Dell and Social Media: Efficiency is more than numbers

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At the Social Web Breakfast in Munich I was focusing on the efficiency discussion around social media in companies and how firms need to define measurement anew. To start the ROI discussion will be misleading as we have not many proofs in terms of numbers as to how profitable social media will be for companies. Now, finding new solutions of a tracking mode is a big challenge and then finally the C-levels need to believe in that new vision. So, the target must be to elaborate on reasons why companies need to start kicking off social media activities versus just talking about efficiency and tracking methods.

Last week, I did a quick poll on Twitter what the drivers are for social media. My intention was to figure out if there are other efficiency measurement method than just revenue figures. And I was surprised to see that most companies see other reasons as their main argument for social media.

Looking at these results, it becomes clear that marketing, pr activities and sales must work closely together to maximize the companies‘ efficiency. Now, we all know how difficult it is to measure pr and marketing (although we have hundreds of techniques) as one tracking number. But the question remains: Do we have to measure every effort we make if we find good examples of proven track record in other companies? They did not have a double bottom when they started – and no measurement method, too. But right, what worked for one company does not have be applicable to another.

Dell has been through this measurement process with Idea Storm. Last week Richard Binhammer explained why Dell decided to face social media. It was a decision backed by ratio and emotion, so not only pure numbers but also the wish to talk to, understand and learn from the client perspective.

Let me quote the most important insights as a summary to motivate other companies to follow this decision:

„1. The Magnitude of Change: One billion people are now online — a figure that will double by 2011. In fact, every day 500,000 new users come online for the first time. Content is exploding.
(…) News cycles can start from anywhere today. News and conversations are not just local/regional, they are global. Single blog posts can have as much power as major news stories. People are publishers, content providers and decision-makers.(…)

2. The Value of Personal: (…) The move from “objective,” fact-based, third party reporting and commentary (traditional media/advertising/controlled messages/interruptions) to individual, “subjective,” and “crowd sourced” perceptions is very powerful. Perceptions are no longer just reality. They are real. The “new facts” are based on real interactions and experiences that people share with each other.(…)

3. Connecting with Customers: Since when did any business not want to connect with its customers? Seriously, what is the issue here? Do we need to justify using today’s efficient, effective and readily available technology to spend 30 minutes or couple hours a day connecting with real customers? Social media is an ideal tool to reach customers more quickly, efficiently, frequently and cost effectively.

This week Richard Binhammer took the argumentation on efficiency to the next level but sees the problem in the ROI discussions going on at top management level…

“The problem: ROI as it applies in the business world and as understood by C-level executives means but one thing–how much money was returned on our investment. Simply put ROI = gains – investment costs ÷ investment costs. Just because that definition and formula might not meet our needs does not mean we can redefine it in our own way to justify the use of Social Media (SM) and Social Networking (SN) or any set of communications and marketing tools. If we use ROI in any other way than dollars returned, C-level executives will quickly come to lose respect for us and our efforts and see SM and SN as fluff.”

Did not Dell take the ‚fluff‘ approach? Dell was courageous and in doing so the IT company has a lot of experience to profit from today – experience through authentic communication. It was not only numbers – but finally resulting in a new measurement point of view.

So, efficiency for Dell means a long-term transition which is defined by a combination of mass usage of media, by the ‚power of the few‘ (remember Malcolm Gladwell’s vision?) and by the ‚listening‘ factor. The last being one of the first rules in the sales business if you want to be successful. You don’t even have to think about ROI if you listen carefully. If you do so, word-of-mouth is working in your favour. Numbers will follow.

If companies just see efficiency of social media from a financial point of view, then I may ask, why companies ever started building corporate homepages? Did they have a proof on efficiency? No, they had to go down that route because their competitors started and they had to follow to stay in that competition.

Let me tell you our own success story: I asked myself last year why companies were placing pr news and buying space on platforms like silicon which launched in 2000 as one of the first business communities in Germany? This community had no track record and no proof that we might convert our clients‘ investment in numbers. Most of the companies were not even in the shape of tracking anything. To be present on the web was key, not more.

There was no such thing like measuring efficiency in terms of new contacts. No lead generation via bannering or newsletters or follow up on calls they had after we published content about those companies. But we called them… When we though their marketing campaign could perform better with different texts – no matter if this campaign will be running on our platform or not. All of these clients came back and numbers followed. Our efficiency was closley connected to pure communication and word-of-mouth.

Talking about efficiency in those days was more a question of: Can you track pis and clicks already? We could not, but it did not bother anyone of our clients. They tried it out as Dell believed in social media before there was a proof of concept.

Spot On!
Be aware that the efficiency discussion around social media will go on. Nevertheless, there is Michael Dell in a Business Week Discussion with Jeff Jarvis encouraging companies to start their efforts on social media.

„The conversations are going to occur whether you like it or not… do you want to be part of that or not? My argument is you absolutely do. You can learn from that. You can improve your reaction time. And you can be a better company by listening and being involved in that conversation.“

If companies see the possibilities, effects and the value of social media, there is no reason to talk about measurement anymore. It’s more a topic of identification and reorganization: ‚Why did you face the options of social media so late and have tried to find numbers to justify social media?‘

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