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The other day an analyst asked me about the different ways companies use Scout Labs — why they start using it and all the ways they end up using it. It got me thinking about the evolution I see when companies decide to use a service to help them tune in to customers across the Internet. In fact, it reminds me of Maslow’s Hierarchy of Needs. In 1943, Abraham Maslow developed his Hierarchy of Needs, a theory to explain human behavior. Maslow suggested that psychological needs are hierarchical, and you can’t move up the pyramid until the underlying psychological needs are met. Many have since challenged his strict hierarchy, pointing out several exceptions to the rule. But as a pop-culture metaphor, it helps describe the various ways companies use Scout Labs.

Here is Scout Labs’ Social Media version of the Hierarchy of Needs:

1. Find and fight fires (or CYA)

Many organizations get interested in consumer-generated media (CGM for short) because they want to find fires—exploding laptops, rants from prominent bloggers, a rumor leak, a copyright violation—and fight them as quickly as possible. This is an absolutely essential way to apply a service like Scout Labs, and the reason why whatever service you select needs to:

• Be real-time (so you can find those fires as they happen).
• Find the fires for you, prioritizing what’s important / worth paying attention to right now.
• Have alert capabilities built in (email, SMS, RSS).
• Help you quickly mobilize your response and take action.

In this time of highly vocal customers who are connected to each other real-time and whose seething blog posts about you can show up within the first few results on Google, companies worry about the sheer volume of CGM and their lack of visibility into it. There are huge dollars at stake. Finding and fighting fires are fundamental reasons to scout the Internet, and your organization must become good at it. This means you need to have confidence not only in the tool you use, but in your team’s judgment and ability to take action in time of threat.

2. Build relationships with customers

Only after a company is a good listener can it jump in and start building relationships with customers. If you’re new to the social media scene, watch for a while. Learn who the key influencers are. Get a feel for the language, the concerns, and the issues. See which companies enjoy a good rapport online and which get flamed. And when you’re ready… jump in. Be part of the conversation. Answer questions, ask questions, and inform the best you can.

I like to think of it like a schoolyard game of jump rope. The customer conversation has its rhythm, pattern and players, and you don’t want to barge right in before getting the lay of the land—you’ll just get all tangled up. (Scout Labs lore: At one point, many moons ago, we toyed with the idea of naming the company Double Dutch!)

Of course, building relationships with customers being key to business success is nothing new. That idea is as old as commerce itself. But what is new is the accessibility of customers (thank you web 2.0!) and the availability of solutions like Scout Labs to actually build relationships on a mass scale. It’s not easy to evolve to this place. You have to really understand your customers and their communities before you can be welcomed in. AND you have to trust your employees to have these conversations and build these relationships. But if you can get there, the rewards are great.

3. Seek out feedback on products and marketing

Once an organization gets good at finding and fighting fires and starts to engage in dialogues with their customers, it’s going to start hearing what customers are actually saying ;-) I joke, but in the early phases of a company’s social media evolution, a person talking about your brand is often a “mention”—an event to log and tally. But pretty soon you start reading the content of those mentions and you see a rich tapestry of feedback—rants about customer service issues, wishes for features the product is lacking, competing products they are considering switching to, people with problems (that lo and behold, your product can solve).

Rather than monitoring for the huge PR nightmares, companies ask lots of its employees to listen every day, seeking little insight they can use to improve products and marketing. Product managers, research groups and marketing managers love using Scout Labs in this way.

4. Be a customer-centric organization

The apex for an individual, according to Maslow, is self-actualization—making the most of your abilities and striving to be the best you can be. For an organization that wants to listen to customers, the pinnacle is being a truly customer-centric organization. For a company at this stage of evolution, customers are partners. Listening to customers and engaging with them to build better products and sell more is a strategic priority and part of a company’s culture. Everyone—from the CEO to customer service, from product to PR—is tuned in to what customers are talking about, coming up with new, customer-inspired ideas, jumping into conversations to build relationships, and truly innovating.

Being a customer-centric organization is more than a nice-sounding aspiration. We believe it’s a strategic competitive advantage. Whoever listens better, innovates faster and builds stronger relationships, wins.

Note: this is an update to a post I did a year ago.