Who’s Out There?
CFOs can’t ignore social media. But what’s the ROI?
Reposted from CFO Magazine | by David Rosenbaum
In 1775, when Boston silversmith Paul Revere famously rode northwest to alert the countryside that British troops were on the move, Boston tanner William Dawes, bearing the same message, rode not so famously southwest.
When the British arrived in Lexington and Concord, they did not meet many militiamen from the towns Dawes visited. Why? In The Tipping Point, Malcolm Gladwell suggests that whereas Revere was a “connector,” blessed with “unique social skills,” Dawes was an ordinary man lacking Revere’s social network.
Today, we’d call Revere an influencer. He’d have thousands of Twitter followers and Facebook friends.
He’d belong to the “Don’t Tread on Me” group on LinkedIn. Rather than knock on doors, he’d tweet “@samueladams @johnhancock Citizens, militia, resist. #redcoats #toarms #bostonpostroad.” Sound crazy? Consider that #Egypt was 2011’s most used hashtag and that Arabic-language tweets soared from 99,000 a day in October 2010 to more than 2 million a day by the following October as the revolutionary movement took hold in that part of the world.
The power of social media — or, at least, its potential power — is not lost on American companies. Many are using it successfully for everything from new-product marketing to employee collaboration to innovative and very effective forms of customer service. But most companies are struggling mightily to turn nascent, ad hoc efforts into something resembling an actual strategy.
From Listening to Engaging
After learning how to listen, businesses must learn how to engage. One way is the popular “like” approach. As Bruce Parks, CEO of Chocolate Bakery, explains, “When we run a sweepstakes, you click ‘like’ on our Facebook page in order to enter. That increases our potential marketing field. We send out e-mails inviting the entrants’ friends to enter. Using Facebook is brand-building, versus simply showing up in a Google search if people are looking for your product.”
Parks read about Wildfire social media marketing tools “in a tech magazine,””and became a subscriber in February 2010. That helped him to connect to a Facebook fan base, grow it, build an e-mail list, and automate Facebook contests.
Parks says social media has transformed Chocolate Bakery from a company whose customers could all be found within an 80-mile radius to an international concern. “We’ve had people in Singapore order from us because they have Facebook friends in the U.S.,” says Parks. “Who would ever have thought that? It’s crazy. And it’s so inexpensive. It costs me roughly $500 to $1,000 a month for the sweepstakes with Wildfire. With Google AdWords, I was spending $2,000 to $4,000 a month.”
Measuring a reduction in cost is not the same as calculating a true ROI, however. And if matching a social media investment to an income-generating return is tricky, imagine trying to put a price tag on the ways that social media can enhance corporate performance. Yet that may be where the most promising payoff beckons. “We’ve seen the biggest transformation by using social media internally,” says Scott Travasos, CFO of Blue Shield of California Foundation.
A longtime client of Salesforce.com, Blue Shield adopted the tool’s new communication platform, Chatter, which in many ways mimics a Facebook page. When an employee opens Chatter, she sees profiles of people and groups (with pictures and icons); a separate column allows her to search for anything stored by the application — client histories, analytics on deal close rates, price approval points, and so on. She can make recommendations, record “likes,” post stories about clients or events, or share files. Access is role-based, so people see only what they should.
“I post three to five messages a day in Chatter to update my department,” Travasos says. “Things like, ‘I was scheduled for noon to complete this part of the close; I won’t.’ It’s like an internal Twitter feed, integrated with sales to create a different system of communication.”
As employees have rushed to adopt Facebook and other forms of social media in their personal lives, says Chatter senior vice president Kendall Collins, their workplace technology arsenal can seem “like an IT museum. The very simple premise of a photo doesn’t exist in enterprise software. There are tables and data, but no pictures of customers. All enterprise systems are based on reporting and control. New systems will be based on people and interaction.”
“It’s hard to put a dollar figure on the collaboration advantage we get from Chatter,” Travasos says. “It’s about efficiency. We spend less time on transactions and more time on strategic analysis.”
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