Twitter has about 40 million users who each day produce a staggering amount of tweets, Twitter's quaint word to describe short messages. Its users spent nearly 300 million minutes on the site in April, 3,712% more than in April 2008, Nielsen says.
Increasingly, consumers don't search for products and services. Rather, services come to their attention via social media, says Erik Qualman, author of Socialnomics, a new book that explains how social media have changed how companies do business.
Social-networking-savvy businesses have appointed social-media directors to help:
•Add customers quickly. When software maker Intuit built a site for small businesses in late January, it integrated elements of Facebook, Twitter and LinkedIn, the social network for business professionals. After 12 weeks, it generated more than 1 million visits and helped spike QuickBooks unit shipments 57% in June, year-over-year.
"Social (media) is one of the key trends driving our business," says Kira Wampler, social-media marketing leader at Intuit. "It's more than pure marketing. It's about fast connections with customers and building an ongoing relationship."
National pizza chain Papa John's added 148,000 fans on Nov. 17 through a guerrilla marketing campaign on Facebook. It offered a free medium pizza to anyone who signed up to be its fan on Facebook. The promotion gained it thousands of customers and drove its Web traffic up 253%. It now has more than 300,000 fans and hopes to top 1 million by the end of the year.
•Word-of-mouth marketing. Sometimes a company's best advocates are its customers. Just ask Best Buy and MyFICO, the consumer division of Fair Isaac, which invented the FICO credit-risk score used by lenders. They've built specialized online communities where their customers freely evaluate products and services.
Those who visit MyFICO's community website are spending 41% more than other customers, says Lyle Fong, CEO of software Lithium, which helps build online communities for more than 150 companies, including MyFICO.
Nine in 10 consumers trust their peers more than marketers, according to a recent survey of 25,000 by Nielsen.
The Federal Trade Commission is in the process of amending guidelines that would require bloggers to disclose their relationships with marketers whose products they endorse, says Mary Engle, associate director of advertising practices for the FTC.
•Enhance customer service. For more than a year, Comcast has pioneered the use of Twitter to talk directly to customers. Its Twitter page, @comcastcares, has 28,000 followers.
Comcast's blueprint for unfettered customer support — no more waiting on hold on the phone — fomented a movement. Software maker Sage North America, to cite another example, routinely receives instant feedback from hundreds of people within an hour on specific products and services. "It is a living, breathing, 24/7 think tank of users and employees," says Ryan Zuk, a company spokesman.
Besides being instant, such feedback is cheap. Typically, companies have relied on third-party focus groups that let them observe the reactions of customers during a two-hour session that can cost $10,000 to $15,000, says Natalie L. Petouhoff, an analyst at Forrester Research.
Lenovo has seen a 20% reduction in call-center activity in the U.S. over six months because nearly 50,000 customers go to its community website for information about laptops.