Social Media is one of the most pervasive technological trends of our day. The phenomena that are Facebook, YouTube, and blogging have fundamentally changed the way we express ourselves and connect with others. No longer is social media just for the creative expression of individuals and consumers; now businesses and organizations are getting involved. But how do businesses use social media to uniquely define themselves in the marketplace? This analysis will show that, contrary to popular belief, businesses of various industry, size, and target audience can all benefit from social media. Specific tactics are described that businesses can use to better engage with customers, which will boost brand equity and eventually lead to bottom-line growth.
What is social media? From the broadest perspective, social media is about Web tools that enable dynamic multi-user interaction. If past forms of communication were about a one-way message to your audience, true social media is about a multi-way conversation where users share content with one another and become more deeply engaged. See social media types in Table 1.
Table 1: “Social Media Types”
Social Media Type
Social Networking Sites
A medium for sharing information between friends within a network.
Multimedia Sharing Sites
Hosting of photos, video, and music for the purpose of sharing.
A destination for conversation around a specific niche topic.
Sharing concentrated bursts of information.
A log of user-generated content, news, and advice.
Huffington Post, TechCrunch
Let’s look at this communication on Facebook. A consumer wants advice on Thai restaurants in their area. They post this request on their Facebook status update, which can be seen by other users in their network, or “friends,” who may then offer advice as comments, Web links to nearby Thai restaurants, Southeast Asian food blogs, or reviews of local Thai restaurants. Now consider the potential here for a Thai restaurant. What if the restaurant itself could respond to this prospective customer? In today’s social media environment, that is exactly what is happening. Places of business are increasingly responding to this request by creating their own Facebook pages and using them to raise awareness and offer the user incentives through weekly specials and coupons.
Social media clearly presents an important communication tool for businesses and organizations. The potential has not been lost on President Obama, who has a Facebook fan page with 11,405,803 members as of July 2010. A survey conducted by consultancy firm Marketing Sherpa found that the 2009 to 2010 social marketing budget for each of the seven industry sectors represented in the survey was projected to increase. In the e-commerce vertical alone, budgets were projected to increase by as much as 79 percent. Sites like Facebook have become so ubiquitous that Ford Motor Company unveiled its brand new 2011 Explorer through a dedicated Facebook page this July (2010), forgoing a traditional car show—the first time a major carmaker has ever done so. Ford has already well surpassed their goal of 30,000 Facebook fans. Social media is vital enough that, of the more than 5,000 marketing executives surveyed by Datran Media in December 2009, 72.3 percent had company Facebook pages, 72 percent had a company Twitter account, and 67.2 percent planned on leveraging online video in 2010.
So, it’s clear that companies and organizations are using social media, but just how significant is it and will it grow your business? Not every company has the marketing muscle of Ford Motors or President Obama, but many businesses can implement some of the same techniques. To be successful with social media you must first decide what your specific goals are. Increased revenue is always important but that is an indirect result of deeper customer engagement and building your brand equity. To better engage and build brand equity, many companies focus on improving the following: brand awareness, Web site traffic, customer service, thought leadership (providing unique insights and value), search engine optimization (SEO), and lead generation. Social media can readily assist with each of these goals. Deciding which ones to emphasize is also a function of a company’s industry and target audience. For example, a B2B software company may focus its efforts on “thought leadership,” whereas a women’s apparel manufacturer could emphasize brand awareness. And, in a few cases, your business may not benefit at all from social media. Table 2, “Social Media Goals by Company Type,” can assist a company in determining how social media may best suit its marketing objectives.
Table 2: “Social Media Goals by Company Type”
B2B Company Social
B2C Company Social Media Goals
Companies with Least Benefit From Social Media
Web site traffic
B2B companies whose potential target market is highly limited.
Web site traffic
Any company unwilling to devote some time and resources to it
Once clearly defined goals are established, companies must be realistic about the resources they’ll need. Management buy-in and investments in personnel and other resources will all be necessary to create and maintain a social media presence. Buy-in can pose a challenge, as social media is still in its early stages and correlations between social media activity and revenue growth are slowly emerging and not yet fully formed. To make the most of your investment in social media, employ these three methods: listen to the audience, participate in the conversation, and measure success against predefined metrics, (i.e., increasing Web site traffic by 20 percent in the second quarter, reducing customer service wait times, etc.)
Whether you already have a social media presence or not, the key to getting into the game is getting a better feel for what people are saying about you in the “interactive marketplace.” Some of the top tools for monitoring and listening include: Twitter Search, Google Alerts, Radian6, and PR Newswire’s Social Media Metrics. By signing up for these services, you will be notified any time your company’s name comes up online. You can also set them up to receive notification of your competitor’s names or key words for your industry. From this information, companies can discover what social media channels to participate in (i.e., social networks vs. forums), and how best to engage with customers. The key is to be willing to hear the good and the bad that’s being said about you online, and where it’s being said. Then companies can best figure out how best to reach out to their target audience.
Some of the more significant “locations” where your business should have a social media presence include Facebook and microblog Twitter. But there are other social networking sites out there where your audience may already reside including Hi5.com, Plurk.com, Bebo.com, Jaiku.com, Xanga.com, and Vox.com. Deciding where to get involved will depend on where your audience spends its time.
For example, if you are a manufacturer of performance after-market parts for Volkswagen vehicles, then chances are you have some passionate fans outside the mainstream social networks in a dedicated enthusiast forum like www.vwvortex.com. Updating customers about your products and services on that forum may be just as, if not more important as your Facebook and Twitter presence.
And once you’ve accurately found the locations where your audience spends most of its time, you can use aggregator software to create messaging and status updates from one source and broadcast it out to all your social media locations—software like Hootsuite and Ping.FM do this very well.
Participation is the crux of making social media work for your business. Participating is the act of contributing to different social media channels to effectively interact with your audience. The key to participation is knowing which exact locations to target and what tactics to use. See Tactics below.
Tactic #1: Blogging
With an understanding of where to participate, the next question is what tactics to use.
An excellent way to do this is through a company blog. Company blogs fulfill the goal of increased “thought leadership” and product/brand awareness. In 2010, already 65 percent of U.S. companies were using a corporate blog. A good corporate blogging technique is to focus on relationship building and less on selling. Engage with your audience by building trust based on shared principles, instead of just talking about the features and functionality of your products. Jeff Swartz, president and CEO of Timberland, an outdoor clothing and shoe company, spends a lot of his social media efforts blogging about social causes he is passionate about instead of just talking about the company’s shoes and apparel. His biggest cause is Timberland’s environmental charity, Earthkeepers. The idea behind this technique is that the more personal and human you can be in your social media interactions, the greater the connection you’ll make with your audience, which will translate into greater brand recognition and eventual revenue growth. It is also important to keep the blog active by updating a few times a week, but not so often that you’re simply writing just for the sake of saying something.
Tactic #2: Social Networks
Social networks like Facebook are clearly a great way to learn about your audience and interact with them in a dynamic way. These networks also allow you to have your customers do the marketing and advertising for you by simply getting them more engaged. For example, on Gap’s “Baby Gap” tab on their fan page, there is a simple yet colorful collage of pictures of babies wearing GAP denim. Users who become fans of the page have the opportunity to upload pictures of their own babies wearing any variety of Gap denim. Users show off their own well-dressed babies and send the link to the many friends they have in their network, Gap denim gets more exposure, and it is all done for a fraction of the price that a traditional marketing campaign would cost. This type of social network interaction can be used by businesses to boost Web site traffic to the corporate site and help increase brand recognition.
Tactic #3: Microblogging
Microblogs like Twitter, FriendFeed, and Tumblr are a great way to communicate in short concentrated bursts. In the case of Twitter, those bursts are limited to 140 characters or less. One industry that has made the most of Twitter is the food truck industry in Los Angeles. These mobile trucks announce or “tweet” their locations, and followers flock to them. The tweets have grown to include food specials, promotions, and contests several times a day. In fact, without Twitter, these trucks may not have had a future. According to an interview with proprietor Y.L. of Kabob N’Roll truck, “Ninety-nine percent of our business is through Twitter. But we weren’t the first. If it weren’t for Kogi [a Los Angeles-based Korean barbeque truck], we wouldn’t be here. In March of last year , Kogi almost gave up. Their trucks barely had sales of $300 or $350 a night and were going to shut down. But when they started using Twitter, their sales started booming, especially when they started parking at clubs after they get out. It’s thanks to them that we’re here.” Twitter can be used for fun contests to drive sales as well, according to our interview with Jamie Kadzik of the Crepe’n Around truck. Kadzik tells his Twitter followers that the first person to tweet, “Crepes are for Mondays” gets a free meal of their choice at his truck. Contests like these are a free and easy technique that your business can use to generate excitement that will help you engage with your customers, increase your brand awareness, and boost your sales.
Tactic #4: Integrate Multiple Social Media Channels
A good example of a small business that integrates multiple social media techniques that complement one another well is the Emerson Hair Salon of Seattle, Washington. Knowing full well that one in five small business owners are integrating social media into their business processes, Emerson integrates Facebook, Twitter, and a daily blog into their Web site. This strategy is easy for any small business to emulate. Their Web site is very uncluttered and has a highly intuitive layout. There is a link to each of their stylist’s Facebook profiles right on their home page, and users can book their next hair appointment online. Taking it one step further, Emerson’s site gives customers a chance to share that appointment with other users on Twitter and Facebook. Emerson also encourages patrons to post pictures and talk about local rock concerts, street festivals, and block parties on their pages. Their efforts are paying off: over the last two years, 75 percent of their business now comes from their Facebook, Twitter, and blog.
Now that you’ve listened and participated, it’s time to measure your success. If your goal was to increase Web site traffic by 20 percent through your social media campaign, were you successful? Were you able to increase your SEO ranking on Google through social media so that every time people search your Web site, you now rank on the first page of a Google search instead of the seventh? In addition to those more traditional metrics, new social media metrics include how many Facebook followers you have, the number of conversations going on about you, and “sentiment”—what people really think about you. Software like Radian6, Sentiment Metrics, and Argyle Social can help you quantify success in those areas. Finally, how do you measure if your social media has boosted your revenue? While it may be difficult to quantify the connection between each Facebook fan and a certain dollar increase in revenue, by having a good strategy of knowing where your customers are and how to reach them—you will see quantifiable results. Specifically, the more engaged your company is on a whole with its customers, the more your revenue and gross margin can increase—top brands that ranked highest in their social media engagement (such as Starbucks and Dell), saw increases in their revenue of 18 percent vs. non-engaged brands that saw a 6 percent drop in their revenues in the 12-month period ending July 2009. See Figure 1.
The world of social media for business is still in its early stages, but a variety of businesses have already seen quantifiable benefits. There is very little to lose and much to gain by getting involved. The case studies and examples provided are proof that by having a good overall strategy and knowing how to listen, participate, and measure, you can better engage and build your brand, as well as your long-term revenue goals. Regardless of what stage you’re at in your social media marketing approach, the sooner you become more engaged with your customers, the sooner you’ll develop a strong relationship with the people who are most important to your business.
 About.com: Webtrends, “What is Social Media?” http://webtrends.about.com/od/web20/a/social-media.htm.
 MarketingSherpa, “2010 Social Media Marketing Benchmark Report,”
 Van Grove, Jennifer, “Inside the 2011 Ford Explorer Facebook Reveal,” Mashable.com, July, 2010
 Datran, “Fourth Annual Marketing and Media Survey,” December 2009,
 Solis, Brian, “The 10 Stages of Social Media Business Integration,” Mashable.com, January 2010, http://mashable.com/2010/01/11/social-media-integration/.
 KingFishMedia, “Social Media Usage, Attitudes, and Measurability: What do Marketers Think?” 2010,
 Charles, Ann, “Five Social Media Tips for Better Corporate Social Responsibility,” Mashable.com, February 2010, http://mashable.com/2009/09/22/social-media-business/.
 Y.L., owner of Kabob N’Roll, In-person interview, August 13, 2010, Los Angeles.
 Jamie Kadzik, owner of Crepe’n Around, In-person interview, August 11, 2010, Los Angeles.
 Swallow, Erica, “Five Small Business Social Media Success Stories,” Mashable.com, June 2010,
 Wetpaint and Altimeter Group, “The World’s Most Valuable Brands. Who’s Most Engaged?” Engagementdb, http://www.engagementdb.com/downloads/ENGAGEMENTdb_Report_2009.pdf (link no longer accessible).