The world's largest social network, Facebook, announced on Tuesday it has finally become profitable. On top of that, they also passed the 300 million registered-user milestone.
On Thursday, Twitter said they have become a billion-dollar company.
As social media companies join the million-dollar club and membership numbers continue to skyrocket, it’s hard to ignore the opportunity to get your brand into the arena. However, as with anything new, some companies encounter push back from management teams who are hesitant to jump into uncharted waters.
Confidence prevails despite potential risks
A new study from Russell Herder and Ethos Business Law takes a close look at management teams’ perception of social media. The group’s research confirms that confidence exists in social networking as a viable communication undertaking, but so do worries about the potential liabilities.
Eighty-one percent of surveyed executives believe social media is a corporate security risk, while 49 percent said that using social media could damage company reputation.
Despite these concerns, respondents view social networking as a key strategy. According to survey results, eight in 10 senior management, human resource and marketing executives believe social media can enhance relationships with customers/clients (81%) and build brand reputation (81%). In doing so, it’s important to have a social media policy grounded in honesty and respect.
Communication with results
Above all, companies want to know what results they can expect. A recent USA Today article highlighted several businesses that have embraced social media tactics and reaped the benefits.
Intuit added customers quickly when they integrated elements of Facebook, Twitter and LinkedIn into a new site for small businesses. It generated more than 1 million visits in 12 weeks and increased QuickBooks unit shipments 57% in June.
National pizza chain Papa John’s launched a guerrilla marketing campaign on Facebook to add 148,000 fans. They offered a free medium pizza to anyone that joined and ultimately got 300,000 fans and drove Web site traffic up 253%.
Comcast pioneered the use of Twitter to talk directly to customers and has 28,000 amassed followers. Customers can talk to a representative immediately on Twitter, making the days of waiting on hold on the phone a thing of the past.
Software maker Sage North America receives instant feedback from hundreds of people to improve their products and services. Typically, companies rely on third-party focus groups to observe reactions of customers that can cost up to $15,000.
Social media can be the ideal forum for a CEO to speak directly to customers. Companies can say “I’m sorry” when necessary on Twitter to respond to a customer service slip-up.
Follow consumers online
Increasingly, consumers don’t proactively search for products and services but encounter them via social media. Nine in 10 consumers trust their peers more than marketers, according to a recent survey of 25,000 by Nielsen. Consumers are exchanging messages and advice online more than ever. In April, Facebook members spent almost 14 billion minutes on the site, up 700% since April 2008, Nielsen NetView said. In that same month, Twitter users spent nearly 300 million minutes on the site, up 3,712% since April 2008, reported Nielsen.
As customers spend less time with traditional media and more online, companies have no choice but to follow. Some of the largest companies, including Ford, Levi Strauss and Chevron, are reinventing their marketing operations to embrace digital tools to support customers through online communities and implement aggressive outreach programs.
“It was an easy call. This is where our customers are,” said Megan O’Connor, director of digital marketing at Levi’s, a 150-year-old company.
Ask Rippe Keane about the possibilities of social media. We can help.
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