Making the connection

The growing number of online networking tools is making it easier than ever for companies to connect with customers

BY JODIE GILMORE For the VBJ

Want to know what customers are saying? Need a way to announce a new deal? Want to expand your customer base?

These are just some of the ways local companies are using online networking – sometimes referred to as Web 2.0 technology – to bolster their success.

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According to the 2008 Cone Business in Social Media study, 60 percent of Americans use social media, and of those, more than half interact with companies on social media websites.

By 2012, half of all purchases (online and offline) will have a web-based component, according to research by Gartner, an information technology research and advisory company. And 59 percent of retailers now use Facebook, according to interactive marketing agency Rosetta.
Local retailers are no exception.

Jennifer Crego, director of business development at Vancouver-based GiftTree, has gradually entered the social media arena and is pleased so far. The company, which markets gifts and gift baskets, started a blog in January 2008, then opened Facebook and Twitter accounts, along with accounts at several smaller social communities.

“(Social networking) is kind of like accepting Visa and debit cards a few years ago,” Crego said. “If you’re not doing it now, you will be.”
Social media sites let the company actively listen to customers and engage them in conversation. Plus, the act of blogging and tweeting has engaged both GiftTree’s customers and employees, she said.

This double engagement is important. Gartner estimates that although 75 percent of Fortune 1000 companies with websites have undertaken some kind of online social networking project, more than half will fail because they don’t balance serving the company and the audience interacting with the company.

Getting local

Vancouver-based Elguji Software LLC creates and sells social networking software. Its flagship product, IdeaJam, is a virtual suggestion box that allows businesses to collect ideas, solicit and manage feedback and use the “wisdom of the crowd” to rank ideas.
The application has won several awards for its innovative approach.

“People are already talking about your company,” said Bruce Elgort, adviser to the Elguji team. “So you should give them a place to talk and talk with them.”

Elguji offers IdeaJam on a per-server license basis ($12,000 per server), or on a Software-as-a-Service basis, in which the application is hosted off-site on the Internet for $1 to $5 per user.

Meanwhile, Vancouver-based online technology firm Dotster’s user community platform, Dotster Connect, launched late last summer, said Catherine Brown, director of online communities.

“Dotster Connect allows businesses to create their own user community, branded with their own look and feel,” she said.

The product comes in four varieties, ranging from “Silver,” which offers basic services and costs $899 for setup and $200 per month, to “Enterprise,” which supports multiple languages and a high level of customization. Brown declined to share the cost of Enterprise.

Dotster also offers web design services, and can help companies add a blog, forum or photo gallery to their websites.

MapWith.Us (a dba of GeoMonkey Inc.) has a different focus.

The company was founded in 2006 based on patented technology developed at Washington State University Vancouver. It provides mobile and web-based mapping solutions, paired with social networking around location-based data.

The Southwest Washington Convention and Visitors Bureau is a client of MapWith.Us, linking its business directory to mapping data.
Earlier this year, MapWith.Us received a $35,582 grant from the Washington Technology Center to work with WSUV’s School of Engineering and Computer Science to develop a framework for publishing geo-spatial data generated from consumer mobile communication devices.

Elguji tests its own software at a public website,
www.ideajam.net, where customers can comment on IdeaJam and make suggestions for improvements.
“We’ve added 140 features based on customer feedback,” Elgort said.

Dotster opened a Twitter account a month ago and can already attribute some definite benefits to being connected. By addressing customer complaints and questions via Twitter and by engaging in conversations with these customers, Dotster has managed to solve the problems and complaints and make customers happy again, Brown said.

What’s the ROI?

The return on investment for social networking is hard to measure with traditional metrics.
It’s the level of interaction rather than the quantity that is important, Crego said.

And while a Facebook account is free (for the time being), the time spent maintaining the interaction is considerable.

Bart Phillips, president of the Columbia River Economic Development Council, has had a blog at credc.blogspot.com since December.
“It takes a lot of resources to ‘feed the beast,’ ” said Phillips, who tries to blog once a week. “It appears to be free, but it’s not.”

A white paper, “User Community Return on Investment,” published by Dotster, indicates companies can use social media campaigns to, among other things, reduce the cost of obtaining customers and reduce call center costs.

In a March report, Forrester Research indicated that despite the popularity of online networking and social media, advertisers aren’t yet convinced – 75 percent of marketers have budgeted less than $100,000 for social media efforts in the next year.

On the other hand, 53 percent of marketers said they expected to increase spending on social media.

This spells opportunity for growth for companies like Elguji, MapWith.Us and Dotster.

Dotster is seriously considering adding a staff person who would be dedicated to handling all of the company’s social media campaigns, Brown said.
Elguji has plans to expand its product line, adding an arm of the company dedicated to social networking on iPhones, Elgort said. As a sign of industry growth, Elguji’s first quarter 2009 revenue was already 75 percent of the all of 2008’s revenue, he added.