Social Media as a Profit Driver

Major corporations are increasingly using Facebook, Twitter, YouTube and other social media tools to connect with consumers in completely new ways. Many are struggling with how to manage social media for maximum impact and don’t know how to measure the return on investment.

Further, while there are a growing number of success stories, there is no “tried and true” path for using social media effectively.

The first step in planning your approach is to set clear objectives. Social media can be used for diverse purposes. For example:

• Comcast service reps search for customer complaints in Twitter and on blogs and respond directly, beginning simply: “How can I help?”
• Google and Microsoft rely on user-generated content for technical support and product development.
• Coca-Cola gives consumers online experiences that don’t “look like an ad,” experiences that the consumer can interact with, forward to his/her friends, talk about or learn something from.
• Musicians sing Chick-fil-A’s praises in humorous YouTube videos
• Dell consumers provide detailed laptop reviews on YouTube.
• AT&T monitors Twitter and other social media to better understand how consumers perceive their brand.
• Comcast tweets requests for feedback on service enhancements, and gets data back in minutes. Many companies use social media to do competitive research.

Neilsen reported that time spent on social network and blogging sites accounted for 17 percent of al time spent on the Internet in August 2009, nearly triple the percentage of time spent on the sector a year ago.

In this environment, companies are using social media for diverse purposes, including customer service, promotions, monitoring consumer sentiment, creating marketing buzz, acquiring new customers, providing technical support, collecting product enhancement ideas and performing market research.

While large companies can test the waters of social media at very little expense, to get any major benefit, they need to implement a solid plan.

Here are a few factors to consider when using social media:

1. What are the objectives of the social media investment? For example, the American Red Cross’s objective is “to help people prevent, prepare for and respond to emergencies using social media.” Comcast set out to turn around very negative public opinion regarding service experiences, and over the course of less than two years improved satisfaction ratings dramatically.
2. What will be the primary way of achieving those objectives? What has been successful for other companies? What can you try that’s new? Successful companies look at what their customers are already doing online and interact in a personal and engaging way. For example, Coke found that consumers had created over 300 fan pages on Facebook and written songs and poems about the brand, without any company involvement. The company gets huge brand value by merely curating and encouraging what consumers are already doing.
3. Who will manage that social media program, and what policies and guidelines must be in place? Since many employees and functions may be involved, having clear but flexible policies is key.  The American Red Cross, has has 35,000 employees and a million volunteers; its social media handbook at http://bit.ly/1wIdgND and event-specific guides such as http://rdcrss.org/1XTNJO3 provide good examples.
4. What new internal processes may be required? For example, how will employees work across corporate functional to address customer complaints voiced on Twitter?
5. What level of resources will be required to meet the objectives, maintain a consistent presence and manage peak activity? For example, if you offer a promotion on Facebook, be sure you have the organizational and technical bandwidth to cope if response rates are more than expected.

Most companies are finding that with respect to social media, they need to take the initial steps, then “learn as they go.” I am interested in hearing about your company’s experiences, so keep me posted.