Complaining and unhappy customers from our perspective our gifts for you and your business. They allow you to look closely as those aspects of your business or brand that have come into question, review how you are managing your customer service responses, allow you to engage with your customers one on one and build a relationship and make the great things you currently do better! Ironically  feedback and criticism promotes fear for many businesses – especially in today’s world of social media- where word of mouth spreads like a wild virus, yet what they forget is that by hiding or not responding this unhappiness spreads anyway. Why not take the initiative to face that unhappy person or group and use the good will and caring you demonstrate – as another way to promote the many great reasons – why they should continue to do business with you and SHARE their good relationship and experiences with others. Now that sounds like good publicity…taking lemons and making some delicious lemonade!

On Mashable.com I came across an article that speaks directly about this very issue today. Susan Payton posted an article that provides some good examples, expanding upon my thoughts in this post – to leverage that unhappy or unsatisfied customer – not only to help solve their discontent, but to take advantage of the ways you can learn more about how to make your business better and promote the way you face head on – the negative things you do or have done.

The outcome is that your customers win and at the same time so does your business and your brand. You learn about the way you can make your business better and in turn can promote the great way you engage with your customers. Think Zappos – they focused on customer service and it became their best skill because they realized when they began it was something they lacked. We always promote the positive things – but isn’t it a positive thing to know – that if I have a problem with your products or business you will be there immediately – to make sure that it gets fixed immediately?

How are you embracing complaining customers in your business? We would love to hear how you have managed some of your customer service challenges.

Best Nicole

Companies love positive feedback. They share it on Twitter (), post it on their website and use it as marketing fodder. But what about when feedback is, well, less than pleasant? What can you do with a handful (or more) of irate customers? Do you ignore them? Bury them out back? Not in today’s social atmosphere.

Rather than try to sweep these unhappy customers under the rug, look at them as a challenge and an opportunity to improve your brand and leverage them for some publicity.

Why You Want Angry Customers

There are several ways to connect with unhappy customers in a meaningful way:

• Hold a panel or forum in person; give them a tour of your facility and hold a venting session
• Work virtually; host an online panel to get feedback from them
• Work one-on-one to understand their concerns and address them individually

In-Person Events

Dell recently held its first Customer Advisory Panel event at their headquarters in Round Rock, TX. They invited two groups of 15 bloggers and social media gurus. One group was full of people who had negative experiences with the company and who were vocal about their displeasure. The second group was made up of people that Dell considered brand evangelists; people who loved Dell and told others.

The attendees started the morning with their gripes; customer service issues came up again and again. The heads of customer service and marketing were present and actively engaged. As they listened, they took notes, then asked questions and they promised they would make changes.

That type of customer empowerment is important. Now, whether they’ll go through with the promised changes is another story, but it was clear that Dell understood it was time to start paying attention to the public’s perception of its brand, and make some changes to keep their customers.

Nestlé is another company that has been successful at holding an event to let people engage with its brand directly. After a resurgence in interest in the Nestle Boycott a few years ago, Nestlé decided to invite a group of bloggers to what it called its “Happy, Healthy Gathering” in 2009. Mommy bloggers, who’d been tweeting up a storm about the company’s stance on breastfeeding in third world countries, were invited to tour the facilities and give their input on the company.

Whether the event truly changed perceptions remains to be seen, but it did a great deal to show that Nestlé was putting in the effort to reach its audience.

Disclosure: I was one of the bloggers invited to participate Dell’s Customer Advisory Panel.

Virtual Panels

Virtual panels are decidedly less effective than in-person ones. But they can be good replacements for focus groups. Pssst is General Mills’ online testing ground for new products. The company sends participants coupons and free products to try, and in return they are asked to fill out surveys. The program is so successful that bloggers who write about saving money are gladly turning others onto joining Pssst.

Similarly, the Starbucks Passion Panel was designed to get customer feedback — for better or worse. The community of Starbucks drinkers gives their input via surveys and forums.

Passion Panel member Jennifer Boyd said, “Being on the Passion Panel means that I have access to direct input and discussion with other members. It enables me to give my opinion on Starbucks’ current and future products through surveys. The panel is a great way to engage with their loyal customers and solidifies a relationship with a consumer to a brand.”

Wal-Mart’s Elevenmoms platform is another example of how a mix of online community, shopper experience and in-person visits can work together to help the company gather new insights. John Andrews, former Senior Manager of Emerging Media for Wal-Mart and founder of the Elevenmoms, said the community succeeded in getting Wal-Mart’s attention in a few areas where it was lacking.

When the iPhone was launched in Wal-Mart stores, the Elevenmoms were invited to go through the purchase process. Some had no problems, but others did. It took one blogger two hours to buy a phone. Each blogger published her experience, and Wal-Mart took the feedback to its operations staff, who took notes and improved the purchase process.

“The Elevenmoms used direct social media interaction to improve the shopping process,” said Andrews.

Other feedback caused Wal-Mart to reconsider its layaway strategy. Having canceled the layaway plan due to costs, Wal-Mart got some flack from the Elevenmoms, who felt it made it easier to make big purchases. As a result, Wal-Mart developed its Site to Store platform, which provided the benefit of layaway online, so that local stores didn’t incur extra costs.

Disclosure: John Andrews now works with Collective Bias, a company with which I have collaborated on projects.

One-on-One

Solving a customer’s problems and changing their perception individually is the least cost-effective method, but a little work goes a long way. And it starts with customer service personnel being properly trained to solve problems, and not to simply stick to “the script” at all costs. Look at Zappos or Disney for great examples of how service reps are empowered to solve problems.

Disney empowers each of its “cast members” (staff) to solve a guest’s problem. From the street sweeper to the reservation specialist, everyone has the ability to turn a negative situation into a good one. That might mean replacing a fallen ice cream cone, upgrading a guest’s hotel room, or simply answering politely the most commonly asked question on Disney property: what time is the three o’clock parade?

Disney is so good at customer service, they’ve opened the Disney Institute, a customer service training program helps other corporations use the same techniques that has made Disney such a success.

Likewise, Zappos is also famous for its customer service tactics. The reps don’t use scripts, and seem to genuinely care about solving problems. Many customers are pleasantly surprised when their shipping gets upgraded and they get their shoes even faster – at no additional charge.

By providing instant happiness to the customer, these brands can prevent a lot of the bad karma that comes down the road when an unhappy customer becomes an enraged customer who tells everyone he knows about how bad the company is (no one wants their own version of DellHell).

Conclusion

It got me thinking – as my response was immediately that social media is not akin to one product or style of business, but rather the idea of finding ways to communicate and engage your target market by connecting with them, them connecting with you and of course with each other – as members of a community who all have the same interests and goals. I think that this all relates back to understanding a target markets social computing behavior. This behavior is not referenced by a product or a brand – but rather by the way they choose to communicate, share and access information. It is your job to understand what it is that you want from this engagement as a business and then understand who it is that you want to engage – learn how they will best want to engage with you and then proceed with that strategy in a way that will involve them in a mutually beneficial relationship of sharing.

One of the great things I learned about the many years in the fashion business was – that understanding that consumer behavior can be vital and varied for different target markets. Their response to your designs, colors, fabrics and price points can be directly pointed to how well you listened to what it is that they wanted, needed and liked. That strategic planning and understanding of your target customer was part of the strategic DNA of each season’s line planning – long before social media or computers (when I first began (lol))! When you got it right – they kept coming back and the re-orders were unstoppable and when you didn’t listen – the repeated reductions of your product still didn’t move off the floor.

While thinking about this topic of pigeon holing the product – instead of understanding that social media is about networking, community, engagement, sharing and extending your reach – to a vast network or as Seth Godin, coined “a tribe of people” who all have shared goals and interests – has more to do with the format that you choose to engage – then what the product may be. I found an article from last year at Mashable.com written by Samir Balwani that features 10 of the smartest brands leveraging social media. Blendtec, Burger King, Starbucks, Sun Micro Systems, IBM, Zappos, Comcast, Ford, Graco and Dell – all using different tools to target very different customers with very different products and services.

As Samir says in his summation “Lesson: Social media isn’t all about ROI, but it is possible. Creating cross-platform strategies can lead to the most success, especially when your demographic is already Internet and technologically savvy.”

Best Nicole

As we battle a global recession, corporations are looking for new ways to sell their products and engage their consumers. Many have turned to the Internet, with Social Media in particular, to market their goods. Let’s take a look at 10 companies that have done a phenomenal job of taking advantage of social media platforms.

1. Blendtec Blends it on YouTube

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Blendtec leveraged YouTube’s subscriber base and tried something fun and original. The campaign was a success and continues to entertain and sell.

Lesson: Social media marketing doesn’t always need to cost a lot of money. Creating funny, original video and leveraging an already large user base can be used to increase sales.

2. Burger King and the Sacrifice Facebook Application

Sadly, the application was shut down as quickly as it started by Facebook, citing privacy concerns. Regardless, the application was beautifully built and the idea was perfect. Burger King built in the ability to share it, the incentive to use it, and added just enough humor to make the campaign a hit.

Lesson: Successful and viral campaigns don’t just test out social media, they jump in it. Pushing the envelope can create the buzz that makes your campaign memorable.

3. Starbucks Asks for Your Advice

The site allows users to submit suggestions to be voted on by Starbucks consumers, and the most popular suggestions are highlighted and reviewed. Starbucks then took it a step further and added an “Ideas in Action” blog that gives updates to users on the status of changes suggested.

By empowering their exceptionally web savvy consumer, Starbucks strengthens their campaign to add a personal touch to coffee.

Lesson: Thinking of ways to build your company are great, but directly asking your consumers what they want, is better. Acting on that information and doing it publicly is key to the success of this campaign.

Starbucks has also embraced Twitter, you can see their stream at @Starbucks.

4. Sun Microsystems and the CEO Blog

It’s not the number of hits that make his blog a social media success, but the openness on it. Positive and negative comments are allowed, and even the most inane are approved. Transparency from the highest position in a company trickles down and increases trust from consumers.

Lesson: Social media is a culture of transparency and honesty that must be embraced, leading by example is one of the best ways to introduce it to a company. Few things are better than a CEO that blogs or uses twitter.

Sun Microsystems also has a network of blogs, friends on Facebook (), friends on Twitter, and their own Twitter account as well.

5. IBM With Lots of Blogs

IBM capitalizes on the intelligence of their employees to give consumers insight into what happens behind the scenes. By giving the industry experts they’ve hired a voice, IBM is able to highlight the people behind their products. Users get to see how IBM operates, and are given a direct connection with IBM employees.

Lesson: Having a CEO that blogs is great, but increase the number of blogs and you increase the number of connections. Leveraging your employees to write about what they love conveys the corporate dedication to the industry.

You can also find IBM on Twitter giving updates on events from their calendar.

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6. Zappos on Twitter

The idea of micro-blogging and the sense of exceptional customer service is ingrained in the corporate culture. Most Zappos employees have an active account, and the Zappos site has a page that aggregates all the streams.

The reason why Zappos stands out on Twitter is because of their ability to bring the company to life. The Zappos CEO has lent his personality to the company brand, a personality that is friendly, helpful, funny, and trustworthy. They use Twitter to highlight interesting facts, and to talk to their consumers. Talking to Zappos is like talking to a friend that happens to sell shoes.

Lesson: Take a CEO that twitters, add in a great personality and you have a recipe for social success. Ingraining social media into the culture of a corporation means that every consumer interaction is personal.

Zappos also does a great job of using their blog and Facebook to engage their avid fanbase.

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7. Comcast on Twitter too

Comcast has found a way to offer exceptional customer service to their consumers, but the thing that really makes them stand out is how well they monitor discontent. Complain about Comcast and you can bet you’ll hear from @comcastcares to see if they can help.

Lesson: Being active on Twitter is great but tracking and seeing who’s mentioning you, is the next step. Social media allows for the possibility of great customer service, and with it, better brand loyalty.

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8. Ford and Social Media PR

The basic story is that there was an internal gaffe where Ford’s legal department sent out cease and desist letters to forum owners using Ford trademarks. Obviously the story was twisted and changed, and in the end people were outraged.

What makes this a success story for social media is that Scott Monty (Ford’s community manager) was quick to find out what happened and let us know the true story. Not only that, but as things were being fixed and a compromise was ironed out, the public was informed every step of the way.

Although we don’t know if social media has shown a direct return on investment for Ford, the public relations fiasco it helped avert (think Motrin) should help make the case for more funding for social media.

Lesson: Social media can be used to inform consumers in real-time of how a corporation is reacting to events that affect the customer. Transparency in the process and access to constant information can help stop a negative story from going viral.

9. Graco Uses Pictures on Flickr

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Flickr isn’t the center of their campaign, but they promote it heavily with the Graco blog which also creates an incentive for others to submit pictures. The photographs help highlight the people behind Graco and the consumers using their products.

Graco takes their strategy one step further by introducing offline marketing in the form of community gatherings. The pictures from these meet-ups are posted to the Flickr page, further humanizing the community around the product.

Lesson: Social media doesn’t have to exist wholly online. Blending offline marketing with online efforts can build a community around a brand.

Graco has a blog and leverages Lindsay Lebresco (the corporate blogger for Graco) to be active on Twitter.

10. Dell Doing it Everywhere

Dell is also one of the few companies to publicly state that they created a return on investment from Twitter. Apparently, Dell’s social media efforts help create “$1 million in revenue“.

Lesson: Social media isn’t all about ROI, but it is possible. Creating cross-platform strategies can lead to the most success, especially when your demographic is already Internet and technologically savvy.

Social media is the tool of today that will do just that. Ask Dell. To date, they have reaped $7 million dollars in global product sales using Twitter. Yes, you heard it—Twitter. They’ve taken the “Mom and Pop” philosophy and used social media as a conduit to engage their customer in conversation. It’s that simple. I came across an article in the Huffington Post by Manish Mehta, VP of Social Media and Communications for Dell, that discusses how simple their successful use of Twitter and Facebook has been.

As an agency that specializes in social media and creative design—supporting businesses in creative ways to connect and engage with their customers directly—we can vouch for his article and tell you that it IS simple. People want to know that there is a human face to that name and brand and that you are eager to listen to them, assist them in solving their problems and, in turn, build a meaningful relationship with them. In return, they want to share their awesome experiences with you—and with everyone they know.

How easy can it be?

Best Nicole

Today’s corporate leaders are struggling to figure out how to use social media to further their business strategy. At Dell, we believe this is backwards thinking. Social media isn’t a means to further a corporation’s strategy, it’s a means to help determine it.

The “Mom and Pop” businesses in our neighborhoods have always followed sound and pragmatic business practices, rooted in developing, maintaining and strengthening relationships with customers. The customers and the businesses valued those relationships because “Mom and Pop” offered convenience. They listened to their customers and used their suggestions to improve the business. They provided great service and found ways to thank their clientele. Social media is really nothing more than the simple application of these business practices in a digital form.

So if you are wondering about how to leverage Twitter, Facebook, blogs, forums, and the company Web site to achieve your organization’s goals, perhaps you are starting from the wrong point. As with the corner store, if your business uses social media to engage in conversations on a human level, you strengthen your business and allow your strategy — both corporate and social media — to evolve based on customer feedback.

At Dell, we have a longer perspective on the social media conundrum than most. We’ve been an active leader in the space since 2006, with a depth and breadth to our social media presence that has earned top billing among brands using social media to engage stakeholders.

What we’ve learned is that social media has transformed the large corporation of the millennium into the Mom and Pop shop of the old days. The emergence of social media simply makes it more possible to connect directly with customers every day. Dell’s community goes well beyond our own forums — it now extends to direct contact with more than three million followers worldwide. Even during a historically difficult time for businesses of all stripes, Dell has generated nearly $7 million in global product sales on Twitter.

“Mom and Pop” knew that their business was only as successful as their relationships with customers could make it. That’s the value of the direct connection to your customer, and that’s how every company can achieve success using social media — by facilitating the conversation. No strategy necessary.

There have been a lot of articles and questions about the value of social media as the ROI has been hard to measure. It’s still a new communications arena for many—not to mention the concerns and trepidation regarding negative responses, management and time resources, lack of understanding of the integration of their offline and online initiatives and the list goes on. While pondering what is most important and the defining reason why a customer is going to want to work with our business, it comes down to dollars and cents. Will they receive an ROI on the initiatives we help them plan and execute, which will lead them to a slam dunk—the sale of more products?

I came across a blog today written by Jason Falls: The Social Media Explorer. In this blog, he speaks about the fact that  many in the social media space are focused on engagement, listening and connecting with little to NO discussion about ROI. Digital agencies are popping up like dandelions in spring. He talks about the conversation and issues of engagement and listening in on what the consumer is talking about. All this is important, he cites, but how is it going to make my customers money? Jason says -

“I’m all for your principles. I’m a big fan of The Cluetrain’s “markets are conversations,” notion. But I can promise you a conversation never paid the damn electric bill.

Make your company blog drive search results to the keywords you want to win. Present calls to action that lead your Facebook fans to buy your product. Entice Twitter followers to subscribe to your e-mail newsletter where you can present similar calls to action for purchase. And if you think doing that turns consumers off, look at the millions of dollars Marriott racks up from Bill Marriott’s blog. Look at the sales Southwest Airlines attributes to it’s social media activity. Look at the $3 million Dell reported earning from its @delloutlet Twitter account. Look at Wiggly Wigglers, which has 90,000 worldwide customers, largely because when they talk about a product on their blog they put an “order here” link along with it.

They don’t do this because they hug and kiss everyone. They do this because they make a compelling argument and persuade you to buy things, then they give you the opportunity to buy them. It doesn’t mean they aren’t social. Just that they’re smart.”

Many experts argue that there are not a lot of businesses that are truly bringing in ROI using social media, which is very true. But Jason has cited some very impressive companies that are doing just that by finding ways to leverage the social media tools that engage their customers, build relationships and sell more products and services. As the famous O’Jay’s song, For The Love of Money, says, “money, money moneeeeeeeeeeey. Almighty Dollar!” As I write this post, Jason has 185 comments  on his post. I was 185—need I say more?

Best Nicole

Ann Handley, author for Mashable.com, writes about what we can learn from these creative and resourceful businesses who understand the power of connecting and engaging with their customers!

Check out some of these incredibly innovative businesses. And they’re all related to street food (something we all love)! Take a break as we can all learn from them.

Hmm time to eat!

Best Nicole

“Twitter* is still a scary, untamed frontier for many businesses,” Fortune wrote last week. I hear a similar refrain from the marketers who are part of the MarketingProfs community: They know that they should be engaging online, but they don’t have the foggiest notion of how to do it.

Lots of businesses on Twitter are doing it right. But, lately, I’ve been finding inspiration less from those companies that have become the poster children for leveraging social media (this means you Comcast, and Zappos, and Dell) and more from the lesser-knowns: not just the little guys, but the littlest of the little guys. I’m talking about street food vendors.

Time was that lunch from street vendors meant limited options. But no more: Street food vendors have expanded both in number and cuisine. In New York City, this growth has recently led to a kind of food fight over turf. But elsewhere, it’s just meant that you can get vegan ice cream sandwiches or East Coast lobster rolls (in San Fran!) as easily as you can score a slice of pizza pie.

Twitter may not be the sole driving source (no pun intended) behind the growth of street food vendors—undoubtedly the economy has done its part to encourage the otherwise unemployed to find an inexpensive way to make a living. But, nonetheless, a growing number of street vendors have been leveraging Twitter in innovative and interesting ways, serving up lessons for any business.

1. Find your target market. (Sometimes, less is more.)

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The best use of Twitter for your business, of course, is to start gathering followers in your target market. Aside from a few exceptions, you won’t find street food vendors on Twitter with tens of thousands of followers, as their target markets are geographically constrained. Rather, street food vendors focus on getting the right followers.

Lunchtime lesson: 1,000 followers who will actually do business with you are ultimately more valuable to your business than 100,000 less-engaged people.

2. Create demand.

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New York City’s The Treats Truck writes updates so vivid that you can almost smell the cookies and brownies baking. It also does a great job of creating a sense of urgency in a purchase:

Others stay top-of-mind with hungry (or potentially hungry) customers, like the way Food Shark publishes its daily menu of Mediterranean-by-way-of-West-Texas food via Twitter:

Or check out the “food porn” photos shared by Vancouver’s Japanese hot dog stand Japa Dog:

Lunchtime lesson: Communicate the breadth and depth of your products or services on Twitter in a fresh, compelling way, and in a manner that speaks directly to your customers’ needs.

3. Humanize a brand.

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NYC’s Chef Shack (run by two NY chefs) does a great job of monitoring any conversation online. When caterer Molly Hermann praised the truck’s Indian spiced donuts, the Chefs responded:

Profound? Not really. But such simple efforts can go a long way to make customers feel appreciated, and to humanize your business.

Or consider the way Rickshaw Truck, which sells steamed and fried dumplings in Manhattan, fosters a personality behind the brand:

Here’s the way Big Gay Ice Cream Truck shows that the dessert circuit isn’t always a bowl of cherries:

Lunchtime lesson: Be real. Reveal a little bit about the people and personalities who run your business so that your customers can connect with you on a human level.

4. Share news and updates. (Even when it’s bad news.)

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Twitter offers a platform for regular and instant communication. The mobile bake shop known as the Cupcake Truck, in New Haven, CT, publicizes its locations and hours, which change regularly, of course. But even less-portable companies might consider regularly communicating business updates or other news (and how it affects your customers):

Or think about sharing some love by calling out awards and/or customer reviews:

Look at how Seattle’s Skillet Street Food used Twitter to rally customer support when it got into hot water with city officials over permitting issues:

And Durham, NC’s OnlyBurger (”the only burger you’ll ever want”) uses Twitter to keep its customers in the know when things literally break down:

Lunchtime lesson: It might be obvious to share the good stuff with your customers, but consider sharing the less-good, too. Doing so allows your customers to rally around your otherwise sound business. What’s more, your audience will likely respect you more for being honest and forthcoming. (Or, at the very least, you can tell your side of the story.)

5. Gather customer feedback.

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I particularly like the way many food vendors treat their clientele as resources, not just customers. Here, Washington DC’s Streetflow Mobile, which sells frozen yogurt, solicits street intelligence, literally, when it asks its customers about the best place to find city parking:

Lunchtime lesson: Use Twitter to solicit and listen to customer suggestions and opinions. Treat your customers as resources for the kind of feedback that informs product development or other business improvements.

6. Run fun promotions.

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NYC’s Waffletruck regularly runs Twitter-specific special promotions to its followers:

Lunchtime lesson: Take a page from Dell’s playbook on this idea: Use Twitter as a vehicle to run certain social media-based promotions and specials. Your followers will begin to readily anticipate them.

7. Create a sense of community.

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Organizing face-to-face tweetups for Twitter followers is one way of extending your community into the offline world, especially as it will connect your customers to each other (not just you). The nature of that event should reflect your market, of course. Magic Curry Man in San Francisco fostered that sense of customer community by organizing a singles meet up:

Or consider connecting your business to a larger cause, like San Francisco’s UrbanNectar does with its Twitter presence:

Lunchtime lesson: Creating a sense of a customer community around your business furthers your clientele’s engagement with you and your products or services. And connecting your customers with each other strengthens both their relationships with each other as well as with you.

8. Integrate your efforts.

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Twitter is only one tool in the social media shed—or, in this case, one dish at the social-media buffet table. Like any marketing effort by any business, it works best intertwined with other tools in a marketing mix, like a website, or Flickr*, a blog*, YouTube*, or whatever.

Lunchtime lesson: Done well, Twitter is plenty fulfilling for connecting customers with your business on an immediate and intimate level. But it’s even more nourishing when it’s served up as part of a bigger spread.

Today’s article from ManageSmarter, by Alex Palmer,  provides some research that concludes just that. Customer reviews are really valued by web shoppers as well as info from family and friends. One of the best sales tools you can implement is the feedback of your customers on your products and services. It’s a great way to get the conversation going and get them engaged! Besides, your future customers are eager to hear from them.

Best Nicole

Online shoppers trust the online reviews of strangers more than the recommendations of their friends, new research finds.

“Conversations Among Consumers,” a new report from online retail marketer Ripple6 and the e-tailing group, finds that shoppers buying products on the Internet are influenced both by online social networking sites and face-to-face conversations with friends. But when it comes to whose opinions influence the shoppers, strangers have as much if not more impact than friends.

The survey, which drew on the responses of 1,000 online shoppers, found that while 46 percent of e-shoppers find value in product recommendations from their friends, 47 percent look to onsite customer reviews when making a decision.

Online consumers also look to expert information (43 percent), information from individuals they consider “like me” (40 percent) and product comparison tools (38 percent) to help decide what to buy.

Two-thirds (67 percent) of respondents spend at least one hour per week on social networking sites like Facebook and MySpace. Forty-three percent said they make purchases as a result of time spent on these sites. Sixty-five percent of respondents see value in connecting directly with other shoppers who bought similar products.

Representatives from the e-tailing group and Ripple6 believe these results point to consumers’ desires for more online communities where they can share recommendations and opinions about their purchases. In a statement, Ripple6 CEO Sang Kim said, “This research confirms that most of the things consumers find valuable are those delivered by community.”

But friends still play an important role in influencing consumers. Eighty-three percent of online shoppers said they are interested in sharing information about their purchases with people they know, while 74 percent are influenced by the opinions of others in their decision to buy the product in the first place.

How easy can it be?

Best Nicole

SAN FRANCISCO — Three weeks after Curtis Kimball opened his crème brûlée cart in San Francisco, he noticed a stranger among the friends in line for his desserts. How had the man discovered the cart? He had read about it on Twitter.

For Mr. Kimball, who conceded that he “hadn’t really understood the purpose of Twitter,” the beauty of digital word-of-mouth marketing was immediately clear. He signed up for an account and has more than 5,400 followers who wait for him to post the current location of his itinerant cart and list the flavors of the day, like lavender and orange creamsicle.

“I would love to say that I just had a really good idea and strategy, but Twitter has been pretty essential to my success,” he said. He has quit his day job as a carpenter to keep up with the demand.

Much has been made of how big companies like Dell, Starbucks and Comcast use Twitter to promote their products and answer customers’ questions. But today, small businesses outnumber the big ones on the free microblogging service, and in many ways, Twitter is an even more useful tool for them.

For many mom-and-pop shops with no ad budget, Twitter has become their sole means of marketing. It is far easier to set up and update a Twitter account than to maintain a Web page. And because small-business owners tend to work at the cash register, not in a cubicle in the marketing department, Twitter’s intimacy suits them well.

“We think of these social media tools as being in the realm of the sophisticated, multiplatform marketers like Coca-Cola and McDonald’s, but a lot of these supersmall businesses are gravitating toward them because they are accessible, free and very simple,” said Greg Sterling, an analyst who studies the Internet’s influence on shopping and local businesses.

Small businesses typically get more than half of their customers through word of mouth, he said, and Twitter is the digital manifestation of that. Twitter users broadcast messages of up to 140 characters in length, and the culture of the service encourages people to spread news to friends in their own network.

Umi, a sushi restaurant in San Francisco, sometimes gets five new customers a night who learned about it on Twitter, said Shamus Booth, a co-owner.

He twitters about the fresh fish of the night — “The O-Toro (bluefin tuna belly) tonight is some of the most rich and buttery tuna I’ve had,” he recently wrote — and offers free seaweed salads to people who mention Twitter.

Twitter is not just for businesses that want to lure customers with mouth-watering descriptions of food. For Cynthia Sutton-Stolle, the co-owner of Silver Barn Antiques in tiny Columbus, Tex., Twitter has been a way to find both suppliers and customers nationwide.

Since she joined Twitter in February, she has connected with people making lamps and candles that she subsequently ordered for her shop and has sold a few thousand dollars of merchandise to people outside Columbus, including to a woman in New Jersey shopping for graduation gifts.

“We don’t even have our Web site done, and we weren’t even trying to start an e-commerce business,” Ms. Sutton-Stolle said. “Twitter has been a real valuable tool because it’s made us national instead of a little-bitty store in a little-bitty town.”

Scott Seaman of Blowing Rock, N.C., also uses Twitter to expand his customer base beyond his town of about 1,500 residents. Mr. Seaman is a partner at Christopher’s Wine and Cheese shop and owns a bed and breakfast in town. He sets up searches on TweetDeck, a Web application that helps people manage their Twitter messages, to start conversations with people talking about his town or the mountain nearby. One person he met on Twitter booked a room at his inn, and a woman in Dallas ordered sake from his shop.

The extra traffic has come despite his rarely pitching his own businesses on Twitter. “To me, that’s a turn-off,” he said. Instead of marketing to customers, small-business owners should use the same persona they have offline, he advised. “Be the small shopkeeper down the street that everyone knows by name.”

Chris Mann, the owner of Woodhouse Day Spa in Cincinnati, twitters about discounts for massages and manicures every Tuesday. Twitter beats e-mail promotions because he can send tweets from his phone in a meeting and “every single business sends out an e-mail,” he said.

Even if a shop’s customers are not on Twitter, the service can be useful for entrepreneurs, said Becky McCray, who runs a liquor store and cattle ranch in Oklahoma and publishes a blog called Small Biz Survival.

In towns like hers, with only 5,000 people, small-business owners can feel isolated, she said. But on Twitter, she has learned business tax tips from an accountant, marketing tips from a consultant in Tennessee and start-up tips from the founder of several tech companies.

Anamitra Banerji, who manages commercial products at Twitter, said that when he joined the company from Yahoo in March, “I thought this was a place where large businesses were. What I’m finding more and more, to my surprise every single day, is business of all kinds.”

Twitter, which does not yet make money, is now concentrating on teaching businesses how they can join and use it, Mr. Banerji said, and the company plans to publish case studies. He is also developing products that Twitter can sell to businesses of all sizes this year, including features to verify businesses’ accounts and analyze traffic to their Twitter profiles.

According to Mr. Banerji, small-business owners like Twitter because they can talk directly to customers in a way that they were able to do only in person before. “We’re finding the emotional distance between businesses and their customers is shortening quite a bit,” he said.

Best Nicole

“There’s so much talk about social media that it is easy for people to become cynical, perhaps losing track of the fact that it can have a positive impact on your business.”

So how can you determine whether a social media strategy is proving beneficial to your business? How do you know that it is working out for you? And is now really the best time to find out?

Rather than focusing on individual social media campaigns, I’d like to look at social media measurement from the perspective of a business that a) buys into social media, b) commits to it over a period of time, and as such c) has an integrated social media strategy. You people know who you are!

Let it breathe

The key with social media measurement, I think, is to stand back and take a widescreen approach to measurement. 

Rather than focusing on the smaller, campaign-specific metrics, such as traffic from Twitter or the number of fans on Facebook, wouldn’t it be better to look at how it helps to shift the most important business KPIs, such as sales, profits, as well as customer retention and satisfaction rates?

To do this effectively, you’ll need to give your social media strategy time. Like a good wine, it needs to breathe. In doing so you will be able to look at your overall business performance, as well as the performance of your social media campaigns over the duration. 

Take the Skittles campaign. I called it ‘brave’, ‘amazing’, ‘sensational’ and ‘ballsy’. I still think it is all of those things, and I’ll think that next year even if it fails miserably. It was a big move. But nobody yet knows for sure whether giving over a brand’s entire website to consumer-powered media channels is a smart move. Only time will tell.

Social media vs TV advertising

Here I want to make a small point on accuracy, and attribution. I firmly believe that if you can spend tens of millions on TV ads and make any kind of sense out of that investment, in terms of TV ads helping to boost sales while increasing the key brand metrics, then you can make sense of your (much smaller) investment into social media. 

TV campaigns can run for a long time, and the effects on the business are a) not known immediately and b) possibly overstated. Hindsight is a beautiful thing, and advertising executives (and creative agencies) like to take credit for improving sales, when really these sales might have little or nothing to do with TV ads. Attribution is one thing, but knowing that something works is entirely different. Social media appears to be a mixture of the two.

Maybe we can create a model for scoring the performance of social media, or for splitting up attribution by channel, but the truth is that there needs to be some room for manoeuvre when making sense of things. There are few absolutes in measuring advertising campaigns, if you work outside of paid search. You can far more accurately measure social media than you can a TV ad, but like TV advertising, or PR for that matter, there has to be some scope to play around with attribution.

Like TV advertising, social media will play a role in moving brand metrics, and perhaps more so (it is easier to make a noise and to be socially active; there’s an anytime, anywhere factor at work here. And hey, shit sticks around longer when you throw it online). There is a huge viral factor with social media sites (behold ye retweeters). You can really see word of mouth in action on social media sites, and as such there is less guesswork involved when measuring the results – less extrapolation is needed. If 500,000 consumers start saying good things about your brand, with few dissenters, then surely it is fair to say that brand favourability will have improved?

If brand indicators matter, or if you subscribe to the AIDA model, or if you care enough to undertake research to find out your own brand metrics (PDF), then by all means factor in your social media efforts when attributing the success of your overall marketing campaigns.

Take a snapshot

Before you start the clock it is a good idea to benchmark where you’re at…

1. Make a note of the obvious numbers (number of Facebook fans, Twitter followers, Digg links, Delicious bookmarks, and referrals from social media sites, plus existing website traffic).
2. Make a note of the less obvious benchmarks (such as SEO rankings and referrals, customer satisfaction scores and other business data). 
3. Make a note of ROI benchmarks. How much are you paying to acquire customers via other marketing channels? How vast is that advertising budget, and how is it being split up? And what proportion is being directed into channels that you cannot accurately measure?  

After that make sure you’re doing the right things. There are lots of social media experts handing out lots of advice for free. There are all manner of social media agencies out there that will help you, if you don’t have the appetite to do this in-house. And there are sites devoted to measuring social media. Get some, get some.

Measuring the effects of social media in 10 steps

1. Traffic
This is one of the more obvious ways of measuring social media. Remember that quality often beats quantity, though not always (as many CPM-focused publishers will surely testify). 

2. Interaction
Participation is a valuable indicator for many publishers (and brands). It says something about the kind of traffic you are attracting. Remember that an engaged customer is a highly valuable one. Interaction can be anything from leaving comments, to participating in support forums, to leaving customer reviews and ratings. It can happen on your website and on other websites. Keep your eyes and ears open!

3. Sales
We at Econsultancy are tracking sales from organic Google referrals and also paid search. It didn’t seem like much of a leap to track other channels, such as Twitter. Try it. Dell did, and discovered that it made $1m from Twitter in 18 months. Blendtec’s ‘Will It Blend?’ campaign on YouTube helped to drive “a five-fold increase in sales”. 

4. Leads
Some companies simply cannot process sales online, because their products or services do not allow for it. For example, the automotive industry, which tends to measure the effects of its online ad campaigns by the amount of brochures requests, or test drives booked in (as opposed to car sales, which is, in marketing terms, an altogether more macro effort). B2B operators are in a similar position. If you are a consultant and spend time interacting on LinkedIn Answers then there’s a way of tracking that activity to enquiries about your services. The same applies across the spectrum of social media sites. Choose your weapon, thought leaders.

5. Search marketing
The SEO factor cannot be understated. Social media can be far more powerful in this regard than you might initially imagine. For example, a well-placed story / video / image on a site like Digg will generate a lot of traffic and a nice link from Digg itself, but the real win here is that it will generate a lot more interest beyond Digg. Bloggers and major publishers are following Digg’s Upcoming channel to unearth new and interesting stories (Sky News now has a Twitter correspondent). One link and 20,000 referrals from Digg might lead on to 40,000 referrals and 100 links from other sites. The long tail, in action. 100 links means that your page might well wind up being placed highly on Google, resulting in lots of ongoing traffic. Remember too that you can use sites like Twitter and YouTube to claim valuable search rankings on your brand search terms (‘social search optimisation’).

6. Brand metrics
Word of mouth and the viral factor (inherent in sites like Twitter, Facebook and Digg) can help shift the key brand metrics, both negatively and positively. These include brand favourability, brand awareness, brand recall, propensity to buy, etc. Expensive TV ads are measured in this way, so if these metrics are good enough for TV then they’re surely good enough for the internet? Positive brand associations via social media campaigns can help drive clicks on paid search ads, and responses to other forms of advertising. We know that TV ads boost activity on search engines, resulting in paid search success stories, so I’d bet that social media can do the same.

7. PR
The nature of public relations has changed, forever. The last five years have been largely about the traditional PR folks not really being able to figure out the blogosphere. But if PRs cannot control the bloggers, then how on earth will they handle consumers? The distinct worlds of PR, customer service, and marketing are fusing. Twitter means everybody has a blog these days, and somewhere to shout about things to their friends (and beyond). Social media sites are the biggest echo chambers in the world! In any event, if you can measure PR (beyond adding up column inches and applying a random multiple to the equivalent size on the rate card!), then you can measure social media.

8. Customer engagement
Given the prevalence of choice, and the ease with which consumers can switch from one brand to another, customer engagement is one of the most important of all metrics in today’s business environment. Engagement can take place offline and online, both on your website and on other sites, particularly social media sites. Customer engagement is key to improving satisfaction and loyalty rates, and revenue. By listening to customers, and letting them know that you are listening, you can improve your business, your products, and your levels of service. The alternative is to ignore customers, which sends out a terrible message. Our research found that an engaged customer will recommend your brand, convert more readily and purchase more often. 

9. Retention
A positive side effect of increased customer engagement – assuming certain other factors in play work in your favour – is an increase in customer retention. This is going to be a crucial factor in the success of your business in the years to come. Make no bones about it: we are moving into an age of optimisation and retention. Watch your retention rates as you start participating in social media. Over time, all things remaining equal, they should rise. Zappos, which is a case study in how-to-do-Twitter (and active on MySpace, Facebook and Youtube), is closing in on $1bn of sales this year, and “75% of its orders are from repeat customers”. Go figure, as they say.

10. Profits
If you can reduce customer churn, and engage customers more often, the result will surely be that you’ll generate more business from your existing customer base (who in turn will recommend your business to their network of friends, family, and social media contacts). This reduces your reliance on vast customer acquisition budgets to maintain or grow profits. It makes for a far more profitable and more efficient organisation. I really hope that more businesses will find a better balance between acquisition and retention, sooner rather than later, from a resourcing standpoint. Too many acquisition strategies appear to be ill-conceived, are not joined up (both in terms of marketing and also operations), and as such are ripe for optimisation. Plug the leaky bucket and you won’t need to turn the tap so hard to top it up. And remember that old adage about it being cheaper to keep existing customers than to seek out new ones.