Tuesday, January 29, 2013

Popularity and Influence in Social Media (Part I): Do You Know The Difference?

Popularity and Influence.
If you are developing your social media presence, whether for your business or yourself as a professional, it’s important to be able to recognize the difference between influence and popularity, two terms that are often wrongly interpreted.

As always, we start by defining the two terms:

Popularity: To be liked, admired, or enjoyed by many people or, at least, by a group of people in particular.
Influence: People who have the ability to impact positively or negatively on a particular subject. According to another source: “People with power or authority with whose intervention an advantage, favor or benefit can be obtained.”

From this point on, the difference is crystal-clear: A popular person is loved, admired, and enjoyed by many. An influential person is someone who can make a difference, promote a change, and enjoys the confidence of its surrounding group, whether large or small. 

And notice that popularity and influence are two concepts that have so little in common, that the person you least expect can be very influential in a particular topic and help you make some decisions.

And it happened to me personally some time ago: I had doubts about whether to buy some accessories for my bike and talking to a close friend of mine, who has all my confidence, I mentioned my concerns and, to my surprise, it turned out that this friend of mine, Alberto Polo Positivo, knew a lot of things about bikes and the accessories I was planning to buy, far more than I ever imagined.

And he influenced me so strongly that day, that not only helped me make a decision but anytime I have questions about bikes, I go back to him without hesitation. That’s influence.

An influential person has the ability to generate a change of opinion.

You have to clearly understand the difference between popularity and influence so you can use them properly to promote your products and services. Going back to the exchange I had with my friend Alberto, as you can see his opinion was so important to me that helped me make a decision.

And my decision had nothing to do with Alberto’s popularity, nor with how many followers he’s got  on Twitter or anything like that.

My decision was based on the confidence I put in Alberto and the knowledge he showed me when we were talking about bikes and the accessories I was planning to buy.

Popularity does not determine influence.

As you can see, influence is strongly linked to two elements that are worth mentioning:

  • Trust: It’s obvious that for a person to be influential to you, it must have earned your trust. If there is no trust, that person will not be able to influence you in any way.
  • Authority: The knowledge that person proves to have about a particular topic.

And although it’s very important to have authority on the topic at hand, showing knowledge and skills, if the person hasn’t earned your trust, nothing will happen.

Every so often we get on the web lists highlighting the most influential people, as it’s the case in the article I recommend you to read at the end of this post. However, it’s important for you to know that a very popular person isn’t necessarily influential in a specific topic. It may be retweeted hundred of times per day, mentioned in every conversation, but that is not necessarily a true index of that person’s influence.

How important it is for your product, an influential person within your industry?

And now you will see why it’s so important to know the difference between popularity and influence: A person who is influential within your industry can create a wave of favorable opinions for your product, which will therefore lead to more sales. Period.

Please note that if your product is really good, offers value, is different from what others offer, an influential person (or what people like to name: “an industry expert”) will want to know about it and share it with others.

It’s a mutual exchange: The influential person gains knowledge and increases its reputation within the industry by talking about a new product that perhaps few people know, and your product gets the endorsement of an “industry expert” or influential person. A real "win-win" situation.

The same is not necessarily the case with a person who is only popular.

I included herein a link to the post by Douglas Karr in Social Media Today, that develops this theme in an extraordinary way, using plain and simple language.

Now that we have talked about Popularity and Influence, How are you planning to use it to promote your products or services?

Recommended Reading:
We Should Stop Saying Influential When We Mean Popular People

Click here continue reading part II and III of this post:
Popularity and Influence in Social Networks: You Choose What Works and What Doesn’t.
Popularity and Influence in Social Networks: Create Your Own Voice

Related Article:
Correspondence and Influence: Why Do We Share Content?

Tuesday, January 22, 2013

How To Make Sure Your Business Is Being Profitable, In A Simple Way.

Are you making money?
What's your idea of ​​a profitable business? Are you thinking that to be profitable your business has to be large, have multiple offices or a large payroll?

And even though my goal here is not to make a treaty about business’ profitability  from a theoretical point of view, since it’s not my professional area, as an entrepreneur I’ve been, I already know it's extremely important to understand the meaning of "business’ profitability" in order to properly manage yours and make sound decisions, at the right time.

Having made this clarification, I want to review with you some ideas about "profit" because it often happens that “profitability” is mixed and confused with earnings, successful, billing volumes, and so forth, and all this leads many entrepreneurs to pursue really good goals that have been set in not the best possible way.

Let's get back to the beginning: What does "profitable" mean?

According to the Dictionary:

"Profitable" means "producing sufficient income or being rewarding" and "rewarding" refers to something that "is generating profits, satisfaction”. And according to Wikipedia, the "Profitability" is the ability to produce or generate additional benefits on an specific investment or effort.

If you notice, the definition is very simple: A profitable business is one that produces profit. And it will be more or less profitable, depending if it generates more or less profits based on the money or effort you’ve invested or put into it.

Now: How can your understanding of “Profitability” lead to confusion.

Let’s talk about a big company with a million dollar payroll, hundreds of employees, spacious offices, yearly billings of 200 million euros, has about 175 million in expenses and has generated a 25 million euros net profit. Not bad, right? Those figures are very interesting, great, awesome.

Let’s compare it then with a small, local company with yearly billings of 150,000 euros, expenses in the order of 100K and generates only 50K €profit a year.

Which one would you consider the successful one? Which one would you perceive as the most profitable?

At first glance, you could be strongly impressed by big figures and an annual profit of 25 million euros. And they really are impressive, but they represent a return of only 14%.

How to calculate this percentage?: just take the profit earned, then divide it by their costs and multiply it by one hundred. If you do the same calculation for the small local business, what do you get as a result?

It turns out that the small local business, with tiny numbers, has a profitability of 40%. Almost three times that of the big business!

What does it mean to your business?

First of all, big figures can give you a false illusion about your business: The fact it has millions on billings, doesn’t necessarily represent a successful and profitable business.

Second, your business will be more or less profitable, as it produces profit, nothing more than that. Your business’ size, the number of employees you have, the square footage your offices occupy, doesn’t make any difference at all

It is about numbers and nothing else, and it can be calculated on a simple way:
  • Calculate your total sales in a specific period.
  • Add up all the money you spent running your business during the same period of time.
  • Subtract your expenses from your total sales to get your net profit.
  • Divide your net profit by your total expenses, multiply it by one hundred, and that is the profitability rate of your business, in a very simple and domestic way.
If the ending result is positive, you're on track and you're making money. If it is negative, then it is time to make decisions and check what could be going wrong.

Some time ago I published an article in which I said businesses should be driven by numbers and not emotions. The amount of effort you put in, the many hours you work, all the ideas you get going, everything you do is only justified and makes sense when your business is profitable, and not otherwise.

Do not fall prey to the illusion of numbers, size or appearance. Even the smallest business can be extremely profitable, if the numbers are managed properly.

Remember that a business is more profitable not because it has the largest billings, but because it generates more profits.

Related article: Charging the Right Price: The Single Most Important Rule of Business

Tuesday, January 15, 2013

Social Media: How To Destroy A Relationship In Less Than 24 Hours.

Are we building or destroying them?
Social networks are a very powerful vehicle to get in touch with potential customers for your business or company. Social networks can even offer you the opportunity to reach out for specific industries or influential people within the industry of your interest.

All you need to do is to properly search and be patient enough to initiate and develop truly effective contacts.

Amongst the most popular networks, Twitter is the easiest one to use to get connections because people’s profiles are open and you only need to write the twitter handler of the person you are interested in, tweet him/her and thereafter establish the connection.

There is very little patience to do it right.

However, because it is so simple, you can make the mistake of starting to aggressively search for new prospects or influential people who can provide your product with an extraordinary visibility.

Before using social networks to find new prospects or influential people, you must make sure all your sales representatives, including yourself, have things clear and you have established with them a concrete strategy to carry out the task of prospecting, in order not to go out and start destroying relationships rather than building them.

First of all, have the patience to get it done right.

A clear example of HOW NOT TO do things.

"Social Selling On Twitter Blackout."

The picture I included above shows you as the representative of company "X", burned a possible relationship with a very influential person within their industry, virtually overnight. The exchange goes as follows:
  • The representative retweeted content posted by Robert Trenson, a very influential person within their business.
  • As usual Trenson thanked them for the retweet and cordially offered himself to provide help if needed.
  • The representative immediately replied Robert, offering a demonstration of their product.
  • Robert very kindly encouraged the representative to get to know him first at least a little, spend some more time developing the relationship before attempting to sell their product.
And in just two interactions, a relationship that might have started from a very good initial point, in a friendly and easy going way, by the impatience of the company’s representative, is going down the drain.

How could this situation be handled better?

Robert himself gives all of us the answer. If the representative from company "X" had taken the time to tell Robert the reason why they had retweeted his post, or the reason for their interaction or simply expressing their intention of opening up a relationship and getting to know each other, perhaps the story would have had a happy ending, or perhaps less embarrassing at least.

A small exchange, perhaps something like the following:
  • "You're welcome, Robert. We love the content you post because it provides great value to the industry in which our company moves ", or perhaps something like ...
  • "You're welcome, Robert. At our company we are very interested in the topic you posted. Maybe we can talk a little bit further about it "
Something that had simply shown an interest in developing the relationship a little more, in getting to know the other person a bit more, would have sufficed.

However, given the urgent desire to promote a product or service, companies usually forget the fact social networks have different dynamics, and that the important thing is the relationship. Yes, you can get to sell your products but that the strategy should be a little different.

Don’t you think it would have been much smarter to use a different approach? Surely it would have been more effective!

This post was inpired by Jonathan Catley's "An Example of Social Prospecting Gone Wrong"
You would also like to read Relationship value: What can you expect from social media?

Tuesday, January 8, 2013

It’s Not The Same Thing Being An Entrepreneur Than An Adventurer.

Are you an entrepreneur or an adventurer?
Nor is it an adventure to venture into entrepreneurship. Although it seems like a non important words game, it it’s like that.

I am positive that, being an entrepreneur as you are and willing to go the extra mile for your business, you’ve attended various courses, seminars and lectures offered to business owners.

Have you noticed, as I have, that a lot of emphasis is placed on the fact that you should be passionate about what you do, keep always looking forward, work really hard, maintain a spirit of innovation, and not to stop at anything?

Have you noticed how it’s emphasized the fact that you could even launch a new business without having any funds, or even in some cases, not having a business plan? It’s an awkward feeling but sometimes it looks as if the only thing required is to have a strong wish to being successful.

And I want to make a stop on these two points, because I think it’s worth for all of us to talk a little bit about them: funding and planning.

Launching a new business with no money, means you could have a hard time.

In many cases it’s said that young people need no financing to start a new businesses because they don’t have kids, or major financial obligations, or simply because they continue to live with their parents.

It’s understandable that young adults have less financial burden. Up to that point, it’s ok, but: Who said that a young man who still lives with his parents doesn’t have any funding? What happens with the money their parents pay for electricity and telephone bills, monthly rental payment, food, and so forth...? Isn’t it a way to finance the cost of starting a business which said young man is operating from his parent’s home?

In these cases, it’s valuable to set the record straight, before we continue to encourage young entrepreneurs, fresh out of college, to jump into the new business world with great enthusiasm and without a penny in their pockets.

Chances are their ideas, which could have been extraordinarily profitable, don’t see the light, just because they did follow bad advice. And that has happened already to more than one.

Not having a plan is not having a course, not even a rough guide.

Nobody in their right mind one day decides to go out on an adventure without, at least, preparing a backpack with bottled water and some snacks, or even have a road map or a fairly clear idea of ​​what to expect.

That is to have a plan. I don’t know if you have been surprised as I have, but in many of the sessions I've attended, having a plan is not mentioned or even a having a simple outline of what your business is going to be, how it will operate, the things you'll need along the road, or what people use to name "A business plan in a napkin"

I have to say it’s very important to stay with a positive and proactive attitudes, have hopes, be passionate about what you do and the idea you have for your business. On that we agree one hundred percent, but it’s also necessary to have a business plan, simple, brief, in which you analyze at least the key elements, remember?: Your business’ strengths, weaknesses, opportunities and threats.

I assure you that by doing this short exercise, you will feel much more relaxed and you will be able to manage your business more effectively.

What can you do to really become an entrepreneur and not a mere adventurer?
  • First of all, you have to know where you're going and how long you want the ride to be. The "where" it’s important to make sure that all your actions take you in that direction. The "how long" is equally important because it allows you to change course if the ride is taking longer than expected.
  • Make sure you have enough money to cover your business expenses, at least for the first two years. If it is impossible, make it at least for the first 12 months. If you don’t do so, your venture will depend heavily on your initial sales and your business will be strongly vulnerable to any fluctuation in the market. If you still live with your parents, your funding is semi-approved! :-D
  • Make a concrete plan detailing how you will reach your customers and bring in the money. An idea doesn’t become a huge business until prospect customers pay for it.
  • Define clearly what you will do and what decisions you are going to make as your business grows. Many times it happens that your business growth fills your pockets, but doesn’t generate real growth. Make sure it's the opposite way: Grow your business first and then increase the money going to your pocket progressively.

Being an entrepreneur is a wonderful adventure, provided it is carried out with a minimum of common sense. Do not turn your venture into a nightmare, nor let your wonderful idea die, for not taking it a little bit more seriously.

Related Article: Social Media: Who is responsible? The ball or the player who kicks it?

Sunday, January 6, 2013

2013 Will Be A Year Of Positive Changes.

And changes start at home, as it should always be. If you have noticed, I have added some new things to this blog, so that your experience with it becomes more enjoyable and you can have easy access to important information.

Who am I and which the mission of this blog is?

Ok, now you can find that information in two new tabs in the top navigation bar. The first one is "Mission and Vision" where you will learn a little bit more about this blog, what it wants to mean for you and where it is headed to from now on.

The second tab is about me, your servant, the person who writes this blog. I named it "Let's Get to Know" precisely because I don't want it to be just for you to get to know me, but also to have the wonderful opportunity of getting to know you a little bit better.

Want to read these posts in Spanish?

If you are just interested in practicing the language, or just browsing a little longer, the link to this blog's version in Spanish is also included in the top navigation bar. It's named "Versión en Español" obviously.

Do you want us to get connected on LinkedIn?

It is now much easier. The link is on the left sidebar, just below where you see the link to Puromarketing.

And that's about it, small little changes I'm giving this blog, which in 2013 celebrates its second birthday, thanks to you and due to you.

Thanks for your visits (which are always important), thanks for your comments (which are even more important) and thanks a lot for sharing my posts, for which I'm forever grateful.

Have a wonderful day!

Joel Pinto