Wednesday, April 28, 2010

The Flywheel and the Lightning Strike

There seems to be a bit of schizophrenia in B2B marketing these days. The excitement and interest in social media, and all it can do, is palpable. However, the number of companies that are making significant hard dollar investments in social media as a marketing initiative is not as large as one might expect. By “significant” I mean investments on the level of the other major marketing programs such as search or event marketing, with teams creating great content, engaging with audiences and finding creative ways to add value to potential buyers.

Most B2B marketing teams appear to be experimenting, rather than heavily investing. Sure, they have a Twitter account, and may have put up a blog and even a Facebook fan page, but the level of investment falls far shy of the amounts we invest in Google search campaigns, trade shows or sponsorships. Why is this?

Investment Dynamics: The Flywheel and the Lightning Strike

The most significant challenge in making comparable investments is in the way that investments are made and pay off. With most typical marketing investments, a “lightning strike” pattern is what is seen. A big investment is made, and a big payoff is realized. We run a large campaign, attend a major show or increase our investment in search ad spending, and we see the results immediately.

However, with social media, investments follow a “flywheel” pattern. Over time a steady pattern of investments builds more of a “presence” in social media, a community of interested participants and relationships with key influencers. The building of this “asset” takes significant time and effort – often years – but once it is built it pays off tremendously in terms of awareness, interest and lead flow.

Budgets and Planning

The challenge is that we, as marketing organizations, do not plan this way. Our planning and budgeting cycles are driven by an underlying assumption of a “lightning strike” pattern. Thus, when looking at which investments will drive leads and revenue this quarter or next quarter, a significant investment in social media does not generally make the top of the list.

Other departments have found ways to model, value, and plan for investments that pay off in the long run, but not in a short-term budget. Today’s CMOs must tackle this budgeting and planning challenge if they are to correctly prioritize the marketing investments we must make between those with short-term, “lightning strike” patterns of investment and long-term, “flywheel” patterns such as social media.

(this article first appeared as a guest post on ZoomInfo's "Follow the Lead" blog)
Many of the topics on this blog are discussed in more detail in my book Digital Body Language
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