CEO Question For Social Media – What About Growth, Profit & The 4Ps?

Fundamental to business, is profit. Too often social media proposals lose track of this principle. Real Marketing Professionals propose every program, initiative or campaign in context with growth and driving profit. Grounding social initiatives in business fundamentals increases Marketing credibility in the C-suite and throughout the organization.

There is a lot of what marketers call “FUD” (fear, uncertainty and doubt) floating around about social media. It’s not hard to find a social media agency ready to sell pre-packaged activity-based services. The pitches: “must invest now,” “you can’t wait,” and “B2B better get on board” hyperbolically overstate the real urgency and often sacrifices a company’s marketing basics for action.

Two Approaches To Social Media Value

Please understand, I’m an avid social technologist, and believe in its value. Social is one of many new digitally-rooted marketing advances.  To maximize social media value, it must be tied to business and marketing fundamentals.

Two typical paths to social marketing initiatives are often taken: 1) jump in without thinking – a potentially costly path that relies on luck, and 2) plan, engage invest, adopt, adapt and grow the social program as one would with any worthwhile marketing program – an approach that works. The second approach also implies that your Marketing team is not losing track of marketing process basics.

Ask Your CEO

With social media, are the 4Ps no longer relevant, are they changing or just evolving. The 4Ps are fundamental and relevant. The CMO or VP or Marketing is the CEO’s trusted advisor on all things strategy and marketing. If you doubt that business fundamentals, (revenue and profit); or you feel that the core marketing processes have changed or become irrelevant because of the speed of social media today, consider asking the CEO these questions:

1. Does the company still provide a product or service? (P=product)
2. Where does value get delivered / exchanged to customers? (P=place)
3. To reach customers, are activities required to gain visibility? (P=promotion)
4. Does that product or service transfer value to customer for money? (P=price)

I think we all can agree that the CEO will answer these questions about the 4Ps with answers similar to these:

1. YES, we still have a product (or service),
2. Our (market) place still exists, and it is bigger – we now compete with global competitors who compete with us in our local marketplaces.
3. Our promotion reach is now greater, and errors are not acceptable as it costs more to correct them. so our messages must be accurate, crisp, clear and timing on point.
4. To make money, our product or service must have a price, set as a fair exchange of value to our customers.

Customers & Users

What about Google? Facebook? And Twitter”?  Aren’t those products free? No, absolutely not, their business ecosystem has increased complexity; but these companies aggregate digitally connected user communities in order to sell targeted access to advertisers and other  customers.  Don’t make the mistake of assuming that users of social media are automatically the customer; they are more often not the customer.

Importance Of Value

To take full advantage of a digitally connected economy and new virtual marketplaces across a global reach, you cannot argue that marketing must go through the foundational marketing processes of:

• Creating Value (segmentation targeting, positioning and messaging).
• Capturing Value (the 4Ps).
• Sustaining Value (acquiring and retaining customers).

New digital tools expand our ability to create, capture and sustain value profoundly, but the marketing fundamentals are still relevant and necessary, if not more important. I’ve watched many a “professional Marketer” fail, and lose credibility at the same time, in an attempt to convince their CEO otherwise – it just doesn’t fly. If you still don’t believe this, take your idea to a VC or other investor, and see what they tell you!

It also does not help the profession of Marketing when your CEO knows that business is about making profit, and the proposals you make requesting marketing investment don’t demonstrate that you understand that critical relationship.

Broadened Importance Of The 4Ps

The best description of how the 4P’s have become more relevant in today’s connected economy was a recent panel discussion noted on the Marketo blog last week. Kevin Cox, Senior Director of SAP Global Marketing commented recently at a B2B  Netmarketing breakfast on 16 February 2012 in San Francisco, “the principles of marketing are broadening from product, place, price, and promotion to experience, everywhere, exchange, and evangelism.” Read this a few times, carefully. Kevin makes clear that the 4Ps are broadened, not irrelevant.

His words “experience, everywhere, exchange and evangelism” are a huge expansions of the 4Ps original concept. I would further argue that relevance of the 4Ps is even more critical. And, the responsibility and value contribution of the CMO and Marketing leadership in the executive suite as well as the profession as a whole has increased as they have the responsibility to relate this broad new context to the company’s core strategy for revenue, growth and profit.

Something Further To Ponder

Remember, social media investment must deliver on the CEO’s agenda to achieve corporate goals. Social media presents an opportunity, to be sure; however it requires grounding in the business’ revenue, growth and profit -supporting fundamentals.

Any marketing investment (brand-building, community development, and so on) must be a strategy to 1) acquire customers, and 2) retain customers – for profitable revenue. CEOs need to see this direct relationship – no hype or meaningless metrics about clicks, views, and opens – but real and comprehendible marketing metrics for investment directly tied to closed deals, and profit.  CMO’s and VPs of Marketing need to be the CEO’s trusted advisor, and show this connection to her/him.

As a Marketing Professional, how are you doing this?