On May 21, 2009, marketers from all over Austin converged on the Hilton for the Online Marketing Summit (OMS) where the Austin AMA and the OMS jointly hosted the luncheon as a part of the Power Lunch Series. The speaker was Paula Berg, who shared her successes and failures in Social Media for Southwest Airlines.

Through my recent adventures into Social Media I have found chests full of theory and only a few hidden nuggets of practical usable knowledge. At least that was the case until Paula Berg took the stage last week at the Austin AMA - OMS luncheon. As our barbecue lunch began to settle, Paula walked us through her ups and downs in Social Media for Southwest Airlines. Like most companies, Southwest started their foray into Social Media with a blog, but Paul and her team have since utilized everything from Twitter to YouTube.

Southwest Airlines Emerging Media Presentation

I’m sure that Paula didn’t have a top ten list in mind while she was presenting, but in the spirit of Social Media here are the 10 things Paul taught us about Social Media:

1. It can help you reach a new demographic. The Nuts About Southwest blog started as a replacement for A&E’s Airline. The show allowed Southwest to reach a different demographic by giving customers an inside look at their culture. All you need to know is who you want to target and where they hang out.
2. It’s OK to not have a strategy as long as you have a strategy?!? Paula mentioned she didn’t have a strategy when they started the blog, but I think she was just being modest. The strategy, or maybe we should call it a goal, was to give customers an inside look at Southwest. What they didn’t anticipate was all the things the blog would become. Social Media is so new, don’t try and put too narrow a scope on your strategy. It’s very much like a box of chocolates…
3. It’s good to have a presence in Social Media before you have a crisis. Blogs in response to bad press are not seen as authentic. You need to create conversations using Social Media before it’s too late.
4. Immediate, passionate feedback exists at no cost. Southwest was able to avoid using too much ink when customers print boarding passes, and discovered the real reason people don’t like their open seating policy. Paula has been able to create an open relationship with customers where they offer feedback because they know they will be heard.
5. You need thick skin. Criticism, warranted or not, hurts. The lesson is to be prepared to take the good with the bad.
6. When the media won’t listen, take your message directly to the people. Paula and her team “fought fire with fire” when responding to a couple of young ladies claiming they were treated unfairly because of their good looks. Since the media was only interested in one side of the story, Southwest created a video response that went viral. The only videos viewed more that week were of Barack Obama and Hillary Clinton.
7. Listen. Some of the most valuable information Paula received was from listening to what people where saying- especially on Twitter. Southwest first discovered their “rapping flight attendant” through a twitter post. It’s amazing to think you might learn something about your own company reading your Twitter feed!
8. Never stop the conversation. When people comment on your blog posts, respond. This goes right along with listening. Social Media is a two way street. Don’t ignore people when they talk to you.
9. Social Media causes sleeplessness. Someone asked Paula what the ROI is for Southwest’s Social Media efforts. From Southwest’s point of view, it is huge. The only cost for them was paying Paula, and, over the past three years, she has worked many hours of free overtime. Social Media never sleeps, and neither does Paula. If you decide to immerse yourself this world, be ready with a case of red bull and a trusty mobile device.
10. Southwest will be flying to Hawaii and Mexico in the near future. Paula was kind enough to slip us this insider information after her presentation. This doesn’t really have any Social Media implications, but twitter probably works better on the beach.

- Josh

Recent studies have again shown that inbound marketing is a cheaper lead generation tool than outbound marketing.

While inbound marketing (which includes: blogging, social media, search engine optimization [SEO], and search engine pay-per-click advertising [SEM]), may reach smaller audiences than outbound marketing (direct mail, telemarketing, trade show, and trade and consumer advertising), the cost per lead and cost per sale are typically significantly lower for inbound. While it may be impossible to generate all of your sales leads requirements through these inbound efforts you should certainly maximize and allocate your dollars and efforts to attain the lowest cost per lead and/or cost per sale.

I am often asked by clients and prospective clients, “How much should I spend on Search Engine Marketing aka pay-per-click?” The answer is as much as your budget per lead allows until you can convert the leads to sales and validate the lead source via a cost per sale. Typically, I am accused of double talk after the response. The simple fact is that most companies know how much it costs to produce a product or provide a service, but many do not know what their customer or sales acquisition costs are.

Without knowing your costs of acquisition you have to focus on your cost per lead until you can track leads to sales. You’ll need to know your typical “time to close,” “closing ratio,” “percentage of closure rate per sales process step,” and more. All should be tied back to your lead acquisition source to make an educated judgment on how to spend your resources by source.

As the internet has evolved and the economy has gotten worse, prospective buyers research more than ever before making their list of products and vendors of consideration for purchase. The most prevalent research medium is the internet and articles, white papers and media coverage are all reference points for prospect research. A solid internet strategy is more than SEM and SEO, it’s also getting the references, back links, chatter on blogs, reviews, etc. Public and Media relations are critical to a successful internet presence. While many trade publications are “controlled circulation and access”, which is not indexed, or at least the articles are not readily available via an internet search, many trade, consumer, and news sites, blogs and archives are widely indexed.

Like any investor with your lead generation and marketing you need to “spread the risk, invest in the highest probability returns to the lowest, and monitor them constantly.”

If your PR firm is focused on paper - you better augment them with online efforts or replace them with a firm that can integrate the online and offline editorial opportunities. 

Share your thoughts or questions by leaving me a comment.

About the Author

Michael Romanies has more than twenty-three years’ experience in P&L management, marketing, sales, business development, product management, and operations. Michael has held executive positions in technology and publishing companies and has extensive experience in business-to-business (B to B), business-to-consumer (B to C), and business-to-government (B to G) product development, marketing, and sales.