Time for business to join the conversation

New Zealanders are enthusiastic social networkers - with more than 1.6 million signed up on Facebook alone - but marketing experts say local businesses are struggling to cash in on that enthusiasm.

While most companies still have it placed in the too-hard basket, the social networking phenomena can be harnessed to improve the way businesses respond to customers and research their markets, says Richard Binhammer, a senior social media manager with computer maker Dell.

Texas-based Binhammer was among a line-up of speakers at a Dell event in Sydney last month which included marketing experts from New Zealand and Australian companies, including Air New Zealand, that have spent money to tap local customer interest in social media.

Binhammer echoed the views of his boss, Dell founder Michael Dell, who has driven the company's social media strategy from the premise that businesses have no option but to listen to what customers are saying about them online.

"These [social networking] conversations are going to occur whether you like it or not. Do you want to be part of that or not?" Michael Dell has said.

"My argument is you absolutely do. You can learn from them. You can improve your reaction time. And you can be a better company by listening and being involved in that conversation."

The case for "being involved" has been put bluntly by US author Erik Qualman who said: "The ROI [return on investment] of social media is that your business will still exist in five years."

Speakers at the Sydney event said social networking had the potential to be used as a means for turning staff loyalty - and employees' enthusiasm for their jobs - into a marketing and market research tool. For that to happen, however, the strategy needed to be led by senior management within an organisation, they said.

That approach was being taken at Air New Zealand, where one of chief executive Rob Fyfe's goals has been to turn all the company's staff into "brand ambassadors," said Air NZ's head of social media, Tom Bates.

The airline has been among the most innovative and visible local business users of social networking sites.

It has more than 29,000 followers of its main Facebook page and more than 20,000 users following two Twitter accounts: one focused on general interactions with customers and a second for its "Airpoints Fairy" identity, which gives away travel rewards.

Last month the company launched a rewards programme on Foursquare, a start-up social networking site where members use GPS-enabled mobile devices to share their location with others in real-time.

Logging into an Air NZ location gives Foursquare users the chance to win airpoints prizes.

Bates said while it was too early to measure the success of the Foursquare initiative, it had been met with a positive response from users and had not involved any marketing spend. It had only been promoted by "word-of-mouth" and via the company's other social media channels.

Dell, a natural player on the social media stage because of its background as an online-only retailer, has been refining its strategies in this type of marketing since 2006.

Binhammer said Dell's social media endeavours have included its "Swarm" programme which encourages members to join its network by promoting discounts on the company's products which grow as the membership count increases.

On Twitter, the company is turning over several million dollars selling end-of-line stock and special offers through its Dell Outlet account which has more than 1.5 million followers.

Binhammer said corporate social media required a "glasshouse philosophy" or a transparency which in Dell's case encourages the company's employees to use one Twitter account for both work and personal use. (His account name is RichardAtDell).

The benefit to businesses of this approach was that "people buy from people," he said. Online shoppers, for example, were increasingly relying on referrals from people they knew, or at least interacted with online through shared communities of interest, rather than making purchasing decisions based on search engine results.

Mike Hickinbotham, a senior social media adviser at Australian telecommunication company Telstra, told the Sydney event a key aspect of making use of social networking for businesses was ensuring all staff behaved in an appropriate manner online.

To help achieve this, Telstra had implemented a basic training programme in public relations which was given to all the company's staff.

Telstra had also instituted simple social media guidelines rather than develop a detailed policy. Staff were asked to be clear about who they were representing when engaging online, to take responsibility for ensuring that any references to Telstra were accurate and did not breach confidentiality agreements, and that they showed respect for individuals and online communities.

TOP TIPS

New Zealand businesses have been slow to embrace social networking but globally more than 300,000 companies have a presence on Facebook, a third of them small businesses.

Here are some tips for a successful social media strategy for businesses.
* Review your company's work culture and brand values. Ensure they are clear and appropriate before launching them online.
* Start by assessing what is being said about the business online. It's like going to a dinner party with new friends: observe first then participate in conversation.
* Decide how social networking can specifically assist your business. Identify potential social media projects and the staff who will participate in them.
* Test your strategy and be prepared to adapt it quickly if required.
* No business is immune from criticism on social networks. Even technology-product darling Apple has been stung recently by a popular "I hate Apple" Facebook page.

Mark Robotham is an Auckland-based business consultant. He travelled to Sydney as a guest of Dell.
Mark@GrowthManagement.co.nz