Web Monitoring Company Helps Monetize Social Media Use

Peppy and breathlessly voluble, Shaila Ittycheria believes her company, LocalResponse, is on the cusp of changing the customer-business relationship. Will they increase customer loyalty? Sure. Increase return on investment for businesses? She can give evidence. Increase customer satisfaction? She points to customer blog posts. Monetize social media efforts? She’d probably show you receipts.

LocalResponse is a New York-based web monitoring company that allows companies respond to individual social media mentions across the sprawling social media domain. The company took its services out of the beta testing phase on April 19.

"We’re putting the relationship directly back from the business to the customer," said Ittycheria, who is in charge of managing local businesses’ accounts in New York. "We want to change the paradigm of that relationship."

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LocalResponse’s draw is that it monitors both explicit and implicit social media mentions. Explicit mentions are the direct check-in to a location from any number of Twitter-integrated, location-based mobile services – Foursquare, Gowalla and Yelp to name a few. Implicit mentions are culled from the vast data – reviews, comments and even photos – that are posted across sites like Facebook, Twitter, Instagram, Path, Color, Yelp, Foodspotting and so on.

Businesses can then access a dashboard – or "listening page" as Ittycheria calls it – to see the information about their company. An owner can track trends, view locations of mentions and users and view individual comments. Then, through LocalResponse they can send contextualized responses to these individuals, offering coupons, discounts or simply a public thank you. And it’s free – to a point. The first 100 messages are on the house before a monthly subscription fee is required.

"We can record and follow the click-through and redemption rate of these messages," Ittycheria said. "We can then actually track the timing of when they choose to redeem a coupon or discount versus when the offer was given, which can prove the effectiveness of a campaign."

LocalResponse even holds on to all former data, allowing a business to login and check their data over a period of the last two hours, days, months, etc. – much like Google Analytics.

Thus far, all the campaigns during the beta testing period have been successful. Around 2,000 mostly small businesses in New York – "restaurants, clubs, mom and pop bars, even Madison Square Garden," said Ittycheria – used LocalResponse beta and averaged 60 percent click through rates on messages. Some companies have seen rates over 85 percent, according to Ittycheria. Redemption rates have hovered around 15-20 percent.

"We think click through is so high because the response to the Tweet, for example, is coming from the actual local business’s Twitter handle," Ittycheria said, noting that personalization and contextualization drove higher click-through rates.

There’s also the novelty factor. People are still surprised when a business actually sees – much less responds to – an ephemeral comment made on the web. But how long until it’s not cool that big brother is waiting to pounce when you mention their business? Ittycheria thinks the key is personalization and limitation. She encourages small businesses to craft individualized responses as much as possible

"We’ve built in frequency capping to stop spamming behavior," she said. LocalResponse only allows any person to receive one response a week and allows anybody to opt out of receiving any messages. Clients can send up to 200 messages at once through LocalResponse. "Without engaging your audience, a special or deal is just promotion. We encourage people to contextualize as much as possible. As a business manager, all I care about is transactions that come back to my register. You have to provide a service that’s actually relevant."

All told, LocalResponse holds the potential to track, measure and monetize social media, something everyone has been looking for.

"Most businesses are not using social media the way they can and should," Ittycheria said. "It’s hard to get through the clutter and figure out what is most relevant."

LocalResponse aims to do just that.