15 Tips for Getting the Most From LinkedIn Groups

I spend a lot of time in LinkedIn groups and have learned a bit about maximizing their potential as conversation-starters. Here are 15 of my favorite tips. Please add your own as comments.

1. Ask Questions

The best way to provoke discussion on LinkedIn is to ask questions. Rather than sharing a link to an article, use it to kick off a discussion. For example, instead of posting a headline and a link to an article about cloud security, formulate it into a question:

“This article on Cloud Computing Path makes the case that the recent Dropbox security breach proves that the cloud is not yet secure enough for the enterprise. Do you agree?”

http://www.cloudcomputingpath.com/dropbox-security-breach-prove-that-cloud-is-not-secure/

2. Make it Personal

LinkedIn is the only major social network that doesn’t permit brands to interact as members. Only people can post content. With that in mind, make sure your posts have a personal tone. For example, instead of saying, “This webinar on the benefits of platform as a service has particular relevance to business partners,” try “This webinar on the benefits of platform as a service looks interesting. I hope you’ll join me there.”

3. Follow Up

This is very, very, very important. Don’t post a question and just walk away. When people do you the courtesy of responding, return the favor by responding to them or simply “Liking” their post. Remember that you started the conversation. That means you own it.

4. Fill Out Your Profile

When you contribute something interesting to the group, people will want to find out more about you. It’s disappointing when their click takes them to a skeletal profile page with no photo. It’s a lost opportunity for you, too, because you’re missing the chance to create a professional contact.

5. Use Active Voice

Why “facilitate the implementation of” when you can just “do?” Corporate speak doesn’t work in social channels because you communicate there as a person, not as an institution. Cleanse your prose of passive voice, buzzwords and superlatives. Write like you talk.

6. Keep Headlines Short and Avoid the Ellipses Of Death

LinkedIn gives you 120 characters for a headline, which is pretty generous. Headlines over 120 characters are truncated with an ellipsis (…). You want to avoid this because you’re forcing readers to click through to read the rest of the headline. The more clicks you require the more visitors you lose. The “Add more details” field gives you plenty of space to spread out.

7. There Are Three Parts Of Any LinkedIn Post. Use Them All

They are:

  • Headline – Keep it brief and use it to communicate basic information or arouse interest.
  • Add more details - Provide background and explanatory information. Tell people why you think this information is important.
  • Attach a link – Use this area to post links. Never include links in the headline. If you need to have more than one link in your post, use a URL shortening service (see below) and include it in the “Add more details” section.

For example, instead of writing a headline like “Can anyone recommend a useful eBook on cloud computing? I’m looking for something oriented toward professional developers that has recommendations for the major PaaS and/or IaaS solutions.” post the question as a headline and the second sentence in the “Add more details” section.

8. Think of the Benefit to Your Audience

Success in social channels is all about helping other people. Keep that in mind when composing a post. It’s not about you, it’s about them. For example:

  • Instead of “A Primer on PaaS,” try “This Paas Primer could be a great conversation-starter for your prospects.”
  • Instead of “Spot Market Pricing, New Services Fuel Amazon GovCloud Growth,” try “What You Need to Know about Amazon’s Government Strategy”

Use words like “you” and “I” a lot. This is a discussion, not a billboard.

9. Minimize Copy and Paste

Respect your readers’ time by minimizing pointless verbiage. Don’t just copy and paste the promotion from a webcast. Boil down the basic facts and tell the reader why you recommend it. The more you make your post a personal message from you, rather than a rehash of somebody else’s message, the more compelling it is.

10. Don’t Copy From Twitter

When I see hash tags in a headline, it tells me one thing: This person was too lazy to customize the message for me. The language we use on Twitter doesn’t fit well in the more generous confines of a LinkedIn or Facebook post. Rewrite the message for the network you’re using and the people you’re hoping to reach. Think of the context, too. Facebook is more playful than LinkedIn. The Sales Best Practices group on LinkedIn has a different membership than the Construction Professionals group.

11. Avoid Repetition

LinkedIn does you a favor by copying the first few words of any article that you post as a link. Don’t copy and paste those same words into your description field. You have 15 minutes to edit anything you post in a group, so check your work to make sure your description isn’t a carbon copy of the item to which you link.

12. Take Advantage of Polls

Polls are a basic tool you can use to solicit feedback. You can specify up to five answer choices and choose how long the poll runs. Try mixing it up; instead of posting a question, occasionally formulate the topic as a survey.

13. Use Trackable Links

It’s easy to measure the response to content you post. URL shortening services like Bit.ly and JotURL make it easy to shorten links and then track the number of clicks they generate. LinkedIn processes these short links just like regular URLs. You can also use Google URL Builder. It generates longer links, but they’re compatible with Google Analytics. You can also shorten those links with Bit.ly prior to posting them.

14. Be Provocative

I don’t recommend overusing this technique, but it’s fun to try from time to time. Instead of a descriptive headline, try one that piques curiosity. Here are a couple from the Sales Best Practices group:

Eat that Frog!

If it’s your job to eat a frog, it’s best to do it first thing in the morning. And If it’s your job to eat two frogs, it’s best to eat the biggest one first. ~ Mark Twain

How do you start your day? Do you ‘eat that frog?’ Do you have a ritual that starts your morning?

Who’s ruining it for the rest of us?

The member goes on to ask why sales people continue to use spamming tactics that don’t work and give the whole profession a bad name.

15. Connect with Other Members

When you request a connection with another LinkedIn member, the service asks you to verify that you have an existing relationship. If you don’t, it denies the connection request. You can get around this by joining a group to which the other person already belongs and requesting the connection as a fellow member. Be aware that if your request is denied, LinkedIn won’t let you try this trick a second time.

 

 

IBMer: ‘Social Selling’ Is a Sales Process in Itself

It’s no secret that the factors that motivate salespeople to change the way they work have to be pretty simple: Help them spend more time selling and less time scrounging for information and telling managers what they’re doing.

So when IBM began to introduce the concept of “social selling,” it chose a test base of a few hundred salespeople and their managers to build a set of integrated systems that improved productivity and reduced administrative overhead. In a presentation to the SugarCRM SugarCon conference in San Francisco earlier this week, Gary Burnette, vice president of sales transformation at IBM, told how the implementation team at IBM succeeded in making social selling a coveted goal rather than another set of rules and reports.

“We didn’t think of it as social selling; we thought of it as improving sales productivity,” Burnette said of the pilot. “It was about returning value and time to our sales teams for their time invested.”

Familiarity Breeds Intent

The program began with the assumption that nearly every salesperson was already familiar with the value provided by Facebook and LinkedIn in their personal lives. The tools made it easy to find information and expertise by consulting friends. Those same capabilities could be useful as a formal part of the business process.


Download Gary Burnette’s Social Selling Presentation here


A key goal was to simplify reporting, an already distasteful task that becomes more intrusive as the end of the quarter nears. Management has a constant need for information about the status of different sales opportunities, and as a result “We’ve had sales people called out of client meetings to answer questions from upline sales execs,” Burnette said. Much of this information was locked up in Excel spreadsheets owned by individual reps. The only person who could answer a question was the representative on the account.

IBM built a sales force automation system based on SugarCRM, Websphere and Lotus Connections to enable collaboration and streamline visibility into the sales cycle. Cognos and SPSS analytics were applied to better qualify opportunities and improve forecasting. As a result, salespeople now know more about their prospects and managers have better visibility into progress against goals.

Opportunity reports were replaced with an “activity stream” approach similar to the Facebook timeline that enables salespeople to document the status of each opportunity on an ongoing basis. Management can peek into the status of opportunities at any point in the process and get the latest information. As a result, lag times have been cut from five days to almost nothing and report preparation has been significantly reduced because everyone has access to the same information.

“I don’t think most senior sales executives have any idea how many people are behind the scenes creating reports and forecasts,” Burnette said. “If managers are in collaboration with their teams the information is more accurate and less filtered.”

All members of the team can now apply social tools like tagging and profiling to identify and recommend experts who can help solve customer problems and closed deals. “The management team is helping the seller sell instead of asking why they aren’t selling,” Burnette said.

Critical Success Factors

A project this ambitious can’t succeed without support at three levels:  top management, brand managers and the reps on the street. The fact that new IBM CEO Ginni Rometty had endorsed the project before she even became CEO was a godsend, Burnette said. Also critical was involving users in the development of the dashboard. Nearly 800 sales reps gave feedback at every step. Brand leaders helped in strategic direction so that the most important information would be the easiest to find.

Social selling is now being woven into the mainstream of IBM’s business process, but adoption was never a sure thing.

“Becoming a social business is a transformational journey,” Burnette said. “The onus has been on us to translate these systems into something that has clear business value.” As word-of-mouth has grown, the new social selling process has taken on a life of its own. “It started with us deliberately selecting the people to participate, but now it’s ballooned to the point where people are saying, ‘I want to be a part of this.’”

Read more coverage of Burnette’s session.


This is one in a series of posts sponsored by IBM Midsize Business that explore people and technologies that enable midsize companies to innovate. In some cases, the topics are requested by IBM; however, the words and opinions are entirely my own.

Waiving Speaking Fee for Book Buyers

My book Social Marketing to the Business Customer with co-author Eric Schwartzman was released last month and is now available through Amazon, Barnes & Noble, Borders and other booksellers.  It’s the first book devoted exclusively to B2B social media, and the most comprehensive collection of best practices and case studies currently available in print.

B2B is hot topic these days as marketers look for applied wisdom and operational frameworks to help them integrate social media into their existing organizational outreach efforts.  Everyone seems to be interested in the concept of using social media to reach a focused, select group of individuals. If social media for business is on your mind lately, consider picking up a copy of the book, or downloading one of our B2B social media podcasts which we’ve been releasing over the last couple of weeks through On the Record…Online.

If you’re looking for speakers to address the subject of social media for business at your next conference or event, both Eric and I are waiving our fees now through June 1, 2011 with bulk book purchases of 200 of more copies. So if you’d like to have Eric or me present on B2B social media at your company or conference, we’ll speak and autograph your 200 copies in person.

Some of the topics we can address include:

  • Building the Business Case for B2B Social Marketing
  • Generating Qualified B2B Leads with Social Media
  • How the B2B/B2C Difference Applies to Social Media Strategy
  • Current and Future B2B Social Marketing Trends
  • Or challenge us with some aspect of social media specific to your interest

If you’re interested in having me present, please check my online calendar first. Note that I will be unavailable for personal reasons (expecting twins any day now!) through about the end of April, but any speaking engagements booked before June 1 qualify for this offer. Or if you’d like to have Eric speak your group, you can check his online calendar as well. We’d both be honored to talk your group about B2B social marketing specifically, or social media marketing in general. It’s a topic about which we are very passionate.

We look forward to hearing from you! Contact me at paul [at] gillin [dot] com.

Social CRM: Curb Your Enthusiasm

If you’re a marketer in a medium-to large-sized B2B company, you’re almost certainly using customer relationship management (CRM) software to track your customers and prospects. And if you’re a CRM user, you’re almost certainly hearing about Social CRM, the hottest new craze in that 20-year-old field. I encourage you to restrain your enthusiasm.

CRM is a well-established discipline that presumes that the more information we can capture about a customer’s interactions with our company, the better we can deliver products and services that the person wants to buy. It seems only natural that online social interactions should be part of this profile. Vendors of CRM services, who are always looking for differentiation points in that crowded market, have lately been talking up this social dimension as a kind of CRM 2.0.

The problem is that most of their customers are still struggling to get CRM 1.0 right. CRM is hard to do well because A) everyone who interacts with the customer must be committed to documenting every touch point; and B) the company must have the analytical chops to know what to do with the data it collects. Strategy changes, turnover, layoffs and the like make the first step difficult enough, and we all know how analytically challenged sales managers can be.

Social CRM introduces potentially enormous new complexity to the process. Social maps – or diagrams of relationships across social platforms – sound good in theory, but are nearly impossible to create on a broad scale. What’s more, I question how much social interactions have to do with decision-making in many cases.

For example, I have 725 friends on Facebook, nearly 1,000 connections on LinkedIn, and almost 7,500 Twitter followers. I know most of these people little or not at all, a result of my admittedly promiscuous approach to accepting friend requests. Trying to map these relationships in any meaningful way would be nearly impossible. What’s more, it would be pointless. The fact that I’m connected to people has little to do with their influence over my decisions. Like most people, I keep my network of truly trusted advisers small and communicate with them largely outside of the public eye. There is no way that social profiling would reveal which relationships really matter.

I also often seek advice from people who aren’t part of my social network. For example, when I consult TripAdvisor to make a hotel reservation or Google Maps to find a restaurant, I put faith in the advice of total strangers. No social map is going to unearth these relationships. When my iPod went on the fritz this week, I became briefly involved in communities that provide diagnosis and repair advice, but it’s unlikely I’ll ever visit those places again. In fact, I routinely seek the advice of experts outside of my social circle when I have important decisions to make.

Even if you were able to identify the relationships that matter, I’m not sure customers are entirely comfortable with that idea. A few years ago, the marketing industry became enamored with the concept of “one-to-one marketing,” which was about building customer profiles that were so detailed that marketers could literally respond to individual needs.

I don’t know about you, but I find that whole idea a little unsettling. If someone were to cold-call me to follow up on a stray comment I made on Twitter, I would be as likely to hang up as to ask for a proposal. Many of us now live in public to a degree that was unimaginable a few years ago, but that doesn’t mean that we want our activities to be used as a basis for commerce. Google CEO Eric Schmidt has said that this “creepiness factor” is an important reason why Google doesn’t do more with the behavioral data it collects.

I do believe that some of the core concepts of social CRM are valid. For example, an automotive dealer should be able to generate sales by tracking public comments from nearby consumers who are looking to buy a car. A contact within a person’s social circle may be valuable in reaching that person (that’s just good prospecting). A customer’s Twitter handle and tweet stream should also be monitored to look for opportunities or signs of dissatisfaction.

It’s incumbent on all companies these days to track comments from customers that might indicate an opportunity or a problem. Conversation monitoring is good business practice. But it’s not 2.0 anything.

Oracle’s Social Media Policy

With the acquisition of Sun complete, Oracle distributed its social media policy to employees this week, and I was forwarded a copy. A version from six months ago can be found here. This is a nice, concise document that covers all the bases I can think of. It’s particularly useful in its approach to copyright and permissions. Perhaps it will help you in formulating your own policy. Chris Boudreaux has assembled an amazing database of 167 social media policies from businesses, government agencies and nonprofit organizations that you may also find useful. Employee names and e-mail addresses have been withheld and I’ve removed links to several documents that are available only behind Oracle’s firewall.

The Oracle Social Media Participation Policy applies to

  • All blogs, wikis, forums, and social networks hosted or sponsored by Oracle 
    (e.g., blogs.oracle.comwiki.oracle.commix.oracle.comforums.oracle.com)
  • Your personal blogs that contain postings about Oracle’s business, products, employees, customers, partners, or competitors
  • Your postings about Oracle’s business, products, employees, customers, partners, or competitors on external blogs, wikis, discussion forums, micro-blogs 
    (e.g., Twitter, social networking sites)
  • Your participation in any video related to Oracle’s business, products, employees, customers, partners, or competitors; whether you create a video to post or link to on your blog, you contribute content for a video, or you appear in a video created either by another Oracle employee or by a third party.

Since social media activities can impact your ability to do your job and Oracle’s business interests, it is extremely important to follow the requirements set forth below.

REQUIREMENTS
This section describes the requirements that are most relevant to Oracle employees participating in social media of various kinds (Oracle hosted and external).

Follow the Code
The Oracle Code of Ethics and Business Conduct and Oracle’s corporate policies – including the Acceptable Use Policy, Information Protection Policy, and Copyright Compliance Policy – apply to your online conduct (blogging or other online activities) just as much as they apply to your offline behavior. Make sure you’re familiar with them.

Make Sure Your Management Approves
Social media activities must not interfere with your work or productivity at Oracle, and your personal activities should take place outside of work. Your current management must approve your activities related to Oracle’s business. In addition, if you are VP-level or above, make sure to contact <name withheld> of Oracle‘s Corporate Communications team to discuss work related blogs. Please be aware that Oracle may choose to restrict social media activities that relate to your employment or Oracle’s business.

Don’t Misuse Oracle Resources
Don’t use company resources to set-up your own blogging environment, even if you are blogging about matters related to Oracle. Oracle resources, including servers, may be used solely in connection with formally authorized blogging environments that have been established following consultation with Global IT, Global Information Security, Legal, and Oracle Brand and Creative. Please contact blogs_us@oracle.com if you have questions regarding setting-up authorized blogging environments.

Protect Confidential Information
You may not use your blog, micro-blog or other social media to disclose Oracle’s confidential information. This includes nonpublic financial information such as future revenue, earnings, and other financial forecasts, and anything related to Oracle strategy, sales, products, policy, management, operating units, and potential acquisitions, that have not been made public.

Protecting the confidential information of our employees, customers, partners, and suppliers is also important. Do not mention them, including Oracle executives, in social media without their permission, and make sure you don’t disclose items such as sensitive personal information of others or details related to Oracle’s business with its customers. Third party social media services use servers that are outside of Oracle’s control and may pose a security risk. Don’t use these services to conduct internal Oracle business.

In addition, you may not publish (nor should you possess) our competitors’ proprietary or confidential information. You may make observations about competitors’ products and activities if your observations are accurate and based on publicly available information. Take care not to disparage or denigrate competitors.

Don’t Comment on Mergers & Acquisitions (M&A) Activity
You must not comment publicly on Oracle’s or our competitors’ M&A activity, including potential and pending acquisitions. This applies to potential acquisitions regardless of their status–in diligence, announced but not closed, integration plans for acquired companies, etc. Any commentary on what a transaction or potential transaction may mean to Oracle, positive, negative or neutral can be problematic.

Don’t Discuss Future Offerings
Don’t discuss product plans, upgrades or future product releases. Because of potential revenue recognition issues, it is especially important that we do not give the impression to customers or potential customers that a given product upgrade will include specific features that will be incorporated into the product within a specific time frame. See Revenue Recognition Guidelines. Any exceptions must be approved by senior management, Legal, and Revenue Recognition.

Refrain from Objectionable or Inflammatory Posts
Do not post anything that is false, misleading, obscene, defamatory, profane, discriminatory, libelous, threatening, harassing, abusive, hateful, or embarrassing to another person or entity. Make sure to respect others’ privacy. Third party Web sites and blogs that you link to must meet our standards of propriety. Be aware that false or defamatory statements or the publication of an individual’s private details could result in legal liability for Oracle and you.

Don’t Speak for Oracle
Remember that you are not an official spokesperson for Oracle. Make it clear that your opinions are your own and do not necessarily reflect the views of the corporation. See Policy Regarding Communications with Press and Analysts.

For this reason, Oracle employees with personal blogs that discuss Oracle’s business, products, employees, customers, partners, or competitors should include the following disclaimer in a visually prominent place on their blog:

The views expressed on this [blog; Web site] are my own and do not necessarily reflect the views of Oracle.

Similarly, if you appear in a video, you should preface your comments by making it clear that you are not an Oracle spokesperson and your opinion doesn’t necessarily reflect Oracle’s.

No Legal Commentary
Stay away from discussing items of a legal nature. For example, employees must not post comments related to legal documents such as Oracle’s software license agreements.

Don’t Post Anonymously
While you are not an official spokesperson, your status as an Oracle employee may still be relevant to the subject matter. You should identify yourself as an employee if failing to do so could be misleading to readers or viewers. Employees should not engage in covert advocacy for Oracle. Whenever you are blogging about Oracle-related topics or providing feedback relevant to Oracle to other blogs or forums, identify yourself as an Oracle employee.

Respect Copyrights
You must recognize and respect others’ intellectual property rights, including copyrights. While certain limited use of third-party materials (for example, use of a short quotation that you are providing comment on) may not always require approval from the copyright owner, it is still advisable to get the owner’s permission whenever you use third-party materials. Never use more than a short excerpt from someone else’s work, and make sure to credit and, if possible, link to the original source.

Use Video Responsibly
Remember that you may be viewed as endorsing any Web video (whether hosted by YouTube or elsewhere) or other content you link to from your blog or posting, whether created by you, by other Oracle employees, or by third parties, and the Social Media Participation Policy applies to this content. Also, recognize that video is an area in which you need to be particularly sensitive to others’ copyright rights. You generally cannot include third party content such as film clips or songs in your video without obtaining the owner’s permission.

Stick to Oracle Topics on Oracle-Sponsored Blogs
Blogs that are hosted or run by Oracle should focus on topics that are related to Oracle’s business. Take care to avoid subject areas that are likely to be controversial, such as politics and religion.

Blogging Best Practices
A “New Media Handbook for Bloggers” is available as a separate document for employees interested in establishing a blog. Employees who want to start a blog on sites that are sponsored by Oracle need to read this document and submit a request as specified in the New Media Handbook for Bloggers.

Reporting Misconduct
While Oracle has no obligation to monitor your participation in social media activities related to Oracle’s business, products, employees, customers, partners, or competitors, we reserve the right to do so. We do count on our employees to help us make sure that the Social Media Participation Policy is being followed. Please report possible misconduct (copyright violations, harassment, misstatements, et al.) to the Oracle Compliance and Ethics Helplineor, for possible copyright violations, to copyright_us@oracle.com.


How to Calculate Social Marketing ROI

This is a draft of chapter 10 of Social Marketing to the Business Customer by Paul Gillin and Eric Schwartzman. This chapter focuses on how to calculate ROI of social media and Internet marketing programs in general. I’m particularly interested in your feedback on this chapter because it presents some new ideas I’ve been playing with about how to calculate the ROI of almost anything. My biggest concern is that these ideas are overly simplistic. They do assume that a company has a rich set of historical data to work with, which is often not the case.


Please ignore the typos and grammar flaws that invariably appear at this stage.

We’ve told you about a few companies that have achieved a notable return on investment (ROI) from their social marketing initiatives. They include Indium Corp., whose blog-driven search strategy yielded a six-fold increase in leads in just one quarter, and Clickable, whose Gurus drove a 400% one-year growth in billings.

These numbers are impressive, but in our experience, they’re more the exception than the rule. In conversations with hundreds of marketers over the last few years, we’ve observed that few of them closely track the ROI of their social marketing programs. In fact, many of the most successful marketers aren’t that concerned with ROI at all. Rather, they invest in social marketing because they believe that the benefits – customer engagement, market awareness, continuous feedback and professional development – are good for

any company, regardless of the financial impact. They measure like crazy, but they rarely translate the benefits of engagement into hard dollar figures.

Most of these early adopters work for companies with adaptive, change-oriented management. That’s good if you can get it, but the reality is that most top executives are still wary about social marketing. ROI is typically the number one or two most cited concern we hear from the people who work for these companies.

B2B Social Media Metrics

We’re conflicted about the whole ROI debate. On the one hand, we believe that businesses should make decisions based on sound reasoning rather than vague promises or impulse. ROI analysis enforces rigor that leads to better decisions. On the other hand, we believe ROI objections are often used to avoid decisions that executives don’t want to make for other reasons, such as fear of losing control. Few people want to admit that they’re afraid, so they fall back on convenient stalling tactics, of which ROI is a primary one.

The reality is that businesses make decisions without applying hard ROI criteria all the time.  Much of the money that B2B marketers have poured into direct mail campaigns, trade show exhibitions and trade print advertising for the last 50 years has questionable returns. The only reason we make these investments is that these practices are established and businesses are accustomed to them. “ROI calculations don’t work well for social media and they don’t work well for marketing in general,” says Benjamin Ellis, a UK-based serial entrepreneur who now specializes in social marketing.

What’s the return on landscaping, an expensive conference room table or free bagels on Fridays? It may be possible to calculate a payback through extensive customer perception or employee satisfaction analysis, but why bother? We know these investments make people feel better.  If your employees feel better, they do a better job and your customers feel better.

EMC Corp. has been known to charter jets to fly technicians across country in the middle of the night to take care of a customer whose computers are down. Do you suppose the storage giant conducts an ROI analysis before making that decision? Of course not. EMC is a premium-priced provider whose philosophy is to always go the extra mile to take care of the customer. In the aggregate, the company may be able to justify its practices in the form of higher customer satisfaction and repeat sales, but we doubt the support manager who charters the midnight express is required to justify the added expense in advance.

That said, we understand the ROI justification is a hurdle many marketers must clear to get their social programs off the ground. We believe that many social marketing programs can be justified, but the process requires discipline and careful documentation. After all, the Internet is the most measurable medium ever invented. If you can isolate variables, establish correlations and apply a little creativity, it’s remarkable what you can do. In this chapter, we’ll suggest some approaches.

Defining ROI

A lot of marketers would probably like to be in Susan Popper’s shoes. The VP of marketing communications at SAP was recently asked by B-to-B magazine how she is measuring ROI on marketing efforts. Her response: “When [our target audiences comes] to our site, they watch the videos and they are engaging with the content on the site. Our impression-to-visit ratio (as measured by click-through rates) doubled this year versus last year.” That’s an impressive result, but it isn’t a return. In order to compute return, you need to think in financial terms.

According to Wikipedia, ROI is “the ratio of money gained or lost (whether realized or unrealized) on an investment relative to the amount of money invested.” There are two important variables in this equation: Return and Investment. There’s also a third vital term: Money.

Return is payoff as measured in revenue generated or costs avoided. There are other ways to measure return (for example, improvement in customer satisfaction scores), but unless those outputs can be measured financially, they really don’t qualify as considerations in ROI. We believe many of these intangibles actually can be translated into financial terms, and we’ll cover that later in this chapter.

But for now, let’s look at a couple of basic examples. A simple one is an ROI analysis of the impact of hiring a new sales representative. Let’s say the new rep carries a fully loaded cost of $100,000 and delivers $2 million in incremental annual sales revenue at a 10% net profit. In that case, the first-year ROI of hiring the salesperson is 100%, expressed as profit divided by investment:

Cost of sales rep

$100,000

Revenue generated by rep

$2,000,000

Profit margin

10%

Net profit

$200,000

ROI ((net profit – cost)/cost)

100%


We can apply the same type of analysis to cost avoidance. That’s what Pitney Bowes did when a 2007 Postal Service rate increase prompted 430,000 calls from customers. The mailing service provider launched an online forum to deflect some of the most common questions and tracked 40,000 visits in six weeks. Pitney Bowes was able to correlate savings in call center costs and estimate that the forum more than paid for its first-year costs in just a short time.

Let’s say we implement a customer self-service portal as a way to reduce support costs. We assume that the portal will require half of one full-time equivalent (FTE) employee to administer, that the fully loaded cost of that employee is $70,000 and that the portal will enable the company to eliminate one support position at a fully loaded cost of $70,000. Let’s further assume that efficiencies will enable us to reduce administrative support costs to one-quarter of an FTE the second year and 10% the third year. At the same time, the value generated by the community will enable us to cut an additional one-half customer support position each year.

Here’s what the analysis would look like:

Year

Item

Annual

Cumulative

1

Administrative costs

$           35,000

$                    35,000

Savings

$           70,000

$                    70,000

ROI

100%

100%

2

Administrative costs

$           17,500

$                    52,500

Savings

$          105,000

$                  175,000

ROI

500%

233%

3

Administrative costs

$             7,000

$                    59,500

Savings

$          140,000

$                  315,000

ROI

1900%

429%


The portal looks like a good investment, yielding a positive first-year ROI and blowout value in the third year. The cumulative value is also very strong. Even if our annual savings estimates are off by 50%, we’d still get nearly a 10-fold return on operating costs in year three.

These are two simple examples, but they both require confident forecasting based upon accurate historical data. For many companies, that’s far from simple. In the case of the sales rep, we must be able to predict with reasonable certainty that the person can generate $2 million in incremental business in year one. There are a lot of factors underlying that assumption. For example, we assume predictable growth in the overall market and in our growth rate relative to the market. We must be confident that there is $2 million in new business out there to find. In niche B2B markets with a small number of potential customers, that assumption may be optimistic. And then there are unforeseen circumstances: The bankruptcy of a major competitor could move that revenue goal higher, while the emergence of new competition might force us to trim our forecasts.

There are also nuances of calculating net present value, inflation, opportunity cost, return on capital and other fine points of finance that we won’t try to cover here for the sake of simplicity. ROI calculations are rarely a precise science to begin with.

History and Correlation

Good ROI analysis almost always requires accurate historical information, which few companies have, in our experience. Capturing and analyzing historical data requires time and discipline. It’s easy to cast aside analytical tasks when everyone is focused on generating revenue. However, you can’t forecast the future without understanding the past. Historical data also sets a baseline for measuring change. That change can then be measured and compared to actions that may have caused it. If you can correlate action to impact, then you can calculate ROI.

In the example below, lead activity appears to correlate positively with traffic to a company blog. The positive correlation is indicated by the change from baseline, which appears to correspond with the upward movement in blog traffic. Even then, a definitive correlation can’t be established until other factors are eliminated from consideration, such as a promotion or a new advertising campaign.

Positive Correlation of B2B Blog and SalesIdentifying correlations can be a time-consuming process, requiring new variables to be introduced independently of each other so that change can be isolated. However, you don’t necessarily have to test only one variable at a time. With split testing, you can try two different experiments, each targeting a different segment of your customer base.

Suppose you license e-mail marketing services to customers on a subscription basis. For the last three years, your renewal rate has been about 40% annually, so you can reasonably expect that trend to continue. This gives you a baseline from which to test new tactics.

You’re going to try out two new incentives this year to increase renewal rates. One provides a 10% discount on the annual fee to each customer that renews more than one month ahead of deadline. The other provides access to six customer-only educational webcasts during next 12 months for all customers who renew, regardless of timing. Each eligible customer gets one incentive or the other. This should give you a sound indication of ROI because you can compare your results to historical data.

It turns out that both programs are equally successful in boosting renewal rates, but the webcast promotion has a better ROI. That’s because 40% of the renewing customers who were offered the discount renewed before the one-month deadline, which incurred a higher discount obligation. Not only was the webcast promotion more cost-effective, but it carried a predictable cost of about $1,500 per webcast, compared to the variable cost of the discount. The webcast is probably the smarter incentive to offer.

Historic

With 10% discount

With webcast

Expiring customers

100

100

100

Average subscription cost

$             5,000

$                      5,000

$           5,000

Renewal rate

40%

60%

60%

Profit margin

20%

20%

20%

Profit from renewing customers

$           40,000

$                    60,000

$          60,000

Incremental profit from incentive

N/A

$                    20,000

$          20,000

Cost of incentive

N/A

$                    12,000

$           9,000

ROI

N/A

67%

122%


This example presupposes that the company has good data about past renewals, but many companies lack the systems to capture complete data in the first place. A good CRM system is essential. Many excellent solutions are now available on a software-as-a-service basis today, including Salesforce.com, RightNow Technologies and NetSuite. You can find a complete directory at Saas-showplace.com. But choosing the tool isn’t nearly as important as knowing how to put it to work.

Effective CRM requires discipline to capture every customer contact from initial website visit through sale and continuing with ongoing support. That means involving more than just the sales force in the process. To calculate the ROI on social marketing, you need to understand every dimension of the customer relationship, beginning with the action that creates the first contact. It’s not enough to begin tracking when the lead is generated. Marketing should have the systems in place to identify the action that created the lead, whether that’s a search query, e-mail link, customer referral or some other event. Most CRM systems are good at tracking customer activity after leads come in. The difficult job for marketing is figuring out the sequence of events that brought them there.

We can’t emphasize this enough: Being able to predict the future means knowing a lot about the past. If you can’t establish effective baseline expectations, then your forecasts are little more than educated guesses. In order to do ROI right, you need to track every customer contact, not just interactions with the sales force.

Metrics

Web analytics today deliver unprecedented insight about online interactions. The basic features of the free Google Analytics service match the capabilities of products that cost thousands of dollars just a few years ago. Premium services like Webtrends build in sophisticated behavioral and sentiment analysis and can track offsite activity such as a prospect’s comments on Twitter or use of a mobile application. They can even trigger customized e-mails or tweets when a person’s behavior matches certain predefined patterns.

With all this rich data now available, it’s remarkable how many marketers still use the basic metrics of traffic and unique visitors to measure success. We’re not big fans of these measurements; it’s easy to generate spikes of valueless traffic by posting celebrity photos or top-10 lists, for example. In Chapter XX, we listed some common metrics you can use and how they relate to different business goals. We think richer measures such as referring keywords, top content, bounce rate, average time spent on site, pages-per-visit and content analysis yield more actionable insight that will only get better.

The best way to select relevant metrics is to work backwards. Start with sales trends, match them to Web activity and look for the metrics that correlate most closely. Those are the metrics that are most meaningful to you. For example, if an increase in session time spent on site appears to correlate with registrations for a webcast, then that indicates that webcasts resonate with the audience.

You also shouldn’t confine metrics to those which can be measured online. One of the most popular indications of customer satisfaction is the Net Promoter Score (NPS), introduced in 2003 by Fred Reichheld of Bain & Co. Obtaining an NPS requires asking customers a single question on a 0-to-10 rating scale: “How likely is it that you would recommend our company to a friend or colleague?” This simple tactic has been adopted by big B2B companies like General Electric and American Express as a key performance indicator.

You can also choose to monitor classic metrics that have nothing to do with the Internet. These include press mentions, speaking invitations and performance on customer satisfaction surveys.  Metrics also vary by objective. For example, the success of a blog set up to generate leads may be measured by inquiries, time spent on site and to repeat visitors, while one targeted at search optimization may be evaluated based on keyword rankings and inbound links.

For ROI purposes, though, the choice of metrics is less important than your ability to correlate behavior to results. In other words, if certain page views are more valuable than others, then an increase in traffic and session time could be a good starting metric for evaluating ROI. Just be aware that they are imperfect indicators of visitor engagement.

One thing you absolutely need to know, however, is how people reach your site. Unique URLs are a way to measure that. We’re astonished at how many e-mails we still get from brand-name companies that don’t make use of this simple tactic, which enables a marketer to specify a web address that is unique to the e-mail, tweet, wall post or any other message.  Unique URLs use a simple server redirect function to identify the source of an incoming click. They look like this: http://mycompany.23.com/public/?q=ulink&fn=Link&ssid=5155.  Everything after the word “public/” is a unique code that tells where the visitor came from.

Unique URLs enable your analytics software to track inbound traffic from each source separately so you can determine the ROI of each channel. Without unique URLs, visits are simply classified as “direct traffic,” meaning that the source could be a forwarded e-mail, bookmark or an address typed into the browser.

A simple example of how you might use this information is to measure traffic to a landing page and analyze the number of visitors who fill out a registration form according to the referring source. This would show you, for example, that registration rates are twice as high from a newsletter as from a tweet. The value of those registrants divided by the cost of the newsletter is an ROI metric. Unique URLs are also valuable to split testing; you can try out two different invitation messages in the same email and use a different URL for each to measure response to each message.

PUTTING IT ALL TOGETHER

Let’s apply all the factors we’ve described above to two B2B social marketing scenarios. First, we’ll compare the ROI of webcasts to white papers. Start with historical data. What is the conversion rate of webcast viewers versus people who download a white paper? What is the lifetime value of an average customer? Compare the outputs and divide by costs to assess ROI:

Formula for Calculating B2B Social Media ROI

 

 

Let’s assume the following:

·       The average lifetime value of a customer is $50,000 at a 10% profit margin.

·       The average cost of delivering a webcast to 100 registered viewers is $3,000; viewers convert at a 2% rate;

·       The average cost of delivering a white paper to 500 registrants is $10,000; registrants convert at a 1% rate.

Our ROI analysis looks like this:

 

 

Webcast

White paper

Audience size

100

500

Conversion rate

2%

1%

Lifetime profitability

$           10,000

$                    25,000

Cost of acquisition

$             3,000

$                    10,000

ROI

233%

150%


The webcast ROI is superior, but not by much. Armed with this data, we might choose to promote the webcast more aggressively to leverage its stronger ROI. However, another option would be to focus on improving the white paper’s conversion rate. In fact, doubling the rate would drive ROI to 400%, making this a potentially higher return action.

Let’s look at one more example in which we use a blog for lead generation. We know that performance will be slow during the first few quarters until search engine traffic kicks in. Based upon the experience of others, we believe that lead growth will improve steadily as traffic builds. We expect to be at 50 leads per month by the end of the first year and 160 per month by the end of the second. Our historical data tells us that a lead is worth $100. We further estimate our editorial costs at $2,000 per quarter during the first year, doubling to $4,000 during the second. Here’s our analysis of quarterly and cumulative ROI.

 

Leads

Lead value

Cost

Quarterly ROI

Cumulative ROI

Y1Q1

10

$          1,000

$     2,000

-50%

-50%

Y1Q2

25

$          2,500

$     2,000

25%

-13%

Y1Q3

35

$          3,500

$     2,000

75%

17%

Y1Q4

50

$          5,000

$     2,000

150%

50%

Y2Q1

75

$          7,500

$     4,000

88%

63%

Y2Q2

100

$        10,000

$     4,000

150%

84%

Y2Q3

130

$        13,000

$     4,000

225%

113%

Y2Q4

160

$        16,000

$     4,000

300%

144%

This gives us a firm foundation to make the case for investing in the blog. If leads aren’t coming in as quickly as we had estimated, we can adjust costs downward to improve ROI by setting up content-sharing arrangements.

Measuring Intangibles

The trickiest aspect of ROI analysis is accounting for intangibles. These include factors like customer satisfaction, customer loyalty, brand reputation and market influence. Many social marketing projects are justified for these reasons but the outputs are never measured, either because it’s not worth the effort or because the measurements aren’t in place.

In fact, all of these outputs can be measured and have been for years using some of the following tests:

Value

Measurement

Customer satisfaction

Customer surveys; renewal rates; referrals; incremental business; testimonials; Net Promoter Score

Customer loyalty

Renewal rates; incremental business, response rates, event attendance; testimonials; Net Promoter Score

Customer engagement

Newsletter subscriptions; online community activity; response rates; event attendance; testimonials; feedback volume

Reputation

Market share research; awareness research; media citations; analyst research

Market influence

Market share research; lift studies; media/social media citations; speaking invitations; analyst research

Leadership

Attitudinal research; growth rate; media citations; copycat competitors


However, research statistics aren’t sufficient. You have to find a way to translate these measurements into dollars and cents. That’s where creativity comes in handy. Many of the metrics on the right can be mapped to business outcomes, but only if historical data is available to correlate to those changes.

For example, you can calculate the business value of customer loyalty by comparing the revenue derived from customers at different longevity levels, such as five-plus years, three to five years and less than three years. Then look at the support and sales costs allocated to these same customers. You’ll probably find that long-term customers are cheaper to support and have lower sales costs than newer customers. Comparing the ratio of revenue to expense for each longevity segment should give you an idea of where to invest.

What is the business value of reputation? There’s a lot of research to indicate that B2B customers weigh this factor heavily when making buying decisions. A simple telephone survey can identify who these customers are. You can then see where they rank in order of value to your business. If they are near the top (and we believe they will be) then that is compelling evidence that investment in reputation pays off. You can compare the average profitability of these customers versus those who don’t value reputation as highly and see which has more investment upside.

You can even quantify, to some degree, factors that are almost impossible to measure. For example, suppose that a publicity campaign results in five million impressions in mainstream media. By conducting pre- and post-campaign “lift” studies, you can measure changes in awareness. Then drag out the record books to compare previous increases in awareness to corresponding changes in the business, such as lead quality and conversion times. You can quantify the value of those outputs to calculate ROI.

Once again, these analyses require accurate historical data. If you can’t segment your customers according to criteria like these, the justification process is far more difficult. That doesn’t mean it’s impossible, though. Analyst estimates, industry averages and ratios derived from analyzing your competitors and those in other industries may yield similar insights.

How does this all relate to social marketing? We believe it’s critical. The ROI objection is the roadblock you’re most likely to encounter in selling a social marketing initiative. You need to speak the language of your inquisitors. Social marketing has also introduced new cost variables into the business. For example, press tours used to be a standard tactic for increasing market awareness, but today a blog may do the same thing at a much lower cost. In order to understand the true value of these new tools, you need to have a baseline for comparing them to past practices. Get your Excel skills in order, because you’re going to have some explaining to do.


Sidebar –  Valuing Twitter Followers

When marketers get up on stage to describe their social marketing successes these days, they invariably refer to follower and fan totals. On Twitter, follower counts have become a sort of merit badge, despite the fact that anyone can quickly run up that number by simply auto-following everyone who follows them. There are even paid services that inflate follower totals.

What is the true value of a Twitter follower? There is no industry standard to calculate that number, but if you have the right metrics in place, you can do that for your own organization. Here’s how:

Look at the total number of clicks to your site from Twitter in any given month and divide that by the number of tweets you posted. This gives you the average visits per tweet. Once you have this number in hand, you can look at the behavior of visitors who arrive from Twitter and compare it to those who find you from other sources. Look at page views per visit, time spent on site and visitor paths to identify what percentage of Twitter visitors become leads or customers. Using your standard qualifying metrics, you should be able to determine the average value of a Twitter visitor.

For example, if 1,000 visitors arrived from Twitter in a given month as a result of 20 tweets, that yields an average of 50 visits per tweet. If you know that 5% of Twitter visitors register for a download or newsletter, and that the value of an average registrant is $50, then you can calculate that Twitter delivers $2,500 in business value, or an average of $125/tweet. If you have 5,000 followers, then you can also calculate that an average follower is worth 2.5 cents.

This formula is overly simplistic, of course. Not all Twitter followers are created equal. If you want to dive deeper into the mechanics of influence, services like TweetReach.com and Twinfluence.com can calculate the total reach of your followers or tweets according to so-called “second-order followers,” or those who follow the people who follow you. These metrics can also be used to estimate the value of retweets by certain popular members.

This same approach may also be applied to finding the value of Facebook fans, LinkedIn connections, SlideShare followers and the like.

End sidebar




The Changing Rules of B2B Marketing

Here is a draft of the first chapter of Social Marketing to the Business Customer by Paul Gillin and Eric Schwartzman. This chapter focuses on drawing the major distinctions between business-to-business (B2B) and business-to-consumer (B2C) markets and where social marketing has particular value to B2B companies. Your feedback is welcome. Please ignore the typos and grammar flaws that inevitably appear at this stage.

Friends know Scott Hanson as an affable native Texan with a penchant for computers, cars and poker. But to thousands of technology professionals around the world, Hanson is a celebrity. By day, he and three other technologists at Dell Computer manage the Dell TechCenter, an online community that helps enterprise IT professionals unravel the thorniest problems that occur when trying to integrate technology from multiple vendors.

Dell conceived of the community in 2007 as a way to enhance loyalty among its largest customers. Members share advice and ask questions of Hanson and the other engineers, who dispense it for free. The community is open and fully searchable, although only registered members can submit articles and comments. In 2008, about 100 people visited the site every day. By early 2010, that number was over 5,000.

Hansen and colleagues Jeff Sullivan, Kong Yang and Dennis Smith are celebrities of sorts in the community of enterprise customers, who frequently seek them out for meetings at trade shows and during visits to the company’s executive briefing center. Their celebrity is paid off handsomely for Dell: Hanson won’t provide specifics, but Dell has estimated that the Tech Center is indirectly responsible for many millions of dollars in sales each year.

That’s despite the fact that Dell Tech Center isn’t charged with selling anything. The site is free of advertising and the member list may never be used for promotions. “The last thing IT people want when they come to a technical resource is an ad asking them to buy a laptop,” Hanson says.

Those sales are generated by the affinity that the staff has developed with these key corporate customers. It’s a camaraderie that is nurtured by personal contact. In the early days of Twitter, the Dell TechCenter staff had set up a common Twitter account as a secondary channel of communication. But it turned out that customers wanted to speak to people, not brands. The Twitter initiative really gained traction when Hanson became @DellServerGeek and Sullivan became @SANPenguin. Suddenly the discussion became more personal and the people behind Dell TechCenter more real to their constituents.

Welcome to the new world of B2B communications. Dell TechCenter and other initiatives like it are microcosms of the changes that are sweeping across corporate America as a consequence of the rapid growth of social media tools like blogs, communities and user-generated multimedia.

Companies like Dell, which does 80% of its sales volume with corporate customers, are ideally positioned to take advantage of these new channels. In fact, B2B companies were among the earliest adopters of social media. Technology leaders like Microsoft, IBM and Cisco had hundreds or thousands of employees blogging as early as 2005 and those same companies are now expanding their footprint into social networks like Facebook, YouTube and, overwhelmingly, Twitter.

Microsoft used a video program called Channel 9 to show its human side to a market that saw it as a closed and secretive company. B2B technology companies have also been among the most creative users of social channels to reach the highly skilled people they need to hire in competitive labor markets. Recruiters have found that social channels are far more effective in identifying prospective employees than recruitment advertising sources and that prospects came into the hiring cycle with a better understanding and more enthusiasm about the company they were hoping to work for.

Yet B2B applications of social media get remarkably little attention. Perhaps that’s because their focused communities of buyers pale in size to the millions who flock to Facebook Official Pages for Coca-Cola and Nike is. Perhaps it’s because glitzy video contests and games don’t resonate with the time-challenged professional audience. It doesn’t really matter. Few B2B companies seek the consumer spotlight and their audiences, which may spend millions of dollars with them, are more interested in substance than in style. Fortunately, B2B social media is all about substance. Continue reading

Seven Questions to Ask About Your Website

People usually call me for help setting up and optimizing their social marketing programs. But in the early stages of our engagement the conversation almost always takes another turn.

In about two out of three cases, in fact, we start by focusing on the client’s website because so many basic issues still need attention.
Clients are sometimes frustrated by this. After all, they want to get started with the cool new tools and usher new business in the door. But if the most important source of new business – the website – isn’t doing the job for them, the new tools are a waste of time. After all, why would you want to bring new visitors to a site that does a poor job of telling your story?

Websites are developed by people who work at the company and who are very knowledgeable about the business. It’s natural for them to assume more knowledge on the part of the visitor than the typical visitor actually has. Messages are often focused on selling a solution rather than solving a problem, but people don’t care about your product; they care about what’s troubling them right now. That’s a fine distinction, but it’s critical to conveying an effective message.

A well-crafted message communicates understanding of the visitor’s needs and frames the solution in the context of relieving pain or creating opportunity. Focus on results rather than process.
Here are some questions that can help you determine whether your website is hitting the mark:

Is the message clear and succinct? Ask a few people who are familiar with your industry but not with your company to spend exactly one minute on your website. That’s about the amount of time an average visitor will grant you. Then ask them to tell you what your company does, what problems you address and who the target customer is. If they can’t answer those three questions after one minute, then your message isn’t clear enough.

Are you optimized for search? Navigate through your website and look at the page titles at the top of your browser. Do they include the keywords that customers use to find you? Do some of your pages have generic titles such as “About” or “Services?” How about PDF documents? Are the titles and meta-tags clear or do they still have gibberish file names that machines generate? Are your images and videos tagged? These are simple things that mean a lot to search engines.

Does your message communicate understanding of the visitor’s problem? Put yourself in the shoes of a typical prospect visiting your website. Think about the problem that person is trying to solve. Does your message demonstrate that your solution was designed with that problem in mind? Or are you selling aspirin when you should be selling headache relief? Does your choice of words show that you’re committed to easing the visitor’s pain?

Are you using all the available tools? Many business websites are heavy on text, which may have been all that was available when the site was built. But 65% of people are classified as visual learners. If you’re not using all the media you can, you’re under-serving your audience. I’m not talking about stock photography but rather about illustrations that clarify and explain. Today it’s cheap and easy to point a camera at a product manager or engineer and ask the person to explain a product. Voice-annotated screen shows or PowerPoint slidecasts are also inexpensive ways to illustrate complex concepts.

Is it easy to join your list? Every page of your website should have an invitation for visitors to become prospects. These can be in the form of newsletter sign-ups, white paper downloads, requests for more information or invitations to view a webcast. Why would you want to miss any chance to turn an interested passerby into a lead?

Are your pages easy to share? Every page should also have embedded widgets that make it easy for visitors to e-mail, bookmark, tweet or otherwise share your content. In most cases, these are easy to add to a template and there’s no downside to having them.

Do you humanize your company? This is particularly important for b-to-b companies, which establish long-term relationships with their customers. Does your site include faces, biographies and personal messages? What do you do to create personal connections that increase a visitor’s comfort level with the people behind the product? Does your website have personality or does it read like a research paper? If you’re interested in social marketing, start with the social part. Let your people go.

I’m sure I’ve missed some things, so let me know your own thoughts in the comments section.

Blogging Essentials: the Slides

Here’s a substantially updated version of a presentation on blogging essentials I’ve been delivering to business clients over the last couple of years. The full presentation runs about three hours live or via webcast and focuses  on helping bloggers deal with some of the more common problems of publishing, including generating ideas and  unique angles.

Update: Alan Belniak from PTC has a nice series of blogging guidelines on his Subjectively Speaking blog.

Full description:

This is a crash course intended to quickly bring bloggers up to speed on today’s best practices for achieving the greatest mileage from your blog posts. Topics include:
  • How influence works in the blogosphere
  • Major applications of corporate blogs
  • Developing a content model
  • Generating ideas and unique angles
  • Writing compelling headlines and entries
  • Positioning and voice
  • Why top business blogs are successful
  • Unique characteristics of b-to-b markets
  • Tricks for generating buzz and recognition
  • Working with multiple media

View more presentations from Paul Gillin.