Today’s Internet tools can be seductive. There is relatively little or no cost to set up a web site, blog, construct a presence on LinkedIn and facebook, conduct podcasts, post videos on YouTube and tweet. Based on the enormity of those connected to the Internet, reaching only a small percentage will yield a fantastic return.

Has nirvana arrived? Unfortunately, not yet.

There are costs, both obvious and hidden, that are required in order to be a successful user of the current and emerging social networking tools. For example:

Policies. Before leaping into the use of social networking tools, corporate policies must be established. Who will blog? Is training required? Is there an editorial policy? If facebook pages and tweeter are going to be used as customer input media, who is going to monitor them, and what is the expected response time? Unless buy-in is obtained by all functions, the risk of being flamed in blogs as a poor vendor potentially offsets any gains using other tools.

While there are no out-of-pocket costs in establishing policies, the energy and political capital expended by the Marketing Manager may be significant.

Training. If there are going to be several people blogging, tweeting, appearing on podcasts or YouTube and responding to customer requests, they should understand what they are doing, how it fits in the larger context of the Marketing/Corporate message, and what ground rules, if any, must be followed.

Once the policies have been established, training can follow. However, a curriculum must be established and the message delivered. If no-one on staff is available to do this, outside resources must be engaged to do construct the courses and do the first round of training.

Blogging. If this is to become the unofficial voice of the company, the person(s) chosen to blog through the company site must be a mixture of Marketing, CTO, Sales and Management, with a sense of humor. If successful, this person will be the spokesperson at events and may be one of the leads in closing large sales. Few people can cover all these bases so using multiple people helps, especially when the bloggers are expected to respond to competitive blogs or analysts’ reports.

The costs related to blogging, whether it is one person or several, is ensuring that the blogs are timely, accurate and content rich. To the extent that each blog can be reviewed by someone for grammar and usage is a plus.

Our experience, confirmed in conversation with others, is that it takes the equivalent of one person, full time, to originate content, respond to news/comments, and attend shows and seminars, etc. in order to generate 3 blogs per week.

LinkedIn and facebook pages. While the initial posting can be relatively static, reflecting the official voice of the company, comments and discussions require origination, monitoring and responses. These pages can be used to communicate with “fans” or “contacts” to deliver specific messages or announcements. These can also be the place where fans and contacts take the company to task for poor performance or perceived slights.

The size of the company and their inclination to use these tools will drive the cost. Certainly daily monitoring is required. Responses will depend upon policy, but must be timely. One estimate is that if a company is going to engage in this area, ½ of a full time employee is required.

Twitter.If multiple people are using twitter, under their own name, there is no cost other than training and potentially monitoring. If the company chooses to tweet, i.e. @Acmetoolanddie, then the intent of the tweeting needs to be defined and executed. It is possible that one of the bloggers could be assigned the role of corporate tweeter, but some one should be monitoring all the tweets, both originating from and about the company.

Again, depending upon the size of the company and their intent, the resource requirement will vary. At a minimum, ½ of a full time employee may be required.

Podcasts. One of the surprises that came out of the silent film era is that several of the silent film stars could not make the transition to “talkies” because their voices didn’t work. The same may hold true in trying to move bloggers to podcasts. Some will work, some won’t. If a new personality is required, this will be another added expense.

If the thought is to use podcasts as a vehicle to distribute information about the products, i.e training manuals, installation manuals, etc. careful consideration must be given to the nature and tone of the presentation. Here, using outside professional talent may be the best long term approach.

YouTube. One early approach was to have the summer intern go around the office and shoot video of all the players. While still interesting, and part of the social networking fabric, savvy Marketers are using YouTube to enhance their brand and deliver messages.

The resource requirement in using YouTube depends upon the intent and message.

Have you scoped out all the obvious and hidden costs in using social networks? Have all the policies and procedures been put in place…is there complete buy-in by all functions as to their responsibility? Are you budgeting for an additional 2-3 people, plus training and professional expenses, for social networking in 2010?

Next – What is the right mix of “traditional” and social networking tools?

RHM 7/9/2009

Although we are only a few days from summer, it is not too late for “spring cleaning”  The Wikipedia entry for “spring cleaning” reads:

The most common usage of spring-cleaning refers to the yearly act of cleaning a house from top to bottom which would take place in the first warm days of the year typically in spring, hence the name. However it has also come to be synonymous with any kind of heavy duty cleaning or organizing enterprise. A person who gets their affairs in order before an audit or inspection could be said to be doing some spring-cleaning.

In today’s economy, almost all hardware and software companies can benefit from spring-cleaning. The focus should be on those products that are in the last stage of their life cycle. Many companies are loath to “sunset” products, often for a variety of reasons; the CEO cut his teeth on that product; one major customer continues to buy it; it was our flagship 5 years ago, we will lose out identity if we sunset it, etc. etc.

However, by critically examining the product(s), especially in the harsh light of today’s economy, an astute Product Manager may find that demand has fallen off dramatically, that the margins once generated are no longer there, or that the product is no longer competitive.

If the decision is to do spring cleaning, what actions are appropriate? Underlying all decisions is the need to recognize that if action is appropriate today, it will be imperative six months from now. So fast, aggressive action must be taken today.

For chosen hardware products:

1. Immediately stop production and stop the purchase of all unique parts. Take inventory and determine the value of unique parts in stock. Based on finished goods inventory and projected demand (which will probably be high) make a determination on whether to build out inventory or not.

2. Determine if promoting and selling the chosen products will cannibalize growth products. If yes, seek an alternative disposal process. If no, move quickly to clear the inventory. The best way to clear inventory is to increase the value of the transaction. This can be by lowering the price, or by tying the sale into some other value, i.e., free installation, extended warranty.

3. If the promotion of the chosen product(s) will cannibalize growth products, consider:

a. Contacting the main customer(s) and working with him/them on taking the inventory at a reduced value,

b. Finding a geography that is not as mature as your main market, and moving the product(s) through that geography,

c. Focusing on a well defined vertical, and re-position the chosen product(s) in that vertical with some added features/benefits. Make sure that this solution does not overlap into your mainstream market.

d. Scraping the inventory.

For software products:

1. Announce the end of life (support) for the chosen release.

2. Announce the quarter in which the next release will be made.

3. Offer inducements to the installed based to purchase the current release, with a well-defined path for upgrading to the new release. (Assuming that it is not a forklift upgrade.)

4. Stop all promotion/selling of the chosen release.

Clear direction to the sales channels regarding the discontinued products is a critical part of any spring-cleaning. Specifically, instructions on how to handle on-going sales to existing customers, defined migration paths, length and breadth of warranties, etc, for each product must be finalized prior to any announcement.

Taking action now may preclude having to set aside a “reserve” next January, after your auditor has reviewed your sales forecasts and inventory.  Usually such reserves are a charge against profitability, which may already be slim this year.

Is spring-cleaning in order?

RHM 6/18/2009

If I hear one more time that the key to success is from innovation or that a company’s number one value is innovation, I am going to write a blog about innovation and the REAL truth.

Wait, you are saying there is innovation; I agree there is, but nowhere to the degree that we are led to believe via the deluge of marketing, speeches, and emails.  For example, there is a TV ad that depicts two salespeople proposing a very innovative idea to a potential client.  The client is so impressed with the innovative idea and says he is sold… this is followed by a long pause and one of the salesperson says, OH, we just have ideas we don’t actually do anything!

I would propose that outside the implementation of pure R & D, two forces drive what passes for innovation.  One force is the customer, who is in the driver’s seat and is requesting (sometimes demanding) features that companies develop.  The second force is those companies who are leaders in their field execute well vs. being innovative.  Neither force represents true innovation.

As I stated there is innovation going on.  The internet (actually web browsing) has changed communication.  Digital photography is a disruptive technology and has replaced standard photography; and it appears that some of the social networking tools will change the way we communicate.

One world of caution about innovation; sometimes innovation does not hit the mark or is very slow to be accepted.  IP/internet telephony, while some might argue is innovative, has been slow to be adopted because of issues of reliability and ease of use.

Microsoft is not really innovative (sorry Microsoft), instead they execute (Vista is not a good example).  Microsoft Office does not sell because it is innovative; it sells because of Microsoft’s dominant market share and their integration of their products.  There are better Word or Power Point applications in the market, but major suppliers and complete suites sell. 

IBM was the market leader in computer hardware, not because of innovation, but more so because of having market share.  IBM realized that the hardware ride was coming to an end and converted to service and solutions company (still selling main frames but for different applications).  This was not innovation but pure survival (listening to their customers) and good execution.  As the world moves toward “cloud” computing, look for Microsoft to follow a similar path.

Dell and UPS are other examples of companies that execute with precision.  No one is holding them up as innovators. 

The common theme among Microsoft, IBM, Dell, UPS and other leaders is that they found a market niche where they have (or had) a differentiated product, and then listened to their customers.  By responding to their customers and executing well they maintained their growth and profitability.  Success was not driven by “innovation,” it was achieved by listening and execution.

So, while there are and will be many ideas out there to be discovered, the real driving force for success is to execute well in a timely manner, such that you beat your competition and respond to your customer’s demand.

RHL  6/4/09

A guest post from Erika Goldwater.  

Everyone wants to save money these days, but a marketing department cannot run without spending money, right?  Wrong!  There are a few cost-effective programs that can be run using your own email marketing campaigns and some creativity.

I have had great success (new leads generated and business closed) by implementing company and/or vertical-specific newsletters.  Your customers and prospects- no matter what your business is- care about getting, industry-specific information and hot business news that pertains to them. 

First, look at your database of names and contacts (prospects and customers) and ensure that each and every contact has the correct industry associated with the company.  For example, Joe Johnson, CTO, Citizens Bank, must have financial services listed as the industry associated with that contact.  Whether you use Siebel, Salesforce.com or another CRM, there is always a way to associate valuable marketing information with the contact.

Once you have associated industries with your contact, schedule a series of content-rich newsletters.  I suggest both a company-focused newsletter and an industry-specific newsletter for the different segments of your database.  For example, current financial services customers should be on the list for both the quarterly company newsletter as well as the monthly financial services newsletter.  These electronic publications should have valuable industry information, helpful product information (new releases, product reviews, use cases, etc.,) and relevant news stories or case studies that relate to the industry.  Include links to stories or articles so readers can quickly and easily access the information from the newsletter.  Note that not all the content needs to be self generated, links to news stories, government reports, etc. can accentuate your content.  If possible, set up a unique URL per newsletter to enable tracking and hit rates, which help you determine relevance and success of your efforts.

Do not worry if a number of respondents unsubscribe to your newsletters or if there are a lot of bounces.  This happens, and actually helps you clean up your database, ensuring that you are only sending information to people who are true prospects and who are interested in hearing from you.  Additionally, this helps to give you better metrics to measure success of these newsletter campaigns, as you will have a realistic idea of who is a viable and legitimate prospect in your database. 

As today’s buying decisions are often made by committee, it is important to reach as many people in the company as possible.  Augment, rather than delete mailings sent to the same company. 

By including calls for action and linking the metrics from the newsletters to your web site analytics you can begin to trace a level of buyer interest, which then can be “closed” by the appropriate sales channel.

Effective –Yes.  Cost Efficient – Yes.  Not all marketing programs need to drain your valuable Marketing resources.

An experienced marketing and public relations professional, Erika has developed marketing, public relations strategies and lead generation programs for both start-ups and publicly traded companies.  Erika has helped companies develop new partnerships, launch product lines, integrate sales and marketing initiatives to drive sales and increase a company’s visibility.  She holds a B.A. in Journalism from the University of Maryland, College Park and is a Certified Information Privacy Professional (CIPP).