Is social media good for business? Well, let’s see. 1.3 billion people are online, with 50,000 new internet users coming online each day. And thanks to social media tools, every web user has a voice he or she can use to share, seek, recommend and complain. At the very least, social media cannot be ignored by business.

Social media marketer Sean McDonald, BBA ’86, MBA ’95, shared insight and tips on how businesses can use this powerful new phenomenon during a McCombs Knowledge to Go webinar March 9. McDonald spoke from his experience as a Dell marketing executive and principal strategist at social business firm Ant’s Eye View.

Businesses Value Transactions, but Humans Value Relationships

McDonald opened with the warning that customers are bombarded with thousands of messages everyday and yet trust in companies is at an all-time low. He added that 65 percent of marketing spending in 2007 had no effect on customers.

While of course companies want and need to make money, they need to see the value in having a relationship with a customer first, McDonald said. Relationships eventually turn into customers. And loyal customers at that.

“Think about the great businesses that have had real staying power—they provide a great product or service and you have a relationship, a connection with that brand,” said McDonald, adding that we tend to forget about brands we don’t have relationships with.

He also noted that social media is not just for marketing. Companies like Dell and Starbucks have successfully used it for R&D, gathering customer insights as input for innovation. Social media can support sales, customer service and operations as well.

The 4-Step Social Media Gameplan

So how can a company get started using social media?

McDonald offered this strategy:

• 1. Listen. Set up accounts on major social media sites like Twitter and Facebook and see what people are talking about. Use Google Alerts or any number of paid monitoring services to track what people are saying about your brand.
• 2. Engage. Start participating in social media. Follow people on Twitter, respond to mentions of your brand, ask questions.
• 3. Tell YOUR Story. Resist the urge to skip the other steps and start with this one. If you want your message to be effective, the community understanding and relationships need to come first.
• 4. Collaborate with Stakeholders. What projects and initiatives can your audience help you push forward?

6 Social Media Principles

McDonald closed by outlining six guiding truths of social media:

• Social media is a means to an end, not a solution.
• The act of being social requires you to give first and expect nothing in return.
• Social media can put relationships on a steroid program—meaning relationships, good and bad—will be amplified in social media communities.
• Technology is an enabler, not the solution or substitute for relationships.
• Marketing has always been about conversations, but the mediums did not always support it.
• Change management is necessary to operate social media alongside the rest of the enterprise, not to replace it.

Get slides and a recording of McDonald’s talk, including a social media case study with Dell and examples of small businesses using social media effectively.

Register for the next webinar is April 13, when McCombs Senior Lecturer of management John Doggett will discuss the global trade outlook.