Social Media Marketing Worth Paying For

Unlike any technology before it, social media lets marketers engage directly with customers and prospective customers. That’s important because when companies get close enough to build relationships, sales rise.

“You look at companies that are killing it on Twitter. They’re killing it because they’re connecting on a personal basis,” says social-media marketing consultant Paul Gillin, who has written three books on the topic.

Consider Ford Motor Co., which Gillin cites as one of Corporate America’s top users of social media for marketing. Last year, Ford gave 100 social-media savvy influencers new Fiesta compacts to test drive for six months. Their tweets and blog posts about the experience led 125,000 prospective buyers to register their names with the automaker.

Those kinds of results explain why marketers at companies of all sizes have embraced social media. In 2009, 43 percent of the Inc. 500 rated social media as “very important” to their marketing strategy, up from just 26 percent in 2007, according to a study from the Center for Marketing Research at the University of Massachusetts Dartmouth.

Mid-size companies are using social media to connect with consumers whose buying habits are changing. “People are literally bypassing the home pages of corporations. They are bypassing the flyers in the mail and the television commercials, and they’re going to social media,” says Derick Schaefer, whose Dallas-based firm, Orangecast, manages social-media marketing campaigns for roughly 30 clients.

Many of Schaefer’s clients invest in social-media marketing to build their brands, and with good reason. In a March 2010 study, researcher Chadwick Martin Bailey (CMB) found that consumers who follow brands on Twitter and Facebook were more likely to buy after engaging with them in the social sphere.

While some marketers invest in social marketing to find leads, others use it to build community and still others to manage a crisis, all with impressive results.

Blogging for leads
Before the advent of social media, companies spent their marketing dollars buying lists, surveys and advertising campaigns to generate leads. Today, marketers are taking that money and pouring it into social media.

In Rick Short's case, that means paying for blogs. Short is marketing communications director at Indium, a mid-size maker of electronic components in Utica, New York. In lieu of other marketing, Short uses a web-based program to create keyword-based blogs the company uses to generate leads. In all, Indium runs 73 blogs organized around keywords and phrases that pertain to its business, including words such as “heat spring” and “solder paste.” Maintaining 73 blogs is easier than it sounds. Thirty Indium engineers and other employees create the content, but blog software from a vendor called Compendium Blogware automatically repurposes a single post to any of the company's blogs where the material is relevant. To capture leads, each blog runs with the employee-blogger's contact information, allowing prospective customers to leave a comment, a question, and if all goes well, their email address.

The company's blogging strategy has paid off. Since adopting Compendium's blogging software in the second quarter of 2009, Indium has seen its opt-in contacts rise 600 percent. “Most people would be happy with a 10 percent, or a 20 percent or a 50 percent increase,” Short says.

Linking up a community
Other companies rely on social media to cultivate online communities where participants could eventually turn into customers.

That’s the case at uTest, a Southborough, Massachusetts, company that gets paid to match professional testers with clients that have websites and software that need testing. Without a large enough community of testers, uTest wouldn’t have a business. To build that community, the two-year-old company uses a company blog, Twitter, a Facebook page and a LinkedIn group. The company has also created its own community-building tools, including a web-based app called “Meet the Testers.”

According to Matt Johnston, uTest’s vice president of marketing and community, creating all those groups helps the company build credibility by starting discussions that interest testers. “We do that because it’s one of the best ways to engage people in our community,” he says.

So far, so good. A total of 30,000 testers have joined uTest’s various social networks, and in 2009 its community building tools received a “Commendation of Excellence” award from the Society for New Communications Research.

uTest also advertises on social networks to prospect for companies that might need its services. On LinkedIn, uTest presents ads to members whose demographics suggest they have something to test, and therefore a need for uTest’s services. As a result, Johnston has been able to generate 1,000 leads from a single campaign for half of what he expected to spend.

Disaster recovery
Some companies use social-media marketing to get out of sticky situations, or prevent them from happening in the first place.

Boingo Wireless is one of them. On April 10, the Los Angeles WiFi company’s email marketing system malfunctioned and erroneously notified thousands of customers they were no longer eligible for unlimited wireless service.

Within minutes, Boingo PR and social media manager Baochi Nguyen’s iPhone and Nexus One smartphones buzzed with the epileptic frenzy of thousands of angry tweets forwarded from the company’s Twitter feed.

Boingo was quick to act. Within five hours of getting the first complaint, CEO Dave Hagan posted an apology on the front page of the company’s website. Nguyen followed with her own contrite blog post, resulting in kudos from customers and observers. Nguyen then spent the rest of Saturday through Monday morning answering 700 tweets, emails and Facebook posts, reassuring customers they’d been exposed to a bogus message.

The day of the malfunction, it was by luck that Nguyen was monitoring the company’s Twitter feed, since Boingo had no formal social media monitoring system.

They got one fast enough afterward though. Today, under the company’s new policy, during business hours Nguyen and a fellow Boingo employee respond to any customer tweet within 30 minutes. The extra vigilance has paid off. Since the email malfunction, the number of people following the company’s social media accounts – on Facebook and Twitter particularly – has risen 50 percent, Nguyen says.

“By and large they were really understanding,” Nguyen says. “After the apology, it was so amazing to see the folks that came forward to support Boingo.”

Gillin, the author and social-media marketing consultant, gives Boingo credit for acting fast. But he also credits the channels, arguing that social media’s ability to engage immediately and authentically sets it apart. Top marketers recognize this, and they’re mixing and matching services to meet customers where they are, instead of waiting for them to show up at their virtual doorstep.

Indium’s Short agrees. “The content that we publish in our blogs today is an answer,” he says. “Tomorrow, somebody’s going to type in the question.”