June 30, 2011
Peter Friedman founded LiveWorld in 1996 and has 27 years of experience creating and executing community strategies for Fortune 500 companies. He has launched and managed multiple online services on a global scale, always focused on bringing people together in successful collaboration.
Previously, Peter was the vice president and general manager of Apple Computer’s Internet/Online Services business unit. He oversaw the creation, launch, and growth of Apple’s online services including AppleLink, eWorld, and Internet services such as Salon. His responsibilities also included managing Business Systems Marketing and product line management in Apple’s Macintosh division.
Social media is described as a strategy, a channel, a discipline, a set of technologies, a platform, etc. How do you define it?
Social is a media channel like TV or print, but really it’s more. It’s a societal change that transforms the way business, education and play are done because it enables people to dialogue and form relationships.
Is social media different in a B2B context than in a B2C context?
Whether it’s consumer or business, the core principles of dialogue and relationships are the same. In a consumer model people are often looking for affinity with similar minded people or to connect with a celebrity.
In B2B communities, however, the focus is on the content an influencer or other community member delivers. B2B participants are looking for what industry expert John Hagel calls ROA – Return on the Attention they provide. They want relationships, content, and expertise that will help make them successful in their businesses.
How are LiveWorld’s clients growing their businesses via social media?
Johnson & Johnson Diabetes Institute is a good example. They created a B2B community for health care providers and educators with the goal of engaging them in transforming diabetic care. J&J knows it doesn’t have to sell its products in the community. They just have to increase the number of influencers that are knowledgeable and engaged and that will bring product sales along. So far, 10 percentof all U.S. diabetes educators have joined and J&J is finding a two to three times increase in engagement with these programs.
American Express Open Forum is an example of a small business community that has grown to hundreds of thousands of unique visitors per month over a multi-year period. They’ve seen increases in American Express cards issued and in transactions per card that they can correlate to the activity in that community.
One other example is eBay. Their online community of a million sellers started off with a focus on support for how to sell on eBay. Over time, it developed into a forum for members to help each other with their businesses and even connect on personal topics. It’s a good example of social being more than a channel. The interactions are valuable to the community and to eBay. A Harvard Business Study from a few years ago showed that sellers who are active in the community sell six times as much as those who are not active.
What are some key components in a social media strategy?
First, you need goals, a strategy and an implementation program based on your business goals, the brand and customer needs. “We should be on Twitter,” is not a thought out social media strategy. Think through what you’re trying to do and come up with a measurable goal, even if it is just to learn something.
Next make a sustained strategic and resource commitment to support the social media effort. We’ve seen a lot of people start and stop. That doesn’t work. As one of our clients once said, “This isn’t just for Christmas. It’s for life.” This is relationship marketing and relationship marketing wants follow through. You need to have people dedicated to the effort.
Once those elements are in place, we recommend focusing on three key success factors of a social community implementation: the cultural model, how the brand will participate, and how it’s integrated with the rest of the organization and its marketing.
Think of the cultural model for your social effort as the kind of party you are throwing – a gallery opening versus a rave, for example. The cultural model should reflect, extend and positively affect your brand while appealing to your customers.
The second success factor is how the brand participates. It’s your party so you need to be there and be the host or have someone help you host. Howard Schultz at Starbucks (an early LiveWorld investor) likened our online community moderators to his baristas – people who set a tone and create a cultural environment.
Finally, the effort needs to be integrated with the rest of your marketing and your organization. To really be successful, you need more and more parts of your company involved over time. It can’t stay in marketing. Whoever champions the effort, whether from marketing or another area, needs to champion it for all parts of the company because it’s going to affect customer support, sales, product development, etc. in ways that nothing else does. The more people in the company that participate, the closer you’ll be to your customers.
How do you know when your social media strategy is working?
One good indicator of success for your social media effort is that you’re seeing the emergence of brand ambassadors or, if you’re having a crisis, brand defenders. These are people who are enthusiastic about what you’re doing and becoming personalities in your effort.
A second indicator is that you’re getting a lot of questions from your community. Questions mean customers perceive your brand as one they want to interact with. If you have a blog with no comments, you’re not fostering engagement and that’s not very social. You want real dialogue amongst your customers and with your company.
A third way you know you’re succeeding is that you’re learning new things – like what your brand really is – because you’re listening and talking to your customers. We’ve had clients say “That’s not our brand,” when they get feedback. But if that’s what your customers are saying, it is your brand. It may not be what you want your brand to be, so you can either adapt to what your customers already think your brand is or do something fundamental to change it.
How do you ensure social feedback is shared inside a company?
Operationalizing and deploying the learnings from a social effort is very important and something the world is quite immature on now. A best practice example is eBay voices, a private message board and advisory council made up of selected community members. The feedback is reviewed by the executive team every week and everyone in the company knows about it. This allows the executive team to understand the customer better but it also sets a powerful cultural model for the company around listening to and engaging customers.
How do you mitigate the risk of bad PR with a social media effort?
People worry that their customers are going to tell them what the company should be doing. I ask them, “Don’t you spend a lot of money trying to get that information?” Companies want to know what their customers think but they need to break some bad habits.
You have to have an attitude of running towards your customers, not away from them. Anyone who’s going to say something online today is going to say it whether you’re there or not. You might as well listen to it and position yourself as a company that is seeking feedback and learning. It’s uncomfortable and difficult but companies that engage customers well will beat their competitors.
What social trends do you think we’ll see in the next few years?
In the next two years, social media will become more pervasive and the velocity will continue to increase. You’ll see more businesses orienting toward their customers and engaging them. Marketing will become more a mixture of culture, community and brand. And, there will be new applications and services that we don’t understand or realize yet. Right now everyone is thinking social is Facebook but there are other players starting to emerge that will be big.
In two to five years, demographic segmentation will fall away. Demographics were a guess about what people want based on data we could get. But now we can see how people think, behave and interact online so you can tell what they want instead of guessing. Segments in the future will be driven by opinion and behavior.
In five to ten years, corporations that are not running internally and externally on a social network model will have trouble hiring and retaining people. In the 1960s, if you didn’t have a phone system who was going to work for you? Similarly, in 2020, you’ll need a social network model to attract people coming out of school now who use social media as their primary means of interacting, learning and thinking.
Also in ten years, customer awareness will move across borders. Companies will no longer be able to rely on geography to artificially segment their products, behaviors and practices. Being locally relevant will still be important but customers in one country will know how you do business in every country.
This will hasten another phenomenon of the “best practice anywhere” becoming the “minimal expected practice everywhere” – like Amazon’s 1-Click. Today if you’re on any e-commerce website, you want to be able to buy with one click because you’ve had that experience. This expectation started with consumers but it will become the norm in B2B as well.
Finally, new experience models will emerge that will be very visual and mobile and will further ignite social.