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Facebook IPO Fallout–The Seven Doggone-Its of Highly Effective People!

Posted in Uncategorized, tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , on May 27, 2012 | Leave a Comment »

In our April 14th post “If Facebook Were a Country…” we hinted at the “irrational exuberance” that was being generated by the Facebook IPO.  Since early April, MahaTweeter (The Marketing Id’s Twitter handle) had been trying to stand “athwart history, yelling ‘Stop!’”  In any event, before we get to our Seven Doggone-Its of Highly Effective People (with apologies to Dr. Stephen R. Covey, Author of The 7 Habits of Highly Effective People®) involved in the Facebook IPO, we present a timeline (keeping in character with Facebook’s new look) of MahaTweeter tweets to make our larger point.

A couple of days after Facebook acquired Instagram for an ungodly sum, MahaTweeter fired a couple of warning shots, the first of which included a sarcastic reference to its “insta-acquisition”:

 April 11, 2012 – Instawham: #social #media startup earns billion dollar valuation despite phantom cash flows from non-paying subscriber base of millions! #in

April 12, 2012 – Déjà vu all over again–financiers investing in fantasy business models that promise a #socmed utilization they cannot fully comprehend! #in

MahaTweeter followed up with a quote from our Aril 14th post to highlight Facebook’s ridiculously low revenue per subscriber and net income per subscriber numbers:

April 16, 2012 – #Social #media by numbers: FB generated $4.39 in revenue per active sub and $1.18 in net income per active sub in 2011. http://wp.me/p1zesw-8h

In late April, MahaTweeter wondered about the efficacy of advertising-based social media models in this tweet:

April 28, 2012 – The success of advertising-based #social #media models depends on how effectively those impressions transcend brand to generate demand! #in

By Mayday, seeing no discernible drop in Facebook fever, MahaTweeter warned:

May 3, 2012 – #IPO: It’s no #GOOG–without a plan to monetize its active subscriber base of photo-swapping millennials– #FB is all sizzle and no steak! #in

As FB’s IPO date drew near, some alarm bells finally started to ring.  MahaTweeter read what Francis Gaskins, President of IPODesktop.com, had to say and tweeted accordingly:

May 7, 2012 – #Social #media bubble stress test on May 18th – meanwhile IPO expert warns of getting egg all over your #Facebook http://yhoo.it/J8jgm0 #in

The following day, MahaTweeter was tickled by the hoodie roadshow and remembered how even his hippie idol, Steve Jobs, had to clean up for Apple’s IPO back in December 1980.  It resulted in a Bob Dylan and Dire Straits laced “MahaTweet” that would have hopefully made Jobs proud:

May 8, 2012 – The Times They Are A-Changin’–“don’t-judge-a-Facebook-by-its-cover” #WallStreet raises Money for Nothing during the #hoodie roadshow? #in

During IPO week, MahaTweeter fired daily warning shots as recounted below – even referencing a cautionary Wall Street Journal report on IPO eve:

May 15, 2012 – Caveat Emptor–unless #B2C #social #media demonstrates sustainable, long-term monetization model, we are headed for Internet #Bubble 2.0! #in

May 16, 2012 – Planets aligned for the big #IPO–Jupiter will spawn instant millionaires–but can #social #media reconcile with notion of capital gains? #in

May 17, 2012 – #FB #IPO: public investors rush in where private ones have fled–http://on.wsj.com/JklbRY –we Face growing pains, as they Book early gains! #in

Finally, MahaTweeter put out this deferential (to the markets) tweet on the morning of the FB IPO:

May 18, 2012 – #FB #IPO: When Social Met Capital–markets will now validate whether a billion non-paying subscribers warrant its $100 billion valuation? #in

After the disastrous debut of the Facebook IPO, MahaTweeter expressed relief in a rare Saturday tweet that at least there would be no social media bubble:

 May 19, 2012 – All that glitters is not Google – #FB #IPO indicates dot com bubble redux unlikely; #social #media must learn to walk before it can run! #in

But then Monday after the IPO, we were disheartened to learn that the company that had made its name by encouraging people to share all sorts of information had actually withheld pertinent financial information relating to its future growth from the investing public!  Even before the call for congressional inquiries had begun, MahaTweeter had one last blast on the subject:

May 22, 2012 – More egg over your Facebook–during hoodie roadshow, rev est. cut while IPO price raised–no wonder #FB is tanking! http://yhoo.it/KIzl4W#in

And so, here we are on Memorial Day weekend doing a post-mortem examination of the highly-anticipated, yet badly-botched Facebook IPO.  Our intent is to present readers with what we referred to earlier as the “Seven Doggone-Its of Highly Effective People,” who were involved in some material way with this fiasco:

  1. TAS (Total Active Subscribers) is not equal to TAM (Total Addressable Market)!  Infinity times zero is still zero–even in the new math!  A billion non-paying subscribers can be active for several hours a day on their Facebook pages, yet not move the needle on company revenue.  Typically, TAM is what businesses count on for revenue-generating opportunities, and investors are beginning to understand that TAS is not the same as TAM.  Unfortunately, the highly effective analysts who rave over the social media juggernaut seemed to have missed this distinction.
  2. The Facebook Like has more social value than business value!  It’s pretty apparent that Facebook’s legacy subscriber base (i.e., students from U.S. schools, colleges and universities), which indulges in the use of “likes” in its collective vocabulary, transferred that same sentiment pretty liberally through the use of Facebook’s infamous “Like” button.  From a business perspective, if there is no easy way to monetize that Like, it offers very little redeeming value.  Again, investors seemed to have figured out that the Facebook “Like” thus far has not been all that it is cracked up to be.  So when will the highly effective social media quants come up with a measure already?
  3. Facebook not only made “friend” a verb but also devalued its meaning!  According to HubSpot, an inbound marketing company, the average Facebook user has 130 friends.  In the age of social media that might seem low, but The Marketing Id believes that is a high number of friends for the average Joe to have.  Since its birth in a Harvard dorm room, Facebook has gradually blurred the distinction between friend and acquaintance.  In fact, in the rush to appear popular (i.e., well-connected), Facebook subscribers are quite likely friending strangers.  From a business standpoint, a non-celebrity subscriber is unlikely to influence the purchase decisions of such a “questionable” network of friends.  The highly effective people that derived Facebook’s lofty valuation seemed to have based at least a part of it on an over-valued “friend” factor.
  4. Facebook squandered a “mobile in the hand opportunity for two PCs in the bush!” Facebook had admitted in its S-1 filing that it does “not currently directly generate any meaningful revenue from the use of Facebook mobile products.”  This confession seemed to have not garnered a lot of attention prior to the IPO but gained some currency after the fact.  This “revenue immobility” situation could be attributed to the fact that Facebook’s legacy subscriber base is likely more mobile than its newer and smaller desktop subscriber base from the business world – a possibility that seems to have eluded Facebook’s highly effective management until recently.
  5. Facebook’s “too much, too little, too late” platform strategy?  The Facebook platform had been largely static (i.e., computer-based as opposed to mobile device-based) for five years until Instagram, which was hastily acquired (so it seemed) by Facebook’s highly effective management about five weeks before the IPO.  Most social media pundits believed at the time that Facebook paid too much – $1 billion – to jumpstart its mobile strategy ahead of the IPO.  Then on May 24th Facebook Camera was launched and Forbes suggested that “Facebook purchased Instagram to remove the competition.”  It is unclear how Facebook Camera monetizes mobile, so even if the platform is great and may not be too late, it still remains a too little strategy from a business standpoint.  Again, Facebook’s highly effective management needs to reconcile Instagram with Facebook Camera for a skeptical investing public?
  6. Facebook’s IPO roadshow violated its own mission statement!  A company that wants to “to give people the power to share and make the world more open and connected” stumbled right out of the starting gate.  It appears that during the Facebook roadshow, its lead investment bank, Morgan Stanley cut its second-quarter and full-year forecasts for Facebook and “shared” this vital information with only a handful of clients.  It reminded The Marketing Id of that classical Orwellian line from Animal Farm – “All animals are equal but some animals are more equal than others.” This is a doggone it at the heart of the social media experiment, which needs to be addressed by the Chief Highly Effective Officer himself!
  7. NASDAQ’s embarrassing ~$100 million glitch over a $100 billion IPO!  In the grand scheme of things, NASDAQ’s 20-minute black hole at the start of trading amounted to only 0.1% of Facebook’s market value at launch.  The stars might have been aligned to spawn insta-millionaires as MahaTweeter had tweeted, but according to the Wall Street Journal, “The market-making arms of UBS AG (UBS) and Citigroup Inc. (C) suffered combined losses of about $50 million on trades made during last Friday’s glitch-plagued listing of Facebook Inc.”  Any wonder that FINRA is investigating how the highly effective NASDAQ went dark on FB trades for 20 minutes – an eternity in today’s high-frequency trading environment!

So after a tumultuous week (ending May 25th) as a publicly traded company, FB stock closed 16% below its IPO price.  Notwithstanding the seven doggone-its of the various highly effective people that we have outlined above, it might be still too early to judge whether FB shares had been priced appropriately for the IPO.  Nonetheless, the fallout from the Facebook IPO has significantly reduced the risks of a bubble in social media stocks for the foreseeable future.  Unfortunately, the foreseeable future always comes sooner than later in Internet time; so doggone it, we all need to be vigilant!  Happy Memorial Day!

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Top 20 Social Media Savvy Companies of the Fortune 100 (Part 1)

Posted in Uncategorized, tagged , , , , , , , , , , , , on January 9, 2012 | 2 Comments »

Introduction

Social media usage has been baked into the business psyche for at least three years and its adoption in the commercial domain continues to grow. So The Marketing Id felt there was sufficient history to determine which of the Fortune 100 (F100) companies have been leading the social media charge. In conducting its analysis, The Marketing Id made a few assumptions and also defined some new terms.

  • In keeping with our penchant for a six count calculus, we analyzed a company’s social media activities in the following six categories:
    1. Total number of Twitter Followers (where “Fi” indicates a company’s Followers Inbound).
    2. Total number of Twitter Following (where “Fo” indicates a company’s Following Outbound).
    3. FiFo Ratio defines a company’s social curiosity and its level of reciprocity; e.g., a ~1.0 ratio suggests a high-level of mutual interest in its Followers.
    4. Total number of Tweets put out by a company.
    5. Total number of Likes (Li) recorded by a company’s Facebook page.
    6. LiFi Ratio defines a company’s likeability fidelity or amplitude; e.g., a ~10.0 ratio indicates that a company’s has ten times as many Facebook Likes as it does Twitter Followers–thus any LiFi ratio > 1 suggests the possibility of attracting more Twitter Followers.
  • All Twitter and Facebook activity for all F100 companies was recorded as of December 28, 2011, except for ExxonMobil data which was updated on 1/2/2012 due to a previous recording error.
  • In calculating averages, we assumed an across the board 36-month previous life for business-related Facebook and Twitter activities.
  • In the case of four companies, we used data from popular or available, instead of seemingly static or non-existent corporate Facebook Pages–these companies were Verizon (where we used its wireless FB page), Sunoco (where we used its NASCAR official fuel FB page), CVS Caremark (where we used its CVS pharmacy FB page), and IBM (where we used its IBM Research FB page).
  • We were unable to locate corporate Twitter handles for 22 of the Fortune 100 companies, so we assumed that they did not have Twitter accounts. Apple did not have a corporate Twitter handle per se; but it did have multiple Twitter accounts for iTunes – but these were too many to consider in our analysis without prejudicing other companies that might also be using multiple Twitter accounts for their various brands.

F100 Social Media State-of-the-Art

To better understand the overall picture, we start off with some summary statistics on social media usage in the F100.  In Table 1: Social Media Usage in Top 10 Companies of the Fortune 100, we present social media usage data in the afore-mentioned six categories.  It might be noted that two (namely, Fannie Mae and Berkshire Hathaway) of the Top 10 companies do not seem to operate Twitter accounts.  As we noted in the Introduction, 22% of F100 companies did not have a Twitter account as of 12/28/2011.  This appears to be a rather significant percentage of F100 companies, who have not yet started their “climb up the social media ladder” as it were.

Table 1: Social Media Usage in Top 10 Companies of the Fortune 100

In any case, we offer below averages of social media activities in the six categories for the Fortune 100 companies:

  1. Average Number of Tweets in the F100: 2674
  2. Average Number of Tweets in the F78: 3429
      (not including 22 non-participating companies)
  3. Average monthly Tweets over 36-month period: 95
  4. Average Number of Following Outbound (Fo) in the F100: 2851
  5. Average Number of Following Outbound (Fo) in the F78: 3656
      (not including 22 non-participating companies)
  6. Average monthly Following Outbound (Fo) over 36-month period: 102
  7. Average Number of Followers Inbound (Fi) in the F100: 85,279
  8. Average Number of Followers Inbound (Fi) in the F78: 109,332
      (not including 22 non-participating companies)
  9. Average monthly Followers Inbound (Fi) over 36-month period: 3037
  10. Average FiFo ratio in the F100/F78: 30
  11. Average Number of Facebook Likes (Li) in the F100: 1,259,185
  12. Average monthly Facebook Likes (Li) over 36-month period: 34,977
  13. Average LiFi ratio in the F100: 15
  14. Average LiFi ratio in the F78: 12

The key takeaway from these averages is–for a company to be as social media savvy as the average F100 company was in December 2011, it needs to send on average 95 tweets a month, attract on average 3037 new Twitter followers a month, follow on average 102 new Twitter accounts a month, maintain an average FiFo ratio of 30 or below, and obtain on average 34,977 Facebook Likes a month to retain a LiFi ratio between 12 and 15.

Note on the FiFo and LiFi ratios:

Everyone has heard of FIFO (First In, First Out) as used in asset management and inventory control.  Our FiFo (Followers Inbound, Following Outbound) ratio is a measure of a company’s social curiosity and its level of reciprocity.  The Marketing Id believes that the ideal for a company is to get its FiFo ratio as close to 1 as possible because it greatly expands the company’s social network and its monitoring abilities.  While all followers might not be worth following, a company must attempt to cull the undesirables out and reciprocate following as many of the rest as is feasible.  Such reciprocity is based on the simple premise that by following today’s follower, a company plants the seed for tomorrow’s customer.

Yesteryear’s lexicon had HiFi; today’s lingo has WiFi, so why not LiFi in tomorrow’s vernacular?  LiFi makes sense because it defines a company’s likeability fidelity or amplitude.  There are enormous possibilities for a company with a very high LiFi multiple – even the average 15x more Facebook Likes than Twitter Followers suggests that a company can logically attract a much larger follower base.  Again, today’s follower when properly nurtured can turn into tomorrow’s customer.

Social Media Category 1: F100 Top 10 Twitter Followers Inbound (Fi)

On March 3, 2011 USA Today reported that the Guinness Book of World Records had confirmed that “It took Sheen 25 hours and 17 minutes, between March 1 and 2, to reach 1 million followers.”  Yes, that was actor Charlie Sheen drumming up the fastest million Followers on Twitter – companies could only wish that they could have it that way!  In the business world, The Marketing Id has always believed that quality is more relevant than quantity.  Nonetheless, we were surprised to find that among the F100, the company at the top of the list in Twitter Followers had almost 4x more Followers than the company second on the list – Top-ranked Google with its 4+ million Twitter Followers swamped second place Walt Disney with its 1+ million Twitter Followers.   The Top 10 list is presented in Table 2: F100 Top 10 Twitter Followers Inbound (Fi).

Table 2: F100 Top 10 Twitter Followers Inbound (Fi)

The key takeaway from Table 2 is that both, Google and Delta Airlines have managed to maintain a LiFi ratio of 1.  In Google’s case, with 4+ million Facebook Likes (Li) and 4+ million Followers (Fi), this is a notable achievement.  But it also indicates that new growth in its Follower (Fi) base might be harder to come by.

Also of note is Coca Cola’s FiFo ratio of 7 and American Express’ FiFo ratio of 12 – both, coming under the F100 average of 30 – indicates a higher level of social curiosity and reciprocity than most companies.

A graphical representation Figure 1: F100 Top 10 Twitter Followers Inbound (Fi) is shown below..

Figure 1: F100 Top 10 Twitter Followers Inbound (Fi)

As the bar chart in Figure 1 shows, Wal-Mart, #1 company in the F100 list, squeaked into our Top 10 Twitter Followers Inbound (Fi) list at #10 with its 129,424 Followers – which is a mere 3.2% of #1 Google’s 4+ million Followers!

Social Media Category 2: F100 Top 10 Twitter Following Outbound (Fo)

If there is one thing that stands out, from our Top 10 list presented in Table 3: F100 Top 10 Twitter Following Outbound (Fo), is the fact that all ten companies in the list have low FiFo ratios (less than or equal to 12).  In addition, two of those companies, PepsiCo and Kraft Foods, also have LiFi ratios of 1, which suggests they will have to work harder at attracting new Twitter Followers (Fi).  In fact, PepsiCo has less Facebook Likes (Li) than Twitter Followers (Fi).

Table 3: F100 Top 10 Twitter Following Outbound (Fo)

The key takeaway from Table 3 is that 6 of the 10 companies belong to the more socially-aware Retail and Food & Beverages sectors, which seem naturally pre-disposed to better understanding their consumers’ preferences in choosing to follow them with a higher reciprocity.

A graphical representation Figure 2: F100 Top 10 Twitter Following Outbound (Fo) is shown below.

Figure 2: F100 Top 10 Twitter Following Outbound (Fo)

As the bar chart in Figure 2 shows, Coca Cola, #1 company in our Top 10 list, is following approximately 2x Twitter accounts than that of #2 Home Depot and roughly 11x Twitter accounts over #10 Kraft Foods.

{NOTE: Top 20 Social Media Savvy Companies of the Fortune 100 (Part 2), which includes an analysis of Social Media Categories 3 through 6 and our Top 20 Ranking based on all six categories ,  will be published next week.}

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Top 5 B2B Concerns As Social Media Advertising Scales

Posted in Uncategorized, tagged , , , , , , , , , , , , , , on November 7, 2011 | Leave a Comment »

The Marketing Id came across a very fascinating article in the Wall Street Journal recently, “Big Brands Like Facebook, But They Don’t Like to Pay,” pertaining largely to the consumer domain.  Nonetheless, there are a number of lessons to be learned from this article by the B2B world.

  1. Big Brands Like Facebook, But They Don’t Like to Pay.  The title of the WSJ article itself is a major but not altogether surprising revelation.  Facebook users, on both sides of the supply-demand business chain, are tight-fisted.  Internet consumers (the demand side) were born “freeloaders” and would like to stay that way as far as possible.  This mentality is especially true given the history of social media and particularly the lineage of the original Facebook community.  Now it appears that their business counterparts (the supply side) are realizing that free, if you can get away with it, is good for the bottom line.

    2. Is it any wonder that the WSJ article states that “While Ford shelled out an estimated $95 million to advertise the new Focus across a broad range of media, it spent just pennies on the dollar for Facebook ads.”  But this “penny-wise” behavior in the B2C world, can translate into a “pound-foolish” strategy in the B2B realm–simply because business customers are not typically penny-pinching consumers spending their own money.  Besides, as a general rule, the average B2B customer looks to purchase a solution that meets their needs first and their budget second–these priorities are usually flipped around in the case of the average consumer.

  2. Big brands still spend big money on big outbound media.  The WSJ article stated that most of Facebook’s ads “were for small advertisers, such as local businesses and small-scale websites, according to comScore Inc.”  Big brands, which included B2B giant (Intel), got more bang for their buck (or pennies, as the article seemed to imply) by developing and managing free Facebook pages that generated strong word-of-mouth campaigns.  In a weird irony, it appears like it’s the big consumer brands that continue to spend big money on big outbound media such as TV, radio and print.  Meanwhile, a typical B2B, especially in a high-tech, long sales cycle environment, can generate more online, interactive, word-of-mouth buzz using relatively inexpensive, inbound marketing and social media techniques.
  3. Brand building is OK but traditional advertising not so much.  At least, not in the consumer’s social space, is the general feeling of the big advertising gurus.  Consumers might resent the encroachment, despite the fact that it’s a free space that they “occupy” – to use a contemporary analogy.  Nonetheless, consumers share information, pictures and all kinds of personal details in this social environment, so traditional advertising might be viewed as an invasion of privacy – ironical as that might sound.  From a B2B viewpoint, the best approach is to focus on attracting followers to your Facebook page through the “character of your content,” entice them to “like” it and engage them in an ongoing dialog of substance and value.  Again, from the B2B perspective, The Marketing Id believes that use of social media for brand building should be a secondary priority and sales enablement must remain its primary goal.
  4. “Likeonomics,” an emotional B2C phenomenon, is harder to sustain in the B2B domain.  As the article states, Likeonomics is “a term coined by Rohit Bhargava, a senior vice president with WPP agency Ogilvy, for the practice of brands using social media to create an affinity with customers who share the sentiment with friends.”   The Marketing Id believes that Likeonomics could help build a certain amount of brand equity in the B2B realm as well, but it is unlikely to influence the purchase decision as significantly as it does on the consumer side of the equation.  As The Marketing Id stated in its last post, “Top 10 Social Media & Inbound Marketing Tips for the B2B Marketer,” “the quality of B2B social media followers is as important, if not more, than the quantity.”  In fact, even on the consumer side, the article notes that “Ford found that only buying ads encouraging people to ‘Like’ its autos didn’t necessarily lead to long-term relationships. ‘You can give them money, and they can give you Likes,’ said Mr. Kelly, ‘but the question is, what is the value of those Likes?’” (Per the WSJ article, Scott Kelly is Ford’s head of digital marketing.)
  5. The “Mad Men” of Madison Avenue want Facebook advertising to scale.  In consumer advertising, bigger is better and as the article states, “Facebook caps its revenues by limiting ad sizes.”  It will be interesting to see how Facebook’s legacy subscriber base that constitutes Madison Avenue’s dream Millennial demographic (18-29 year olds) reacts to the impending advertising clutter about to be visited on their favorite social network.  Fortunately, B2B marketers do not have to be worried about upsetting a specific demographic per se, but they have to be more concerned that scaling the advertising on social media networks will promote the brand at the cost of carefully cultivated long-term relationships with followers, prospects and likely customers.  From a B2B perspective that is tantamount to selling the sizzle and not the steak–which might be good for marketing but not for sales.

The overall takeaway from the WSJ article, as The Marketing Id understands it, is that as Madison Avenue seeks to put its imprimatur on advertising in social media, the B2B marketer must be careful that contemporary inbound demand generation is not supplanted by traditional outbound brand equity building.

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Top 10 Social Media & Inbound Marketing Tips for the B2B Marketer

Posted in Uncategorized, tagged , , , , , , , , , on October 31, 2011 | 2 Comments »

Social media is to sharing, what Google is to searching and GPS is to driving.  It is important that B2B marketers not fall into the 80-20 trap of social media, where 80% of traffic is generated by 20% of users, who tend to talk more than they listen.  So B2Bs need to get SMART (Social Media Acquisition & Retention Tools) while implementing inbound marketing techniques and marketing automation platforms.  The Marketing Id would like to offer some tips that a B2B marketer might find useful in this regard.  Per our guidelines listed below, B2B marketers must:

  1. Realize they will cause more pain than gain by jumping onto the social media bandwagon without a coherent marketing strategy and adequate resources.

    2. A B2B should therefore not launch a blog, create a Facebook page, or acquire a Twitter handle, etc., if these activities are not “owned” by a dedicated marketer, who is committed to developing and maintaining pertinent content on a regular basis.

  2.  Ensure that their social media marketing plan conforms to basic marketing communications principles including message, medium, messenger, timing, target, frequency and metrics.

    3. Per the old adage if you fail to plan, then you plan to fail–when a B2B marketer implements social media by creating a casual Facebook page or sending out arbitrary tweets–such random actions invariably lead to “social” chaos.

  3.  Grow an inbound footprint, relative to other demand generation activities, as an increasing fraction of the B2B’s total addressable market.

    4. Success of a B2B’s social media marketing plan can be measured by the increase in the ratio of inbound marketing leads to total leads generated by the B2B over appropriately comparable periods.

  4.  Recognize a critical persona distinction between B2B and B2C social media segments–in that; consumers generally socialize, whereas business folk typically network.

    5. A consumer’s likes and comments do not necessarily indicate a propensity to buy, but business prospects are more likely to purchase if their level of social media interaction is pertinent, inquisitive, repetitive and rising.

  5.  Remember that the quality of B2B social media followers is as important, if not more, than the quantity.

    6. The corollary to point 4 above is that B2B followers, unlike their B2C counterparts, must be chosen and cultivated in a more circumspect manner–this might result in smaller but more meaningful followers, i.e., ones that are more likely to convert to customers.

  6.  Recognize the real value in a long sales cycle is not only exposing latent demand but actually creating & nurturing it using inbound marketing techniques.

    7. B2B marketers need to be persistent with their followers and today’s marketing automation platforms make this possible–casual inbound visitors can be nurtured over an extended period of time until they are ready to convert into willing customers.

  7.  Develop an ABC (Access Better Content) mindset in order to ensure the success of their inbound marketing efforts.

    8. Successful B2B sales folks are known to maintain an ABC (Always Be Closing) mindset.  In the social media marketing world, the B2B marketer has to develop an ABC attitude as well–albeit, a slightly different ABC–Access Better Content mindset!  It is incumbent on B2B marketers to own and manage their inbound marketing content–build it and they will come!

  8.  Ensure that their social media efforts add value to an inbound visitor’s decision-making process.

    9. When inbound visitors are drawn into a B2B’s digital “Field of Dreams,” the B2B marketer’s ABC efforts have to assist them in moving forward in their respective decision-making processes.

  9.  Make each inbound marketing experience a minor variation of Caesar’s “Veni, Vidi, Vici” proclamation for an inbound visitor–“I came, I saw, I was conquered!”

    10. After a B2B marketer has built a digital “Field of Dreams,” inbound visitors should be so enamored by what the B2B has to offer–they will eventually surrender to the totality of the inbound marketing experience and become a customer!

  10.  Adopt a “moneyball” approach to inbound marketing­ by increasing OBP (on-blog percentage) to boost SLG (sales leads generated).

    11. This is a baseball analogy taken from the recent popular Brad Pitt movie, “Moneyball” to drive home a point to the B2B marketer–get visitors to your blog by adopting that ABC attitude mentioned in point 7 above.  The higher a B2B marketer’s OBP, the more likely that they will increase their SLG!  After all, generating qualified sales leads is the moneyball of social media and inbound marketing!

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Attention B2Bs! Is your marketing mix social?

Posted in Uncategorized, tagged , , , , , , , , , , , , , , , on October 17, 2011 | 1 Comment »

After Marc Benioff asked during his opening keynote address at Dreamforce 2011 in San Francisco,

“Customers and employees are social. Are enterprises social?”

The Marketing Id responded with an enthusiastic “Welcome to the Social Enterprise – It’s Not What You Think, B2B Skeptics!”

So in revisiting Mr. Benioff’s concept of a social enterprise; for a B2B to become one, it needs to follow a three step process:

  1. Create customer social profiles in its CRM database
    • Who they are, what they say about you (via Twitter) what they like (via Facebook) and who they are connected to (via LinkedIn)
  2. Establish an employee social network by deploying
    • Salesforce Chatter – profiles, status updates, file sharing, groups, feeds, app updates
    • Salesforce Chatter Now – presence, IM, collaboration, workflow
    • Salesforce Chatter Connect – Sharepoint, Lotus Notes, 3rd party apps, etc.
  3. Integrate these with customer and product social networks
    • Perform social marketing via crowd-sourcing – listen to and analyze what customers are saying using social media monitoring tools
    • Make a ubiquitous product-friendly social network available across all platforms and channels

While a B2B might prefer taking a more incremental approach to “climbing this social enterprise ladder” as it were, there are already a number of social interactions that the B2B’s inbound marketing efforts continually record in its CRM database.  Two weeks prior to Dreamforce 2011, The Marketing Id had shown “How Inbound Marketing Is Driving the B2B Marketing Mix–Viva La 4Ps!” by suggesting that these social interactions can influence the manipulation of a B2B’s marketing mix, either in its current revenue cycle or in a succeeding one.  Hence, in that sense, the concept of a social marketing mix actually precedes the B2B’s progression to a full-fledged social enterprise.

So with apologies to Mr. Benioff, The Marketing Id would like to ask,

“Is your marketing mix social?” 

The good news is that–if your B2B has implemented a CRM-integrated marketing automation platform that is engaged in inbound marketing and social media–the answer is yes! However, the catch is that at a typical B2B, the inbound marketing activities are mostly focused on demand generation and sales enablement.

Every such B2B marketing department has to realize that it has a treasure trove of information in its CRM database that can be of tremendous import to its product marketing team (for details, see afore-mentioned Viva La 4Ps blog post).  It is therefore imperative for that B2B’s inbound marketing initiatives to not only engage in demand generation, but also drive its marketing mix.  This necessarily means that the new “cool kids” of B2B marketing–its inbound marketing team–have to sit at the same lunch table as the old “geek kids” of B2B marketing–its product marketing team–and share all of that critical CRM data!  Quite simply, a social marketing mix can positively impact the 4Ps of a B2B’s solutions portfolio, which in turn translates into more predictable revenue performance. More predictable revenue performance resulting from marketing efforts is what is going to get a B2B’s CMO a permanent seat at the CEO’s decision-making roundtable!

With Marketing thus firmly established as a revenue driver on the demand chain side, it becomes easier to convince the B2B’s other functional departments about the necessity to create a larger, more encompassing social enterprise.  And, in this regard the three-step Benioff process, which has been outlined above provides a simple incremental approach.  So what are you waiting for B2Bs?  Interconnected social networks–employee, customer and product–are becoming increasingly vital to the long-term success of your business!  If your marketing mix is already social, well begun is half-done!

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Top 5 Ways to Ensure a Customer Awaits at the End of Your Funnel

Posted in Uncategorized, tagged , , , , , , , , , , , , on October 3, 2011 | Leave a Comment »

The Marketing Id has blogged previously about how a proactive B2B always finds light at the end of the tunnel.  It’s called Revenue Performance Management and it helps a B2B to more predictively manage its revenue cycle across an integrated sales and marketing funnel.  Nonetheless, there are many steps that a B2B marketer must take during the course of the revenue cycle to ensure that an inbound visitor is effectively engaged in their journey from fuzzy awareness to a fully informed state, in which they emerge as an enlightened customer:

  1. “SEO IT the money.”  The B2B marketer needs to champion Search Engine Optimization of all of the B2B’s related inbound digital properties and have this activity performed on a regular schedule.  If you assume that IT will automatically take care of this, it’s just not going to happen in a timely manner.  As a B2B marketer, you must set a target for IT to get each of your top keyword searches within the top 5 results of their corresponding SERPs.  Incentivize IT if you have to – SEO IT the money – because it means more customers and enhanced revenue potential that will result from your marketing efforts.
  2. “Tweet it like a sound bite.” The B2B marketer must construct every tweet – the message – as if it were a sound bite, albeit, an inviting one!  One that will attract a visitor’s attention, arouse their immediate interest with a commensurate desire that instantly compels them into action – to seek more information related to what you have to offer.  The Marketing Id recently blogged about “The Art & Science of the B2B Tweet and Strategic Intent!”  It’s imperative for a B2B tweet to resonate like that quintessential TV or radio sound bite, propelling visitors onward in their inbound journey to relevant landing pages that inform, engage and help initiate the conversion process.
  3. “Character of your content.”  The Marketing Id has previously made this memorable reference by “reversing terminology that Dr. Martin Luther King made famous to emphasize the point.”  After a visitor has landed on the page that you, the B2B marketer, directed them to, they need to be mesmerized by its subject matter expertise.  Thought leadership is critical to the conversion process – the character of your content is going to be key to influencing, in turn, the thought processes of your visitor!  So it is of vital importance that the B2B marketer serves as the content champion and ensures that it is always topical, trendy and thought-provoking.
  4. “Take a stand on the brand.” In a previous post, The Marketing Id had postulated that “the social enterprise could become the holy grail for B2B marketers when it comes to sales enablement, demand generation and a truly integrated sales and marketing funnel with one vision of the truth.”  However, The Marketing Id needs to caution that a B2B needs to establish the equivalent of a “Social Enterprise Guidelines Manual” akin to a corporate branding guidelines manual, before establishing an employee social network.  The B2B brand can get quickly compromised if employees do not have a standard set of rules with which to engage customers, partners, vendors and other employees in an extended employee social network.  It’s incumbent upon the B2B marketer to drive for the establishment of these guidelines, so that potential customers are encouraged not skeptical about doing business with you.
  5. “Let inbound marketing drive the B2B marketing mix.” In an August post, “How Inbound Marketing Is Driving the B2B Marketing Mix–Viva La 4Ps!” The Marketing Id suggested that in its CRM-integrated Marketing Automation Platform (MAP), a B2B has a vast repertoire of information that is very pertinent to its marketing mix.  That repertoire of information is being fed by the B2B’s inbound marketing strategy that includes its social media efforts. The Marketing Id concluded that “inbound marketing has become a rather useful driver of the traditional B2B marketing mix – in fact; the 4Ps have become more reliable and effective within the new marketing paradigm!”  Thus from a customer acquisition standpoint, the B2B marketer needs to coordinate inbound marketing strategy closely with the product marketing team by sharing that one vision of the truth available in the CRM-MAP database.

If a B2B marketer adheres to these five key measures during the RPM lifecycle, there is a higher probability that a visitor’s journey will result in a customer at the end of the funnel!

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The Art & Science of the B2B Tweet and Strategic Intent!

Posted in Uncategorized, tagged , , , , , , , , , , on September 20, 2011 | 3 Comments »

Given the reality of inbound marketing in the B2B realm, especially in the long sales cycle kind, marketers need to have a well-crafted social media strategy that combines creative talent with logical skills in order to achieve desired results.  This is especially true with Twitter, where 140-character messages inundate the social media networking space, so getting noticed is challenging enough, not to mention eliciting a reaction to your tweet.

The Marketing Id assumes that the underlying purpose of a B2B tweet goes beyond the traditional “broadcast and inform” variety and that the majority of B2B tweets have a strategic intent.  In doing so, they are part of the B2B sales enablement process and thus support a desired phase of the B2B’s overall revenue performance management cycle.  Accordingly, it becomes critical for every strategic B2B tweet to be embedded with an appropriate click-compelling link, which a percentage of readers are expected to click through to per the B2B’s marketing plan.

In order to better understand the art and science of a strategic B2B tweet, The Marketing Id needs to deconstruct its 140 characters approximately as follows:

  1. Actual strategic message text             100 characters
  2. Related hashtag(s)                             20 characters
  3. Go to compressed link                        20 characters

While Twitter provides 140 characters to communicate, the actual message text needs to be less than 100 characters for a strategic B2B tweet.  The other 40 characters are of critical importance to a B2B marketer – these 40 characters will invariably become the source for either an existing customer/prospect or better yet an originating source for a new one! In dissecting the actual message text – 100 characters allows for approximately 10 to 15 words in which the B2B must succinctly convey a very powerful message.

From the halcyon days of those “Mad Men” of Madison Avenue to these present times of rather chaotic social media marketing, the age-old AIDA concept for messaging and advertising still rings true.  For a B2B’s 100 character message to resonate on Twitter, it must instantly draw Attention, grab its reader’s Interest, create sufficient Desire so that the reader will be compelled to take instantaneous Action and click either on the related hashtag or on the link embedded in the full 140-character tweet.  It is important to use URL compression, such as offered by TinyURL or Bitly, on the actual link address so that the URL is shortened to inside 20 characters.  Twitter has also recently integrated its own t.co auto-shortening service for tweets.

So what about the hashtag and how is it related to the embedded link?  B2B marketers can use the hashtag to promote marketing campaigns, events, collateral, products, PR etc. with a related link that can direct readers to a landing page where they can be processed per the B2B’s strategic intent.  The B2B’s purpose might be to make available, in exchange for basic reader contact information, a critical white paper from a subject matter expert, or a product-related webinar on demand, or an invite-only new product demo, etc.  Associated hashtags also embedded in the tweet allow readers to link with a specific audience that is already participating in related Twitter discussions.  The marketing possibilities are endless but each one of them must be geared towards supporting the B2B’s revenue performance management cycle.

The Marketing Id believes the best way to illustrate the art and science of a strategic B2B tweet is by example.  So we will draw from a couple of recent blog posts that cited certain key events and create the requisite strategic tweet in each case to promote those specific events.  The Marketing Id’s readers can then decide if the generated tweets meet the AIDA test and are click-worthy enough to compel them on to landing pages associated with their respective events.  The Marketing Id’s sample tweets are as follows:

Example 1:

Learn how a social enterprise can become the Holy Grail for B2B marketers in sales enablement–watch #Dreamforce2011 keynote @ bit.ly/nDVDcO

The hashtag (#Dreamforce2011) takes readers to a Twitter page that highlights all the tweets relating to this event. The compressed URL (bit.ly/nDVDcO) takes readers to a YouTube video that plays the “Opening Keynote: Part 1 – Welcome to the Social Enterprise.”

Example 2:

Here’s how a B2B marketer can incorporate social media at every stage of the revenue cycle–download #Marketo whitepaper @ bit.ly/9ofVoF

The hashtag (#Marketo) takes readers to a Twitter page that educates them on other reader experiences with Marketo. The compressed URL (bit.ly/9ofVoF) takes readers to a landing page that lets readers download “The Definitive Guide to B2B Social Media.”

From these couple of examples, it can be seen that Twitter is a powerful social media tool that can be used very effectively to generate demand in the B2B world, if a marketer recognizes that there is an art and science to every strategic B2B tweet.  So let your B2B marketers creative juices flow and intermingle with their logical streams – the result could very well be a lead that began with a simple, albeit strategic, tweet!

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All It Takes Is “A Few Good Men” Blogging & Tweeting to Generate Leads

Posted in Uncategorized, tagged , , , , , , , , , on September 1, 2011 | Leave a Comment »

As the economy seems to be going through a sluggish phase, SMBs are beginning to wonder if there is a paucity of demand out there.  Judging by how the stock markets have bounced back in the past couple of weeks after their early August volatility, it might  be fair to assume that a double dip recession is probably not in the cards.  In business terms, this implies that demand is not really drying up – all you have to do is tap into it in the right places, nurture it for as long as it takes and then capture it when the time is right.  To put it in my favorite Garden State lingo, “You want leads, I got your leads right here!”

But seriously, as an SMB, if you are not already immersed into social media and inbound marketing, you are quite likely losing out on a substantial portion of your leads–because they are out there but your current marketing setup is probably not allowing you to access them!  The Marketing Id culled what it perceives as pertinent facts from a 96-slide HubSpot (an Internet marketing company) presentation.  HubSpot’s complete presentation can be viewed at http://www.slideshare.net/HubSpot/marketing-fact-vs-marketing-fantasy), but from The Marketing Id’s perspective its Top 10 facts are as reproduced below:

  1. 57% of small businesses say social media is beneficial  to their business
  2. 39% of B2B companies using Twitter have acquired new  customers from it
  3. Companies that use Twitter average 2X more leads than  those that don’t
    • Companies with 1000+ Twitter followers get 6Xmore traffic
  4. 41% of B2B companies using Facebook have acquired new customers from it
  5. 54% of companies increased their investments in social  media and blogs in 2011
    • Leads generated via inbound marketing tactics like blogging & social media cost 62% less
  6. Companies that blog get 55% more web traffic than those  that don’t–they also get 70% more leads
  7. 57% of companies have acquired a customer through their blog
  8. Blogging can increase your Twitter reach by 75%
  9. Businesses who blog at least 20 times per month  generate 5X more traffic
    • They also generate 4X more leads
  10. 2/3rd of marketers say their company blog is “critical” or “important” to their  business

It should be noted that some of these facts apply to  companies in general and not only B2Bs – where they do, it has so been  indicated.  Nonetheless, all of these facts  are also relevant to the B2B domain.  A  simple way to sum up these Top 10 facts – if, as a B2B, your company is not  blogging and tweeting, it is leaving a lot of money on the table!

The Marketing Id has previously blogged about this new marketing paradigm that has evolved over  the past few years and changed the way business is conducted, including in the  B2B long sales cycle domain.  It is fair  to say that the B2C companies were first to cultivate this new marketing paradigm, but it is now increasingly dominating the B2B world as well.  So The  Marketing Id would like to conclude this post with a parody of a famous  dialog between actors Jack Nicholson and Tom Cruise from that classic  movie, “A Few Good Men.”

The Marketing Id  (asking in Jack Nicholson’s agitated voice): “You want demand?”

A hapless B2B (replying  in Tom Cruise’s earnest pitch): “I want  the leads.”

The Marketing Id (growling in Jack Nicholson’s full-throated roar): “You can’t handle the leads!”

This is it, B2Bs, if you think you can “handle” the leads, you  must make some serious changes in the way your marketing is currently being run  on the demand side.  With a few good men,  it is money that you can take off the table!

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How Inbound Marketing Is Driving the B2B Marketing Mix–Viva La 4Ps!

Posted in Uncategorized, tagged , , , , , , , , , , , , , , , , on August 13, 2011 | 3 Comments »

For the past several years B2B marketers have been using inbound marketing techniques for various activities such as:

  • Mastering SEO/SEM across web properties
  • Topping organic and contextual SERP listings
  • Building brand equity across relevant social networks
  • Developing appropriate marketing personas
  • Honing market segments
  • Establishing adequate thought leadership
  • Influencing buyer behavior
  • Targeting prospects with the right message at the right time

These are all necessary activities that constitute what The Marketing Id had referred to as the “customer marketing life cycle” in “The Social Media Marketing Value Chain in a Company’s Revenue Cycle.”

 

However, the customer marketing life cycle or revenue cycle typically pertains to the sale of a current or existing product, service or solution set.  It is important to recognize that with the adoption of a CRM-integrated Marketing Automation Platform (MAP), a B2B has in its extended database a vast repertoire of information that is very pertinent to its marketing mix.  The traditional marketing mix is made up of the classical 4P elements, each of which can be favorably manipulated based on the intelligence that is continually being gathered by the CRM-integrated MAP system:

  •  Product

    • Prospects–comments on a blog, questions during a webinar, dialogs based on a whitepaper and/or case study, etc.–offer invaluable feedback regarding a B2B’s current product definition that is captured in the CRM-integrated MAP system, and which the B2B can analyze and use accordingly during the ongoing product management lifecycle to positively impact its current or a future revenue cycle.

  • Price

    • Prospects have had a tremendous impact on product pricing in the B2C world, especially in the e-commerce enabled retail sector, where 3rd party websites offer comparative product pricing that tremendously benefits the consumer.  However, in the B2B world, especially one that is characterized by long sales cycles, prospects have less immediate influence on a product’s operating margins.  Nonetheless, they contribute towards making the market pricing more efficient.  Again, some of these benefits can be attributed to the new marketing paradigm, wherein a prospect establishes their digital footprint on a B2B’s various web properties that can be then extracted from its CRM-integrated MAP system and analyzed to arrive at a more optimum pricing structure during the ongoing product management lifecycle to positively impact its current or a future revenue cycle.

  • Place

    • Many contemporary marketers were so enamored by the new marketing paradigm and the influence of inbound marketing on the B2C space that they prematurely wrote about the death-knell of the traditional 4P marketing mix, especially the forthcoming redundancy of the outbound marketing channel!  Well, as far as the long sales cycle B2B world is concerned, the rumors about the demise of the outbound marketing channel have been greatly exaggerated!  In fact, the new marketing paradigm is proving to be a great value-add to one particular outbound channel – the B2B direct sales force!  The Marketing Id has explained how inbound marketing is changing the cold calling paradigm of traditional telemarketing and telesales in a previous post “Hello Sales, the Cold Call Just Got Warmer!”   Suffice it to say that with the help of the new marketing paradigm, a prospect’s digital footprint in a B2B’s CRM-integrated MAP system is analyzed and used for more efficient outbound channel management to positively impact its current or a future revenue cycle.

  • Promotion

    • Inbound marketing has made a radical difference to the promotional aspects of B2B long sales cycle marketing.  Analysis of a prospect’s digital footprint in a B2B’s CRM-integrated MAP system is enabling the targeting of the right message to the right prospect at the right time – The Marketing Id discussed this concept in a previous post “From Leads to Deals: Promoting Sales with a New Marketing Paradigm.”  In fact, the promotion of a product has become a more scientific process and there are metrics to establish the efficacy of various promotional efforts.

 

Clearly inbound marketing has become a rather useful driver of the traditional B2B marketing mix – in fact; the 4Ps have become more reliable and effective within the new marketing paradigm!

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Revenue Performance Management: Viva La Drucker!

Posted in Uncategorized, tagged , , , , , , , , , , , , , , , , , , on July 29, 2011 | 2 Comments »

If you believed that RPM was short for revolutions per minute, you are most likely an engineer (like I used to be), but if you knew that a more contemporary acronym stood for Revenue Performance Management, then you are probably a marketer (like I am today). But seriously folks, RPM is attempting to engineer a rather revolutionary paradigm shift in marketing that would make all marketers feel good about their profession all over again! In fact, I tweeted recently in anticipation,

“Revenue Performance Management (RPM) is transforming the SMB demand chain and reviving the concept of a marketing-driven organization.”

So what is RPM? Marketo, a leading market automation company, defines RPM as follows:

RPM is a strategy to optimize interactions with buyers across the revenue cycle to accelerate predictable revenue growth.

Competitor, Eloqua, defines RPM very similarly as follows:

RPM is a strategy for managing a company’s interactions with buyers through the entire purchase process to enable dramatically more predictable, rapid and profitable revenue growth.

Quite simply, RPM is empowering Marketing to transform its perception from that of a cost center to that of a partner revenue generator, alongside traditional Sales.

In its whitepaper, “Revenue Performance Management: Re-Engineering the Revenue Cycle,” Eloqua summarizes the requirements for a successful RPM strategy as follows:

As a business strategy, RPM requires the right mix of people, process and technology in order to drive real revenue growth. Marketing automation is certainly one enabling technology, but not the only. After all, businesses use all kinds of tools and services to drive revenue – from social media tracking tools to website analytics to sales force automation. But even more important than investing in technology is the development of business practices that are universally accepted and adhered to.

The pattern that emerges among best in class adopters of RPM shows the following four business practices are key to a successful RPM strategy:

  1. Modeling the integrated sales and marketing funnel
  2. Continuous improvement through industry benchmarking
  3. Making data actionable with deep analytics
  4. Long-term forecasting to identify future revenue opportunities.

Jon Miller, VP of Marketing at Marketo, offers an equally succinct take on RPM in a whiteboard session on video, “What is Revenue Performance Management?” The Marketing Id would encourage readers to view his entire five-and-half minute video pitch. I was intrigued by Jon’s reference to RPM as the equivalent of a six sigma process on the “demand chain side” corresponding to the more well-known six sigma process on the cost or supply chain side. He also mentioned a comparable need for achieving a mentality for continuous measurement and process improvements on the demand chain side.

More importantly Jon, like his Eloqua counterparts, stressed on the imperative for transforming people, process and technologies to ensure the success of RPM. The concept of a Chief Revenue Officer that oversees both, CSO and CMO functions, across the new integrated sales and marketing funnel, is definitely a way to go. The need to review and revise how sales and marketing people are measured and compensated seems inherently fair. And, critically, to evaluate and incorporate the right technologies and tools, over and above a company’s CRM system, that would support the entire revenue cycle.

Having reviewed what both these thought leaders in the marketing automation space had to say about RPM, The Marketing Id saw it fit to encapsulate their combined RPM vision in one diagram that is reproduced below. Per the old adage “a picture is worth a thousand words,” the diagram captures all the essential elements of an RPM system.

REVENUE CYCLE ACROSS INTEGRATED SALES & MARKETING FUNNEL

Finally, my review of RPM brought to mind that old Peter Drucker quote about the raison d’être for a business:

“Because the purpose of business is to create a customer, the business enterprise has two-and only two-basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”

The management guru was way ahead of his times–Peter Drucker never considered marketing as a cost to the enterprise! His vision is being born again as today’s RPM gives new meaning to the concept of a marketing-driven organization. Viva La Drucker!

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