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Social Media Optimisation

A few weeks ago, in an article called Man verses the Machine, I wrote about the search algorithm (as used by search engines, for example Google) verses digital curatorship (whereby the people using social media like Facebook drive the information and content delivery, through posting, sharing and liking). Here are some more thoughts on the subject

Search engine optimisation (SEO) is a critical strategy for driving people to your website, but it is only one aspect of the modern digital strategy. With social media there are more meaningful and effective ways of bringing in audiences. The term for this is social media optimisation (SMO.)

SEO uses algorithms to rank top search results. SMO uses audience behaviour to determine what’s important. SMO differentiates and distinguishes individuals, making sense of their specific content wants and needs. Real people articulating real interests eliminates the algorithm as middleman.

The social network is starting to replace the search engine as the average web user spends more time on Facebook than Google. We need to reengineer our approach driving traffic to our content and building our digital brands. Here are some elements of an effective SMO programme.

Find out and evaluate what the audience wants

SEO is based on pandering to search engines to bring you more audiences, by using key words and metatags. But with social media, the new formula is to grab people’s attention in such a way that they will bring you more audiences.

The first step is winning the attention of the audience and knowing what it wants. The key question is, who are they, what do they want from you and when and how do they want it? Fortunately, this data is abundant. You can find it in your social media sites, analytics system, in customer research, in your competitors’ wins. The trick is to make use of that data and experiment to find these insights.

Knowing what the audience wants means asking and observing them and then delivering value that they want to be associated with. Then track what gets consumed when and by whom.

By asking the audience you also get people immediately engaged in the conversation.

Build your community

The tactics of SMO will change over time, in much the same way that social media will change. Today, Facebook and Twitter are the two significant social media platforms.

An effective SMO strategy is about getting the community started. Set up a marketing drive to bring your fans to your community page. Use Facebook’s advertising platform to help make potential friends aware of you. Use viral networking to get people to invite their friends. Build a base of influencers to a size that approaches critical mass, so that you are fully connected within the social network from the beginning, rather than sitting outside just looking in.

Create content worth spreading

Once you know what your audience wants, and you have a community to appeal to, now comes the part that great marketers are good at. Designing for sharing is much more than just designing for consumption. In some instances the practices that help marketers succeed in SEO are deadly in SMO. If you stuff a page full of keywords, match the URL to the keywords and keep the content readable by algorithms, you will that find a boring website which falls flat on your users and they will not distribute.

Instead, publish content that is worthy of being shared and wrap it in experiences that your users can’t wait to share with their friends — with pride — which is the emotional fuel that powers the “Like” button.

Package to get attention

These days you’re competing for attention in a Facebook feed or Twitter stream.

Facebook and Twitter are networks and so their value is to be found in quantity (the more there is the more value to each user) but for successful marketers it’s about quality. Standing out in the crowd puts the focus not just on what you say, but on how it’s said. What are the iconic images and headlines that appear in a Facebook feed?

Design for virality

Viral distribution is about much more than the content itself — it’s also about an experience that promotes sharing. Your site, your experience, and your Facebook page all need to be designed for virality. Turn content into interactive features with sharing. It starts by making sharing easy:

  • Include the familiar “like” and “share” icons;
  • Place them in obvious places next to the article you want them to share; and
  • Pull social conversations relevant to your content in as a live feed on your website. Let people see what other people are saying on your Facebook page and Twitter and let them participate in the conversations right from your site.

Previously I have written about The Porous Web where your audiences seamlessly osmosises from areas of low value to high value. Doing all of these things provides a tightly integrated social experience.

Engage and reward your audience

Get involved in the conversation to stimulate dialogue, talk alongside your users and ask them what they want. Engage your audience like a community member not a marketing executive.

Validation is all about appealing to people’s emotional desire to look and feel good. Rewards for these people are intrinsic to the sharing itself.

Measure and experiment

On every page measure how many people viewed it and shared it, and how many more people that brings. You can test and vary every element, from the tools that promote sharing, to the content itself. Test rigorously and learn what works for your website, community and your audience.

These are just some of ways that SMO can be effectively deployed. The most important thing right now is recognising that SEO is important but that social media is changing the rules.

About Digital Bridges

Digital Bridges creates high performance organisations by unlocking the business value of the web. We create digital strategies, user requirement and functional specifications for Intranets, websites and web applications. We also develop and implement social media strategies and create powerful digital brands using eMarketing and Communication and manage brand conversations with consumers.

Digital Bridges approaches the web from a management consulting position and relies heavily on rigorous academic thinking as well as business experience. It is headed up by Kate Elphick who has a Law degree and an MBA from GIBS. Kate has spent the last fifteen years of her career on the business side of the IT industry with companies such as Datatec, Didata, Business ConneXion and Primedia.

Digital Bridges has a broad range of experience working with significant, successful clients in the Financial, Gaming, Tourism, Pharmaceutical, ICT, Legal, Airline, Professional Services, Media and Public Sectors.

To find out more about Digital Bridges, please visit www.digitalbridges.co.za or contact Kate Elphick on katee@digitalbridges.co.za

 

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Filed under Business, Digital Communities, eMarketing, Facebook, Google, Web 2.0, Web Marketing

The Porous Web

I often see clients who ask me to assist them in developing a web site, potentially in SharePoint 2010 or using some other open source technology. While it is important to have some kind of digital real estate, it is more important to look at how people use the web these days.

From our audience point of view the Internet is one great big environment from which they can consume information, engage with each other and entertain themselves.

Our domain is only one place they can go to to do this, but there are multiple other places. We need to consider the entire environment. The website is only one element of our conversation on line. These days our audiences practise osmosis as they flow from places of low value to high value.

High value is a product of information and context. Information is available everywhere, but if it can’t be found or it does not come from a trustworthy source its value is compromised. So how do we make sure that we deliver high value in this porous environment? We do this by designing our projects around audiences through content architectures, digital geographies, SEO and curatorship.

Content Architectures

Content architectures are thought constructs which examine how we wish to position ourselves in our audience minds, and what we need to say or do in order to achieve this. They require a thorough investigation into our audience’s motivations, worlds-views and environments.

Digital Geography

Digital geography is concerned with where our audiences are, are they on social media sites, looking through lists, browsing or on special interest sites. Do we need to make sure that we have a presence on Facebook, Twitter or that on-line newspaper? What industry forums are they consulting, who are the thought leaders?

SEO

These days, very few people type in the name of our domain to find us, they are far more likely to go to their preferred search engine, whether it be Yahoo, Bing or the ubiquitous Google and type in a search term. If we can’t be found easily, we have wasted our efforts. We need to make sure that whatever we put out there can is as search engine friendly as possible.

Curatorship

Curatorship is the human intervention which adds value. These are trusted sources of information who assemble information and contextualise it. They may be thought leaders, bloggers, on line journalists or even someone inside our own company who engages with our audience or who they follow or engage with to filter the masses of information out there and make it easy to consume.

Far too many companies develop website strategies, but to create competitive advantage in the digital world, we should rather create digital strategies which encompass the entire digital milieu.

About Digital Bridges

Digital Bridges creates high performance organisations by unlocking the business value of the web. We create digital strategies, user requirement and functional specifications for Intranets, websites and web applications. We also develop and implement social media strategies and create powerful digital brands using eMarketing and Communication and manage brand conversations with consumers.

Digital Bridges approaches the web from a management consulting position and relies heavily on rigorous academic thinking as well as business experience. It is headed up by Kate Elphick who has a Law degree and an MBA from GIBS. Kate has spent the last fifteen years of her career on the business side of the IT industry with companies such as Datatec, Didata, Business ConneXion and Primedia.

Digital Bridges has a broad range of experience working with significant, successful clients in the Financial, Gaming, Tourism, Pharmaceutical, ICT, Legal, Airline, Professional Services, Media and Public Sectors.

To find out more about Digital Bridges, please visit www.digitalbridges.co.za or contact Kate Elphick on katee@digitalbridges.co.za

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Filed under Blogging, Business, Digital Communities, eMarketing, Enterprise 2.0, Facebook, Google, Web 2.0, Web Marketing

Approaching Enterprise 2.0, beware your mindset

I recently read an interesting article by Donald Sull entitled “Why good companies go bad” – Financial Times (3 October 2005). In it he expands on the concept of “active inertia”, saying that “companies  often respond to even the most disruptive market shifts by accelerating activities that succeeded in the past. When the world changes, organizations trapped in active inertia do more of the same. A little faster perhaps or tweaked at the margin, but basically the same old same old.”

Sull uses the example of organisations trapped in active inertia as resembling a car with its back wheels stuck in a rut. Managers step on the petrol and rather than escaping the rut, they only dig themselves in deeper.

He talks about clear commitments being required for company’ initial successes, but he says that these commitments harden with time and ultimately constrain a firm’s ability to adapt when its competitive environment shifts. He discusses distinctive success formulas which focus on employees, confer efficiency, attract resources and differentiate the company from rivals.

Five categories of commitments comprise the success formula for organisations:

  • Strategic frames – What we see when we look at the world, including definition of industry, relevant competitors and how to create value;
  • Processes – How we do things – entailing both informal and formal routines;
  • Resources – Tangible and intangible assets that we control which help us compete, such as brand, skills, technology, real estate, expertise, etc.;
  • Relationships – Established links with external stakeholders including investors, technology partners or distributors; and
  • Values – Beliefs that inspire, unify and identify us.

Initial success reinforces management’s belief that they should fortify their success formula. With time and repetition, people stop considering alternatives to their commitments and take them for granted. The individual components of the success formula grow less flexible – Strategic frames become blinkers, resources harden into millstones hanging around a company’s neck, processes settle into routines, relationships become shackles and values ossify into dogmas.

Ossified success formulas are fine, as long as the context remains stable. However when the environment shifts, a gap can grow between what the market demands and what the firm does. Managers see the gap, often at an early stage, and respond aggressively to close it. But their hardened commitments channel their responses into well-worn ruts. The harder they work, the wider the gap becomes. The result is active inertia.

One seismic environmental shift, apart from structural changes in the global economy, is the advent of web 2.0 or the interactive internet. The new Internet has radically changed the rules of the game, customers have more power, companies have the ability to harness the Internet to apply many minds both internally and externally to collaborate and innovate.

Many companies are investigating Enterprise 2.0, but they are still filtering their interpretation through their existing success formulas.

In organisations I have worked with, I often see the role out of Enterprise 2.0 technologies from the IT department as though it was any other Enterprise technology like SAP or Oracle. Whilst there is nothing wrong with the technology being owned by the techies, web 2.0 has fundamentally changed the way that businesses will do business in the future and should be owned by the business. Often web 2.0 seems to be interpreted as the technical ability to blog, or a wiki, bolted onto a content management system for a website, or the document management system within an organisation.

In reality Enterprise 2.0 should be accompanied by a strategic review of how a company is doing business, its environment and its new, empowered customers and expanding markets. Processes need to be reviewed and designed from the user backwards, the way we handle orders and complaints needs to be streamlined, or the world will know all about a company’s unwillingness or inability to address issues. People’s skills need to be analysed, have they got what it takes to be able to communicate across porous company boundaries, do they know how to maintain their personal and company brands in an increasingly transparent business environment, has the organisation got enough dedicated resources to engage with powerful consumers and other stakeholders? What relationships are going to be key to the future of doing business and are the entrenched value systems compatible with a new business environment?

Many companies are looking to their suppliers for advice on how to roll out Enterprise 2.0, if the suppliers are technology companies or PR companies, firms need to realise that they will approach web 2.0 from their own mindset. PR companies see web 2.0 as an extension of the companies’ communication. Technology companies see it as an addition to the application architecture.

Microsoft has just released their magnificent SharePoint 2010, but it is important to realise that this is still just a software application. Granted its potential is fabulous, but until organisations review their strategies, processes and competencies, they are not going to realise the full power of the web. If they don’t think through their success formulas, the application will be implemented in such a way as to reinforce or aggravate the “active inertia”, enabling people to do more of the same more quickly. Generally the skills in technology suppliers are geared towards rolling out seats and adhering to good project management principles. They are not strategic business thinkers and need to partner with people who are focused on how companies create competitive advantage and function in the business environment.

Applications do not conduct business, people do. If employees in the organisation are required to collaborate for the organisation to become more successful, then the fact that they now have the tools to do so is not necessarily going to improve collaboration, they may need to be taught to collaborate – when, why, how? If people are required to engage with customers to shorten sales cycles, but the value system within the organisation is all about risk mitigation and proprietary methodologies, then the value system may need to be adapted to fit the modern business environment. If processes are designed from a point of view which suits the organisation and call centres have been deployed to cut costs, then no amount of wiki’s and blogs or the ability to “share” on Facebook is going to appease outraged customers who will take their gripes public.

Enterprise 2.0 requires greater levels of maturity within organisations and sophistication in how they function successfully in an ever changing environment. By reviewing their success formulas companies can use the web to compete in an extraordinary way and conduct business in a structurally changed business environment.

About Digital Bridges

Digital Bridges creates high performance organisations by unlocking the business value of the web. We create digital strategies, user requirement and functional specifications for Intranets, websites and web applications. We also develop and implement social media strategies and create powerful digital brands using eMarketing and Communication and manage brand conversations with consumers.

Digital Bridges approaches the web from a management consulting position and relies heavily on rigorous academic thinking as well as business experience. It is headed up by Kate Elphick who has a Law degree and an MBA from GIBS. Kate has spent the last fifteen years of her career on the business side of the IT industry with companies such as Datatec, Didata, Business ConneXion and Primedia.

Digital Bridges has a broad range of experience working with significant, successful clients in the Financial, Gaming, Tourism, Pharmaceutical, ICT, Legal, Airline, Professional Services, Media and Public Sectors.

To find out more about Digital Bridges, please visit www.digitalbridges.co.za or contact Kate Elphick on katee@digitalbridges.co.za

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Filed under Business, eMarketing, Enterprise 2.0, Macroeconomics 2.0

Blue Ocean 2.0

Blue Ocean Strategy is a business concept developed by W. Chan Kim and Renée Mauborgne of INSEAD that promotes the creation of new market spaces or “Blue Oceans” rather than competing in existing industries which they term “Red Oceans”.

Red Oceans are industries in existence today—the known market space. In the red oceans, industry boundaries are defined and accepted and the competitive rules of the game are known. Here companies try to outperform their rivals to grab a greater share of the available demand. As the market space gets crowded, prospects for profits and growth are reduced. Products become commoditised and cut-throat competition turns the ocean bloody, hence, the term red ocean. The competition is this on the supply side of the micro economy.

“Blue Ocean Strategy” aligns innovation with utility, price and cost positions to create competitive advantage by influencing or creating demand. Value Innovation is the simultaneous pursuit of differentiation and low cost, and focusing on the buyer to drive demand. It is the creation of an uncontested market space and makes competition irrelevant.

The powerful new web 2.0 is creating the opportunities for forward thinking organisations to change their competitive landscape forever. No longer are industry boundaries fixed, but with a little imagination they are nonexistent.

The four principles of blue ocean strategy formulation include how to create uncontested market space by

  • Reconstructing market boundaries,
  • Focusing on the big picture,
  • Reaching beyond existing demand; and
  • Getting the strategic sequence right.

These formulation principles address how an organisation can create blue oceans by looking across the conventional boundaries of competition, reduce their planning risk by visualising strategy, creating new demand by unlocking the non-customers and launching a commercially-viable blue ocean idea by aligning unprecedented utility of an offering with strategic pricing and target costing and by overcoming adoption hurdles.

The new economic principals of the web include

  • The law of abundance whereby things can be created once and sold many times
  • The networked economy whereby the value of a (social) network is increased with every additional member; and
  • Unfettered geographical constraints where we have access to audiences outside of our immediate environment.

Using these new economic rules we can break out of the traditional competitive (structuralist) strategic thinking and grow demand and profits for our businesses and the industry using blue ocean (reconstructionist) strategic thinking to redefine the business rules.

The winning organisations will be those whose leaders can overcome the key organisational hurdles that prevent even the best strategies from being executed – the cognitive, resource, motivational and political hurdles that prevent people involved in strategy execution from understanding the need to break from status quo, explore the opportunities provided by the modern internet, commit the resources to implement the new strategic shift, keep people focused on implementing the new strategy and from overcoming powerful vested interests that may block the change.

Extra demand is out there, largely untapped, the problem is how to create it. By exploring the value of web 2.0 and questioning our traditional thinking around business models and what is and isn’t possible we can shift of attention from supply to creating new demand, from a focus on competing to a focus on value innovation. The simultaneous pursuit of differentiation and low-cost a model is ideal on the internet. Competition is rendered irrelevant. By expanding the demand side of the economy using the modern web, new wealth will be created.

About Digital Bridges

Digital Bridges creates high performance organisations by unlocking the business value of the web. We create digital strategies, user requirement and functional specifications for Intranets, websites and web applications. We also develop and implement social media strategies and create powerful digital brands using eMarketing and Communication and manage brand conversations with consumers.

Digital Bridges approaches the web from a management consulting position and relies heavily on rigorous academic thinking as well as business experience. It is headed up by Kate Elphick who has a Law degree and an MBA from GIBS. Kate has spent the last fifteen years of her career on the business side of the IT industry with companies such as Datatec, Didata, Business ConneXion and Primedia.

Digital Bridges has a broad range of experience working with significant, successful clients in the Financial, Gaming, Tourism, Pharmaceutical, ICT, Legal, Airline, Professional Services, Media and Public Sectors.

To find out more about Digital Bridges, please visit www.digitalbridges.co.za or contact Kate Elphick on katee@digitalbridges.co.za

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Filed under Business, eMarketing, Enterprise 2.0, Macroeconomics 2.0

Financial Ratios for Social Media

Much has been written about the benefits of Digital Media to business, not the least of which is that it is highly measurable. We can see how many hits we have on a website, how many clicks through on an advertisement, how many members in a community, how many employees are blogging, but are these actually numbers which indicate Return on investment of time, resources and money? Not necessarily. They are merely potential precursors of transactions. In other words they are indicators that there may be additional transaction and revenue. So if we can see the numbers, how do we determine what value these measurement’s have and how to use them to forecast future success, or analyse past opportunities?

If we are to truly unlock the business value of the web, we need to develop a series of indicators of digital success, similar to the financial ratios developed by DuPont for investors and management accountants.

Naturally these indicators are determined by the business objectives and different ratios are more appropriate for different scenarios. It is also critically important to understand that we need to define the ratios correctly by defining a causal link between what we measure and what is actually an indicator of success. Using the wrong ratios to manage the digital side of the business could have dire unintended consequences and be incredibly detrimental.

Here are some proposed digital ratios for a social media business;

  • Social Leverage Ratios

Social leverage ratios are similar to the financial concept of beta, because they relate to the amount of commercial leverage in a social network. The “network effect”, when it come s to social media relates to the fact that a network (of people, telephones, social media sites etc.) becomes more valuable to each member, the more users that are part of the network. One Social Leverage Ratio is the Viral Coefficient.

In his book, The Viral Effect (2009), Adam Penenberg talks about the viral coefficient which needs to have a value greater than one for the network to grow in value. The viral coefficient basically means that each individual member must invite more than one person i.e. replace himself in the membership of the network and add at least one more member. If each individual only invites one person and that individual invites one person, then the growth of the network will be linear. But say for example, each individual invites two people, and each of those individual’s invite two people, then the membership and hence the value to the members grows exponentially.

This has huge implications for the design of social media businesses and marketing campaigns. Although the focus is to get people to register and start using the services, an equal effort must be expended getting them to share and invite other people to join the network. This is called viral loop marketing, and is measured by calculating and comparing the viral coefficient of each social network activity.

Facebook’s new function, which suggests friends for you based on the number of friends you have in common, is an example of a social network activity which is aimed at increasing the number of people you link to and increasing the value of your personal network, to keep you on Facebook. The more active members who are Facebooking, the more Facebook can monetise their platform through advertising, and the more value to the Facebookers the more they will encourage non-Facebookers to join.

  • Collaboration Coefficients

There are similar ratios that can be used to calibrate Intranets, such as the collaboration coefficient which explores the depth and usefulness of employees as nodes in a network. High collaboration coefficients suggest that the business is deriving value from the way that employees are working together.

  • RODSI

Web sales ratios include the conversion ratio or the RODSI which is a measure of the Return On Direct Sales Investment, and is calculated by subtracting the sales and marketing costs directly related to a campaign from the revenue that the campaign attracts, and calculating it as a percentage. Businesses can then experiment with different techniques and tools to increase their RODSI, such as Leads Management, SEO, different advertising media etc.

Each of these ratios can be used as a measure of success and the future success of digital strategies, it is incumbent on us to work out what the best measures are, and if necessary to develop ratios that are particular to the project.

These Social Media Ratios start off by being experimental, but over time they should stabilise as we ratify the causal link between what we are measuring and the business objectives which are predicated on them. Once we have validated the ratios, they can be used to benchmark and compare the success of one social media activity over another.

About Digital Bridges

Digital Bridges creates high performance organisations by unlocking the business value of the web. We create digital strategies, user requirement and functional specifications for Intranets, websites and web applications. We also develop and implement social media strategies and create powerful digital brands using eMarketing and Communication and manage brand conversations with consumers.

Digital Bridges approaches the web from a management consulting position and relies heavily on rigorous academic thinking as well as business experience. It is headed up by Kate Elphick who has a Law degree and an MBA from GIBS. Kate has spent the last fifteen years of her career on the business side of the IT industry with companies such as Datatec, Didata, Business ConneXion and Primedia.

Digital Bridges has a broad range of experience working with significant, successful clients in the Financial, Gaming, Tourism, Pharmaceutical, ICT, Legal, Airline, Professional Services, Media and Public Sectors.

To find out more about Digital Bridges, please visit www.digitalbridges.co.za or contact Kate Elphick on katee@digitalbridges.co.za

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Filed under Business, Digital Communities, eMarketing, Enterprise 2.0, HR Intranet, Interactive Intranets, Web 2.0

Forget Social Media for Social Media’s Sake – Your website is a strategic asset

There is much talk of how websites are moving away from being brochure sites, designed to communicate at the target audience, towards them being web applications for engaging with the audience. This is the natural logic which follows on from the interactive power of web 2.0, but perhaps the pendulum has swung too far.

Throughout the years companies have needed marketing collateral to position their brand to their best advantage, this includes brochureware, presentation folders, inserts, boilerplates on press releases, the website etc. and there is no reason why this should no longer be the case. Organisations need a strategically defined brand which acts as the fundamental backbone for all marketing and communication.

The website might be a manifestation of the brand because it contains the corporate messaging and the logos, but it is also a tool which the organisation can use to tell the audience where it thinks it is and what is important to the company. While the brand is a collection of experiences, we cannot expect our audiences to divine our purpose simply from their exposure to our employees, and as such, carefully written brochureware is a critical tool in the brand management arsenal. We also need to tell people what it is we think we are and why we think we are better and what better opportunity than through our marketing collateral?

At the same time, with the power of the modern interactive web and the advent of the knowledge worker, businesses are no longer about the buildings, logos and balance sheets etc. They are being perceived as a collection of individuals who provide services and ensure that operational requirements are met, whether they are legal financial, technical etc. As such, we expect to speak to people and feel justifiably aggrieved when we are forced to talk to a call centre operator or run up against obstinate individuals who hide behind company policies. It is at the touch points of an organisation that we experience the brand, whether through the sales process, service in fixing a problem, collection on payment or delivery on service.

Unfortunately with the world becoming obsessed with web 2.0 and using social media  to engage with audiences, we see a proliferation of unnecessary social media tools on so many websites. It’s as though people are adding Facebook and Twitter links for social media’s sake, without thinking about their strategic objectives; blogs stand sparsely populated, links are broken and wikis left unattended. Why do I want to become a “Fan” of some arbitrary photography shop on Facebook? What is the point of being a “Fan”, all I get is some self-serving drivel, or worse still a price list, from someone who is married to his business. There are no interesting conversations or people to meet, the owner merely has access to Facebook and thinks that web advertising is free.

The choice of the social media format that you select for your website is dependent of your organisational strategy, the types of employees, what your brand stands for, the depths of relationships that you need to form, and the investment that you are prepared to make, both financially and in terms of time and your business environment. There are a multitude of permutations, here are three examples.

  • Let’s say you are a night club and audience interaction will lead to more clubbers on a Friday night, then you do want your audience using the website as an interactive application for networking with each other and you. Your website could be developed as the point of engagement and the audience equipped with a range of social media tools such as blogs, posts, wiki’s along with the usual eMail addresses and telephone numbers with which to communicate or engage with you. They should be able to be a fan and post interesting comments about what happened last week from your site to Facebook.
  • On the other hand,  if you are a conservative bank which trades on its proud legacy of serving clients for one hundred and fifty years, you probably want to manage your engagement with the public in a more measured way, so your website would be a collateral site with certain mechanisms in place such as avatars and IM to manage communication and your online reputation. In this instance, you do not want every employee to have their own social profile as a representative of the organisation, although you most certainly want your executive to have a pretty robust digital footprint. Your website should be a piece of organisational collateral which everyone recognises as such, enhanced by some direct communication tools and the necessary individuals who make up the executive should build up their individual profiles using other social media tools such as Linked In, Facebook, industry forums etc.
  • If you are a Management Consultancy, an Executive Head-Hunter or a company that trades on the IP of the individuals who work there  then the website could be a hybrid where it becomes a repository for both the organisational collateral and the collective intellect and thought leadership within the organisation. Depending on what the user is looking for, he can choose to “find about us” XYZ Corporation, or he can “find out about me” Bryan Mole, Head of Performance Management Solutions at XYZ Corporation. The potential employee or client has the choice of how he manages the relationship by, for example, taking the conversations into cyberspace on Linked In, becoming part of the Bryan Mole’s network, or following him on Twitter.

Social media may well have changed our ability to communicate with our environment and the way we do business, but fundamentally, the rules of engagement and marketing have stayed the same; relationship management and brand building are still all about delivering on the organisational objectives and contributing to the bottom line and as such, the planning of our web presence requires an investment in strategic thought.

About Digital Bridges

Digital Bridges creates high performance organisations by unlocking the business value of the web. We create digital strategies, user requirement and functional specifications for Intranets, websites and web applications. We also develop and implement social media strategies and create powerful digital brands using eMarketing and Communication.

Digital Bridges approaches the web from a management consulting position and relies heavily on rigorous academic thinking as well as business experience. It is headed up by Kate Elphick who has a Law degree and an MBA from GIBS. Kate has spent the last fifteen years of her career on the business side of the IT industry with companies such as Datatec, Didata, Business ConneXion and Primedia.

Digital Bridges has a broad range of experience working with significant, successful clients in the Financial, Gaming, Tourism, Pharmaceutical, ICT, Legal, Airline, Professional Services, Media and Public Sectors.

To find out more about Digital Bridges, please visit www.digitalbridges.co.za or contact Kate Elphick on katee@digitalbridges.co.za.

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Filed under Business, Digital Communities, eMarketing, Enterprise 2.0, Web 2.0, Web Marketing

Can South African Banks regain their Reputations after the Economic Crisis?

The financial crisis of 2008 spawned not just a deep recession but a structurally different business environment globally. This restructured economic order, requires some new thinking, particularly for retail banks.

Many retail banks responded instinctively to the recession, without giving any thought to the aftermath of their actions, and there is a growing perception they have violated their ‘social’ contract with their customers.

In the heady days of courtship, when banks are acquiring customers, they make promises of service and understanding to clients. They position themselves as suitable partners for the long term, especially when it came to buying the major assets in peoples’ lives, houses and cars. Customers commit themselves to the relationship by signing up for twenty year bonds.

Up until mid 2008 it was rational to assume that a customer who didn’t pay back a loan was unwilling to, or incapable of doing so in the very short term, through incompetence or poor planning. It was also perfectly reasonable for a bank to divorce a client that wasn’t committed to the mutually beneficial aspects of the relationship.

When the crisis loomed, many people were retrenched and entrepreneurs, who had been successfully trading for years, suddenly hit a brick wall, where money just stopped coming in regardless of what they did.

Banks responded in a pre-crisis manner, based on the  economic assumptions that non payers were the bad guys. They came down harshly on offenders, foreclosing, handing over to debt collection agencies who are used to dealing with recalcitrant bad guys, harassed and heckled already devastated clients, who’s only fault was not to have foreseen a recession when even the economists didn’t see it coming. Their way of helping customers was to offer quick sells of customer’s homes before handing them over to the courts. They reported gleefully of moving more inventory through the system.

What they effectively did was to kick their customers while they were down, and then grind them into the ground. Banks should have looked at this as a relationship-building opportunity and demonstrated that customer loyalty was not misplaced. Instead they alienated a captive audience, who though they might not have been happy, were unlikely to have migrated in droves away from their respective banks.

Had the banks taken a long term view on their client relationships and their financial position, they could have operationalised a single view of customer strategy and considered the customer as the complex entity he or she really is. This would have enabled them to rationalise their exposure to the customer’s risk and facilitated the renegotiation of the terms of their relationships so that the customer would retain their lifetime value to the bank, instead of squeezing them for the present value in a recession.

Take for example, a regularly paying bondholder who has been with the bank for ten years, he hits a problem in the global recession. Judging by his history and paying behaviour, he is likely to get back on his feet in the next twelve months and resume repaying any loans regularly. His house is still worth more than the bond, mitigating the risk that the bank will not be able to recoup its money in future. Surely it makes sense to arrange for a 12 month payment holiday and raise his interest rates by 2%, for the rest of the bond period, thus retaining his Life Time Value to the bank, rather than selling his house off at auction at 50% of its value, alienating the customer, even when he has been rehabilitated and incurring the cost of acquiring an unknown customer from another bank which has similarly disenfranchised their relationship?

The banks add insult to injury by managing their collection processes so badly, that once they have collected their debts in full (and some blood, just for good measure), their alienated and bruised customer keeps receiving SMS’s from the lawyers threatening judgements if they don’t pay up.

Many banks do not understand their customer’s footprint across their financial institutions. In fact some banks are set up on the Owner-Entrepreneur model, because in good times this facilitates the accountability and entrepreneurial behaviour that agile companies need to succeed.

In the past this was a risky practise because it meant that the bank would miss out of cross and up-sell opportunities. Today the risk is much higher. Many banks who noticed a change in consumer behaviour when the economy turned, panicked. They exacerbated the problem at every client interface, by freezing overdrafts and making them due immediately, or by freezing access bonds, so that the customers who could have made payments on most of the accounts or were at risk of falling marginally short on payments, (for example meeting 90% of their commitments to the bank) were tipped into the emotional and financial abyss of bankruptcy. Where they could have had the car repossessed and saved the house, they lost everything.

The banks did not consider that the inventory that they were “flushing” through their system, was the life and heart of their customer, their home, the place where they loved and celebrated, brought up children and created a lifetime of memories. Customers are not going to be so quick to forgive banks, the cost of acquisition and creating loyalty amongst customers has just escalated through the roof.

The breadth and depth of today’s reputational challenge is a consequence not just of the retail bank’s instinctive responses to the speed, severity and unexpectedness of recent economic events but also of underlying shifts in the importance of Web-based participatory media, or web 2.0.

The Modern Internet and the era of Social Media are promoting wider, faster scrutiny of banks and rendering traditional public-relations tools less effective in addressing reputational challenges.

It will be transparent, decisive action that builds strong reputations in the future. Doing so effectively means stepping up both the sophistication and the internal coordination of reputation efforts. Some companies, for example, not only use cutting-edge attitudinal-segmentation techniques to understand the concerns of customers better but also mobilise cross-functional teams to gather intelligence and respond quickly to far-flung reputational threats.

One key is to cut through organisational barriers that impede such efforts through committed senior leadership who have an opportunity to differentiate their companies by demonstrating real statesmanship. An energised, enlightened and empowered public will expect nothing else.

The proliferation of Web-based platforms, has given individuals and organisations new tools they use to subject banks to greater and faster scrutiny. This communication revolution also means that certain issues (such as poor customer service) can be picked up by “citizen journalists” or bloggers and generate outrage on a much larger scale.

As a result, what formerly were operational risks resulting from failed or inadequate processes, people, or systems now often manifest themselves as reputational risks whose costs far exceed those of the original missteps.

In this dispersed and multifaceted environment, banks must collect information about reputational threats across the organisation, analyse that information in sophisticated ways, and address problems by taking action to mitigate them. This requires significant collaboration, coordination, commitment and an ability to act quickly.

Many retail banks are structured around centralised corporate-affairs departments that can’t monitor or examine diverse reputational threats with sufficient sophistication. Moreover, traditional PR can’t deal with many concerns, which must often be addressed by changing business operations and conducting two-way conversations. Managers of business units such as home loans or credit cards, have a better position for spotting potential challenges but often fail to recognise their reputational significance. This is often an unintentioned consequence of remuneration systems designed by financial managers, not being aligned to marketing strategies. Internal communication about reputational risks may be inhibited by the absence of consistent methodologies for tracking and quantifying those risks. Accountability for managing problems is often blurred.

As a result, responses to reputational issues can be short term, ad hoc, and defensive, and therein lies a problem that companies must solve quickly: even as reputational challenges boost the importance of good PR, companies will struggle if they rely on PR alone, with little insight into the thinking and operational root causes of their reputational problems.

A logical starting point for companies seeking to raise their game is to put in place an effective early-warning system to make executives aware of reputational problems quickly. Most companies are quite good at tracking press mentions, and many are beginning to monitor the multitude of Web-based voices whose power is beginning to rival the mainstream media’s. However, doing these things effectively, while an important prerequisite for stepping up engagement with stakeholders, isn’t the toughest task facing organisations.

To prepare for and respond to reputational threats, we suggest that retail banks should emphasise these priorities.

  • First, they need to assemble enough facts to gain a rich understanding of their customer base as it manifests itself across the entire organisation, not only their product preferences but also the psychographic profiles of segments of customers including propensity for risk, social media adoption and behaviours etc.
  • Secondly, they must conduct a two way dialogue with their customer (segments).

Banks are still the heart of the South African economy. They pump the funds on which productive human enterprise depends. Banks must perform this role well, with all the diligence we would expect of any expert or custodian of an essential task.

They must refocus on those fundamentals that are unchanged by the financial crisis — their core purpose, customer needs, and capabilities — while recognising that profound market changes have occurred and will affect how these capabilities need to be delivered. Those leaders whose banks can respond to the times and enhance their capabilities will be to­morrow’s winners.

About Digital Bridges

Digital Bridges creates high performance organisations by unlocking the business value of the web. We create digital strategies, user requirement and functional specifications for Intranets, websites and web applications. We also develop and implement social media strategies and create powerful digital brands using eMarketing and Communication.

Digital Bridges is technology agnostic and partners with great technology companies in order to ensure that our solutions are fit for purpose and deliver on organisational strategy.

Digital Bridges approaches the web from a management consulting position and relies heavily on rigorous academic thinking as well as business experience. It is headed up by Kate Elphick who has a Law degree and an MBA from GIBS. Kate has spent the last fifteen years of her career on the business side of the IT industry with companies such as Datatec, Didata, Business ConneXion and Primedia. Her skills include innovation and growth through marketing, communication, collaboration, knowledge management, human capital, performance management, process engineering and BI.

Digital Bridges has a broad range of experience working with significant, successful clients in the Financial, Gaming, Tourism, Pharmaceutical, ICT, Legal, Airline, Professional Services, Media and Public Sectors.

To find out more about Digital Bridges, please visit www.digitalbridges.co.za or contact Kate Elphick on katee@digitalbridges.co.za.

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