by Martin Newman

Special to the eTail Blog

By my reckoning, social media has been all the rage for the last three years. Yet the abiding question on everyone’s minds still is how to monetize the social space.

Getting right to it – here are my top tips for companies who want to make the most out of social media and a few key examples of companies who’ve done so:

1. Think strategically.

You need to decide what your objectives are for social media. Is social media about customer engagement, improving customer service and increasing customer retention, generating insight, improving communications and driving customer acquisition? Once you can answer this, you can also then make decisions about where the ownership for social media sits within your business. It may well be that more than one part of your business is leveraging it.

2. Align customer segmentation and platforms with acquisition and retention.

Think about customer segmentation and which social media platforms are the ones that will reach new customers, existing customers, younger customers, older customers and so on. Dell is believed to have generated more than $3m in incremental revenue through Twitter within a year. So you may view Twitter at this stage as more of a customer acquisition opportunity. But it’s also an opportunity to retain customers who have had a bad experience with your brand and to nip problems in the bud before they escalate.

Look at Facebook-studio.com, as this provides insight into how other business are leveraging the ever-increasing opportunities to market to customers on Facebook.

3. Think internally as well as externally.

It is my contention that social media should penetrate the whole organization. It shouldn’t be a ‘campaign’ or a ‘tactical’ sales tool. Nor should it only be customer facing. Social media should embrace the internal business and harness the knowledge and insight available within those who don’t always have a voice or a vehicle to impart their knowledge through.

A great example of this is with Best Buy. Their Best Buy Connect social media platform has the aim of showcasing their people, their culture and with unedited perspectives, presents a transparent picture of the business and its employees. It puts a truly human face on the brand, whilst increasing accessibility and driving transparency. This in turn can have a tremendously positive effect on current and future customer perceptions as well as on current and future employees.

The manifestation of this can be seen here on Twitter with the ‘Twelpforce’ service.

This is both a driver of customer service and advice and customer engagement, the byproduct of which is a more loyal customer base, significant ‘word of web’ generated by happy customers and of course an uplift in sales.

4. Think engagement.

Burberry is probably just about the best example of a social media campaign I can think of that drove a huge amount of customer engagement and user generated content with its ‘art of the trench’ campaign launched in 2009. Many thousands of people have now uploaded pictures of themselves in Burberry trench coats. Although not directly linked to purchasing products, it will have had a positive spin off on sales. It also made the brand more accessible, opening it up to a wider customer base.

Luxury brand Jimmy Choo ran a successful social media ‘competition’ which saw a real-time ‘shoe hunt in London.’

The ‘catchaChoo’ campaign involved a pair of its new trainers ‘checking in’ at fashionable hot spots around London. Fans received real-time updates via social networking sites such as Twitter, Facebook and FourSquare. They were given a short amount of time to track the shoes down and get to the location using the sites’ geolocation software in order to win a pair of trainers in their size.

They had more than 4,000 entrants and generated significant media coverage. The competition details were viewed on Facebook more than 285,000 times.

Levi’s ran a ‘ready to work campaign’ in 2010 targeting the 18-34 demographic and tested Facebook-only 40% off discounts to gauge whether there would be a measurable conversion rate among the viewers.

Within 15 minutes of the campaign launch, Levi’s saw the traffic to its website double as consumers cashed in on the 40% off incentive. Traffic to the Levi’s Facebook page saw 1,500% more interactions, with its total amount of fans increasing by 35% over the course of the campaign.

Martin Newman is the CEO of consultancy firm Practicology which works with brands like Pink, Space.NK, Dyson and more on strategy development, optimisation, business intelligence, training and more. Newman has been involved in multi-channel retailing for more than 25 years having had P&L responsibility for retail, direct mail, e-commerce, kiosks and call centre channels for a number of retailers including Ted Baker, Harrods, Pentland brands (Speedo, Kickers, Boxfresh etc) Burberry and Intersport. He will deliver a master class at eTail London, which takes place this coming June. Visit the website to learn more.