Companies large and small are using social media not by spending big bucks on viral campaigns or contests, but by simply participating in the conversation and connecting with bloggers.

Cartier and Mulberry among other high fashion brands are courting bloggers to get them excited about products but also to better explain costs and respond to complaints.

Up to this point, high fashion has considered itself above social media. Now, companies are digging in. Thanks Andrea for pointing me to this article on the fashion industry.

On the opposite side of the spectrum, a start-up mom and pop pet food company has built it’s revenues to $2.5 million solely on plain old word of mouth. Without hawking their brand, the owners of K9 Cuisine have logged onto a variety of social networks and joined the conversation about pets. Their passion for the health and safety of the animals they love has given them a fast following.

K9 Cuisine also blogs and maintains Twitter and Facebook accounts. This way they can initiate the conversation, optimize their content for search engines and develop a core following.

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Those 20-somethings won’t join companies that ban Facebook on company time. Executives that don’t allow texting during a meeting are considered out of touch. Companies that don’t blog have missed out on the conversation that is the marketplace (their customers, prospects, and even competitors).

Wake up! It’s a new world.

Web 2.0 and social media are here to stay. These tools, technologies, features and Web platforms have forever changed user behavior online, as well as user expectations of the companies they purchase from. It is important for companies to understand and participate in this new Web.

Social media offers new opportunities to engage customers directly, influence the marketplace, increase brand awareness and affinity, build a better customer experience, and collect market intelligence. Now, why would you want to ignore that?

Learn and Apply

Today user-generated content (UGC) in blogs, podcasts, wikis, social networks, communities, virtual worlds, product reviews/comments, and videos is fast becoming the bulk of content on the Web. No longer can corporate websites, branding activities, and mainstream press programs alone drive the conversation online.

The vast amount of information created by customers, prospects, and industry bloggers through these new media vehicles can help employees gain a better grasp of trends, customer sentiment, competitor activities and product and service requirements. So encourage all of your employees to get online and learn!

In addition, employees can enhance and extend the company’s customer experience by creating and distributing content that adds value, and learning from and applying information created by external audiences. In the old-fashioned, hierarchical workplace, executives want absolute control over information going out of the company. That’s understandable assuming there are some crown jewels to protect.

But the wholesale rejection of employee blogging or interacting with social media as a part of their job is a grave error in judgment. The opportunity cost to a company can be huge. To meet the needs of both sides, there must be rules in place that guide employees through their online interactions.

Responsible Participation

Social media interactions and blogging by employees should be designed to build relationships with customers, partners, and bloggers, attract prospects, initiate or add value to the public discourse and embrace outside interaction. Employees can be encouraged to interact responsibly on social media such as blogs, wikis and through comments.

Getting involved in social media should be the choice of each employee. Anyone with a passion or interest should be encouraged to create a blog or participate in a group blog. Start with internal blogs to get a feel for how it works. And make sure you have written social media guidelines that every employee reads in advance. I’ve written in the past about specific guidelines that help employees make good decisions.

It’s critical at this point that you don’t let fear of the unknown hold you back. It’s okay to take baby steps. At least you’ll be walking in the right direction.

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Scott McNealy (Sun Microsystems’ chairman) used to say that any press is good press. I doubt he sticks by that today. Bad news has a long half life in the era of Web 2.0.

What concerns CEOs at this moment is a wealth of online comments, product reviews and blog posts from their customers. Word of mouth has replaced mainstream press and what customers say matters.

Understanding customer loyalty (or lack there of) isn’t a new discipline. It has however changed. Today, customer sentiment is public and executives want to know what to do about negative comments.

When Fred Reichheld introduced us to Net Promoter Scores it gave businesses a straightforward way to measure brand equity and brand loyalty. And it helped companies to understand that all employees can impact the customer’s experience. But most companies focus on how to make service better, and how to increase positive word of mouth. When in fact, it’s more important to decrease the number of negative comments.

A few years ago, the London School of Economics viewed Net Promoter from the other side of the fence. They measured negative word of mouth and it’s impact on the brand and product revenue.

What did they find? Every 1% reduction in negative word of mouth correlated to .41% growth, while a 1% increase in positive word of mouth correlated to just .14% growth. In other words, reducing negative comments could grow revenue by 300% over increasing positive comments.

The bottom line, monitor what’s said about your brands online and enact a plan to reduce negative comments. Dell has done it with IdeaStorm.com. Comcast is doing it with a simple (and free) Twitter feed (@comcastcares).

There are many tools available to monitor your customer comments (free and for a fee). Here are just a few:

Nielson BuzzMetrics
Radian6
Attensity
co.comments
Google alerts

Here are some thoughts on changing customer sentiment.

If your customer service team can help a customer in distress then they should contact that person directly (in an informal, personal voice).

Create an advocates program that highlights, informs and interacts with your most active and vocal users.

Start a blog or use your blog to talk openly about issues in the company or with the product that you’re fixing. Ask readers for their help and input.

Allow users to comment on, review, rate, and bookmark any content (including products) on your site.

Set up a process to evaluate comments found on the Web or on your site and escalate issues that can be resolved.

Incorporate learning in your marketing and product development.

Give recognition to users whose ideas are implemented.

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More great news I’m excited to spread. The highly prestigious and notable National Best Books 2008 Awards gives a nod to The Age of Engage.

The Age of Engage continues to win praise and awards. You can download excerpts here.

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About 18 months ago while I was in the middle of writing The Age of Engage, I took a break and picked up Wikinomics by Don Tapscott. There were so many parallels with the book I was writing I felt compelled to call Don and ask him to write the foreword to my book. (And he did!) I like the way Don thinks.

So when he sent me the manuscript to his latest book (I think his 12th), Grown Up Digital (a follow up to Growing Up Digital which he wrote 10 years ago), I put everything else on my nightstand aside and plowed through it. Here are my thoughts.

Businesses and marketers take note. There’s no way to ignore the Net Generation; they’re 81 million strong. (That’s bigger than the Boomer generation!) It’s time we get to know them, intimately. Don Tapscott’s Grown Up Digital gives you the opportunity to see how Net Geners (11-31 years old) think, act, learn, purchase, and relate. The book is packed with information, yet written in a casual, first person voice making it easy to read and enjoy.

All around us we’re seeing the impact of this intelligent, savvy, self-confident generation. They’re in our workplace, in our homes (if you’re a Boomer), and on the Web critiquing and customizing our products and services. Say what you will…they’re coddled by parents who hover and never miss a soccer game…but understand we are learning the ways of the social Web from them. And they are pushing the envelope of what is possible. They fully democratize information and access to it; they collaborate across geographical boundaries, and they are highly mobile and always connected.

While reading Grown Up Digital, I realized I have been a bit set in my traditional Boomer generation thinking (rather linear). More and more lately I get asked by Net Geners to create something with them or join them on a project they’ve started (rather than ask me a question or to consult). That’s how they think (rather non-linear). Today’s 30-year-old doesn’t think twice about your age or ethnicity or your years of experience. They simply reach out and instinctively look for ways to collaborate.

If you have Net Geners in your workplace, learn from this book how to manage and incent them. If you have them in your home, revel in their technical and social networking expertise. And if you market to them, deeply understand their motivations, desires, and demands for the products and services they purchase.

Check out the Grown Up Digital website too.

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