Musings of a Marketing Maven

Indus­try pun­dits and mar­ket ana­lysts have lots of advice to offer com­pa­nies pon­der­ing the impli­ca­tions of Web 2.0, Enter­prise 2.0, PR 2.0, social media or con­ver­sa­tional mar­ket­ing. The blo­gos­phere and con­fer­ence cir­cuits are full of what experts have to say about the urgent need for busi­ness trans­for­ma­tion, for com­pa­nies to “embrace the groundswell.” Threats loom, as expressed in this quote from a lead­ing source:

If you have a brand, you’re under threat. Your cus­tomers have always had an idea about what your brand sig­ni­fies, an idea that may vary from the image you are pro­ject­ing. Now they’re talk­ing to each other about that idea. They are redefin­ing for them­selves the brand you spent mil­lions of dol­lars, or hun­dreds of mil­lions of dol­lars, cre­at­ing. …Business-to-business com­pa­nies are, if any­thing, more vul­ner­a­ble to these trends.

— From Groundswell, Char­lene Li & Josh Bernoff, For­rester Research, 2008

If you’re a prac­ti­cal, action-oriented busi­ness per­son, you’re prob­a­bly won­der­ing about the incre­men­tal price tag. Hold on to your hats: if you work for a mid-market or larger com­pany, you could eas­ily be look­ing at a start-up invest­ment of hun­dreds of thou­sands of dol­lars on top of your exist­ing mar­ket­ing bud­get. Here’s why.

 

Incre­men­tal Costs of Embrac­ing Social Media

Let’s start with a rough guess of what some of the incre­men­tal com­po­nents might cost your com­pany. These esti­mates assume

• you already have an ade­quate infra­struc­ture and capa­ble team to design and man­age your exter­nal web prop­er­ties, and
• your cur­rent staff (and customer/partner base) are ready, will­ing and able to cre­ate inter­est­ing blog postings.

Com­po­nent	Annual Cost	Cost Basis
Basic lis­ten­ing platform	$3000	Unlim­ited users
Advanced lis­ten­ing plat­form (analytics)	$75,000 – 150,000	Enter­prise (SaaS)subscription
Enter­prise blog­ging platform	$1500	Sub­scrip­tion for 20 autho­rized authors
Online com­mu­nity man­age­ment platform	$100,000	Enter­prise (SaaS)subscription
Ded­i­cated com­mu­nity manager	$60,000 – 80,000	Salary (employee or contractor)

 Source: ven­dor con­ver­sa­tions, For­rester Wave (lis­ten­ing platforms)

The esti­mates above do not include the infra­struc­ture costs of a sophis­ti­cated web site (CMS-based sys­tem) that’s capa­ble of rec­og­niz­ing who is vis­it­ing your site, respond­ing in real time, and serv­ing up an expe­ri­ence that’s tai­lored to that per­son or role. (You already have one of those plat­forms, right?)

But before you invest in any tech­nol­ogy, you need to define your game plan and your busi­ness objectives.

Start by Listening

Pretty much every­one agrees that the best place to start is with an active lis­ten­ing strat­egy. By lis­ten­ing to the con­ver­sa­tions tak­ing place all over the Inter­net, you can get a sense of who’s talk­ing, who the influ­encers are, and where the key peo­ple you’d like to reach tend to congregate.

Given the vol­ume of chat­ter, this means you need a game plan for mon­i­tor­ing what is being said across the Inter­net and social media about your com­pany, your prod­ucts, brands, cus­tomer ser­vice prac­tices, pric­ing, etc. With over 100 mil­lion blogs there’s an explod­ing amount of “user gen­er­ated con­tent” to mon­i­tor – the blogs, dis­cus­sion forums, YouTube videos and so on that are being used to talk about your com­pany and your offer­ings. If you try to do this man­u­ally every­day, it quickly gets out of hand.

If you’re just get­ting started (or work for a small com­pany), sim­ple keyword-based search tools can save time by aggre­gat­ing UGC search results from mul­ti­ple sources. Some offer sim­ple ways to track changes in “sen­ti­ment” – mon­i­tor­ing the pat­terns that occur when peo­ple express pos­i­tive, neg­a­tive or neu­tral feel­ings about your brand. Sam­ple ser­vice providers: Radian6 and Scout Labs.

If you work for a com­pany with com­plex prod­uct port­fo­lios or lots of brands, or in a com­pany whose prod­uct and brand names are used in ordi­nary con­ver­sa­tion, you may need a more sophis­ti­cated lis­ten­ing plat­form. Exam­ples: TNS Cym­fony, Nielsen Online, Vis­i­ble Tech­nolo­gies.

There are many fac­tors to con­sider, hence the huge range in prices for lis­ten­ing plat­forms. Here’s a link to a sum­mary report by For­rester Research com­par­ing the lead­ing ven­dors of lis­ten­ing plat­form capa­bil­i­ties as of Jan­u­ary 2009.

Define Your Audience

Once you’ve iden­ti­fied the peo­ple you’d like to lis­ten to, talk to, engage – what­ever – it’s good prac­tice to develop some user per­sonas to guide your design and com­mu­ni­ca­tion strate­gies. This requires a good blend of cre­ative insight and care­ful mar­ket research.

There are lots of books, resources and spe­cialty firms that can help you develop user per­sonas. Costs range from the do-it-yourself in-house approach to tens of thou­sands of dol­lars for pro­fes­sional mar­ket research and per­sona devel­op­ment. (Or poten­tially hun­dreds of thou­sands of dol­lars if you’re going to con­duct ethno­graphic, con­tex­tual research.)

For­rester Research advises you (via their blogs, advi­sory ser­vices and the Groundswell book) to develop what they call “The Social Techno­graph­ics Pro­file” of your cus­tomers. They offer a tool for doing so – or access, for a price, to their pro­pri­etary data sets, which offer the advan­tage of sta­tis­ti­cal valid­ity. What does their cus­tom data cost you? My guess: tens of thou­sands of dol­lars, depend­ing on the scope (or lack thereof) of your sub­scrip­tion rela­tion­ship with the firm.

Set Your Objectives

What are you try­ing to accom­plish by shift­ing from a broad­cast mes­sag­ing approach to a more relationship-oriented engage­ment with your customers?

The cost to answer this ques­tion is pre­sum­ably inter­nal: the time and atten­tion of your staff as they artic­u­late the busi­ness objec­tives, social­ize the plan and make rec­om­men­da­tions for next steps.

Oth­er­wise you can engage a con­sult­ing firm to help. Prices vary…

What will it cost to exe­cute this strat­egy? It all depends on the tech­nol­ogy choices you make and how you intend to tackle the likely change man­age­ment required. You are, after all, engaged on a jour­ney that’s likely to trans­form your mar­ket­ing practices.

Good luck with the journey.