Making the Case - Business Examples

Many people want to know how social media impacts business results.  We started the conversation here with a few of the more high profile examples.  This is just a start, so we invite you contribute additional examples and case studies that demonstrate the importance of social media in today's business environment.  

(Please include references to published sources) 

Positive Impacts 

March of the Penguins
Two suburban DC area moms run a podcast called Mommycast out of their homes to discuss common parenting topics. The two enjoyed seeing the movie "March of the Penguins" so much they promoted it to their audience. This generated so much positive word of mouth that Warner Bros now attributes 25% of the film's $100 million revenue this podcast. (CBS News)

Starwood Hotels
Starwood Hotels launched their new brand Aloft with a marketing event in Second Life. Starwood looks at this as a way to test the hotel's design. They can see what design elements people are attracted to and what they ignore. In addition they are seeking active feedback on the associated blog.In a Business Week interview, Starwood Vice-President Brian McGuinness said "We're saving money. If we find that significant numbers of people don't like a certain feature, we don't have to actually build it," "We don't have to have a painter here for 40 hours changing the color of a wall. We can reconfigure a detail. It is very parallel to rapid prototyping."  (BusinessWeek)

Mentos
An attorney from Massachusetts and an entertainer from Maine started an internet sensation when they combined the candy Mentos with bottles of Diet Coke to create streaming fountains of Coke foam. Videos of their "artistry" were viewed by millions of people on YouTube spawning thousands of imitators. In the Wall Street Journal, Mentos VP of Marketing Pete Healy says he is "tickled pink" by the visibility this has generated for his brand. He should be. He estimates that the value of this online buzz is "over $10 million", about half of their entire advertising budget. This buzz turned into bucks as BusinessWeek reports that Mentos sales have jumped 15% from these videos. (BusinessWeek)

Intuit
Intuit uses a range of strategies including blogs and discussion boards, to tap its customers to solicit new ideas, prioritize features in development, and even test new advertising messages. To respond to customer questions about their Quickbooks product, Intuit created a community with discussion boards on their site so customers can help each other with questions. Intuit participates in these discussions to understand customer needs so they can respond with product enhancements faster. According to Business Week, this community now has over 100,000 members discussing topics across 50 subject areas. (BusinessWeek)

In the company's 2005 annual report, CEO Steve Bennett's letter to shareholders states "...positive word of mouth creates a durable advantage for Intuit that translates into sustained revenue and profit growth." (Annual Report)

Petco
Petco's e-commerce website features customer reviews for all the products they sell. Analysis of their web traffic revealed that users that sort the list of products by customer ratings spend 41% more than users who search with other methods like popularity or price. This consumer-driven content is impacting their outbound marketing initiatives as well. Emails that feature customer review content receive 50% higher clickthrough rates.  (WOMMA Presentation)

General Motors
Bob Lutz, the vice chairman of General Motors, actively engages GM customers on his GM FastLane Blog. He recognizes that by communicating candidly and directly to car enthusiasts, he can get "pure and unvarnished" comments on the frustrations, thoughts and suggestions of car buyers today. Mr. Lutz says, "These people have a great deal of influence, not just on what we read, but on the cars their friends and family purchase."

Boeing
Boeing, struggling over the past several years due to scandals and increasing competition from Airbus, decided to engage their critics in an open dialogue. Marketing VP Randy Baseler's blog played an important role in explaining their new strategies while the blog "Flight Test Journal" written by engineers, managers, and test pilots showcased their new Worldliner 777 jet. Boeing's blogs now get upwards of 30,000 visitors per month, and James Albaugh, CEO of the Integrated Defense Systems unit, is championing a new application of blogs as an internal knowledge sharing tool.

Negative Impacts

AOL
Vincent Ferrari decided to cancel his rarely used AOL account, but he heard rumors about poor AOL customer service so he decided to record his phone call to AOL. After 15 minutes on hold, he reached a customer service rep who refused to cancel Vincent's account, even after he repeated "cancel the account" over and over again. Vincent then posted the recording on YouTube where it became and instant hit and a magnet for others sharing the same frustration with AOL. This caught the attention of the Today Show which broadcast an interview with Vincent. AOL apologized, fired the rep and promised to make changes.

Comcast
Law student Brian Finkelstein's Comcast internet service kept going down. A Comcast technician arrived to repair the modem but was placed on hold so long he fell asleep on Brian's couch. Brian grabbed his video camera and filmed him. He added the text "thanks for two broken routers, four hour appointment blocks, weeklong internet outages, long hold times, high prices, three missed appointments, thanks for everything" and put it all to music. Like Vincent Ferrari, he posted the video to YouTube and it took off. Millions of views, mainstream media coverage, a rep firing, and a company apology followed.

Kryptonite
The Kryptonite lock story has been told many times, but it is an important cautionary tale for businesses who may believe they can afford to ignore blogs. This case demonstrates the dynamic between bloggers and traditional media journalists that significantly amplified the impact of the story.

A video demonstrating how to pick these expensive bike locks with an ordinary Bic pen appeared on a blog and quickly reached hundreds of thousands of blog readers a day. When the company issued a statement downplaying the issue saying the locks "continue to present an effective deterrent to theft" bloggers reacted aggressively and the NY Times and the AP picked up the story, exposing the problem in newspapers all across the country.

By the time the company announced the product exchange plan almost a week later, the "make-good" received very little coverage. Even today the story lives on: lock buyers today will find today turns up 8 negative stories about this incident in the top 10 results of a Google search for "kryptonite lock"- but no mention of the problem being corrected and affected locks having been replaced.

Chevrolet
Chevrolet ran a unique user-generated marketing promotion with "The Apprentice" TV show where it enabled people to visit the Chevy site to create an ad for the new Tahoe SUV; users could select from a library of images and music then write their own text to create a 30-second TV commercial. Anti-SUV activists created ads depicting the Tahoe as a gas-guzzling, global-warming-gas-belching, earth-destroying behemoth. These negative clips became so popular across the Web and on viral video sites like YouTube.com that Nightline ran a story about them.

Chevy didn't censor or remove any of the negative ads. Chevrolet GM Ed Peper also responded on the GM FastLane blog acknowledging these concerns and reaching out to continue the conversation. He presented Chevy's rebuttal that the new Tahoe gets 22 MPG, it can run on ethanol which reduces pollution and dependency on foreign oil and it has earned the highest safety ratings for any vehicle in its category making it an excellent choice for large families. Peper referred to this as one of their most creative and successful promotions and he finished his post saying, "Anyway, it sure got people talking about the Tahoe. Which was the whole idea, after all." (GM FastLane)