March 31, 2009

Getting social on the web may be key
to online business success
Social media marketing is playing an increasingly important role
in how business is being conducted online

By Amy Bostock, Editor

Do you tweet? Is blogging part of your daily routine? Are you LinkedIn or residing in MySpace? Do you like to Digg?

If you answered yes to any of these questions then you are part of an overwhelming percentage of Canadians who have adopted social media for business and personal use.

A report just released by independent research company Forrester Research Inc. found that although 75 per cent
of marketers surveyed would spend less than $100,000 this year on social media, 53 per cent said they would be increasing their spend, and only 5 per cent would decrease spend.

Social media refers to the use of technology combined
with social interaction to create or co-create value. Social media—including blogs, RSS, social search, social networks, and bookmarking—presents the marketer with a rich set of new tools to help in the effort to generate new business . It keeps people connected with their friends and business associates and it plays an increasingly important role in how business is conducted.

It used to be all you needed to be on the web was a web site. But according to Let’s talk: Social Media for Small Business author John Jantsch, “today you need to think and act in terms of a total Web presence. And that means if you’re not participating in social media, you’re not really online.”

But can the use of social media sites really help your business to make money online? And if so – how?

According to the Social Media Marketing Industry Report released by Michael Steizner, social networks are becoming a high-priority tool for marketers with 88 per cent of about 900 marketers surveyed saying that they use social media tools such as Facebook and Twitter for business purposes. Sixty-one per cent of businesses say that they use social media sites to track what people are saying about their brand online.

“Most marketers who use Facebook and Twitter create or link to content and gather followers exposed tot heir brand and business,” says Steizner.

The report looked at seven key areas where social media marketing has helped businesses. More than 61 per cent
of participants said that social media has helped them to close business. A large percentage of users also said that having a presence on social media sites has helped them
to generate exposure for their business. Other positive results include new business partnerships, more qualified leads, improved search engine rankings, reduction in overall marketing expenses and increased traffic/subscribers/opt-in list.

But generating new business using social media still has
a ways to go with only 35 per cent of participants saying they were able to do that.

Measuring your success

The benefit of social media marketing is that it’s free.
The downside is that it is time consuming. The report shows that 61 per cent of participants are using social media for 20 hours a week.

With all this time invested, it’s only logical that marketers are going to want some indication of how effective their efforts are. But according to Stelzner,
most people don’t know how to begin measuring their success “but they are just realizing that they are getting responses, often a lot more than before, using social media.”

According to Heidi Cohen, president of Riverside Marketing Strategies, social media advertising provides
a wide variety of measures in place that allow marketers to assess their performance. Among the important
factors to monitor are:

Traffic and sales leads: t hese metrics give you an understanding of the number of people who interact
with your product and/or brand. More important is
the number of qualified sales leads acquired.

Click-through and conversion rates : CTRs show how many prospects take an action to the next step in the process; conversion rates show how many of those prospects ultimately buy from your firm.

Sales: i n any marketing campaign, revenues are the major factor in determining your success. The benefit of utilizing a social media environment is that your marketing and sales teams are actively involved throughout the purchase process so that customer relationships can be built and extended.

Costs: t hese are an important determinant of marketing effectiveness and need to be tracked so they can be compared to benefits.

Customer interactions: t hese indicators can shed light on how prospects feel about your product and competitive products. Among the numbers to track are the number of threads and the number of posts referencing your product, brand, and/or business.

Getting started

When it comes to social media, too many companies get hung up on the toys and tools and lose sight of the key element of social media marketing strategies - the people. So before running off and joining every online group you can find, ask yourself these questions:

• Who is the audience?
• What is the desired behaviour?
• What timeline is being considered?
• What is the commitment?
• How are you going to respond to negativity?

“I recommend small business owners look at the following progression or hierarchy as they move deeper into social marketing tactics,” says Jantsch. ”So, jump in, but do it in this order and don’t move on until you have the basics of each stage down and working for you.

1. Blogging – the foundation of the pyramid – read blogs, comment on blogs, and then blog. This is the doorway to all other social marketing.
2. RSS – Aggregate and filter content around subjects, and use RSS technology as a tool to help you repurpose, republish, and create content.
3. Social Search – Often ignored in this discussion but it’s become very important for small business owners. By participating, you can stimulate and manage your reputation here.
4. Social Bookmarking – Tagging content and participating in social bookmarking communities can be a great way to open up more channels to your business. It can also generate extra search traffic, but it takes work.
5. Social Networks – Branching out to take advantage of the potential prospects you might find on sites like Facebook or MySpace will frustrate—at least as a business tool— if you don’t have many of the above needs met. These networks take time to understand and thrive on ideas and content. You’ve got to have much to share if you wish to build a business case.
6. Micro – Includes some of the more experimental social tools into the edgy trend of micro: social, real-time communication that will likely only confuse most small business owners. The confusion is not because they can’t figure out how to make them work, it’s just not obvious why they should spend the time.

Companies that utilize the social web well

According to Charlene Li, co-author of Groundswell, and former Forrester analyst, some companies that use the social web well are:

Oracle - Prior to running Oracle Open World, Oracle changed its home page for two weeks.  The page asked for consumer feedback; community involvement was important enough to interrupt the normal flow.

H&R Block - When H&R Block realized selling was no longer working, they created a page on FaceBook to provide tax advice. They don't say "come and do your taxes with us," on FaceBook; they only offer advice.

Comcast - Frank Eliason, Director of Digital Care for Comcast Cable uses Twitter to look for people talking about Comcast, 'tweets' them, and offers to help.

Skittles - Skittles has a page on FaceBook called 'Mix the Rainbow'. It's created a spark and now the community is interacting with one another.  The company occasionally steps in with light and fun comments; never with sales talk. 

Starbucks - Starbucks asks for suggestions on how to make the company better.  If you provide a suggestion, Starbucks CIO will discuss the idea on the site; it's not just a black hole that suggestions go into.  He explains the back end - or what has to happen on the technical level before they can implement the idea.