How Do Businesses Make Money With Twitter?

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BOSTON (TheStreet) — Remember when you first heard the word "Twitter?" Most likely, you wrote the whole thing off as a passing fad. Only the most desperate narcissists would want to narrate their life in real time, right?

Millions of tweets later, Twitter has become a cornerstone of the social-media landscape, along with LinkedIn and Facebook. According to the new conventional wisdom, these sites are critical in attracting new and future customers. Big businesses have spent the past year test-driving numerous new strategies, from Procter & Gamble (Stock Quote: PG) offering discounts to Old Spice fans on Facebook, to McDonald's (Stock Quote: MCD) providing quick customer feedback via Twitter.

A few specialty businesses do depend on mobile updates to draw most of their customers, such as the gourmet-food carts in Manhattan that post their upcoming locations on Twitter. But for the vast majority of businesses, a Twitter or Facebook presence doesn't translate into huge profits. To be used effectively, these sites should be thought of as networking resources, not a path toward direct sales.

Ivan Misner, author of "Networking Like a Pro" (Entrepreneur Press) and founder of the business-networking organization BNI, says online venues are a form of marketing that's still emerging. "People don't even know where to start," he says. "They're asking themselves, 'Where do I go, and what do I do there?' "

Whether it's online or in-person networking, the first step is visibility, Misner says. People have to know who you are and what you do. It's easy enough to become visible on Facebook or Twitter; both sites make it quick and easy to sign up.

Once you're visible online, the next step is to establish credibility. "People have to not only know what you do, they have to trust your work," Misner says. The final step is profitability, which comes when other people trust your work enough to refer you. And no one is going to refer you solely based on your Facebook updates.

"Networking is more about farming than hunting," Misner says. "It takes a long time, and it's often harder to measure results in the short term."

In addition to unrealistic expectations, social-media sites also can lead to a whole lot of wasted time. Once you get online, it's awfully easy to get distracted. Sign on to Facebook, and you risk getting caught up in a cousin's vacation photos, then following a link posted by a friend, which in turn leads you to an interesting new Web site that you decide to browse — and so on. You might think adding updates to a Twitter feed and Facebook page will take only a few minutes, but the process can easily take up an hour that would have been used more productively elsewhere.

Misner suggests scheduling your online time as you would any other regular business function, ideally during your most unproductive portion of the day or in the evening at home. You can leverage that time even more by using a service such as Ping.fm or seismic.com, which allow you to compose one message that is then posted across all your different sites. Cotweet.com allows you to type in and schedule tweets ahead of time, so you don't have to log on throughout the day.

If you expect your online network to build, you have to post content that is both useful and relevant to your customers. While they probably don't care what you ate for breakfast, don't forget that social media are, in fact, social: adding personal insights can enhance your credibility.

"People want to know the person behind the business," Misner says. "Even if you have someone else running your site or posting for you, it's important that you respond personally to questions. If you're not engaged, people feel disconnected from the process."

Whether it's online or in person, effective networking is still a two-way street. To grow your network, you have to help others grow theirs. Give other, complimentary businesses a plug on your site, and link to them when relevant. If you found helpful information on an obscure blog, post a positive comment.

Just make sure all that time in front of a computer screen doesn't interfere with the day-to-day running of your business. A great Twitter feed might win you some points with the cool kids, but so far no one's found a way to turn tweeting into profits.

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