Social Media, Strategy, Consulting, Social Content Development, Product Development, Web

Social Media for Business

Business Strategy, Social Media, Twitter6 Comments

Though social media is often thought of as entertainment, a way to keep track of friends and family or as a medium used most frequently by those under 25, there are many business applications for it.

Social media includes any web site that supports social interaction like user participation or user-generated content. This includes sites like Facebook, MySpace, YouTube, Flickr, Yelp, Digg, Twitter and many others. Using these sites allows businesses to interact with customers in their own domain. For a customer, this is a more natural, less intimidating way to have a conversation with a company.

The fastest growing demographic on sites like Facebook are those over the age of 35. According to iStrategyLabs, in the six months ending in January 2009 the number of people using Facebook between the ages of 35 and 54 increased 276%.

Here are some of the advantages of using social media for business:

Social media is a good way to promote your business, whether it is large or small, during difficult economic times
• Most social media sites are free to use or very inexpensive. They cost less than traditional marketing or advertising, and unlike television or radio commercials or even print ads, content for social media sites can be created without the assistance of an ad agency. According to Jacob Morgan, co-founder of Mighty Mouth Media, a social media campaign can cost a fraction of what traditional advertising costs.
• It’s fast and accessible – social media is Internet based, can be updated rapidly, and can be reached 24 hours a day, seven days a week.
• Large audiences already exist for YouTube, Facebook, MySpace and Twitter and therefore social media market reach is much wider than local advertising
• Studies have shown that social media is more effective than traditional advertising. According to a Forrester study, Proctor & Gamble found that their http://www.beinggirl.com community for adolescent girls was 4 times more effective than television advertising for their products.
• Social media can help your business to connect with potential customers, for example, a local photographer who put his portfolio on his Facebook page gets most of his business from people looking at his work there.  Since there are large communities on Facebook and MySpace already, they can be very effective channels for promotions as well as a good way to interact with customers outside of a business transaction.

It’s a great way to find useful information and connect with business resources

• There are many examples of businesses using Twitter or other social media to connect to people who have the expertise they lack. Answers can be rapidly obtained and connections made. For example recently I received this message on Twitter:

“Twitter friend @mistersterling needs real estate agent who knows Lee’s Summit area.”

A California-based real estate broker needed to find a Realtor in the Kansas City area who knew Lees Summit. Within a few hours, I had connected him with some friends on Facebook who are in the real estate business. These kinds of interactions happen every day on Twitter.
• On LinkedIn, the online work profile and resume site, people can create groups focused on special topics like entrepreneurship or job hunting, ask questions of these networks and use them to organize events, among other things.

It’s an excellent way to monitor how your business is doing.
• Twitter can be used to check customer sentiment. Well known examples include companies like Comcast which looks for bad customer experiences using Twitter and solves customer problems.
• Social media monitoring tools like Spiral16’s Spark platform or Infegy’s Social Radar, are available to enable a business to monitor customer sentiment through “chatter” on social media sites and blogs.
• Rather than simply reacting (oftentimes much too late to change perception) when the feedback that a customer has had a bad experience finally reaches you through word-of-mouth, a business can proactively manage its reputation interacting directly with customers; this allows you to fix a bad customer experience before it is virally spread everywhere.

Social media is a good way to differentiate your business
• Traditional marketing is about “positioning,” and many people have grown to distrust it because they consider it a company, rather than customer perspective.
• On the other hand, the key to successfully using social media is to be yourself. The more authentic you are the more customers will trust you. The more they trust you the more they will recommend you.  Third party recommendations are a powerful way to attract new customers.
• As companies develop reputations for not being in tune with customers, the ones who use social media reap large rewards:
• President Barack Obama has been credited with a very skillful use of social media during his election campaign. He has over six million fans on Facebook, more than anyone else and was active on Twitter during his campaign.
• Zappos has a very loyal customer base. CEO Tony Hsieh’s amiable style and personal response to customer problems on Twitter has made it one of the most successful dotcom companies with an enviable reputation with customers.
• Whole Foods considers it’s broad use of social media sites like Twitter, Flickr and Facebook a key part of it’s marketing strategy. They have increased the buzz about the company, helped create a positive feedback loop and made customers more aware of its passion for community involvement.

For individuals, especially ones who have been laid off, social media can help increase the size your personal network, connect with companies that are hiring and find new jobs.
• Placement agencies will tell you that most people who are laid-off from jobs find new ones using their personal networks, rather than though blindly sending resumes in response to job postings.
• Business social media sites like LinkedIn and Plaxo enable people to post information about job history, form groups that are focused on specific industries or professions and ask questions to people who might be able to assist with a job search.
• There are many companies, including executive recruiters who routinely look for people with certain skillsets by first messaging their Twitter or LinkedIn networks.

What are some of the barriers to companies using social media effectively?
• Many companies still don’t have a social media strategy today. Conversations about your company will occur whether you have a strategy or not. However, you have the option to either participate in these conversations or to not participate. Not participating means you aren’t managing your reputation during those conversations.
• Social media is different than traditional advertising and marketing so companies have to change their thinking about it to use it effectively. Many companies still believe in tightly controlling their communications, including identifying precisely who can represent the company and what can or cannot be said by a company representative. Social media is most effective when company representatives are allowed to be themselves. Avoid using social media as a channel for traditional “positioning” marketing messages. People see through blatant self-promotion on sites like Facebook and Twitter and don’t like it. Be authentic. Don’t be afraid of interacting with customers at their level.
• Not having defined policies around social media use or prohibiting it entirely.  Rather than barring any use, it is much more effective to define the rules around the use of social media, accept that there needs to be some freedom associated with this method of communicating with customers and enabling employees to work within them.
• Not ensuring that there are clear metrics associated with social media campaigns. Since social media is all about engagement, there are many cases where it is easier to measure success than with a traditional ad. Engagement is directly connected to behavior and is more relevant to a specific outcome than traditional advertising’s more passive activities like watching or reading an ad. Failure to establish success metrics will compromise the effectiveness of social media efforts.

For More Information
• Please e-mail us at: info@lightthread.com or call us at 816-298-9913.

6 Responses to “Social Media for Business”

  1. Shawn Kinkade says:

    Simon,

    Great (and comprehensive) overview on Social Media for business.

    One thing that I would add based on my experiences working with business owners that are starting to use Social Media is the importance of having a clear idea of what it is you want to accomplish before you get started and having a clear idea of who your target market is.

    Are you trying to drive traffic with direct prospects? Are you trying to build credibility as an expert and a thought leader? Are you trying to develop relationships with key partners? Are you trying to provide enhanced service to your existing customers?

    All of those (and many more) are valid strategies, but if you’re just getting started, it’s important to pick no more than 1 or 2 and focus on those for a period of time.

    It’s also important to build up your relationships in an authentic way before you can expect much in the way of results…it takes time to get momentum.

    Shawn

  2. Zach @ Ideas and Angles says:

    Great post Simon. I am sure your clients really appreciate you painting a picture of social media and its potential yet are upfront and honest about its obstacles. This space has had a lot of growing pains but it is literally changing the way people communicate. Companies are not in control of their brands anymore…people are. That is exciting. Great job on TV Sunday morning.

  3. Kevin Dervin says:

    Nice overview on using social media for business Simon.

    Social media certainly is not and end-all / be-all or the “Next Big Thing” in marketing, but businesses do need to consider how it fits within their overall marketing plan.

    For one thing, customers/clients want more control over what information they take in for making decisions. They don’t want to be sold, but they do value good solid information to make well-informed decisions.

    Social media gives you the power to connect and communicate with your networks of clients, prospects, referral partners, centers of influence, and potential joint venture partners in a whole new way.

    Ignoring it might not be a good idea for businesses. But, launching in without a game plan is not a good idea either. It can lead to a lot of busy work without much in the way of results.

    Keep up the good posts.

    All my Best!
    Kevin

  4. Social Media ROI - More Than Just Revenue | LightThread Blog says:

    […] associated to measuring social media Return on Investment (ROI). Simon also mentioned in his Social Media for Business post the challenges associated to social media metrics, specifically engagement metrics. Measuring […]

  5. Michael Nagles says:

    Great article! The “tweet” concept still scares off a lot of people, but those in the know are learning that it, combined with facebook, is a great way to build a brand.

  6. Eric Melin says:

    Thanks for including Spiral16 in your article; great stuff!

    This is really important information for a company to know right now, and one of the biggest factors is the efficiency you can get from monitoring tools like Spark.

    These days, time is the biggest limiter for making sense out of the huge amounts of information out there about your brand. Integrating offline data into the platform can take it to another level as well.

    cheers!
    Eric Melin
    Spiral16