What Dell’s doing on Twitter is one of my favorite stories, and is explained best by a Stefanie N, a dell employee herself:

I started tweeting for the U.S. Dell Outlet in June of 2007 based on a suggestion from a colleague who learned about Twitter at the SXSW Interactive conference, and the response had been very positive. But I knew we could do more. So I started tweeting more regularly and doing more Twitter-exclusive offers, which created more buzz and helped us to grow our follower base (we’re now over 600,000). Our followers responded by re-tweeting @DellOutlet messages to their followers, and our numbers rose even more. The chart below (click on it to see more options) shows our growth over the last 3 months—right around the time we began introducing more exclusive offers, when we were at about 11,000 followers. … we’ve actually eclipsed $3 million in overall sales.

Did you catch that? $3 million in overall sales since June of 2007… that’s only 2 years!

How do they do this? There seems to be a few basics I find in common for many twitter success stories:

1. Connect with your audience - Import databases, publicize your twitter profile, follow the people who talk about you and/or your product… general stay-in-touch stuff.

2. Listen and Respond to what the community is saying about you – use twitter tracking tools like search.twitter.com to keep track of what the general public is saying about you – not just the people that are following you.

3. Give your followers what they want when they want it – which for companies like Dell is answers to service issues, help finding product, and the deals that apply to them.

Always keep in mind what you are trying to accomplish, and use whatever tool it is to accomplish your goal. For Dell it’s keeping their customers satisfied in the products and making it easier for them to get the service they want. This thoughtfullness has generated over $3million in revenue for them. How could you be more thoughtful for your clients? Would twitter social networking be able to supplement this? These are the questions you need to ask, not just of yourself, but of your clients – conduct a survey, try out the software.. there are a myriad of ways to put your toe in the water and find if it’s right for you

Deepening Customer Loyalty Through Social Media by Aaron Strout

When was the last time you said to yourself: “Wow, I’d recommend this product or service to a friend”? Within the last month? Six months? If you have to think about this question, you’ve already made my point. Over the last 50 years, outsourced manufacturing, poor customer service and an overall commoditization of products and services have served to erode consumers’ affections for most brands.

While the idea of diminished customer loyalty may be disheartening–after all, if customers aren’t loyal, they don’t rave about your brand to other customers and they certainly can’t be tricked into forking over a greater share of their wallet–all hope is not lost. In fact, smart brands like Dell, Ford and Sears are starting to see increases in brand affinity as a result of their social endeavors.

Before we talk about some of these examples, let’s start by reminding ourselves why loyalty is important. Arguably the biggest benefit is highlighted in an article by loyalty guru Fred Reichheld, titled “Leading with Loyalty.” Based on research Reichheld’s employer, Bain & Company, conducted last year, “companies that enjoy [the] ‘loyalty effect’ grow at better than twice the average for their industry.”

If doubling your growth rate isn’t enticing enough in and of itself, Reichheld also proves in his landmark book, The Loyalty Effect, that “as little as a 5 percent increase in retention can improve a company’s bottom-line profitability between 25 percent and 85 percent, depending on the industry.” Not too shabby, but also easier said than done.

Let’s take a look at how a few well-known companies are using social media to dramatically improve their customer loyalty:

•   Dell Computers: As recently as 2005, Dell was struggling mightily to keep its customers. Complaints of poor customer service combined with a scathing barrage of bad press stemming from stories of laptop batteries catching on fire led CEO and founder, Michael Dell to tap current “chief blogger” Lionel Menchaca to help right the ship. Through a campaign of open and honest communications via the Dell blogs and proactive participation by its employees in Dell’s support forums, customer satisfaction and loyalty have started to come back in full force.

•   Ford: It’s no secret that the auto industry has come under heavy scrutiny over the last 12 months. The big three in particular have suffered huge PR and sales hits during that time as they attempt to figure out what’s next. During that time, Ford made a giant leap into the world of social by bringing in social media head Scotty Monty. Through tools like Twitter, Scott’s blog and Ford’s Sync My Ride community, they have slowly begun to win back customer and influencer confidence. Ford still has a long road ahead, but they are reaping the benefits of being reconnected.

•   Sears: you’ll be surprised to find out that the company you used to know as Sears is not your father’s department store. In fact, you may be surprised to know that Sears launched its SKU community last summer, and now has more than 200,000 members.

According to VP of Community, Rob Harles, Sears is starting to see some little wins with their community: “Overall, customers are starting to feel that they are being listened to, core members skew toward being some of the most valuable/profitable customers and the ability to reach out to customers and solve their issues proactively is definitively turning around customer perceptions.” Rob mentioned that in one extreme case, the SKU community turned a client from “I would never shop with you again” to “I have put my store card back in wallet.”

If Dell, Ford and Sears can do it, why can’t you?

For anyone interested, here are a few steps to help get you started:

1.   Listen first – You may already know why your customers aren’t as loyal as they might be. If you don’t know, you should start by listening to what they are saying.

2.   Engage – Unless you are one of the lucky few brands that instill passion in your base, think about giving your customers a reason to engage with you. This is most easily and simply accomplished by offering compelling content that is not about your company’s products, but is germane to the customers’ lifestyle. Wrapping this content in social tools makes it more scalable and repeatable.

3.   Measure – If you are diligent about putting steps one and two into practice, make sure you measure. Not only will it help you gauge the effectiveness of your program, it can help you get more funding to fuel it–especially during tough economic times like we’re living through now.

What makes social media so special is it’s two main applications: social media optimization and social media marketing. Social media optimization is the trick/expertise/pure luck of creating social media in a way that will encourage it’s spread (aka. viral) across the web. This is where rules like no videos over 2 minutes come in to play – 2 min is a very viral-able time block. Social media marketing is focused more on the pr, content, and collaborative aspects of social media – this isn’t too far off from traditional marketing and pr… just add tech and a strong narrowing of topics/audience (there’s blogs for people who love radishes for goodness sakes!)

Great info, but why should you care?

If your business is ever impacted by referrals (meaning you ever get referrals or want to get referrals) or your reputation matters at all (people talk you know), then you might want to make sure that you have an “ear to the ground” in the areas that your clients are talking. Even if you aren’t’ advertising, or spending any real marketing dollars in social media – because your clients are there… they are on Facebook telling their girlfriends and coworkers and random friends about how their back doesn’t ache any more thanks to the chiropractor Aunt Jemima referred them to. Tourist Sally is posting reviews of the restaurants she ate at while on vacation in San Diego. Lesley the promo products lady is writing recommendations of her favorite colleagues that EVERYONE’s friends can see.

I was talking with a restaurateur friend of mine last week that said he didn’t want to work on the internet – people say bad things and you can’t do anything about it (which isn’t true – you can – it’s what I do for a living) – and he’s not sure he wants to get involved. I understand what he means.. don’t you? If people “run their mouths” illegitimately in real-life, imagine what they could do with a veil of anonymity via online reviewing services!!

But wouldn’t you rather know?

in the next episode we’ll talk about how you can keep track of your reputation (and build referrals) online… stay tuned!