Archive for the ‘risk management’ Tag

10 Top Questions for Contemplating Social Media Monitoring

For companies contemplating social media monitoring, this post analysis is meant as a starting point for integrating such an offer with Social Gastronomy’s Enterprise Social Management consulting services.

The Social media monitoring technologies are not sufficiently mature to be “install and go”; especially if the provider is looking to integrate multiple tools. This will require additional selling, implementing, customizing, and executing to manage the integration of the multiple data stream; which are exponentially more complex beyond single tool selection. Some large brands use up to 16 different tools in its social media monitoring program, we use 10+ for just our social market audit. Adding to the complexity in tool selection is the fact that a strategic snapshot that shows the relevance to the brand and business is different than the tactical dashboard and may require a completely different tools set.

 Additionally, the competitive tool landscape becomes more complicated as provider moves up the “food chain” to sell to new levels. The expectations as to how extensive the monitoring program will become will be dictated by the CMO’s desire to consolidate efforts; ie. Across monitoring for brand, reputation management, customer contact, etc. the provider could find itself competing for a broader base of business against PR, Marketing Communications, and Contact Center firms for the Social Media business. We suspect that this will naturally (already) occur as CMO’s will come to the conclusion that the monitoring and listening capabilities should be centralized and feed data for multi-purposes.

Recommended Planning Steps

Area of Planning Key Issues Impact
Business Planning
  • Expected return
  • Ownership within Organization
  • Measure success
  • What are you really buying
  • Investment required over time
  • Resources
  • Business case
  • Technology investment to support offering
Roadmap will dictate the business and investment requirements. If requirements are more extensive than expected, will cause perception issues as to quality and ability to execute.
Program Management 
  • Pricing
  • Packaging
  • Target customers within organization
  • Tool selection now and future
  • Duplication of data
  • Data cleansing process
  • Start with a core application and add other offerings
Expectations around the offering will dictate whether one tool or many will be required. We are seeing client have more mature requirements in terms of comprehensive information collection and synthesis.
Operation Execution
  • People Requirements
  • Process Requirements
  • Technology Requirements
How far along the business requirements have gone in preparing to scale the a program
Solution Customization
  • Add’l types of listening tools
  • Process
  • Training
  • Dashboard
  • Addl tools
  • Packages?
  • Pricing
If you trend as other enterprise social media clients that we have seen, then the customization requirements eventually will be extensive. Preparing for scenarios may allow for better initial package and accelerated scalability
Integration
  • Process
  • Requirements
  • Customer training
  • Project set-up
  • Policies and procedures setup
  • Roadmap for clients

 

The enterprise customers seem to be more mature in expectations around integrating offering into their environments and not as tolerant for siloed management. Has impact on operations and customization.

 

10 Top Takeaway Questions to Answer

  1. What is the expected hand-off when Social Gastronomy does strategy?
  2. What if organization wants other tools to include into the mix?
  3. What if monitors in other areas and wants to combine – call center, pr or marcom firm?
  4. Reputation monitoring, brand reach, complaints, categories, competitive intelligence, and qualitative analysis – what are you monitoring and why?
  5. Sentiment analysis – how leverage, how integrate with other data, how overcome shortcomings?
  6. Sentiment analysis challenges and manual review, omissions, volumes, discrepancies
  7. What does the integrated tool dashboard look like? Is there a different dashboard for the daily user, weekly manager, and monthly/quarterly executive?
  8. Integration into CRM – process, results, so what?
  9. How integrate into broader programs, how to use as door-opener for new expanded social media presence management?

10.  Where does this go? Roadmap?

Unhorsing an Entrenched Competitor

Since my last post was about first mover advantage https://rosenhaft.wordpress.com/2009/06/02/web-marketing-leveraging-first-mover-advantage-on-the-web/, this post will be a how-to on enter a market with an entrenched, but less capable competitor. The assumption is that your offering is of superior quality or has unique attributes for the market at large. There are different strategies for purely niche products, “me-too”, or purely local offerings that are the subject for later posts. This post is for that company that has developed a better mouse-trap and needs a market entry strategy to unhorse an less capable, but established competitor.

My last post discussed the micro-economics behind the marketing and this post will do the same. Displacing a competitor is all about two costs:

1. Opportunity Costs – the value of your opportunity outweighs the switching costs; time, money, resources, pain, risk, etc.

2. Switching Costs – hard AND soft costs; time, money, resources, training, risk, pain, etc.

The entrenched competitors barriers to exit are your customers barriers to entry for your offering. Many companies under estimate the switching cost equation in displacing a competitor. Many times a company has a much better offering than their entrenched competitor, but cannot seem to get traction. When you di deeper, you find out that there is much more to the “cost” of switching beyond features or a small price difference. You find out a customer has to go through extensive training, has an extended contract that is not up for renewal, or doesn’t perceive the value of the offering as worth the hassle of switching for such a small price savings.

The keys to switching are really about changing the rules of the market. Bringing something new in terms of capabilities, changing the cost structure through planned commoditization, providing a different focus, bringing a targeted solution, AND FINALLY – being easier-to-do business.

Major Factors

1. Price –  Competing on price alone is a very difficult as it actually devalues the offering and discourages loyalty. “Cheep” is different than “economies of scale”. At the onset of the article, I positioned “me-too” offerings as a different strategy. This is why… “me-too @ a lower cost” has a place in the spectrum of the market targeting the cost-conscious buyer. Knock-offs are a good example; however, this takes a different type of positioning to target the cost-conscious buyer with a specific call-to-action. This is a particular market strategy that, in reality, is a niche. If done poorly, or not by design, it can lead to devaluation and rampant commoditization. If you can match the quality with 20% less cost, you generally can attract a portion of the market’s attention depending upon the industry and the competitor (see relationship below).

2. Capabilities – Features & Functionality – This is the secret-sauce approach. We are better because we can provide better capabilities that the competitor cannot. This may be a segment of the market or the whole market depending upon your capabilities. Features tend to not be sufficient on their own to motivate switching.

Better functionality may not necessarilymotivate a buyer to switch either. If you are higher priced with better functionality, you will have trouble with major displacement . The cost factor will be weighed into the equation unless your capabilities significantly change the buyers value equation; ie you save them much more money than the offering’s cost. “Our product saved the buyer 35% in processing time which translated into $250,000 in savingsover 3 years.” If your product costs $75,000 installed, which is $25,000 more than your competitors, but you save them $$225,000 in total cost over 3 years, you can make a case for displacement. If you are more expensive and cannot calculate a hard $ ROI, you will have to rely on a combination of techniques for displacement. For products that are truly revolutionary in which you change the cost structure of the market, you can introduce a lower price, and show a better ROI; then you have an opportunity to displace a large part of the market.

3. Relationship – Customer Support /Responsiveness /Ease-of-Use / Easy-to-Do-Business – Most companies provide mediocre service by definition. Whether by scale issues, complacency, or distraction; a majority of entrenched industry players are vulnerable to displacement based upon customer dissatisfaction. The notable exceptions are the ones that really shine. Service is particularly challenging for product companies.

If you are a new entrant, make service a hall-mark of your offering. Take the time to put in place the processes that will enable you to demonstrate your responsiveness to the challenges of the market. If your competitor’s customers are annoyed by the amount of training it takes to get people productive, then this should be your focus. If a competitor takes 2 business days to answer an email, then this should be your focus. My guess is that average companies probably have 10-20% of their customer base vulnerable to switching due to service. Below average service companies probably have a lot more.

4. Speed– the axiom of “time is money” is a great selling point for a potential customer if you can demonstrate the ROI from the change. Selling that we are faster (slightly) in itself does not generally motivate buyers. Proportionality is critical. Did you upgrade your last PC because it was milliseconds faster? If so, you were a minority; hence why the PC & chip industries are rethinking the “speed is better” industry sales pitches. Save 20% in a major operation & improve quality; you have a customer’s attention. Do it at a lower cost due to changes in technology; better. Now, do it without disrupting their organization’s operations while they switch; you have a “winner”.

5. Tailored Solutions –A large competitor’s niche or market segment, may actually be your market. Once again, proportionality applies. For your competitor, a segment may be 10% of their total market. A niche may be 1 or 2% of their revenues. For a company with $2B in revenues, $50M may not be sufficient to focus. For you, $50M is a sufficient market to enter and begin your market domination. If you competitor is not focused on a part of the market, then the obvious strategy is to pick a small enough market segment that you can dominate with a more tailored offering.

The challenge is to balance the entry into the niche without pigeon-holing yourself or awaking the sleeping giant. Your ability to service this niche with ramifications for the rest of the market, may be just the wake-up call and the validation for upgrading their offering. You could create your greatest competitor; who then leverages their relationships to the market with a “me-too” offering. Your competitor could even use your “newness” against you as a risk mitigation strategy.

Figuring out how you will enter, how you will communication the value, how you will expand beyond the entry point, and how you will evolve your offering to stay ahead of the competitor is critical. You don’t want to win the initial battle and find yourself losing the war….

6. Risk Management – Most new entrants fail to gain traction because they fail to account for the buyer’s fear of change and overall inertia. “I am not really happy with our vendor, but….. we would have to go through training, we have a contract, saving that little money isn’t important, we are comfortable, we are used to it, etc.”

Pick your excuse…. what they are really saying is that your offering isn’t worth the trouble in switching. You haven’t built a sufficient case to risk switching. Contrast that with a resounding YES that certain products and services elicit. These offerings provide a significantly, measurable, emotional, and tangible improvement over what they are doing today. AND these offerings do it in a way that seems easier and doesn’t involve much risk of switching.

Pull all of the above together to build a multi-faceted, multi-stage market entry strategy and you have the potential for a “disruptive” offering. The reality is that most companies don’t have a disruptive, “home-run” where they can drive word-of-mouth merely by “building it and they will come”. The majority of younger companies will have to focus on the fundamentals and build upon their slight advantages. In essence, they will have to manufacture runs from their singles and wait for the “right pitch”. Understanding your competitors strengths and weaknesses, the market opportunity for improved offerings, and understanding the market’s risk equation are the keys to successfully entering a new market. 

There is a concept that I call “switching point” which is the micro-econmomic version of Malcolm Gladwell’s “tipping point”. The switching point is the threshold in which you have created sufficient value to convince the potential customer that the opportunity of your offering outweighs the switching costs from the competitor. This is not an absolute, in fact may be unique to each customer, but a good market analysis should incorporate an identification of this equation into the sales process. Understanding the buyer motivation, switching challenges, and pain points will assist you in displacing an entrenched competitor.