Dive into Social Media Now- BusinessWeek Article May 12, 2009

The Innovation Engine May 12, 2009, 2:37PM EST
Dive into Social Media Now

Your competitors know that Twitter, Linkedin, and the rest of the social media gang are a communication channel between you and your consumers. Do you?

By G. Michael Maddock and Raphael Louis Vitón

We believe this with all our heart: While social media are complex and often misunderstood, they have a value beyond traditional marketing campaigns. More specifically, we believe they can be used to help form your marketing strategy and be integrated into all your communications.

We have invested heavily in social media at our company. We believe in the power of online communities to help uncover insights; generate and validate new-product, service, and business-model concepts; and most important, create the necessary conversations that spark a new idea we can develop and introduce across the globe.

Everything it has done for us, we believe it can do for your organization as well. Our research shows that marketers intend to invest more in social media in the months ahead, but they have yet to allot substantial budgets for them. That isn’t the way to go. And if you continue to fund social applications only as experiments, you’re unlikely to be able to make an impact.
Ownership Is Fleeting

Our purpose here is twofold. First, we want to clarify exactly what we (and you) should be talking about when using the term “social media,” and then we will address the three biggest worries about implementing it: the loss of control, the related concern that someone in your employ will make a mistake during real-time interactions with customers, and perhaps the biggest misconception of all, that there is no way to measure its impact.

Simple definition first: Social media are a technically enhanced—think Internet and mobile-based—way of discussing ideas with people in communities. (Twitter, blogs, niche communities, and giant communities like LinkedIn and Facebook are the sorts of things we are talking about here.) Social media use words, pictures, audio, and video to foster interaction.

It is that interaction that makes some business people nervous. We understand.

When you advertise in a publication or on radio or TV, you decide on the words, the imagery, and everything else. When you use social media to get that message out, that ownership is fleeting. While you maintain absolute control over the initial content, what happens afterward depends on the audience. Is there any way to alter that? No.

But instead of worrying about it, we think you should see it as an opportunity, one that you already have some (analogous) experience with.
Tightly vs. Loosely Scripted

Most companies have call centers, places where they handle orders and provide customer service over the phone. The people in those centers are trained and given various “scripts” to follow, but no interaction with a customer (or potential customer) goes exactly as the company has drawn it up.

Still, just about every company finds call centers an effective way to maintain service levels and boost sales. Why should social media be any different?

“But suppose employees make a mistake and say or promise something they shouldn’t during these interactions?” we are often asked.

The answer to that is simple: You handle it exactly the way you would any other mistake or problem. You fix it and put steps in place to minimize the chances it will happen again.

And if you use that worry as an excuse for not engaging in social media, you are putting yourself at a huge disadvantage. We recently addressed a national association of hotel executives, and one, a vice-president at a huge chain, raised the “what-if-a-customer-writes-something-bad-about-us?” issue. We listened patiently and then hit him with some research we’d done about his company in preparation for the meeting.

“We did a Google (GOOG) search about weddings held at the biggest hotel in your region,” we said. “And while we found all the wonderful pictures you posted about the facility on your Web site, we also found troubling items that came up on wedding-related blogs—in particular, two women who went on at great length about the problems they had with their receptions at this hotel. There was no response from the hotel anywhere. The posts were three years old. What kind of impact do you think their comments are going to have on someone looking for a place to have their wedding?” The point is, if the company had been monitoring mentions of its hotels on social media, it could have responded to the complaints for all the world to see. Instead the company missed its chance to redeem itself.

(When we encounter situations like this, we always imagine executives in a boardroom with fingers in their ears repeating “Lalalalalalalala.”)
Measurable Return

As for the last objection, that there is no way to measure the impact social media have on revenues and profits: That is just wrong. Take a look at two resources we found on the Web: a post about Web ROI by blogger Phil Baumann and an ROI calculator from Dragon Research. They will prove that you can measure the return on your investment.

(Ironically, if we probe deeper, the executives suggesting that social-media impact is not measurable don’t have many metrics or ROI in place with most of their other marketing efforts either. You should align all your marketing with key financial outcomes/objectives and measure it in the context of those objectives.)

But knowing you can measure the bang you get for the buck is not the end point when it comes to social media. The real question to ask is: “Are we getting what we want out of the conversation?”

That will be the subject for next time.

G. Michael Maddock is founding partner, and Raphael Louis Vitón is president, of Maddock Douglas, a company that invents, brands, and markets products “for companies driven by innovation” .