A good resource for social media business rationale is the McKinsey digital marketing practice which churns out papers on various topics from time to time. August's edition is on UGC and how the success of such a project depends on a core group of enthusiasts. You're telling me! I think they're referring to the 99/1 rule (aka 1% rule) of user generated content, that on average one in 100 people will generate the content that in some way benefits the other 99.
Earlier in the year McKinsey published a global survey on how businesses are using social web technologies. It's one of those meaty chart-laden papers that says the kind of thing you'd expect to see. But buried away there are some good snippets that show what kind of benefits businesses are seeing from their investment. I'd have liked to see those elusive stats on firms' return on investment, but it's a good read in any case. Worth registering and having a read.
Some executives say the tools are already having visible effects, such as better communication with customers. “The most valuable aspects today are providing a means for customers to have a dialogue with us.” One panelist cites blogs and RSS as factors that are helping to reduce the customer churn rate. Perhaps even more important, several participants are tapping customers’ opinions and expertise to improve product design. “We now see customers, particularly the professionals and customer experts, as having a much greater role in the development of new products,” says one. Another adds, “Our success is based on allowing [clients] to participate in the process.”