Fusion marketing – a way to improve your ROI opportunityInterview
Lon SafkoAdvisory Board Member of Forbes School of Business & Technology
In our conversation with Lon Safko, Bestselling Author of The Fusion Marketing Bible – It’s What’s Next and The Social Media Bible, he talks about this new concept of marketing and how it helps marketers improve their unseen ROI opportunity.
REGALIX: How do you define this new form of marketing that you have termed as “Fusion Marketing”?
LS: Fusion Marketing will be the face of marketing in next 5 years from now – its 2020 marketing. People addressing themselves as social media experts are announcing to the world that they are missing on digital and traditional marketing. Fusion Marketing is about unifying traditional, digital and social media marketing on one platform to improve return on investment (ROI). Marketing tools and cost analysis are used to evaluate the usefulness of traditional, digital and social media marketing tools. Thereafter, the user can integrate these into one unified set of tools. For example, if you are using Facebook, make sure you have an email signup option there. Every time you send a mail, remind people to follow you on Twitter. This different genre of marketing is about integrating tools to increase the effectiveness of other tools.
REGALIX: Can you explain the need for marketers to incorporate this concept?
LS: Globally, various universities are still teaching traditional marketing concepts, as they have no or very limited hold on modern social media marketing. However, traditional marketing is still relevant for some companies, as companies are either not comfortable using social media or do not know the right way of using it as a marketing tool. It’s 2015, and companies need to be competitive to survive. Early adopters of social media have already allocated 100% of their marketing budget, or nearly so, to it and moved from traditional marketing.
However, it’s imperative that organizations understand their demographics, and choose their tools depending on that. For example, if the target audience is older, companies need not spend on social media as very few in that age group use social media. On the contrary, if they are focusing on a young crowd, they should not waste time and money on newspaper.
REGALIX: In your book “The Fusion Marketing Bible”, you are talking about how to analyze your marketing efforts and leverage synergies across platforms to produce best results? Can you explain to us the different tactics businesses should adopt to achieve the same?
LS: Some of the questions I often ask companies when I speak internationally are: What is your total cost of customer acquisition? How much did you spend last year and how many new customers did that money bring in? Well, none can answer these questions. These are the answers every organization must know. To know the exact number, companies need to calculate their annual revenue by subtracting money spent on marketing and dividing the total with the number of new customers. That actually is how many new customers that company has won. After understanding this, organizations can get the clear picture of what was done last year and understand what is working and what is not.
They must also track their print ads, as companies spend a lot on them. Social media and digital marketing is very easy to track but traditional marketing is not. Hence, both must be integrated to know the actual cost of customer acquisition.
REGALIX: Can you provide some examples of companies who have incorporated the concept of fusion marketing and tasted success?
LS: Yes, Philips Healthcare and Chevron Oil are some of the corporations that have actually succeeded in incorporating fusion marketing concepts. Also, I enjoy working with small companies. Besides this, I have worked and taught fusion marketing classes at ISB (Indian School of Business) Hyderabad, and in couple of weeks I will be introducing the concept to 30 or 40 largest corporations in Mumbai and Delhi.
REGALIX: You have also invented a marketing tool called the “Safko Wheel” a Marketing Toolkit; can you explain what it does?
LS: Just doing traditional marketing for the last hundred years has been quite difficult. In 2006, arrival of social media marketing added another level of complexity. To help users determine which tool is effective from dozens of different tools and save them the trouble of testing each tool, I invented something called the ‘Safko Wheel’ that can be visualized as a pinwheel with spokes. Safko wheel can be used for digital and traditional both. We can pick and select the best from every tool without missing on anything, including demographics, and then combine these together to create a highly effective marketing tool. It goes beyond this, as it helps in developing certain tactics, tools, objectives and leads.
REGALIX: How do the tool “Safko Wheel” fit into the overall Fusion Marketing concept and how do companies benefit from it?
LS: Fusion Marketing is merging traditional and digital marketing worlds, picking the correct tools, doing the correct analysis, putting measurement in place and completely integrating it with everything that is appropriate.
If there are 20 traditional tools and 20 social/digital tools, that makes it 40 tools in all. Connecting all those tools is just impossible, as there will be multiple combinations and permutations. This tool is simple and effective to follow, as it gives you step by step information on what is effective and what is not, so you can connect all that works together to create a powerful marketing plan.
REGALIX: What, according to you, are the key challenges businesses face when it comes to using Social Media for marketing?
LS: At present we are facing many challenges and it’s getting even more complex and difficult by the day. In 2006, nobody knew what social media was about. In 2008, I wrote a book “Social Media Bible” which hit number one on Amazon. In 2008, everybody wanted to know what it was and still nobody knew how to use it. In 2010, most of the top companies were getting involved in this but were using it incorrectly. There have been different types of challenges ever since social media came into picture.
The biggest challenge today is that though companies have a good understanding of social media tools and some of them are using it well, most organizations are not doing a good job as they do not understand it completely.
Another major challenge is that social media has been affecting the overall marketing plan. Let’s suppose you have a beautiful crystal bowl that represents all of your demographics, potential customers and clients. You drop it and it breaks into thousand pieces. In order to get back the larger piece of that demographic crystal, you will have to collect a lot of pieces. What social media ended up doing was breaking the marketing crystal ball. You get 2% or 3% on FB, 0.5% on Twitter, 2% on print ads, and hence the difficulty in collecting the broken pieces. Fusion Marketing understands how to go out about it, find all of those little bits and pieces, and put them together.
REGALIX: What you think are some mistakes that companies commonly make when establishing their social media presence?
LS: Well, one of the biggest mistakes that has been committed in the past and is still being committed by a lot of companies is that external marketing companies are being hired to do the communication for them. From the beginning, I have been teaching that organizations have to be sincere, authentic and transparent in their communication. If they are not transparent, customers will see right through.
Another thing is unresponsiveness. Many companies are participating in Social Media campaigns but they are not responsive. If customers send out a tweet or complain of having an issue, many companies just ignore it. One such example is Dominos, the largest chain of pizza in America, which was almost thrown out of business for being unresponsive. Even United Airlines has been historically very unresponsive, which has led to customer losses. So, paying attention and being responsive is absolutely critical.
Businesses must use the tools correctly and pay attention to them because that’s what the customers demand. When customers talk, they want to hear back from you. There is something called “word of mouth”, which travels at the speed of light. Many years ago, they said happy customers will talk to 7 different people about their experiences, unsatisfied will talk to 15 or 17 different people. At present, if you have an unsatisfied customer they will tell 1500 to 1, 00,000 people as they have the ability to communicate to people around the world at the speed of light. Thus, it is imperative that companies participate in the conversations that are taking place around them.
REGALIX: Companies are also facing unprecedented challenges through hyper-competition driven by the internet, globalization and social media. What do companies need to do to stay relevant?
LS: The first thing I see when I look at a company is their geographic area and can they sell their products online or not. If they are trying to compete on internet instantly, they are competing internationally. The moment you open up the website, you are competing with other people with a lot of resources and probably with a very good head start. So that’s another difficulty. If you are competing globally, you also have to understand the culture and ways of communication. For example, if an organization in the US is competing globally and their targeted audience also includes China, they need to make sure they are marketing on Chinese social media platform, as China has blocked all the major western social media websites. To communicate with people outside the US effectively, the business needs to compete regionally on the World Wide Web.
REGALIX: What do you think will be the key social media trends in 2015?
LS: Well, there is an unfortunate trend. Eventually, we are going to see that social media is becoming less and less effective. 4 to 5 years ago, a single tweet got 30 to 40 responses within the first 60 second, but now the number of responses has decreased. This trend is quite evident on Facebook, where people post something and see no comments or feedback. The difficulty most of the corporations are facing at present is that social media is proving to be less effective. Also, almost everyone on major social media platform has gone public. We all know Facebook went public with some crazy numbers. Once you are a public corporation, you are no longer answering to the founder or the tech geek that created it. You are answering to the Wall Street and Board of Directors. All of the changes that we saw on Facebook, were just ways of making money. Facebook is systematically limiting our ability as marketers to communicate with our potential customers, either by removing the features or by making us pay for it.
REGALIX: What do you have to say about the changing social media landscape and how marketers can stay on top of these trends?
LS: Listen to your customers. If someone asks you to connect on a particular social network, then connect and show your presence. Google and find out how many members they have. People say MySpace does not exist anymore. It does exit as it has 32 million active members, as compared to 4.2 billion members on Facebook. MySpace is still a small percentage. But wait a minute. If your customer is one in a million that got 32 million, you’ve got 32 million plus the billion on Facebook. The point is that organizations have to engage, get out there, participate and see what is going on.