Lance Loveday has a thoughtful piece in Search Engine Land on the advantages of letting users rate and review your products.  Everyone, Loveday argues, is desperate to maximise the benefit of social media – think of all those millions of potential customers gathered together in one place – but no-one is quite sure how.

Having attended a presentation by Steve Mulder, he’s a convert to the value of using social media for reviewing and rating products. Mulder convincingly argues that letting users rate and review products can significantly improve sales: products with reviews have 26% higher sales than those without; including reviews has a positive impact on search engine optimisation (SEO).

As Loveday points out, lots of users are cautious about shelling out a large sum of money for a product, and will feel much more confident about doing so if they have read positive reviews first. The only downside, a sceptic might argue, is that you have to really believe in the quality of your own products if you’re going to open them for user review.

You can see Mulder’s presentation here.

Travel and holiday companies are particularly well placed to benefit from social media. Travelling generates all kinds of personal experiences that people naturally want to share.

So it’s not surprising that some travel brands have taken to it in a big way. One is the American cruise company Carnival Cruise Lines, which has a presence on all the major social networking sites.

Carnival has its own Facebook page, and has also set up its own social networking community to help family and friends plan their cruise vacations, with a special invite tool that can be used to organise reunions and holidays. Meanwhile a blog offers running commentary on life on board a cruise ships, with a stream of anecdotes about guests’ experiences. So far it has attracted three million visitors, and the 25,000 comments shows it to be a hugely interactive communication tool.

That’s just the start. Carnival’s customers can upload their photos on Flickr, watch video clips on YouTube, and take part in a virtual tour on FunShipIsland.com along with friends and family – this clocked more than a million visitors last year. They can also communicate with the company and share experiences on its Twitter page.

Another big user of social media is Southwest Airlines, which has a presence on Twitter, Flickr, Facebook, YouTube and LinkedIn. The company produces regular new content for YouTube, which ensures it connects with the huge and growing video audience and boosts its search rankings. A blog called “Nuts about Southwest” is written by employees and gets 70,000 unique visitors each month. Some 8000 people follow it on Twitter. The business community is also an important target, and the on LinkedIn profile connects 3000 of its employees.

Both Carnival and Southwest Airlines are seen as “fun” brands with loyal followings, and both clearly see a presence on social networks as an ideal way to underline their unstuffy image. Southwest in particular relies heavily on the Internet for its bookings. It is also one of the most consistently successful airlines in the world, posting a profit for 35 consecutive years.

Two examples to take note of.

Who’s responsible for monitoring customer relationships and experiences in an organisation? According to a new survey of marketers in the US, nobody. The businesses they work for talk a lot about listening to consumers, but they don’t have the processes in place. In particular, few companies bother to monitor what people say about their brands in social media, the marketers complain.

Fifty-six per cent said their companies have no programs to track or propagate positive word-of-mouth. Only 16% said their companies have systems that routinely listen to what people are saying about them or their brands online.

The marketers clearly felt that someone should be taking ownership of this activity, and that it should be them. But it’s something they’re finding it difficult to get their boards to understand.

More details here.

In the old days, unhappy customers would moan to their friends  about the bad service they’d received. They might tell half a dozen or so people. That’s not great for business, but at least it’s contained. These days, those unhappy customers go on the Internet and blog about it. Or they enter their comments on a consumer forum read by hundreds, or maybe thousands.

My colleague Rob McLuhan has written about what happened when angry blogger Jeff Jarvis wrote about his bad experience with Dell, and how Dell responded by setting up its ideastorm site where users can post suggestions for improvements to Dell’s products and services.

Other companies are also becoming more proactive. Brendan Cooper  recently wrote a blog about his problems in getting a Virgin Media broadband connection in his new house. Shortly afterwards, Alex Brown, Virgin Media’s senior internet product manager, popped up in the Comments section of his blog offering help. When journalist Sally Whittle posted a blog entry about Cooper’s experience, a commenter wrote:

“The same thing happened to me with Virgin Media when I wrote about them on my own blog – Alex has a Google Alert set up for his company’s name, which I reckon is a pretty good idea. I had just written a rant, but I ended up being pretty impressed by their handling of the whole thing.”

It’s a great example of how social media can be made to work in your business’s favour. Setting up a Google Alert (or monitoring Twitter) for mentions of your company name is a smart way of improving your customer reputation and nipping bad publicity in the bud. The really smart companies, of course, will take the negative comments on board and improve their customer service.