Social as a Business Growth Engine


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In an interview from the summer 2011 edition of "sparks," from Catalyst Strategies, LiveWorld CEO Peter Friedman explains how "social media is transforming interactions and brands through dialogue and relationships."

More highlights from Peter's interview can also be found on the LiveWorld SocialVoice blog:

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Social as a Business Growth Engine

  1. 1. sparks ideas to ignite growth volume 4 – summer ‘11About sparksCatalyst Strategies seeks to be a catalyst for business growth, a spark that ignites innovation andmomentum. sparks is our Q&A series designed to fire-up ideas about growth. Each edition featuresinterviews with respected business leaders who share their insights and expertise on a current hot topicrelated to business growth.In this volume: social as a business growth engineThis edition explores social business strategy with three talented business leaders:Highlights“The core principles of social “High performing companies “Every company should bemedia – dialogue and are … 57% more likely to use looking at a broader socialrelationships – are the same social techniques.” business strategy.”for consumers and “Social business … removes “Social business softwarebusinesses.” boundaries between experts … will touch every“[Social] isn’t just for inside and outside of a employee and be a part ofChristmas. It’s for life. It’s company.” every customer andrelationship marketing [that] - Carter partner interaction inwants follow through.” every vertical.” - Friedman - TuckerAbout Catalyst StrategiesCatalyst Strategies identifies business growth opportunities and defines practical strategies and programs torealize those opportunities. Working with companies in the services and technology sectors, we specialize ingrowth strategy, product innovation, customer experience, and sales & marketing acceleration. Clients hireus the first time because of our expertise, best practices, and analytical rigor. They bring us back time andagain because we catalyze decisive action that delivers tangible market results.© Catalyst Strategies 2011 |1
  2. 2. Catalystvol. 4 – summer ’11 sparks ideas to ignite growth bio Peter founded LiveWorld in 1996 and has 27 years of experience creating and executing mantra for ‘11 community strategies for Fortune 500 Tech-Powered Human companies. He has launched and managed Touch multiple online services on a global scale, always focused on bringing people together Social is in successful collaboration. transformative favorite catalyst Previously, Peter was the vice president and For Peter Friedman, Putting people together – general manager of Apple Computer’s Chairman and CEO of they accomplish things Internet/Online Services business unit. He they couldn’t do by oversaw the creation, launch, and growth of LiveWorld, social media Apple’s online services including AppleLink, is transforming themselves eWorld, and Internet services such as Salon. interactions and brands His responsibilities also included managing through dialog and Business Systems Marketing and product line relationships. management in Apple’s Macintosh division.Q Social media is described as a strategy, a Q How are LiveWorld’s clients growing their channel, a discipline, a set of technologies, businesses via social media? a platform, etc. How do you define it? A Johnson & Johnson Diabetes Institute is aA Social is a media channel like TV or print, good example. They created a B2B communitybut really it’s more. It’s a societal change that for health care providers and educators withtransforms the way business, education and the goal of engaging them in transformingplay are done because it enables people to diabetic care. J&J knows it doesn’t have to selldialogue and form relationships. its products in the community. They just have to increase the number of influencers that are knowledgeable and engaged and that will bringQ Is social media different in a B2B context product sales along. So far, 10% of all U.S. than in a B2C context? diabetes educators have joined and J&J isA Whether it’s consumer or business, the core finding a two to three times increase inprinciples of dialogue and relationships are the engagement with these programs.same. In a consumer model people are oftenlooking for affinity with similar minded people American Express Open Forum is an example ofor to connect with a celebrity. a small business community that has grown to hundreds of thousands of unique visitors perIn B2B communities, however, the focus is on month over a multi-year period. They’ve seenthe content an influencer or other community increases in American Express cards issued andmember delivers. B2B participants are looking in transactions per card that they can correlatefor what industry expert John Hagel calls ROA – to the activity in that community.Return on the Attention they provide. Theywant relationships, content, and expertise thatwill help make them successful in theirbusinesses.© Catalyst Strategies 2011 |2
  3. 3. Catalystvol. 4 – summer ’11 sparks ideas to ignite growthOne other example is eBay. Their online The second success factor is how the brandcommunity of a million sellers started off with a participates. It’s your party so you need to befocus on support for how to sell on eBay. Over there and be the host or have someone helptime, it developed into a forum for members to you host. Howard Schultz at Starbucks (an earlyhelp each other with their businesses and even LiveWorld investor) likened our onlineconnect on personal topics. It’s a good example community moderators to his baristas – peopleof social being more than a channel. The who set a tone and create a culturalinteractions are valuable to the community and eBay. A Harvard Business Study from a few Finally, the effort needs to be integrated withyears ago showed that sellers who are active in the rest of your marketing and yourthe community sell six times as much as those organization. To really be successful, you needwho are not active. more and more parts of your company involved over time. It can’t stay in marketing. WhoeverQ What are some key components in a social champions the effort, whether from marketing media strategy? or another area, needs to champion it for allA First, you need goals, a strategy and an parts of the company because it’s going toimplementation program based on your affect customer support, sales, productbusiness goals, the brand and customer needs. development, etc. in ways that nothing else“We should be on Twitter,” is not a thought out does. The more people in the company thatsocial media strategy. Think through what participate, the closer you’ll be to youryou’re trying to do and come up with a customers.measurable goal, even if it is just to learnsomething. Q How do you know when your social media strategy is working?Next make a sustained strategic and resourcecommitment to support the social media effort. A One good indicator of success for your socialWe’ve seen a lot of people start and stop. That media effort is that you’re seeing thedoesn’t work. As one of our clients once said, emergence of brand ambassadors or, if you’re“This isn’t just for Christmas. It’s for life.” This having a crisis, brand defenders. These areis relationship marketing and relationship people who are enthusiastic about what you’remarketing wants follow through. You need to doing and becoming personalities in your effort.have people dedicated to the effort. A second indicator is that you’re getting a lot ofOnce those elements are in place, we questions from your community. Questionsrecommend focusing on three key success mean customers perceive your brand as onefactors of a social community implementation: they want to interact with. If you have a blogthe cultural model, how the brand will with no comments, you’re not fosteringparticipate, and how it’s integrated with the engagement and that’s not very social. Yourest of the organization and its marketing. want real dialogue amongst your customers and with your company.Think of the cultural model for your social effortas the kind of party you are throwing – a gallery A third way you know you’re succeeding is thatopening versus a rave, for example. The you’re learning new things – like what yourcultural model should reflect, extend and brand really is – because you’re listening andpositively affect your brand while appealing to talking to your customers. We’ve had clientsyour customers. say “That’s not our brand,” when they get feedback. But if that’s what your customers are saying, it is your brand. It may not be what you© Catalyst Strategies 2011 |3
  4. 4. Catalystvol. 4 – summer ’11 sparks ideas to ignite growthwant your brand to be, so you can either adapt of culture, community and brand. And, thereto what your customers already think your will be new applications and services that webrand is or do something fundamental to don’t understand or realize yet. Right nowchange it. everyone is thinking social is Facebook but there are other players starting to emerge that will be big.Q How do you ensure social feedback is shared inside a company? In two to five years, demographic segmentation will fall away. Demographics were a guessA Operationalizing and deploying the about what people want based on data welearnings from a social effort is very important could get. But now we can see how peopleand something the world is quite immature on think, behave and interact online so you can tellnow. A best practice example is eBay voices, a what they want instead of guessing. Segmentsprivate message board and advisory council in the future will be driven by opinion andmade up of selected community members. The is reviewed by the executive teamevery week and everyone in the company In five to ten years, corporations that are notknows about it. This allows the executive team running internally and externally on a socialto understand the customer better but it also network model will have trouble hiring andsets a powerful cultural model for the company retaining people. In the 1960s, if you didn’taround listening to and engaging customers. have a phone system who was going to work for you? Similarly, in 2020, you’ll need a socialQ How do you mitigate the risk of bad PR network model to attract people coming out of with a social media effort? school now who use social media as theirA People worry that their customers are going primary means of interacting, learning andto tell them what the company should be doing. thinking.I ask them, “Don’t you spend a lot of money Also in ten years, customer awareness willtrying to get that information?” Companies move across borders. Companies will no longerwant to know what their customers think but be able to rely on geography to artificiallythey need to break some bad habits. segment their products, behaviors andYou have to have an attitude of running practices. Being locally relevant will still betowards your customers, not away from them. important but customers in one country willAnyone who’s going to say something online know how you do business in every is going to say it whether you’re there or This will hasten another phenomenon of thenot. You might as well listen to it and position “best practice anywhere” becoming theyourself as a company that is seeking feedback “minimal expected practice everywhere” – likeand learning. It’s uncomfortable and difficult Amazon’s 1-Click. Today if you’re on any e-but companies that engage customers well will commerce website, you want to be able to buybeat their competitors. with one click because you’ve had that experience. This expectation started withQ What social trends do you think we’ll see in consumers but it will become the norm in B2B the next few years? as well.A In the next two years, social media will Finally, new experience models will emerge thatbecome more pervasive and the velocity will will be very visual and mobile and will furthercontinue to increase. You’ll see more businesses ignite social.orienting toward their customers and engagingthem. Marketing will become more a mixture© Catalyst Strategies 2011 |4
  5. 5. Catalystvol. 4 – summer ’11 sparks ideas to ignite growth bio Sandy Carter is Vice President of Social Business and Collaboration Solutions Sales and Evangelism at IBM where she sets the direction for IBM’s Social Business initiative, works with companies who are becoming Social Businesses, and is the evangelist Social business mantra for ‘11 for the concept and best practices around Social is a people play Social businesses have Business. She is the best-selling author of two For Sandy Carter real advantages books, an avid social media evangelist, and is one VP, Social Business & of the top Bloggers and Twitter-ers in IBM. Prior to her current position, Ms. Carter was VP, Software Collaboration Solutions Sales & favorite catalyst Business Partners and Midmarket where she was responsible for IBM’s worldwide software Evangelism at IBM, Sharing social business ecosystem initiatives. social business is expertise creating competitive Ms. Carter holds a B.S. degree in math and advantage by computer science from Duke University an MBA leveraging insights and from Harvard, and is fluent in eight programming speeding information languages. She received a patent for developing a within and across methodology and tool to help customers create a technology deployment path in automation of their companies. IT processes.Q How do you define social media? We’re already seeing from our 2010 GlobalA Actually, we don’t think in terms of social Chief Human Resource Officer Study that highmedia. We think of the broader concept of performing companies – those with better stock“social business”. Social business elevates prices, profits and business results – are 57%social media to be used in a work setting, more likely to use social techniques in theirspeeding business along with real-time insight companies.and making social interactions truly impactful toa business. Q What B2B uses of social are you seeing now?We define social business as a nimble, A In a B2B environment, you want to build atransparent, and engaged two-way dialog that trusted relationship, drive brand advocacy, andremoves boundaries between experts inside create dialog across communities and channels.and outside of a company. We strongly believe B2B is more about developing your best friendsthat social businesses will be more agile, more whereas B2C is more about developing a partyresponsive and more successful than non-social with a big group of friends. B2B clientbusinesses. They’ll activate networks of people relationships tend to be deeper and take a littleto improve their processes, marketing, longer. You can see that difference in how twocustomer service and more to create a higher companies used social in product innovation.return on investment.© Catalyst Strategies 2011 |5
  6. 6. Catalystvol. 4 – summer ’11 sparks ideas to ignite growthConsumer-focused Coach developed a forum Now, we’re using social to showcase how thefor crowdsourcing one of its bags. They had technology can help in healthcare, supplysomething like 6 million engagements – a great chains, and customer service and support byresponse from a broad audience. being able to analyze data and find problemsOn the other hand, we recently worked with a before they become problems. We’ve enabledcompany focused on tapping a small private our sales teams with a content activationcommunity in biotechnology. They also wanted package with all the Watson facts and figures.the community to provide them insight on their We have really filled up our pipe and focused onnext generation product through social. But lead generation using a Watson starter kit. Thethis company accessed a smaller set of approach we took with Watson trulyinfluencers in a private community for exemplifies a change in our marketing and salesbrainstorming and sharing insights on processes leveraging social.breakthrough ideas. Internally, we use our community platform –But being a social business isn’t just about B2B IBM Connections – to connect a leadershipor B2C. There’s such power in using social network. We’re a very complex matrixmedia even inside a company. Collaborating organization that is constantly building the nextinside is a powerful way to share expertise, generation of leaders. We share best practices,develop products, and make business decisions education tips, and opportunities to grow.faster and cheaper. Slumberland Furniture, a Social provides us a way to strengthen informalsmall Midwestern furniture company, uses networks and create new media internally to train its franchisees. We have also documented real savings from ourThey do video training, share best practices real internal collaboration efforts. In 2010, we sawtime, and have debates across their 120 a 50% productivity improvement in some areasfranchise stores. They’re able to leverage ideas and $4.5 million in savings using insideand best practices from experts within their collaboration. We saved $700,000.00 perown business environment. month in travel using video collaboration, and had significant reduction in e-mail server costs.Q How is social driving IBM’s growth?A IBM leverages B2B marketing by embedding Q What’s important in a social businesssocial in everything we do. A great example is strategy?how we used social with Watson. Watson is a A We have a framework for social businessDeepQA machine that can understand natural that we call our social business agenda (seelanguage and deliver a single, precise answer to graphic below). It starts with a companya question. Most people know Watson as a aligning its goals and culture. If you don’t dorecent Jeopardy contestant but the technology that, you may get a lot of hits, views and fans,represents a huge leap forward in data analytics but that’s not what this is about. Eventually, ittechnology that will have a big impact on is about impacting your business, so if you can’tbusiness and industry. show business results and align business goalsWe used social to connect people to Watson to it, it’s just going be something on the side.and spark their imaginations about what the The second thing we do is we teach companiestechnology could do. We sponsored Watson how to gain friends and develop social trust. Asparties where customers could watch the a B2B company, you want to find yourJeopardy event, talk to our scientists live “tippers”, those important influencers. Ourabout it and tweet about it. Watson has a studies and those of the analysts show thatFacebook page. He’s got a Twitter ID and a somewhere between 5% and 16% of all theYouTube channel.© Catalyst Strategies 2011 |6
  7. 7. Catalystvol. 4 – summer ’11 sparks ideas to ignite growthauthors and engagers in the blogosphere Q What social trends do you think we’ll see ininfluence everyone else. So, if you are trying to the next few years?make an impact, you don’t need to go after a A I see the whole area of crowdsourcing andmillion people, just the 5% of that million expert sourcing becoming more popular. I seepeople that will influence all the others. mobile growing exponentially. Social gamingOnce you know your goals and who your friends will be on the forefront of how we learn and theare or need to be, we define the engagement way we interact with brands. And locationexperiences that are important to those people. based services are at the cusp of making a bigThen, we look at which processes will deliver breakthrough.the best ROI for you, and which of those you And, of course, this whole area of sociallywant to socially enable. Is it human resources, enabling your business processes. Back in themarketing, customer service? What’s really Internet and early e-commerce days, I’d talk togoing drive ROI for you? companies who would laugh at me and say, “NoThe fifth step is to help you develop a one’s ever going to use the Internet forreputation and risk management plan. This is business. It’s just not going to happen.” Now,the number one concern of most C-level of course, you can’t have a business without theexecutives I talk to. They tell me, “Social is too Internet.risky. I can’t do it.” But not doing anything is I think the same thing is happening in terms ofjust as risky because people are already talking social business. I see a lot of companies saying,about you. It’s better to be the one setting the “That’s for kids, something my daughter does.tone and trying to engage in a positive way than It’s not going impact my business.” But this willsitting back and allowing the conversation to be be a bigger trend than the Internet was and itrandom. will be more important to get in early. E-The last thing is we focus on is analytics. This is commerce was more of a technology play buta combination of software, services, and plain social business is a people play. Social isold planning. IBM is also a great social business, relationship based so getting involved early willand we take the lessons we’ve learned and help build relationships and create a timeshare those publicly. advantage that will make a difference. We know social businesses are outpacing their competition and accelerating growth.© Catalyst Strategies 2011 |7
  8. 8. Catalystvol. 4 – summer ’11 sparks ideas to ignite growth bio mantra for Matt Tucker, co-founder and CTO, is ‘2011 responsible for the long-term technical and strategic direction of Jives products. Make work great Along with Bill Lynch, Matt founded Jive again Software in 2001 and has helped build Social business is the company from just two people to a revolution favorite catalyst where it is today. Matt is an active For Matt Tucker Making work fun member in open standards communities Co-Founder and CTO of again for the tired, including having served on the board of Jive Software, social the poor, the the XMPP Standards Foundation. business is making work huddled masses Prior to Jive, Matt worked as a software better by improving the yearning to breathe engineer at an internet startup in San software with which we free (the cube Francisco called 4charity. communicate and dwellers) collaborate. Matt holds a BS in Computer Science from the University of Iowa.Q How do you define social media? Social business represents a revolution in how employees inside companies can communicateA Social media is the set of technologies in our and collaborate, and also how companiesconsumer lives that have transformed the way communicate with their customers and partners.we communicate and engage with our friendsand family via sites like Facebook and Twitter.For businesses, there is social business software Q How are companies using social business software to grow? What problems are theyand we tend to use the term social business, tackling?rather than social media. A On average, sales reps spend 20% of their time searching for information. That’s moneyQ What’s driving the shift to social business? left on the table. Social business softwareA Over the past decade, there has been a connects sales reps with the experts, content,profound lack of innovation in the tools we use and information they need to collaborate sofor communication and collaboration in our work they never sell alone. This makes their saleslives. Most of us are still stuck in email and teams more efficient. They share best practicesMicrosoft Office or with enterprise software that and get the latest field or competitive data asis really hard to use and provides a terrible user quickly as possible which significantly impactsexperience. There’s a reason that shows like revenue generation.“The Office” or cartoons like “Dilbert” exist. It’sbecause work sucks. Most of us understand that Sometimes companies are simply looking toand implicitly understand that we need better provide tools that will get the next generation oftools and new ways to work together. employees really engaged. Recent college graduates have grown up using Facebook, Twitter© Catalyst Strategies 2011 |8
  9. 9. Catalystvol. 4 – summer ’11 sparks ideas to ignite growthand that whole set of technologies which make it to facilitate collaboration easier. They shavedeasy to interact with their entire social network. days off the bid and proposal process which hasIf they get into a company with ten-year-old lowered customer acquisition costs and driventechnology, they are just not satisfied. For them, broad process software is about enabling tools and user Second, social business software greatlyexperiences that employees now expect. improves interaction with customers andInnovation is another major challenge companies partners. In our survey, companies saw:can and are addressing with social business  42 percent more communication withsoftware. Rather than having an in-person once customersa year customer advisory board meeting, they’re  31 percent increase in customer retentiongathering real time customer feedback and ideas  28 percent decrease in support call volumeby sharing the latest road map and product plans.  34 percent more feedback and ideas fromThis makes the iterative innovation cycle much, customersmuch faster.  27 percent increase in new customer salesSo, companies usually choose a business driver SAP is an example of a customer that uses Jive toand set a goal of driving very specific results. power its 1-million strong collaboration networkAfter they see the results, social becomes a for software developers, business processubiquitous communication and collaboration experts, customers, and partners. Their sociallayer and they keep finding more and more business community achieved a 5% reduction inchallenges to take on with the social approach. product release cycles and a 5% increase in partner sales.Q What kinds of results are Jive customers Similarly, Intel was able to increase engagement seeing with social? and reduce costs by shifting half of its partnerA We recently surveyed our whole customer events to the web. Intel’s business is primarilybase to try to quantify the business impact of channel driven so enabling a large-scale onlinesocial business adoption. The feedback clearly partner community has significantly reduced theindicates a material impact on business huge costs ($500k+ per event) associated withperformance. enabling 200,000+ partners around the globe.First, social business software can makeemployee communication profoundly more Q Are there companies that should not pursueefficient, enabling interaction with a much wider a social business strategy?variety of employees much faster. Surveyedcustomers showed impressive results, including: A If your customers or your partners are on Facebook, Twitter and other consumer social  30 percent increase in employee satisfaction sites, then you should be too. You should have a  27 percent less email volume social media strategy. But, every company should  32 percent reduction in time to find answers be looking at a broader social business strategy.  37 percent increase in project collaboration and productivity Social business software is the most important new enterprise software category in at least aCSC is an example of a customer that has seen decade because it will touch every employee andgreat results. They have 92,000 employees in be a part of every customer and partnerover 90 countries, so barriers like time, distance interaction in every vertical. There is no pocketand siloed organizations were complicating and of the enterprise that is not adopting it and anylengthening their proposal process. Their Jive- company can benefit from implementing socialpowered community attracted 25,000 users in its business software.first 20 weeks and made locating internal experts© Catalyst Strategies 2011 |9
  10. 10. Catalystvol. 4 – summer ’11 sparks ideas to ignite growthHowever, some companies are more ready than Q What trends do you think we’ll see in B2Bothers to adopt social software, for a couple of social in the next few years?reasons. One is general readiness which is basedon things like the company culture and age of the A The first trend is that Facebook is at over six hundred million users and racing toward a force. These impact how quickly people are This has already transformed our consumer livesable to change the way they work together. The and we are at the early stage of the impact thatsecond is the size of the problem that the social will have on business. I expect there iscompany is trying to solve. The larger the going to be massive growth in the next two toproblem, the more worthwhile it is to address four years in social business and 2011 will be anwith social business. inflection point for mainstream adoption in the enterprise.Q What’s important in a social business strategy? The second trend is that social is becoming a platform inside companies. There have beenA First, choose the right problems to tackle first massive investments in ERP, CRM, and differentso that it is successful and embraced inside your content management systems in recent Select a couple of really hard problems Social business software is becoming the layerthat social can have a massive impact on. That that connects all of those different systems withwill drive change and how people are willing to people. It’s a much easier and faster way tointeract with one another. Innovation is an interact with all that content. So in theexample of a big problem that is a critical piece of enterprise world, social as a platform or layersome companies’ entire strategy. Making across the enterprise is one of the biggest trendsinnovating faster and better by speeding iteration we’ll see over the next couple of years.cycles leads directly to top line revenue and togrowth. A third trend is that social business will come to where you are already working. Social representsSecond, keep in mind that implementing a social a profoundly new way to get work done andeffort is not just a matter of choosing a people don’t change overnight so there has to betechnology and deploying it. There are a set of a way to transition into this new way of gettingcultural and process changes to factor in as well. work done. So, bringing social tools to MicrosoftSocial truly is a new way of getting work done so Office or your email where you already work is ait means adopting new ways of working together really important employees and new ways of interacting withcustomers and partners. All of these changes will mean that work will be good again. It will be as easy and fun to interact with people in your work life as it is in yourQ Does social require people in different roles or personal life. Most of us spend the majority of just in the same roles doing different things? our lives at work so if we can make that trulyA There are some new roles that are created better, that’s a mission we get pretty fired upinside of companies for social. There is a about at manager that helps run and nurturethe implementations of social business software.Customer support folks will need policies andguidelines on how to engage with employees,customers and prospects on the company’s socialplatform as well as on Facebook and Twitter. Youshouldn’t need a lot of training to get started, butit is a different way of getting business done soyou need to go about it the right way.© Catalyst Strategies 2011 | 10