Good question. I would begin by asking what are the objectives of our overall marekting strategy? Are we meeting or exceeding those objectives? If not, where are we failing? How can we measure the impact?
Then I would start to look for opportunities where a social media strategy can augment the existing marketing strategy. I think this is where so many people get lost in that they think the social media strategy is a standalone when in fact, it's an integral part of the overall marketing and communications strategy.
Finally, the leadership of the organization cannot be wrapped up in a paralysis by analysis mentality. There's very little risk to launching a well thought out social media strategy vs. spending considerable money on a new television commercial.
I would conduct a small preliminary social media audit of the business. I would go on-line and find out everything about the company and their products. I would use various tools from tweetbeep to Whostalking to try to find information that may not be known by the client. So far, I have left some prospective clients with some social media intelligence. One would not believe how many companies don't know their employees have created facebook pages entitled " Employees Against ..(Insert name of company here!)!
I think the "audit" is a good idea. However till now I don't think that's any good indicators as to what checks needs to be done, and the purpose of it.
I would avoid using the word "social media", listen to the client's needs, then begin constructing solutions from some "social media" tools- and eventually other non-social-media tools. The goal would be to have them help you construct their social media strategy with you. I personally think it's not about the trendy-concept, it's more about answering to the "what's in it for me" question from the client.
I'm with Hery and Cathy - ask questions. Lots of them. Make the client define their marketing & business goals. Then help them meet those goals with the tools that are best for the situation.
Perhaps the key is to have them think about their business from the point of view of their customers. Those customers who expect them to find them where *they* are... could be a growing segment of their potential future business. Depending on their target demographic, social media could be just where their new customers are to be found.