Does Social Media Payoff?

I came across a new study (July 2009) yesterday prepared by WetPaint and Altimeter entitled ENGAGEMENT:db. The study tracks and ranks the top most valuable brands and how they are engaging in social media.

The study included rankings in the  Retail, Leisure, Consumer Electronics and Products, Business Services, Food & Beverage, Financial, Apparel, Manufacturing, Auto, Media and Technology industries.

Specifically, they focused on the:

• Depth of engagement – How many channels and how many individuals in the company are engaged in Social Media (Starbucks got the top score of 127 engaging in 11 different channels.
• Engagement Profile – The study defined four profiles:

1. Mavens – Engaged in +7 channels w/above average activity (Starbucks and Dell in this category)
2. Butterflies – Engaged in +7 channels but with below average activity (American Express and Hyundai here)
3. Selectives – Engaged in 6 or less channels w/above average activity (H&M and Philips in this category)
4. Wallflowers – Engaged in 6 or less channels but below average activity (McDonalds and BP here)

• Financial Performance – Focusing on a financial correlation between those deeply engaged and those that outperform their peers.

The conclusi0n: Heavy engagement and focus on social media does pay off. The Mavens ended up on top and outperformed the other groups in revenue growth (18%) as well as gross (15%) and net margin growth (4%). As you might expect, the Butterflies came next, followed by the Selectives (although the higher activity kept this group closer to the numbers of the group above), and finally the Wallflowers fell in negative territory.

Although ranking the top 100 brands, the study provided additional insight into four brands including some best practices:

• Starbucks: Deputize people throughout the organization, Understand how each channel provides a different dimension of engagement, Central coordination, Find champions who can explain and mitigate risk
• Toyota: Be in it for the long haul, Pick channels carefully, Spread engagement to employees beyond the Social Media Team
• SAP: Open the platform to everyone and anyone, Encourage employees to tap into Social Media to get work done, Engage in new channels where people already are, Support engagement as an extension of the company culture
• Dell: Be conversational from the start, Make Social Media part of the job, just like email, Modularize and synchronize content across channels

Key Takeaways?

• Engagement via social media is important – and it can be quantified
• What’s in it for me? There does seem to be a correlation between social media engagement and financial performance metrics – revenue / profit
• Emphasize quality, not quantity – fresh relevant content and engagement is king
• To scale engagement, make social media everyone’s job
• Doing it all may not be for you, but do something - ignoring social media risks falling behind
• Find your sweet spot – better to be consistent in fewer channels.

OK … so how does this correlate to the wine industry? There aren’t many wineries with the size and resources of the companies listed above. In fact, many wineries may not even have a marketing person at all let alone a Social Media team available to engage as suggested by the study. Oftentimes the winemaker is also the farmer, owner, chief administrator, spokesperson, tasting room manager, and/or top sales person, not to mention various other potential assignments.

Does that mean there are no lessons to be learned or takeaways for wineries to think about? Not at all.

Manyof these best practises outlined above are already being used successfully by wineries. I can assure you that some of these are in play by the top 50 wineries on Facebook.

So what are the wineries doing:

• Seeking out current and prospective customers
• Engaging them based on their interests and concerns with relevant, consistent and timely content
• Building a dialogue with them in order to better understand and satisfy them
• Keeping the discussion on-going

Eagles Nest Winery of San Diego is  a prime example of a winery that understands the value of social media. Dennis Grimes is the winemaker as well as a blogger, a video producer, taster, and administrator of Eagles Nest’s own social network built on Ning. Eagles Nest has a fan page on Facebook and is the #1 winery on Twitter with over 6000 followers, and was recently featured on another blog – Best practices on Twitter: Wine industry.

Wineries may not be able to do things at the same scale, but the benefits are there and the opportunity is waiting.

I expect that over time there will be more and more evidence of the benefits (in revenue and profits) of engaging in social media and networking.