According to Compete.com, Twitter is now the third most visited social networking website behind Facebook and MySpace. As a real-time social networking and micro-blogging tool, Twitter offers tremendous opportunities for businesses to improve and deepen interactions with customers. These opportunities translate well into e-commerce business scenarios as well.

Here’s how Twitter can help your e-business:

• Create brand advocates while humanizing your brand
  (e.g. Marvel Entertainment, airlines like Jet Blue, sports team Chicago Bulls, electronics stores like Best Buy)
• Facilitate customer support
  (e.g. Like Comcast and Zappos, H&R Block)
• Collect market intelligence
  (e.g. Motrin Moms flare up on Twitter resulted in Johnson & Johnson withdrawing a controversial ad, The Home Depot, Whole Foods)
• Drive sales
  (e.g. think Dell Outlet, Roots Canada, Toys R Us, Rubbermaid)

Before you jump on the Twitter bandwagon, you need to assess the value of using it as a tool to support your e-business.

1) Are you customers using Twitter? If they’re not, creating a presence on Twitter isn’t exactly worth your time. If they are using Twitter, what are they saying about you? This kind of insight can help you to assess the best way to interact with customers (and how to mitigate any negative brand experiences or promote any positive brand experiences they may be talking about).

2) Once you have verified your customers are using Twitter, determine your goals for implementing a social media program on Twitter. Is it to achieve only one or all of the above business objectives?

3) Like any good marketing plan, you need to determine how you will go about achieving your goals. Will you offer customer support via Twitter, promote web-only promos/discounts or contests, solicit feedback via surveys, nurture relationships via one:one dialog with customers? Etc.

4) Who within your company will be responsible for developing and managing your Twitter presence? Will it be a team of people or a single individual? It’s a good idea to establish guidelines for employees on what your brand will and will not do on Twitter. Guidelines also help to ensure consistency in tone and brand messaging, and sets expectations for both your Twitter team and your customers.

5) Measure and adapt as needed. Monitor your Twitter progress over time and be prepared to adapt your strategy and objectives as required. Doing so allows you to spot opportunities and threats in a proactive rather than reactive manner.

In the end, determining whether Twitter can help your e-business depends on whether there is a fit between your e-business objectives, the way your customers use Twitter and they way you want to interact online with your customers. It also depends on whether you have the resources and commitment to execute a social media strategy on Twitter.

To gain some inspiration, read this Mashable.com article on a list of prominent brands doing great things on Twitter.