One of the things I’ve noticed over the past four months as a consulting has been how social media is regarded by some companies an economic salvation.

There’s this belief that social media and the way the tools can leverage online marketing, communications and sales efforts has the power to magically attract more customers and drive sales. After all, the online market continues to evolve, and companies who aggressively use the Web can still attain a competitive advantage.

In some cases, this may, in fact, be true but the caveat is even the best-executed social media efforts won’t succeed unless the underlying product or service is appealing to users. Granted, it’s a simple proposition but a proposition that doesn’t get as much attention as it should.

Over the past four or five years during the heady days of “Web 2.0″, there were a lot of services launched – and funded – that attempted into insert square pegs in round holes.

In theory, they sounded interesting but there wasn’t a compelling need or demand for them. Or, least, there wasn’t enough demand or interest to make them viable businesses.

For Web 2.0 aficionados, this wasn’t a problem because trying these round-peg-square-hole products didn’t cost anything other than some time. For investors, it was/is more of a problem because they poured money into ideas that didn’t stand much of a chance of being successful.

I’ve been thinking about this idea for the past few weeks as there’s been an increasing focus and interest in companies with products/services that people want to buy because the underlying product/service has enough value to escape the Land of Free.

Some examples include Sysomos, a powerful social media analytics service (disclaimer: Sysomos is a client), Freshbooks, which now has more than 800,000 users of its invoicing service, including me; Rypple, an up and coming feedback service; and Mozy, an online back-up service (acquired by EMC in 2007) that just added its one millionth customer.

What these companies have in common is a service with appeal to customers – as opposed to simply users – as a core part of their corporate DNA.

Rather than trying develop a core service and then hope that adding bells and whistles, some social media pixie dust and a mention on TechCrunch will magically transform into a business, these companies created services from the start that filled a need and/or solved a problem that makes it easy to justify paying for.

The more we focus on these kind of companies, the farther we’ll get away from the myth that if we build it, customers (and then advertisers) will come.

Technorati Tags: freemium, social media