This thought piece, authored by strategists from the Proximity network and presented by Digital Lab, examines the empirical need for social media investment by brands and explores the frameworks for measuring the...

1. 1
ROSI:
Return on Social
Investment

2. 1
Table of contents
The Necessity of Social Investment 2
Future Shock 3
The Advertising Anachronism 4
The Limitations of Social Media 6
• In the age of social media, you do not control your brand 6
• Social media is nothing but a tool 7
• The value of fans is debatable 8
• Advocates are hard-won 8
• Social media requires basic math skills 9
• Word-of-mouth (WOM) is not a cure-all 10
• Social media will cost you 11
Measuring the Effects of your Social Media Efforts 12
Social media measurement is immature 13
A framework for measuring social platforms 14
Measuring individual engagement 16
The payoff of measuring engagement 19
Being pragmatic about Social Investments 20
Losing control 22
So what’s the difference? 22
In practice 24
Takeaway Tweets 26

3. 2
The Necessity of
Social Investment

4. 3
Future Shock
When it suddenly strikes you that the culture is changing so fast it feels foreign to your own,
you go into shock. It’s a very peculiar kind of shock which is called ‘culture shock’.
This kind of shock has also been referred to as ‘future shock’ for some time now. It also
happens to be the title of a very influential book by husband-and-wife futurists Heidi and Alvin
Toffler, who introduced the phenomenon. ‘Future shock’ was promptly added to the
lexicon, as were the words ‘information overload’ and ‘prosumers’. And in case you may
be wondering who quoted ‘Change is the only constant’, well, they did. In 1970.
What is wrong with us advertisers and advertising agencies? Are we suffering from ‘future
shock’? Because, forty years later, we still don’t seem to understand that the old rules don’t
apply to the future.
‘Future shock’ is probably the only plausible explanation for this very persistent phenomenon
we’d like to call ‘the advertising anachronism’.

5. 4
The Advertising Anachronism
Look around today in any randomly chosen advertising agency or marketing communications
department. Compare it to the way of working in ‘Mad Men’ and the most fundamental
difference you will notice today is the presence of computers. Apart from that, basically
nothing much has changed. How come?
Well, no consumer ever died as a direct result from out-of-sync and inefficient marketing
communications.
“Once in front of a screen, be it a desktop, laptop, or increasingly a handheld device,
we ‘log in’ – not into a system, but into a community.”

6. 5
This is not a quote from ‘Future Shock’. It is not a quote from a marketing communications
handbook either. The quote is taken from “War 2.0, Irregular Warfare in the Information Age”
by Thomas Rid and Marc Hecker.
The army, as opposed to the advertising world, is not suffering from ‘future shock’. The army
does not adhere to a belief of how the world works which prevents one from seeing how
the world really works. Daniel Kahneman, Noble Prize winner in Economics, calls this effect
‘theory-induced blindness’.
Why not? Dead simple: you would surely be killed if you do.
Once in a while, a company which adheres to a certain belief of how the world works runs a
campaign that says one thing, while their actions are quite the opposite. And once in a while,
these actions do cause harm and make people suffer.
When this happens, the company learns in no time how the world really works. How consumers
who, just like insurgents in warfare today have access to very accessible means of
communications and cheap technology, can easily bring any huge company to its knees.

7. 6
The limitations
of social media
In the age of social media, you
do not control your brand.
Ask Comcast, Domino’s Pizza, Toyota or
GAP. Ask BP.
After these companies experienced this
first and foremost limitation of social
media, they acquired social media skills
and learned to use these very same
accessible means of communications and
cheap technology to their benefit remarkably fast.
BP proved that you cannot promise the world that your company is all about renewable
energy (“Beyond Petroleum”) and heavily under-deliver on that promise (while heavily over-
delivering on petroleum in the Gulf of Mexico).
BP proved that branding today is a fundamentally different game. A game where the value of
any elaborate campaign is reduced to zero in a snap if your message is untruthful. If it is all
words and no action…
Because in the age of social media, consumers will give you exactly what they think
you deserve.
“In the age of social media,
you do not control your brand.”

8. 7
Social Media is nothing but a tool.
The misunderstanding that quite often prevails today is that when you think you are actually
practising ‘social media marketing’ you are merely practising ‘social media check marketing’.
Do I have a Facebook Fan Page? Check. Do I have a Twitter account? Check. Do I have a
blog and a channel on YouTube? Check. Check.
If this is what your social media marketing plan looks like, don’t even bother. It will most
certainly be to no avail. What you first need is a story. A story based on facts. And if the facts
are all wrong, you will have to first iron out this problem (remember BP).
If you’re ready to tell your story, then definitely do so. If you don’t, somebody else will do it for you.

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The value of fans is debatable.
Advertisers who are more familiar with traditional media often are extremely critical with
regards to social media. Whereas theoretical values with regards to traditional media
(which are sometimes seriously flawed) are met with a much less critical attitude. That being
said, the value of a fan (or a ‘liker’ in today’s terms) is at the very least debatable.
Fans and followers compare best to what traditional advertising calls ‘eyeballs’, ‘traffic’,
‘targets’ or ‘potential reach’. They are ‘the people formerly known as the audience’. They are
however more valuable: they have knowingly clicked a button which said ‘like’ or ‘follow’,
designating that they are interested in your brand and want to hear from you.
On the other hand, clicking a ‘hide’ button is just as easy. And not everyone is aware of each
and every post. So, even if you have a huge number of fans and followers, you may still be
talking to an imaginary audience.
Although this still trumps commercials which are more often than not a signal to hurry to
the bathroom or start time-shifting, it is not merely the fans and followers you should be after.
As an advertiser, you should be predominantly occupied with going after the advocates.
Advocates are hard-won.
According to McKinsey, consumers have become overloaded and increasingly sceptical
about traditional company-driven advertising and marketing. They increasingly prefer to make
purchasing decisions largely independent of what companies tell them about their products.
This is where your advocates will make the difference.
Word of mouth is – and always has been – the most powerful form of marketing. It is the
only form of marketing that can make a consumer change his mind completely or even make
consumers consider brands they would never have considered otherwise.
But when do consumers start talking actively about your product or service to their social
networks? When do they become your advocates? There’s only two occasions. Either when

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you over-deliver and give them a better experience than expected. Or when you under-deliver
and give them a worse experience than expected. What you have to do is as simple as it is
hard: you have to over-deliver in order for people to start sharing positive news about your
brand with the people they socially engage with.
‘Social media’ requires basic math skills.
According to McKinsey, “word-of-mouth equity” is an index of a brand’s power to generate
messages that influence a consumer’s decision to purchase. Word-of-mouth equity basically
is a formula: volume times impact.
Volume is easy enough: are there few or many messages that may influence my
purchase decision?
Impact is somewhat more complex and determined by the following factors:
• Where: messages shared within a closed or trusted network create more impact
compared to messages shared within a large or dispersed network.
• What: if the message addresses important product or service features, it is more likely
to influence consumer decisions.
• Who: is the sender a trusted person and is he/she influential?
• Source: is the message based on one’s own experience or on hearsay?
Research by McKinsey showed that a high-impact recommendation – from a trusted friend
conveying a relevant message for example – is up to 50 times more likely to trigger a
purchase than is a low-impact recommendation.
From “A new way to measure word-of-mouth marketing”, McKinsey
“Marketers tend to build campaigns around
emotional positioning, yet we found that
consumers actually tend to talk – and
generate buzz – about functional messages.”

11. 10
WOM is not a cure-all.
One can never argue that what is wrong is right. If your product or service is not up to par,
cross out any budget you’re spending on marketing communications and use it to get your
act together first.
The best way to eradicate a bad product or service is to advertise it. And this is certainly
true today: consumers trust anonymous peers more than they trust advertisers. Systematic
negative word-of-mouth will put a stop to your business.
But what can positive word-of-mouth do for you? Well, there are all kinds of word-of-mouth
— and these are the ones you should understand.
• Experiential word-of-mouth results from a consumer’s direct experience with a product
or service if that experience deviates from what’s expected.
• Consequential word-of-mouth occurs when consumers directly exposed to traditional
marketing campaigns pass on messages about them or the brand they’re publicising.
• Intentional word-of-mouth is e.g. when marketers use celebrity endorsements to trigger
positive buzz for product launches.
From “A new way to measure word-of-mouth marketing”, McKinsey
“To turn consumers into an effective
marketing vehicle, companies need to
outperform on product and service attributes
that have intrinsic word-of-mouth potential.”

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Social media will
cost you.
If you stay away from social
media, it will cost you.
Remember BP: if you don’t
tell your story, somebody else
will do it for you. But getting
involved with social media will
cost you as well. And there
are three ways of investing in
social media.
Investment in culture
Social media is all about trust and engagement. If you build your company on these pillars,
your first and best advocates will be your employees. As of today, the people from Zappos
have not spent one dollar on marketing communications. They have a fire-and-hire policy
based on the company’s core values. And they have made Zappos a company where
everyone wins: company, employees and customers.
Investment in good ideas
You don’t have to be Coca-Cola to come up with a good idea everyone starts talking
about (‘The Happiness Machine’). Albion’s Oven, a London-based bakery, started sending
automated tweets whenever something absolutely tasty had just been taken out of the oven.
That’s the only marketing it ever needs.
Investment in data
No matter what your company does you should start seeing your activities as an
‘information-based service’. You have to get to know your customers if you want to be
able to deliver them a better experience. It is ‘better experiences’ that will turn each and
every one of your customers into advocates.

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Measuring the
effects of your
Social Media
efforts

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Social media measurement is immature
Marketing investment in social media is increasing, yet marketers continue to struggle with
the methodologies for validating these investments. A lot of excitement accompanies the
development of social media marketing ideas because the majority of marketers and agency
representatives prefer to work with their creative right-brain functions. However, we need the
decidedly less sexy left-brain analytics skills to measure and prove ROI. Just like any other
medium, measuring the effects of social media is a critical component to success.
Social media measurement is quite immature, just as web analytics was a few years ago.
To determine how capable marketers are at measuring the results of their online direct
response, branding and social media campaigns, we surveyed almost 100 Belgian marketers.
When asked to rank their measurement capabilities on a scale of 1 to 3 where 1 is novice and
3 is expert, we found that marketers consider themselves to be (cf. Figure 1):
• Best at direct response. Marketers rate their ability to measure the effect of direct
response campaigns at an average of 1.29 out of 3. Not surprising considering
marketers have more experience with direct response tools like email and paid
searches compared with newer online tools like online video or blogs.
• So-so at brand marketing. Belgian marketers are a little less confident when it comes to
measuring brand campaigns, averaging 1.05 out of 3.
• Novices at social media.
Marketers rated themselves
the least mature with
measuring social media
efforts at 0.85 out of 3. We
find this average ambitious
compared to the other two
disciplines, considering that
social media is only a few
years old.
Figure 1

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A framework for measuring
social platforms
The online marketer is overwhelmed by the number of metrics available through (free) web
analytics software. Many of these marketers suffer from the Google Analytics syndrome:
“measure everything”. Just because you can measure something, doesn’t mean you should.
In fact, the amount of available online data can paralyse marketers who try to track it all.
It’s better to focus on a small subset of metrics that align closely with clearly-defined business
or campaign goals. Not all metrics will be equally relevant to all marketers; not all metrics are
equally relevant to all campaigns.
It’s not surprising that marketers have so much trouble measuring social media well. Every
social platform and vendor offers its own metrics, and there are literally hundreds of ways to
measure the success of social initiatives.
“Just because you can measure something,
doesn’t mean you shoulD.”

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We can easily classify all available social media metrics into four categories:
User reach describes how far and wide your messages spread.
Volume of participation describes how many consumers interact with your social
initiatives.
User impact describes how your efforts change consumers’ actions or opinions.
Quality of participation describes the strength and depth of consumers’ interactions
with your social initiatives.
Measuring user reach is easy but imperfect. It’s so easy, in fact, that it’s the most used metric.
Counting Facebook fans, Twitter followers, and blog feed subscribers can all give you insight
into how many consumers you’re reaching. But keep in mind that not everyone who follows or
likes your brand in social media will see every message you post. Click-through rates on the
links you post — as measured through traditional web analytics — can tell you what portion
of your social media audience are effectively reached.
Volume of participation tells you how engaged consumers are. The number of comments on
your blog posts, the number of @replies you receive on Twitter, and the number of likes and
comments on your Facebook fan page quantify how many consumers are interacting with
your efforts. But as much as some marketers fixate on this category, it’s not the best way to
measure success for any of your social media objectives.
Both fore-mentioned quantitative metrics should be complemented with qualitative metrics
to assess the full impact of your social media investments, such as user impact and quality of
participation.
When measuring user impact, you might look for returning visitors per month or active
visitors per month, which give an indirect indication of user impact. If direct response is your
main objective, conversions such as subscriptions, leads or sales derived from your social
initiatives should be your focus. And if you’re hoping to make a brand impact, an online
survey is still your best option to measure the effect. Perhaps complemented with sentiment
tracking via listening platforms, a survey is the best way to find out if your followers,
subscribers or fans are more eager to purchase from you, or to refer your brand to their peers.

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Quality of participation is a subjective metric. You’ll know high-quality participation when
you see it. In support forums it means your customers are satisfied and support call volume
drops. While in user innovation initiatives, it means you have lots of great, new ideas in your
development queue. Likewise, if the video entries you generate from a contest are good
enough to use on your website or on TV, then you’ve succeeded.
To have a holistic
view of the impact
of your social
platform, it is best
to measure across
both axes: quality
vs. quantity and
users vs. usage.
This requires a set
of measurement
tools and metrics
that go beyond the
ones provided by the social platform itself such as focus groups, online surveys and social
listening tracking systems.
Measuring individual engagement
The above-mentioned framework still only measures first-degree impact of social platform(s):
i.e. the participation volume and quality of the users present on the platforms. It does not yet
measure the all-encompassing impact, taking into account the reach and influence of these users.
So, how can we measure the impact of your subscribers, followers or fans and their
interactions with your social initiatives on others? The answer lies perhaps by putting the
individual at the centre of the two axes.

18. 17
Engagement measurement encompasses quantitative and qualitative metrics. It comprises
concrete individual metrics from website visits and online purchases to the softer insights
from brand awareness studies, sentiment, loyalty, and advocacy.
Forrester’s definition of engagement is:
Engagement is the level of involvement, interaction, intimacy and influence an individual has
with a brand over time.
Four components make up the engagement framework — the four I’s:
• Involvement — the presence of a person at various brand touch points. Metrics include website
visitors, time spent per page, and pages viewed. The main data source is web analytics.
• Interaction — the social actions people take while present at these touch points. Metrics
include comments, reviews, ratings, uploaded photos or videos, etc. Data sources include
mainly social media platforms.
• Intimacy — the affection or aversion a person holds for a brand. Metrics include sentiment
measurement in blog posts, blog comments, discussion forums, etc. Data sources include
brand monitoring services, survey responses, etc.
• Influence — the likelihood a person is to advocate on behalf of the brand. Metrics include
Net Promoter, satisfaction ratings, forwarded content, etc. Data sources include market
research services, surveys, web analytics, etc.

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Measurement of individual engagement is complex. And requires a set of tools:
The most fundamental tool required is a central customer data repository providing a
consolidated view of an individual customer or prospect’s relationship with your brand.
Analytics tools work off this central database such as web analytics to map individual
research, browse and purchase behaviour. But online isn’t just about transactional
relationships. Consumers use your social channels to share feedback, create and
distribute content and broadcast opinions. You’ll need more sophisticated monitoring
tools beyond traditional web analytics to capture this type of feedback.
Social monitoring tools help marketers to understand how consumers perceive and
interact with the brand in channels not controlled by marketers. Consumers have
numerous venues outside the organisation’s control to voice their attitudes and
preferences. These tools collect, organise and deliver information on the strength and
type of consumer sentiment. This allows marketers to answer important questions like:
“What are consumers saying about us?” or “Who’s influencing their peers in a positive
or negative manner?”
Finally, the often-neglected but utterly invaluable customer surveys (satisfaction survey,
brand research, etc.) are extremely important in providing additional insight into brand
affinity and influence of customers. And to get a complete picture of the state of the 4 I’s
at an individual level.

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The payoff of measuring engagement
Measuring engagement is not an easy task, and measurement vendors don’t yet provide
unified services to help tie it all together. To get started, you’ll need to take the first steps
alone. But consider the payoff of your hard work. You’ll be able to:
• Gain much deeper insight into customer behaviour and beliefs. And translate this
insight into marketing strategies that target customer segments with more relevant and
persuasive messages and innovative products.
• Measure and learn from things you currently ignore. Qualitative metrics like feelings,
affinity and sentiment historically have been difficult to track. But social media makes
it easier for customers to offer their opinion, and as a result, all that data is sitting out
there waiting to be mined. By tracking commentary in discussion forums, you’ll get
insights that no survey would ever detect since they come straight from the minds of
the customers.
• Identify customers who influence others to buy. A person who contributes content,
such as a product review or a video of the product in use, may be far more valuable
than the average purchaser. As a result, your idea of who you would consider the most
valuable customer will change. Identify customers who make significant product reviews
that influence other peoples’ purchases, and then initiate programmes to encourage
these customers to contribute more content. This will become your focus.

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“The Whirlpool case: Twitter user @dooce complains about her
MAYTAG washing machine after a customer service agent tells her
it doesn’t matter she’s got 1.5+ million Twitter followers.”
Being pragmatic
about Social
Investments

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Let’s imagine for a second that you’ve decided social media should be a part of your
communications strategy. You created policies, bought monitoring software, hired a social
media expert and thoroughly discussed and outlined all possible scenarios. You’re ready to
enter the promising world of social media conversations.
And yet, you aren’t. In as much as you have all the processes defined, ultimately it’s up to
the customer to decide what is going to happen. You can probably already guess what this
means. He will likely stumble upon a problem on an early Sunday morning, try to contact
your customer support service and find out it is only opened during office hours. This is when
he starts to share his problem (and frustrations) with his online friends, followers and the
worldwide web.
It’s a problem we’ve had to deal with in the past — before online/social media — as well.
However, as the consumer doesn’t have the means to solve the problem with anyone else
but us, we managed to teach him to respect our rules (our office opening hours, expensive
phone number, etc.) and thus call us on Monday morning. An entire Customer Relationship
Management (CRM) business was built around this idea, making it as easy as possible for
companies to manage interactions with customers, prospects and suppliers.
A brilliant idea really, that only recently started to show some weaknesses. The advent of the
internet — and social media in particular — allowed the customer to entirely circumvent the
company. He now has access to a wide range of tools to get in touch with other customers,
ask them about anything he wants to ask and complain about anything he feels you, as a
brand, did wrong. Moreover, “customers” are no longer only limited to people you have a
financial relationship with; your best customer in this new situation isn’t necessarily the one
who buys the most.

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Losing control
In no time at all, the company moved from a central position in control of interaction to an
isolated entity, desperately trying to regain relevancy. Paul Greenberg describes social CRM
as “the company’s response to the customer’s ownership of the conversation.” It’s up to
the brand to become a relevant part of the conversation again. It goes without saying that a
traditional inside-out CRM approach is not the kind of relevancy your customer expects.
One could therefore wonder if social customer relationship management is the best term to
describe this new discipline. We’re no longer talking about customers only, and relationships
today are quite different from what they used to be. And let’s not even touch on the subject
of management, which is in fact quite the opposite of what is happening. We’ll leave the
challenge of coming up with a better name to someone else. Yet to take away any confusion,
let’s first define how social CRM relates to traditional CRM.
So what’s the difference?
We already mentioned the consumer is in control of the conversation. Opposite to the
traditional inside-out approach, social CRM is all about outside-in. No longer pushing
messages, but rather monitoring, listening and responding. Which already indicates a typical
SCRM flow is far more decentralised: as consumers prefer to consult with their friends
instead of brands, it’s up to these brands to actively look for conversations (in any channel the
customer prefers).
Company Customer
TRADITIONAL CRM: INSIDE OUT
SOCIAL CRM: OUTSIDE IN

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There’s no need to mention that this is a rather drastic switch for businesses and the way they
interact with their customers:
• Rather than the CRM department only, everyone needs to be involved and aware of
both the opportunities and threats of social media. You as a marketer might be well
aware of all this, but your primary customer-facing departments (such as your outsourced
customer service team) should be even more so.
• The customer will take the initiative, which means it’s up to you to make sure you’ve
got all the tools and processes in line to react adequately.
• There’s no need to say this is not limited to business hours. Expect the worst on a
Friday night.
On a side note: in no way does social CRM replace traditional CRM. In fact, both can be
perfectly complementary. Anything you’ve learned while monitoring social media can be
applied to traditional sales, marketing and customer support CRM flows and vice versa.
“Twitter has changed the culture of our
company.” Brian Roberts, Comcast CEO
Assigned departments
company-defined process
business hours
defined channels
transaction
inside out
who
what
when
where
why
how
everyone
customer-defined process
customer sets the hours
customer-driven dynamic channels
interaction
outside in

25. 24
In practice
There’s no one-size-fits-all solution as every applicable situation, target group and goal will be
unique. However, every social CRM implementation will somehow need to take into account
the five M’s of social CRM (as defined by Altimeter).
Monitoring (obviously) requires you to scan the web for relevant content and listen to
whatever people are saying related to your brand or product. In a typical second mapping
phase, online and offline profiles and identities should be mapped and connected in order to
provide relevance. Not too many — if any at all — complaints on Twitter today clearly indicate
the user’s customer ID. In order to effectively solve an issue, we’ll have to know who’s talking
to us. This is certainly not the easiest thing to do, yet by offering the right benefits and
rewards users can actually be encouraged to do the mapping themselves.
Which leads us to the third phase: if we know what’s being said and we know who’s saying it,
then it’s up to us to (possibly) respond. Who’s going to respond and how? The management
phase will define the process and dispatch information to the right people (remember SCRM
is about the entire organisation). Closely related to this is the fourth M — middleware —
as we not only need to dispatch messages to the right people, we’ll also have to save this
information in our database in order to integrate it with any other corporate data.
“The five M’s of social CRM”:
- Monitoring
- Mapping
- Management
- Middleware
- Measuring

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Needless to say, our last M is about measuring. We already stressed the importance
of metrics in a previous chapter, yet we can’t stress it enough: what you can’t measure,
you can’t improve.
Based upon the 5M model, Altimeter defined 18 different social CRM use cases applied to
sales, marketing and customer support. Depending on your organisation and needs, these
can be used as a framework to get started with social CRM in your organisation. Pick one and
try to apply it to your situation. You’ll be surprised to discover all the different opportunities
social CRM offers.

27. 26
Takeaway
tweets

28. 27

29. 28
See your company as an information-based service. Get to know your
customers, offer a better experience # FollowFridays
10:58 AM Nov 3rd
Branding today is a whole different game: you need to make sure you’re
backing it up in the market place # FollowFridays
1116 AM Nov 3rd
You have to overdeliver in order to generate WOM! # FollowFridays
11:03 AM Nov 3rd
Experiential WOM beats Consequential WOM! # FollowFridays
11:25 AM Nov 3rd
AdNerds
AdNerds
AdNerds
AdNerds

30. 29
Marketing dollars will shift from outbound communication to data
analysis # FollowFridays
09:36 AM Nov 4th
Measuring engagement means measuring and learning from things you
currently ignore # FollowFridays
10:08 AM Nov 4th
Identifying and targeting “evangelists” rather than only new customers
becomes relevant # FollowFridays
09:52 AM Nov 4th
Measure beyond volume, i.e. engagement # FollowFridays
10:21 AM Nov 4th
AdNerds
AdNerds
AdNerds
AdNerds

31. 30
Polar organizations focused purely on analytics or creative are destined
to fail # FollowFridays
10:46 AM Nov 4th
It’s a solution to business problems that have always existed.
# FollowFridays
10:13 AM Nov 7th
Social CRM is not a replacement for traditional CRM, or for social
media. # FollowFridays
10:02 AM Nov 7th
AdNerds
AdNerds
AdNerds

32. 31
There’s no such thing as one-size-fits-all. # FollowFridays
11:29 AM Nov 7th
We’re just scratching the surface. And you should do that too.
# FollowFridays
11:56 AM Nov 7th
SCRM is a (long-term) strategy. Technology is only the enabler.
# FollowFridays
11:08 AM Nov 7th
AdNerds
AdNerds
AdNerds

33. 32
authors
Tijs Vrolix
http://be.linkedin.com/in/tijsvrolix
Franky Willekens
http://be.linkedin.com/in/frankywillekens
Jan Algoed
http://be.linkedin.com/in/janalgoed

34. 33
www.bbdo.com
www.proximityworld.com
www.digitallabblog.com