I’ve been blogging about online community and tools of cooperation for years now.  A lot of what I’ve focused on has been social media in the service of small groups, what I call Focused Social Media.  But a major strength of social media is the interface between businesses and consumers - or between any actors in a value chain.I thought I’d take a look at what social media for business actually is.  This is sort of a primer, sort of a vehicle to focus my thoughts.

Since this will be a fairly long post, I’m not going to burden everyone’s feed readers.  Please click below to read the whole post.

Wikipedia:

Social Media is the democratization of information, transforming people from content readers into content publishers. It is the shift from a broadcast mechanism to a many-to-many model, rooted in conversations between authors, people, and peers.

Social media uses the “wisdom of crowds” to connect information in a collaborative manner. Social media can take many different forms, including Internet forums, message boards, weblogs, wikis, podcasts, pictures and video. Technologies such as blogs, picture-sharing, vlogs, wall-postings, email, instant messaging, music-sharing, group creation and voice over IP, to name a few. Examples of social media applications are Google (reference, social networking), Wikipedia (reference), MySpace (social networking), Facebook(social networking), Last.fm (personal music), YouTube (social networking and video sharing), Second Life (virtual reality), and Flickr (photo sharing).

Social Media and Social Networking tools are multifaceted.  They can be deployed to:

• engender community,
• broadcast and amplify hype,
• help with product development,
• get client feedback,
• create content,
• enhance sales,
• create peer relationships between producer, seller and consumer,
• foster communication, and
• increase trust.

But they can be kind of fickle.  If you go into a social media campaign only to broadcast hype or to sell a product, people will see through that and disregard it - unless it’s really cool.

Those who dive in and forget all senses, will become enamored with a given technology like Twitter or Facebook or MySpace or LinkedIn.  The fact is, there is a deluge of external and internal tools you can use for a wide array of purposes.

How Does it Work?

Social media and networking provides tools to establish relationships.  These can be temporary or long term.  They can be for a specific need or a general interest.

In general, social media operates by bringing people together and letting them do what we do best.  Talk, complain, extol, laugh, make mischief, become enlightened, fall in love.  In other words, it uses something as context to bring together people and things that fit in that context and then steps back and lets them party.

For businesses, this means you can create communities that will give you instant feedback on your products, buy new products when they come out and, if they like them, become evangelists without even being asked.  These people have trusted relationships and will gladly work your products through their networks without any reward from you.

Wow!  That’s the holy grail of business, Jim!  I guess I don’t have to do anything else now?

How Do You Work With Social Media?

Well, no it really doesn’t work like that.  It’s not the holy grail, it will not instantly elevate you.  No social media tools are “load and leave.”  The key word in social media is social.

When we set out on a  social media campaign or incorporate its tools, we have to take into account the care and feeding of the social media system.  You need to participate.  Your staff needs to be visible on the site.  Clients need to know your little web site is an integral part of your business and not a customer play-pen.

Indeed, most of the benefits you will get from social media are likely going to stem from ongoing relationships and conversations that develop - not from someone sending you a note saying “Make Atomic Cheese.”

Why?

Because Make Atomic Cheese has no context.  And context is the foundation for all social media benefits.  How are people using your product?  How do they talk about it?  Is it as you anticipated?  Are they upset?  At what?  Is it valid?  Can they be calmed easily?  Is the problem systemic?  What makes them happy?

In the past, work like this has been done with focus groups, usually at night, when everyone is hungry. Usually people go to focus groups to get $50, not to help the product - which is often a secret until you arrive.  When you get into a focus group, no one really wants to be there but a few people really want to look smart and talk endlessly and annoy everyone else.

Sometimes Focus Groups reveal things of value for marketers, even more rarely they reveal something for the designers.  There is a term for when this value appears: luck.

With social media tools, conversations happen because of pleasure or pain with the product.  Conversations persist because of passion for the product.   Passion often comes from a connection with the product - which can come from good customer service.

So Social Media can make people who are upset with your product into passionate users by enhancing or transforming their consumer experience.

The key here is your staff needs to provide that interaction - and that is an investment.  So you need to set the level of involvement you can afford to have.

Optimization and Analytics

Marketing has always been more of an art than a science.  That’s good.  I like art.

Previous methods of marketing and client interaction have been very costly and difficult to fine-tune after launch.  Social Media techniques, however, are easy to track in data rich environments and fine-tune on a daily or even hourly basis.

Is the target audience showing up?  Are we making the response projections?  Which elements are performing and which are underperforming?  Is there a theme here in the performing area we are seeing?  Can we extend those?

Since social media happens on the web (i.e. in a big cloud of information), it is easy for us to measure who looks at our offerings, who clicks on them, who does not, how long do they look, what are our conversion rates, how many blogs are talking about our product, what external communities are talking about the product, and how does all this compare to what our clients are doing?

Numbers are easy to come by and analyze.  Fine-tuning decisions can be made and implemented at any time.  Because unlike traditional media, the cost of change in a social media campaign is comparatively very low.

A Sample Social Media Campaign

Say we are working for Vision Quest Soups - a small soup company in Scottsbluff, Nebraska.  This is a mom and pop operation owned by Randall and Suzanne Vision.  They can’t afford a huge TV ad campaign and don’t particularly want one.  Vision Quest soups are all organic, gluten free soups packed with antioxidants.  They are going for the healthier watch-no-TV market.

They also can’t afford to run all over the country doing tastings at super markets.  They just don’t have the bandwidth.

But they do have killer soup.

Randall and Suzanne are both very active in the nutrition scene on the web.  They are members of several on line communities and enjoy a good deal of trust because they’ve been engaged in non-threatening informative conversations for years.  They have both given and received good nutrition advice from consumers, producers and food scientists in these online communities.

They want to leverage their current goodwill in the launch of VQS.

They create VQS accounts on Facebook, MySpace and other social networking sites.  These accounts act as a billboard in those communities and bring VQS interest back to the VQS site.

They monitor all discussion forums, blogs, and other information sources on the web mentions of VQS.

They create community tools on their own web site to encourage discussion, lead generation, and product development support.

They participate in every discussion about their product that happens on the web, even if only to thank people for discussing the product.  Through this they personalize interactions between consumer and product.

They automate the monitoring of the web for the popularity of their products and those of their rivals.

They actively track performance measures of the sales of their products and their social media reach.

They update their blog daily and participate in other blog discussions across the web.

The participate in conversations on the web that they are interested in and NEVER mention their own product unless specifically asked about it or it’s obviously relevant.

They demonstrate competence through their blog.  This means most posts are not directly about their products, but provide value beyond their products.  One post may talk about a new flavor of soup being released, followed by ten about nut allergies.

They build product reach using interactive tools like affiliate programs, business partner linking and some contests like “name the soup” or “invent our next flavor” or “find Scottsbluff on a map.”

They reward good behavior in their communities and on the web.  They personally write letters to their biggest fans.  They invite people who are knowledgeable to write in the VQS blog and participate in the site.  They gracefully acknowledge expertise, enthusiasm, and participation.

What is happening here is the application of social media systems involves the participation in the greater social web community.  The Visions and their staff need to be good community members in order to reap the benefits of social media tools.  (They have to honestly give to honestly get).

The Benefits of Social Media Tools

What are the benefits?

Free Advertising:

• Customers that evangelize your product.
• Repeated and permanent mentions of your web site and product on the web.

Micro-Commissioned 24/7 Sales:

• Affiliates that drive sales specific traffic to your site

Free Gigantic Focus Groups:

• Discussing of the pros and cons of your products in
  • Blogs
  • Forums
  • Microblogs
  • OnLine Mainstream Press
  • Review Sites

Detailed Customer Behavior Info:

• Conversion rates from specific campaigns
• Community response to specific campaigns
• Sites where conversations about your product occur
• Sites where traffic to your site originates
• Purchasing behavior in your store
• Products affiliates will group your products with

Relevant Ideas:

• New product ideas
• New campaign ideas
• Product improvement ideas
• Packaging ideas
• Partnership ideas
• Sales Channel ideas
• IDEAS (as many as you can have, 100 people can have a lot more)

Credibility:

• Recognition of company and staff as experts
• Recognition of company and staff as people (trustworthy)

Naturally Occurring and Unexpected Sales Channels:

• Sales can now flow from anywhere, based on the networks of your new evangelists.  (e.g. one of your fans is a Sikh and discovers one of your soups is perfect for Sikhs, suddenly you have tons of sales from Sikhs!)

Bringing It All Together

Social Media is a platform.  You build things on it.  In order to build an effective campaign it has to be coherent, participatory, maintainable and acceptable to the public.  That’s tricky, but we’ve seen that successful campaigns aren’t just acceptable, they are valued by the public.

Social media is a social contract - you are inviting your public to work with you.