Lisa mentioned that one of her competitors launched a “community” but she wasn’t terribly impressed.  In her view the community lacked innovation and leadership and failed to drive concrete business objectives.  Having a look at the competitor I found that while there were a lot of features, an active community with interesting content it seemed disjointed with more monologues then dialogue.  There didn’t seem to be that much direct interaction between the host and it’s visitors and while there were plenty of text links and banners leading to the corresponding e-commerce site none of the links were tagged for analytics reporting.  It’s little wonder Lisa was not impressed.

Lisa was also anonymously participating in industry related blogs and engaging in some other Twitter activities with industry leaders.  In spite of the unofficial nature of Lisa’s strategy, her organization seems to be benefiting, if only modestly from her social media activities.  What’s more Lisa doesn’t have to jump into the responsibility of managing a community or hire more staff to continue to make important and beneficial strides in her social media activity.  As Lisa  engages cautiously she just needs to continue to avoid three common mistakes…

1. Narrowly Defining Social Media. Don’t imagine for a second that the only way to leverage social networking is to put up a community.  Intuitively Lisa realizes this or she wouldn’t have come as far as she has, but she needs to identify those gateway opportunities that will strengthen her confidence to expand her social media activity!
2. Ignoring Social Media Search Engine Optimization (SEO). Some seem to think SEO and Social Media are UNRELATED!  There are two key sources of SEO benefit, you can build a community and grow content that generates traffic, get’s crawled and ranked, spawning more traffic; or encourage your fans to make their voices know in other social media communities kicking off the same virtuous-cycle via inbound links.  Of course doing both will ultimately maximize your benefit but motivating your current fan base is a fine place to start.  When consumers use social media sites to identify their interests, affiliation or appreciation for your web site, your credibility grows, increasing the likelihood that your natural search rank will improve and you will attract new prospects.
3. Without Measurement Your Driving Blindfolded. A failure to create strong measurable and contextually relevant connection between all social media content and commerce is like driving blindfolded.  Having text links and banner ads is great but if you don’t measure it you’re blind or worse yet you’re probably attributing sales to the wrong event or content and skewing ALL your reported results and their interpretation.  Measure accurately or perish!

I strongly believe that organizations should have a comprehensive social media strategy with clear measurable goals engaging the full spectrum of social media tactics.  But use the same approach you’d use grasping a rose, proceed with caution.  You can outline a long term strategy that looking forward a couple of years and flesh out the first year with goals and measurable objectives.  Be flexibility enough to benefit from the learning of a phased deployment and deepening customer insight.  Doing so, organizations can be action oriented while using key learning to refine and optimize strategy.  Ultimately the phased deployment of campaign and tactical layers fill out the full blown strategy.

As a part of that strategy it’s important to establishing some fundamental business rules and training to guide employees in their strategic participation in social media.  This will insure that everyone is in sync as they represent the organization. These rules don’t have to be complex day-one nor does the training need to be a week-long seminar.  The effort should set clear standards of conduct and unify the participants around the strategic thinking behind the planned social media tactics.

Six Shoestring Social Media Salvos

1. Invite or use incentives to get your fellow employees to setup a Linkedin account and link back to your e-commerce site (Benefit: improved natural search ranking)
2. Invite your customer and employees to setup a Delicious account and bookmark several of their favorite pages or products (Benefit: improved natural search ranking), do it in conjunction with a sweepstakes drawing to get people engaged.
3. Launch a single blog that provides your customer base with further insight into your business and provides thought-leadership among your customers (Benefit: improved natural search ranking, contextual advertising via text or banner; foundation for relationship and customer engagement)
4. Identify 5 employees to actively participate in external industry related blogs offering comment and gathering insights on topics and trends that might be relevant to your business.  Include folks from senior management, marketing and customer service. (Benefit: Increased visibility in the community and intelligence gathering)
5. Launch a Social Media Newsroom or convert your existing PR into Social Media PR with the addition of relevant media assets (Benefit: expanded visibility of new product or service offerings, to a wider media audience generating link benefits and ultimately strengthened SEO).
6. Identify employees who are currently maintaining a blog or active on Twitter provide them incentives to do posts with links back to your site about current promotions, new products or services(Benefit: the exponential exposure of existing social networks to your products and services).

Small steps, YES, but remember this is just phase one.  These social tactics will aid core SEO strategies and ultimately create more exposure including consumer feedback and criticism.  Nevertheless by creating a blog you can openly acknowledge your organizational weaknesses and keep your customer base updated on the actions you’re taking to improve their customer experience.  Leading marketing experts argue that consumers actually embrace those who acknowledge their shortcomings, attributing greater overall credibility to the merchant as well as exhibiting greater customer loyalty.

Posthumous portrait of Christopher Columbus by Ridolfo Ghirlandaio.

When Christopher Columbus made his maiden voyage in search of a western route to the East Indies there were many similarities between that venture and the pioneers of social media in organizations today.  It’s an unprecedented request; potentially requiring significant funding & resources; a business case with research and data must be developed; and the project must deliver an attractive and measurable ROI!

It took Columbus more then two years to persuade Queen Isabella’s committee.  Central to his case was his estimation of the circumference of the earth and the argument that he could get to the east faster by going west.  There was also the promise of a huge ROI making Spain competitive in the Indies spice trade.

Once approved, Columbus set sail with the blessings of senior management.  Unfortunately Columbus drastically underestimated the earth’s circumference and assumed there was only ocean between Spain and the Indies.  He landed in the Bahamas. He also misinterpreted this data believing he had landed on the East Asian Mainland.  Nevertheless this voyage is remembered for many crucial discoveries and his subsequent travels benefited from improved metrics.

In the world of Web 2.0 the evolution of social media is well beyond any “Pre-Columbian Era”.  We stand on the shoulders of explorers that have gone ahead of us paving the way with ever more user-friendly and commercialized solutions.  The state of social media simply awaits inspired ideas, informed intuition, and strategic vision applied to unique industry needs to be the catalyst for further exploration and innovation.  In the future, today’s tools may seem as antiquated as a Model-T but unlike the advent of commercial auto industry, the roads are already paved for social media.

Yet senior managers I’ve spoken to still seem hesitant.  The economic conditions we currently face are a factor, yet in these economically challenging times the cost effective nature of social media makes more sense than ever!

• There are FREE open source community applications like Vanilla or blogging applications like WordPress.  Even WordPress has widgets that allow you to build a very serviceable community forum at little or no cost.  Applications like Joomla and Durpal offer FREE open source e-commerce with integrated social media components delivering the holy grail of community, content and commerce.

• Leaders like Pluck, Awareness Network offer highly refined solutions that include blogging, wikis, forums, widgets.  Solutions include media integrations such as video, photos, podcasts as well as API’s that allow integration with Twitter, Facebook, SharePoint and more.

• Industry giants like Google are working on the development and adoption of industry standards like Open Social that should increase networking across the social media landscape.

For some companies delivering content and a community seem very natural but when Fiskar launched their Fiskateers site a few years ago the social media connection wasn’t so obvious, who would want to write or read about scissors?  Nevertheless they found a hook in Scrapbooking and a mission in driving the growth of their specialty retail sales and delivered 3X sales growth.

Social networking and forums create a tremendous opportunities for raising corporate visibility and consumer engagement. Leveraging the full power of the Internet will cost effectively expose your organization to a dramatically larger audience.  By taking a holistic approach that engages your customer where they’re active online and facilitating networking, content and community, you open a dialogue that will fundamentally change your business.

Ultimately senior management want a clear ROI.  “We’ve got limited resources, will social media deliver?  Can you prove it?”  Don’t throw all your eggs in one basket but there are too many examples of success and measurable ROI to ignore the opportunity.

KraftFirstTaste.com Unique Visitors courtesy Compete.com

Kraft’s new KraftFirstTaste.com community has already attracted 1.2 million visitors in Q4 of ‘08

Scotts Miracle Grow experienced an 18% YOY growth in traffic from their February ’08 relaunch converting their forums to a community.

Doing the math, Scotts added 450,000 new visits to the site. (Calculation: 450K / 5 visits per visitor x 3% conversion rate x $50 average order = $135K in incremental retail sales – implementation costs = ROI).  A multivariate linear regression model can show the connection between key variables like visitors and sales.  It’s a safe bet that Scotts will break even in less then a year!

These CPG companies face the most difficult measurement challenges because they aren’t selling anything on their sites.  However they are effectively positioning their products contextually within the community dialogue and offering links within their own site to product info to move the customer down the sales funnel.  Nevertheless the most compelling ROI models will close the loop between investment and real sales.

KraftFirstTaste.com has closed that loop.  Not only do they gather valuable attitudinal and Net Promoter type data (a prize in itself) at sign up, the community seamlessly integrates custom coupons for in store redemption.  Coupon redemption is the tie back to a indisputable ROI.

When an e-commerce site adds content and community it is critical to build a contextual advertising strategy and measure clicks and conversion.  By using contextual text and/or banner advertising in community content and sidebars (properly tagging the links), you’ll be able to use your analytics package to track what percentage of community visitors have moved down your sales funnel to became customers.  Transactions close the loop between the community traffic and sales, yielding a measurable ROI.

It’s a good practice to compare the ROI of media channels to understand their relative performance. But a recent Webinar by Hubspot, Mike Volpe shared a spreadsheet modeling a dramatic contrast between investments in PPC vs. SEO optimized Social Media.   To satisfy my own curiosity I creating a variation to see if diminishing returns or conversion rates changed his results.  Consistent with the Hubspot model, long-term investment in content is clearly more cost effective.  PPC investments only provides a one-time benefit but the shelf life of content can easily be a year or more.  (Beware – Plan to optimize your social media content for SEO.  Without SEO optimized you will easily lose 50% of the traffic you could be generating.)

One final thought, there is one lesson from Columbus that is lost on those who are risk averse.  Regardless of how “buttoned-up” your execution is, you WILL undoubtedly have extremely valuable and unanticipated discoveries that will profoundly enhance your customer relationships, create competitive advantages, and change your world.  Deliver the ROI, but keep your eyes open for the game-changers.  Columbus did!