There has been a lot of talk about Web 2.0, such as the rise of social networks and the emergence of new models of mediated online social interaction (like Twitter and Facebook), yet businesses are still largely failing to capitalise on social media as a powerful, and free, marketing channel.

Despite such a significant shift in how people are using the web, socially and professionally, user generated content hasn’t been adopted for business as I had expected.

99% of companies, certainly in the UK, are completely unaware what is being said about them on the web, what conversations are happening about their competitors and their market sector and they are failing to capture the true power of the social web- the ability to reach new customers, garner better relationships with their existing customers and manage their reputations.

If something is posted online about a company, it stays there. Forever. Positive or negative.

Here are some basic ways that I believe businesses should be using social media:

1) Be proactive: Don’t wait for customers to find you- put your business in front of them

You shouldn’t assume just because you have a web site, a good brand name or even an active SEM strategy that customers will find you. Creating and managing a presence on sites like Twitter, Facebook, YouTube, MySpace, Xing and industry specific forums will enable you to reach and engage customers without them having to look for you.

2) Understand what is being said about your business, your competitors and your market sector; And who the key influencers are

Loaded with this information, begin entering into open online conversations, reply to feedback being left about your business, contact and engage journalists talking/writing/blogging about your space, share information that others may find useful and work to better manage your reputation.

The first step here is to start using Google Alerts. Set up alerts on specific key words such as your company name, your competitors, your product or the services you offer. Google will send you an alert every time (or at the end of each day, you decide) someone blogs or talks online about those key words.

3) Use the web to talk about your business

Set up a blog. Write about what you are up to. Blog about subjects that demonstrate you are thought leaders and highly knowledgeable within your market sector. Use the blog to encourage comments from others. The more fresh content you create on your blog the higher propensity there is of your business getting returned high up in the organic (free) search results of major search engines. The higher up you are, the more people will see you. The more you are seen, the more business you will win.

4) Sign up to Twitter-and make full use of it

Twitter is as powerful as you make it. Twitter works when you have a reasonable amount of followers. A great feature on Twitter is Re-Tweet, which enables people that follow you to re-tweet your twitter posts to their network, if they believe their followers would find it interesting. This makes Twitter one of the most viral channels to get your business in front of people on the web today.

a)    register on Twitter

b)    write a few interesting posts related to your business/market

c)     follow lots of people that you feel could be either influencers, professionals in your industry or potential customers

d)    post at least once a day

e)    check your @ reply box regularly to see who has posted something directed at you

For more on how to use Twitter efficiently, read this

5) Sign up to and integrate Get Satisfaction into your site

This is a great tool for businesses that care about their customers, are interested in their feedback and understand the importance of transparently managing their reputation. Believe me, by using a service like Get Satisfaction, it will do wonders for your reputation and is often the difference when a potential customer is weighing up whether to use your services or those of a competitor.

6) Dedicate time, effort and resource to managing your web presence

This is important. Managing your web activity is time intensive and even with the best will in the world, if this isn’t your FT role, you’ll most likely not devote enough time to it and lots of gaps will appear. I suggest you either dedicate a certain amount of your day to doing just web engagement or hire someone to do it.

7) Free stuff

Give things away. It is no surprise in this economic climate that money saving and voucher sites are the fastest growing sites in terms of traffic in the UK.

By running an offer, say 15% off, and using the web to promote it (Facebook, Twitter, your blog, voucher sites etc) you will not only  be pushing your brand but enticing new customers to spend with you instead of a competitor. It’s also a great lead generator for other services you provide outside the offer.