Are you using social media in your marketing plan? A Harvard Business Review* polled 2,100 companies regarding their use of social media as a marketing tool. Here is what they found.

· 58% were currently using social media

· 21% were not currently using but were planning to launch a social media marketing campaign

· Of those companies who are currently using or planning to use social media, only 12% said they are being effective with social media, while 43% say they are ineffective and 45% said they were getting there.

Among the companies who are being effective, there is a distinction in both the way they use social media and their results compared to the companies who are ineffective. This has to do with a change in the way we think about marketing. For instance, if you are a hardline ROI guy, social media might look like a huge money pit and time waster. Only 11% of the effective companies said that social media was responsible for increasing new business. There seems to be no classic hook in the advertising to get people to buy your products and services. If you "like” a post or retweet a comment, it just doesn’t translate into a sale, does it?

There is a shift in the way people are being convinced to buy these days. There was a time when we could place an ad that stated that a product was the best on the market. That statement may or may not be true, because who could truly measure something like the "best”? What social media has done is given the common person the ability to have a voice in what they think of your products now. Wait a minute! Didn’t they always have the ability to complain if the product was junk? Yes they did, but social media has put a great big megaphone in front of the customer. It has made companies much more transparent in backing up their marketing claims and following through on customer service. The power to decide what product is the "best” is not up to a clever copywriter, it is in the hands of your customers. On the flip side of that equation, when you have a really good product or did good things in the corporation, we rarely gave a large audience the ability to show their appreciation. Social media does that. It has the ability to greatly shape the buying habits of thousands of people.

The companies that are using social media effectively understand the value of having both a strong corporate and product brand. When asked what the three primary benefits of using social media were to their organizations, the three most recorded answers were:

· Increased awareness of our organization, products, or services among target customers – 50%

· Increased traffic to the web site – 30%

· More favorable perceptions of our organization, products, or services – 26%

Beyond the promotion of the brand, effecive companies are using social media to engage their customer base in a couple of ways. First, they are monitoring trends and researching new product ideas. In other words, they are using social media as a focus/research group before they do a full fledged launch of the product. Secondly, they are creating user groups for customers. A user group is becoming more and more popular on social media sites, such as LinkedIn. It gives customers the chance to interact with each other and share common problems and solutions with your product. This leads to the third usage by effective companies: they collect and track customer reviews via social media. Both the user group and the customer reviews are a function of customer service, which is key to retaining your customers.

The biggest drawback to social media is a lack of understanding within the top levels of marketing. Over and again, the Harvard report talks about a lack of commitment to social media because it is simply so foreign to business leaders. In other words, old marketers just don’t get it. Yet many business leaders realize the potential of social media has yet to reach its peak. As with any new medium, it takes some time for business to understand how it contributes to the bottom line. Web sites were basically a brochure on the internet until e-commerce came along. Email was simply an alternative way of communicating until someone invented email marketing that tracked open and click rates for individuals.

If you are considering taking the dive into social media, look at it as a way to engage with your target market and with your current customers. Understanding their thought processes has always been crucial to effective marketing. Knowing what they value, shifting attitudes, and the choices that they have are key to plotting your next move. These people have an opinion about your company and your brand already. Better to know than to be shuttered in your board room and find out a year from now in your P&L statement.

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* Social Media: What Most Companies Don't Know, by Meghan Ennes, Harvard Business Review

This slide show summarizes a Harvard Business Review article: The New Conversation: Taking Social Media from Talk to Action

Photos by Badmanproductions and Temizyurek