Ask the Expert: Should your Business Jump on the Social Media Bandwagon?

A reader asks in the Minnesota Star Tribune: As social media (Facebook, StumbleUpon, LinkedIn, etc.) provide a new form of marketing, how much of a company's overall marketing effort should be geared solely on social media? And if there is not a "magic number," is there a way to gauge, by industry or customer base, for example, online-only customers vs. storefront? Consumers' media habits are changing rapidly and current trends suggest a greater number of consumers will spend more time online in the future. While this does not point to a "magic number" of promotional dollars one must invest in social media strategy, it suggests that today's marketers cannot afford to ignore the Internet space. The first step in gauging whether to spend on social media is assessing the techno-graphic profile of your consumers. This will help you understand the extent to which your customers access the Internet and other social media, and their usage patterns: for example, whether they use these channels to connect with other customers, write product reviews or make product recommendations to others. Once you understand the profile, the next step is to define your social media strategy objectives. Do you want to use the social media to have a dialogue with customers or create word-of-mouth advertising? Do you want to listen in to what customers are saying, generate new product ideas or seek customer feedback? This will dictate the online tools you will need to create as you embark on your social media strategy. The next step is to create an implementation plan that provides guidelines about the frequency of contact you may have with your customers online and the nature of "dialogue" you may engage in with your customers. Once you have these steps in place, it becomes easier to determine how much to allocate to your social media budget. Investing in social media should be a strategic decision -- not an ad hoc or a reactive one. Firms that benefit from such endeavors are those that use social media to gain crucial consumer insights and constantly create and deliver superior customer value based on those insights.