Blinding Me With Science

Conventional wisdom holds that “if you can’t measure it, you can’t manage it,” so we have metrics to help us manage our businesses.

And then there are Twitter-related metrics.

Meeyoung Cha from the Max Planck Institute for Software Systems looked at data from all 52 million Twitter accounts and determined that:

“The number of followers a Tweeter has is largely meaningless. Popular users who have a high number of followers are not necessarily influential in terms of spawning retweets or mentions,” she said. The more interesting question is how should one measure influence, she continues. Unfortunately there is no one easy answer to that, she says. “One would have to take a combination of many metrics, including follower count, mentions, and re-tweets. However the hard part is figuring out the relative importance of the component metrics.”

Cha is spot on that follower count isn’t important. But she’s wrong when she says that the hard part of measuring influence is “figuring out the relative importance of the component metrics.”

The hard part is figuring out what influence is. When you figure that out, then you can start arguing about how to measure it.

Social media analytics firm Sysomos conveniently avoids defining what influence is, and has developed a metric it calls the authority ranking: A score between 0 to 10 – with 10 signifying someone with very high reach and influence.

Social media “heavyweights” Chris Brogan and Jeremiah Owyang have an average follower authority (an “AFA” if you want to sound cool) of 4.0 while Jason Falls’ AFA is 4.8, and Scott Stratten’s is 4.6.

I guess we’re to conclude that Jason and Scott are more influential than Chris and Jeremiah.

If they want to raise their AFA, Chris and Jeremiah can cull through their list of followers (139k for Chris, 65k for Jeremiah) and block those with a low AFA. And then, going forward, only allow people with a high AFA to follow them.  I can’t think of a bigger waste of time, or stupider thing to do.

I could be off-base here, but to me, influence is about shaping how people think and/or act, wouldn’t you agree?

If you do, then how in the world can you measure influence simply by looking at follower count or follower’s follower count, retweeting activity, or mentions? What does any of that have to with influence?

Answer: NOTHING. Those “metrics” have nothing to do with influence.

I can’t tell you how many times I’ve DMed someone who has tweeted a link and asked “You believe that load of crap?” only to receive the reply “oh, I don’t believe it — I was just passing on the link.” If they don’t believe it, then they really weren’t influenced, were they? Nor are they being influential, because, apparently, they’re not trying to shape anyone’s thoughts or behaviors.

Most of these Twitter metrics are just pseudo-scientific stabs at establishing a system for score-keeping.

Don’t get me wrong: I’m not suggesting that you stop bragging about your follower count, influence ranking, or AFA score. Anything that helps you deal with your personal insecurities is OK in my book. But don’t try to blind me with your science. It’s not working.

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Social Media Measurement

If you haven’t read the Social Media Analytics report from Web Analytics Demystified and Altimeter Group, you should. It’s an excellent piece of work.

In fact, I plan on leveraging the work they’ve done (they encourage readers to utilize the framework under the concept of open research) in a social media research effort I’m launching with EFMA (European Financial Marketing Association). I’m going to use the framework to find out what financial firms are measuring, plan to measure, and how well they think they’re doing along the metrics defined in the framework.

I sat in on a webinar given by the authors of the report, John Lovett and Jeremiah Owyang, and I was struck — but really not surprised — by a comment that John made: No one vendor can pull together all the metrics defined within the framework. Not surprising at all, given the relative immaturity of social media tools and processes.

But here’s what it got me thinking:

At what point does the cost of measurement outweigh the benefits of measurement?

Yeah, yeah, yeah, I know: If you can’t measure it, you can’t manage it. That’s a load of crap. First off, how many things in the business world can we really manage, anyway? And of the things we measure, how accurate are those measurements, anyway? Please don’t spew mindless pablum at me.

Here’s the social media reality for 2010: You can’t measure everything, and you shouldn’t be. It’s too damn costly, and requires too much effort relative to the value you’ll get from doing it. Vendors may promise the moon, but at what cost? Considering the overall investment that social media represents as a percentage of the total marketing spend, there’s got to be a marketing measure more important to invest in.

My take: You’ve got to prioritize the metrics in the framework to figure out what to measure. Measuring what’s easy to measure is nice, but could backfire on you. If you start trumpeting the results of the metrics you can easily track — and those metrics aren’t tied to important business goals or bottom line business value — then you’ll be “lookin’ like a fool with your pants on the ground.”

Instead, do the following:

1. Use the framework to determine which business objective is most important, and identify the metrics that relate to that objective.

2.In addition, identify metrics that you think will best help you prove the value of social media investments to the firm. If showing senior management your “share of voice” doesn’t get them excited, it doesn’t fit here.

If the metrics you define in step #2 don’t align with the ones you defined in step #1, something’s wrong.

If you find yourself out of alignment, here’s my bet what’s causing it: Your firm doesn’t have clearly defined strategic objectives. There’s no beacon to follow. This is no longer a “social media measurement” problem. And that makes this a good point to end this post.

What FourSquare Means To Financial Institutions

The Financial Brand does an excellent job of putting FourSquare into perspective for financial services firms:

Most financial institutions are trying to push people out of branches — especially for routine interactions — by encouraging use of self-service channels. But a Foursquare promotion encourages exactly the opposite: frequent branch visits. If your financial institution builds a Foursquare promotion around mayors, you will be taking those who are highly wired, leading-edge, early adopter tech junkies and encouraging them to come into branches more often than they should.

Building a Foursquare promotion around the mayors of your locations may feel like the easiest and most obvious way to tap this social media platform, but it is probably the worst thing you can do. For starters, it really limits the promotion’s audience. There can be only one mayor at a time and there will likely never be more than 2-3 people who could possibly ever overtake him/her. So if you have five branches, a mayor-based promotion would mean something to only around 15 people.”

Banks and credit unions are missing the real lesson here: People like to play games. We like friendly competition, and we like to turn routine things into games to spice them up, make them a little more interesting.

So what should banks and credit unions do? Make a game out of interacting with the bank/CU. No, I don’t mean getting 5 points every time someone does some as meaningless as check their account balance.

But what about applying “game theory” to PFM usage? Construct a budget, get 50 points. Categorize your quarterly spending, get 50 points. Help someone else “in the network” set up their budget, get 250 points. Or more broadly, make a deposit into a savings account for more than $100, get 100 points. Give up paper statements, get 100 points. For every $10 you spend with your debit card, get 10 points.

Sound like a loyalty program? What in tarnation do you think Foursquare is? (Side note: Hypocrisy kills me. There are people who criticize rewards programs for “buying” loyalty instead of “earning” it, and then turn around and rave about some social media concoction like FourSquare).

The keys to success are: 1) Constructing a points scheme that rewards meaningful interactions and actions (this is why I keep harping on the importance of the concept of customer engagement, and how to measure it); 2) Making it social so people can see how they stand relative to everyone else, and to encourage some friendly competition; and 3) Integrating it with enterprise-wide marketing efforts.

Of course, if you prefer publicity over profits, feel free to pursue that Foursquare promotion.

The Seven Annoying Habits Of Social Media Gurus

Stephen Covey made a gazillion dollars, and launched a business empire with the publication of his book The Seven Habits of Highly Effective People. I harbor absolutely no delusions that I will make a penny with this, the publication of my blog post, The Seven Annoying Habits of Social Media Gurus.

I certainly hope I don’t offend anybody with this blog post, but I’m really not too worried, because I know that there’s not a single one of you who would raise your hand and admit to — or claim to — be a social media guru. (Of course, if I were to tweet that you were a social media guru, you’d be DMing me in a heartbeat thanking me for the alleged compliment).

And since none of you want to be a social media guru, please pass this post on to your friends who do. It’s a guide to the seven habits they need to acquire and perfect in their quest to be a social media guru.

1. Preach. If you can’t use the word “must” (or its substitute “have to”) in every other sentence you speak or write, you’ll never make it as a social media guru. You have to be comfortable telling the rest of the business world that they “must” start using social media immediately, and that they “have to” have a Facebook page, Twitter presence, and a blog in order to “be where their customers are” and to “join in the conversation.”

2. Bloviate. This is not the same as preaching. Bloviating is getting up on one’s soapbox, lecturing, haranguing. You’ll need examples of firms’ bad customer service so you can bloviate about how social media made the situation 10 times worse for the good-for-nothing firm that dared to screw up. If you can’t come up with any good examples, feel free to use United Breaks Guitars. The fact that every other social media guru bloviates about this example shouldn’t deter you from using it.

3. Cheerlead. Being a social media guru is hard work. You have to stay on top of all the new social media efforts that firms are launching so you can tweet about them, and cheer them on for “getting it.”

4. Misattribute results. This requires some work, and really separates the amateur gurus from the really good ones. If a firm with a social media effort produces good results — anywhere in their business — you have to find a way to attribute that success to their social media effort. Conveniently ignore things like trends in the general economy, competitors going out of business, or the 100 new sales people the firm hired that quarter.

5. Ignore scale. A 1000% ROI is better than a 23% ROI, right? Of course it is! As a social media guru, you don’t have to worry about the fact that most CEOs would rather invest $100 million and get a 23% ROI, than invest $10k and get a 1000% ROI. If I have to explain the rationale behind that to you, you’ll never make it as a social media guru.

6. Overstate. Declare everything about social media to be a “new breakthrough.”  To be a really good social media guru, you have to know exactly when to drop the “fundamental shift” clause or use the “new paradigm” label. This will take some practice.

7. Create lists. Really now, is there anything more annoying than the endless lists of what to do to succeed in social media?

p.s. There is another annoying habit in the social media world, not limited to the gurus: Suggesting new entries to someone’s list.

How Would You Fix America The Brand?

In introducing an article on its site, Chief Marketer poses some interesting questions:

“What if the United States of America was a brand? As a marketer, what would you do to fix it?”

My take: Judging from the marketing press and blogs that I read, it seems to me that if today’s marketers were in charge of fixing America the brand, the top three initiatives would be:

1) Create a Facebook page.
2) Run a user-generated content contest.
3) Launch a blog.

These initiatives would, of course, be multi-channel efforts, seamlessly integrated with mainstream media efforts like, say, a 30-minute, overly-produced, puff-piece infomercial that would preempt regularly scheduled prime time network programming.

Yep, that should pretty much put America the brand back on course.

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Where Are You On The S-Curve (And Which Curve Are You On)?

Thanks, as always, to Bankwatch, for finding this from Doc Searls:

Amazon and other excellent online retailers have improved the online shopping experience as far as a retailer can. Yes, there is always room for improvement, but there is only so much improvement you can carry out only on the sell side, even if you’re equipping buyers to do a better and better job. At a certain point the improvements need to happen on the buy side. You need better buyers, not just better sellers.

My take: I don’t know if online retailers have improved the online shopping experience as far as they can or not. But there’s an underlying message buried in the comment above, regarding the evolution of technological development and implementation.

Years ago, I worked for a consulting firm called Nlolan, Norton. One of the founders, Dick Nolan, had formulated a theory of the stages by which information technology is leveraged by organizations. His theory (see the diagram below) was that the rate at which technology was deployed could be depicted by a series of S-curves. The time periods between the s-curves were periods of discontinuity — first, technological discontinuity, and then organizational discontinuity.

Nolan formulated his Stages Theory more than 30 years ago, and it still holds up today. Amazon (and perhaps other online retailers) may very well be in that stage of organizational discontinuity — and that’s why Searls says “we need better buyers.”

A former colleague of mine asked me recently if I thought technology vendors were draggind down firms’ ability to implement new technologies. I said it was the other way around — vendors have developed new technologies that are ahead of firms’ ability to implement them.

Another beauty of Nolan’s Stages Theory is that an industry can be characterized as being somewhere along the S-curves, a single organization can be plotted on the curves, and even a line of business within a company can be positoned on the graph.

I tried to put Searls’ comment in the context of the banking industry: Has retail banking (and online banking, more narrowly) improved as far as it can?

No way. My guess is that it’s somewhere in the middle of the middle curve. Many banks have clearly improved their online presence and capabilities beyond their initial efforts of 5 and 10 years ago. But they would be deluding themselves into thinking their sites are good as they can get from a technology perspective.

But from a broader perspective — an organizational perspective — few financial firms have confronted the organizational discontinuity that is caused as they transition from the middle to third curves.

The credit crisis is certainly causing some financial firms to rethink their business. But from what I can tell, most are reverting to [old-way-of-thinking] cost cutting measures, rather than the fundamental, gut-wrenching, strategic change that comes from technology development.

Despite all the attention that social media is getting within the financial services industry, I can’t think of a single firm that has truly confronted — let alone navigated through — the period of organizational discontinuity.

I do think, though, that some (if not many) will get there. And it won’t be pretty.

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Banks, Social Media, And Seinfeld

William Azaroff recently blogged about Vancity’s new Wilki. According to William:

I am pleased to announce the new wiki Vancity has launched. It is for the Microfinance community in Canada, and lives at microfinance.ca. Why did we launch a wiki? Well, in short, we are a longtime Microfinance practitioner wanting to expand knowledge amongst those who are involved with Microfinance in Canada. [W]e are deeply involved with the Microfinance model in Canada, and wanted to create a place where we could take the open source concept a little further. So we created and are hosting a wiki where anyone can add information as a practitioner, researcher or follower of Microfinance in Canada, with the aim of growing and evolving a central knowledge repository about the subject.”

To know Vancity is to know a financial institution that is deeply committed to improving its community and to what it purports to stand for. As a result, I can’t think of another financial institution that is more…..authentic…..in its use of social media to support its goals.

Which makes me wonder about all the other financial institutions’ jumping on the social marketing bandwagon.

In an effort to connect with customers and prospects — especially younger ones, like Gen Yers — many banks and credit unions are starting blogs, putting up Facebook pages, running user-generated content campaigns, and launching other social media-related efforts. Will they succeed? Or better yet:

Will social media make them cool (or at least cooler), or do they have to be cool (like Vancity) before they launch social media efforts?

I suspect that many firms think it’s the former — that jumping into the social media and social marketing pool will make them — ipso facto — more attractive to the younger crowd. I also suspect that they’ll be proven wrong (at least to a certain extent). The lack of authenticity of their efforts will be so apparent to their intended audience.

Large, established banks getting into the social media games conjures up the image of Elaine Benes (from Seinfeld) dancing. I guess you’d call it dancing, but it’s certainly not good dancing.

 

 

And so it is with some financial institutions’ forays into social media. It seems so forced and unnatural. The critical question, though is this: Will it become more natural through trial and error over time, or should they stop what they’re doing and first establish a stronger commitment to serving younger consumers?

I don’t know the answer to that, but I suspect that the right answer is neither — that what they need to do is not let their social meda efforts be the only thing they do in order to reach and serve a new audience.

p.s. Congrats to Vancity and to Currency Marketing (who helped develop the Wiki) on the launch of the Wiki. Great work.

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Getting Started With Social Media

Emily Riley of Jupiter Research recently wrote a blog post titled Getting Started With Social Marketing. Among her suggestions: Start listening, tap your own databases to understand what customers think of you, integrate social media with existing marketing campaigns, align goals with measurement, and start small on your own site.

My take: This is good advice (although I would quibble with the last point) — advice that I don’t believe a lot of marketers are currently following.

As “innovation mania” sweeps through the halls of marketing, many marketers are looking to experiment with social media, lest they get “left behind.” While I’ve got nothing against experimenting, I am against experimenting for the sake of experimenting.

But this exactly what many firms seem to be doing. For example, one large bank put up a page in Facebook. Sure, after 48 hours it had about 125 “fans”. But by my count, about 80% of those fans were affiliated with the ad agency that works with the bank. Another bank implemented a capability on its site to allow site visitors to post reviews of the bank. The bank rigged it so the default view lists the reviews it wants site visitors to see (instead of chronologically).

Here’s my issue with these “experiments”: I’m not convinced that they were the right places for these firms to get started with social media or social marketing techniques.

Emily’s suggestions, though, got it right: The place to start is by looking within, not without.

Before putting up a Facebook page, and especially before monkeying around with your own site, the first thing you need to do to get started with social media is to answer some questions:

  • How are we doing in the marketplace? No — how are we really doing in the market? 
  • Which customers do we do a good job of attracting and keeping? 
  • Which customers don’t we do a good job of attracting and keeping? 
  • Which customers should we be attracting and keeping? No — which customers do we really need to be attracting and keeping?

And then after you answer these questions, then — and only then — should you ask: How could social media help us?

Not only do too few firms start off by asking these questions, but many often get started by hiring a consultant. Sorry to say this, but that’s a big mistake.

Social media gurus may know social media, and know what other firms are doing with social media, but that doesn’t mean they can answer the questions I’ve raised. That’s why Emily astutelypoints out that getting started needs to involve looking within at existing databases to ferret out customers’ opinions. Social media consultants probably can’t help you do that.

Nor can they really tell you which customers you really do well with today, and which ones you don’t do well with. For a brutally honest discussion of that, it has to be done from within.

I can already hear the objection: “But Ron, we really don’t have anybody internally with any experience with social media, so how can we truly understand how social media can or can’t help?”

And therein lies the next step in your social meda journey: Get some personal experience.

Social media is a highly interpersonal affair. It’s about people connecting with other people. When it’s people connecting with firms, there’s the strong potential for the firm’s communication to come off sounding like advertising. Advertising is great for building awareness, and maybe even preference — and if this is what your firm needs, then great, maybe you’re ready to jump in.

But the largely untapped potential of social media is how it can help firms develop and extend relationships with customers. And if the people who work for a company aren’t personally involved with social media — and building relationships with other people and firms themselves — then it’s going to be hard for them to understand how their own firm can use social media to further relationships.

Another reason why personal involvement at the employee level is so important: To break the own-site-centricity of so many firms (this is why I’m quibbling with Emily’s point about “starting small on your own site”).

This mentality — that you have to get customers/prospects to come to your site — has been around for a long time. The irony about Facebook is that the new mentality –“we need to be where our customers are, so let’s put up on our own page on Facebook” — only furthers the old mentality.

Smart bloggers know that the way to make a name for themselves — and ultimately drive traffic to their sites — is by leaving smart comments on other bloggers’ sites. A firm won’t really understand how unimportant your own site is unless its own employees are involved in social media.

Bottom line:
The irony about social media — a tool that can help a firm connect with the outside world — is that it starts with a critical look within, before looking out.

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What The Social Media World Needs Now

Twitter is slowly collapsing under the weight of the growing social media world. That this should happen is no surprise. What will happen next shouldn’t come as a surprise either. The history of business repeats itself over and over: General, all-purpose products and services slowly give way to targeted, segmented offerings.

That’s why I see a migration away from Twitter to a number of new highly specialized “micro-blogging” platforms. The platforms won’t be oriented along traditional segmentation lines — i.e., type of customer — instead, they will specialize by type of message.

Expect to see the following micro-blogging platforms emerge in the near future:

  • Bitter: For those whiny, emo messages where you just have to complain about something.
  • Mutter: For those incoherent messages that no one can understand.
  • Jitter: For those useless, caffeine-induced “I’m at Starbucks” messages.
  • Quitter: For those messages that say “OK, I’m heading home now.”
  • Gutter: For messages that contain curse words.

I imagine that there will be a few more, but my strategy will be to hang around Twitter and wait for everybody else to leave.

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