Nothing gives CEOs and marketers instant heartburn more than seeing their hard-won brand equity hijacked by forces beyond their control — too often by bloggers, online consumer ratings, and YouTube parodies. A rumor ripples across cyberspace that your company’s baby formula turns tiny tots green. Is there anything you can do? Absolutely. Turn the tide to your advantage, argue Charlene Li (MBA ’93) and Josh Bernoff in their new book, Groundswell: Winning in a World Transformed by Social Technologies (HBS Press, 2008). Li and Bernoff are Forrester Research analysts deeply plugged into technology and social computing.

“While you can’t stop it, you can understand it. You can not only live with it; you can thrive in it,” Li and Bernoff write. In fact, you can’t afford not to be part of the virtual buzz.

Online Web 2.0 opportunities for your firm are endless. Managers can engage with customers via blogs (caution: they take much more time than you think). Victoria’s Secret and thousands of other firms have highly successful exposure on Facebook and MySpace. You can also create viral marketing campaigns that energize your current customers to recruit new ones. Before companies enter the social-networking world, however, four “POST” questions need to be answered: People (what are your customers ready for?); Objectives (what are your company’s goals?); Strategy (how do you want your relationship with customers to change?); and Technology (what applications should you build?).

Part of this process is understanding the online characteristics of each of your customer segments, according to Li and Bernoff. Example: “Alpha moms” are not prone to creating their own content online but do like to react in public forums to what they read. So your strategy to engage this segment would be to de-emphasize blogging and underscore forums, ratings, and reviews.

Social networks should be monitored to collect the cyberchatter about your brand. When a negative ground-swell starts to roll, a quick and authentic public response from your CEO has the potential to limit the damage or even change the momentum in your favor, the authors write.

The book provides practical tools and assessments to help readers understand this digital frontier. And the case studies are memorable. For example, a smart marketer at Blendtec hit on the idea of showing the industrial-strength power of the product by filming the blender munching everything from rake handles to an iPhone. The videos racked up 60 million hits on YouTube, and the company’s CEO was soon making an appearance on The Tonight Show. Not a bad ROI on a few hundred dollars invested in social technology.

— Sean Silverthorne

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