Sunday, July 26, 2009

The Most Important Social Media Strategy for Making Money

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The Most Important Social Media Strategy for Making Money
By Chris Crum - Sun, 07/26/2009 - 08:52

WetPaint CEO Talks Business Social Media Use

Earlier this week, WebProNews reported on a study from WetPaint and the Altimeter Group, which indicated that brands who engaged with customers more through social media performed better financially. Judging from our comments, there is a lot of skepticism about the accuracy of this information, but Wetpaint CEO Ben Elowitz shared some further insight with WebProNews about how companies can most effectively utilize social media.

Elowitz also talk a little bit about the ENGAGEMENTdb site, which was announced along with the study. On the site, businesses can match their own social media efforts up alongside those of successful brands.

WebProNews: What do you think is the most important way for a company to utilize social media to have the biggest impact on revenues?

Ben Elowitz Ben Elowitz: For a company to be effective with social media, it has to actually react to the conversations that take place. If the company does, it validates the consumers they engage with and creates even greater loyalty. Beyond that loyalty, engaged companies tend to have products and services that customers actually want. No wonder – those customers actually played a role in creating them. And when you sell products that closely reflect the desires of the customer, you’re better able to drive premium pricing. Better pricing, better margin, better profitability.

WPN: How important is it for a company to have a dedicated team working on social media efforts on a full time basis?

BE: A full time team is great but it might not be a reality. If a full time team isn’t possible, what needs to happen is a couple people within a company that can serve as evangelists and spread the social media word internally. Often times when social media gets started in a company, people are resistant because it’s viewed as another thing someone has to do in their day-to-day job. However, an evangelist can sell the benefits and keep the momentum going to help transition social media from ‘another daily task’ to something that becomes part of the natural work flow.”

WPN: ON the ENGAGEMENTdb site, companies can rank themselves. Can you tell me a bit about the ranking process?

BE: The "Rank Yourself" feature is a quick 5 question survey asking about a company’s social media efforts. Based on those answers, we correlate it to the data we gathered for the ENGAGEMENTdb report. Based on their particular answers, we’re able to generate a report that compares their efforts to the world’s most valuable brands.

WPN: On average, how are the companies (outside the top 100) ranking?

BE: We're seeing companies rank all along the spectrum from Social Media Mavens to Social Media Wallflowers. Since the results are private, we think the self assessment is a pretty good indicator of what companies are really doing in the social media space.

WPN: How much progress needs to be made?

BE: The social media space is evolving so quickly that it’s pretty easy to say we all have a long way to go. The key thing to remember is that the data we’ve been able to gather suggests that there is a very strong correlation between high social media engagement and better financial results. Companies that experiment now and learn the ropes are going to be so much better off than the ones waiting for just the right moment to get involved with their customers.

Wrapping Up

I'd like to thank Mr. Elowitz for answering my questions, and sharing his thoughts on social media practices for businesses. How do think your own social media efforts stack up to those of the big brands? How about to other smaller brands? Share your thoughts.
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