Social Media is the newest darling of marketing. But, for all the buzz it’s generating, there is very little hard data on how or why companies use it, or how successful it is. However, that is beginning to change.

The Aberdeen Group recently concluded a study that shows seven specific reasons why companies choose to use a social media strategy. They separated their respondents into three categories, based upon four key performance criteria. The categories were Best-In-Class (top 20%), Industry Average (middle 50%) and Laggards (bottom 30%).  Of all companies questioned, the top reasons for implementing a social media initiative, in order of their reported importance are:

• Increase customer advocacy / word of mouth        37%
• Protect brand reputation                                                35%
• Improve customer research capabilities                   33%
• Increase product / brand awareness                          32%
• Increase customer loyalty                                               31%
• Increase customer acquisition                                      23%
• Increase customer retention                                          21%

What is interesting to note is that these results were taken from all respondents. However, when looking at Best-In-Class respondents, the number one reason, at 47%, was increasing customer loyalty. The argument might be made that increasing customer loyalty can be seen as an umbrella that includes most of the other categories, so it was just a matter of wording. Or, it might speak to a more refined understanding of Best-In-Class companies that in today’s economy, customer retention is a much more important strategy than in normal times. And, that customer loyalty is a deeper level of customer retention.

Regardless of the relative importance of reasons to engage in a social media strategy, it shows a growing realization among companies that a significant part of their effort to connect with their customers must now take place on this new two-way communication platform. And, it provides the beginning point for quantifying  those efforts.

Best-In-Class companies showed an average of 11% increase in their ability to generate consumer insights that drive new product/service developments. Laggards decreased 10%. Best-Of-Class companies showed an average decrease in customer service costs of 7%. Laggards showed an average increase of 5%.

When companies have to struggle for every sale it’s hard to justify the time and expense for a new, unproven marketing strategy. But, evidence is beginning to grow in support of what many marketing professionals instinctively saw as an important new tool.

Not every company is a candidate for social media. But, if you are wondering what a social media campaign might do for you, a good place to start is the above list. And, if you interview a social media professional, be sure to ask questions that are wrapped around the appropriate reasons that drove you to consider it in the first place.

Rob Charlton

Anyone who hasn’t been locked in a closet for the past five years knows that the Internet has helped level the marketing playing field between large and small companies. Social media and other web marketing methods are allowing businesses with small marketing budgets to compete with larger companies.

Not too many years ago, a business needed to spend $200,000 or more annually in a small to medium market just to have a minimal presence. That left most businesses out of the hunt for any kind of top of mind awareness in their market. Businesses with smaller budgets were limited to a selection of marketing alternatives that might include guerrilla marketing, community newspapers, local store marketing or maybe a modest presence in the local daily newspaper.

Today, if a business owner figures out how to harness the power of the Internet, a world of potential customers, literally, opens up. That’s the good news. the bad news is that it isn’t quite as easy as it might first appear.

In my experience, most people who run a business find that it’s a full time job. Business people tend to be consumed with all that needs tending, from personnel issues to accounting. From dealing with vendors to keeping customers happy. And, there are dozens of other tasks, each screaming for the entrepreneur’s attention.

This business of web marketing takes precious time that most business people simply don’t have. And, it isn’t just the time to execute the e-marketing plan. It also involves creating the plan. How, as an entry level player, do you know where you should have a presence, and what you should do once you are there?

How much effort should you put against search engine optimization? Should you be on YouTube, Flickr, Twitter or Facebook? Should you have an e-mail program or a paid search campaign? Does a blog make sense for you? Then there are the hundreds of add-on applications that extend the effectiveness of all these platforms. And, how do you connect your choices so they all coordinate to deliver a cohesive message to the same target audience? Finally, how do you measure results?

It is the rare business owner who can figure all this out and still run his business. Take advantage of the opportunities the web offers and start today by hiring someone who already knows this stuff. They’ll do a much better job, and do it quicker than you could ever hope to. The money you save by trying to figure it out yourself will be a trifle compared to what you will gain by ramping up now and staying ahead of your competition.

I just read a short article entitled “Agencies Need to Think More Facebook, Twitter, Less TV.”

While my methodical, logical tendency is tugging at me to study the comparison between social marketing and traditional broadcast, then present a studied article with all kinds of facts and figures, I’m caving to impulse. Going with my gut, supported by my personal experience with what I see happening today.

Our agency has been ramping up our social media knowledge and skills as quickly as possible because we recognize its profound importance as time goes on. In the process, I’ve noticed a continuing increase of information and opinions on social media, to the point where it appears that some consider traditional media dead and buried. I suppose this is a natural phenomenon when something as new and ground-breaking as social media is discovered. We get caught up in the frenzy, and bail from our old ways like rats jumping off a sinking ship.

Except, the ship isn’t sinking.

True, traditional media is becoming more fractured. But, just because the days of three primary networks, and a handful of local radio stations are gone doesn’t mean the medium has lost its usefulness. Case in point. We have been running a television campaign for a chain of restaurants in the Sacramento California area. Since we started in June 2008, they have been up in sales every single month. And, up significantly, anywhere from 20% to 30%. And, this is in a recession! And, this isn’t the only success story we’ve seen using traditional media.

What this shows is that it isn’t just the media. It’s finding the right message, then finding your audience. Sometimes the audience can be found on TV, sometimes on radio, sometimes in an industry magazine. If anything, it has made ad agencies more valuable than ever, because they are equipped to find the right mix of places where a client’s audience hangs out.

Social marketing should be a growing part of the mix, no doubt. And for some, social marketing will be all that is needed, or can be afforded. But, the real marketing answer is in looking at the entire landscape of options and mixing them most efficiently to achieve the client’s goals.

Rob