Why Organizations Need 'Social Labs'

My background is in product development management and processes.  One of the things that you learn is that the R part of R&D has to be managed and measured very different than the D part. Most large technology enterprises have dedicated teams focused on research that will not be commercially delivered for a number of years - or even decades. The expectations that management sets for those groups and the associated measurements are very different than those they use to measure the product development pipeline.

I feel strongly that because of the very different approach to customer engagement that is being brought on by the social web, marketing and customer support teams should think seriously about creating social labs whose mission is to experiment and try new techniques and processes - and give them the funding necessarily so that they have the tools and resources to adequately test their hypothesis.

Why? Social processes cannot easily be bolted on to existing processes.  David Alston of Radian6 who is one of the new generation of social CMOs recently explained his approach as "I focus on community first and then layer on more traditional marketing programs, not the other way around". That is a fundamental shift. 

The other issue with this shift - which companies are currently struggling with - is that CxOs want and need to see these new approaches replace the volume they currently get with traditional methods. The problem? Current methods of marketing investment are linear - you spend X in direct response marketing and you get y in return... and there are fairly robust benchmarks to indicate whether you are on target or not. It also scales up and down predictably - if I spend twice as much I get twice the response rate.  Communities look more like hockey sticks.  Initially they require a lot of investment - and have disproportionately low returns. From a measurement perspective, they look like failures for a long time before they look like successes. Over time however, communities see geometric returns that you simply can't achieve from traditional methods and that is when the costs start dropping dramatically relative to the returns.  But that gestation period is different for different types of communities and it requires an act of faith to invest heavily is something for a long enough period to see those returns start to happen. In mature communities, membership doubles in increasingly small increments - SAP's SDN & PBX communities have over 1.5 million members, a year ago it was 1 million... and that was three or more years in.

Which gets me to social labs.  A marketing or support organization cannot switch overnight - there would be a huge drop in performance while the community is in it's incubation stage... a stage that requires a limit to the number of community members in order to consolidate and build a core of passionate advocates which will enable the hyper-growth stage later. Today, too many groups are trying to either add on 'social' to existing processes or expect the same performance out of social initiatives - often trying to skip the critical incubation phase of community development ensuring they will never reach the performance needed to replace traditional practices. So, give your social initiatives an incubator - and don't start judging right away - it doesn't work the same way that you might expect it to.

Comments

[Bert DuMars]

Rachel - I really like this post and I agree a social media/social web/social marketing lab is a very good idea. Especially powerful for large organizations that are transitioning to social media marketing. You are correct that it does take quite a while to build a community. We just started building a Sharpie community at http://sharpieuncapped.com and expect it to take several months to build up to a volume/level that will excite our marketing teams.

Thank you very much for the excellent post.

Bert DuMars
VP E-Business & Interactive Marketing
Newell Rubbermaid
http://newellrubbermaid.com
personal blog: http://socialmediaecosystem.blogspot.com
Twitter: http://twitter.com/bwdumars

[Rachel Happe]

Hi Bert -

Thanks so much for stopping by. One, I had no idea that Newell Rubbermaid owned Sharpie :) Two, http://sharpieuncapped.com is so much fun. Three, it reminds me of 'lead user research' that is a product management technique but we can now use it for niche marketing - i.e. let users that are doing strange things with your product market that use for you to a niche that companies can never reach on their own.

And, of course, I love Sharpies too... especially given that I am currently in the middle of packing and moving!

[Bert DuMars]

Rachel - Thanks for the reply to my comment. In addition to Sharpie, our Graco brand was the pioneer for Newell Rubbermaid with their social media marketing program. Our Graco team started by listening to the Mommy blogger community with special focus on new moms. They then launched the Graco blog in 2008 http://blog.gracobaby.com that is focused on parenting based on the feedback they received from the Mommy blogger community. Later in 2008 they launched a microsite that integrated mom and dad bloggers into a discussion around parenting while on roadtrips http://readyfortheroadahead.com. This site became the launching pad for the Graco Twitter outreach and engagement effort.

Our Rubbermaid brand became our great experimenter. They have been active on Facebook, Twitter, YouTube and other social networks as well as launching the "Adventures in Organization" blog http://blog.rubbermaid.com in early 2008.

We are in process of integrating more social media marketing tools into our branded sites. You will see these integration efforts come to life over the next 6 months.

Again, thanks for the post and the reply. And good luck with your move.

[David Alston]

Hey there Rachel,

I like you idea of a social lab. As you, Jim and I spoke about the other day most enterprises don't have the fortunate circumstance of starting completely fresh in terms of how they want to connect with their customers in a marketing role. I was lucky because I had the chance to build up our approach from scratch and evolve it from there. But I also had the strategic support from the top to take this approach.

I think this would need to be in place as well, viewing the social lab as the incubator for the regeneration of the company's approach. It would also provide the cushion required to see the change process as an investment in a long-term strategy vs. a marketing tactic.

The other reason I love the social lab approach is that it could provide the sandbox for total product experience revival. Word of mouth (social media) reveals the ugly truth about any and all products/services because it points out the extremely good and the extremely bad. Either one is great for a company because it provides point of enhancement and points of improvement. To take a page out of Seth's book, it's about creating a remarkable product worthy of discussion, that taps into the passion of the users. Remarkable product and a community approach go hand in hand and need to be coupled together for a rebirth to be successful at a company.

Loving the discussion. And kudos to the gang at Newell Rubbermaid. Bert you guys are doing some very cool things.

Cheers.

@davidalston
Radian6

[Greg Matthews]

Rachel, thanks for this post. My team at Humana has been working in the social space for about a year, and I would definitely call us a "lab environment" - it's all about the experiments.
But we're getting serious now about how to measure the success of those experiments, and are getting caught up in the trap of measuring the 2.0 world with 1.0 metrics. Would love to hear your thoughts on how to change the way we think about measuring the impact of community.

[Anita Lobo]

Hi Rachel

Great observation.

Most often people under-estimate the effort required to get social media done right, because the tools are free.

Confusion between tools and the message, and the strange absence of clearly defined goals defeats many well-intentioned efforts.

Social labs are an interesting solution. By allowing organisations to experiment till they understand what works, and what do they need to do, to get it right may just encourage better customer service and transparency!

Cheers,

Anita Lobo