May 27, 2010, 12:33 PM

Tweet me

Retailers nurture fledgling Twitter programs, hoping short messages can produce big results.

“Warehouse sale, at 100 Rivington Street, New York City, final days,” was news likely to spur local fans of Steve Madden Ltd. Shoes into action. And that’s exactly what happened when the manufacturer and retailer put the message out on Twitter in March. Electronic counting devices at the store recorded a surge in traffic, about 10% to 15% above average, within the hours following the tweet. While the company hasn’t tracked the impact on revenue, “we would intuit that more traffic leads to more sales,” says Andrew Koven, president, e-commerce and customer experience.

Twitter, the online social networking platform that launched in 2006, is growing fast, hosting 4 billion messages, or tweets, in the first quarter of this year. And where crowds go online, marketers follow. But exactly how to best use Twitter is something online retailers are still hashing out.

“We are all still trying to figure out what it is,” Koven says. “But we want to be very careful not to force it to be what it may not be.”

Is Twitter best used to push promotions or to respond to consumer questions? Or must retailers and consumer goods manufacturers simply keep an eye out on Twitter for negative comments? There’s no consensus, but early returns suggest that all those strategies can yield at least modest results—at a very modest cost.

And there’s another reason to pay attention to Twitter: the service is evolving rapidly as the company seeks a way to make money, and the recent addition of advertising to Twitter underscores its potential as a marketing vehicle.

What it is
Twitter is simplicity itself. All it does is allow users to send messages to each other no longer than 140 characters. That limit was designed to accommodate the text message limit of 160 characters, plus allowing room for user names. Twitter users often send and receive messages on their mobile phones, although they can also access their Twitter accounts at Twitter.com.

Twitter account-holders choose who they want to follow, which can include retailers and brands. Though each post is limited to 140 characters, tweets can include a link to a web page or blog, including to a retailer’s e-commerce site.

While heavily hyped, Twitter adoption is still relatively modest. Forrester Research Inc. recently reported that 8% the country’s online adults post and read updates on Twitter at least monthly, while another 4% read but don’t post. But Forrester also notes one indication of Twitter’s potential in that 26% say they recently started to follow a company on Twitter.

Experts say the short format on Twitter lends an immediacy and informality to communication, and encourages frequent communication exchange among users. That gives marketers who monitor or participate in that exchange a window on what consumers are saying about brands and products.

“What’s different about Twitter is the ability to listen in on the pulse of your brand,” says Matt Holly, natural search optimization account manager at performance marketing services company Performics. “You have to leverage Twitter for what it is, which is the conversation and the connection.”

A recent survey by web marketing consultants E-consultancy of 400 companies, 19% of them retailers, found 77% were using Twitter. It’s free to create a Twitter account and to send tweets. That makes Twitter a low-cost investment, requiring little more than staff time to strategize, monitor and post.

At Steve Madden, that added up to $35,000 to $40,000 in staff time spent on Twitter last year by Koven and others. They manage three Twitter accounts, including the designer’s personal blog, which has 1,233 followers; Koven’s SteveMaddenShoe, with 894 followers; and the deal-focused MySMaddenSale, with 231.

At J & P Cycles, which schedules the content it will push out on Twitter and other social media six weeks in advance, tweeting occupies about 15 minutes of staff time per day to manage two Twitter accounts: informational content on Twitter page JPCycles, with 539 followers; and promotions on JPCyclesDeals, with 331 followers.

Marketers are mainly using Twitter as a means of promotion and branding, for customer service and support, and to deliver company news, says Bob Pearson, chief technology officer and media officer at the WeissComm Group and an architect of Dell Inc.’s pioneering social marketing strategy in his previous position as vice president of communities and conversations with the computer manufacturer.

Reaching out
Dell, like many other companies, monitors Twitter for comments about its products. If a customer tweets about a problem, the company posts a public reply or reaches out to the customer privately via direct messaging functionality built into a follower’s Twitter profile pages. Dell can direct consumers to online resources or customer service, and the manufacturer also displays contact information on its own Twitter pages.

Twitter is useful as an extension of other customer communication channels, because most consumers never reach out by phone or e-mail, Pearson says. Fewer than 10% of a typical company’s customers contact the company in the course of a year, he says, and Twitter is a way for retailers and brands to reach out to consumers who may not be reaching out to them.

As each Twitter account is free, many companies have several, for instance devoting one account to customer service issues and another to deals. That’s the approach at The Home Depot Inc. HomeDepotDeals focuses on promotion, while HomeDepot handles customer queries and general Home Depot events and news. A third Twitter page tweets on Home Depot’s involvement in NASCAR.

That’s a strategy that fits with how people use Twitter, Pearson says. “If they want to get news, they will follow news; if they want support, they want to get support; if they want to buy something, they want to get the deals all in one place. They don’t want to have it all mashed in together.” When visitors arrive at a retailer’s Twitter page, they should immediately be able to determine what the conversation is about and whether it’s of value to them, he adds.

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