A Social Media Primer for Business Executives

I have been having the same conversation recently with a number of different executives and business owners on the topic; “What exactly is Social Media and how will it impact my business?”  They’ve been bombarded by consultants, lower level executives and sales people; all lobbying for more activity centered around social media.   Everyone is requesting budget, yet there is no clear strategy on how to proceed and whether it’s even worth the money and time.

How do you determine a return on investment (ROI) for Twitter? What is the payback on Facebook?

Social media as it impacts the business world is a huge topic with a lot of complexity; one with frankly no easy answers. Every month the best practices concerning  social media and marketing continue to change.

I’m not claiming to be a social media expert, but I also view with suspicion anyone who represents themselves as one.  With this in mind, we are launching a series of articles as we share our developing perspective about social media, complete with our learnings, mistakes and successes.

Here’s my take on social media as a business owner.

Social media is simply people having conversations online.  Think back to high school, where social influence is a dominating factor of everyday life. Conversations would happen in real time (Twitter) or by passing notes during class (blogs, forums, Facebook ) .

More specifically, social media is a marketing method of using the internet tools to link or connect a group of people with similar interests.    This strategy can be used by either a business or an individual.    Using the internet allows you to reach out to people who are far from you geographically.   You are no longer limited by physical distance to touch someone.

To the non-professional, the term “Social Media” is used interchangeably with “Social Network” and “Audience Engagement”.  To most people social media lumps together the websites (Twitter, Facebook), the various tools (Tweetdeck, Facebook app on iPhone), and the strategies businesses employ to influence the conversation.  For the professionals in the field there are specific terms for each area of social media, but most business people and the general public doesn’t really care.

by Harold Lloyd

In fact, almost anything you do when interacting with someone else on the internet is now branded as social media.

When you’re using social media as a business context, think of it like spreading a trail of bread crumbs for very picky birds.   You’re trying to lead blue jays to come and live in your garden.  If your crumbs taste good  and appeal to blue jays, you’ll get lots of them coming to your backyard.  If your crumbs are stale and hard, you may get crows instead of blue jays.  In fact, because you’re attracting crows, the birds that you attracted and are living in your yard may drive away the blue jays that you wanted.

If your crumbs are rancid, the birds get sick and you end up with negative publicity.

Why You Should Be On Social Media

In May 2010, YouTube served 14.6 Billion videos, at an average of 100 videos seen per user.

Google data from the World Bank shows that in 2008, 75.9% of the United States population has access to the internet and uses it in some form.

As technology improves, more and more people will be using the internet as an integral part of their lives.  It already has changed the way we do things such as researching products before we buy.

Here are some other numbers to ponder:

  1. Facebook with 133 million unique visits.
  2. MySpace with 50 million unique visits.
  3. Twitter with 23 million unique visits.
  4. Linkedin with 15 million unique visits.
  5. Classmates with 15 million unique visits.
  6. MyLife with 9 million unique visits.
  7. Ning with 6 million unique visits.
  8. LiveJournal with 4 million unique visits.
  9. Tagged with 4 million unique visits.
  10. Last.fm with 3 million unique visits.

source: Compete trends March 2010

How a Business Uses Social Media

Social media is important for a business because you need to know what kind of conversations people are having about you.   This is especially true for large companies and public corporations.  Everyone has an opinion and today, the internet allows every one of those voices to be recorded.   As an executive, you need to be aware of what those opinions are and participate.

What social media allows you to do is to connect with your customers and vendors, have a dialogue when things go wrong or right, get feedback to build the right product/service, and most important of all, build a community of raving fans to support your business.

We’ll detail the list of business uses on a different post.

One should also note that it seems that nothing disappears off the internet.  It’s all saved somewhere and if there is anything negative, it will be used against you at some point.  A business’ reputation on social media is as important as a credit score nowadays. Remember that opinion you made on Facebook about a random little thing can get you fired.

Reaching Out Through Social Media

Here are just a few ways of reaching out:

  • Blogs – Random opinions and commentary on someone’s site.   (You’re reading one right now.)
  • Micro Blogs (Twitter) – Texting on the phone or using 140 characters to blast your Twitter friends about what you ate today.
  • RSS – Automated News Reader (we’ll explain what the heck this is another time)
  • Social Network (Linkedin, Facebook, etc) – Your employee just commented to 465 friends on Facebook about the frantic reactions he saw from senior management after a board meeting.

  • Video Sharing Site (Youtube) – Your company’s video about the company’s participation in cleaning up the beach just went viral and got 2 Million people to watch.
  • Podcasts – Your executive’s motivational speech is shared on iTunes.
  • Wiki – People created an entire encyclopedia about your products or services
  • Social Bookmark – People really like an article about your business and gave it a thumbs up (just like film critics) on Digg or StumbleUpon.

Social Media Platforms

Platforms are just industry terms for the different tools that you use to talk with people online.  These can be websites, social bookmarking sites, or actual programs such as Twitter.

There are many types of tools available out there and there will be more to come.  In fact, the tools and what’s hot will change every year.   MySpace was huge a few years back.  Now it’s only relevant for certain industries.  Facebook took over and add to its popularity with the adoption of online games like Farmville.

Twitter didn’t exist a few years ago.  It might disappear as a tool in a couple of years as Twitter spam grows and new competitors are created.

Every tool (platform) has its limitations and strengths.  The key for the business owner and executive is to understand enough of the basic strengths of each.   From there, you can analyze and determine which tool is best suited for your needs.

The different factors that are necessary to evaluate the different tools (platforms) will be discussed next.

Here are some of the most popular platforms:

  • Twitter – This is a free program that allows people to have friend and associates on a network.  You can see talk to people by posting on the program.  Conversations are limited to 140 characters at a time.
  • Facebook – This website allows people to invite their friends and family into a private network.  You can share what’s happening with your life by writing on the website.  It updates the people in your network right away.   Popular with kids and seniors.
  • YouTube – Allows people to share videos that they make or see.
  • MySpace – Used to be very popular with high school students.  Similar site to Facebook.
  • iTunes – A site belonging to Apple.  It allows people to upload podscasts (recordings) that can be transfer into their iPhones.
  • Flickr – Allows people to upload and share photographs.
  • LinkedIn – A site that allows people to upload their resume and write a professional profile.  Mainly used by job hunters and recruiters.
  • Blog – Writing articles to highlight your opinions or experience.   Some of the options are WordPress, Typepad, and Blogger.

The good news is that there are some businesses who are figuring out how to leverage social media to their advantage. The bad news is that it may not be your company. We’ll explore some developing best practices in upcoming articles.  Keep in mind that you can have a significant social media presence with very little money invested.  Using social media well is about understanding the tools and not necessarily about paying fat fees to “experts”.

© 2010 MoneyandRisk.com all rights reserved

photo credit: Harold Lloyd, S Bar

5 comments

  1. Thank you Craig,

    I’m sharing my perspectives as a business owner using social media because there is so much information overload out there that we don’t really need to know.

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    in favor of blogging.

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