The rise of social media has given rise to the ‘social consumer’. This is the internet-savvy generation that learn about your company through social channels and who expect you to listen and engage with them when they need you. They have increased expectations of how much you already know of them, and they have little problem doing their best to damage your reputation if they’re not happy with the level of service they are receiving.

The social consumer is taking greater control over the relationships they have with the brands they deal with, and businesses who adapt are seeing increased returns. Recent research from the Sensis Social Media Report showed that small businesses who had a social media presence said they believed it was driving an increase in annual sales of 8%. Now do I have your attention?

“How do I start?” you might ask. Easy. Here are three simple steps to kick-start your social media strategy.

Step 1. Enable the conversations

The first step is thinking about where your customers and potential customers are, and creating a presence in those forums that you manage. The most obvious place to start is to create a Facebook page. Also consider whether a Twitter account is right for you, if there is a social site that is relevant to your specific industry.

Having a presence on these sites creates a place for people to direct their conversation, and increases the amount of control you have.

Step 2. Start listening and engaging

Sometimes it’s not obvious what you want to say on these forums. You might have a business that doesn’t obviously lend itself to social media, so figure out through trial and error what works. Post photos, link to other people and brands of interest and above all, keep it personal and fun.

The beauty of Facebook is that it provides a host of data against each and every post that you make, including how viral it was and how engaging it was. It’s from these insights that you can tailor your plan. Perhaps a post with a photo really hit a sweet spot, but another post on a specific topic was less engaging. Use this information to improve how social you are.

It’s also important to remember that you shouldn’t directly sell in these forums. It’s much more important to talk about the community that you represent than to do a hard sell on the products you sell. At this stage you’re trying to create loyalty and positive branding, so avoid the hard sell as much as you can.

And finally, if someone publically comments on how they are unhappy with your product or service, do your best to rectify the situation quickly and tell them how you fixed it. It is far more powerful to leave a negative comment on your site which you successfully resolved than to delete the comment completely.

Step 3. Convert fans to customers

Over time you will slowly see the benefits that social media can provide, and you will learn new and innovative ways of utilising it for positive outcomes. You might realise that the best use is to manage customer complaints, or to share general business information. You might use it to road test new product ideas or you might use it to share discounts for certain products. For each business the exact use will be different, and is likely to evolve over time.

Facebook has more sophisticated ways of converting fans, including some very snappy tools to learn about who your fans are. Facebook will show you were your fans are located, their age, gender and even the language that they speak. This enables you to not only make smart business decisions (such as the location of a new branch), but also enables you to target messages to specific people. Launching a product in Brisbane targeted at young women? Well now you can just send exactly those women in your network a tailored message. How’s that for increasing your conversation rate!

The bottom line? Social media is a brave new world, but businesses who engage in this new phenomenon are seeing the benefits. Don’t be put off by all the jargon and technology, just jump right in. Who knows, you might turn into the next social media mogul.

When you look at companies that are delivering great results globally, it’s hard to ignore that many of them are run by the guys that started them. Apple of course, Google, Facebook… all of these are run by the founders. These companies appear driven by the legacy that the founders want to leave behind, and their entire business and decision making process revolves around that, not the current years financial numbers. In short, they are hard-wired to create sustainable value for their business.

The reverse seems to hold as well, that once great companies that were run by their founders start faltering when they leave. Case in point: Microsoft. They haven’t had the best five years since Bill Gates resigned.

It makes me wonder how businesses can create that culture within their own organisations when they may not have the luxury of being run by founders.

Most large corporates have Employee Share Programs and even executive remuneration structures that incentivise longer term thinking, but it’s only ever a small portion of what hits their hip pocket. What really makes the big bucks is whether they are able to hit the current financial year targets. Too many businesses make decisions to meet the current year’s target, not to create sustainable value.

Steve Jobs was only ever paid $1 for his services as CEO of Apple, with the rest of his remuneration tied up in shares, a sure fire way to make sure he was focussed on long term shareholder value. For Tim Cook a similar strategy has been employed, with the Board issuing him 1 million Apple stocks (worth an incredible $350m at current prices), but the catch is that half the stocks vest in five years time with the other half in ten years time. That’s a long time, and it means that Tim will be less interested in how maximise this years result, and more interested in how to create long term value that maximises the stock price in five and ten years time.

I think it’s a great strategy and philosophy on how to instil a little more long term thinking in corporates and one that I’d love to see more of in Australian business.

I’m sure Steve Jobs had a hand in setting up this remuneration structure given he was Chairman of the Board at the time it was signed with Tim Cook. I’m guessing it was his little way of ensuring that long term vision stays entrenched at Apple. Nice touch Steve.

Why spend so much money doing blanket advertising for a product that only iPhone users can access? Steve Jobs must be wringing his hands in glee at the free plug their product is getting.

In my experience I’ve learnt that if you push your iPhone App to all users (not just iPhone users) you actually alienate non-iPhone users, who start getting angry about your brand. A much better solution, is to have iPhone, Android and a basic web app sorted, then go with a broader message about how your product is “available on your smartphone now”. Any other approach is wasteful and in fact, damaging to your brand. If I was on the Woolie’s Board I’d be asking for the Marketing Budget to be cut.

In the meantime, congrats on the App Woolies, it’s actually pretty good.

Great strategy, but only useful if you can get people to sign up to Google+ in the first place, and that looks like a tough nut to crack when it’s offering the same things that Facebook already does.

And I’m certain Facebook are already working on easier ways to search your friends history.

Small Businesses Beware

He wasn’t the only one. Another lady who ran a bookkeeping business wanted to stop doing an electronic mail-out highlighting changes in legislation relevant to her customers and instead post them as Facebook updates. I had to explain that her information is probably more critical then what usually appears in Facebook feeds, and that her customers might be upset if they didn’t sign into Facebook and see an important piece of information relevant to them.

The bottom line; SMBs are feeling pressured to engage in Social Media, specifically Facebook, even if it’s not relevant to their business.

2. I have to create an iPhone App.
This came up many times. “I’ve been told that I need to create an iPhone App for my business”. This one worries me because I can imagine these SMBs being told by developers that Mobile is taking off and they have to be in the iPhone App Store. Combine this with all the advertising about the App Store from Apple and it’s no wonder that SMBs are confused. And what’s happening? These SMBs are ending up with native iPhone Apps that are expensive to create when all they needed was a mobile optimised version of their web site. Remember, most of these businesses only have a website for a simple summary of their business, a couple photos and their contact details. And try explaining the difference between native apps, hybrid apps, mobile optimised websites, Android Marketplace and iTunes App Store in five minutes – it’s not easy.

The bottom line; some SMBs are being hoodwinked by developers that are building them expensive Apps they don’t need.

It’s a fast paced digital world and if you’re a small business, make sure you know what’s important for your business and what isn’t. Otherwise you could end up with a huge Social Media overhead or an expensive, but unnecessary, mobile App.

Phew, I’m so glad that is out of the way.

Now, onto more interesting things …