Circos Brand Karma

Will social media go from a cultural phenomenon to a commercial force?  Yes, I believe so.  If last decade’s new new thing for marketers was SEM, I believe this decade’s new new thing will be SMM (social media marketing).

However, for SMM to become legitimate its efficacy must be measurable, otherwise it’s tough to justify devoting any resources to it, particularly because in the last decade marketers learned how to calculate ROI by looking at conversion revenue from CPC traffic referred by their Google (and subsequently, other online) campaigns.  Not only did ad budgets shift, discipline was instilled.

We advise our clients to think about ROI of SMM in 4 major categories:

Brand satisfaction – how do operational improvements and investments increase your overall guest satisfaction over time?  In Brand Karma it’s the Guest Satisfaction Index, which is a composite index of your perception from various public sources, but if you don’t have Brand Karma you can also use something simple like your ranking or ratings on a review site.  When your guests post reviews about you, they’re giving you feedback on their stay.  Because their reviews are public, their words also shape how favorably viewed your brand will be for consumers researching your property.

Brand loyalty – related to overall brand satisfaction, the loyalty measurement lets you know if the guest stay experience is compelling enough that it moves your guests to recommend your brand.  Like satisfaction, this is a measurement that needs to be trended over time as well.  In Brand Karma it’s the Loyalty Index, but again, if you don’t have Brand Karma you can look at the “recommendation” rate on reviews that are written about your brand.  Different sites do this differently, but most have a way for their reviewers to recommend a property.  This index and the Guest Satisfaction Index gives you a good idea of how favorably the public perceives your brand.

Many internal guest surveys also measure satisfaction and loyalty.  Just keep in mind that the surveys guests 1) give you solicited feedback — i.e. questions you ask, not necessarily what the guests want to evaluate, and 2) aren’t viewable by the general public — so they don’t give you insights into how public perceptions may be impacted.

Guest Satisfaction Analysis in Brand Karma

Brand awareness – how do sites with social media increase the awareness of your brand?  In the social media world, in addition to the traditional metrics having to do with volume, awareness metrics must take into account the idea of relative frequency.  Relative frequency lets you know how recent is the content about your brand vs. your competitors.  This is important because if people haven’t been talking about your brand recently, then either you’re not interesting or your competitors are more interesting than you, neither of which is good.

Campaign performance – the ultimate metric that measures ROI.  Suppose you run an ad on Facebook, you’ll want to see what is your ROI for every dollar spent.  This means that you must have a way to measure what you’re advertising.  For example, to execute you can set up a landing page on your ecommerce site so that you can track the referrals and conversion rate from that specific campaign.  Use the traditional ROI formula to calculate what your return is (should be no different than your calculation for search engine marketing).  As you get more advanced, try to establish a link between your brand satisfaction, loyalty, and awareness to your campaign performance.  For instance, how much better does your campaign perform after your brand satisfaction has increased by 10 points?  If you have lower brand awareness than before, do you have fewer click-throughs?  Is there a correlation between guest loyalty to your campaign responses?

In a way, the above points are the fundamentals of marketing, and that’s precisely the point.  Brands wanting to leverage social media for marketing should measure what they’re getting out of their investments in it.  However, like traditional and other online marketing tactics, SMM takes a bit of trial and error to perfect into a strategy, particularly because the ability to micro-target is superb, and so brand owners should consider developing an expertise over a few marketing campaigns.

Some progressive brands are considering hiring a marketing manager to focus on social media in 2010.  Once again, this person’s salary minimally should be considered an investment to improve brand satisfaction, loyalty, and awareness.  List the activities that your social media manager engages in with your fans, followers, and friends, and see how much time they take.  From there, you can calculate the dollar investment (percent of time to salary).  Over time, see what activities lead to gains in satisfaction, loyalty, or awareness, and what activities don’t make a difference.  If you’ve established a link between increases in satisfaction, loyalty, and awareness to increased campaign ROI, then you’ll know how much your social media manager can help you improve your bottom line and guide him/her to engage in activities that increases your key metrics.

I was on a panel with Karthik Siva at the Asia Luxury Travel Market in Shanghai where we discussed traditional vs. “new wave” branding.  Karthik is the visionary behind Global Brand Forum.  The panel was moderated by Siew Hoon Yeoh of Web-in-Travel (aka WIT), the conference where we launched Brand Karma last year.  Though he represented traditional marketing and I represented “new wave,” I found much in common with his thinking.

One such common perspective revolves around the purpose of a brand and its importance today.  Luxury brands have long understood the need to define a unique purpose and have been fulfilling it by manifesting features to not only justify their price point, but also to retain customers.

But what about non-luxury brands?  Does price trump all?

I don’t think so.  Some of the businesses that have filed for bankruptcy actually used price as a key differentiator (e.g. Mervyns) or resorted to using price as a tool to stimulate volume (e.g. General Motors, Eddie Bauer).

Hoteliers around the world are dropping prices.  At the same time, in the eyes of travelers, hotel stay experiences have become more generic.  I hear a lot more statements like “I can’t tell the differences between these hotels,” and “the rooms are all pretty much the same.”  I also see it on the trend graphs in Brand Karma.  If customers don’t feel passion for their product, hoteliers may have to use pricing as the strategy because it typically has an immediate impact of driving volume… at least for a while.  But that’s not sustainable in the long run.  Both General Motors and Eddie Bauer created products that customers didn’t want to buy… eventually even lower prices didn’t work because both brands failed to inspire or stand for something that consumers cared to spend any money on.

Hence hoteliers, if you haven’t already done so, now might be a good time to do a quick check up on your brand purpose.  You don’t need to hire a consultant to do this.  Just answer these questions honestly:

1. Why does your brand exist?
2. How is that relevant today?
3. What are you and your staff doing to deliver on the brand promise?
4. How is what you’re doing different from what your competitors are doing?
5. Would your customers agree with your answers?

The answer to question 5 is critical, and the impact of a “no” or “I don’t know” could be devastating.  Check out AT&T’s change in its upgrade policy for the iPhone and also the site about consumer credit card rules for a sense of how things could evolve.

As a starting point, take a look at what’s been publicly expressed about your brand.  This will give you a pretty good idea, whether you agree or not, at how your guests really felt about their stay experiences.  Because their reviews are public, their words also shape potential customers’ impression of your brand when they research your brand — which has a direct impact on whether consumers book a room at your property or not.

Finally, even when not reviewing your brand, users express strong opinions about what ought to happen, echoing general consumer sentiments or raising expectations.  This may have a significant impact on the relevance of your offering.  For example, Gary Arndt recently tweeted something I’m sure many travelers think of:

• “So many places say they have ‘internet’ but do not mention if it is free or if it is just a computer in a common area”
• “I know free wifi is becoming the deal breaker for me and a lot of other people. Hotels should take note”

How influential will people like Gary Arndt be?  His tweet currently reaches over 72,000 followers.

PhoCusWright just released their top 10 trends for travel technology for 2009-2010 and I couldn’t agree more with what they said about Business Analytics and Intelligence becoming more important in the current economy.  We’ve heard many people who have expressed similar sentiments, particularly as the expected ROI on marketing dollars gets closely scrutinized.

Brand Karma is a business analytic tool for social media.  Social media’s true impact on a brand’s bottom-line must be understood for businesses to remain current, credible, and relevant.  Much of the data warehouses that have been built over the years focus on transactional business data — i.e. how has your business performed after sales.  But what about why?

How your brand is perceived in social media will increasingly hold important answers as to why your business is performing a certain way as more people rely on social media to inform their purchases.  Hence brands that understand the linkage between its performance and its perception will understand the true purchase drivers, and can therefore be very focused in aligning their organization to deliver superior value on those drivers.

For a look at the industries whose consumers are researching social media prior to making a purchase worldwide, you can check out this report from Universal McCann.

The Obamas will be moving to Washington this weekend, and will temporarily be residing at the Hay-Adams Hotel on Lafayette Park. While I’ve never been there, Brand Karma shows it having pretty strong social media in a competitive market like Washington DC. Maybe the incoming first family will write a review after their stay

Last week Mario and I attended Web in Travel in Singapore, and then its companion conference, ITB Asia.  We met a lot of people, showed them Brand Karma, which we’re very proud of, and made lots of new friends all over the travel industry.

One major concern on several travel executives’ minds is: how will social media affect my brand reputation  and how do I manage it?  After demoing Brand Karma, we received warm receptions that we hope will turn into fantastic partnerships.

One of the reasons that these conferences went so well for us was because of a meeting we had with a prominent VC as the market fell apart.  VC meetings can go any number of ways, especially in this market, but this one, I have to say, was world class awesome.  My favorite nugget:

• Don’t sell vitamins; sell painkillers

Thank you.  That made a world of difference.

It’s been a hectic summer at Circos-land.  My wife and I welcomed a new member into our family this summer.  Also, we launched a re-branded Circos.com, and equally importantly, formally launched our b2b service, Brand Karma, which has been well-received, especially by hotel marketers responsible for managing their reputation online.  Brand Karma has been a transformational experience for Circos, and we head into autumn with cautious optimism despite the gloominess brought on by the meltdown in the financial market.

Baby Winston is an infrequent communicator — he’s quiet most of the time because he’s sleeping.  But when he needs something, he’s expressive enough to let us know that 1) he needs something and 2) how much time we have to satisfy his needs before a total meltdown.  WinstonSpeak (TM) gave me an insight into how to explain why the Circos technology is different, and why marketers in particular, should care about Brand Karma.

Many brand reputation monitoring service does an admirable job of counting frequency of mentions on a specific topic.  A smaller set also tries to evaluate valence — namely, using semantic technology to determine whether a brand mention was positive or negative.  These 2 dimensions, used together, can give brands insight into how they’re doing (for example, you can do a simple net brand index by taking the calculating the percentage of positive mentions and subtracting from that, the percentage of negative mentions).

Similarly, I can monitor the frequency of WinstonSpeak.  And depending on whether its cooing (positive) or crying (negative), I can monitor Winston’s general state of being for a specific time period.  The problem is that if the net index is unsatisfactory (i.e. more negatives than positives), neither brand marketers nor I would know what to do because we don’t know what the driver(s) of dissatisfaction was.

To get at the driver(s), we have to understand what kind of brand mention was mentioned (in WinstonSpeak, the parallel would be the type of cry emitted), as well as the intensity of the mention.  These additional semantic understanding helps me/brand marketers’ to be very targeted in addressing complaints effectively (and thereby, improving overall satisfaction).

The semantic engine powering Circos already takes all of this into account, which, when applied to online reviews about hotels and displayed within Brand Karma, tells marketers not only how well their brand is doing, but also, how to go about making it better.

And that, in this economy, is just what’s needed to achieve better ROI on marketing spend.