to receive a distribution. But there needs to be a limit, too. So if a customer qualifies for more than five offer groups, he should only receive the five highest-priority offers.

 People are not equipped to manually manipulate tens of billions of permutations of values, offers and priorities. So it’s not as easy as sitting down with an Excel spreadsheet. Optimization software, Williams said, can perform this type of work quickly and accurately.

Tip 5 – Eliminate Channel-Centric Thinking
Identifying the type of media to use with today’s offers is more involved than choosing between print or email – and you can’t simply run it through a campaign. Instead, your offer needs to be specifically geared to individual customers. And you need to add a multichannel capability into the offer pool so that you can integrate it and figure out the preferred channel for each customer.

 The offer optimization process encompasses an unbelievably challenging matrix, said Williams. “This is why most businesses that I’ve spoken to are still challenged at running campaigns individually. They may run an email program, and then they’ll use a different set of offers and put out a text program, and they’ll do another set of offers as a print program. It all has to be integrated to truly make a difference.”

Tip 6 – Value Math and Marketing as a Match Made in Heaven
As it creates innovative marketing solutions to address a wide range of goals, how does Catalina know they’ll get the results they want? Williams identified three core mathematics-based technologies that have helped Catalina’s customers achieve success with their marketing programs:

• Data mining and predictive analytics. These technologies can quickly uncover all types of information inherent – but not necessarily obvious – in business data.
• Offer optimization. This technology ensures that offers are used to their highest potential. Catalina Marketing uses SAS® Marketing Automation to perform this task.
• Media optimization. Technologies that help you make the most of each customer contact can significantly improve campaign returns.

 For more, register to watch the webcast or download the full white paper: Six Tips for Turning Big Data into Huge Insights.

Traditional marketing is obsolete, and many senior leadership teams have yet to come to grips with what the new model should look like. Our survey shows differences between CMOs and the rest of the C-suite over the priorities of the marketing function, its contribution to the business, and its ability to measure return on marketing (ROMI) investments. The C-suite priorities for the CMO — increase revenue, find new customers and improve the organization’s reputation — are formidable. Yet despite this accountability, the CMO’s role is viewed as strategic in only 61% of organizations and the CMO plays a leading role in formulating marketing strategy in just 53%.

We also see just how broad the CMO’s role has become. The CMO’s job description is as fluid as the marketing landscape he or she navigates. The CMO still oversees traditional marketing functions such as advertising, brand marketing, product marketing and communications. However, the current top areas for marketing investments — customer relationship management, brand advertising, collaboration tools and customer analytics — will morph significantly over the next three years where the focus is primarily on understanding and interacting with the customer. This shift offers a clear indication of the rising importance of the voice of the customer.

But the rise of digital marketing channels — online, social and mobile — and a new customer sovereignty, fuelled by increased access to information about their choices, has added new layers of complexity on top of these traditional activities.

More to come in part 3, or you can check out the full report on the EIU website.

I recently asked marketing expert Wilson Raj (SAS Global Customer Intelligence Director) to name the top three challenges in digital marketing. Check out the short video below to hear his views on: 

1. Managing complex multi-channel customer relationships
2. Dynamically managing customer interactions
3. Applying analytics to the marketing process

Jundong Song, VP of 89 Degrees

For clients of 89 Degrees, a US-based marketing service provider, reducing expenses, increasing revenue and executing effective marketing campaigns is business as usual.

89 Degrees specializes in data- and analytics-driven marketing solutions and services. VP Jundong Song leads a team of database and marketing analysts, statisticians, and computer scientists who use big data, analytics and digital marketing technology to build customer engagement and deliver ROI for clients.

I recently interviewed Song and wanted to share some of the exciting things he and his team are doing and what he’s seeing in the industry:

What are the biggest changes you seen in marketing in the past year?
Song: Marketing went transactional and personal. The boundaries between marketing and sales became increasingly blurred thanks to price transparency and comparison enabled by digitalization and mass intelligence.

For consumers, shopping is no longer just which brand to buy, but when to buy and at what price. Marketing has to not only attract customers to their brand, but must also offer the right price at the right time on the right channel for the right person. 

Personalized pricing and optimization across channels is the trend that picked up speed last year. And it can’t be done accurately unless you’re utilizing big data, analytics, and algorithm-based marketing in speeds approaching real time – that’s how you transform a customer’s total experience with your brand.

Marketers who moved first have seen positive results. For example, Safeway armed its “Just for U” loyalty card program with personalized coupons and pricing over a web portal and smart phone application. It was rolled out last June and has significantly improved Safeway’s earnings and stock price for the most recent quarter.  

What do marketers need to do now to adjust?
Song: Personalized pricing speaks to consumers’ individual needs and shopping habits. It requires an integrated data and marketing platform — and business processes that discover and act upon customer intelligence. It is about achieving a single view of customers across channels and data points. It is about mining big data and discovering patterns and habits specific to customers as segments or individuals. And it is about a marketer’s ability to act on those findings with speed and precision. 

Committed marketers need the right technologies and talents to collect, integrate, and analyze data. Then they need to clearly communicate actionable insights. They need to design a working strategy and execute it flawlessly over an integrated platform across all communication channels and customer touch points.

And most importantly, marketers need to view customer data and intelligence as an enterprise asset, and analytic-driven marketing as an enterprise approach. Commitment and support has to come from the top down and spread across and beyond the marketing department. Safeway’s CEO Steve Burd has been the driving force behind the company’s “Just for U” program.

If you could give one piece of advice to Chief Marketing Officers (CMOs), what would it be?
Song: Be numbers-oriented and a two-way advocate for customer-centricity, speaking with well-defined and simple metrics that can be easily understood across the C-suite. 

A CMO’s job is customer-centric by nature: attract customers to your brand.  Big data and analytics have offered unprecedented opportunities for CMOs to make a difference in promoting customer-centricity beyond marketing and into a firm’s business strategy. With technology and data available to count customers and identify their transactions and activities, CMOs and CFOs are getting much closer in agreement on how to view their firm’s performance from a customer-centric perspective. Number of customers acquired and retained; number of trips a customer made to store; and amount of money spent once a customer was in store — a CMO should have those KPIs at his or her fingertips for decision-making conversations with C-level peers.

CMOs also need to be aware that building a platform of big data analytics and running smart marketing requires money. Most of the benefits will be long-term in nature and a CMO needs to justify spending with a concrete return on investment. To get the support needed — and address customer-centricity — CMOs need to look at a customer’s lifetime value and equate return on customer with earnings per share and return on equity, for CFOs and CEOs.  Justifications like return on marketing campaigns are good, but will barely get attention from CFOs and CEOs who tend to look forward to the long term big picture at a high-level.

Read more from Song on the 89 Degrees blog

Customer-centricity is not a new concept, but it has taken on increasing importance in today’s business environment, marked by empowered consumers who want to interact with a brand on their own terms. For many organizations, the challenge lies in finding innovative ways to capture the “voice of the customer” and infuse customer insights across all business functions, from the point of sale to the call center, in order to create business value.

The chief marketing officer (CMO) is well positioned to serve as the champion of customer insights and engagement at organizations looking to become more customer-driven. Marketing has access to a wealth of data about the behaviors, activities, and interests of customers and prospects and, as a result, is often at the center of the customer experience. 

Ironically, however, CMOs’ attempts to leverage customer insights more strategically across their organization have been thwarted by the increasing demands of their “day job.” As the CMO role has expanded well beyond traditional advertising, branding and PR, marketing’s mandate has in many ways become less clear. The CMO’s increasingly fragmented responsibilities make it increasingly difficult to take ownership of the “voice of the customer” across the organization.

Some believe the CMO remains in the best position to embrace the role of customer champion. Others advocate yet another C-suite position – the chief customer officer (CCO) – to lead the charge to customer-centricity. Regardless of title, a void remains that many organizations need to fill before they can truly call themselves customer-centric.

For more, see the full report on the EIU website.