This is the first post in our new series where we talk to real companies around the world to find out how they’re leveraging social media, how it has impacted their business, and what lessons they’ve learned. Today, we’re talking to Aaron Burcell, VP of Marketing for SmartyCard. Aaron has some interesting insights about both social media and customer development and how they’re using it as part of their mission to provide kids with high-quality games that are both fun and educational. You can keep up with SmartyCard on their blog or follow SmartyCard on Twitter here.
Tell me a little about your company, what you do, how long you’ve been in business, how many employees you have, etc.
SmartyCard is a startup incubated within Gazillion Entertainment — same founders as Gazillion — less than 20 employees. SmartyCard is both a supplemental education games service AND a flexible virtual currency that empowers kids to earn and access family-friendly virtual worlds, MMOGs, games, books, toys, DVDs and downloadable media from well-known brands like Club Penguin, WebKinz, Nickelodeon Games and iTunes.
How much of your business comes from the web, either via social media or via traditional web?
100% of our business comes from the web. We have agreements in place to go to retail through grocery and big-box as soon as this year.
When did you start engaging in social media?
We started building marketing programs focused on social media engagement in Q4 2008. The conceptual planning of social engagement was really initiated when Steve Linde, an architect from NexTag, was hired as our VP of Engineering in the summer of 2008. Steve architected SmartyCard from end-to-end, and our “alpha” product had all of the hooks I needed to develop programs in 2008. Together, Steve and I worked with Gazillion’s compliance group to deal with all of the nuances and complexities of running a social-media-fueled-business for families. Our compliance officer is Izzy Neis, a social-web-celeb in her own right. Izzy generally understands what Steve and I are trying to accomplish.
Who manages your social media efforts?
I personally manage all of our social media efforts so that I can understand the details of programs AND take personal responsibility for the outcomes. Many of my peers look at me funny when I interrupt a meeting to comment on a parenting blog, retweet industry news or review tags in a partner’s blog post. For some that kind of activity seems so inconsequential. But, increasingly my peers recognize that the nature of a business manager’s role and responsibility has changed dramatically in the last 12-15 years, and focusing on the customer means Interacting in all customer input channels, not just emails, support tickets and customer research.
What networks are you active on?
In the category of pure social networks, I’m active daily on Facebook, Digg, Twitter, Utterli, LinkedIn — there are several others that I touch on once a week. In terms of media networks, there are literally dozens of answer communities, education networks and parenting (mom-focused) vertical networks that I interact with in any given day.
Which have been the biggest drivers of business for you?
Without a doubt, mom-focused blogging/podcasting networks are the most critical to our business. Our customers and advocates within these networks have built our brand and identity, and they’ve had a lasting impact on our ability to form business relationships for distribution, acquisition and content. Industry data is clear on these points, moms make 85%+ of all household purchase decisions and they are most-often responsible for child supervision, including computer time. Furthermore, research has shown that the subset of “wired moms” are the single most important voice/factor influencing the overall population of moms. Much more so than advertising or celebrity. And, to a large degree, we knew this would be true long before we launched SmartyCard. However, we had to get very close to this community to understand how to utilize this key customer channel.
True/short story: Early on, we worked with a mom-blog network prior to launching SmartyCard, and they provided us with incredibly strong viewpoints on our product. The inputs were very opinionated about what our business and marketing approach should be, and they reflected a mother-centric view of web applications. Those expert opinions came from moms who influence millions in brand marketing spend through their product reviews. After listening to the feedback for a few weeks, I internalized the messaging and ethnographic details we were receiving. And, then I promptly disengaged from the mom network and disregarded nearly all of the product direction, choosing to place a greater emphasis on what our primary user (kids age 6-13) wanted out of the SmartyCard experience.
Why did I do this?
Somewhere in the hours of feedback from moms, one single truth emerged: I could very easily design a product experience moms wanted and kids hated and we would fail OR I could develop a product that kids loved to use, thus creating educational results that parents loved, making money for SmartyCard. More precisely, by listening long and hard enough, I understood a mother was always going to accommodate their kid’s requests (even online) and they would almost always want to talk to other moms about how smart their kids are. Aligning our business and product design with these customer behaviors was critical. Had we not listened intently to moms, we would not have known these truths. Had we just listened a little, we would have launched a “brick”.
Describe any customer interactions that stick out in your mind.
Reading tear-jerker emails or posts from single moms stick out in my mind. The thing we don’t really promote is that SmartyCard provides a heck-of-a-lot of high-quality educational materials for very little money. We don’t make any money in content. But, when you see a mom confess that what little money she can afford to spend on SmartyCard is creating real educational achievement, and hope for a better life for her children — those comments take the air right out of your chest.
What software tools or web apps do you use in your social media efforts?
Phase One Accelerators built a custom media tracking and promotions engine for SmartyCard — it let’s us work with individual bloggers as if they were media companies, and it speaks to our userDB and media servers as well so that we can analyze the value of a customer sourced from a social media campaign and compare that ongoing value to customers sourced from ads, promotions, partners, etc. Understanding the viral co-efficient of customers by source is critical to deriving credible long-term-growth estimates — this is why we went with POA and the custom integration. And, to repeat, Steve Linde had built our product to accommodate this kind development, even before I was hired.
With POA’s custom development helping us understand conversion, we can use a myriad of tools in combination to understand how and where customers are entering our sites. We use Google Analytics, QuantCast, WordPress (installed-version for security reasons). I’m a fan of Tweetdeck. I’ve used Pipes and various topic-trending tools. The important thing is that our tools tracking the social web feed our site analytics and our back-office reporting, giving me near-real-time visibility into how social media is effecting our business in any given moment in time — past or present. With a sizeable install base now, we can actually look at customer populations for usage and reward data and leverage that in creative for acquisition campaigns. It’s not quite predictive yet, but I could see a point in time wherein we could suggest the right reward or avatar to a new user, or suggest the right subscription package or points purchase for the parent customer.
For your business, what makes social media different from other channels?
Social media requires a “high touch” approach. The promise of social media is brand-building benefits coupled with virality. The problem is that the investment of time for a business manager is frequently undersold as agencies and consultants pitch and develop proposals. It’s undersold because agencies want to simplify the practices and make it feel manageable as an outsourced program. In my view, social media is critical domain knowledge business managers need to own. I’ve adjusted my priorities such that attending industry events, negotiating media buys or working through press releases are just non-starters for me… Someone else can own those areas, I have to be disciplined about managing, planning and resourcing the social media practices.
What has been the most challenging part of dealing with social media?
Dealing with personalities and listening. Social media is an investment of time and attention. Listening with limited context and filtering through what is important, understanding what is important… These are skills that people develop over time. And these activities can be exhausting. Patience and understanding are things we all seek, even outside of work, but you need a lot of both to be effective in managing social media programs. Sometimes, you can reach a human limit for patience when dealing with strong personalities posting, tweeting, commenting, etc. Especially when I’m managing a private back-channel and a public dialogue that one personality is driving. It can feel like a waste of time if you’re not committed to “high touch” practices. But, patience pays off in the form of great blog posts, customer referrals, growing communities, awesome apps and widgets.
What are your social media plans for 2010?
2010 is exciting for us. 2009 was an experimental year, and we really needed to test a lot in order to understand how, when, where to grow our business. We understand all of the scenarios now, and we know how social media factors into those scenarios. We are narrowing our acquisition channels and partner targets through the use of social media. And, if you look at our various customer interaction streams, you can see that we’re conspiring with our customers to define a hand-held version of SmartyCard and truly understand the demand for our physical rewards. Based on 2009 results, we’ve greatly reduced our advertising, choosing to work through promotions, partners and use social media to foster our strong word-of-mouth (40% un-referred traffic). As I think about this year, I’m really interested in leveraging the Facebook developer api roadmap to let parents talk about SmartyCard, promote SmartyCard, refer their friends with some level of choice and control. Facebook doesn’t give us immediate usage by kids, but I believe Facebook will be critical to brand building, spreading SmartyCard awareness in 2010.
I really appreciate Aaron taking the time to talk to me about their social media efforts, and I hope you’ll ask any questions that I missed in the comments. Don’t forget to check out the SmartyCard blog and Twitter account. As always, if you know of any companies that would like to be profiled, please contact us.