The Business of Social Media

The rules of this brave new world are still being written.
Why it matters to your business.

By James Shannon
Business Journal

Notorious bank robber Willie Sutton knocked over more than 100 banks in a criminal career that spanned decades. According to legend, a reporter once asked Sutton why he robbed banks.
“Because that’s where the money is,” he famously replied. Although he later denied saying it, the quote made it into the lexicon.
For any business wondering why they should invest in social media, the answer is simple: That’s where the people are – including past, present and future customers.
“Why should businesses participate in social media channels?” asked Stephanie Molina, director of marketing for the Beaumont Convention and Visitors Bureau.
The savvy social media operative answers her own question.
“Because that’s where everybody is — and social media is everywhere. It’s on their phones, on their computer, iPads, on their television. … It’s pretty important to be at this party because everybody and their grandmother, aunt, uncle, niece, and dog already are there,” she said.
The practicality of social media use varies depending on the type of business and the client base they serve. There are a number of social media platforms available at no cost to individuals and companies, and deciding which one best meets your business needs can require some study. But the dominant site at this writing would certainly appear to be Facebook.
“For people to not use Facebook to their advantage is really a bad business decision,” said Amy Van Pelt, owner of Gaudie & Co. with three boutiques in Beaumont and Nederland. “Number one, it’s free and people have to join that want to join so everything you put on there they want to know. It’s not like they’re getting some mail-out they just throw away – they want to know because they joined.”
Van Pelt basically uses her company Facebook page to drive retails sales to more than 3,500 fans (more on that later) but an essential fact to grasp when considering social media for business is that this is still a rapidly evolving endeavor, and the conventional wisdom of today may be rapidly outpaced by unforeseen events in the near future.
“We’re still writing the rules of this new method of communicating with people,” said Molina. “The way the world consumes media is changing. We want to consume what is interesting to us, we’d like it now, and we want it in the palm of our hand. Our smart phones and devices have become our communication portal to the world. We’re able to broadcast our thoughts, pictures, opinions and ‘expertise’ to virtually anyone.”
Molina’s emphasis addresses the reality that such “expertise” can be fact-based or completely bogus but will still be widely disseminated.
The issue is not whether this free-flowing information stream is necessarily a good thing. It is here to stay in some form or another and is worth serious consideration by any company that wants to survive and prosper in this brave new world of communications.
“For business applications, it allows for instant feedback and dissemination of specials and announcements while allowing our customers to contribute, discuss and be heard,” observed Molina.
“The old mantra on customer service and satisfaction – ‘The customer is always right’ – has never been more true and important to a successful business strategy. The customer is now directly connected to an exponentially expanding network. Instead of telling eight friends about a bad experience, they’ll tell their 500 friends on Facebook, 1,000 followers on Twitter and can post and share a damaging review or picture — you get the picture. Bad news — and really amazing news — spreads like wildfire, and that’s powerful stuff.”
The Beaumont CVB maintains a vigorous social media presence in multiple venues, a logical extension of its mission to market Beaumont. Many of the lessons the CVB is learning have practical applications for all types of businesses.
“There is no charge for any of these services, but human time is valuable. You can’t say it’s free because it takes time to manage all these things,” said Molina. “But it’s very important because people are using these networks; they’re talking about your products, and you need to be part of the conversation.”
Despite her adroit use of social media in her job as CVB marketing director, Molina is not the only staffer there focused on this area. Ashley White is the CVB online media manager who oversees social media and online communication strategy.
“The Beaumont CVB has been recognized among national social media leaders for our trend setting use of social media in the tourism industry,” said White. “Using social media and mobile marketing allows the CVB to plug into the day-to-day routines of leisure travelers. We are able to maximize the return on investment, respond to consumers in a speedy manner, eliminate waste, drive business and communicate with travelers in a way they are accustomed to communicating.”
To that end, White said the CVB uses Facebook, Twitter, FourSquare, QR (quick read) codes, RSS feed, and have established a Beaumont CVB channel on YouTube and an online photo album on Flickr.
Even with the current dominance of Facebook, Twitter is rapidly moving up despite its seeming limitation to brief bursts of text. Molina said it helps to think of all this communication as “clouds of conversation” – discrete thoughts connected through social media.
“People are talking and with Twitter, you are part of the conversation,” she said. “For me, it means being able to connect with people in my industry that I would not have the opportunity to chat with on a regular basis. The CVB is connected to other tourism organizations and people who want to know what’s going on in Beaumont. That’s what the main objective is – what’s going on – and answering that question in 140 characters on Twitter.”
For those not involved in the tourism trade, there are still practical benefits for businesses willing to take the time and effort to embrace social media.
A good example is Gaudie & Co. Van Pelt said they have been on Facebook for about a year and have learned how to use it well.
On a recent chilly day in Beaumont with the temperature near freezing, this post appeared on the Gaudie Facebook page: “Brrrr it’s so COLD!!! Come in today and buy any coat or jacket 40% off!! No reason not to look good in the cold!! New Scarves just came in too!!”
Needless to say, like selling umbrellas on a rainy day, a cold snap will always move coats off retail shelves. When Gaudie & Co added 40 percent in savings to the equation, they sold even more coats.
Van Pelt said she was already convinced of the power of social media before those coats moved.
‘To give you one example, we did the 25 Days of Christmas, so every morning we put something on Facebook for that day only – a sale, a special or whatever we decided to do – and every single day, that’s what they came in for. They wanted to know what the next day was going to be, but we kept that a secret you could only find out on Facebook,” she said.
In addition to the items posted by Van Pelt, the comments of site fans can also help stimulate sales. The same day the coat message appeared, there was another clothing item featured. In response, one fan posted, “Oh ya ... my friend Leisa loves hers!”
How’s that for a recommendation?

A cautionary tale

When first using social media for a business, it helps to learn as much as you can before diving in. Mike McNeill, a news anchor at Fox4 in Beaumont, came up with a unique idea to boost traffic to the station’s Web site when he was hosting the station’s now-defunct morning show.
“When I was a youth pastor, the one way I could always get kids to show up for an event was if I pulled some stunt,” said McNeill. “One time, I said, ‘I’ll shave my head’ – at the time, I had long hair; I was in college and it was down to my shoulders. I said, ‘If we can get 100 kids at this event …’ and they showed up with 375 kids, so I immediately thought, ‘Put this in your back pocket – it works.’”
The veteran broadcaster, now hosting a Fox4 afternoon show, continued the tale.
“So when we were trying to build that fan base online, I just off-the-cuff one time said, ‘I’ll shave my head on-air, we’ll raise money for Locks of Love and make it worthwhile’ – and people got on board; they got crazy with it. I said 3,000 and I think we were at 3,500 by the time we got ready to go,” he explained.
McNeill and Fox were ecstatic over their success until Facebook reality intervened.
“It was right after that we discovered the 5,000 friend cap,” he said ruefully. It turned out that a personal Facebook page allows users to accumulate 5,000 friends, and McNeill’s head-shaving soon had the station over the limit. Fox4 had to switch to a Facebook business site, which allows unlimited numbers of fans instead of friends.
“The only difference is on the fan page, you don’t have to approve your fans. They just automatically hit the ‘Like’ button and they become part of the page. The friend page requires a lot more maintenance; you have to go in there and approve all your friends. So for a business like ours, the fan pages make a lot more sense because it requires less maintenance,” said McNeill, whose hair has fully grown back in the 11 months since he had his head shaved on the air.
Another social media user – albeit in a different form – is a discount retail outlet.
Steve Stoma operates S&M Family Outlet in Beaumont, Port Arthur and Lake Charles, La. The business is more than 50 years old and offers a wide range of merchandise that includes top label fashions, shoes, housewares, gifts and more for the whole family at deep discounts.
Stoma said he has a Facebook page but does not necessarily cater to the same clientele that frequents Gaudie & Co.
“I’m not sure how long Facebook is going to last before something else comes along,” said Stoma. “I remember when people thought AOL was going to take over the world.”
Indeed, the social media landscape is littered with the remains of yesterday’s success story. My Space once competed on even footing with its rivals but has since been eclipsed by the Facebook boom. As one social media user interviewed for this story commented, “My Space is like that once-popular bar that nobody goes to anymore.”
As for Stoma and his S & M Family Outlet stores, they rely on a weekly newsletter e-mailed to customers whose e-mail addresses he has collected over the years. Stoma said this is an effective way to let shoppers know what merchandise they’ve acquired.
Stoma said his newsletters and e-mails are sent out via Constant Contact, a firm launched in 1998 and headquartered in Waltham, Mass. They help small businesses, associations, and nonprofits connect with their customers, clients and members. More than 400,000 organizations worldwide use their e-mail marketing, online survey and event marketing tools – and they have added social media consulting to the mix.
According to Eric Groves, senior vice president of global market development at Constant Contact, “Social media is such a great opportunity for small businesses and organizations – it’s another innovation that’s democratizing the world of marketing, allowing small organizations, who don’t have huge marketing budgets to compete with much larger organizations.”
Groves echoes the findings of others who have acquired valuable hands-on knowledge after spending time using social media.
“It’s very important to ‘listen’ to what others are saying,” he said. “Social media is all about having conversations. It’s not enough to just set up a Facebook page; you need to engage with people. Ask open-ended questions to get a dialogue going.”
Constant Contact offers seminars or Webinars about social media marketing in addition to tools they have developed to let clients maximize their efforts. More information is available at

By the book

As the social media realm continues to evolve – seemingly on a daily basis – there is no shortage of info gurus rushing to fill the intellectual chasm created by technological advances that challenge our ability to use them effectively In a new book published this month – “Enterprise Social Technology: Helping Organizations Harness the Power of Social Media, Social Networking, Social Relevancy” – author Scott Klososky (pictured above) describes how social technologies have exploded into the business world, yet are vastly misunderstood.
Klososky cites a 2010 study of 1,654 IT managers and end users that reported some surprising results:
• 62 percent of IT professionals estimated that social networking was present on their networks, while the actual data showed social networking present in 100 percent of cases.
• File sharing tools were found to be present in 74 percent of locations, although only 32 percent of IT professionals estimated that they were in use.
• Web-based chat was also found in 95 percent of locations, with only 31 percent of IT professional estimating that it was in use.
Expecting IT professionals who harbor such fundamental misunderstandings of social media use to actually implement a social media program does not sound like a sound strategy, but you have to start somewhere. The author recommends his own new book, “Enterprise Social Technology.”
“This book is a how-to manual,” said Klososky, “that will teach you a process for implementing social technology in its most powerful form.”
The Oklahoma City-based guru founded and built Paragraph Inc. and — two Internet companies that sold for more than $200 million in aggregate. He is described as a “thought leader” who can communicate how this new technology impacts businesses and society – and where it is likely to go in the future.
“I want to move the discussion past whether a CEO should be tweeting,” said Klososky, “or the organization developing a Facebook fan page, and toward how leaders can holistically integrate the full range of social technology tools to make a truly meaningful difference in their organizations. Just as personal computers, the Web and e-commerce have caused dramatic changes in how organizations operate, social technology also will alter the way we do business.”
Closer to home, the Beaumont CVB’s Molina reminded that even in social media, there are still some basic tenets to be observed.
“You wouldn’t want to say anything on Facebook that you wouldn’t say in person to someone – that’s just your general rule of business etiquette applied,” she said.
So it is probably a good idea to avoid religious, political and personal comments in your social media expressions, even while being mindful of Molina’s assertion that the rules of these new methods of communication are still being written.

This article originally appeared in the January 2011 edition of the Beaumont Business Journal.

Welcome to setxBIZ - a new blog from the Business Journal

Since 2009, the regional business journal has been alive and well in Southeast Texas.

The Beaumont Business Journal hit the streets in December 2009, followed by the Port Arthur Business Journal in September 2010. These monthly publications about business chronicle the entire business community - news, trends, openings, closings and more.

Between our monthly publication dates, we will present breaking business news on this blog and facilitate feedback on the stories we print. Your input is welcome.

James Shannon
Beaumont Business Journal
Port Arthur Business Journal