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Areg Bagdasarian and Steffanie Tamehiro Academic Advisor: Professor Andrea Scott
Social Media is one of the most pervasive technological trends of our day. The phenomenon that is Facebook, YouTube and blogs has fundamentally changed the way we express ourselves and connect with others. No longer limited to just 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, a wide variety of businesses from various industries, sizes, and with a B2C or even B2B focus can all benefit from social media. Specific tactics will be described that your business can use today to better engage with customers, which will boost your 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. i If past forms of communication were about a one way conversation with 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 below in Chart #1 “Social Media Types” Chart #1 “Social Media Types” Social Media Type Social Networking Sites Multimedia Sharing Sites Web forums Microblogs Blogs Function General Sharing of information between friends within your network Sharing of photos, video and music Sharing around a specific niche topic Sharing in concentrated bursts of information User generated news and advice Example Facebook, LinkedIn YouTube, Flickr vwvortex, boston.com Twitter, FriendFeed Huffington Post, TechCrunch
Let’s look at this engagement on Facebook. A consumer wants advice on Thai restaurants in their area. They post this request on their Facebook status update, and are immediately flooded with advice from their friends as comments, web links to nearby Thai restaurants, links to southeast Asian food blogs, and videos reviews of local Thai restaurants. In today’s social media environment, Thai restaurants themselves are increasingly responding to this request and offering the user advice on weekly specials and coupons. 1|Page
Social media is clearly becoming more important to businesses and organizations. But just how significant is it and will it grow your business? Well, President Obama has a Facebook fan page with 11,405,803 members as of July 2010. Plus, despite the economic downturn, consultancy Marketing Sherpa found that the 2009 to 2010 social marketing budget for all seven industries surveyed was projected to increase. That increase would be by as much as 79% in the e-commerce vertical. ii 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 car maker has ever done so. Ford has already well surpassed their goal of 30,000 Facebook Fans. Social media is vital enough that 87% of companies surveyed said accurate online audience measurement through social media was at least somewhat important for driving increased brand awareness, revenues, and performance. iii 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 the following goals that social media can readily assist with: improving brand awareness, increased website traffic, improving customer service, improving thought leadership, boosting SEO/web presence and increasing lead generation. Deciding which ones to emphasize is also a function of your industry and target audience. For example, if you are a B2B software company it makes sense to emphasize “thought leadership” whereas a feminine apparel manufacturer could emphasize brand awareness. And in a few cases, your business might not benefit at all from social media. See Chart #2 below “Social Media Goals by Company Type” Chart #2 “Social Media Goals by Company Type” B2B Company Social Media Goals Thought leadership Website traffic B2C Company Social Media Goals Brand reputation Customer service Companies that Would Benefit Least From Social Media Defense contractors B2B companies whose potential target market is highly limited. Any company unwilling to devote some time and resources to it
With clearly defined goals, companies must be realistic about the resources they’ll need. Management buy-in, personnel and financial investments will all be necessary to some degree to start with, and to maintain a social media presence. It also requires understanding that social media is in its early stages and slowly proving its worth over time. Correlations between social 2|Page
media activity and revenue growth are slowly emerging but not yet fully formed. But it is an important medium nonetheless and companies can be successful by doing three things: listening to their audience, participating in the conversation, and measuring their success against predefined metrics, (i.e., increasing website traffic by 20% in the 2nd quarter, reducing customer service wait times, etc.)
Listening 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”. iv Some of the top tools for monitoring and listening include: Twitter Search, Google Alerts, Radian6 and PR Newswire’s Social Media Metrics. By listening for your company name, your competitor’s names, or key words for your industry, you’ll have a better feel for what social media channels to participate in (i.e., social networks, vs. forums), and how best to engage with your 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 approach their target audience. Participating Participating is the crux of making social media work for your business. Participating is the act of using various tactics in different social media channels to effectively interact with your audience. The key to participating is knowing which exact locations to target and what tactics to use. Location Some of the more significant “locations” where your business should have a social media presence include social network 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 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.
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% of US companies were using a corporate blog. v 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 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 vi. 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. Also important is 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, 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 your business to boost website traffic to the corporate site, and helps increase brand recognition. Baby Gap Facebook Page Screenshot
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, would be the mobile food truck industry in Los Angeles. These mobile trucks announce or “tweet” their locations, food specials, promotions and contests several times a day. In fact, without Twitter, these trucks may not have had a future. According to our conversation with proprietor Y.L. of Kabob N’Roll truck (www.kabobNRoll.com, Twitter: @KabobNRoll) – “99% of our business is through Twitter. But we weren’t the first. If it weren’t for Kogi (www.kogibbq.com), we wouldn’t be here. In March of last year (2009), 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.” vii Twitter can be used for fun contests to drive sales as well, according to our conversation with Jamie Kadzik of the Crepe’nAround truck (www.crepenaround.com, twitter: @crepenAround). Jamie tells his Twitter followers that the first to tweet, “Crepes are for Mondays” gets a free meal of their choice at his truck. viii 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 your Approach A small business that integrates multiple social media techniques that complement one another well is the Emerson Hair Salon of Seattle, WA http://emersonsalon.com/. Knowing full well that 1 in 5 small business owners are integrating social media into their business processes ix, Emerson integrates Facebook, twitter and a daily blog into their website. This strategy is easy for any small business to emulate. Their website is very uncluttered and has a highly intuitive layout. There is a link to each of their stylist’s Facebook profile right on their website, and the chance to book their next hair appointment online, and taking it one step further, a chance to share that appointment with other users on Twitter and Facebook. Emerson also gives their patrons the chance to post pictures and talk about local rock concerts, street festivals and block parties. Their efforts are paying off, since over the last 2 years, 75% of their business now comes from their Facebook, Twitter and blog. x See screenshot below:
Emerson Salon Home Page Screenshot
Measuring Now that you’ve listened and participated, it’s time to measure your success. If your goal was to increase website traffic by 20% 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 website, you now rank on the first page of a Google search instead of the 7th? 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 correlating to 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% vs. non-engaged brands that saw a 6% drop in their revenues in the 12 month period ending July. 2009. xi See Chart #3 below.
Chart #3 Engagement Correlates to Financial Performance – Engagementdb Report
Conclusion It is safe to say that the world of social media for business is in its early stages. But it is also safe to say that a variety of businesses have something 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 that 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” http://www.marketingsherpa.com/SocialMediaExcerpt.pdf Datran: “4th Annual Marketing and Media Survey” - December 2009 http://www.datranmediasurvey2010.com/start.php?showtype=page-1
Mashable.com – “The 10 Stages of Social Media Business Integration” – Brian Solis – January 2010 http://mashable.com/2010/01/11/social-media-integration/
KingFishMedia- “Social Media Usage, Attitudes, and Measurability: What do Marketers Think?” 2010 http://www.kingfishmedia.com/marketing-resources/research/social-media-usage-2010-ebook08112010
Mashable.com- “Five Social Media Tips for Better Corporate Social Responsibility” – Ann Charles – February 2010 http://mashable.com/2009/09/22/social-media-business/
In-person interview – Conducted on August 13th 2010 with Y.L. of Kabob N’Roll – Wilshire Blvd. - Miracle Mile area of Los Angeles. In-person interview – Conducted on August 11th 2010 with Jamie Kadzik of Crepe’nAround – Wilshire Blvd. – Miracle Mile area of Los Angeles.
Mashable.com – “Five Small Business Social Media Success Stories” – Ann Swallow – June 2010 http://mashable.com/2010/06/02/small-business-social-media-success-stories/ Mashable.com – “Five Small Business Social Media Success Stories” – Ann Swallow – June 2010 http://mashable.com/2010/06/02/small-business-social-media-success-stories/ Wetpaint and Altimeter Group – “The World’s Most Valuable Brands. Who’s Most Engaged?” Engagementdb Ranking the World’s Top 100 Global Brands. http://www.engagementdb.com/downloads/ENGAGEMENTdb_Report_2009.pdf