PR 101

I am presenting at a session on social media Saturday at a conference sponsored by the Public Relations Student Society of America at the University of Wisconsin – Whitewater. I am looking forward to it. I enjoy talking to students because they have a lot fewer preconceived notions that we older types.

However, what these students don’t have is much social media knowledge. That surprised me.

In fact, in the last week it has been driven home to me how many people either don’t know, or don’t want to know, about social media. That was my awakening. It isn’t just students – it people at every level of every organization. I feel like these people are standing at the bottom of a mountain with their backs turned. The social media avalanche is roaring down and about to engulf them. Yet they can’t, or choose not to, hear the rumble of the approaching change.

The rate that social media is taking over is like an avalanche. I could give you numbers about how fast it is growing, but I am going to save that for another blog.

Curious about my metaphor, I did some research on avalanche survival. One of the things that experts advise is to swim in the flow if you get caught. The key is keeping your head above the snow. That’s good advice for people who about to be engulfed by social media – start swimming with the flow.

I do not include most students among that group. They clearly want to learn. That’s why I was asked to come and speak at UW – Whitewater.

When the conference’s student organizers first approached me, I assumed they wanted me to talk about social media marketing. I have met many Whitewater students. They are bright and committed. They also have never known a time without the Internet and computers. In contrast, I have known a time without push-button phones and cable television. Yes, I am that old.

So, I assumed they would know more about the various social media applications than I did. I figured these students didn’t need me to tell the basics. The two women organizing the conference gently disabused me of that notion. They told me students wanted to hear the basics. They wanted to learn about Twitter, Linkedin, YouTube and all of the other social media applications.

Now, I know UW-Whitewater Public Relations Instructor Ann Knabe is drilling her students in social media. I have heard from the students about that. Ann, who is a friend, is very good instructor. However, I guess the students want to hear from someone else who is actually doing it on a day-in, day-out basis.

As I said, I think a lot of people out there would like to know about social media and how to use it. But, they don’t understand the implications of social media taking over marketing. Or, they are just too embarrassed to admit they don’t know what to do.

That second point was brought up at a meeting I was at last week. I am a member of the Southeastern Wisconsin chapter of the Public Relations Society of America’s social media committee. (Say that five times fast.) At a recent meeting another committee member talked about his experiences teaching social media. He said he runs into many adults who are afraid to admit they don’t know what they are doing.

Another thing I like about working with students is that they much higher embarrassment threshold. They are not afraid to admit they don’t know how to do something.

I think that embarrassment is why many companies are not moving faster to integrate social media into their marketing. But, hey get over it. There is nothing wrong with asking questions and admitting you don’t know something. So let this be your awakening. Doing nothing will get buried in the coming avalanche.

Did you ever notice how hard businesses work to attract new business? Yet, once they make the sale, they act like a two-year-old. They lose interest and move on to what looks like another shiny opportunity. They only notice the old sale when some other company tries to take the customer away. The two-year-old mentally kicks again. They suddenly want to keep what they ignored because someone else wants it.

The problem with being reactive is that it’s usually too late. A customer ignored is usually a customer lost.

That has always struck me as a strange way to do business. Yet, I see it all the time.

I am reading a book called “Flip The Funnel. How to Use Existing Customers to Gain New Ones” by Joseph Jaffe, president and chief interrupter (a title I love, by the way) of the Long Island-based consulting firm crayon. It lays out the reasons why more efforts should be focused on keeping existing customers.

As Jaffe says in the book: “why – if our customers are the lifeblood of our business – are we not relatively investing in them according?”

Jaffe cited a number of examples of why marketing to existing companies is extremely important, but I will give one. In 2008, customers who made more than three purchases from online shoe retailer Zappos accounted for 50.2 percent of the company’s business. In comparison, those people who only ever made one purchase accounted for 28.6 percent of sales. The remaining 21.2 percent of sales came from those who made two or three purchases.

So, a little more than half of the company’s business came from loyal, committed customers. Now, Zappos works hard to serve to that group of people. As they should – these people are the company’s most reliable revenue stream.

According to the website 1000ventures.com:

• Acquiring new customers can cost five times more than satisfying and retaining current customers.
• A two percent increase in customer retention has the same effect on profits as cutting costs by 10 percent.
• The average company loses 10 percent of its customers each year
• A five percent reduction in customer defection rate can increase profits by 25-125 percent, depending on the industry.
• The customer profitability rate tends to increase over the life of a retained customer.

Yet, despite all of those facts, most companies work harder to attract new customers than they do to keep the ones they have. I have to say marketing agencies are part of the problem. When was the last time you read about an agency touting its ability to hang onto existing customers?

Yes, it is important to attract new business. But, I would argue that it is more important to hold onto the business your company already has. As Jaffe points out, churning business is a bad thing.

That churn forces companies to focus too much energy on replacing lost business. It takes less energy and effort to hold onto an existing customer than it does to attract a new one. The energy used to attract new business could be better used coming up with new ways to satisfy existing customers. After all, happy customers don’t leave.

Which brings me to another point. It is an axiom in the agency business that a client will want to shift its a business when a new marketing manager takes over. I suspect the same axiom holds true in other businesses, although it might when a new buyer takes over or when management changes. The argument goes that the new executive at the client will like some other agency and will make a switch for that reason alone. I have seen a lot of companies that just give up when there’s a change in the client’s executive team changes.

It doesn’t have to be that way. The mindset needs to change.  Social media is an excellent way to maintain a brand and hence hold onto clients. In the coming weeks, I will be talking about some companies that do customer retention very well. I am always looking for examples. Let me know which companies you think do it well and how they do it.  If you have examples, I would like those too.



Many major corporations around seem to be either scared of social media or want to pretend it doesn’t exist. Yet one of the largest and oldest companies on Earth – IBM – has embraced the new way of marketing. It has moved into the area with a lot of enthusiasm and success.

All of that effort would have gone nowhere if the people charged with integrating social media didn’t take the company’s culture into account, Tim Blair, IBM’s vice-president for Marketing and Communications said. Blair spoke at the PR + Social Media Summit held at Marquette University in Milwaukee, WI. Marquette and a number of Wisconsin companies sponsored the summit.

I wanted to hear Blair speak because IBM has a reputation in the social media world of being one of the most open companies when it comes to social media.

What makes this particularly interesting is that IBM is almost a century old. This is a not a Starbucks, Southwest Airlines, or Zappos. Those companies are all fairly new. Their corporate cultures are still forming, so it would seem to me to be easier to incorporate social media.

IBM, on the other hand, used to be known for its rigid corporate culture. When my late brother worked there in the late 1960s, the standard uniform was a white shirt, subdued tie, and gray suit. You did not deviate from that.

For a company such as IBM to change its culture to allow its employees to act as individuals is a stretch. It impressed me that such an institution is willing adopt a new way of doing things. It reminds of how the U.S. is also willing to stretch its culture to allow its members to use social media. The company accomplished because people such as Blair understood what would it take to make the change.

“Social media needs to be derivative of business model and corporate culture,” Blair explained. “Culture always wins. You have to figure out to stretch the culture. Not changing the culture, but stretching it. Social media needs to be a derivative of the business and corporate culture.”

The first step in moving into social media is knowing where a company wants social media to take them. There has be a definition of the destination, Blair said.

“You need to know where are going or you will fail,” Blair said.

Stretching means working to ensure social media becomes a part of it. It is almost impossible to change a corporate culture, Blair said. If you try to do that, you will fail. What needs to be done is to demonstrate how social media will fit into what the company is already doing.

“Social media does fundamentally change how you manage communications,” Blair said. “When I arrived at IBM, communication was very linear. But social media has helped flatten that out.”

IBM now uses social media for internal and external communications, Blair said. It has three primary uses within the company: to flatten communication channels, to help employees learn and to influence the conversation going on among all of IBM’s stakeholders.

As example of internal use, Blair cited the company’s management training program. IBM used to fly all of its managers into its Armonk, N.Y. headquarters for training. It now trains them via the Internet. The training is as effective ever and it saved IBM money, he said.

A key to using social media is empowering employees, Blair said. IBM does not lock its employees out of the Internet. That would be counterproductive, he said.

“At the end of the day, we want to empower everybody, Blair said. “Our brand is experienced by the expertise our employees in the field have with customers. We have to trust those employees.”

Every IBM employee is seeped in the company’s values. That’s important because it ensures those employees will hew to those values when they use social media, Blair said.

In fact, the company’s social media policies – first created in 2005 – were created by the employees. There are now 17,000 blogs written by IBM employees, he said.

There was a learning curve for senior executives, Blair said. They had to shown why it was important to deal with bloggers whom they had never heard of before. It took them awhile to understand the influence bloggers could have, That doesn’t mean the company ignores traditional media, he added. Engaging with the traditional outlets is still important, he said.

As I said, it was impressive. I think a lot of companies can learn from the computer giant did.