Are there businesses that shouldn't engage in social media marketing?

I used to think there were many verticals, business types and industries that should refrain from social media marketing all together. Now, with the ever-widening array of tools and platforms, coupled with skyrocketing consumer use of platforms like Facebook and Twitter worldwide, I'm less certain this is the case. I think that for most businesses, there is a way to use SM for marketing, but it may require inventive thinking and substantial resource investment.

Jason Trout was adamant:

Absolutely!!!

1) Those that do not know how to utilize social media correctly and do harm to their brand

a) do not update regularly

b) do not engage correctly

c) do not communicate professionally

d) are not knowledgeable about the tools or keep up with the trends

e) do not invest proper resources

2) Those where social media activities will not add any value to the company – yes, these companies still exist.

I’ll concede his first point; of course businesses out there that consistently make these mistakes should either quit or reformulate their social media plans, but this is a bit like saying that bad writers shouldn’t try to be professional authors. As for his second point, I’d like to know more—which type of company or industry?

Annie Noll’s thinking mirrors my own, and she illustrates an important point: Whether we value social media often depends on our understanding of the different ways people use it.

I think every company and industry can find a use for social media. At least all the ones that I can think of. I remember I was at IMS09 in October and there was a person there from the federal reserve. She asked if they should use social media because they really don't have any competitors. The answer was yes, because social media can be used for so much more than just promotion (internal communications, etc). It is simply the way people want to communicate now!

I do social media for a university and am finding so many different ways social media can be used in our classrooms, in our admissions offices (we are getting admissions essays through Facebook), for our alumni. It does take innovative thinking, but it pays off really well.

Modeling our use of social media on the successes of others is only valuable insofar as the model applies to us, but we always need to think of new ways to use the tools at our disposal. There is no guidebook, and this causes both anxiety and excitement. But it’s also a huge opportunity, and people that look at it this way, people like Annie, are the ones that implement winning social strategies.

B2B companies, Brad Shorr argues, have had a tough time with social media, but that’s changing:

As recently as a couple years ago, certain industries could safely avoid SM because on the whole, customers weren't really frequenting SM sites in significant numbers. I think that's changed. B2Bs can take it for granted that their market is present in SM – the only question is, where?

The pervasiveness of SM in business is the result of two factors, as I see it. First, non-business SM platforms like Facebook and YouTube are so ingrained that it's no longer a big leap into the unknown to use social platforms for business purposes. Second, the line between business and personal use of SM is starting to break down. People no longer compartmentalize their online activities. On Twitter or Facebook or even LinkedIn, you can follow up a highly personal interaction with one that is all business, and go back and forth all day long. In this kind of SM environment, just about any brand is a consumer brand. It would take some pretty compelling reasons to deter a firm from incorporating SM into its marketing program.

Spot on. We’ve seen our B2B clients embrace social media and customer-created content to drive serious ROI, and new use cases for B2B engagement in social media are occurring to sharp folks like Brad Shorr every day.

Social media marketing is all about amplifying the voice of your customers, says Chelsea Mueller:

Often people think of social media marketing as a brand new avenue, but really it's all about word-of-mouth marketing. Social media is about getting your customers to talk, to brag about your company/product/service. The online setting has just accelerated our ability to connect with these customers in an immediate fashion. We can spark conversion and provide the tools for our clients to become brand ambassadors.

Any business — B2C, B2B, non-profit — can benefit from the word-of-mouth buzz associated with correctly leveraging social media trust and engagement.

Highly-regulated industries, Peter Landesman argues, may have more hurdles, but can and should find solutions:

I have come into contact with a few firms — especially those that are involved in wealth and financial management. These industries are highly regulated and SM is discouraged, if not completely forbidden. In my opinion, firms in these industries need to develop a workable solution so that SM can be used as a platform to interact with clients and prospects within the rules of governance. Let's face it … we're all creative people and I am confident that these kinds of workable solutions are out there.

I couldn’t agree more, and companies like LendingTree and Nationwide have saddled up and seen measurable results.  I’ll let Peter wrap it up, because he does it perfectly:

There is no valid reason for businesses to eschew or avoid SM, but there seem to be plenty of excuses.

What do you think? Are there any businesses that shouldn’t engage in SMM? Leave your thoughts in the comments below.

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Competitive analysis

Company profiles can help you track competing organizations by displaying new hires and departures, a list of current employees and other data like divisions, related companies and company news through an aggregated feed. Keep in mind, however, that this is all available simply by viewing the profile. Following a company gives you the benefit of receiving updates via email that highlight changes to the information you’re specifically interested in following.

Think before you hit that follow button, however, because a company’s followers are displayed publicly within just one click of their profile, so if you’re a known competitor, you’ll probably want to avoid that list. The alternative is to simply visit your competitor’s profile often and track changes in a spreadsheet.

A shot of our Company Profile

Sales and Marketing

The best salespeople know how to stand out from the herd of other salespeople clamoring for the attention of decision makers. They know that each touch with a prospect should demonstrate that they understand their unique needs or situation, that they aren’t just a name on a list. Company Follow makes this process significantly easier. Received an alert that a prospect was recently promoted? Send them a congratulatory note.  Did your alert contain recent news about a company in your pipeline? Be sure to mention it when you have them on the phone.

On the company profile page, LinkedIn displays current employees to which you are currently connected, or to which you are connected through a mutual contact. Use this information to warm up an otherwise-cold call or to determine who you might approach first.

LinkedIn’s limitations

Much of the information on a company’s profile is self-reported. Employees may update their company’s description, specialties and website URL. Data on personnel comes from users updating their profile to reflect their new positions and workplace, and since it often takes weeks for this to happen, the intelligence offered by Company Follow and Company Profiles is less timely and complete than we might prefer.

While receiving network updates and an email digest of recent changes at followed companies is helpful, neither qualifies as a true “alert”. Users may select whether they would like to receive these updates on a daily or weekly basis, but there is not currently an option for receiving them only when, or as soon as, changes are reflected in a company’s profile. These would be welcome additions to the current slate of notification options.

Notification options

A great free offering

Although there are several obvious limitations, LinkedIn’s Company Follow feature is the type of offering that will positively differentiate LinkedIn from competing social media platforms. LinkedIn has long been the business platform of choice, and free apps like this further articulate the business use case.

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Communities that Sell:
How to Keep Customers
Engaged — and Buying

Tuesday, May 4, 2010, 1:00 PM-2:00 PM CST

I wanted to hear all sides, so I posed the question on LinkedIn – which city is the “capital” of social media? I got a lot of great responses, but the answers left me with more questions.

What makes a city the “capital”?

“…I guess you'd have to set the context around what makes a city the capital.”
Alicia Benjamin, Social Media Manager at MeYou Health (LinkedIn)

“You'd have as many capitals as definitions of social media.”
Daniel Alfon, trilingual online marketing specialist seeking a new challenge (website, Twitter)

Biggest SM user base? Most integration of social into daily life? Most Twitter, Facebook or Foursquare users per capita? A hub of social-centered startups? Is there even a rubric we can all agree on to evaluate this question?  Based on the varied definitions respondents seemed to create for “social media capital”, probably not.

“Las Vegas, of course. We enable the most social interactions- online and off. C'mon.”
Michael Perhaes, Assistant Vice President, Marketing, MGM Grand Hotel (LinkedIn, Twitter)

“LA is the capital of social media. It's the center of entertainment-oriented content, a seat of innovation, a denizen of app-crazy dining aficionados and ground-zero for a great deal of lifestyle-oriented communications.”
Barry Berkowitz, VP, Digital Mktg. Solutions @ infogroup Interactive (website, Twitter)

“San Francisco. Since it's social media, it's all about the people, and the Bay Area has literally thousands of very plugged-in people, most of whom work for extremely innovative organizations. Don't just take my word for it…attend a conference or a Tweetup there and see for yourself!”
Todd Castor, Area Director, eCommerce at Marriott International (LinkedIn)

“According to Chris Brogan, Pittsburgh is number one, based on the entire community and tribes crossing over to foster a cohesive community. If you judge by SXSW standards, Minneapolis is number one with the largest chapter in the world of the Social Media Breakfast groups, with Boston and San Francisco rounding out the top 3. Austin may host SXSW but that doesn't mean that Social Media is practiced there more.”
Christopher Lower, Co-Owner Sterling Cross Communications (website, Twitter)

Can there be a capital at all? Should there be?

My favorite comment challenged the question altogether.

“I thought the point of social media, the internet, crowdsourcing, cloud computing, et cetera was that there isn't a capital?”
Matt McCoy, Online Strategy Manager at Volt (Twitter)

The fact that our answers come from all over the country and globe begs the question:  If social media is a borderless world, can there even be a single capital? Maybe there can be multiple capitals, or perhaps social media should never have a capital in the first place. After all, traditional capitals are nodes of centralized power and top-down governance, ideas that seem contrary to the ideas behind social media.

So you tell us: What’s the capital of social media? Can (and should) there be one at all?

See who you know at Bazaarvoice.

Connect with BV employees on LinkedIn, and participate in discussions like this one.

But you probably haven't heard about this: today, Google's valuation surpassed Wal-Mart's for the first time.  Wal-Mart is the largest company in the world as the Fortune and Global 1.  As of today's market close, Google is worth $177.6 billion while Wal-Mart is worth $175.58 billion.  Wal-Mart has a P/E ratio of 14.46 while Google's is 46.24.  The high relative P/E is a reflection of Google's insane growth (and projected growth) and margins since their founding (that may seem like a high P/E overall but note that Yahoo!'s is 51.75 and the only explanation is that the market must value a more diversified and theoretically more stable revenue stream).

And talk about a young company.  While Facebook was founded in 2004, Google was founded in 1998 (that's around $20 billion of value created every year since their founding).  It's amazing to think that only around 10% of all advertising is spent online today.  The revenue shift from offline to online advertising is mindboggling.  We are witnessing the creation of the most valuable company in the history of the world.

The only explanation for Facebook's incredible valuation is the average (very long) dwell time of the user (especially Millennials, as Kelly Mooney would call them) and the theoretical future value of their advertising stream.  I presented at a local high school recently and learned, not surprisingly, that the students were communicating (i.e., living) in Facebook more than IM or email.  But it's not just for kids.  Our CMO, Sam Decker, wrote about Facebook taking off for business users in his blog.  I have certainly seen that.  The CEO of Ice.com just sent me an invite to connect on Facebook today (I had the pleasure of presenting with his brother, Pinny, at last week's awesome Shop.org Annual Summit in Vegas).  I am getting 5-6 invites per week now and am spending more time on Facebook than LinkedIn now.  And everyone, including Bazaarvoice, is rushing in to integrate with Facebook. 

I wrote about how the Web browser and social networks are becoming increasingly more integrated in April.  Hang on to your hat – if Microsoft invests in Facebook, it is going to get really interesting really quickly.  How consumer-generated content becomes more integrated in social networks is going to create some very interesting (viral) opportunities.  We're gearing up for that here.

By the way, I would be remiss if I didn't mention that Google never advertised.  Neither did Facebook.  Both brands were built entirely by word of mouth.  And both brands are very young but obviously very established.  That's just how valuable of a service they created.  They're worth talking about… really worth talking about.  Now, Facebook me.

It is always dangerous to make any conclusions based on only your own behavior.  You need to look no further than the failure of Webvan, which raised $1 billion based on the premise that everyone in the U.S. was like San Franciscans.  But I still find it fascinating that I am more compelled to write about people than products.  Perhaps it is the nature of my job or personality type.  Or perhaps most of us talk more about people (i.e., generating more word of mouth) than products in everyday life.  Let’s not forget how many Americans voted on the last American Idol (74 million in the last round).

In a previous post, I gave the three reasons why I believe consumers write reviews: 1. ego, 2. social connection, and 3. good karma.  But these three rules may be slightly different when writing reviews on people.  The majority of reviews I have written on people have been on LinkedIn.  LinkedIn recently reached a tipping point, as you may have noticed from the increased number of "let's-connect" invitations that you have been receiving.  The network effect is kicking in (more on that subject in the brilliant book Information Rules), just as it has for eBay, Amazon.com, MySpace, Facebook, Second Life, StumbleUpon, Digg, Threadless, and many other businesses literally built on community.

I am often solicited to write these reviews (on people), not dissimilar from the way we at Bazaarvoice suggest our retail clients encourage their customers to write reviews on their purchases.  But I have a more emotional connection to people than I do to products, and therefore I am likely to act when asked.  And writing a review on a former employee or service provider on LinkedIn takes me a lot less time (5 minutes) than writing a recommendation letter for an MBA applicant (2-3 hours).

In any case, I believe that reason #1, “ego”, needs to be replaced with “emotion”.  I am compelled to thank the person publicly by writing the review – it's the reciprocity principle in action.  The other two reasons, “social connection” and “good karma”, fit fine.  I’m also not sure if the "J-Curve" will hold up when reviewing people.  From my own experience, I haven’t written a single negative review on LinkedIn.  I just won’t write the review at all if I don’t feel comfortable with doing so.

But that may be different on Avvo.  One thing is for sure with their launch – it is a whole new world for lawyers.  Just wait – this is coming for doctors, dentists, teachers, consultants, and all forms of service providers in a big way (I say “big” because there are already examples of all on smaller-trafficked sites).  Imagine for a moment joining a new HMO and having access to all members’ ratings on pediatricians.  Revolutionary, yes.  Incredibly useful, yes.  Scary, for some.  But I am convinced that it is just a matter of time before every person, place, product, service, or thing becomes reviewable – and very easily accessible to all.  And I am optimistic about this future, ultimately believing that it will lead to more accountability and better service overall.

But like I said at the beginning, let’s not make any conclusions from my own behavior.  As the founder of Coremetrics, spending seven years immersed in Web analytics, I learned that data tells the real story over time.  We’ll analyze Avvo and other clients as they build people-review volume and report back on the trends once they become clear.  For now, I would love to hear from you.  Do you review more people than products online?  Why?

Update 6/16: What timing!  I am a little behind on my TechCrunch reading, and was alerted by one of our Sales Directors that Avvo is now being sued by lawyers that are unhappy with negative reviews!  This is pretty ironic given my post yesterday was about how skewed to the positive I am when rating people. 

I'm assuming that Avvo expected this given the nature of some lawyers.  Avvo's CEO, Mark Britton, responds to the lawsuit on Avvo's blog.  There is a heated debate between readers of each blog post that is worth reading (although the reactions are as you would expect).  I applaud Avvo for providing a controversial, and highly useful, service.  And I hope that ultimately this press helps Avvo establish a well-known brand early in their history (remember that they just launched in beta).  My prediction is that the lawsuit gets dismissed and Avvo gets a ton of free press out of it.

Again, Second Life may not be the 3D Web to survive – it is very early in the adoption curve and it all depends on their execution (the good, old basics of business).  But this move should be the spark needed to fuel further interest in the 3D Web as the next-generation medium for shopping, browsing, and socially connecting.  Just look at what happened with FireFox, based on the open-source Mozilla Project.  It now represents over 4.5% of all Web browsers in use.  That may seem like a small number, but remember how many people are online now (over 1 billion).  And don't count the market-share leader, Microsoft, out in adopting the 3D Web.

At last year's Shop.org Multichannel Executive Symposium, Tony Lenk said that today's 2D Web is like shopping in a store one square foot at a time.  I think that is a little extreme (site search from Endeca and Mercado, to name just one example, help you instantenously find what you are looking for as opposed to hunting for it in a store).  But he makes a good point, and his recent DHTML enhancements to Gap were designed to make online shopping more tactile (and it paid off).  Second Life and its 3D Web successors will definitely improve online shopping in a major way.  Remember that scene in The Matrix where Neo says, "guns, lots of guns", and the endless row of guns comes streaming by in real-time?  Kind of like that… but smarter.  The key is adoption (wide availability and easy installation), speed (Second Life needs a heavy-duty machine and bandwidth to run well), and a relentless focus on serving their users well (Mark Cuban says it well).

If you missed my in-depth Word-of-Mouth Wisdom interview with Giff Constable, who builds a 3D, virtual presence for businesses in Second Life, you can read that here.