Social media is a concept that bubbled up through the masses starting, roughly speaking, around 2005. While social media sites like MySpace and Facebook began as ways for primarily young people to find each other and keep in touch, corporations soon saw how these sites could be used to improve customer relations. By 2009 social media begun to revolutionize the way corporations managed customer relations.

IT advisory and research company Gartner has said that by 2010, 60% of the Fortune 1000 companies will be using social media as one means to improve customer relations. Although that’s good news, Gartner also surmises that over 50% of those companies using social media for customer relations will do it the wrong way, thus actually harming customer relations. Gartner suggests that companies instead focus on analyzing customer buying online so as to offer figures on return on investment for sales and customer loyalty, specifically as they come through social media sites.

Gartner has said that there are four steps that businesses need to pursue so as to use social media successfully as a means to improve and manage customer relations. The first step is to clearly define what the purpose of the social and media initiative is. The second step is that a company must be willing to surrender some control over social media as a means to customer relations, because the public at large wants to "own" part of the relationship as a reward for their participation.

Companies then have to reward those customers that participate socially. This may mean allowing them to vote on, or otherwise rate contributions and information on the site. Finally, companies must appoint someone in-house who has the skills to head up a social media customer relations initiative. Using social media for customer relations should never be an afterthought. In fact, it should probably have someone specifically devoted to it full time, with their own staff if necessary.

There is no question that social networking has changed the behavior of a critical mass of individuals as customers and prospects. According to Gartner, they can no longer be described adequately based on demographic information, which is the usual target for corporate customer relations efforts.

However, with that said, don’t spend a lot of time or effort in trying to use social media as a focus with any great effort unless you know will pay off by driving truly valuable traffic to your website.

Non-linear Creations undertook a study for a year focusing on five social media sites and the effects they had on customer relations. The sites included MySpace, LinkedIn, Stumbleupon, Facebook and Twitter. After a year, Non-linear Creations determined that social media sites drove about’% of its sites visitors from referring sites in aggregate.

Of the social networking sites that drove traffic to business sites, Non-linear Creations determined that by far, two sites, LinkedIn and Facebook, did the best in terms of performance. That’s important, but it’s not everything. You also have to consider conversion rates. Non-linear Creations measured the conversion rate by determining those visitors that had downloaded a white paper, contacted them by phone or email, or subscribe to their newsletter or blog. When considered with these parameters, with "real prospects" actually being driven to their site, LinkedIn performed the best. It was in fact determined that traffic would convert much more frequently if it came from LinkedIn than it would if an average visitor was involved. In fact, other social media sites performed below average.

Despite these results, it’s not guaranteed that LinkedIn is going to give your company the guaranteed results that Non-linear Creations found with its research. Factors that may impact your actual results include the type of business you have. In addition, the less obvious results are not yet understood when it comes to reaching customers online such that customers feel like a brand or company is listening to them and cares about them enough to interact as they see fit. People don’t like customer call centers, for example, because of the anonymity they experience. There’s no relationship to the brand with call centers, in other words. So far, obvious downsides have not been seen if you’re going to use social media for customer service, so it seems to be in your best interest to use this means for customer contact.

It certainly isn’t hard to create accounts on social media sites. The hard part is in actually interacting with customers on them, listening to them, and analyzing your online visitor numbers to see which social media sites give you the most return on investment in terms of online sales or some other metric. At that point you’ll have to determine how much effort to put into making under-performing social media referrers more effective.

Learn more about Social Media. Stop by David Baxters’s site www.SmartMediaInnovations.com where you can find out all the latest data and information about Social Media and how you can use it to improve your customer relations today.

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