Contactually is very smart. One of the reasons I was initially drawn to it is that like a lot of useful, modern web services, it doesn't just sit there and wait for you to make it useful. Instead, Contactually is often one-step ahead, prompting you to do specific things that help you get more value out of the system, and by extension, your network of contacts.
The first thing you have to do to get any value out of this intelligence, though, is properly organize your contacts into our famous "buckets". The trick, as explained to me by Nick (I was lucky enough to get the in-person version, but you can get it yourself via this video), is to remember that buckets aren't just labels; they should reflect how you want to interact with the people in them.
Before having this explained to me, I did the complete opposite. While I had a blast dividing my address book up into things like "family", "bad musicians", "compulsive liars", and "people with beards", I soon realized that those distinctions were largely pointless in terms of how I interacted with the people I applied them to. Some beards are worth contacting once a month; others hardly ever. As my mom used to say*, never judge the quality of a contact by his or her beard.
(* she never said this.)
Building a Better Bucket
So I started over. Everyone's system will probably vary a bit, but I simply started by creating buckets for "once a year", "twice a year", "once a month", "twice a month", setting the follow-up times to match, and then thinking about what kind of people fit in each bucket. I ended up renaming "once a year" to "don't forget me", and "twice a month" to "strong references" -- that's just what made sense for me. While doing this, I realized I needed an extra bucket or two, which was no problem now that I was thinking about buckets properly.
Once I had my buckets set up and properly named, it was off to The Bucket Game. God, I love The Bucket Game. If you haven't used it, the bucket game lets you rapidly organize contacts by simply presenting them to you, one at a time, asking you which bucket to stash them in, and letting you answer with a single keypress -- or you can skip them. If you don't answer in time, it simply moves on to the next unbucketed contact.
I've played the bucket game many times; it's the biggest reason so many of my contacts have been properly bucketed. It also has the added benefit of keeping you from obsessing over the status of any given contact, which keeps you moving and starts to give you a better sense of how to use the buckets you have, and what additional ones you may need to create.
For a pretty poor networker, my contact rules are pretty aggressive. But that's okay -- I set them up, and if my rules don't make sense, I'll change them. For now, the important thing is that my many, many weak -- but useful! -- contacts have a home, and I've got a plan for staying in touch. That's pretty good for playing with some buckets for a couple hours.