Contributor: David Brim April 25, 2010
Did you know there are over 400 million active Facebook users? How about the fact that there are over 50 million tweets every day? When you mix in YouTube, LinkedIn, blogs, Yelp, and hundreds of other social, review or community based sites what does this mean to your business? It means people are talking.
Potential customers as well as existing or past ones are talking about your business and those of your competitors. They are talking about what they like and don’t like, what problems they face and if you listen closely enough…what they are looking for.
Many businesses are aware of social media and have heard stories of the power it has to significantly impact their business for better or for worse. They have heard the buzz about Facebook, Twitter and the power of the blogosphere. But how does one measure the success of a social media initiative?
This is a hot topic of discussion within the industry. There are many ways to measure a social media campaign. Some of which include relatively straight forward and traditional metrics such as:
- Increase in web traffic
- Increase in sign ups, sales or leads
- Increase in fans, friends or followers
- Increase in video views (youtube/vimeo/etc)
- Increase in customer engagement (comments, replies, brand mentions)
There however is a much more powerful way of measuring social media. That way is on the profit and loss statement of the business overtime. A profit and loss statement (Income statement) is a very basic financial instrument used to determine the financial position of a business within a given time. It’s basic formula is the core of any business–> Sales – expenses= Profits.
There are two ways to make more profits…which is generally the goal of any business…Number one save costs and number two increase revenue.
Lets take a look at how social media can do both for your business.
How Social Media Can Impact your Bottom Line
Top of Mind Awareness Leading to More Sales
By engaging with your customers online you are remaining at the top of their mind. Engaging doesn’t mean spamming. You simply need to interact with them, participate in conversations with them, wish them a happy birthday, etc. By keeping frequent contact online with your current and potential customers when they are ready to purchase your product or service you’ll be the first company they think of resulting in more sales.
Save Marketing Dollars by Embracing Brand Advocates to Market For You
Word of mouth is the most powerful form of marketing that exists. By rewarding your brand advocates or simply interacting with them publicly those in their social circle will be exposed to your brand. Social networks, blogs and twitter are all very viral in nature. If you are interacting with a current customer through one of these channels…their friends will notice. A simple example is when someone “likes” or “becomes a fan” of your business on Facebook this update is published in the news feed of that person’s friends. This inexpensive form of marketing is very powerful and effective.
Utilize Social Media as a low cost Customer Service tool
In some cases social media is great as a customer service tool. Since your consumers are talking if they have an issue show them that you are listening and respond to them promptly as possible to resolve their issue. This will keep customers happy and show them you value their business increasing the life time value of the customer.
Distribute Coupons, Special offers and Discounts to Socially Connected Customers
It’s no secret that customers like deals. Offer deals specific to fans, followers and friends on your social sites to keep them spending their dollars with your business. Create fan only content on Facebook such as whitepapers, images, videos, etc to increase your social circle of influence. If customers have a time sensitive offer or great deal the chances they are going to buy will exponentially increase meaning more revenue for your business.
Less expensive Market Research via Social Media
Social media is a powerful market research tool. With it you are able to monitor consumer sentiment, desires and problems and adapting accordingly. Market research firms can be expensive often charging tens of thousands of dollars for focus groups, survey distribution, etc…Social media provides a free focus group 24 hours a day/7 days a week.
Use Social Media to Gather Cost Effective Competitive Intelligence
Chances are that your competitors are on social media. Social media offers you an easy way to keep tabs on your competition and not only see what promotions they are offering, but what consumers are saying about their products and services. Social media can keep your team aware and on their toes…always two steps ahead of the competition. This competitive intelligence can be used in a variety of ways which will favorably impact your bottom line.
Save money by Connecting with your Industry Online
Trade shows, industry networking events and training seminars can all be very expensive venues to attend. There are many industry specific directories, groups and lists on linkedin, twitter, facebook and dozens of other community sites. Engaging with industry professionals online can save you the cost of travel and also keep you up to date on industry trends without attending conferences, educational seminars, etc. These relationships may also lead to favorable business development relationships opening up channels for new customers, cross selling, joint purchases for cost savings, etc.
In addition to the cost savings and revenue generating benefits of social media above there are some aspects that are more difficult to measure than others. For example….
What if a consumer finds your brand on facebook then becomes a paying customer. He then tells his neighbor down the street or friends at the gym and they call you directly. You may not know where this consumer came from…all he may say is “Bob recommended you”. Well Bob would not have found you and neither would his friend if it wasn’t for social media.
Social media is like physical networking on steroids. Just as you may meet potential customers or friends at a networking event you can do the same online and so much more. The beauty of social media is that you can also empower your brand advocates or brand champions to easily share their good experiences with your brand.
If your not utilizing social media or ignoring it…know that these conversations and interactions amongst your customer base are still happening. It’s vital to be aware of them and get involved…If not your competitors will.
Contact us today for a free social media consultation.