How to Make Money Marketing Your Business on Facebook

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HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK Clara Shih

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

By now, it is common knowledge that for virtually any business, Facebook matters. Mark Zuckerberg was recently named Time Magazine’s Man of the Year. Facebook is the biggest, fastest growing website in the world, period. More than 500 million people log on (see Figure 1) and spend an astonishing twenty billion minutes on the site every single day. Like the Internet before it, Facebook is changing every aspect of business and society. Facebook has in fact become, for all intents and purposes, the new Web. What does this mean for your organization?

Figure 1 Like the Internet before it, Facebook has experienced spectacular growth in the seven years since it began. Today, Facebook has more than 500 million active users worldwide.

Social media is a disruptive force for your business. Every customer and employee suddenly has a profile and a voice, and what they say gets automatically broadcast to their friends. Brands are being elevated or jeopardized overnight by a single customer’s opinion that “goes viral.” Companies have no choice but to become

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

transparent, responsive, and collaborative. Next-generation products are no longer being conceived in the lab or executive boardroom but by customers themselves. Everything is changing around customer conversation, participation, and how companies are organized. Fifteen years ago, we all had to learn how to build landing pages and run email campaigns. Today we have to master Facebook to stay in touch and to stay relevant with customers. Business leaders who understand how to cultivate fans and followers on social media are reaping the benefits of customer loyalty—repeat sales, cross-selling opportunities, and referrals. Those who don’t (or choose not to) miss out on critical customer conversations and risk their brand becoming irrelevant over time. 2010 was about social media strategy, vision, and learning. 2011 is all about execution. The dialogue has evolved from “we need to be on Facebook” to “show me the results.” Although specific campaigns and tactics will vary by company and industry, just about every organization needs to think about how its brand and customer conversations fit with the decentralized nature of social media. This article walks you through the recent Facebook developments, strategic considerations, tactical steps, case studies, and best practices you’ll need to help your organization succeed wildly in the Facebook Era.

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

Whose Job Is Social Media? Social media marketing is a misnomer because these efforts should not be limited to your organization’s marketing staff. In many companies, marketing departments spearhead social media efforts, but successful execution involves many groups, including sales, customer service, multiple brand or product teams, recruiting, IT, legal, compliance, and partners, such as your affiliates, resellers, and your PR agency (see Figure 2). Because it is your customers and not you driving the conversations on Facebook, you never know where the conversation will go. This means that all hands need to be on deck to continually engage fans and be ready to respond in real time. Understand that social media will naturally break down barriers in your organization. Take, for example, a negative customer post on your Facebook Page about a defective product purchased from your company. Though the customer issue itself might need to be resolved through your support department, the issue might also require action by your product development and PR teams. Does your company have the systems, policies, and procedures to address these complex workflow requirements in real time? Customers view your organization as a single entity. They expect a consistent and cohesive experience across all their interactions with your various departments. They do not know or care about the politics or communication gaps within your company. And they are

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

not going to wait around to see whether your company figures out Facebook.

Figure 2 Facebook is the ultimate test of an organization’s ability to collaborate, communicate, and coordinate internally and externally across multiple different groups, each of which plays an important role in providing an exceptional customer experience.

In addition to cross-functional collaboration, successful social media execution requires coordination and education up and down the chain of command: ► Executives—Executives need to set the social media priority and agenda for the company. It’s tremendously valuable for executives to take the time to understand and learn social media for themselves, even if day-to-day

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

Facebook marketing efforts are generally delegated to frontline employees. Staying close to the customer voice allows executives to determine where social media fits best in the organization, communicate strategic goals, allocate adequate budget and resources, and ensure all the right teams are involved internally. In fact, a growing number of executives (most often CEOs and VPs of Marketing) are even creating public profiles as a further means of connecting with and providing updates to customers, investors, and press. In a world where people are growing increasingly accustomed to “following” celebrities and CEOs, companies can build emotional loyalty by nurturing a sense of personal connection to corporate leadership. These social network updates often feel more personal and credible, even though in many cases they are crafted behind the scenes by PR staff. ► Line managers—Successful execution on Facebook requires aligning social media efforts with existing digital and offline strategies, building business cases for executive buy-in, and proving out return on investment (ROI). The real-time and highly transparent nature of Facebook initiatives are forcing mid-level managers to adapt to a rapidly changing technology environment while educating and managing both up and down the chain of command. The good news is social media provides a wealth of careerdefining opportunities. Managers who invest in leading and

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

defining these efforts can have a tremendous impact on the organization. ► Corporate employees—Chances are good that a large number of your employees are on Facebook, at minimum for personal use and in some cases on behalf of your company. These employees represent your brand. It is therefore imperative that corporate establish and communicate clear policies and guidelines on who is allowed to participate and what’s okay to share, as well as put systems in place to track these conversations. Just about everyone in your organization can benefit from some level of Facebook education. This is why a growing number of companies, such as Zappos, are even incorporating social media training into new hire orientation. Employees should also be encouraged to follow brands they like and to experience Facebook marketing as a consumer. This helps them understand what it’s like to be on the receiving end of corporate social media campaigns so they can develop a more authentic brand voice. If 2010 was the year you started wondering if you could afford to educate your employees about Facebook, then 2011 will be the year you’ll be asking yourself whether you can afford not to.

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

Who Spends Time on Facebook and Why As you decide whether to invest in building a presence for your company on Facebook, it’s important to ask where your target audiences are spending time. 94% of college students surveyed for The Facebook Era (my book published last year) said they do not use email on a regular basis. They prefer text messages and Facebook wall posts. What happens when these cohorts of individuals graduate and become the people you are trying to hire, manage, sell and market to? But it’s not just college students. More than half of Facebook’s 130 million users in the U.S. are older than 25 (see Figure 3). The largest increase in Facebook and Twitter users last year actually came from those aged 35–49. And surprisingly, the fastest growing audience on Facebook is women over 55, an impressive feat considering this group traditionally has tended to be techno-phobic. More and more, people are relying on social networking sites as a primary means to communicate with friends and follow brands (see Figure 3). Certainly, companies need to be where the customers are and communicate through the channels they prefer. People clearly prefer Facebook. Why? Facebook appeals to innate and universal human desires for self expression, human connection, and a sense of belonging. These desires are especially strong online, which prior to social networking

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

sites were beginning to feel overly vast, unnavigable, and anonymous for many Internet users. Facebook captures our photos, feelings, and relationships in real time and makes the Web feel increasingly human.

Figure 3 Well over half of Facebook users in the United States are older than 25. The data suggests that Facebook has “gone mainstream” and is used by people of all different age groups to connect with both friends and brands. In addition, 40% of users “like” one or more brands on Facebook.

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

Five Pillars of Facebook Marketing There are five ways companies are engaging audiences with Facebook (generally in this order): Pages, Places/Deals, Ads, Apps, and Facebook for Websites (also known as Facebook Connect): 1. Facebook Pages—Facebook Pages are essentially Facebook profiles representing a company, brand, or other business entity—they are like business websites on Facebook. Instead of friends, Facebook Pages have fans. When someone “likes” (becomes a fan of) your Page, she is both opting in to receive your Page updates in her News Feed as well as publicly declaring an affinity for your brand. When fans “like,” post, or comment on your Page, it is published to their friends’ News Feeds, generating free, word-of-mouth impressions for your business. In addition, Facebook provides Page administrators with aggregate demographic data, page views, click-throughs, and other valuable analytics. Facebook Pages provide an opportunity to learn about and truly engage your audience while building customer relationships and loyalty. Creating a Facebook Page establishes your company’s home base on Facebook. Instead of asking customers to visit your website, you are going to them on Facebook where you know they already spend time. A growing

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

number of businesses, in particular small businesses, are even foregoing websites in favor of a Facebook Page because it is far cheaper and less time-consuming to create, drive traffic to, and maintain. For bigger brands with an existing website strategy, Facebook Pages can play an important complementary role to test new campaigns or for reaching new audiences. (Without going into too much detail, Facebook Groups are generally not recommended for business because they are associated with the personal profile of whoever is posting and do not provide the same level of analytics.) Create a Facebook Page. Of course, setting up a Facebook Page is the easy part. The challenge is how to keep the Page interesting by periodically posting timely and relevant content and how to attract and retain fans. For more on this, check out Chapter 11 in The Facebook Era (click here for an excerpt on my blog).

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

Figure 4 Facebook Page for The Facebook Era (found at http://facebook.com/thefacebookera).

2. Facebook Places and Deals. Facebook Places is Facebook’s response to popular location-based services such as Foursquare, Yelp, and Gowalla. Facebook users “check in” to share their physical location (such as a restaurant, airport, gym, and so on), see where their friends are, and receive location-based deals. As with Facebook Pages, your business benefits from free word-of-mouth impressions every time someone checks in at your

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

establishment and this gets published to his or her friends’ News Feed. In addition, Facebook Deals allows local merchants to offer special location-based promotions to any user who checks in to their Place Page. When Facebook Places launched in August 2010, approximately 14 million local business Place Pages were automatically created from business directory information. Facebook users who search for but do not find a business on Places are also given an option to create a new Place Page. To claim a Place Page, click on the link that says, “Is this your business?” You will be asked to enter an address and phone number and provide one of the following proofs of ownership: articles of incorporation, business license, or BBB accreditation. Note that Facebook Place Pages may be created for certain businesses that already have a traditional Facebook Page. Facebook now offers the option for business owners to merge their Pages and Place Pages (though be warned there are some bugs!) and are working toward being able to provide a single Page object that fully integrates the two. Visit Facebook Places.

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

3. Facebook Ads. Facebook Ads are similar to Google AdWords, except instead of targeting search terms, Facebook Ad campaigns target specific audience profiles (known as “hypertargeting”). Facebook’s sophisticated platform allows advertisers to choose which users on Facebook get shown an ad. Advertisers can target profiles based on filters like location, gender, age, education, workplace, relationship status, relationship interests, and interest keywords.

Case Study: Elle Jae Award-winning photojournalists Elle Jae wanted to focus on shooting weddings that have a cultural or artistic element (their specialty). They created a Facebook ad campaign hypertargeting Facebook users whose relationship status is set to “Engaged” and who listed “art” as a profile interest (see Figure 5). Recognizing the highly referral-driven nature of their business, they also used Connection Targeting to specifically reach people who are friends with their existing Page fans. The result? Fewer but much more highly qualified leads at a lower cost than from Google AdWords ($0.33 instead of $1.48 per click, with higher conversion). Instead of bidding up the same keywords as every other wedding vendor, Elle Jae is able to focus on the exact profile of brides- and grooms-to-be with whom they enjoy working most.

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

Figure 5 Facebook Ad from award-winning wedding photographers Elle Jae. They use hypertargeting techniques on Facebook to focus their campaign on reaching engaged couples only.

Facebook Ads are powerful because they allow advertisers for the first time to reach very precise audience segments. Hypertargeting techniques can improve ad conversions and reduce costs because they allow companies to buy and show ads only to those most likely to buy. It is valuable even for brand advertisers who might wish to reach much larger audiences because it enables them to tailor messages to specific audiences as well as bid different amounts for more or less valuable audience segments. Like AdWords, Facebook Ads can be purchased in either a CPC (cost per click) or CPM (cost per thousand

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

impressions) model. Ads generally have four components: destination URL (which could be an external landing page or Facebook Page, Application, Group, or Event), title (25 characters), text (135 characters), and image (110 x 80 pixels). Create a Facebook Ad. 4. Facebook for Websites (originally Facebook Connect). One of the most interesting things Facebook has done is open up their technology so that any external website can integrate Facebook’s functionality. Facebook for Websites lets Facebook users authenticate to your website using their Facebook login. Instead of asking site visitors to register for a new username and password on your site (high barrier to adoption), you can implement Facebook for Websites’s single sign-on feature. Generally this results in more logins and therefore more data about who is coming to your site. Once you have implemented Facebook single sign-on, you can tailor the content and experience for each site visitor based on his or her friends and what their activity has been on your site. You can also embed Facebook’s “Like” button and other social plugins with one line of HTML added to your web page. When site visitors interact with any of these plugins, the activity is shown to their friends via the News Feed, which again provides free word-of-mouth impressions back to your business.

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

Figure 6 Facebook for Websites's social discussion widget embedded in The Facebook Era website (http://thefacebookera.com/home.php).

5. Facebook Apps. Warning: This is for advanced users only and will require deep involvement from your IT group or external developers. Facebook Apps provide businesses with an opportunity to integrate in the core Facebook user experience. The most popular Facebook Apps are games such as Mafia Wars, Farmville, and Bejeweled. However,

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

the most common Facebook Apps created for business usually appear as a custom tab on your Facebook Page. Why build an app? Less well-known brands with fewer Page views and fans typically find it is not worth their while to invest in building a Facebook App because of the higher barriers to adoption. However, for those with the resources and a big audience, Facebook Apps allow for greater customization and deeper user engagement than Pages and Ads alone. There is currently a big push toward social commerce on Facebook. Retailers are finding that people do not like to leave Facebook, so shopping experiences that originate on a Facebook Page but take people off Facebook face much higher rates of cart abandonment. For this reason, a small but growing number of companies are building apps to provide end-to-end shopping experiences on Facebook. For example, Facebook users can order pizza for delivery from Pizza Hut without ever leaving Facebook (see here). Similarly, JC Penney shoppers can access the entire catalog and place their orders through the app on JC Penney’s Facebook Page (see here). It would be very aggressive (and likely redundant) to try to tackle all five options Facebook has provided for businesses. Usually, companies start with one or two of these and expand naturally as they grow more sophisticated and learn about what their audiences respond to best.

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

Balancing Corporate and Local Initiatives Distributed, “corporate/local” companies, such as brick-and-mortar chains and franchises, insurance companies, banks, and directselling organizations have a unique set of challenges on Facebook. How do you align field reps, franchisees, store managers, agents, and affiliates with corporate brand guidelines while empowering them to have their own voice? Many corporate executives initially feel frustrated when they realize social network profiles such as Facebook Places and Yelp profiles are being autocreated for each agent and store location (behind the scenes, Facebook and Yelp are importing public business directory listings), or that local agents and stores themselves are creating their own Facebook profiles. Rightly so, they worry about lack of visibility, loss of control, damage to the brand, and even legal liability for what local brand agents post. Given that there is little corporate can do to prevent or ban these local profiles, many corporate/local executives are learning to embrace them. When properly managed, local-originated content is actually resulting in substantially higher consumer engagement, which can be tremendously beneficial for the brand. While consumers identify with national or global brands, the actual customer experience happens at the local level through the physical locations they frequent and now check-in to via Foursquare or Facebook Places.

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

It then becomes a question of how corporate can empower agents and stores with the right tools, training, and messages. As you have likely experienced first-hand, franchisees and local establishments are eager to get involved with social media, but they often don’t know what to say after they’ve created a Facebook Page or Twitter account. Worse yet, some locations say all the wrong things—for example, they are too salesy, they fail to delete profane language, or their posts contain misspellings—all of which can damage your brand. Other locations hit the ground running, pushing out top-notch content for a few weeks, but then it ends abruptly. A local page gone stagnant quickly fills with spam and reflects poorly on the brand. What is the solution? Distributed organizations have to balance corporate with local Facebook initiatives, but with a little extra effort, they can harness invaluable local market knowledge, reach, and customer connection. The following sidebar illustrates how global fitness company 24 Hour Fitness is successfully tapping into the Facebook marketing opportunity at both the brand and local levels through a combination of policies, tools, and training.

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

Case Study: Balancing Corporate and Local Initiatives on Facebook

Last winter, 24 Hour Fitness had developed a rapidly growing corporate Facebook Page with 100,000 fans but needed to figure out a Facebook strategy for its 400-plus fitness clubs across the country. Especially following the launch of Facebook Places, the corporate marketing team realized that local Facebook Pages for each club would be the perfect way to replicate and extend the fitness dialogue and experience between visits. The challenge was how to balance protecting the brand with encouraging each location to cater to its unique market, such as local preferences, habits, and even weather. High-priority goals included the following: ► Monitor and analyze corporate as well as local efforts on Facebook and Twitter ► Utilize a content workflow system to approve, reject, or suggest content (including Wall posts, branded tabs, and promotions) to all or a subset of locations

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

► Encourage localization to increase consumer engagement and check-ins while enforcing brand compliance 24 Hour Fitness sought the help of Hearsay Corporation, a Facebook Preferred Partner that has developed a social media–management tool for distributed organizations. The 24 Hour Fitness marketing team works with local club managers to create a Facebook Page for each location and then uses Hearsay’s administration tool to centrally monitor, analyze, and provide Facebook content suggestions to the various locations across the country (see Figure 7). Club managers can view the suggestions, personalize and localize, then one-click publish to their Facebook Wall and Twitter account. The results have been higher engagement both by consumers and local club staff, a consistent brand experience across these local efforts, and hours of work saved by the corporate marketing team and local staff each day. In addition, 24 Hour Fitness uses Hearsay's compliance module to filter profanity and personally identifiable information which may appear in Wall posts. “There is a tremendous opportunity for us to engage with our members using Facebook during and in-between their visits to our fitness clubs, but managing the social media activity of our over four hundred clubs was a daunting task. Hearsay

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

Social helps us organize, empower, and measure all of these disparate local club initiatives from a central dashboard and is helping our brand reach and connect with larger audiences while saving valuable time for my team." —Tony Wells, Chief Marketing Officer, 24 Hour Fitness

Figure 7 Hearsay Corporation, a Facebook Preferred Partner, helps distributed organizations centrally manage content, compliance, and workflow across corporate and local social media presences (such as Facebook Pages, LinkedIn profiles, and Twitter accounts).

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

The Questions Every Company Should Ask Before you get lost in the weeds of tactical execution, it’s important to develop a strategic framework to guide decision-making, prioritization, and resource allocation. Often, the best place to begin is by asking the right questions. Here are five important questions to help you get started.

What Is Being Said and Who Is Saying It? The first step for most organizations is to be able to monitor what conversations are taking place on Facebook. What’s being said? Is it positive or negative? How is the frequency and sentiment changing over time? What are people asking for (could signify an unmet need that needs to be addressed)?

Who Said It and Are They Allowed? Increasingly, monitoring is not enough. Federal law and industry regulation are being extended into the realm of social media. To avoid lawsuits and hefty fines, companies need to start taking corporate governance and compliance seriously.

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

What Should Be Said? The mantra that “content is king” has never held more true than it does on Facebook. Relevant, timely, interesting content is how companies generate a following, captivate fans, and influence audiences in the Facebook Era. Distributed organizations face an added challenge when it comes to coordinating and empowering remote employees and agents who sell or otherwise represent the brand on Facebook. Typically individuals in these customer-facing roles tend to be more sales people than marketers, so internal systems must be put in place to coordinate the periodic dissemination of marketing messages to the field.

What’s the ROI? What is the value of a Facebook fan? Which initiatives are driving results, and which ones are less effective? Which of my people are demonstrating best practices? Early on, measurement will focus on fan count, number of likes/posts/comments, and other first-order metrics. As Facebook programs mature, companies will need to tie social media engagement back to business outcomes such as sales, customer retention, and referrals (requiring integration to ERP software).

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

Whom Should I Work with and How Much Do I Spend? There are thousands of social media vendors out there, and new ones are cropping up every day. Whom should you work with? It depends on the business objectives you are trying to address and how much you’d like to outsource. Costs can range anywhere from $1,000 for a one-off project to a recurring monthly fee for services or technology retained. If you either have high fan interaction volume or multiple social presences being managed in your organization, it’s almost guaranteed that you will need some sort of technology to help coordinate all the moving parts and make sure nothing slips through the cracks. Table 1 illustrates the landscape of top social media vendors that can help up your team’s social media velocity and productivity. TABLE 1 Social Media Marketing Vendor Map I Created for The Facebook Era Blog (posted January 2011).

Category

Major Functions

Digital Media Agency

Manage ad buys, build Facebook Page creative assets, can help with brand voice. Example: Edelman Digital creates and updates articles and videos on how to maintain a healthy heart for the American

Who in Your Org Manages Relationship Marketing

Leading Vendors Archrival Likeable Media JESS3 Razorfish Edelman Digital

Cost $$

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

Heart Association’s Facebook Page. Facebook Custom Tabs

Create custom tabs to help make Facebook Pages more strongly branded and interactive.

Marketing

Example: 1-800FLOWERS.COM has sought the help of Hearsay Social to develop branded tabs (Twitter and RSS feeds, videos, Google Map showing store location, and brand elements for a consistent look and feel) for franchisee Facebook Pages. Facebook Custom Apps

Build custom apps to engage users Marketing, as deeply as possible. Product Team

Social Commerce Apps

Enable e-commerce on Facebook Pages.

$$$

eBusiness/ Online Sales

Payvment Social Amp Fluid Wishpot

$$$

Customer Service, Marketing

Jive Lithium Syncapse Spigit GetSatisfaction KickApps

$$$$

Example: JC Penney’s store catalog is now available on its Facebook Page.

Example: Best Buy runs its online community on Lithium’s technology.

$

Buddy Media Context Optional Sprout Friend2Friend Avenue Social Razorfish

Example: Context Optional built a Facebook App for Mattel that allows Barbie fans to select a Ken doll virtual gift to send to friends.

Online Offer standalone online Community community off Facebook, often used for customer service.

Fan Appz Wildfire Votigo Involver Transpond Hearsay Social

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

Brand Listening

Monitor brand mentions and sentiment.

PR

Example: Adobe uses Radian6 to monitor brand mentions.

Visible Radian6 Buzzlogic

Compliance Provide monitoring, archiving, and Field Enablement, Facetime workflow functionality for Compliance, Socialware FINRA, SEC, FTC, HIPAA, and Legal Hearsay Social other federal regulation.

$$

Example: Farmer's Insurance Group manages FINRA compliance requirements using Hearsay Social. Global/ Local Publishing Platform

Facilitate global/local publishing with workflow, multiple roles and owners, history tracking, and so on across multiple Facebook Pages, Twitter accounts, and other social assets. Example: 24 Hour Fitness uses Hearsay Social to monitor, measure, and empower its 400+ fitness clubs to each have a unique voice while aligning to a unified brand.

Marketing, Sales, Field Enablement in Companies with Distributed Reps/Locations

Hearsay Social $$ Custom development by digital agencies

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

Five Steps to Hitting a Facebook Home Run 1. Assign an owner and educate your organization. Hire or assign a social media director, a companywide owner who sits on the executive team (or in marketing) who coordinates social media efforts across the organization. Some companies, such as DeVry Inc., have had success with convening a social media task force consisting of representatives from various departments. People are most afraid of the unknown, so educating employees on how to achieve their personal and department goals using Facebook mitigates their natural resistance to change. Organizations like Coldwell Banker and the State of Utah now incorporate Facebook training as part of ongoing training for employees. Other companies have encouraged “reverse mentorship” on social media topics where Gen-Y hires help teach older employees the ins and outs of Facebook. There are also a number of popular conferences now that provide an immersive experience for key employees to quickly learn and absorb best practices to bring back to the company (see Mashable’s Weekly Social Media Event Guide).

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

2. Start monitoring and managing existing social media brand assets. The first place to start is to search for any existing brand conversations taking place on Facebook. Start tracking and responding to those first to build experience and context to inform your overall Facebook strategy. Understanding what is being said about your company and who is saying it provides valuable context for setting your business objectives and subsequently developing your plan. For example, if there is a lot of negative sentiment about your company on Facebook, then one of your top social media goals should be to address negative comments and elevate your brand. On the other hand, if people overwhelmingly love your brand and are creating viral videos, writing glowing reviews, and posting photos of themselves in your stores, your social media goals might be to recognize and promote these individuals across your Facebook and Web properties. Plan from day one to measure and monitor over time, as trends are generally more important and telling than raw numbers. A common situation that many large brands find themselves in is that by the time they get serious about engaging on Facebook, fans have already beat them to the punch and have created unofficial Facebook Pages or Groups. Take Ferrero, the European chocolate maker whose products are popular and loved around the world. In 2008, Ferrero executives discovered a zealous fan had created a Facebook

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

Page for Ferrero Rocher, one of their most popular products. But not only had a Page been created—it had actually become one of the most popular Pages on Facebook, with more than two and a half million fans! Instead of reinventing the wheel and losing the community momentum, executives decided to collaborate with this fan and co-opt the page. Without taking the time to research and listen first, brands might accidentally create redundant efforts or compete against their own fans. Instead, brands at minimum should be monitoring and complementing, or in some cases even working directly with grassroots efforts to best engage their community of fans. 3. Map business goals to Facebook’s capabilities. Review high-priority business goals to see which might be addressed well using Facebook. For example, if your company priority is to appeal to new audience segments, you may want to consider creating highly tailored Facebook Pages for those audiences and running Facebook Ad campaigns hypertargeting those audience profiles. If, on the other hand, your organization’s top business goal is improved customer service, you may wish instead to reorient your Facebook Page around customer questions, issues, complaints, and case resolution. 4. Invest in corporate governance and compliance. Throughout this process, have the discipline to periodically

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

check in with your legal and compliance teams to see if any existing or potential future activities may be in violation of company policy or industry regulation. Seeing how regulatory bodies from the FTC and SEC to FINRA and FDA are starting to clamp down on Facebook, the inconvenience will be well worth being able to avoid costly lawsuits and hefty fines. (Read more about FINRA social media compliance on my blog.) The following case study profiles how Farmers Insurance Group tackled the issue of corporate governance in a highly regulated industry and is reaping the benefits of social media across its 15,000 agents across the country.

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

Case Study: Empowering Field Reps with Corporate-Approved Content and Compliance

On the heels of a highly successful corporate Facebook Page initiative by corporate marketing last year, a number of Farmers Insurance agents began creating their own Facebook Pages to connect with their customers and local communities. The challenge for corporate marketing quickly became how to ensure FINRA compliance and corporate governance on these locally driven Facebook Pages while empowering each of their 15,000 agents to have an authentic personality and voice on social media. It is a tricky balance because, although agents are not Farmers employees (each agency is independently owned and operated), they represent the brand. Another challenge was what happened after agents created a Facebook Page for their agency. Agents and their staff did not necessarily have the proper systems or training to

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

consistently post timely, relevant, and interesting content, nor were these communications being filtered and archived for compliance. Farmers Insurance Group looked to Hearsay Social to help address these important challenges: ► Archive social network communications per FINRA 10-06 regulatory guidelines (using Hearsay's built-in integration to the LinkedIn messaging API) ► Provide agents with social media best practices and compliance training ► Help seed agent conversations on Facebook with articles, videos, and other educational content, as well as promotional messaging such as contests and sweepstakes ► Provide one-click distribution of branded tabs to all or a subset of agents (see Figure 8) The results? FINRA compliance, increased agent and customer engagement, and strong and consistent Farmers branding across all agent Facebook Pages. Each agent was up and running on Hearsay within a matter of minutes, and more than 90% quadrupled their number of Facebook fans in the first 60 days. A recent Rose Bowl sweepstakes campaign run through Hearsay’s branded tab distribution system (see

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

Figure 8) was one of the most popular and successful in the marketing team’s history.

Figure 8 Farmers uses Hearsay Social’s Facebook tab distribution platform to push branded tabs (such as its recent Rose Bowl sweepstakes campaign) to local agents’ Facebook Pages. Certain aspects of the tab like the logo are fixed for brand consistency, with customization opportunities for agents who wish to add a personal message or touch.

“Our 15,000 agents are our most valuable brand representatives. For eighty years, we have empowered our agents with offline tools and training. It was imperative we start thinking about how to empower them with social media tools and training, so we looked to Hearsay Social. Their technology platform is powerful, effective, and simply outstanding.” —Marc Zeitlin, Vice President of Marketing, Farmers Insurance Group

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

Chapter 15 in The Facebook Era also provides a step-bystep guide for identifying key risks to your organization and developing a corporate social media policy (click here for an excerpt on my blog). 5. Measure, learn, and iterate. After you’ve decided on goals, it is useful to define metrics around these goals to help define what success means, determine the appropriate level of investment, and measure direct value to the business. For example, “identify X new trends in the market” or “increase our Net Promoter Score by Y.” Over time, comparing results from one Facebook campaign to another, as well as across different marketing mediums, will enable you to determine how best to allocate resources across your various marketing channels. In addition to these more traditional measures, it’s likely we will need to develop new measurement techniques. This is not unlike a decade ago when the notion of “cost per click” was developed for measuring online ad performance. The Facebook Era introduces a concept of “social customer lifetime value,” which I simplify and summarize in the following sidebar.

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

Social Customer Lifetime Value (sCLV) Customer lifetime value (CLV) is a popular marketing metric that approximates the business “value” from a customer. Traditionally, it has been calculated as the net present value of future cash flows from a customer relationship—in other words, how much someone will spend on your products or services across his or her lifetime as a customer. As a business, you wouldn’t want to spend more on marketing and selling to someone than her CLV minus the cost of goods sold, because then you would be losing money. CLV has been instrumental to the marketing discipline, but perhaps it is outdated. Seeking to incorporate the social word-of-mouth effects of customer engagement on Facebook, I developed a new way of thinking about CLV, which I call social customer lifetime value (sCLV): sCLV = CLV + Sales from word of mouth on Facebook + Customer support savings + Product revenue from crowdsourced ideas

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

This example accounts for 1) incremental word-of-mouth News Feed referrals from a customer engaging with a Facebook Page, 2) support savings from community questions being answered by another customer instead of a company’s own support staff, and 3) revenue generated from a product or feature suggestion posted by a customer on Facebook. sCLV will be calculated differently for each company based on the business goals defined and initiatives pursued. Charlene Li, founder of Altimeter Group, recently developed a number of helpful tools and calculators relating to this concept (download here).

Important Trends Here are a few important trends and key takeaways to keep in mind as you build out your Facebook marketing program: 1. Be where the customers are—Especially if you are struggling with SEO and SEM efforts to drive traffic to your website, try going where your customers already are (that is, Facebook). Facebook Pages are the new website. 2. Get local—Facebook autocreating Place Pages aside, local business profiles are inevitable replacements for the Yellow Pages. People have a natural affinity for the local shops and

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

restaurants where they spend time and will continue to “check in” to these local establishments. Brick-and-mortars can capitalize on the advantage of their physical locations to deepen customer connection and word-of-mouth impressions on friends’ News Feeds. 3. Personalize experiences across the Web—Facebook for Websites and hypertargeting capabilities are enabling highly social and personalized experiences across the Web. When people visit your website, they will increasingly expect the option to login with their Facebook credentials and to be able to bring their Facebook profile identity and friends with them as they search, shop, or interact otherwise with your site. 4. Grow your company’s network—Social networks are growing. Studies suggest that although the average number of close connections is not deviating much from Dunbar’s number of 150, most people’s social networks are growing as a result of staying in touch with weak ties via Facebook. In fact, by inventing “fan relationships,” Facebook is extending the notion of weak ties to include not only people but also brands and businesses. For businesses, having a bigger social network of fans is akin to having a bigger funnel of people to market to. 5. Recognize that customer loyalty has never been more valuable—In the Facebook Era, suddenly every customer has a voice, and what they say matters to their friends.

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

Increasingly, friends are becoming more prominent filters and recommenders for news, information, and products, heavily influencing how decisions are made. When you win over (or lose) a customer, you could be winning over (or losing) an entire friend group. Along the same vein, beware too of these common pitfalls: 1. Getting swindled by social media “experts”—It feels like everyone is a social media expert these days. Beware of fake opportunistic “experts” who have no track record of execution. 2. Outsourcing too much—Ben Smith, a marketing manager at Dunkin’ Brands, always warns companies against outsourcing social media to their digital agency (probably for the same reason that most of us wouldn’t outsource the company website). Facebook is a critical channel for keeping a pulse on the customer voice, and managing social media well needs to become part of your corporate DNA. No one knows your business and your customers better than you, and keeping Facebook efforts close allows you to adapt and respond quickly to real-time feedback. Exactly how much you outsource versus keep in-house will vary by organization, but many business leaders are choosing to own the overall social strategy themselves and delegate certain pieces, such as media buys and creative.

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

3. Hiring people to do what can be automated—Nor should you over-hire. Social media archiving and brand compliance work in particular can be extremely timeconsuming to do manually. Don’t make the mistake of turning social media into manual labor when there are plenty of ways to automate these tasks through off-the-shelf or custom-developed technology solutions. 4. Focusing only on technology—Technology is often part of the solution, but never the full solution. The hardest part about making Facebook work for business is the organizational change required. Successful programs require winning executive buy-in, properly training employees, and fostering a culture that is receptive to transparency and change. 5. Resting on your laurels—Facebook is rapidly evolving and shows no signs of slowing down. New features are released every week, with major product changes almost every quarter. This is why companies can’t afford to drag out RFP’s or wait for long decision cycles. By the time a decision is made, Facebook’s technology has changed. Partner with a vendor you know can keep up. Focusing too much on today’s features and requirements is dangerous because they may soon become obsolete.

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

How Facebook Is Changing the Online Marketing Discipline Thanks to Facebook, the Internet is evolving from a contentcentric Information Web to a relationship-centric Social Web. A decade ago, information was at a premium. Today, it is relationships that are king. Last decade, search marketing taught us to focus on maximizing each transaction, measured by click-through rates and conversions. Today, Facebook fan relationships encourage us to take a longer-term view. Rather than maximize for a single transaction, companies need to optimize for the lifetime of a customer relationship. It’s not about how much a customer buys today, but rather what she buys over a lifetime, together with how she influences others to (or not to) buy. As marketers, we need to move up the marketing funnel and engage audiences sooner in the buying cycle because this gives us an opportunity to build trust and help influence the purchase decision. In contrast, search marketing doesn’t provide much opportunity to influence. By the time someone is searching on Google for “digital camera,” chances are high he is already pretty far along in the purchase decision. There is not much opportunity to influence beyond price, and that is not a game most of us want to be in.

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

Online marketing still needs to be performance-based, but instead of measuring click-through rates for a single campaign, we can invest and analyze with a longer-term view. In many ways, the Facebook Era is a throwback to the days before the Internet. This is especially true for brick-andmortar businesses, which have long mastered the art of instore customer connection. 1-800-FLOWERS.COM founder and CEO Jim McCann sums it up nicely in his foreword to my book, The Facebook Era: “Past technologies helped drive down costs, improve reach, and grow the business, but in the process we lost something very important: customer connection. I have missed the direct customer dialog I had in our retail flower shops. The digital age has felt largely transactional in comparison. This is why I feel even more excited about the Facebook Era than I did about toll-free numbers or the Internet. The Social Web is about connecting with customers again, hearing their stories, sharing in their joys and sorrows and the most important moments of their lives. It’s about reopening the dialog so that businesses can put customers back in the driver’s seat and keep getting better.” The challenge to all of us is how to replicate this customer connection through the online medium. Fortunately for us, there is no better tool for this task than Facebook.

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

What exactly the future holds is anyone’s guess, but what we do know is that, thanks to Facebook, your business will never again be the same—whatever your industry, wherever you work, and whether you are in marketing, IT, or another corporate function. I hope you have found this guide helpful in your Facebook marketing efforts. In the spirit of practicing what we preach, let’s keep the conversation going. Post your questions and best practices on my Facebook Page. Or if you must ☺, you can email me at [email protected].

Continue the Dialogue Connect with other readers and stay in tough with Clara on Facebook: http://facebook.com/thefacebookera

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

Acknowledgments A big thank you to my readers and customers, who have taught me everything I know about social media marketing and are always inspiring me with their ideas and questions. I am also grateful for the insightful feedback and suggestions on this manuscript from some of the most prominent leaders in the industry: ► Jaleh Bisharat, Vice President of Marketing at Hearsay Corporation ► Andrea Harrison, Head of Social Media Practice at Razorfish ► Charlene Li, Founder of Altimeter Group and author of Groundswell and Open Leadership ► Michael Slaby, Executive Vice President, Global Practice Chair of Edelman Digital ► Ray Wang, CEO and Principal Analyst of Constellation Research

HOW TO MAKE MONEY MARKETING YOUR BUSINESS ON FACEBOOK

About the Author Clara Shih is author of the bestselling book The Facebook Era and founder/CEO of Hearsay Corporation, which provides Facebook, LinkedIn, and Twitter enterprise management technology for the Fortune 500. Named one of Fast Company’s Most Influential People in Technology, Ms. Shih is credited by Forrester Research and others as having launched the social business movement in 2007 when she developed the first business application on Facebook. As marketing and alliances executive at salesforce.com, she led the company’s social networking initiatives. She has also worked in corporate strategy and software development at Google and Microsoft. Her book, The Facebook Era, has been featured in The New York Times and is being used as a textbook at Harvard Business School.

© 2011 by Pearson Education Publishing as FTPress Upper Saddle River, New Jersey 07458 Company and product names mentioned herein are the trademarks or registered trademarks of their respective owners. All rights reserved. No part of this book may be reproduced, in any form or by any means, without permission in writing from the publisher. ISBN-10: 0-13-269188-4 ISBN-13: 978-0-13-269188-8 For more information, please contact us at [email protected]

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