Best ways for companies to capitalize on social media tools are still up for debate

NEW YORK CITY — Four months since its June founding, flash-sale website Fab.com has gained 850,000 followers – a meteoric rise that the company’s co-founder attributes to an effective use of social media.

“We’re adding 10,000 users a day, most of it through social media,” Jason Goldberg, who also serves as the site’s chief executive officer, said to a crowd of media and marketing professionals gathered at the Helen Mills Theater Tuesday afternoon.

Goldberg was one of several dozen professionals invited to speak at the Social Media Analytics conference, hosted by Business Insider and aimed at helping companies capitalize on tools like Facebook and Twitter.

(Authors note: This is one in a series of blog posts related to business reporting class assignments.  While interesting (I hope!) they will likely not have much to do with municipal finance.)

“Social is radically changing, just about everything people do on the Internet,” Business Insider Chief Executive Officer Henry Blodget said in the event’s opening remarks.

But the conference’s first two panels, focused on how companies can best measure success and return on investment when using social media tools, made clear that the best ways to use the tools are in many ways still an unanswered question.

“It’s really difficult to track because the analytics we’re getting from the services we use aren’t that good,” said Christina Warren, entertainment editor for news website Mashable.

For every social media success, like Fab.com, there is also a failure like last week’s marketing debacle for Jet Blue Airlines after one of the company’s planes filled with passengers was left stranded on a tarmac for nearly eight hours.

Many of the flight’s passengers took to Twitter to complain of their plight. But JetBlue, a company that was at one time hailed for its use of Twitter for customer service measures, was silent.

“The airport wasn’t listening. Jet Blue wasn’t listening,” said Paul Magnone, who co-authored Drinking from the Fire hose, a book that looks at which metrics matter the most for using social media tools.

While Fab.com’s Goldberg obviously enjoyed considerable success from viral marketing, Magnone and his co-author Christopher Frank said many companies are too focused on the volume game.

“People don’t know what they’re looking for,” Frank said. “They’re overwhelmed by the volume.

Rather than chasing millions of “Facebook likes” or Twitter Followers, firms should zero in on those users that have the most influence on others, they said. They should also improve on responding and engaging with their customers, rather than just monitoring or “listening” to the information provided by social media.

“We are still in the very nascent stages,” Frank said. “Right now, the money is not being effectively spent.”

How to most effectively spend time and money on social media is on the mind of Claire Wiggil, who recently joined Bowlmor Lanes as their vice president of customer engagement, a new position.

After learning of the Business Insider conference on Twitter, she said she attended to help shape her plans to take the multi-state bowling alley’s use of social media beyond marketing promotions.

“If there are problems, we want to learn about it in real time,” she said. “We think social media is the most cost effective way to reach retail customers.”

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