When you look at a company such as Dell, Boeing, or EMC that has over tens  of thousands of employees the potential to collaborate, share information, and build relationships internally is enormous (as it is for smaller size companies as well).  When social media really started to gain momentum most people immediately turned to its external uses.  Many of those involved with Enterprise 2.0 (myself included) believe that most companies should begin their social business transformation internally before branching out externally.  There are several benefits to doing this such as building a social corporate culture, familiarizing the company with new tools, and understanding how to gain actionable insight and drive business results from collaboration.  Once the company as whole understand this then it becomes much easier to build relationships and collaborate externally with prospects and existing customers.

I briefly explored a few ways in which social media can be used externally, but what are some of the benefits that enterprises can see from collaboration and social business within the enterprise?  Here are a few:

• Improving productivity by making information and people easier to find and connect with.  This also means reducing the amount of time that people spend on email, browsing through an outdated intranet platform, or perhaps finding the right person within the company to ask a question to.

• Knowledge sharing across the enterprise.  There are numerous Enterprise 2.0 examples and case studies of how companies have been able to either make money or reduce costs by sharing information from one individual, department, or location to another.  If one division of a company (such as a franchise) finds a way to save hundreds or even tens of thousands of dollars annually, imagine how much the company as a whole could save if they were privy to the same information.

There is a lot more to be said on Enterprise 2.0 as many of the same issues arise (as in externally facing initiatives) such as ROI, increasing adoption, getting buy in, organizational structure, and resource allocation.  I’m hoping to explore these topics in more detail here (as I do on my blog) but first wanted to get you thinking about social business can be used to benefit the company internally.

What are your thoughts and ideas on this?  Do you have any questions?  Let’s discuss.

• A study by the CMO council found that LESS than 20% of top technology marketers surveyed had developed “meaningful, comprehensive measures and metrics for their marketing organizations.”
• 68% of marketers were unable to determine the ROI of their initiatives (according to the last major survey).

According to the Prophet Annual State of Marketing Study in 2007 which surveyed companies with revenues between 1-10 billion:

• 60% don’t have the right approaches or analytic tools to measure marketing accountability and ROI
• 45% don’t have the right data or market research
• 45% employ too many programs or make frequent changes

Measuring any type of ROI for any type of marketing effort starts with building a foundation and an infrastructure that allows you to begin looking at marketing accountability to begin with. For example, if you want to track social media ROI and the company doesn’t have customer information or analytics/metrics then guess what, you’re going to be tracking and measuring a whole lot of nothing.
Here’s another interesting thought:
How come some organizations have marketing directors, senior marketing directors, executive marketing directors, senior executive marketing directors, VPs of marketing, senior VPs of marketing, etc. Is it me or does it feel like everyone at every company is some sort of VP or director. Who on earth is accountable for all of the marketing efforts? This isn’t creating a hierarchy it’s creating a totem pole.
It’s great that we are talking about social media ROI but to be honest most companies in the world are having enough trouble justifying ANY type of marketing spend, let alone justifying something that most social media “consultants” say can’t be justified with a dollar amount.

• What about the ROI from that giant bill board?
• What about the ROI from SEO efforts?
• What about the ROI from the party the company hosted?
• What about the ROI from that giant full page spread the company purchased?
• What about the ROI from that television or radio commercial?

If I sound a bit uneasy about all of this it’s just because I’m passionate about ushering in and encouraging individuals and companies to really focus on measuring MARKETING accountability and ROI across the board. Going forward it’s not going to be good enough to tell executive teams that marketing is an “art” or that the “ROI can’t be measured” or that something is “impossible to track.”
This post isn’t necessarily designed to criticize and critique marketers, instead it’s a challenge and an offer for marketers to work with each other and with their organizations to help tie marketing spend to results. I certainly don’t have all the answers and I don’t think any one person does, but if marketers want to make their jobs easier then one thing is clear, we need to remove the “black box” around marketing and we need to start focusing on marketing accountability.
There are a lot of things that organizations can do to improve marketing accountability, I’ll give three:

• Understand your customers, deploy analytics/surveys/etc to find out what your customers want, who they are, and where they exist.
• Make sure your marketing and finance departments are closely working together and aligned (actually you should really make sure that all of your departments are aligned)
• Understand the RIGHT metrics that you should be measuring and tracking

I encourage everyone to watch these series of videos on marketing accountability and ROI
What are your thoughts on this? What do you perceive to be some of the greatest obstacles for marketing accountability and how can we get over them?
Want to continue the discussion? Send me a message on Twitter.

The reason why it’s difficult for a lot of companies to calculate their social media ROI actually has nothing to do with social media. It has to do with companies not knowing the value of their customers. If we are going to start looking at social media in terms of quantifiable numbers then we need to start understanding how much our customers are worth, and this means looking at more than just how much a customer spends. A customers value is not equal to how much they spend at your store. It’s far more.
Here’s one example of how to calculate the LIFETIME value and profit from a customer. The article also has a free excel file with created formulas that you can use.
A recent study in 2008 by DEI Worldwide on the Impact of Social Media on Customer Behavior was able to provide the following interesting statistics:

• 70% of consumers have visited social media sites to get information
• 49% of these consumers made a purchase decision based on the info they found through social media sites
• 60% of people in the study said they are likely to use social media sites to pass along info to other online
• 45% of people who searched for info via social media sites engaged in WOM compared to 36% who found info on a company or news site

There’s more useful info in the study so I highly suggest that you take a look. So what does all of this information mean? It means that organizations need to be able to answer “value” questions about their customers so that they can translate the value into ROI from social media.
Here are a few questions I think organizations need to be able to answer.

• How much is a customer worth?
• How much does the average customer spend per transaction?
• Is a customer more likely to purchase a product after some sort of social media interaction?
• How much is it worth to convert an unhappy customer to a happy customer?
• On average how many people does a happy customer tell about a product or service?
• How much can an unhappy customer hurt you?

You don’t need exact numbers but you do need some sort of estimation or framework that you can work within. There are plenty of other questions you can ask but the point is that you need to start understanding the value of customers; this will greatly help when it comes time to explain the ROI of your social media efforts (not to mention customer value is something you should know regardless of whether or not you’re using social media).
Do you know how much your customers are worth to you?

“Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. The term developed from the original meaning which referred literally to going to market, as in shopping, or going to a market to buy or sell goods or services.”
The above tasks are by no means easy, especially now during our less than stellar economy. Marketers have fascinating yet challenging jobs that essentially boil down to making business work. I was thinking about a few things that marketers can do to help improve their game and wanted to share those things with you.

Stay up to date with technology

Technology is shaping how we market to and build relationships with our users. We have tools that let you communicate to the world instantly, social networks that allow you to build fan pages, applications that can tell what store carries a particular product and for how much, etc. As a marketer you need to be aware of the new technologies out there and how they could potentially impact how you do business.

Create conversations not broadcasts

Broadcast messages are dead, they are just too easy to ignore and tune out. Instead of focusing on creating broadcast messages to large groups of people, shift strategies and try to create conversations with your marketing tactics. The more flow of information you can create the better.

Communicating the new

It’s no secret that the marketing landscape is changing. It’s not enough to just want to be a part of the new type of marketing. You have to be able to understand why you want to be a part of it and how to communicate that to senior execs. Take twitter as a simple example. Would you be able to justify using twitter for business to your boss? Part of marketing is being unique and standing out, being the “purple cow;” the other part is communicating why and how you are going to become that “purple cow.” Desire and ideas will only get you so far, you have to back up your actions and decisions.

Metrics and measurement

Part of being an effective marketer is the ability to show results. How do you do this? by identifying metrics that tie in with your marketing objectives and then showing those metrics increasing. How do you justify the cost for a billboard ad or a television commercial? How do you justify creating a facebook fan page or a twitter account? Learn how to use online analytics and measurement tools and make sure you understand how to correlate your metrics with your actions.

Listening and responding

As a marketer you should be keenly listening to, observing, and engaging in the conversations and discussions that are going on around your product or service. Pay attention to what your users want and don’t want what they like and don’t like. Technology has created virtually free ways for marketers to monitor their brand and create online focus groups. Much of the information a marker needs can be found online for free (or can be gathered). If your customers complain, listen, if they talk to you, respond. This is how you can keep your conversations from turning into broadcasts.
There are several other things that can be added to this list but I’d rather hear from you. What are some of your tips for becoming a better a marketer?

Real world
Walk into a cocktail party
Social media world
Sign up for an account on a social media platform such as Twitter or Facebook
Real world
Start talking to people at the cocktail party
Social media world
Start engaging in conversations on social networks
Real world
Somebody starts saying negative things about you. You approach them and try to figure out what you did to offend them, perhaps apologize and buy them a drink. If that doesn’t work just understand and respect that you have differing opinions.
Social media world
You start receiving negative feedback across social networks. Respond by explaining yourself through a blog post or individual message. State that you are willing to work with users to help identify and resolve any issues. Apologize for any inconvenience caused to the users and make sure you act and respond to user feedback. Understand that there may always be people out there who try to bash your brand, there is nothing wrong with negative feedback as long you respond appropriately.
Real world
Use a megaphone to try to speak with everyone at the cocktail party at once. People will hate you and learn to ignore you.
Social media world
Get as many friends or followers as you can and start sending them out links, marketing messages, and product offerings. Again, people will hate you and learn to ignore you.
Real world
Have a conversation with a small group of people who share your similar interests or fans of your work. These people will want to connect with you and stay in touch with you once the cocktail party is over.
Social media world
Connect with people who share similar interests. Respond to messages and requests. Focus on the interaction and the relationship and not so much on trying to push across a piece of content. If you can provide something of value to your connections, then they will turn into brand evangelists over time.
There are probably a few other scenarios that you can think of in the real world that are easily translated into social media world scenarios. At the end of the day though we are dealing with real people and real connections, don’t forget that