Archive for August, 2009

The Good, Bad and Ugly of Social Media

When you don’t own the relationships, you don’t own the relationships

Nobody will doubt the impact that social media is having on businesses of all types.  It can be a valuable tool to help you reach potential customers and stay connected to build long-term customer relationships.  But what happens when things go bad?  When you use someone else’s media platform (whether it be Facebook, Twitter or otherwise), you don’t own those relationships.  And if things change, whether it be from a technical problem (ranging from hackers to glitches), competitors accusing you of rules violations or perhaps a changing of the tide to the new platform-du-jour, it puts your relationships at risk.  Basically, when you don’t own the relationships you are creating with social media, you don’t own the relationships.

Let me tell you a story of one of my clients, an independent rock band that learned this the hard way.

SAGE4 (www.sage4.com) was fairly early on the social media scene.  Being a band, they turned to MySpace in September of 2005 where they launched a MySpace site, complete with streaming audio of their songs, a blog to keep fans posted about their band updates and other key information about the band.   I know MySpace is sometimes regarded as a bit passé amongst social networking gurus, but it’s still an incredibly popular site and an important venue for bands.  Plus, the lessons from this story could be applied directly to Facebook, Twitter, etc.

Here’s the familiar situation- the band’s members spent hours each day on MySpace connecting and directly communicating with fans of their hard style of music.  They personally responded to every fan’s comments (which included 20,000 comments and thousands of private email messages.) This added up to thousands of hours spent marketing through MySpace, creating a personalized relationship with the SAGE4 fans.

The Good: Their social media effort made SAGE4 a very successful MySpace story.  An independent band without the backing of a major label, SAGE4 quickly built their fan base to over 54,000 fan “members”, who supported the band in their growth efforts.  Through this fan base and the band’s exposure on MySpace, SAGE4 maximized their social media bang-for-the-buck.  Their achievements ranged from winning retail chain Hot Topic’s national Battle of the Bands competition to landing a movie appearance and soundtrack deal in a major big budget horror movie.  Moreover, SAGE4 was being approached daily with new opportunities for radio play, gigs, magazine interviews and record label inquiries- not bad for an independent band.

The Bad: The band was in negotiations with several labels when they got the worst news they could imagine.  Their site (and all 54,000+ friends) had mysteriously disappeared from MySpace, with only a “dear John” form letter to compensate for their years of work building their fan base on the site.  Not that this was the first time that SAGE4 encountered issues with MySpace.  Their page had been hacked three times before and this was the second time it had been wiped out completely.  After the first wipeout, they sent a note to customer service, and although they didn’t hear back, the page was restored.  This time, after trying to contact customer service for a month and getting the same form email over and over, they lived with the reality that their work was totally gone.  The band learned that this was not a unique situation and connected with other bands that endured the same fate.

The Ugly: With no prior warnings before the site was taken down and no opportunity to address any potential hacker issues or correct any perceived wrongdoings, the band had to start their marketing again from scratch; something that they found difficult to do with much enthusiasm.  Every one of their followers was lost and the band now had no way to contact their fans to let them know what happened.

The Take Away: The take away is that while social media can provide an exciting platform for businesses to tap to build relationships, there needs to be a plan in place to migrate those relationships so that the business owns them.  Otherwise, you, as a business owner, are at the mercy of that third-party site.  If something goes wrong or if it goes out-of-style (which will happen to all the current “hot” social media sites at some point), you risk losing access to your relationships built on the site.

Third-party social media sites should be a part of a larger strategy, one that creates a path to gain ownership of the relationships.

In the case of SAGE4, they decided as part of their re-building strategy to go with a proprietary forum and mailing list that they now run on their own website.  While they acknowledge they couldn’t have built their following so quickly if it weren’t for a third-party platform, they know all too well the perils of not transitioning their “customers” to their own platform more quickly.

Monday, August 31st, 2009
Posted in Business Strategy | 2 Comments »

The Fear of “Numbers” in Business

You need to be able to keep score to play the game

In the game we call business, numbers are the way we keep score.  Whether it is through financial statements, metrics or other benchmarks, numbers are a critical tool to evaluate business successes (and failures) and areas for improvement.  This wouldn’t be a problem if so many people weren’t so incredibly scared of numbers.

I have called b.s. on this “numbers fear” a number of times.  I constantly hear from entrepreneurs and business people that they are, “not good with numbers”.  Yet, virtually every woman I know can walk into a department store, find a shoe sale and immediately calculate the discount they will receive and how many pairs of shoes they can buy with their budget.  And almost every guy I know can explain the intricacies of their fantasy football scoring system.  Stereotypes and hyperbole aside, do you catch my drift here?

These same people shun numbers in their business and professional life.  These are the same entrepreneurs who struggle putting together financial projections for their business.  These are the same CEOs who can’t evaluate the return on investment of various projects they are evaluating.  They are the same salespeople who don’t want to evaluate any financial benchmark (other than perhaps how much commission they are receiving).  But if you can calculate a sales discount or keep score in your sports pool, then you have no reason to think you are not adept with numbers (unless you are one of those people who whips out a tip app to calculate a tip in a restaurant).

Why the fear of numbers?  Just like anything you do, if it is new to you, it is hard.  Once you take the time to learn it, it isn’t so hard.  Maybe the fear is generated because we spent so much time taking generally useless math classes like Calculus and Trigonometry.  Don’t worry, you don’t need that.  Just about 6th grade math (addition, subtraction, multiplication, division, fractions/percentages) and some good old logic will get you by; you certainly should be able to master that.

The bottom line is that everyone in business (and in fact, throughout your organization) needs to be a numbers person.  If you are going to be playing the game of business professionally, you have to know how to keep score.

Friday, August 14th, 2009
Posted in Business Strategy | 1 Comment »