Posts Tagged ‘Business’
One Thing Social Media Can't Change
I woke up this morning with the question running through my brain, I wonder what he’ll say? He is the Doctor, a Specialist or a Sports Doctor. I broke my left shoulder back on July 5th, my physician was concerned that the break wasn’t healing so he shipped me off to see this guru of bones for athletes.
Anyway, I had to drive to the next community to see him as wasn’t local to where I lived. The drive was beautiful, the sky was clear and I was taking my time enjoying the journey I was on. I found his office relatively easy and pulled into the parking lot wondering if I had to pay to park there, I didn’t…SWEET! I mean how often do you find free parking?
I went in and filled out the paperwork, then I waited, I waited and waited some more before finally getting into wait a little longer. The door opens, at last I’m thinking, and then he asks me why I was there! I said pardon, don’t you have my file on hand? Nope! I told him what happened and then he said, I want you to go a block and half and get some X-Rays done. It was like he wasn’t even listening! Feeling a little frustrated and annoyed at the same time I agreed to go. He gave me the paper and the address, he then gave me directions and off I went. Guess what? The directions were bogus, he sent me the wrong way and I was gone for almost 40 minutes before I came back with X-Rays in hand. Enough about that.
The good news is, the shoulder is healing but very slowly, and the break was actually a shatter but everything was pulling together just fine and he said I would be as good as new in about 6 more weeks of waiting. I said, I want to play sports again…when can I play soccer again? He felt the shoulder couldn’t take a hit or a fall just yet and preferred that I waited another 6 weeks. I asked why 6 weeks, I want you to come back and see me then and we can discuss it then. I thanked him even though I felt cheated, off home I went. Doctor’s are you listening?
While driving home I got to thinking, how would Social Media change the experience I just went through. Again, taking my time going home, I hammered on this thought and I just couldn’t find an answer. Maybe you have some thoughts on the topic, if so, leave your thoughts in the comments. I’m just not convinced that Social Media would have made the Doctor listen better, actually pay attention to what I was saying and or how I was feeling. You have to keep in mind, in Canada our medical system is unique at best and the Doctors are pretty safe from public pressure when it comes to the customer service expectation. How could Doctors learn from these communities, could these communities make these kinds of changes in Doctors? As you can see my head was racing with questions and very few conclusions.
I would love to hear from communities on this particular topic, and hear some great ideas on how we or I could proceed so we could make this experience more positive. Or is this One Thing Social Media Can’t Change?
How Do I Implement Social Media?
There are two questions that come up in almost every conversation I have on the topic of Social Media here in my local community, not online but offline. It never fails, these are the most asked questions I face.
1.) How Do I make or Implement Social Media in my Business?
2.) How do I make money and get the appropriate ROI using Social Media?
That’s more than two questions and alot to unpack, but that’s how they end up coming to me.
Keep in mind, I live in Canada and we typically are not early adopters on most things, we are at least 6 – 18 months behind our neighboring domestic USA. But that’s another story. We tend to be behind on what these new technology tools and movements are, what they mean and how to integrate them into our businesses and lives. So when the questions come from the executives the department leaders don’t have the right answer and worse yet they try to figure it out on their own, using old metrics and methods to generate some kind of understanding.
These two questions are hard to answer over a coffee or even in a board room, bringing in someone who has an understanding and is actually involved or an early adopter having success with Social Media to walk through some very important questions. Success doesn’t have to mean they are making millions, it means they have done many things right putting them in a position to monetize their passion or existing business.
There is many a debate on where Social Media fits in an organization, the Marketing / PR Department, HR, IT Department and so on. I would suggest to you it fits into all three. The Marketing / PR Department will most likely be the message creator for consistency purposes and also would hand off the Social Media chores to the Online Community Communications person. The HR Department would be involved for NDA purposes and orientation of new and existing staff, this would include the Internet Policy that the I.T. Department most likely helped develop. I.T. supports and ensures up time for all aspects of Information Technology needs.
I am assuming here that Information Technology was implemented properly in the organization, which means, I.T. is in line with business needs and processes for the purpose of obtaining the goals of the organizations business plan. As you can see there is much that needs to be discussed before you venture out into this environment without building a team to discuss how you will proceed. The key is to bring someone in your area that is in the know and can help your team by ensuring the right questions are being asked and that they are getting answered. This person is much like a Project Manager with a difference, he/she is a lighthouse, a beacon and a sounding board. In the end it is up to the organization to decide what and how they want to proceed.
The point of this article is not lay out what you have to do step by step, but to prompt you to bring in someone who is knowledgeable, who is respected and recognized as someone in Social Media circles that can truly assist your organization. Someone with a strong background in technology and online marketing. This person can help you build the appropriate team, that will go a long way to ensuring success in developing your Social Media Strategy.
If you are in need of help, feel free to contact me at: owen@owengreaves.com
This Is Where Customers Are Going!
Remember when you were a kid, you ran out the door and then heard your Mother calling, where are you going? That’s what many local businesses are doing with their customers today. If you are the one calling, it’s most likely too late because your customers are off looking for what you didn’t have to keep them around the supper table. In this picture you are behind them calling out not in front of them engaging and sharing, drawing them in building a relationship, a relationship that builds loyalty and increased return on Investments. For many this sounds like way too much work and don’t have time for this new way of doing business. This new way is happening and you will have no choice, this new way is called Social Media, resistance is futile, you will be assimulated.
Businesses today will have to figure out how to integrate multiple Social Media Networks into there web presence, their marketing strategy and above all incorporate it into the business plan as a another way of generating a ROI. Keep in mind that Social Media is not the Messiah, it is one of many tools to use to build a stronger more viable business. Reaching out to millions of consumers who thrive online around the clock requires an investment, a different type of thinking and some courage too. Many business are still wedded to a traditional marketing approach, based on TV, radio and print ads, Social Media seems harder to understand.
The biggest change taking place, or the shift as I see it, there is no gap between the CEO and customer. They now talk directly to each other, there’s no need for the middleman. Support costs are dropping, some businesses are using these Social Mediums to reach customers and save large dollars in doing so. Take Comcast as an example, for more than a year Comcast has pioneered the use of Twitter to speak directly to it’s customers. It’s Twitter page @comcastcares has 28,000+ followers. Software maker Sage North America, to cite another example, routinely receives instant feedback from hundreds of people within an hour on specific products and services. Another example is in sales, those who visit MyFICO’s community website are spending 41% more than other customers!
Businesses don’t think in terms of inbound marketing, they are very good at outbound marketing. Outbound Marketing is only half the equation in today’s new market place. A great resource to learn about Inbound Marketing is Chris Brogan & Justin Levy’s Inbound Marketing Summit.
There are multiple shifts taking place but increasingly, consumers don’t search for products and services anymore. Rather, services come to their attention via social media networks like Twitter. So if you are wondering where your customers are going, look to the Social Networks a plenty, don’t believe me, here is another example of a National pizza chain, Papa John’s added 148,000 fans on Nov. 17, 2008 through a guerrilla marketing campaign on Facebook. It offered a free medium pizza to anyone who signed up to be its fan on Facebook. The promotion gained it thousands of customers and drove its Web traffic up 253%. It now has more than 300,000 fans and hopes to top 1 million by the end of this year.
I could list many, many more examples of how businesses are winning and using Social Media to enhance existing marketing efforts. When was the last time traditional marketing campaigns garnered such ROI’s as some of these businesses are experiencing in today’s new social environments? Your customers are in these social networks and you had better be there to.
Now you know where your customers are going, the question is….are you going ahead of them?
Social Media In Your Community
How many times have you gone to a Conference hoping to see or hear a particular thing only to be disappointed? I’m not suggesting these Conference’s were bad and didn’t provide value, but what was it you went there for but walked away feeling like you didn’t get what you invested in? I think more conferences should be taking place to involve as many people as possible, in as many area’s as possible too! I am working on putting together a Conference in my area but I’m hoping you will tell me, what you would like to see & hear if you attended. Keep in mind we can’t please everyone and it’s possible the conference could go on for weeks with everyone’s wishes, so the list will be scrutinized to ensure we cover the HOT topics.
I am looking for your input on the topic of Social Media In Your Community, please send me an e-mail or leave your idea’s and wish list in the comments of what you would really love to see & hear at a Social Media Conference in your Community. After all, you did want to come to Canada didn’t you?
Return On Investment Selling
In July I wrote an article for you called, ” Your Break Even Point “. The premise was to help you calculate that number and for you to have a better understanding as to why you might be loosing money everyday and not know why. Your business depends on you knowing! I mean it’s not something real obvious because it’s kind of hidden, if you don’t have the right indicators in front of you everyday you won’t see it. Hopefully you were able to figure out what those indicators might be and you are monitoring them daily. I’ll assume you’ve done that because next I want to walk you through an advertising slash marketing concept with you.
Years ago when I was selling Radio Advertising we used a thing called Return On Investment Selling, it was an education and very interesting. The program was to show how you would be able to pay for a new ad campaign and make money too! Yep, pay for the advertising and make your desired ROI, sounds to good to be true right? Well….yes & no. Let me lay out a scenario and we’ll walk through this together, I think you will find it most interesting.
I’ll change the names and places to protect the innocent, just kidding. I’m going to take you through a simple Growth Objectives equation and an Investment Analysis so you can understand the number at the end when I’m finished. Oh, and the Forward Slash ( / ) means Divide By in my equations if I don’t use the ÷ Symbol, I thought I should clear that up right upfront 🙂
Let’s pick a market, let’s say you are in the furniture business and the Market Potential was say 5 Million Dollars. That means 5 Million Dollars in business is being done in the Market your business operates in. Lets keep it simple and say you have a present Gross Sales figure of $500,000. That means you have a 10% market share. But you want to realize a growth objective of $100,000 out of your market, what kind of additional penetration do you need to achieve your goal? You would need 2.2% more, here’s how I figured it out:
100,000 ÷ 5,000,000 – 500,000 = 100,000 ÷ 4,500,000 = .022 x 100 = 2.2 (actually 2.222222)
If you’re struggling with the equation, get your calculator out and punch it up. It works.
So now we know the Penetration needed to reach a $100,000 Growth Objective in your Furniture market. Next I’ll break down how many customers or prospects it will take per day to achieve your goal of One Hundred Thousand Dollars.
To make this equation work we will need to know a few things first before it will work. We need to know what the average customer worth is in your store, how much each customer spends in your store. We also need to know what your closing ratio is, a great way to see how well your sales staff produces I might add.
For the purposes of this exercise I’ll use an average customer worth of $1,000 and a closing ratio of 40%. That will keep the numbers easy to work with. The equation is somewhat simple, I’ll try to lay it out that way.
$100,000 / $1,000 = 100
Growth Objective / Avg. Customer Worth = Additional Customers Needed
100 / 40% = 250
Additional Cust. Needed / Closing Ratio = Additional Prospects Needed
250 / 312 = .08
Additional Prospects Needed / # of Selling Days (Days Open) = # of Prospects per day
Is the number of prospects needed realistic? Yes No
This is only part of the equation, this merely tells you how many prospects per day you would need above and beyond you current customer base over the course of one year or 312 business days.
OK, we now know what the daily number is, but it still doesn’t tell us what the additional Gross Profit is going to be. Well, if your Growth Objective is $100,000 we now need to multiply it by the Average Gross Margin. Let’s use a simple number and one that might be realistic, let’s use 25%. Using our numbers from above this is how the equations looks:
$100,000 x 25% = $25,000
Growth Objective x Avg. Gross Margin = Additional Gross Profit
So in order to achieve the additional gross profit of $25,000 you were going to need to make $100,000 more (above and beyond) in business over the next year. We figured out how many new prospects / customers it would take to hit that number (0.8 per day) and we felt it was realistic. Now, what kind of ROI did you want to achieve, I’ll assume you wanted 100%! You want to make $100,000 in additional business which would give you an additional gross profit of $25,000 and you want a return of 100%, right?
The question begs to be asked…..HOW?
Well, obviously you would have to do something different than you have been doing to achieve that fine 10% market share. You want to grab 2.2% more of that market right? That means you have to do something above and beyond what you are already doing in your advertising efforts. You WILL have to put more advertising dollars into achieving your goal of 12.2% Market Penetration, your $100,000 Growth Objective and put the additional $25,000 Gross profit in your pocket.
The ROI I’m talking about is what you have to spend in additional advertising dollars to make it happen. You are probably asking yourself how you figure out how much to invest in advertising dollars. the Investment Analysis is quite simple. Here’s the equation:
Desired ROI is 100%
$25,000 / 1 + 1 = $12,500
Gross Profit / Desired ROI as a Decimal (1 + 1) = Maximum Additional Advertising Investment
25,000 ÷ 2
So, you want to get 100% of your advertising investment back, you will spend $12,500 in new advertising dollars plus make $12,500.
You will Invest $12,500 in additional advertising to realize the Growth Objective of $100,000 in additional revenues that will produce and directly impact your bottom line by an additional $25,000. Cool & achievable based on the above numbers.
The above is an over simplified view, achieving a market share growth of 2.2% on top of the already acquired 10% market share is not easy, the numbers don’t tell the whole story. Now you still have to go through the process of doing the creative, copy, layout and cross promotional stuff but now you an idea in advance the hill or mountain you may have to climb.
I hope this helps you when you get the notion to grab more market share, do your homework and crunch the numbers. You will have a much better picture and it will allow you to enjoy the process of achieving it. Keep this in mind the next time your advertising sales rep wants to up sell you. If you want more real gross profit you will invest to get it, it’s a fact of life. Just make sure it fits your goals, think with the end in mind and work hard to reach it.
Until next Time.