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Puneet Manchanda
  Puneet Manchanda

Three Ways to Leverage Social Media -- and Two Mistakes to Avoid

5/4/2010 --

This article by marketing professor Puneet Manchanda draws upon his ongoing research in social interactions, social networks, and social media.

ANN ARBOR, Mich. — Walk into any company today and you might hear the following questions: "Do we have Facebook strategy?" "Is anybody reading our tweets?" "What is this Foursquare thing?" The aggregated sound of corporate America asking these questions is fast reaching a crescendo. To an outsider, this rush to adopt and use social media seems driven by a mass hysteria.

However, this isn't surprising at all. As consumers adopt new media in larger and larger numbers, companies have always "followed their eyeballs." The adoption of television and then the Internet have represented the last two such big consumer movements.

So how should companies think about social media? There are three ways they can leverage this major shift in consumer behavior. The first is to be present where the consumers are. The best way to execute here is to create simple content (ads, keyword links, links to brand websites, etc.) that ends up in front of the eyeballs. However, in the stampede to use social media, simplicity is usually forgotten and companies take two types of missteps.

The first misstep is that companies develop a fragmented "site-based" strategy: They have a plan for Facebook or Twitter instead of an overall social media strategy. This can become a problem as consumers in this space migrate to different sites and platforms with breathtaking speed. Remember Friendster or Dodgeball? Admit it, you haven't thought about them in eons (i.e., two years!). MySpace, a pioneer and technophile darling at one time, is heading toward Friendster status at an increasing speed. So companies should treat their presence at a given site as a tactical execution (that leverages site-specific features) of the overall social media strategy.

The second misstep they make is that they try to adapt the “site du jour” to the requirements of branding and marketing. As many companies have discovered, maintaining a Facebook brand page is incredibly time-consuming, primarily because the life of brand is not replete with the small and banal updates that comprise activity on Facebook. But if there is no activity, then consumers lose interest, so brand teams spend a huge amount of time creating frothy content that doesn't ring true. In a similar vein, providing a constant series of tweets when there is really not much to tweet about can drain resources at an alarming rate.

Besides simple presence, companies can leverage social media in an extremely productive way by just plain listening. The Web is replete with discussion fora, newsgroups, ratings and review sites, fan websites, and blogs that contain rich and nuanced conversations. Text (and increasingly, multimedia) mining software has become very good at distilling the content and sentiment from millions of conversations on topics that are very important to consumers. The relative anonymity of the Web gives consumers free rein to express their concerns, suggest ideas, and yes, voice complaints and criticize company actions. Virtually all this content is available publicly for free, and all companies need to do is listen systematically. Companies tend to underrate this "unglamorous" part of the Web as they try to chase the hottest new site or trend in the social media space. However, in terms of most bang for the buck gaining customer insights and intimacy, this is as good as it gets.

The two ways suggested above on leveraging social media are mostly passive. However, the emergence of these media can also be seen as a rich field for experimenting with more active approaches. In such approaches, companies need to choose the optimal level of intervention with the objective of creating the maximum possible engagement. The amount of intervention is a function of consumer involvement in the product category and the company position/objective. At one end of the spectrum, for example, with passionate and involved customers and a strong brand, companies would do well to set up brand communities that facilitate consumer-to-consumer interaction and then step out of the way. Companies that are developing their brands could be a little more interventionist (e.g., participating in discussion forums and building relationships with the category mavens and brand evangelists). It is absolutely crucial here though that the company be completely transparent in its activities by revealing its identity and obtaining the relevant permissions. For very novel initiatives with a high degree of uncertainty, companies could leverage social media by bringing a group of customers into the production process and allowing the remaining customers to comment upon and influence the process as it unwinds. The process can be simple (the creation of a communication piece) or complex (the involvement of consumers in live product development and testing).

Finally, as with all consumer communication and engagement strategies, the elephant in the room is the return-on-investment of social media initiatives. Unfortunately, there is no one-size-fits-all approach possible, as the medium has not yet reached any sort of equilibrium. In such a situation, the best approach is to start at the beginning. As companies develop and formulate their overall social media strategy, they need to ensure that they build in a method to measure both returns and costs.

And that Foursquare thing? It is the latest iteration of a social medium that has the additional attribute of geography (location) built in. The hype around it, at this point, exceeds the reality by a couple of orders of magnitude!

Puneet Manchanda is professor of marketing at the Ross School of Business. Social interactions, social networks, and social media comprise one of his streams of research.

For more information, contact:
Bernie DeGroat, (734) 936-1015 or 647-1847,