Social media such as Twitter, Facebook, and YouTube aren't just helping us keep track of long-lost friends and distant family. They're also transforming how we interact with companies.
Just witness how active (or inactive) the main Twitter accounts for these well-known consumer brands can get:
Sirius XM Radio
Source: Twitter.com, as of Oct. 15, 2010.
Clearly, the size of the company doesn't dictate the activity level: Jones Soda is a small company, yet $3-billion E*TRADE has far less activity. While a lack of Twitter activity can certainly disappoint loyal customers and fans today, investors should be more interested in how much value companies can generate from their online interactions in the future.
Let's take a brief look at some of the ways that these companies are talking to the world through Twitter.
Tweeting can be an effective way to announce new products and update fans on their growth. Jones Soda uses its feed to update readers on the rollouts of new beverages. Many corporate tweets also announce contests where fans can win free products. Cree, for instance, has a monthly LED lighting contest, and invites followers to submit photos of lighting in their homes.
Bigger competitor Coca-Cola has far more tweets and followers, but has still managed to establish an informal voice, responding to fan tweets with phrases such as "Thanks for the shout out" and offering many replies in Spanish, as well. I noticed many references to customer loyalty, suggesting that perhaps Coca-Cola is trying to subliminally increase its fans' dedication. Harley-Davidson also interacts well with fans via Twitter in a friendly, not-too-commercial way, asking about their riding habits and discussing the weather.
Harley-Davidson also effectively uses its tweets to build its brand, posting photos of its "Bike of the Day" and linking to snippets of movies featuring its bikes.
Room to grow
Many companies have little or no presence on Twitter, but that can always change. E*TRADE Financial just had nine tweets when I checked, but those tweets were informative, announcing enhanced stock research offerings for customers, philanthropic endeavors, a high service rating, and more.
Compare that with competitor Charles Schwab, which has a busier presence and is helpful to its readers with tweets such as, "Tomorrow is last chance 2 recharacterize a Roth conversion back 2 trad IRA!" Schwab also engages in some subtler tweeting; its feed has announced the latest rise in average tuition rates at colleges and links to a calculator. These tweets could encourage Schwab customers to increase their trading or consult one of the brokerage's advisors.
Sirius XM Radio sports a quiet Twitter page, recently averaging less than one tweet a day. That's surprising, since the company has so much programming it could be promoting. It's possible to drown users in an overflow of tweets, but the company isn't coming close. I spotted an announcement of Sirius' presence on Android smartphones, which is useful information, but many posts were simply thanking various folks for their comments or questions, or recommending purchases of Sirius products.
By surveying the corporate Twitter universe, you can get a good sense of how companies are using the technology to communicate with followers. As you assess stocks for your portfolio, consider looking at how well they're using social media. Even a poor showing isn't necessarily bad -- it simply leaves the company with plenty of room for business-boosting improvement.
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Longtime Fool contributor Selena Maranjian owns shares of Coca-Cola. Charles Schwab is a Motley Fool Stock Advisor recommendation. The Fool owns shares of Coca-Cola, which is a Motley Fool Inside Value choice and a Motley Fool Income Investor recommendation. Try any of our investing newsletter services free for 30 days. The Motley Fool is Fools writing for Fools.