Most of us are regularly bombarded by technological innovations that fight for our attention.
More often than not, these ‘latest and greatest’ fads fail to make much of an impression on our lives (remember Second Life?).
What is true for our personal lives is also true for our professional lives, only the stakes are higher. Why did we listen to IT experts about Y2K, enterprise systems, business intelligence, web services, and all those other white elephants that continue to suck our budgets dry?
Today, the latest buzz to light up the IT universe is social media. But is this just more of the same? The answer, of course, is... that depends.
By now, most people know about social media. Yet, few managers have figured out how to use it in their organizations.
Most firms are dabbling around the margins or simply waiting on the sidelines to see whether it has staying power.
Indeed, fewer than half of the 50 largest firms in Europe have links to any social media applications from their home pages.
The situation is not much better in the US, where a 2010 study found that 36 percent of Fortune 500 companies have no social media presence whatsoever[i].
So, how involved should your organization be in social media, if at all?
In my opinion, organizational success with social media comes down to how SICK your strategy is.
SICK is short for:
- Segmentation
- Implementation
- Critical mass
- Knowledge integration
Segmentation
Social media has many variations, and you should decide what you want to do and where you want to play.
Indeed, segmentation needs to occur along three dimensions: segmentation by objective, segmentation by stakeholder, and segmentation by application.
Let’s look first at objectives. Organizations must identify what they want to achieve with social media.
Common options include branding, informing, innovating, selling, and recruiting. If the answer is not obvious, or cannot be clearly articulated, then the best approach is ‘don’t do it!’
It is important to clearly define objectives in advance, since the form of your social media strategy will vary depending on the choices you make.
For example, recruiting tends to work well on YouTube but not necessarily with Twitter, branding works well on Facebook, while informing is best done with RSS feeds.
If you are not clear on your objectives, then you run the risk of using resources on approaches that are not productive.
The second segmentation category is stakeholder. Different segments respond to different approaches.
The fastest growing Facebook segment, for instance, is women over age 55. Very few of them, however, are on Twitter.
The approach taken to entice an impulse snack food purchaser will be very different from the one used to communicate the benefits of baby nutrition to a new mother.
In short, you need to be clear on what segments you are targeting, and then adjust your social media strategy accordingly.
The third segmentation category is application. If you have properly segmented your approach by objective and customer, then it will often be quite clear which social media application to use.
B2B firms may have less need for Facebook than, say, Coca Cola, but they might get a lot of value from an innovation tournament, or an RSS feed.
You have to understand the pros and cons of each application and play to its strengths.
Implementation
Many firms today have a scattershot social media strategy. They may have a couple of brand-focused Facebook sites run by different divisions, and PR may have a Twitter account, but there is little consistency or coordination behind the scenes. Dangers lurk if a structured approach is not taken.
Many firms have paid a steep price for undisciplined social media practices — some recent examples include United Airlines (United breaks Guitars!), Kenneth Cole (Egyptian insensitivity), and Nestle (Kit Kats and Orang-utans).
Your social media strategy should be well coordinated. This means implementing rules and codes of conduct, training employees on social media norms, articulating a consistent corporate message, measuring performance, implementing strong governance, and avoiding unnecessary proliferation (including shutting down sites where necessary). This part of the strategy is a necessary evil.
Critical Mass
If you build it, will they come? Probably not, unless you make it worth their while. Of course, social media is only effective if there is a critical mass of people using it.
In this respect, it’s not really social media at all, but collective media. There is nothing sadder than a corporate Facebook page with 86 absentee fans and stale content.
Building critical mass is hard work. It requires lots of content that is updated regularly, and a high level of engagement — often including senior management involvement.
Practically speaking, it requires well trained, full time staff to monitor and respond to consumer questions, comments and concerns.
If you are lucky, you will have regular interaction with 10 percent of your community, and for a site to have the required amount of communication ‘liquidity’, in my experience it needs at least 100 participating users.
That means that your site better have 1,000 or more members (Facebook fans, Twitter followers, YouTube views, etc).
Building such a degree of engagement is tough, but organizations are getting creative.
The airline JetBlue hit a home run with its ‘All you can jet’ Facebook promotion. Some progressive firms are even providing discounts to prolific bloggers and tweeters in the hopes that they will spread a good word or two about their experiences with the company.
Knowledge integration
The final piece of the social media puzzle is knowledge integration. Social media provides a wealth of information about products, customer experiences, competitors, and areas for improvement.
It is the proverbial canary in a coal mine for many organizations.
Unfortunately, many firms are still very poor at integrating and acting on the information they receive through social media channels.
They often lack a mechanism to filter and capture insights, and feed these into the decision making apparatus. Some companies take this very seriously.
For example, when Starbucks learned through its social media channels that customers disliked having to throw away their paper cups, the company implemented a campaign encouraging the use of reusable containers, and offered a free cup of coffee in return.
Given its massive user base and rapid growth, social media is likely here to stay.
However, organizations who want to be involved need to approach it with care. There can be benefits, but also risks.
When it comes to social media, it’s good to be SICK!
Michael Wade is a Professor of innovation and strategic information management at IMD (www.imd.ch). He teaches in IMD’s program Strategic Marketing in Action.
