Off The Grid PR

Posted 2.25.08. What's hotter than genome dating, celebrity sitings or cool nanotech muppet videos from UC Berkeley? It's Twitter, the latest social media tool redefining the marketing landscape. In case you haven't read CNN. the WSJ or NY Times lately, Twitter is a "social networking and micro-blogging service that allows its users to send and read other user's updates (known as "tweets"), text-based posts of up to 140 characters in length". (Courtesy of Wikipedia)

A brand building network? A public relations device? A market research tool? Twitter is all of these.

Inspired by Sarah Milstein's recent article in O'Reilly's Radar compiling business case studies backing Twitter's application to real business, I set out to find not only what hard-nosed data existed, but also under what conditions it seemed to be working.

To start, if you're dubious on the value of Web 2.0 tools as the preferred new platform for corporate communication, you might want to check out the McKinsey Quarterly's Six New Ways to Make Web 2.0 Work. (Perhaps even more telling, check out how much time McKinsey itself is spending on Twitter...). You might also note that as of Feb 20th, the Obama administration put out an OMB announcement mandating the use of RSS feeds to report the uses of the money by takers. (Much cheaper than a SOX implementation, but more on this later....) And as to Twitter, an indicator of its rich green field opportunity is the estimated 10-15 Twitter apps that are put on the shelf daily.

So what data exists that Twitter is having a significant effect on conventional business metrics- items like revenue, web traffic and brand-building measures? Where do we see results and how is that happening? What are the mechanisms? Does Twitter per se achieve results or isn't it interacting with pre-existing core assets of the company?

Case Study 1.  Dell Computer's $1 Million in Twitter-associated Revenue

What first caught people's attention was a Fall 2008 announcement by Dell's Bob Pearson, VP of Communities and Conversations,  that the company credits Twitter sales alerts with over $1 Mn in incremental revenue. Dell's Twitter followers receive messages when discounted products are at the company's Home Outlet Store where they can click over to purchase the product or forward the information to others. Beyond coupons, Dell also credits that they have successfully identified and acted upon customer concerns up to three weeks earlier than previously, thanks to blog and social media commentary.

For a full discussion of Dell's social media strategy, check out  Forrester Research's interview, where we found this nice video interview.

Case Study 2  Twitter.Zappos.Com: When Every Employee Becomes a Customer Service Rep

Perhaps one of the most superb busness uses of Twitter is exemplified by Zappos, the Amazonian style e-commerce company stocking over 3 million shoes, handbags, clothing item and accessories from over 1100 brands.

The 24-year old CEO Tony Hsieh, not only twitters himself (with some 140,500 followers), but has encouraged its Zappos' employees to twitter, as can be seen on their twitter.zappos.com web page.

 

Zappos now claims it is twittering with over 9 million customers, or 3% of the U.S. population. The company;s efforts with social media networking before the public eye, including blogs, Zappos.TV, Facebook and Twitter have resulted in over $1 Bn in sales, 75% of which are from repeat customers.

 

Now it shouldn't be surprising that a CEO who sold LinkExchange to Microsoft for $270 Mn should grasp the importance of driving web traffic through well-placed self-linking in public conversations. A web page like twitter.zappos.com is worthy of study as the "secret sauce": It drives inbound links, its employees create a good deal of internal web links -- all magnets for search engine activity, in particular, raising Google Page Rank.

But as much as Zappos spectacular results have surely been enabled by Twitter, it should be pointed out that Zappos, like Dell, is delivering on some mighty good customer service offers in those tweets. The company offers free shipping both ways, has a 365-day return policy nad supports a call center that's always open. Then there's outrageously wonderful benefit that Zappos randomly bestows free upgrades to customers.

So those believing that Twitter per se is a magic technology bullet are over-simplifying: Twitter can clearly magnify great customer service, but the offers, the compelling content, still need to be there to fully experience the full magnification of this great new social lens.

Will large companies get the ramifications of Tony Hsieh's battle cry "Customer service is a branding opportunity?" The twitter.zappos.com page is a mash-up: It's not only a customer service forum, it's a public relations, branding and search engine attraction platform. Companies that continue to view these functions as separate corporate silos aren't going to "get it".

For companies new to Twitter, it's time well spent to view Tony Hsieh's slideware show on exposing your company as much as possible with Web 2.0 tools. (Inspired? Zappo's Quick Start Guide provides a highly approachable description of how to begin.

Case Study 3   Early Twitter Advertisers Get Subscriber Count Windfall

Another great example of the new green field opportunities offered by Twitter was described in a recent LA Times piece covering the impact of Twitter's new "suggested users" feature. To help new users get started, Twitter began offering this feature, a link list of showcased websites and personalities. Putting aside the fact that this new feature did arouse some protestations, the latent power of Twitter advertising was revealed in the traffic counts of the beneficiary companies. Per TwitterCounter, TechCrunch, already one of the internet's most popular tech blogs, jumped from 41,000 to 111,000 Twitter followers in one month while the Guardian's technology page jumped from 4000 followers to 66,000. (It's doubled this already.) According to the LA Times piece, @GuardianTech added new users at a pace 300% faster than the previous two weeks and The New York Times Twitter account increased its subscriber base by a factor of six - to 145,000.

Case Study 4: Gary Vaynerchuk: Personality + Wine + Web 2.0 Tools = Twitter Force

Following on the Dell-Zappos theme that it takes more than a social media tool per se to make a good business use of it, let's look at Gary Vaynerchuk and Wine LibraryTV.

First, it's important to realise that well before the advent of Twitter, Vaynerchuk had already brought up his family's wine business from $4.5 Mn in sales to $45 Mn. Today, Veynerchuk hosts 38,000 followers. More significantly, he is beginning to monetize his Twitter and other social media use, striking a deal with Revision 3 whih is producing 3 minute segments of Wine LibraryTV.

While Gary's Keynotes  ar well worthy of watching to understand his approach, his Feb 19 video post really captures best who he is and attitude toward traditional media and new media. (Do watch it: he video comments back to Twitter posters.)

What are the operating rules that have made Wine LibraryTV such a social media phenom? Even though this is a near one-man show, there are 4 rules that Vaynerchuk goes by that we believe translate up to corporate use of Twitter. (Most of these have been abstracted from Gary's videos. He's writing a book on social media, in case i did'nt quite get these right..)

Rule 1. Use the Social Media Tools, All the Tools.

Arriving at Tumblr-driven GaryVayNerChuk.com, it's clear what's part of the secret sauce accompanying Vaynerchuk's wine. There's just a plethora of social media tools, applications and widgets here. Seemingly, every bit as much as Steve Rubel's Micropersuasion or Scobleizer, both of whom make a business of social media per se.

Rule 2. Offer "Free-mium". Pour It On Generously.

In one of his keynote addresses, Gary explains that he's a great believer in "free-mium", namely, giving away stuff for free. But what stuff? The viral hook that keeps Gary's followers hooked is sure, the guy knows tons about wine and enthusiastically shares it, but he's also a great source of tracking and knowing about the latest social media tools. In other words, if you follow Gary, you know where the new hot channel and tools are - whether it's Twitter, Tumblr or probably something new next week.

Rule 3. Be Completely Transparent.

Observing Wine LibraryTV, one is struck by the intense blend and merging of personality, product and media. This stems from Vaynerchuk's philosophy of imbuing his brand DNA into his products and services. After all, the product idea came from you - it's your inner child. Twitter and web video just expose your inner child publicly. Transparency, and with that comes authenticity and honesty, is part of the juice behind people's attraction to these tools. And part of being transparent means you let the rough edges show. When Gary's Cork'd  blog got hacked, he was open about it, getting interviewed in TechCrunch's coverage of the story. And in the end, he ends up looking all the more human for it.

(Sidenote: It is also the transparency factor that drove the Obama administration's use of RSS feeds as a mandate to taking stimulus money. If everybody can watch the Stimulus Money RSS channel, we all know where the money's going.)

Rule 4. "Don't Listen to Anybody, Listen to Everybody" (Gary Vaynerchuk)

There areat least two meanings behind this great quote. First and obvous, it's clear that savvy business people do watch what people are twittering about their company. In fact, there's probably no faster way to convert executive management to Twitter than to take them to seach.twitter.com and type in the company name.

Second meaning. It's impossible (especially if your real business is selling wine or shoes) to stay up on all the social media tools real-time, but if you've added value to your followers, among those "followers" are "leaders", people who have tools, insights and news relevant to your business to share with you. This is the true genius of Twitter business use: Even the smallest of compaies can have 10,000 low-overhead marketing and customer service evangelists.

Other Great Examples?

There are many other profoundly great examples of Twitter use contributing to real business results.

• Ushering in a new era of fundraising, Pistachio Consulting's combined use of Twitter and micro-lending to raise $25,000 for a nonprofit called charity:water URL. In four day, @wellwishes had raised $5000 among its Twitter followers. It also earned Pistachio and Laura Fitton a mention on HuffPo.
• Combining Twitter with a contest, domain registrar NameCheap raised web traffic 10% in December, resulting in a 20% increase in sold domain registrations.
• Then there's a host of small business case studies emerging.

 

Take Away Lessons

Lesson 1. Judging from Dell and Zappos, there's good support for the first of six factors identified inMcKinsey's Six Factors Behind Using Web 2.0, namely, "The transformation to a bottom-up culture needs help from the top". Executive management not only sets precedent for behavior, it provides best practice examples of how to use the tools with customer, the public and others.

Lesson 2. The Dell and Zappos case studies also support McKinsey's factor, "What's in the Workflow Gets Used". These organizations have embedded Twitter use into their customer service operations with compelling results.

Lesson 3. Effective use of participatory technology leverages not just "cognitive surplus" or the untapped potential from employees, but from customers and partners as well. Wine LibraryTV's deal with Revision 3 as well as "free-ium" cool tool trading with outsiders illustrates this well.

Lesson 4. Companies with great brands adopt the latest brand-expanding technologies early. This is perhaps the greatest lession of the Twitter business success stories: It is no longer sufficient to have a great brand inside your industry, companies have to be seen as technology leaders, specifically adopting the latest brand communication channels. And today that channel is Twitter.

Ironically, a great number of highly sophisticated tech companies must be realizing at this point that the marketing benefits of Web 2.0 are being best leveraged by a shoe company and an alcoholic beverages supplier.

In the end, the trick to social media tools is no trick at all: Twitter just happens to be the latest green field marketing channel. There are many more new social media channels to come. As Gary V might say, you have to be ready to sample them, swirl and savor them in your mouth (perhaps biting a few rocks and pebbles along the way), and then spit the whole thing out with a ferocious force.

For companies that can't ascend to recognizing that marketing has become 360 degrees of mass participation? To paraphrase Francis Fukayama from "Are We Approaching the End of History?", there's the danger of being "still in history", the equivalent of being left behind after the Rapture, where everyone else will have already transcended to a celestial "participatory marketing" plane.