Much has been discussed about return on investment in the social media space. Some commentators say ROI needs to focus on areas like brand perception and customer satisfaction – but these can be hard to measure accurately. While I agree that these areas need to be taken into consideration, not having well defined metrics and ignoring conversion goals simply makes no sense. In short, there needs to be alignment with the business objectives.

The great thing about social media is it allows you to capture vast quantities of demographic and psychometric data. This data can, and should, be used for targeted messaging. The segments you market to will be fairly broad to start with, but will become increasingly granular over time. After testing the waters, it will be possible to economically communicate to individuals with tailored messaging – messaging that understands the individual on a personal level.

You don’t always need a ‘hard sell’ approach to move potential customers down a sales conversion path. Sometimes it’s enough to show them that you know and care, and are prepared to communicate on a personal level. In this ultra-personalised digital world, your market – particularly younger demographics – now expect everything to be personalised. In fact it is often the only way to get noticed.

A research report published in October this year from the Australian Centre of Retail Studies concluded that the more channels in which a consumer encounters a particular brand, the more likely they are to purchase, and the higher their overall spend will be. The lesson here is not rocket science. Once you have used social media to develop your contact list, find out how to communicate with them via email, mobile, social media and your website. Get all the channels working together.

The final step on the conversion journey is the execution. Communicating in a customised way via multiple channels can be expensive if there is not a strong system sitting in the background. What’s more, these interactions in social media mean that you are never sure when someone will take the first step in the conversion cycle. Platforms like ExactTarget allow you to not only automate communications through many different channels, but also provide the necessary tools to refine the sales strategy as additional customer data flows in.

So it is possible to create an effective social media conversion strategy. Just remember to keep things simple, and stay focused on what the customer wants.

But don’t be confused by the apparent meaninglessness of some interactions in the social web. What is happening may seem like a waste of time but the communications can also be profound – and you need to be a part of them.

The social web, and more specifically platforms like Facebook and Twitter, allow brands to develop relationships with their customers in ways that have never existed before. Customer loyalty has always been recognised as incredibly important, but developing metrics that measure things other than swiping a card at the point of purchase has been difficult.

Now it’s not. With a well designed and executed social media strategy, companies can identify and reward the most loyal and vocal customers. The brand evangelists who actively encourage others to purchase from their favourite brand.

The companies doing this the best are the ones who understand that they need to create a relationship with each customer – they need to recognise that each customer is unique, and reward people for interacting with the brand. Customers now have more power to voice an opinion than ever before, and they will do it whether you are participating or not. It is no longer good enough to simply treat customers as something to convert into a sale then move on. ‘Speed dating’ marketing is out, romancing is in.

The brilliant people who work for Facebook understand this better than most. In fact, they have recently changed the way that advertising works within Facebook to incentivise brands to be more active and engaging. Facebook knows that the real value from their platform comes from the engagement that creates longer term relationships. And they are now changing the game within Facebook so everybody else gets that too. It is likely that the recent changes to the Facebook platform will be game-changers for some brands. Others, particularly brands who have been looking at social media as just a broadcast channel, are going to struggle. What is certain is that Facebook’s advertising revenue is set to make another giant leap as brands are incentivised to engage with customers more – and use Facebook even more as a result.

As a marketer you have many choices about how you treat your audience. You can develop techniques that let you know who they are and how they wish to be communicated with and you can engage them in creative interesting ways – creating long term relationships. Or you can look at the customers as numbers to be churned through quickly. We all know that being treated as an individual is more effective – and now it seems there is going to be an additional financial benefit to it.

So you can view the social web as a place where people waste time and generate low value. But it is up to you, as a marketer, to change the way your customers interact with you. Social media is fast paced and there can be a lot of distractions. To really stand out you need to create meaningful experiences – that can turn into happy long term relationships.

If an individual spent a lot of time trying to control every message they heard about themselves, and responding to everything that everybody else said about them, we would, quite rightly, think that person insecure or, worse, a narcissist. But there are a number of brands which think this kind of control to be normal. From the perspective of the general population there is nothing normal about it at all.

A brand that is confronted by negative comments on the social web needs to learn a simple two-step reaction: first, see the comment as valuable feedback; and second, view that feedback as an opportunity to improve and build its relationship with customers. This is the way the the best relationships among individuals work. As anyone who has gone through a personal relationship break-up will know, relationships break down when one party believes they are not being heard.

Recently I moved house. Before I moved I bought new furniture from a very well know Australian retailer. On the day the furniture was due to be delivered the delivery team arrived and got down to work. It turned out that one piece of furniture did not fit into the lift of my new apartment building. When I called to ask how to rectify this situation the immediate response from the store was “This is your fault; you should have measured the size of your lift; there’s nothing we can do.”. Needless to say I thought this was pretty poor customer service. So I jumped onto Twitter and said as much. Of course my experience with the local service rep was not indicative of the company as a whole but it did taint my view of the brand. But that wasn’t the end of the story. The company was monitoring Twitter and used my comment as an opportunity to contact me and offer to send around a new team the next day to carry the piece furniture up the stairs. Naturally I then went back onto Twitter and gave them high praise. Our ‘conversation’ started testily but ended up well.

My case highlights the way brands should be thinking about negative comments. It’s not about your ‘mistakes’ as viewed by others. We all make them. What matters is whether you really listen and how you respond. And this is the real opportunity. I’m not suggesting that every negative comment needs a ‘fix’ – sometimes it’s enough to simply tell the customer that they have been heard. But if a comment identifies a problem you can fix then a potential brand ‘enemy’ can be turned into a brand ‘lover’ very quickly.

So don’t try to bubble-wrap your brand in entirely positive messages. Embrace the diversity of your market and realise every contact point is an opportunity to stand apart from your competition.

This idea has become increasingly important as more firms participate in social media. Companies that have used the ‘customers own the brand’ principle as a useful intellectual exercise and little more are being forced to rethink, and very quickly. In the social web you can direct, participate and engage in conversations about your brand. But so can your customers. It is a level playing field. Social media has given your customers more control of your brand than ever before. Customers that believe that their needs are not being met will let you know, along with everyone else.

Customers’ relationship with a brand is an emotional one. Every touchpoint your customers’ interact with will shape that relationship. Understanding how your market interacts with your brand, and the personality your brand conveys at each of those interactions is vitally important. Think of a time you rang a utility provider and encountered someone on the end of the phone who was rude. For most of us the emotional response to this is “I don’t like this company”. We look for other information to support this view. We talk to friends and share experiences. The emotional connection with the brand has been assigned. Changing this type of entrenched negative view is no easy task.

But social media as a touchpoint is different because your customers’ views are visible. And you can respond. Social media platforms allow customers to interact with your brand in much the same way that they do with their friends. They treat it as a person. If your social media strategy recognises that, you can make sure your brand has a personality with clear emotional cues. If you don’t then your customers will assign a personality for you. And it may be not be the personality that you want.

So remember, a brand is more than a just a logo. Take the time to build a brand strategy that incorporates interaction in the social web. Define the personality and make sure your business understands it and can express it – particularly online. Opting out is much more risky than participating in social media. Get it right the rewards will be easy to see.

Before you can begin a thought leadership strategy there are a few things to consider: who are your companies thought leaders, who are the influencers in your network, how often can you create content and how will you distribute it? It is necessary to start to document each of these points. They will evolve over time but let’s look at the starting points.

Every professional service company has at least one thought leader. If you are a small consultancy you may be the one and only. If the company is bigger then it is best to try and get more than one person being a thought leader. This will put less pressure on one person and will exponentially grow the network you have influence over.

You then need to think about who the influencers in your network are. If you use LinkedIn it can be relatively easy to do this. The ones that have the most connections and are most active tend to be the most influential. It can get more complicated than this but in general that’s a great place to start.

It is important to try and plan regular updates to the thought leadership strategy. The first place most companies start is writing short pieces for their own blog. Creating a content roster for this activity is one way to make sure that everybody is participating in the thought leadership process. Try and avoid a flurry of activity followed by a long silence. If you develop a following and then simply stop because you get too busy then you run the risk of disappointing your market.

If you do develop a strategy around your blog you then need to think about distributing your content so it gets in front of more people. One mistake that is easy to make is assuming that people will keep coming back to your site or blog. Chances are they won’t as most of them are as busy as you are. Make sure you employ tools and techniques that automatically send your intent to various social platforms while also making sure you content is easy to share.

The ex CEO of Sun Microsystems, Jonathan Schwartz, is a great example of a business leader who developed a thought leadership strategy. He had a blog where he openly discussed what was on his mind. And he invited comments from the public. Importantly, he tried to answer as many of those comments as possible, especially the negative ones. Over time this created a culture of honesty and a focus around customer service.

This is what being a thought leader is all about. You know a lot about your particular speciality – that covers the thought. How you express that, and
how you communicate with your market as you do so is where the leadership part come into play. If your up to the job your market is looking for a leader.

Before the communication revolution ushered in by platforms like Twitter and Facebook, companies were very much in control of the messages surrounding their brand. Marketing was a one way street where the brand developed a strategy and told the customer what to think. Customer service was relegated to call centres and market research happened behind closed doors with small focus groups. All of that has now changed. Customers now have more power to voice an opinion than they ever have had, and they are wielding that power ever more rapidly and with greater impact. Ignore this development at your brand’s peril.

The reality is that people are not always going to be happy with your brand. They will occasionally complain. And they will do it publicly. You can try to persuade yourself that if you do not get involved in social media then it won’t happen. But you’d be wrong because it will. Ignoring it just means that you won’t be able to do anything about it, and that may do irreversible damage to your brand.

The good news is if you recognise and respect the relationship you have with your customers, social media can be a very powerful tool. Your customers deserve to be valued and heard. Work out how to do this well, and do it out in the open, and your reputation will grow. People can accept mistakes. It’s how you handle them that determines whether the outcome is disaster or an opportunity.

Being open and honest is healthy for a brand. It tells your market “we can be trusted” – and trust is what your customers are looking for. All it takes is a bit of planning. Develop a strategy. Know what you are trying to achieve, who you are going to be talking to and how you are going to handle difficult situations. Make sure that staff who are involved in the “customer conversation” are all properly trained and on board. If you need help at the planning stage then go and get it. This is a strategic exercise that will enhance and possibly determine your competitive advantage. Getting it right from the outset will save you a lot of time and expense.

So don’t be afraid of negative comments. Embrace them. They are part of the texture of the marketplace you compete in. You cannot control social media any more than you can people’s thoughts. But you can manage it by being involved.

In the world of social media it is safer to step into the light than hide in the shadows.

Social media has really made it’s mark on 2010. Twitter and Facebook seem to be in the headlines almost every day, Hollywood is even making a movie about Facebook, and it seems as if every company is now looking to social media to help propel themselves beyond the aftermath of the GFC. But there is still a lot of confusion about what social media actually is and where the threats and opportunities lie.

In this article I take a close look at the social media landscape, describe some of the “platforms”, examine how these are changing the market place and outline a strategic framework for deploying social media as a branding, marketing, PR and intelligence tool.

What is social media really?

The big social media brands are YouTube, Twitter, Facebook and LinkedIn but they are just that – brands, and like any brand they are designed to cater to a certain niche to meet a specific need.

As with any successful product or service the people behind these brands spotted a market need and developed a solution to it. They then had to work out how to generate revenue. Because social media is able to generate a huge amount of data about each user (age, gender, place of work, where they live, things they like, people they know and so on) the most obvious choice was to provide highly targeted advertising. Facebook is the brand that has managed to do this most successfully so far. But it is still early days – and Google is yet to weigh in seriously.

The market leaders do not define the market.

Social media is the convergence of technology and the desire people have to be heard and connected. In an age where people are feeling increasingly isolated, social media has managed to connect people with old friends, complete strangers and interest groups – or said another way connect people to the “market segments” they wish to belong to. This has happened in a way no other technology has been able to do.

We humans are essentially tribal animals and social media has allowed us to gather into these new ‘location free tribes’ incredibly fast. What’s more, the users of social media like it and want more.

The march of social media is now unstoppable. There have been times this year where the amount of time spent on Facebook eclipsed the time spent on Google. This competition is only going to intensify. Facebook recently released some new tools to extend its reach and influence over the whole of the web. Recently rumours around a new service called GoogleMe have started to surface.

Social media is now becoming more than a marketing experiment. By the end of the year the majority of big name companies will be looking at how social media can be directly integrated into their brand strategy. It will be the core of any new digital strategy.

Why has it happened?

Networking and collaboration is fundamental to what it means to be human. In our bodies atoms work together to create cells and cells work together to create our organs. In our brains’ neurons work together to create our thoughts, feelings and language. In your company people are working together in a similar way – to create something bigger and more exciting than the sum of it’s parts.

We can take this thinking and look at the development of the personal computer and see a very distinct pattern emerging.

Before anyone had a computer or a smart phone, everything was a social event. Meetings were face-to-face or over the phone. Communication in general was human-to-human based.

In the last 30 years things changed. Initially the personal computer made everything a private and secluded affair. Games, for example, could be played without the help of another human and work could be carried out sitting in front of a screen. The advent of the early internet exposed the power of a computer network. But from a personal perspective ‘computing’ was an insular activity.

The first social networks, forums and blogs worked with a huge number of anonymous users. While this was a step forward in person-to-person networking, the anonymity allowed people to behave in ways they would never dream of in real life. This constrained many of these networks to the domain of early adopters and special interest groups. The ‘rules’ that govern effective social networks were yet to be developed.

What has happened recently, particularly with Facebook, is that it’s become far easier to transport your real identity around the web. This means that increasingly people are joining new social networks with their ‘real identity’ – their real name, their place of work, and other details that define them as a person in a movement (sometimes referred to as the ‘Open Web’). Naturally this makes people think more carefully about what they say and how they behave on social networks.  Because they ‘own’ their comments the common rules of society come into play. When a person’s reputation is attached to what they say it makes them think carefully about what that comment might mean to others.

Of course people can still misbehave in social networks as they can in real world networks. But the networks are now being governed by majority rule so this behaviour is quickly dealt with. This makes cooperation and collaboration much easier. Because of this the barriers to entry are dropping at an astronomical rate. Companies are starting to feel more secure in setting up their own networks, knowing that the majority of users will join to get value out of the information that is provided and quickly deal with other users who lessen the overall value of that network.

So when thinking about why social media has become so widely adopted, and pondering where it is going, avoid getting distracted by in the leaps in technology. These are important of course but it is the behaviour of the network and the development of new social norms that are really driving the progress. Every individual in this massive network is doing what he or she is preprogrammed to do – communicate, collaborate and continue the march of civilisation’s evolution.

The New Web

The age of the “website” as we have known it is coming to an end. People may still go to your site but they expect information to be tailored for them and available on the social media platform of their choosing and on any device that connects to the web. What’s more they expect to be able to comment on almost everything they see. The web is no longer a digital version of print. It is the space where conversation is facilitated. Websites are becoming applications that feed information out to various social based platforms. This allows people to receive and consume information the way they choose.

The more you can utilise your social media presence and leverage the influencers in your network the better. It is even possible to embed e-commerce and other web based applications directly into Facebook. Most brands need to start thinking about their websites as a database that organises and distributes information and features to specific groups within the world of social media.

Owning the data

One way to think about the forces driving the development of social media is the old saying: “knowledge is power”. To that you need add a more recent motto “and the person with the most data wins”. Each social media brand-name earns its money from collecting and analysing data. And they are not too keen on sharing that information.

Obviously there’s a huge amount of data that brands can obtain from the many social media monitoring tools currently available. But if you really want ‘granular’ information about your brand you need to devise ways to generate and own your own data. If you are used to thinking about campaigns and short term goals this might feel difficult. If you take a longer term view however, it is possible to generate massive amounts of data relevant and specific to your brand, your product category and your competition.

It’s the economy, stupid

During the 1992 presidential campaign in the USA, Bill Clinton’s campaign strategist coined the phrase “…it’s the economy, stupid…”. He did this to make the case that Clinton was a better choice for president because president George H. W. Bush had not successfully addressed the economy, which had recently undergone a recession. Clinton, of course, won that election.

Nearly twenty years later the world is emerging from a period of economic turmoil that has forever reshaped important elements of the market place. One of the most significant changes is the movement of social media into the mainstream. This is far from surprising. Challenging economic times always induce consumers to carefully assess how they spend. Being a member of a community where you trust the recommendations of people who are real consumers is an obvious choice. Technology has allowed this to happen in a measurable way and on a global scale.

We are now in a time where the phrase “it’s the social economy, stupid” could well become a catch phrase for companies rather than voters. Those that ignore the opportunities social networks provide may well be putting themselves at a distinct disadvantage.

Fractured or identifiable markets

There has been a lot of talk about how social media is fracturing markets. This is a myth.

Social media doesn’t ‘create’ new markets and market segments. It just identifies them. The interest groups and needs already existed – we just didn’t know enough about them.

The mountain of data that social media produces can now shed light on who these people are, and what they like. We now have clearly identifiable and serviceable markets.

Of course this has created an additional layer of complexity. But utilising tools to listen to, and more importantly, understand these market segments gives you an opportunity to talk to them in their own language and hear what they have to say. You might say this technology can help you treat your customers like humans – something that most forms of marketing and communication have not been good at thus far.

Defining value

A recent survey of the social media activity of major brands, including Nokia, Adidas, Nike, Coca-Cola and Red Bull, showed that some brands are engaging well with their Facebook fans. The people who have voluntarily decided to follow what these brands have to say tend to spend significantly more than non-fans – sometimes more than twice as much. Further, fans were more loyal and 68% were inclined to recommend the product to their peers. Nike was able to put a value of $209.83 on each Facebook fan – even though some fans spend nothing at all.

It could be argued that these fans would be loyal brand advocates anyway. But even so social media has given them a convenient platform to stay engaged and and share their views and preferences with others.

Starting a social media strategy

With this background we are now equipped to discuss how to form a social media strategy. Before we start a couple of principles need to be highlighted. First there is no “one size fits all” when it comes to strategy. Secondly it’s worth taking time to get a strategy right.

Many companies have been adopting an approach to social media based on an assumption that it is ‘free’. They have set up accounts and hoped it will work. It won’t. Hope is not a strategy, and social media takes time to get right – so it can’t be free.

So let’s walk through the basic steps…

Define your goal

A brand needs to first define it’s goal. Social media can be used for customer service, customer acquisition, brand awareness or public relations. But trying to do everything will produce unfocused results. Understanding what stage your company is at and setting goals to propel communications to your desired stakeholders is the first step.

Listen to gain context

Once you have defined your goal you need to measure what is already happening. Before meaningful KPIs can be set it helps to know what measurement tools are available and the quality of the data they generate. These tools can be categorised into three groups.

Site analytics – One of the most important tools you will need to utilise is website analytics – tools that measure the activity on your website. Google analytics is an extremely good free option but there are many others depending on what it is you are actually trying to do. Make sure you do your research get advice and know what option is right for you.

Social media monitoring – There are a number of ways to monitor what is happening in the social media space. Who is talking to who, who is influential and why the conversations are happening. There are free tools available but some of these lack precision as the technology is not constantly upgraded or not enough effort is put into collecting the data. A well developed tool is worth the investment. Good monitoring tools can give you extremely detailed information – what people are saying about your brand, who is saying it, details of the demographics of your social media following and even what people are saying about your competition. The right data allows you to snare the ‘low hanging fruit’.

Data mining tools – To dig deeper into data it may be necessary to employ more advanced tools. You may need ‘text mining’ to get an overview of what words or themes seem to be surrounding your brand online or ‘geo-locating’ comments to identify potential new markets.

Good choices require knowledge of what type of data is available, and how to best get your hands on it.

Choose your communication platforms

Platforms then need to be chosen. Twitter, Facebook and YouTube are a few of the big ones but there are many more. Each is focused on a different demographic. There is also the possibility of creating your own platform to fulfil a need that may only exist for your market

Set KPIs

Once you know your goal, have chosen the tools you will use to measure it and the platforms through which you will focus your communications you are ready to set your KPIs. There are many ways of doing this. One of the most effective is aiming to ‘increase positive sentiment’ – basically getting more people on side.

Define a voice

Finally you need to create a ‘voice’. A tone for how you will communicate. Will you be informative, humorous or serious? What language will your market respond to?  Making the correct choice and implementing well is important. Get this right and your market will follow.

Get good advice

Ultimately a good social media strategy needs good advice. So make sure you talk to people who know this space well.

Looking to the future

Social media is here to stay. These methods of communicating have become embedded in our technologies and culture. Companies will soon be interacting with a generation that will find it impossible to imagine a time where the individual didn’t have a voice and an ability to exert influence.

This gives those companies a huge opportunity to be involved in conversations about their brands and to learn and respond to the views and preferences of their customers.

We are moving into the age of the ‘people organised web’ – information organised by people, for people and recommended by people in your network. We have moved beyond the ‘industrialised’ view of the world where markets are represented by impersonal statistics. Markets are made of individuals and they demand to be treated as such.

This is the beginning of the next great step in the evolution of human civilisation. It’s happening. Time to get on board and be part of that evolution.

Many of you may have heard that markets across the globe are fracturing into ever finer segments. You may have also heard that this is been driven by the rise of social media.

But if people are getting together to discuss specific interests and this is leading to an emergence of ‘new markets’ to emerge then surely these interest groups must must have existed already. It just we didn’t know about them. So in this sense social media doesn’t ‘create’ new markets and market segments. It just identifies them.

The mountain of data that social media produces can now shine a light on who these people are, and what they like. And voila – we have new identifiable and serviceable markets.

Want to grow in this brave new world? Then learn to collect and read the data and then use the tools to communicate with them as they progress down the path towards making a purchasing decision.

All the tools are there and the people are waiting.

“Social media hit a tipping point in 2009 as sites like Facebook and YouTube increased their presence in mainstream media while sites like Twitter and Digg emerged. On top of the obvious, thousands of new and legitimate social media websites hit the scene with hopes of being the “next big thing”.

While most credit and attention are being given to Facebook for unofficially winning the social networking battle with MySpace, Bebo, and others, Twitter and Digg were the real winners in 2009 for very different reasons.”

Click here to read it all

It said:

“Before the latest social media revolution, Jessica Gottlieb would have probably watched helplessly when her kids, Jane and Alexander, were trapped on the tarmac, waiting for their Virgin America flight to take off.

But that’s so 2008. When it happened to her last week, the Los Angeles-based blogger reached for her iPhone and twittered about her troubles. “Dear Virgin Air,” she wrote. “My children have been on the tarmac for one hour with 90 more minutes to wait. I am at JFK gate b25. Pls RT.”

That last request — please “RT” — is shorthand for Gottlieb’s nearly 10,000 followers to “retweet” her message, or rebroadcast it to their followers. And re-tweet they did. Within minutes, Virgin had phoned Gottlieb to reassure her that her kids would be fine.

“They contacted the gate agent manager and explained to us the entire weather situation,” she says. “Within 20 minutes of that conversation, the plane took off.”

The same forces that threaten to unravel a repressive Iranian regime are revolutionizing the way Americans travel. Social media sites that allow people to interact in the moment are changing how travel companies talk to their customers — and how their customers talk back. ”

The full article can be read here