Predictions and Priorities for Social Business in 2012 – Part I

My pet peeve about the annual predictions ritual is that they lack context for action. It’s nice to know that tablets and big data are important — but what should you do about it?

So here’s my attempt at not only forecasting but also to provide actions that companies should be prioritizing in 2012.

The Process: I went through my speaking and client engagements in 2011 and looked at which topics and themes I kept referring to over and over again, especially toward the end of the year. I also analyzed which of the tweets from these events were most retweeted to verify where the heat was.

I boiled it down to three predictions and also explain why I think these are a priority for business leaders to address in 2012. Because they are on the long-ish side, I’ll be posting one a day so that there can be discussion about each prediction and priority.

Prediction #1: Consumers will reward transparent companies with their loyalty. Companies must get courageous with transparency and make it an every day occurrence. Or they will face the wrath of outraged customers.

Almost 8 million people have now seen the FedEx delivery guy tossing a monitor over the fence. FedEx’s response was timely and tried to be authentic, but lacked only one thing — a link to that video. It was just a short search away, so why not link to what everyone already knew existed? Regardless, I was glad to see FedEx respond quickly when so many other companies facing a crisis try to wait for the situation to fade away.

The gold standard on transparency reaches all the way back to July 2006 when Dell’s brand new blog had the courage to write the post entitled  “Flaming Notebook” about a Dell computer bursting into flames in Osaka, Japan. And they included a link to a photo of their product exploding into flames.

Where did they find the guts to do this? Michael Dell made it crystal clear in his instructions for the post: Dell was built on the value of going direct to consumers and the blog had to communicate and live by those same values.

I’ve told the Dell flaming notebook story and shown that photo at hundreds of speeches and asked a simple question: If your organization had it’s version of flaming notebook happen today, would you be able to write that post? In a most telling way, there are only a few hands that get raised.

Dell’s flaming notebook was five and a half years ago, before there were Facebook Pages, before Twitter even existed. It was the Dark Ages of social media and Dell understood then that it was important to build a new, unique relationship with their customers.

Think about what would be needed to get your organization to that point and make it a priority to be transparent about the everyday small problems that always occur. Practice on the easy stuff to get prepared for The Big One.

Too busy you say, with your existing social media efforts to do this? All of the efforts that you make updating your Facebook page or posting on Twitter add up to mere hand-waving if you can’t master this new type of relationship demanded by your customers.

Does your organization have the courage to engage when things go wrong, no matter how big or small? How did you organization get to this point? Please share where you are on your journey, and what you found helpful to bring greater accountability and transparency into your company.

Next up: How well do you really know your customers?

Groundswell Paperback: A Look Back Three Years Later

Groundswell NameplateThree years ago, Josh Bernoff and I proudly launched our book, Groundswell. To our astonishment, it has sold more than 100,000 books and now a new, updated paperback version is available (links below), with two new chapters on how to use Twitter and social maturity.

A lot has changed over the past three years – in May 2008, Facebook and Twitter were still nascent and the iPhone had no apps! To address this, Josh added a new chapter about Twitter. But the theme of the book — that you have to focus first on the relationships created by social technologies (and not the technologies themselves) – still resonates today.

At the same time, very little has changed. One of my favorite examples in Groundswell is how Dell responded to one of their notebooks spontaneously bursting into flames in June 2006. The chief blogger, Lionel Menchaca, wrote a blog post titled, “Flaming Notebook” that linked to a photo of that laptop on fire. Talk about guts! That was five years ago, and as a whole, organizations still lack the maturity to be able to truly engage in an honest, authentic dialog – despite their adoption of social technologies.

Groundswell has a new chapter discussing social maturity and Forrester published a report this week on the topic. My organization, Altimeter Group, has done research and consulting on this, as have agencies like Dachis. The fact that so many people are chiming in on how to address social strategies is an indication of the strong interest. But the fact that so many organizations are still treating social as a marketing and messaging channel demonstrates that we still have a long, long way to go.

A key reason why I wrote my second book, Open Leadership, is because leaders could viscerally feel the change that social media was causing in the pit of their stomach – and they lacked the framework to understand how to think, act, and lead in a new environment where relationships were being formed in these new channels. Leadership is built on relationships, and leaders in general have failed to grasp this change.

Groundswell

But by far my favorite part of the new paperback edition is the quotes from readers describing the impact Groundswell has had on them. It is the most gratifying and humbling experience as an author to know that your words have had an impact. I love it when readers show me their books that have been highlighted, dog-eared, and filled with post-it notes. (This photo is from Elizabeth Gebhardt, who showed me her book at an event in 2009.) And I am especially awed when people tell me that Groundswell inspired them to start new jobs or even careers because of the inspiration they got from the book.

So from the bottom of my heart, thank you to all of the readers of Groundswell, and I hope to all of the new readers that you find it just as relevant today. It has been a joy hearing from you over the past three years and I hope to continue growing the relationship we’ve begun!

Where to buy the Groundswell paperback:

Report: How Corporations Should Prioritize Social Business Budgets

One question I frequently get is “How much should I be spending on social media?” The answer, of course, is it depends. This report looks at how 140 Social Strategists spent on social media in 2010 — and their plans for 2011 (read report). From this deep data, my co-author, Jeremiah Owyang, and I, found that maturity levels are a key driver of social technology adoption, and hence, social spending. (Jeremiah also wrote a detailed post about the report). I *love* data, so this was a particular fun and satisfying report to work on with the team (special thanks to Christine Tran and Andrew Jones for being our data gurus).

I’ve included several key charts and points, as well as the report below. But here are a few key takeaways:

  • Budgets are the numerical depiction of your strategy. If you don’t have a coherent strategy, you won’t have a coherent budget. And the core of every strategy is a keen sense of what you will do — and what you won’t do. Thus, the budget expresses the prioritization of what you need to focus on. You have limited dollars, people, and time — so you better be focused on how you deploy your precious resources.
  • Over-invest in training. It was shocking to see how little people were investing in training. Social is hugely transformative, and I frequently find that most organizations are in desperate need to train not only their social strategists, but anyone touching the customer. Trainers in HR need to be brought into the fold — and they typically have budgets set aside for training employees, meaning more non-social business dollars that you can tap to support your strategy.
  • Don’t try to boil the ocean. While it’s fun to dig into the latest SCRM or community platform, unless your maturity level and strategy is aligned to take advantage of that level of social business sophistication, you’re wasting your dollars. Double down on the basics in each area of your social business and build a firm foundation for your long-term strategy, making sure that you are driving concrete business results (so that you can ask for even more budget next year!)

Report Details

The chart below shows the three different types of maturity levels (take a quick quiz to determine your maturity level), and how the average budget, team size, and also the way they are organized differs. The report has a great deal more detail on how adoption and thus spending differs by maturity.

We looked in greater detail at 12 spending categories in three areas: 1) Internal soft costs (staff, R&D, training); 2) Customer-facing initiatives; and 3) Technology investments. The graphic below shows the average spend for each of these categories, for those people who have adopted them. The story is nuanced because not every company is spending in areas like SCRM or community platforms.

Recommendations

This begs the question then, of what you need to do to prioritize in your budget, and thus your social strategy. We developed specific priorities and recommendations for each maturity level, summarized conveniently in the graphic below. Mashable also has a great write-up of the recommendations from the report.

Below is the report, followed by some key charts and findings:

Facebook’s New Profile Page: Good For People (And Yes, Advertisers Too)

Facebook announced the new profile page, updating how member profiles are shown. I was pre-briefed last week by Peter Deng, the product manager in charge of the project, about the changes.

In a nutshell, the profiles are getting a new look with a few new features that will not only make them more functional to read, but also easy to update. I’ll detail those in a minute, but some perspective first. Why the big deal?

First, anytime Facebook makes changes to the interface, there is usually a huge outcry. Expect nothing less this time, especially because this is a person’s expression of themselves on Facebook. Learning from past experiences, Facebook is not pushing this out automatically to people, but instead allowing people to opt-in (you can try it out on the new Facebook Profile “About” page. You can see my new profile too.)

Second, the freshness of profiles is vital not only to the experience, but also to Facebook’s business model. Facebook has innovated a great deal to add new things associated with a person, such as the Pages of which they are a fan or recent “Likes” they have indicated. But the profile page remained an island, infrequently touched, infrequently updated.

And that’s a problem when the advertising that Facebook offers is keyed off the explicit information included in a person’s profile. Advertisers can target off that information but if you’re like me, you seldom look at or update the Info tab on your Facebook profile page.

So Facebook has an incentive to encourage people to not only update their profile pages, but to also make it much more reflective of their interests and relationships, making it a real reflection of the people and things that are important to them. And in so doing, people are providing valuable meta data to Facebook and its advertisers. Deng took care to emphasize that a person’s privacy settings are unchanged with this update – so if they do not want their information to be publicly available, it will not appear thus.

So on to the three key features that I believe are going to make profiles more functional, updated, and thus, valuable to Facebook in the end.

Profile Summary

A synopsis of each person will appear at the top of the new profile page. It includes typical “conversation starters” that get people talking – things like where you work, who you’re married to, where you went to school, etc. In addition, the latest photos posted by the person will also appear – again, complying with existing privacy settings so you only see photos that you have permission to see. In the past, these photos were hidden behind a link on the profile page, so now they are made visible, typically “above the fold”.

Featured Friends

This is one of the most interesting and in my mind, controversial new features. Each person will be able to designate a small number of people to feature as friends. This isn’t necessarily a “top friends” feature, but one where you can specify special relationships, such as family, colleagues, or if you’re a believe that you are defined by who your friends are, celebrity friends.

This introduces a whole new social dynamic into Facebook. Why did you pick Friend A and not Friend B to be featured? What does it mean when you remove someone – did something happen?

But this area also adds greater nuance to friends and relationships within Facebook. Currently, the only designation of a different weight to friends is in the “relationship” field, where you can show that you are in a relationship with one other person. But now I can have a group called “Family” or “College” or “Work” or “Girlfriends” to designate not only the importance of a relationship but also the nature of that relationship.

This becomes valuable meta data to understand who is important in my life – and hence, how influential someone is, or how influential I might be to someone. And a person who is featured on many profiles can be seen as far more influential and thus earn a higher “friend rank” weight than someone who is featured less frequently. Again, this is all valuable information — if not actively used today, then potentially in the future.

Interface Changes

There are several interface changes that will feel disruptive at first, mostly because the information you normally would find in one place are either gone or moved to another place. Case in point: the tabs that appeared at the top of the page are now links on the left hand side.

But I believe those types of navigational changes will be quickly and easily accepted. There will be a backlash at first, but the fact that Facebook is not forcing the changes on to people means that adoption will come because people are seeing the changes on other people’s profiles first.

One of the biggest pull to shift people to the new profiles will be the richness available in the Work profiles and interests. Anything associated with your workplace, such as updates by colleagues, chats, Likes, will appear. Again, you can opt out of having these features show up in your profile, but it will have to be a setting that you control.

In addition, images will usually accompany your stated interests, making it much more visually appealing to browse. For example, my favorite artists, movies, and books will all have images associated with them.

But by far the most valuable and entrancing feature to be added is the Infinite Scroll. Rather than have to click on a link to see “more” photos, friends, and wall posts, I’ll be able to just keep scrolling down and down – and the page will automatically load more information.

Overall, an update to the profile page is long overdue and I personally like a lot of the new features — and this is coming from someone who detests having to update my page. I have basically left it the same since I joined Facebook years ago…until today. What remains to be seen is if by making it more visible, accessible, and feature oriented if I will be motivated to update it as often. I do expect there to be significant push back from Facebook members, both because of the interface changes as well as the new social dynamics that will need to be gotten used to. And of course, privacy will always remain a valid and pressing concern.

But Facebook remains committed to relentless change, something that I greatly admire. But there’s a greater sense of maturity in how it pushes through the changes as well, an acknowledgement and maturing of the organization as it takes into account the fact that rapid changes and advances aren’t always appreciated by the now-mainstream audience that’s on Facebook.

Facebook Messages challenges traditional email & portals

Facebook today announced its revamped Facebook Messages. But this is far more than than launching facebook.com emails or building a “Gmail killer”. After all, running a real email platform is fraught with security and spam risks.

What Facebook realized was that the world didn’t need another email platform but a better, more simple way to stay connected with the people who count the most in our lives – our friends. So Facebook boils messages down to just two things: friends and their messages. There is a simple idea behind this approach to communications:

Friends define priority.

There are three ways this vision is achieved by Facebook Messages:

1) Seamless messaging with messaging interoperability. The big news on the surface is that people will have an email address, me@facebook.com based on their registered Facebook username. In addition, users will finally be able to send emails to people outside of Facebook as messages will be fully interoperable with any email system. Even IMAP will be supported (eventually) so you can see your Facebook messages in your favorite client.

Just as important is what Facebook Messages does not do. It won’t be a replacement for regular email because many typical features – like cc’ing and bcc’ing – are missing. That’s because friend communications don’t typically require that. Attachments are taken care of in the form of links, photos, video attachments. Again, Facebook simplified the communications platform, including the fewest number of features needed to stay in touch with friends.

It’s basically chat with email interoperability added in.

But the biggest feature for me will be the early integration of chat, text, and email messages from anyone into one place.  I can already use Facebook Chat with people outside of Facebook as it’s interoperable with major platforms like Jabber and AIM. But now if a friend sends me a message and I’m signed into Facebook, the system will deliver it as a chat as it recognizes we can talk in real time. Ditto with text messages from friends – by linking my Facebook account to my mobile number I already get messages from Facebook friends.

Messages from my friends will thus begin to be centralized into one place, no matter where they originate. My friends and I won’t have to know or worry about where we each are – Facebook will figure it out. I’ll finally be able to say good-bye to that mental look-up table that I use to figure out the best way to reach someone.

So I can start having a chat with a friend but if they go offline, my message will still be captured in the inbox. Companies like Cisco and Microsoft for companies typically provide this approach to “unified communications”. Today, Google comes close to doing this for me with email, Chat, and Google Voice. Note that the exception to Facebook is voice communications, which I expect will be the next phase of innovation.

2) Friend-based conversations and archives. One outcome of unified communications is that I can now see all of the conversations I’ve had with a friend in one place. This is similar to the conversation threading that was a key differentiator for Gmail – except now I can see the entire history of messages I’ve had with a friend. This reflects the most common type of search I do on Gmail today – by a person’s name.

3) A real social inbox with friends as the filter. Facebook believes that messages from your friends should get priority treatment – and not appear between Amazon order confirmations and Groupon offers. In the new Facebook Inbox, there will be two folders – conversations with Friends and Other for everything else. The Other folder contains all bulk emails from companies, fan pages, notifications, etc. Gmail’s Priority Inbox has a similar approach, but it uses complex algorithms to figure what’s priority.

Facebook uses just one – that the messages are from Facebook friends. I expect that there will be refinements to this in the future, such as the ability to have separate folders for different lists of friends, but for now, it’s introducing this new metaphor in a simple, powerful way.

 

 

Implications of Facebook Messages

There are four major implications I anticipate will happen because of Facebook Messages.

- Migration away from traditional email starts a new portal war. It’s already a trend – communications is diversifying away from email, supplemented by chat, text, Skype, Twitter, Yammer, Chatter, and of course, Facebook. In effect, email is being nibbled into lower usage. Users who already center their communications on Facebook will migrate even more of their communications to Facebook. They won’t give up their Gmail, Yahoo, and AOL accounts, but they rely on them less and less as messaging shifts.

So today’s numbers look like this: 350 million active Facebook Messages users (not everyone on Facebook uses Messages. That’s compared to 363 million Hotmail users, 303 million Yahoo Mail users, and 171 million Gmail users.

The impact is significant. As one of the “front doors” for traditional portals, email is a mainstay as a starting point and locks in many users reluctant to change. It’s estimated that 45% of AOL’s network traffic comes from AOL Mail (AOL just announced an update).

My colleague, Jeremiah Owyang has written about the potential for email providers to become instant social networks (here and here). But attempts to make email inboxes social will face significant challenges. The problem is an email address and messages don’t denote a relationship or priority — even with an understanding of the people you email the most frequently. Without that social data, the billions of social connections lack context.

But more importantly, without the context of the social interactions that take place very day on Facebook chat, and other platforms, email alone simply falls short. The current spat between Google and Facebook over email address portability is just the beginning of this new portal war. But the war isn’t going to be just over the raw social data. Rather, it’s going to be a rush to see who can capture more of the overall consumer communications and that requires that they be more open in the infrastructure to integrate with other platforms.

Data, Advertising, and Privacy

By offering unified communications in one place, Facebook provides an elegant way to consolidate everything in one place. That also means that Facebook ends up being the beneficiary of capturing all of those interactions. The irony is that the ability of Facebook Messages to integrate and unify the messages means that it will also track everything that people share with each other.

Facebook already very effectively mines profile data to better place ads, but limits the data used to what the user already enters on their profiles. In the future, Facebook could (and I emphasize could) understand when people are asking for advice, and if they acted on it and thus mapping influence. While Facebook has not plans to do this in the future, privacy advocates are standing at the ready to understand how that data will be used.

The Importance of Good Friend Management

The underlying assumption to Facebook Messages is that you have a real relationship with your Friends. I expect that Facebook will keep refining how messages are prioritized within the Friends inbox (for example with Friend Lists, recency of interactions), but it highlights the importance of being someone’s friend in the first place

For example, if you want to gain access to a key person, becoming their friend now has tremendous value as it gets priority treatment. Anyone can send an email to charleneli@facebook.com, but it won’t reach my prioritized inbox unless you’re my friend.

But the opposite issue also arises. I may want to elevate and demote existing relationships to have higher/lower priority. Andrew Bosworth, the director of engineering on the project, explained that Facebook assumes that the friendships are “meaningful” and thus messages from them deserve to be elevated to this level. But in many ways, this goes against the appeal of Facebook for many people, which is to create casual connections with people they went to school with or worked with in the past.

At some point, I expect that Facebook will allow us to more accurately map out relationships in their many dimensions, behind the cumbersome friend lists that exist today. They will tap their excellent “friend algorithm”

Facebook Redefined

For me, today represents the day when Facebook truly becomes a portal on the level of Google, Yahoo, Microsoft, AOL. It’s escaped the bounds of being just another social network and is creating a nexus for lasting relationships. By centering communications on friends – rather than features and a simple email address – Facebook is creating a special kind of lock-in unavailable to other portals, your friends.