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.