Think Customers: The 1to1 Blog

Gartner defines social applications as tools that "encourage, capture, and share data among users, ceding levels of control to a community by user-controlled organization mechanisms." These may include intranets, extranets, and public online communities, among others.

The first step in optimizing social media, according to Alvarez, is to determine what a company's purpose is in using it. Business leaders need to consider both the customer's perspective (what is their motivation for participating?) and the company's perspective (what measurable business need does this meet?).

Next, is to build out a social media strategy. This should include aligning what Alvarez called socialization technologies with the customers' buying processes, as well as planning how to encourage customer participation in online communities and other social media sites. He suggested using social reputation technology for ranking the quality of customer input on company-hosted communities. Some are based on peer recognition (like level of expertise), others on authority and value ranking, and others offer community voting guidelines. Alvarez also advised attendees to allocate budget to recruit employees with skills in either the social sciences or online gaming. "Many of these skills will be difficult to train," he said.

Over the long term, marketers must expect and plan to use continually changing applications to stay innovative and to meet their evolving social application needs. Do not expect one technology solution to provide everything necessary to support a comprehensive social media strategy, Alvarez warned.

Social applications are relevant to the customer's buying process in several ways, Alvarez said. One is providing information. He cited Wells Fargo's Stage Coach Island on Second Life as an example. Wells Fargo wanted to increase its awareness with younger customer segments, so Stagecoach Island offers entertainment that teaches. Users can participate in activities like hang gliding, but must pay in virtual money to do so. To earn virtual money they take quizzes that teach them about money management.

Another way social applications are relevant to the customer's buying process is in the content area. The New York Times wanted to be more relevant to its readers, so it launched two additional ways for customers to access content. One is a page of links to most-read content by category. The other is MyTimes. Readers can create feeds of Times articles and content from other source that are aggregated on their MyTimes page. Even though the information is from various sources, the Times brand is forefront in customers' minds.

A third area is social evaluation and purchases. Newegg, for example, has more than 130,000 product reviews, more than 55,000 four-sided product photos, about 13,000 testimonials, and more than 550 expert opinion articles available on its site to aid customers with the purchase decisions.

Social applications are relevant post-purchase, too, Alvarez said. Community forums provide a place for customers to help solve each others problems without company involvement. Tivo users, for example, have discussion threads on how to best play songs stored in iTunes through a TV. Brookstone catalog now includes quotes from online product reviews, like the much talked-about "This pillow saved our marriage" quote about a pillow that helps stop snoring.

As companies progress up the viral content value ladder, both complexity and value increase, Alvarez said. The lowest rung of the ladder is brand awareness, or viral marketing (e.g. Burger King's "Suburban Chicken"). The next is brand engagement (Volkswagen offers an owners' widget that provides information about upcoming owner events). This is followed by knowledge collection (Starwood had customers help design a hotel in Second Life and used that input when building a new hotel). Next is service extension (Fidelity offers a real-time stocker ticker widget). And finally is community loyalty and wisdom (the Nike+ program is a best practice here).

One point to remember when building out a social media strategy is that the many touchpoints involved may work differently than expected. For example, some marketers think that customers find widgets through search. However, most consumers find widgets because of social engagement features built into then. The next place they find them is on a blog or a feed from friends' networks, then by direct invitation from friends. The last place is via search.

Myriad companies already understand these social media nuances and are using them to their advantage. Now it's your turn. How will your company optimize social media?