Where’s the Beef? Finding & Providing Value in a Digital Age

Last night on the Grammy’s, the president of the Recording Institute made a public plea for the consumers of music to pay for it.  Literally.  He posed this question (paraphrased),” if someone said they like the work you do, but then told you they didn’t want to pay for it, what would you do?”

Well, what would you do?

Most of us can’t imagine that scenario. Truly, if our bosses decided they weren’t going to pay us for the daily grind then most of us would find another job.  If we loved what we were doing, we might consider doing it for free, but on the side, in our off hours.  Many people consider those things hobbies, since they love to do something but know that doing that thing won’t financially support them.  So, how is that different for music?  Well, it probably isn’t.  Most musicians DO work at their music in off hours, after a job or between shifts–trying to make a go of it.  Then, once they “make it”–they get a recording contract, start touring, sell their songs and start making money, they quit their day jobs.   So, why the plea to Grammy watchers to keep paying for the music?  Clearly we are paying for peeps like Beyonce, since she’s making $80 Million this year alone.  It seems to me that what we have here is a failure to communicate about VALUE.

This problem really cropped up because of the shift in how music is provided.  The medium for music changed from something tangible that cost money to produce and which could then be controlled through its physical distribution and thus priced and sold based on that control.  Now, music can be created on your Mac, uploaded and within an hour distributed to thousands of people because of the ability to digitize it.  If music hadn’t gone digital, I swear to you I wouldn’t be writing this. The recording industry –not musicians–is dying.  The record execs  have failed to communicate THEIR value in the digital era.  You can beg people for money because you need to survive, but most people want to know where the value resides.  It isn’t enough that I pay you to survive–the question is Darwinian: why should you survive? What value do you bring? Until the recording industry can articulate the value they bring in a way that the public understands it (given the digital shift which is here to stay), the recording industry will continue to become irrelevant because people won’t pay to feed the machine that no longer controls their content.

Here’s my thought on it:  Service providers have been facing this very issue from the get-go. A service is intangible.  It is only seen once the service is provided.  And often, the service being provided is a back office function of some sort.  So how are service providers able to sell their services?  Do they whine about it and tell the public they MUST pay?  Not the good ones.  The good ones offer potential customers a solid value proposition, so the customer doesn’t just see blue smoke and mirrors, but can clearly understand how the service will impact their bottom line.  The value proposition–a good one–becomes the tangible in an economy of intangibles.  And what we all know is this: people will pay for value.

So, how does this apply to social media? Well, social media is a medium.  How it gets used and why is just now being defined by corporations the world over.  If you are consulting in social media or doing social media work within an organization, you need to tie what you are doing to something people can relate to–like dollars.  Social media tools have come a LOOONG way in a very short time and the tools to measure social activity–what people are doing in a digital sphere–are everywhere, and becoming smarter and more user friendly every day.    So, when offering suggestions for a social media plan for a company, don’t whine and expect them to pay you because you need the money to survive (like the recording industry), show them what you are going to measure and how those measurables tie back to the company’s bottom line.  Be clear about the value your proposal  bring to the table.  Make it beefy–because everyone wants something real to chew on, especially  in a digital economy.

Here are a 5 suggestions for proposing value in Social Media:

1. Determine what the company values and tie your plan into those things.  If the corporate culture is about innovation or their vision is based on customer loyalty, tie your social media proposal into those values.

2. Measure it. Show how each suggestion in your proposal can be measured–the how and the why.  If you aren’t familiar with the tools to measure social media, get familiar with them.  Radian6, Techrigy, ScoutLabs–these are only 3 of the companies that measure social media.

3. Show solid ROI. Specifically, tie measures back to dollars to company will save or make.  Don’t fudge this – be sure your ROI (return on investment) is a solid number that you can jump up and down on.  Will they save money in marketing or advertising?  Will they create revenue streams via social media exposure, interactive sites or some other thing you are proposing?

4. Show comparables. People don’t typically like to be first–so show your customer who else, like them, is doing what you are suggesting.  Show the benefits those example companies are reaping and how.  This will create a comfort level with your customer that what you are proposing really is valuable industrywide and not just in their instance.  Comparables (or comps) will validate your proposal.

5. Get paid for your value. In the end, if you show value, you should reap value – in dollars and in reputation.  Both are important!  Be sure your price makes sense and then stand by it.  If you have done your homework and created a true value proposition, you won’t have to worry about lowering your fees.  People pay for real value.

We should all take a lesson from the recording industry: if you wanna remain relevant, don’t whine about survival–create and offer real value to your customers in a way that THEY recognize.