6 rules of engagement for social media marketing that prove ROI

Social media marketing demonstrates its part of our DNA to find others with similar interests and bond with those who buy the same brands.  There have been destinations on the internet for this purpose since before there was Facebook, Twitter and LinkedIn. 
Social networks accelerate this behavior.  What are the principles at work?  Here are 6 rules of engagement for social media markeing that prove ROI.
1.  ASK CUSTOMERS FOR HELP:  Traditional marketing is a monolgue but social media marketing is a conversation.  It’s ok in a dialogue to ask for help.  Starbucks was one of the first and biggest brands to turn to their customers for new product ideas.  MyStarbucksIdea.com was a major decision by the company to reach out to Starbucks lovers for new coffee drinks and experiences in-store.  The result:  “It’s the difference between launching with many millions of dollars versus millions of fans,” says Chris Bruzzo, Vice President for Brand, Content and Online. 
2.  BUILD 1-TO-1 RELATIONSHIPS: Foiled Cupcakes Founder Mari Luangrath came up with the idea for her gourmet cupcakes trying to find some in Chicago for her son’s birthday.  When she couldn’t find a dozen for less than $100, she realized there was a business opportunity.  To deliver a better product for less money, she decided to sell cupcakes by creating a company internet site instead of renting a storefront in Chicago.  A major snafu occurred when the internet developer off-shored the labor for the company website and ran into Pay-Pal problems.  The cupcakes were ready but the website wasn’t.  With nowhere else to turn, Mari launched Foiled Cupcakes on Facebook and Twitter and built personal relationships with every fan and follower.  The result: Foiled Cupcakes revenues were 6X greater than goal and, even though they now have a website, 93% of customers still come from Facebook and Twitter.      
3.  KEEP CONSUMERS INTERESTED WITH FAMILIAR TOPICS: If you’re a Harley fan and go to HDTalking.com, you’re likely to come back because you can engage in multiples discussions, all organized by the following clearly defined topics:

• Forums, Announcements, News
• General Harley Davidson Talking
• Harley Davidson Motorcycles
• General Tech Harley Davidson
• Self Help Information and Tips
• Manufacturers Product – Official Support
• Chit Chat
• Market Place
• Regional Harley Davidson Riders
• Other

The result: There are 33,839 treads, 340,790 posts and 43,301 members on HDTalking.com.  The are all generated by customers with minimal investment from the company.
4. ENCOURAGE ORIGINAL CONTENT: My first client experience with social marketing was for Shell and their motor oil, Pennzoil.  They spent rougly  25% of their marketing budget on a NASCAR sponsorhip  but couldn’t figure out if it delivered any ROI.  We created a brand community that was an insider’s view into their No. 29 car and race car driver, Kevin Harvick.  The NASCAR sponsorship included content from the race team, so we published stories from the crew, Kevin and his family and web cam footage not available anywhere else.  We were looking to attract autoracing fans that were heavy gasoline and motor oil purchasers to give Shell a return to make a NASCAR investment worthwhile: The result: We attracted fans who purchased 3X more gasoline and motor oil and they told friends who were just like them.  
5.  CREATE SUB-COMMUNITIES:  Many people think social media is for B2C businesses.  Actually, the opposite is true.  Social Media Examiner and Hubspot report 52% of the businesses that use social media are B2B.  IBM is one.  IBM doesn’t have a corporate blog.  Instead, they have a site where their engineers and employees are encouraged to blog with colleagues around the world about ideas for new products and innovations.  IBM set up sub-communities from A to Z.  The result:  Employees have set up 17,000 blogs; 100,000 regularly participate and the number grows to 500,000 when there are “crowdsourcing ‘jams.'”  IBM funded $100 million for product innovations from their employess.  It generated $100 billion in revenues for a 10-to-1 ROI with a 44.1% gross profit margin.
6.  LISTEN:  Because social media marketing is a conversational medium, one of its biggest benefits happen from listening.  Fiskars is a 300 year old Finnish arts and crafts company best known for producing scissors with orange handles.  Many of its retailers are hard to reach specialty arts and crafts stores.   To create awareness for them and to communicate directly with customers, Fiskars created Fiskateers, a brand community and forum where customers could learn about new products, offers, talk with other Fiskars users and contribute ideas.  The result: Fiskateers increased sales 3X.  There are now over 6,000+ members.  The community helps drive company innovation and greatly reduces the cost of focus group research.  
Social media requires time and dedication but, as these case studies show, the results are worth it.  If you need further proof, Social Media Examiner says, in their 2011 Social Media Marketing Report, over 50% of companies with 1 to 3 years experience and over 65% of companies with 3+ years report overall marketing costs drop when social media marketing is integrated into their marketing plans.
Do these rules of engagement help explain why?