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Social media leads draw attention; with 100,000 followers, what will experts pay for a next generation lead?

Most of the clients I work with clearly understand the potential of social media-based lead generation...
socialmedia-leads.jpg

Most of the clients I work with clearly understand the potential of social media-based lead generation.  After all, they are spending millions of dollars to extract leads and demographic information from third party lead sources and house them in marketing data bases. What the majority of carrier marketing and lead managers don't know about, however, are the operational aspects and benefits of securing and maintaining a social lead.

A social lead is active and grows virally (it is accumulating new information and providing it dynamically to the lead generation system without human intervention), whereas a purchased lead is "flat" and represents a "snap shot" in time, each day more dated and less valuable.

In breadth, the purchased lead is a sparse row in a database that was filtered on certain demographic traits at a point in time.  Unlike any previously available lead, the social lead comes with on average of more than 72 dynamic fields of data which are subject to change and augmentation every time the lead accesses the internet; it is a lead that is ever growing, with instant refresh for the carrier lead management system and information pipeline utilities such as Facebook Connect(TM).

In addition, a single social lead may be an "influencer" within a social or technological ecosystem where product preference is driven by "trusted networks" representing thousands of ultimate "connections".

MY OPINION: The social lead is worth a premium over traditional static leads.

WHAT DO YOU THINK?
I'd like to hear your opinion.  What is a Social Media lead worth?  What if it costs less than a database lead?  Do you see any ethical considerations in following a specific lead for an ongoing period of time, even though they are not an insured or applicant?

Comments

Mr. Mitchell

I concur with your opinion.

Over-captitalization (or over-pricing) caused the comoditization of insurance. This drove cut-throat competition over the past thirty years oversaturateing the market with sellers. In general, the consumers' buying experiences are inflexible and distasteful.

Subsequently, the rise of social business is driving the traditional, legacy business models (with processes that are designed for the optimal selling experience) toward obsolesence.

Social business promises to offer an optimal buying experience for the consumer. Now enabled by the social media tools, the consumer experience and the insurance buying process is moving toward a 180 degree change in direction. The buyer will be able to gain control of the process; where it should be.

Have you observed that when a social lead is ready to buy, the opportunity is generally lost within one hour if not acted upon?

Although this is a rather nebulous stat applying to the social business channel, is there any experience measuring that metric from the insurance space?

Thank you.

I think the answer to the questions depends on the strength of the relationship. Facebook uses the work Friend but in many cases acquaintances would be a better word. The business value of a friend is pretty high, someone you just know a little lower but still better than no relationship at all,

Leads garnered via social media are worth substantially more than those obtained through more traditional means. But they also require significant "care and feeding;" if you treat them like merely a lead, they will abandon you. You have to be prepared to engage these people and provide them with content of interest to them. You should also seek their input to continue the conversation. Above all else, don't try to "sell" them. Talk with, not to, them, and you have the potential of gaining significantly loyal customers.

Mr. Meyers- You have brought up a key point with the issue of control.

Mr. Friedberg- You reinforce this point when you correctly state; "don't try to sell them".

Mr. Satalino- You indirectly touch on this topic when you refer to the business value of a "friend" versus an acquantaince.

All of these concerns multiply when you consider the "care and feeding" of 100,000 followers (this is the average number of active leads maintained by a medium sized client of ours.)

What we have found is that it is not possible to nurture 100,000 social leads manually. Here is a list of tools that have to be in a modern marketer's tool kit:

1. Social Listening tools- From a reputation perspective all modern companies that hope to engage the next generation of social media users have to first understand what their current foot print is.. "Who is talking about them?" and "What are they saying"
2. Social engagement tools- It is impossible to interact with thousands of decision makers on a daily basis with out an engagement console that is activity and rules driven. These software products offer one click access to blogs, tweets and social groups in real time when the debate is happening.
3. Social CRM- Traditional CRM systems will not contain the APIs necessary to access changing demographic and preference data within public sites like Facebook(TM) or LinkedIn(TM), nor will they have the necessary data model to capture affilliation data and issue alerts.
4. Private Community tools- For the advanced social marketing firms the pinnacle product is the private social community. This is a private collaboration site that allows prospects to interact with company personnel in a secure environment and seamlessly move to and from a public social community bringing and sharing information and influence.

Note: There are analyst reports for each of these categories that rank the vendors on multiple catagories, including functionality and price.

Additional Questions:

What other tools have you seen in the market place?

What is the downside of social media marketing?

Mr Meyers- You asked:

Q1. "Have you observed that when a social lead is ready to buy, the opportunity is generally lost within one hour if not acted upon?"

My answer: This is true, and also true of a service complaint. Immediate online responses, with a helpful and polite tone and a hyperlink to a one click answer is the path to success.

Q2. Although this is a rather nebulous stat applying to the social business channel, is there any experience measuring that metric from the insurance space?

My answer: We feel that the best measure of success is value, expressed as Free cash Flow (FCF) defined in our Value Realization Method(TM) (VRM) as the benefit (marginal income from increased sales from advanced lead conversion - cost of leads)expressed in dollar terms. The lead "value" needs to be positive and the "cost" of a lead should be viewed though the effectiveness in new business.

Social Lead activity should not get a free pass on ROI - See Jack Keen's blog on this: http://www.infosysblogs.com/management-consulting/2012/01/should_social_media_investment.html

In general, I agree with the premise that "the social lead is worth a premium over traditional static leads." Having said that, this is relatively new territory for many traditional financial services companies. So as a caveat, the true value of the lead is not tied to just the quality and quantity of the information contained in the lead itself but it is also tied to a company's ability to leverage that value. Since the social lead is dynamic it is difficult to predict how it will grow or transform over time. In order to take advantage of this form of lead, companies need to develop flexibility in their capabilities (technical and process wise) to capture, process, and leverage this information. The “flat" or "static" lead as it was labeled, may be less robut but the advantage it has is that it is more easily defined and managed.

Social media is now a big enough phenomenon that we must begin to segment and target our thinking. First cut is between B2B and B2C marketing. Obviously, the generalizations we see in most publications apply only to the consumer side.

Let's stipulate that the B2B Social Media conversation will require us to return another day with a fresh set of principles. Within B2C, we may need to further contrast the realities of brands versus retailers; mass versus luxury; consumables versus high-consideration purchases; and a host of other relevant distinctions.

Social media participation will vary in value, values, and likelihood to influence behavior. Leads cultivated within a social media "greenhouse" do indeed harbor the latent potential to bear great fruit. They are worth more because of what we invest in them. There will also be many fewer of them and the opportunities they represent will be narrower and more targeted.

This is a complex and subtle business we are deconstructing here. We have barely penetrated the surface of the SoLoMo phenomenon. Deep understanding is yet to come.

I particularly like your statements about the value of social networkng vs. paid leads.

We try to encourage knowing the customer, the former, and ignore the paid lead,the latter to our agency members.

Mr Nord- Thank you for the perspective.

I agree with your comment that most companies are not ready for this, but my humble suggestion is that they need to consider the possibility carefully.

Our research indicates that there is a new type of consumer that is not willing to follow the old "sales center" or "mail response" paragdigm; and there is a danger that some old line companies may miss out on an entire generation of consumers as they move to more "with it" online carriers that have incorporated social lead management into their arsenal.

At the same time, social lead management is not something that should be entered into lightly... I guess the most compelling argument is that the representatives of the company are going to involve themselves in some form of social media presence, regardless of the company's intent and the result will be a social media foot print by default. Social media tools can help a marketing department control the inevitable involvement, discipline it and take control of the quality and manage their reputation.

Oddly enough, once these systems are set up properly, they are not that difficult to manage for an advertising or marketing department used to running call centers to respond to static leads and commercials. Perhaps it is best to see this as a natural extension of the advertising function.... Have you ever been behind the scenes when a call center responds to a media drop? Social media lead management is tame in comparison.

Questions:

What are the infrastructure implications?

Would you favor a cloud based or site based social CRM system?

Mr. Tenser-

I am pleased to see your entry. I have followed your own blogs.

Some applications of social media lead management to businesses (B2B) we have seen have been recruitment of insurance producers and insurance agencies networking with businesses in their trade area, both on LinkedIn(TM). You are correct, however, most of what we have seen and built has been business to consumer (B2C) leveraging the Facebook Connect(TM) functionality and private social media repositories.

Question: Sometime back it was unusual to see e-mail address in a master data record. Today e-mail is an obvious data element. Do you see a day when preferred social media ID will be a common data element?

Jim - really enjoyed yours and all the comments here.

My 2 cents worth: SoLoMo's pragmatic and timely emphasis should be on the 'MO." Social marketing is too often perceived as meddlesome and obvious in its intention to transact business - a turn-off to the majority of community members. The case could also be made that in this fast moving techie environment, "SO" could already be old news. Moreover, social leads are generally more expensive and provide less specifically qualified leads relative to mobile, assuming you have decent pricing and expertise by the mob ad agency.

I feel it is more of a trick and more difficult to make an offer or to give away something of value on Facebook or Linkedin that accomplishes an attractive ROI than it is on a Smart Phone. If you have examples that controvert this observation, I would like to review those cases. We're all learning as James points out.

Mobile is quick, to the point, and between the eyes. Walk around in Time Square with all the dazzling gargantuan displays TSquare is known for - one can't help but notice, ALL the eyes are pointed downward toward the devices in their palms - a poignant indication of where the future is rapidly taking us.

Tim - Very interesting point of view. Our perspective is that mobility is the delivery mechanism and cannot be separated from a good social media strategy.

If we expand our definition of social media to include Groupon, Four Square, etc the GEO coded "push" offers may be exactly what the time square crowd is looking at on their smart phones.

To expand on your idea, I spend a lot of time in the third world (over half of Facebook users are outside the US) and the mobile phone is the tool that is used predominantly to access social media.

Where would twitter be without the mobile phone... and where would the mobile phone be without Twitter and other SMS feeds?

Questions:

If your insurance agent sent you valuable coupons, would you use them? (i.e., 50% off at a diner that you frequent often that happens to be his client also)

If you used it, would you think it appropriate to thank her?

Jim, you certainly have kicked off an interesting discussion. A few weeks back I was with head of Innovation of a leading Bank in Europe and discussion around Social lead to the same point as well. Going beyond the hype and getting big with the conversations, organizations now have started to look at what I call:
• Creating a Customer social Profile dashboard – e.g. when Social Media team finds a person on Twitter/Facebook, Blog etc etc mentioning their name/ product/ service they need a Dashboard that would give them a complete picture about the social profile of this guy. The profile would be a complete profile across multiple social identities, and would be a basis of what priority/ degree of attention they get . The profile at a later stage would be used for enriching database that has of all their customers with this data ( if they happen to be one of their customers)
• Creating a rich multidimensional Dashboard for Influencers- The current Influencer identification tools take a single or at the most two way approach to identify Influencers for example by number of followers and possible sentiment, organizations would look at a multi-dimensional view- sorting influencers based on not just the abo but also by Products, Medium, Frequency, channels etc.

In my view these are the two things I hear from clients that would decide on bringing Social to business going forward, Sales ( Social Sales/leads) being a major fosuc area ). If we look at acquisitions made by Google (SocialGrapple) and Facebook in the past have been around this space as well.

Open for comments.. feedback

Mr Mitchell your point of view is right on in that you are one of the few of us in the marketing arena who understands the big picture.

I have worked in this field for years and every day is a new enlightening experience for me.

The social lead is a new phenonenon and we will have to embrace it eventually. Better sooner than later.

-George

While "SoLoMo" does not appear in Wikipedia (yet), it apparently is an abeviation for Social, Local and Mobile and represents application at the intersection of Mobile Search, Social Media and Local-based Services.

(Thank you James T and Tim D for bringing us up to date)

I have installed several geo code based applications in the past and I am sold on the benefit of latitude and longitude in a lead record. Geo codes added to Mobility presents the opportunity to push an offer appropriate to a lead where they are geographically.

This brings up a series of important questions:

In this increasingly mobile society, what is your view of monitoring geo spacial movement for insurance purposes?

Driving habits? Travel patterns? Neighborhoods visited?

Is this type of monitoring taboo? What permission needs to be given?

What do you think? I'd like to know :)

Sorry I was slow to check your reply, Jim M.
SoLoMo does indeed refer to the three O's: sOcial, lOcal and mObile. If you favor mind-bending intricacy, you can add two more: glObal and persOnal.
(We should credit David Dorf of Oracle Retail for first surfacing this terminology in the RetailWire.com blog.)
http://www.retailwire.com/discussion/15226/braintrust-query-solomo-strategies-in-retail

Mr. Mitchell,

A social media lead brings into account the human equation and a certain amount of trust. For example, within the hotel industry business and leisure clients will trust the comments made by prior visitors before they make a decision on where to stay and this will either lead to more business or drive it away. The power of a recommendation is invaluable and if social media can be leveraged to generate a lead then all the better for consumers and businesses.

Mr.Christa-

A properly nurtured social lead is an opt-in for data sharing and a group member in one or more voluntary feeds (blogs, RSS, etc).

Trust is implied in these relationships.

Your hotel analogy is a good one. One has to trust the place where they secure their valuables and sleep while on the road.

The social lead needs to feel the same trust and directly benefit from the relationship by receiving offers and information consistent with their desires and preferences.

Networking is a two way street. Social networking requires maintaining thousands of potential business partners names, e-mail addresses and custom preference data.

Modern tools allow Social CRM systems to maintain blog entries and historical comment patterns. If you have a viable business partner represented by a specific lead, having access to expanded profile data may be the difference between a presentation opportunity and a sale.

I appreciate your comments.

In your opinion, should there be a premium for a lead that comes with social preference information?

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