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Dan's Blog Is There Money in Social Media?
Dan's Blog Is There Money in Social Media?
Is There Money in Social Media?
Written by Dan Schaefer
About a year ago, a vice president at the company I work for decided that we needed to add a social media (SM) site to our company’s web presence. At the time, the company already had a significant website with many branches – one for each product market. But the stigma of SM was beginning to pique our interest, and the vice president thought that adding a SM presence would create more “Groundswell” and, ultimately, bring in more customers.
It was all an experiment at the time, and we knew little about what we were doing, so we consulted with some “experts” on the topic. In retrospect, this was probably a mistake, as many of the experts turned out to want to sell us their solution. We came up with a plan and moved forward with it. The plan involved the creation of a Social Media website, and we would help it grow by seeding it with interesting content. Against my personal advice, we contracted a vendor to provide a social media website, which included a server and a battery of training videos. The cost? About $45,000 for the first year.
Over the course of the year, the vice president fell victim to a corporate downsizing operation, and the overall responsibility for the SM site was tossed about the remaining members of the department like a hot potato. As of last week, I finally made the call to our in-house contract negotiator and told her that we were dropping the contract with the SM vendor. I had to bite my tongue, because I wanted to tell her to take the contract and “terminate with extreme prejudice.”
What went wrong with this experiment? Several things:
- Cost - We were charged way too much money for something we could have set up with Drupal and a couple weeks worth of time from our webmaster.
- Expectation - We had not developed a realistic expectation of LOE and ROI. That is, our Level of Effort was estimated too low, and our Return on Investment was estimated too high.
- Plan - After locking us into the one-year contract, the SM vendor had no realistic business plan – with set milestones and feedback – to help the site grow.
- Content - Seeding the site with content required blog entries and interaction in discussion groups from key members of our company. Most people, however, are not born to interact in such an environment, and they dodged responsibility.
- Politics – Other managers within the company were not sufficiently sold on the idea of SM and thus did not commit their resources to contributing content.
- Legal – The corporate lawyer was concerned that we were providing a “perceived value” to our customers without having a way to account for it on the balance sheet. This struck a raw nerve in the company, as we’d just recovered from an accounting nightmare related to Sarbanes-Oxley. Thus, we were prevented from offering support through the website; instead, we had to rely on our customers offering support to each other. As most of our customers compete with each other, the virtuous notion of helping others amounted to industrial treason.
- Comprehension – Upper level management had difficulty comprehending the independent nature of SM, preferring instead to provide a heavy-handed company presence on the site. This notion runs counter to the nature of SM.
In short, the company did not understand the nature of social media and how to use it to its advantage. Further, SM was not something our customers requested. Finally, the nature of SM is to act as an independent voice, something our corporate psyche was not prepared to deal with.
Additionally, my personal distaste for the SM vendor poisoned my relationship with them, and I admit it did affect my behavior. The vendor offered very little, but charged top dollar, and I felt they took advantage of our inexperience. In troubled economic times, I tend to treat the company’s dollars very much like my own dollars, and the contract created a severe case of “buyer’s remorse” within me.
Bottom Line: Social Media is well worth the pursuit, but please be careful and set your expectations accordingly. Don’t rely on SM vendors to actively engage with your efforts, and take the so-called “Social Media” experts with a few grains of salt. Use your own good judgment on what works and what doesn’t, and be careful to not take anecdotal evidence as real evidence of success. Sure, some companies have used SM to their advantage, but in many cases, the social media aspect to their success grew organically and was not consciously pushed (forced) from behind.
Best,
Dan
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