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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What is the cost of implementing social networking, and how do we measure success? Most executives want to know. A more important question is what is the cost of not doing social networking?

Setting up a site where your customers can talk to each other provides amazing value. You set up the platform, they do the work. Customers create a high value data source that keeps them coming back and attracts others to the site.

Social sites and blogs have turned out to be a highly effective early warning system. Companies are learning of problems they didn’t know they had and fixing them much more quickly. The biggest fear I hear from executives is that customers will rant about the problems we already know we have, but that take time to fix.

So these customers are ranting privately now and trying to figure out how not to use your product or service. They’re talking to your competitors instead of talking to other customers and the company trying to help solve these issues. If you know what your problems are, it’s likely the marketplace knows them too. Airing the issue and having a real, personal conversation with your audience about what you’re doing to fix these problems can keep customers from running away from you. It can build loyalty.

Why wait for your competitors to beat you to the punch and treat customers better.

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Heinz Topthistv.com received 10 million views, Doritos’ Crash the Superbowl contest got a whopping 350 million press impressions, Burger King’s Subservient Chicken viral site reached 14 million unique visitors, and Anheuser-Busch’s Bud Light Dude ad was viewed over 11 million times. With high profile campaigns setting the bar, how can you explain to your boss it’s not about the number of people we reach, it’s about reaching the right people?

We don’t all work for major brand consumer companies, but we still need to leverage the network effect of the Web. How? Determine up front if your goal is reach or touch. Reach is about getting the most views, interactions, or press impressions. It is to a much greater extent about brand recognition than about developing a relationship, context, or relevance.

Touch is about getting to the people who care most about your brand, or are most likely to care about your brand. It’s about getting them involved, interacting with your company or products, and learning enough to want to stay involved. Relevance is key.

So if you aren’t solely focused on reaching the largest possible number of people, what are you measuring? It really depends on the type of campaign, but here are some ideas: time spent on the landing page or subsequent product pages clicked on, number of forwards of the email, number of comments submitted, and corporate learning from the content of those comments, sales lift during or just after the campaign, or number of ideas generated.

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You can tell Jeb Blount loves what he does. Like most hyper-energized people, he just can’t sit still. Last year he started a social site dedicated to sales people, and has over 100,000 registered users today. Not bad for someone who’s just doing something he calls fun.

Jeb has taken a smart and strategic approach with SalesGravy.com. He didn’t set out to make it financially successful right away, so the site isn’t crammed with ads. It’s focused on people. When you join and set up a profile (which is generally a way to promote yourself and your skills), your picture is posted on the front page. People quickly find you, and friend you. And you immediately feel a part of this group.

There’s a bookstore, sales resources, podcasts, blogs, member chat, and a dozen additional services provided on the site. Jeb encourages users to write articles that offer helpful information to other readers, making user-generated content a core part of the site. All in all, it’s one of the better social sites with a clear audience, focus, and great services.

Popularity: 19% [?]