The Payoff from Social Networking

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					Social Networking Panel

The Payoff from Social
It is not just about customer service. Top industry
execs extol the virtues of blogs, wikis, Twittering, and
other forms of social computing to speed innovation,
boost product quality, and increase revenues.
By Howard Baldwin

            or years, the tide of technology unfailingly
            moved in one direction. Advances such as per-
            sonal computers, laptops, broadband, and cell                             Bob Pearson, VP, Dell

phones took hold in the enterprise and then spread                                    sales channels, but they can strengthen the
into the consumer population.                                                         connections among multiple parties. At
                                                                                      the Microsoft Global High Tech Summit

  Now, however, the tide has                 same kind of interaction and rela-       2009, held in Santa Clara, Calif., on
turned—at least in one significant           tionship building their children         January 29, almost 300 executives from
area. Social networking concepts,            are doing could be applied to dis-       some of the leading high-tech firms
pioneered by adolescent-focused              tant colleagues, customers, part-        revealed their reasoning for tackling social
companies such as Facebook and               ners, and suppliers.                     networking, the strategies they use, and
MySpace, are flooding into cor-                 Social networking sites cannot        the obstacles they have had to hurdle.
porations. Executives have real-             bridge the artificial barriers created     Attendees noted that this session
ized, perhaps slowly, that the               by high-tech companies’ indirect         was one of the most compelling of
                                                                                      the entire day; so pay attention to the les-
                                                                                      sons learned.

     Lessons Learned                                                                  Getting Involved in the
     During the social networking panel, executives offered                           The first thing to remember about social
     these insights:                                                                  computing, insisted several of the pan-
     • You cannot ignore the conversations in the blogosphere; in fact, it is more    elists, is that conversations are going on
       prudent to understand what is being discussed and to try and influence         out there about your company whether
       the outcome.                                                                   you like it or not. It is better to participate
     • Most companies use social networking tools to communicate with                 in them, and try and influence their out-
       customers, but the forward-looking ones leverage the technology to             come, rather than let these conversations
       co-create products and services with partners, customers, and other            simmer or even boil over on their own.
       members of their value chain.                                                     “If you type your company name into a
     • Remember that insight about innovation can come from unexpected                search engine and get the first screen of
       sources, so the more widespread the lines of communication, the better.        results, look at how many of those people
     • Be cautious when deploying social networking tools—understand your             you know,” said panelist Bob Pearson,
       goals and the metrics you will use to achieve them first.                      vice president of communities and con-
                                                                                      versations at Dell Inc. Pearson is in
12                                      JOURNAL OF THE MICROSOFT GLOBAL HIGH TECH SUMMIT
“Best Community Platform 2009”

                Download FREE Forrester Wave: Community Platforms, Q1 2009 report at, or call (877) 492-9484.
             Social Networking Panel

charge of all social media activities      target blogs—can help companies iden-                        more worth of equipment. Sperling
and credits Dell’s progress to the         tify and track those conversations.                          later learned that the customer was
founder himself. “These are the peo-          The payoffs can be significant,                           only 14 years old. The moral of the
ple who are fashioning the impression      noted panelist Rick Clancy, senior                           story, he stressed, is that “you don’t
of your brand,” he said, whether you       vice president of corporate communi-                         know who you’re speaking to in
know who they are or not.                  cations at Sony Electronics, the                             cyberspace, but if you treat people
   As an example, panel moderator          largest operating subsidiary of Sony                         with respect, you’ll be fine.”
Brett Bonthron, a partner at consultan-    Corp. He began three years ago with
cy TCG Advisors, noted that when he        support from company CEO Sir                                 Learn More About Customers
typed the name of a major cable com-       Howard Stringer to develop a blog                            It is important to remember, though,
pany into a search engine along with                                                                    that you can learn as much from
the word “blog,” the URL for the site                                                                   happy customers as you can from                 Want to Hear the Buzz?                                     unhappy customers. “There are so
came up. No blogs run or sanctioned          To find out what consumers                                 many ways of interacting with cus-
by the cable company came up at all.         are saying about your company                              tomers,” noted Rob Howard, CEO of
“That company isn’t in the conversa-         in blogs, check out these                                  social networking tools developer
tion,” Bonthron said later. “They’re on      blog-focused search engines.                               Telligent, who also participated in the
the sidelines being beaten up.”              Bloglines                       panel. “We’re seeing a lot of cus-
   When Pearson joined Dell in 2006,                                                                    tomers using social computing tools
he was given a specific charter from the                                                                to find out how their products are
company’s eponymous founder: “We             Technorati                     being used.” That gives companies
need to be better at identifying cus-       Source: Journal of the Microsoft® Global High Tech Summit   insights they have not had previously.
tomers who are dissatisfied and resolve                                                                    Sperling, who monitors eBay to see
their problem,” Dell told Pearson.         that is now the cornerstone of the                           what customers are saying about the
   At the time, the company had come       Sony community. As Clancy told it,                           Harman products they resell there,
under withering attack in the United       Stringer responded in his Welsh                              concurred. “The more we know about
States for some of its technical support   accent, “You don’t strike me as a mad                        customers in terms of what they want
practices; there was also a belief that    blogger, but go for it.”                                     and how they shop, the more know-
Dell was being unresponsive to cus-           In the intervening two years, Clancy                      ledgeable we are. We’re using the
tomer needs.                               has talked in the blog about a wide                          information we get from social net-
   In what turned out to be the begin-     swath of topics: the HD recording for-                       working platforms to predict trends,
ning of a highly praised turnaround,       mat wars; the transition to digital tele-                    validate it with partners, and then get
Michael Dell asked Pearson to launch       vision; computer batteries that PC cus-                      the information into engineering,” he
a three-pronged attack:                    tomers of Sony had problems with;                            said. The result: smarter product
• Create a monitoring system that          and e-waste recycling initiatives. “It’s a                   design and better products.
  could identify negative posts within     great opportunity to deal one-to-one                            Ideally, his company will learn
  an hour.                                 with the public and consumers,” he                           enough about customer preferences to
• Reach out to those people and fix the    said, adding that by listening to cus-                       influence decisions all across the sup-
  problem.                                 tomers, “we’re turning detractors into                       ply chain, from the kinds of raw mate-
• Identify how the company needed to       promoters. Our social networking                             rials used to changes in the dealer
  behave differently to avoid similar      efforts have been a tremendous suc-                          channel. “If you use the customer as a
  posts.                                   cess. We’ve put the ‘public’ back into                       central point of information, it brings
   It is not an easy task. Pearson esti-   public relations.”                                           everyone together,” Sperling added.
mates that there are anywhere from            Another panelist, Herman Sperling,                           That is a key point about social com-
5,000 to 10,000 conversations online       vice president of global Web strategy                        puting—its ability to deliver the insight
about the computer manufacturer            and development at Harman                                    of customers across the company. “We
every day—in blogs, Twitter tweets,        International Industries Inc., recount-                      can deliver more relevant communica-
and other social networking milieu.        ed a story from several years ago of                         tion about what our customers are
The same is undoubtedly true for most      working with a customer dissatisfied                         thinking to marketing, sales, service,
large high-tech companies. And using       with his company’s speakers. The                             support, and even to the CMO and our
tools such as Technorati, BlogPulse,       customer, delighted with Sperling’s                          corporate social responsibility team,”
and Bloglines—all search engines that      assistance, ended up buying $1,400                           Sony Electronics’ Clancy said.

14                                 JOURNAL OF THE MICROSOFT GLOBAL HIGH TECH SUMMIT
Social networking panelists, from left to right: (moderator) Brett Bonthron, TCG Advisors; Herman Sperling, Harman International
Industries; Rob Howard, Telligent; Rick Clancy, Sony Electronics; Rob Rueckert, Intel Capital; Bob Pearson, Dell

Working with Partners at                      from the top executives to the people          Social Computing Barriers and
Every Level                                   wearing the blue shirts on the sales           Challenges
Where most companies have not yet             floor. That’s always been the                  Although the payoff is clear, the pan-
made inroads with social computing            purview of the sales division. But we          elists cautioned that launching a suc-
tools is with partners and dealers.           see a lot of opportunity there, so the         cessful social computing initiative is
“Most enterprises are just starting on        communications department is get-              not as easy as waving a magic wand.
that path,” said panelist Rob                 ting involved.”                                Pearson noted that Dell’s IT group ini-
Rueckert, a director at Intel Capital,           Telligent’s Howard concurred, but           tially balked at the idea three years
the venture capital division of Intel         for a different reason. “Companies             ago, complaining that social network-
Corp., which has invested in several          are trying to bring a 360-degree               ing was not on the roadmap. But
social networking startups. Rueckert          view to improve innovation,” he                bypassing the group was not an
said he sees the desire among compa-          said, adding that executives are real-         option, either. “We need IT’s creativ-
nies for improved communication               izing that good ideas for innovation           ity,” Pearson said. “Now we have a
with partners. He added, however,             may not come from traditional par-             team of people representing multiple
that not many companies have made             ticipants in that discussion. Using            functions of the company that meets
that step, because all of the involved        social computing tools to open up              every two weeks to talk about our
partners must agree on details as             communications channels from                   plans. IT has become an important and
widespread as goals, metrics, and             anywhere—customers, partners,                  strategic partner for social media.”
even software.                                and retailers—means that compa-                   Howard, too, cautioned that, as with
  But the logic for doing so is unas-         nies have a better chance of hearing           any application deployment, you can-
sailable, Sony Electronics’ Clancy            a great idea from an unexpected                not throw all the rules out the window.
argued. “We want to get to the point          source. “Expertise can exist beyond            “You can’t just roll something out and
where we can have a dialogue with             organizational        boundaries,”             expect it to work. You have to identify
everyone at a retailer like Best Buy,         Howard said.                                   who’s going to use the tools and how.”

                                    JOURNAL OF THE MICROSOFT GLOBAL HIGH TECH SUMMIT                                               15
             Social Networking Panel

   As TCG Advisors’ Bonthron noted,
many companies cannot calculate the
return on investment of social comput-
                                             Solution Spotlight
ing efforts. Pearson agreed, adding that     Big Idea: Drive Marketing Effectiveness
“the ROI of doing nothing is an easy
                                             An explosion of customer touch points have become even more pivotal to
argument to make.” To combat this
                                             the success of high-tech manufacturers as the end market for their prod-
problem, he said, deploy analytics and
                                             ucts is increasingly being driven by consumers. The emergence of Web 2.0
tracking tools to track and measure
                                             technologies has greatly expanded the channels for engaging customers
results. Omniture, Nielsen, and others
                                             directly. Social computing technologies such as blogging, wikis, Twittering,
offer such tools.
                                             and instant messaging also provide a new sense of immediacy and direct
   You have to be prepared to put
                                             participation. Social computing tools open new channels for high-tech
measurements in place, Telligent’s
                                             sales, marketing, product development, service, and support teams—and
Howard insisted. You have to know
                                             their customers—to increase their levels of collaboration.
ahead of time how you are going to
                                                However, the new social computing technologies pose multiple chal-
define success. “You need to think
                                             lenges to high-tech companies. These new channels have to be effectively
about analysis tools and even predic-
                                             managed and the insights incorporated into existing information and deci-
tive forecasting,” he said. “If you’re
                                             sion flows. Information from the blogs, wikis, and social networking sites
seeing a high number of questions on
                                             needs to become part of a complete picture of the customer. This integra-
a particular topic, that might indi-
                                             tion is a serious challenge, because most high-tech businesses maintain
cate a problem. Then you have to
                                             customer-related data in multiple places.
link the Web analytics with the
social analytics. Who was it, what           For more information about Microsoft and its partners’ solutions for the
did they talk about, and how long            marketing challenges faced by the high-tech and electronics industry, go to
did they stay on the site?”        
   “The payoff is getting a level of
understanding that we’ve never had
before,” Pearson said. And because         that one of the biggest hurdles is cul-    The Time to Start Is Now
Web-based tools can more easily            tural. “There’s a fundamental release      For those companies still thinking
track results quantitatively, it can       that has to take place. You cannot         about using social computing tools,
lead to more reliable measures than        control the social networking sites,       the panelists warned they might be
most marketing programs. Pearson           and sometimes you may not even             too late. The conversation may
                                                                                      already be going on without corpo-
“It’s a great opportunity to deal one-to-one                                          rate backing. “When we first looked
                                                                                      at social computing,” noted Intel
with the public and consumers… Our social                                             Capital’s Rueckert, “there were
                                                                                      already five wiki vendors being used
networking efforts have been a tremendous                                             in the company. Employees may be
success. We’ve put the ‘public’ back into                                             blogging internally without you
                                                                                      knowing it, or doing it on their own
public relations.” —Rick Clancy, VP, Son y Electronics                                personal blogs.”
                                                                                        Even so, do not hesitate. “Success
reported that Dell’s latest annual         have it all figured out. But it’s better   will depend only on how much
numbers are 210 million page views         to be part of the discussion than not      vision people have,” Dell’s Pearson
for 25 communication properties in         part of it.”                               argued, “not how many social com-
seven languages. Even with those             The easiest way to overcome the          puting platforms they’re using. The
results, he said, “I’m disappointed we     obstacles is to keep in mind the pur-      use of social computing is a totally
haven’t moved faster. Two years from       pose of your efforts: getting closer to    open field right now, and it’s com-
now, 40 percent of the online popula-      the customer. “Get away from your          pletely changing the game of how we
tion will be in Asia, and we need to       established procedures,” he suggested.     interact with customers.” •
address our customer’s needs in this       “Just think about the customers and
region exceptionally well.”                whether you’re providing the right         Howard Baldwin is a senior editor at
   Sony Electronics’ Clancy insisted       experience for them.”                      Triangle Publishing Services Co. Inc.

16                                 JOURNAL OF THE MICROSOFT GLOBAL HIGH TECH SUMMIT