The Business Pages

I hear a lot about the “ROI of Social Media” these days, and every time I do, I cringe.

Over last 27 years I’ve done a ton of ROI calculations determining if an investment of “X” in something (call it “Y“) could, or did,  produce an adequate return on that investment, based on predetermined thresholds.

So, if my threshold was 10%, and my X investment in Y returned 12%, I was either good to go or popping a champagne cork.

Let’s now consider “Social Media“.     Here’s my first problem - most people aren’t buying these platforms, that is, unless you are a venture capitalist that owns a piece of Twitter, Facebook, LinkedIn,  or anything else out there.

They are just USING them.  For free (or pretty close to it).

There goes the “X”, because  there’s no investment,  and the “Y”, because there is no something that has been bought - in one fell swoop.

And thus, the cringe.

What Then, Is A Better Value Evaluator?

I believe a far better way to characterize the potential value of using Social Media is to look at its Utility.

That is, its “fitness for some purpose or worth to some end” (thank you Webster’s dictionary).

Because when you get right down to it, as I’ve said in this space before, Social Media is just another way for humans to communicate.  Right up there with television, e-mail, texting, telephones (wireless and wireline), morse code, tin cans and good ‘ol snail mail.

What’s more, we have (at least) a million potential “ends” for communication - and if you pay close enough attention to your social media streams, you’ll see quite a lot of them.

Pick An End, Any End

For this exercise, let’s just pick one of them, one that I’m pretty familiar with -customer service.

To provide the kind of customer service I want (where the level of satisfaction is such that the lifetime value of those customers is maximized), I need to communicate well.  I need to be available to my customers to talk about their problems, discuss their bills, take payments,  sell services, or even talk about the weather.

I need forms of communication that work well towards that end - they need to have high Utility to me.

The Utility Test

Now let’s put Social Media to the customer service utility test.   On the positive side, it’s probably already being used by  a significant number of my customers, which combined with the relative ease of using the tool means that we have good accessibility.    Next, the negatives - this communication is being done “in public” (so good and bad is exposed),  with inherent limitations on the expansiveness of our discourse (i.e. to use Twitter as an example, I only have 140 characters).

The bottom line on Social Media’s Utility for customer service?   I believe it is poor-to-marginal- we can score some PR points for “being there” and showing empathy and courtesy, but when it comes to actually solving problems and answering questions in a meaningful way, we’ll end up “moving the conversation” to the traditional means anyway (most likely through a telephone, or a face-to-face discussion).

With this Utility determined, I can put it up against the Utility of all the other forms of customer service communications and allocate my resources accordingly (which means we won’t be shutting down our call center anytime soon).

This is just one example - I could also put Social Media through its Utility paces for me personally - and given the way I use it, I’d give it high marks for finding and forging friendships, promoting my blogging activities, learning more about the world I live in,  and indulging my love of  music and music trivia.

Now About That Screwdriver…..

What I hope is apparent here is that Utility carries with it a large doses of subjectivity and personal preference -things that are hard to measure on a pure objective scale (like an ROI), but really should be evaluated when deciding whether or not to use something.

Which is the beauty of assessing Utility for Social Media- it just boils down to, how well does it work as a means to your end?   And within that beauty lies the reason behind the ever-growing popularity of the medium - its seemingly endless number of uses for a corresponding number of ends.

It’s just another tool in the communications toolbox - and when was the last time you tried to calculate the ROI of a screwdriver?

Think Utility instead, and send the ROI back to your stock portfolio.

Starbucker on Leadership

My first encounter with Zappos came a few years ago when my wife was looking for a particular pair of boots.

I had overheard a remark by a friend of mine that praised their “quick service and free shipping”, so I passed it along to her.

We haven’t bought a pair of shoes from anyone else since.

What has always set this particular retailer apart for me has been its attitude towards its customers- it’s apparent on their website, and with their people.   They just seemed to “get it” - making me happy was important to them.

And the free shipping (and on the return side, thank you) didn’t hurt either.

Of course, this appreciation as a customer led me to want to look a little harder at this company, as a businessperson and leader, to find their “secret sauce”.

I didn’t have to look any farther than the CEO’s office.

Zappos is led by someone who had the audacity to put the pursuit of happiness ahead of market share, inventory turnover, margins - heck, ahead of everything.  Happiness is Zappos “raison d’etre”.

That person is Tony Hsieh, and you can find an excellent piece on him in the latest edition of Inc., written by Max Chafkin.

Profiled as someone “widely regarded as one of the most innovative Internet marketers of all time“, he has created a very successful company in a seemingly unorthodox way - passionately and relentlessly  promoting a culture of “personal emotional connections“  with customers and with each other.

He had been through the ups and downs of high-tech entrepreneurship, and wanted to create a place that would be built to last, celebrating the life fulfilling potential of a happy workplace.

Hsieh was convinced that if he was successful in building the right culture, the profits would come - and come they have.

This culture construction had several key components:

• A collaborative summation and discussion of key company values, assembled into a book each new employee receives (this book has grown to 480 pages since each employee is asked to make a contribution)
• Pervasive transparency of all key goals & objectives, both short-term and long-term (i.e. you can’t miss them because they are plastered all over the building)
• Innovative and comprehensive training programs that emphasize knowledge of company history and values (they are famous for offering $2,000 for new trainees to leave the company)
• Emphasis on the social aspect of the workplace (they actually require their managers to spend 10 to 20 percent of their time “goofing off” with the people they mange)
• Confidence and trust in the employee’s ability to creatively,  intelligently, and efficiently please customers with a minimum of process and structure (for example, there is no scripting, and they do not track call times)

Hsieh intends to expand this formula beyond shoes - he’s mentioned hotels and banking as possibilities - and I suspect he’ll continue to find success, as long as his culture constructs continue to be applied.

That’s the big if - as other similar visionaries have learned (Howard Schultz of Starbucks is a great example), the outside pressure to put profits first can be very, very strong.

I hope he can resist that pressure, for he’s showing us a better way forward.- one that blends people, passions, purpose, and profit.

As the parade of bad economic news has continued into the new year, I’ve noticed a much higher collective sense of anxiety.

You can feel and see it, around the water cooler, listening to the chatter at Starbucks, in the Blogosphere, and in the printed press.

The world-wide recession has only added worries to what Dalton Conley called in Newsweek (1/26/09) “an anxious culture where we are haunted by the feeling that we are frauds, expendable in the workplace because so much of our service work is intangible”.

Like most of you who read this blog, I am in an “intangible service business”, so that quote didn’t sit too well with me, along with Conley’s description of all of us as the “Elsewhere class” – professionals dogged by a feeling that we should be elsewhere, always on the go.

On top of that, even the eternal optimist Ben Stein was soberly imploring us (in his most recent column in the NY Times) to “Be Prudent” and “Learn a useful skill that Americans really need – like law or plumbing or medicine or nursing”.

In other words, those of us “professional providers of intangible service” not arguing in courtroom, repairing a faucet, wielding a scalpel, or taking a pulse should be scared out of our wits (and going back to college or trade school).

Oh really?

I think not.

Those who provide services in what Conley calls “abstract industries” should not be so casually lumped into the morass of intangibility.

Rather, I’d suggest these two determining characteristics of whether or not the provider of any good or service should really be nervous:

- Does it deliver true value to the recipient?
- Was it delivered with commitment?

To put it slightly differently, if a business (or a person) is committed to providing a highly valued service and subsequently does so consistently, its “expendability” is significantly lessened, even in the face of outside negative factors.

The real challenge, then, is overcoming the fear of such the commitment. We can’t feel like frauds. We have to really believe we can deliver lasting value.

As someone who has been wrestling with fear quite a bit lately, and who has adopted a mantra to fight with it (“no fear, stay proud”), I realize this isn’t easy. We’re humans, after all.

But of course, there’s always something that comes along that helps you with the concept crystallization process. And I found it on a coffee cup.

I was at Starbucks yesterday, and bought my usual whole milk grande latte. I usually don’t read the “Way I See It” quotes that always appear on the cups, but for some reason this time I did.

Here’s what I read:

#76 - “The irony of commitment is that it’s deeply liberating – in work, in play, in love. The act frees you from the tyranny of your internal critic, from the fear that likes to dress itself up and parade around as rational hesitation. To commit is to remove your head as the barrier to your life”

Bingo.

It was written by Anne Morriss, who was noted on the cup as a “Starbucks customer from New York City” who “describes herself as an organization builder, restless American citizen, and optimist”

(A little research revealed that Anne is now living in the Boston area, and she and Harvard Professor Francis Frei, a customer service researcher who I wrote about back in 2007, have started a blog, “Decision to Lead”. I’m sure this will be a must-read for students of leadership)

So in the face of all the anxious beasts out there waiting to pounce, the key to taming them, or at least keeping them at bay, is a never-wavering (and liberating) commitment to value.

Now, if I could only fix the leak in the sink……

As you may have seen in my last post, my 2009 mantra is:

“No Fear, Stay Proud“

Why this mantra, in this year?

It’s best to split it into two parts, and today I’d like to address “Stay Proud“.

About 10 days ago I was reading the NY Times and came across a piece entitled “Improve Morale By Knowing Your Employees“, written by Kelly Holland.

I was quite curious because I knew as a leader and manager I needed to step things up more than a few notches in 2009 to keep our heads above water in turbulent economic times.

Plus, I also realized that even in my personal life I needed a little something extra to keep the glass half-full this year.

About half-way into the article, I found what I was looking for - it was a quote by Jon R. Katzenbach.

Most motivational managers, he said, “make a personal connection to the worker, and that personal connection is used to make them feel good about the work they do.”

“That gives them pride in the work,” he added, “and if they feel proud of their work, they do a better job.” (my emphasis added).

To do better, especially in a more challenging environment, we need to stay proud. Of our work- and of our life.

Therein lies one of the primary secrets to anyone’s long term success - as Katzenbach puts it, “the relentless pursuit of worthwhile endeavors is a lasting and powerful motivating force”

As leaders, we need to instill in our teammates the feeling that what they are doing every day is indeed worthwhile and fulfilling, and in turn as individuals we need to ensure that we have this feeling about everything we do - both at work and at home.

In his book, “Why Pride Matters More Than Money“, Katzenbach identifies three of the key sources of workplace pride:

• Pride in the results
• Pride in how you work
• Pride in whom you work with and for

Pride doesn’t come from just one place - that’s the beauty of it, actually.

And on top of that, pride is a moment-to-moment emotion -or better said, a sustaining emotion.

One that builds to long-term success.

So, as Katzenbach so aptly summarizes, “always have your compass set on pride“.

Or as I’ve said and will keep saying in 2009,

“Stay Proud”

There have been a lot of great conversations going on out there about the pros and cons of Social Media, particularly in regards to its use and effectiveness in a business context.

Personally, I’m a great user and promoter of Social Media, through this blog, Twitter, Facebook, and my association with SOBCon. That’s one side of me.

There’s a business side of me too - I am an executive within a business organization that is doing its best to attract and retain customers, and turn a good profit.

Where does Social Media fit in there? Are we embracing it wholeheartedly as a game-changing way to improve our business?

The short answer - not yet.

Because its not something a business should jump into head first (ask Motrin).

There’s a LOT more to this than initially meets the eye. There are several questions a business needs to ask itself before it dives into Social Media,  and the first one is the most important.

Why?

It seems like a no brainer - after all, Dell does it. Zappos does it. Whole Foods does it - heck, even Starbucks does it. But it just isn’t a matter of setting up a Twitter and Facebook account and letting ‘er rip.

You are putting a hook out there to catch and promote conversations. Is that the medium you’d like to have them? That’s what we’re asking ourselves right now in our process.

How prevalent is SM use among your customer base? Or in your market in general?. Demographics are important. Believe it or not, a lot of people still don’t carry around Blackberries, or iPhones, or have set up a blog, or pay any attention whatsoever to all the assorted SM tools.

How sensitive are you to negative “stuff” out there? You need to have the stomach (and patience) to chat in public about all the nits and idiosyncrasies of your product or service.

Is your product or service good enough to withstand a possible onslaught of negativity? As I’ve often said, you need to get the “analog” stuff right (i.e. basic business blocking and tackling) before you can advance to “digital”.

What are your current “traditional” conversation avenues and how are they working? With only a few exceptions (Zappos, you know who you are) I don’t see too many companies that are tearing the cover off the ball on good ‘ol traditional customer service - at the counter, in the home, through a call center, and/or through online chat - going full blast at SM. They are already having great dialogs with their customers - the customers don’t need SM to be the first place to find them (although they do set up outposts just in case).

Many of the more active participants got there out of necessity as a way to clean up their act and turn around negative vibes - Dell rings a bell on that one.

As for marketing avenues, the traditional ways are admittedly one way, and while SM allows a two-way dialog, and a word-of-mouth opportunity, you have to go back to some of the earlier questions, as well as looking at your current word-of-mouth effectiveness (it helps to have a Net Promoter Score to look at, like our company does). Your customers may be more comfortable talking about you at a PTA meeting instead of in front of a computer (those demos again).

Lastly, does the company and all of its management truly understand the SM medium, and how to “speak” in it? The last thing we’d want to do is come off as too “corporate”, or be tone deaf to the other aspects of SM that make it so attractive to so many (i.e. the relationship side). That takes time, and a willingness to open up the personal kimono. A lot of folks still aren’t comfortable with that, and that’s quite understandable. You just can’t shove someone onto a different stage and say “OK, now be authentic, but don’t shill“.

These are all of the discussions our business is having internally about our potential involvement in SM. And where are we heading?

We’re already passive listeners on the medium - when issues come, we answer them directly (by calling the customer). We can see a more proactive use of SM down the road, but only as another arrow in the communication quiver. We’d still like to rely on what we already do well.

Because particularly in a service business like ours, nothing beats direct voice to voice, or better still, person to person, contact.

So the SM cat hasn’t meowed just yet, for at least one business. How about yours?