The ROI of Influence

How does one become a leading social media expert? "I decided to leave the real IT world to run off and join the circus," said Chris Brogan.

Brogan spent 16 years working in the IT trenches for a major telecommunications carrier, including trying to stuff big servers into tiny rental cars for remote installations. He now works for CrossTech Media, the company that puts on the ITEC shows I've been speaking at, so I've had the chance to hear several of Brogan's speeches and he's been forced to listen to mine in return.

"Turning ROI Into Return on Influence" is the title of one of Brogan's presentations. The ideas Brogan presents in this and other talks help companies realize social media and social networking are new ways to reach out to customers. These methods humanize the company and let customers engage in areas they like rather than what the corporate marketing department decides.

"You probably remember GM's first attempt to engage customers on the Web, when they made video clips of their Tahoe available so people could make their own mashups of what the Tahoe meant to them," Brogan says. "Their mistake was not considering what the community wanted to talk about, and the community wanted to talk about things like how the Tahoe crushes the environment." Computerworld listed this campaign in its recent article "The 10 Dumbest Viral Marketing Campaigns Ever."

But GM learned. "They now have a nice site called GMNext, and also set up communities for car fans to talk about the cars they're passionate about," Brogan says. "Corvette owners jumped at that, and they now have a much better social networking reputation." For instance, you can now find pages on their corporate Web site linking to car clubs all over the world for the Corvette, Camaro, and other car models.

Another great example of the power of social media against clueless corporations was the frustrated user who blogged about being stuck in "Dell Hell" because of driver and support problems. Dell realized the power of social networks when it saw the number of other bloggers and sites talking about Dell Hell push those Web sites higher up the search rankings than Dell's official site.

Dell took several steps to fix its reputation. Leveraging the passions of customers, and turning them into something a little more positive for the company, Dell unveiled its IdeaStorm Web site. This allows customers to list the kind of features and products they want to see Dell make. And it didn't stop there.

"Now Dell has a great site named Digital Nomads to help all the mobile workers out there," said Brogan. "There's great information there, and you have to look carefully to find the 'powered by Dell' note."

It's great GM and other big companies are getting a smarter, but I asked how small and midsize companies can make social media pay for them. Brogan directed me to FinancialAidPodcast.com, a program run by Christopher Penn of StudentLoanNetwork.com.

"Companies making student loans have to, by law, offer exactly the same loans as their competitors," said Brogan. "So how to stand out? Christopher Penn started the FinancialAidPodcast site, added video blogs and other information about the student loan process. They can directly attribute over [US]$11 million in business to that marketing project." Between their own site and YouTube, people searching for student loan information found them and became customers.

Brogan suggests companies should set aside a small portion of their marketing and PR budget for social media. Brogan suggests 2%, which for big companies will still add up to a fair amount. But even smaller companies can dedicate some marketing time and energy working with various social networks, no matter how small their budget.

"Consider social media like your telephones. Every employee, not just marketing, uses telephones, and every employee should be able to help you reach out through social media," said Brogan.

Blogs and Twitter and video podcasts like telephones? Yes, if you understand that each of these options, along with all the other social media networks available, help you tell your story. Each time you encourage conversations about your company, you and your customers benefit and help each other.

"People like to express their opinions," Brogan says. "Show them you're listening."

Don't try to create your own community at first. Look for groups already organized, such as the various car clubs in the links on the GM Web site. If you participate and provide information, people will notice.

When you do have enough interest to organize a community, remember some people like to complain. Bad forum posts are part of the landscape. If you answer the problems honestly, like Dell did when addressing Dell Hell, you show the other members of the community you will fix problems. Every company has problems, but not every company goes to the effort to fix them. Those who do get positive Return On Influence in the social media space.

"Social networks are a new set of tools," Brogan says. "Done well, they can help restore the humanization of business." When companies actually care what customers complain about, that's getting pretty human.

This story, "The ROI of Influence" was originally published by Network World.

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