There is a story about the Tower of Babel in which a great tower was built in the city of Babylon thousands of years ago. 

Babylon was a cosmopolitan city, many of the citizens were very impressed with themselves.  They were very important.  They did important things.  What they did, what they said eclipsed the value of everything and everybody else. 

Across this city/state there were a myriad of languages spoken, roll all of this together and it was a very confusing and problematic place to be at the time. 

All of this self impression along with the conflicting languages caused things to go badly.

Hmmm.  Does any of this strike a cord?  Did you notice in my blog posting I deliberately mis-spelled Babel?  It’s typed as ‘Babble’.  Dictionary.com defines Babble as “to talk idly, irrationally, excessively, or foolishly; chatter or prattle.” 

Sound vaguely familiar yet?  No?  Ok, I’ll keep going.

How about this.  Earned Media.  Getting warmer?  Tagging? Uh-huh.  Uniques?  Yep.  Web 2.0?  Sure.  Tweets.  Of course.  What about this one:  Link Juice.  Ummmm.

Marketers have their own language that to others sounds like well, babble.  Try an experiment.  Set a meeting request to your company’s CFO and put in the subject line ‘Briefing on Earned Media, Tagging and Link Juice. 

See if he or she accepts or instead, declines and emails you back asking what the @#!&# it is you want to waste their time with. 

Respond saying you made a mistake.  You want to share a few cost-deflection and lost revenue earn-back strategies you’d come across.  You’ll probably get a different result.  You see, marketers speak ‘promotion’, while CFO’s speak P&L (profit and loss).  Accountants speak GAAP (Generally Accepted Accounting Principals), VP’s of Manufacturing speak Lean or Cellular (as in Lean or Cellular Manufacturing).  A few mutants still speak Six Sigma.  Together at some level in the organization, the management committee made up of the C-level and EVP level peeps who make decisions like merge, divest, close the Scranton Office, etc. speak Revenue Center and Cost Center. 

Revenue and Cost center is an interesting language, it has two intertwined dialects.  The first, ‘Cost’ is brutal and gutteral, sort of like Gaelic.  ‘Revenue’, on the other hand is more melodious and sweet; a joy to listen to. 

Those who speak Revenue and Cost see things as, well…generating either revenue or incurring cost.  Revenue and Cost speaks only of black and whites. You as a marketer are part of that world.  Yes!  It’s true.  Unfortunately, you reside more often than not in the Cost side; not always a comfortable place.  Sales sits in the Revenue side, which can be much more fun.  The reason is metrics.  Sales can show direct contribution to revenue.  TV ads and guerilla marketing tactics usually don’t.  Sales are easy to defend.  Without hard metrics, marketing is well, squishy and couple squishy metrics with terms and definitions that others don’t get and you are on thin ice in terms of value and influence.

While the term Earned Media sounds cool and is important to help describe all of which help define the granular inner-workings of some marketing tactic, its impact or outcome, most people outside of the marketing department don’t care or even understand.  Your marketing power points cause some in the organization to spontaneously bleed from the ears (note:  this will usually cause them to exclude you from critical meetings like budget planning).

Not being understood is bad.  If they don’t understand, you’re value to the organization is diminished (imagine getting a new boss who doesn’t understand what you do.  How long will you last?). 

If those who speak Revenue and Cost can’t understand your department or your program’s value, you don’t get the opportunity to actively shape how the marketing promise is delivered. 

Those who control the business enterprise (the making of the widget, the pricing of the widget and the distribution of said widget make their decisions regarding the widget without you.  Your input falls on deaf ears.  Yikes!  Hell on earth!

So what to do?  Don’t live in the chaos of Babylon waiting for the impending doom.  Be proactive!  Learn a second language and communicate.  When we as marketers are as versatile in the other operational languages our peers speak as we are in our own language, amazing things will happen.  One:  You will start measuring your activity and results in ways that are important to others (those who speak Revenue and Cost).  Two:  Your influence and work will amplify in terms of results.  Marketing initiatives will begin to be baked into operational activities and visa versa.

What were previously siloed activities will begin to work more harmoniously (i.e. CRM and Social Marketing) and you as a marketer will cease to be viewed by the other non-marketers in the company (whom by the way out number you) as not just the creator of hokey messaging and some un-measurable brand promise but instead the gate keeper of customer loyalty, net profit generation, low-cost win-backs and heck, maybe even a cost deflection source!

Well, we are at the end of this blog posting and the four non-marketers who were reading this have already gotten their fill and left, so I will reveal the big important ah-ha.  One that trumps even decoding Revenue and Cost.

You as marketers will hold the power of the customer in your hands and strong customer demand trumps everything.  You will understand them better than anyone, you will know how to reach and keep them happy.  You will know how to convert more customers using targeted, efficient techniques and tools.  You will balance the promise of your marketing efforts with the delivery of those promises by the operation.  You will be the master of customer engagement efficiency!  You will drive profit, which you can measure and defend…and that is a very good place to be.

That is, if you like that kind of stuff.

Consider these community facts (these are real, hard metrics from a number of brand communities but are sanitized and general for reasons of NDA).  Keep in mind, the metrics I am sharing are only the tip of the iceberg of what can and should be measured to effectively determine a community’s performance.

• A group of several hundred (less than 500) advocates in one community generate over 500,000 page views with the UGC they create.  That UGC they create offsets the need for branded content and is more effective.  Marketing pages that receive this content outperform their traditional counterparts in terms of dwell time by over 50%.
• This content has significantly increased both product use/downloads and ad impressions as measured against more traditional methods.
• This UGC is syndicated into outbound CRM messaging.  Advocate content increases the click through rate by over 40%.
• A group of only 10 advocates within a community, focused on product support, is responsible for delivering $1,000,000 in support savings (as measured by cost deflection) to the brand on an annual basis.

Using a tool ComBlu invented and has spent the last year refining called the Community Performance Index (tm), we can generate a set of performance metrics that helps the marketing and community management team to intimately understand what’s going on in their community, as well as, what is driving that activity.  It gives them the ability to deliver to management quantitative metrics as to the value of the community to the brand.

Think of it like a Community Net Promoter Score, only better…ok, maybe just more evolved than NPS since you can’t triangulate a position (i.e. measure where you are) with one datapoint (try doing it on a map and you’ll see what I mean).  But this is another blog post.  Back to topic…

Also, I  mention both ‘Advocates’ and ‘Members’ when talking about community.  Advocates are the heartbeat of any vibrant community and contrary to some positions, advocates are critical to a community’s success.  Advocates have a different role in community than general members.  Why?  They are ‘wired’ differently than the everyday person.  They are more influential because of what they know and their place in the social graph.  Tapping and engaging advocates early and asking them to play a role in the development and growth of a community is critical.

It’s important to note I am not talking about Influencers.  Here’s how we (ComBlu) make the distinction.  Influencers are people with big megaphones and reach a very large audience.  Charlene Li is a great example of an Influencer.

Advocates are everyday people equipped with microphones.  They broadcast to their social networks and peers.  ‘Andy B.’ is great example of an Advocate.

From the user’s side (either an Advocate or an everyday Community Member), the index allows the community to evolve efficiently, so that it provides a high level of utility to as many members of the community as is possible.  Using the index, it is easy to change what doesn’t work and enhance what does.  From the user’s perspective, the net result is a very positive and sticky experience.  The user wants to come back.  They want to use more of the products and services the brand offers.  They want to advocate about their experience.  They have greater affinity for the brand.  They have fun and enjoy the experience.  The community shifts from a ‘want’ to a ‘need’. 

This activity isn’t limited to just the four walls of the community either.  The content that the community members generate is aggregated and then syndicated out across the Internet, impacting the awareness of millions, even tens of millions who encounter this content; all of which is in the voice of the customer, is first hand and genuine.  Using the Performance Index, even sentiment, reach and impact can be measured.

Granted, all of the content isn’t perfectly flattering.  However, if it is a well performing community, change is a constant and dialogue is two way.  Brand bombs (negative content) is a rarity that more often than not is effectively managed by community members themselves, not the brand.  Good brands don’t hinder negative content, they learn from it and act on it.  Community members help each other have a more enjoyable experience with something they have a shared interest in.  A brand’s job is to listen and learn first.  Then act. 

That is why measuring performance is so key, so you know how and where to act.  Guessing is largely removed from the equation. 

In part three of this blog post, I’ll reveal how Community Performance Indexing works.

There is an interesting question.  First, you have to put a definition on what social media is.

This might seem like a silly thing to do for some, but I imagine if you ask the CFO of any business (big or small) what their definition of Social Media is, you’ll get a funny look like, “Huh?  What?  Why are you wasting my time with that kind of question?  I have all this red ink and you want to talk about what?”

So here it goes.  Social Media, defined in part within Wikipedia:

“Primarily, social media depend on interactions between people as the discussion and integration of words to build shared-meaning, using technology as a conduit.

Social media utilities create opportunities for the use of both inductive and deductive logic by their users. Claims or warrants are quickly transitioned into generalizations due to the manner in which shared statements are posted and viewed by all. The speed of communication, breadth, and depth, and ability to see how the words build a case solicits the use of rhetoric. Induction is frequently used as a means to validate or authenticate different users' statements and words. Rhetoric is an important part of today’s language in social media.”

Hmmm.  Sounds like a text book entry (under GAAP Principals), so let me translate.

“People sharing insight, ideas, know how and content with one another using a variety of content mediums that reside on the Internet.”

There.  Social Media in a nutshell.

Why is the reality of social media activity important and why should our fictional CFO care?  For that matter, why should anyone else care besides the marketer? 

Why?  Because social media and the knowledge that can come out of it provides the business a significant strategic advantage.  So who else should care and why?

Well, here are a few, other than our CFO and the CMO/marketing team of course.

1.  CEO.  Social media activity is an accurate barometer of brand equity and corporate reputation.  What social media is comprised of (i.e. what’s inside of UGC) is telling as to the company’s current profitability and future performance.  How hard does the company need to work to maintain market share?  Lots goes into this analysis but social media provides a very real comparable metric to help measure whether the company’s internal metrics are accurate and why.  Being able for the CEO to provide real insight at a shareholder meeting or an analyst conference call is important.  It’s doubtful the CEO will reference his source as a social media output, but that’s not the point here.  Social media’s underlying value is.

2. COO.  Why?  Social media activity both internally and externally can indicate well the business and its resources are aligned within the marketplace to deliver on projections, plans and results.  Social media metrics can be compared with operational plans to see if the plans were realistic in the first place, on target or slightly off.  Social media tools and metrics can offer operators ‘real time’ adjustment indices if used properly.

3.  EVP of HR.  Social media isn’t limited to external venues.  How engaged is your brand and your team.  How collaborative are they (or are they capable of being based on the infrastructures and culture in which they operate)?  There are some big brands that are absolutely committed to this.  One old-line brand, a leading insurance provider even makes this a metric that is presented to the board of directors along with things like net profit.

4.  EVP of Sales.  Sales has a lot it can learn from social media.  Value proposition is best delivered from the mouths of customers themselves, as the sales department always has a primary goal-close the transaction.

5.  VP of CRM.  Once the sale is closed, who owns the customer?  Most likely the CRM team does.  They get measured on support costs, call duration in-bound requests, churn and a whole lot of other customer-stickiness metrics.  Social media helps to deflect a lot of these costs, as well as, understand what’s driving inbound requests and churn.  Microsoft gets this.

5.  EVP or VP or Product Development.  Necessity is the mother of invention.  If you want something to work a certain way, you create a work around.  Sometimes, understanding what those work arounds are helps teams innovate.  Sometimes, it’s just asking for ideas.  www.ideastorm.com is the obvious example.  There are dozens of others…good and bad (i.e. that work and don’t work).  Intuit works.  MyStarbucksidea.com doesn’t.

7.  Institutional and individual investors.  Another  part of doing good homework.  What are customers saying and how well is the brand listening?  There is an old-line manufacturing truism.  To understand how well run a manufacturing company is, simply look at it’s loading dock.  A neat and orderly loading dock says the business is on top of things.  Broken pallets, trash and disarray speaks volumes,  You’d be surprised how many savvy investors who bet (or did before the meltdown) on manufacturers did this kind of homework.  Social media can provide the same sort of insight if approached correctly.

Here’s a proof point.  This factoid was provided by my friend and colleague Barak Libai, professor at Tel Aviv University and Advisor to WOMMA and is taken from a good book by Gupta and Lehmann on "Managing Customers as Investments"  and relates to Cox Communications.

You can see that the defection rate for customers who use the product in a wider way is much lower. Much of this wider use comes from formal and informal social media activities (people helping, showing and spreading the word.  This can translate to double the lifetime value!  

Double…that’s a lot of coin, my friend.

Can social media rewrite business rules?  I am here to tell you that that it already is.  So where are you?  Ahead of the curve or behind it?