Social media statistics, skepticism, and strategies

On Deming Hill’s site I found an interesting article about why CEO’s hate social media. Particularly interesting to me was some of the data they posted as to its business benefits:

Executives rely on market research to support and substantiate any designated course of action, and devour facts, stats, and data-points like shrimp at a wedding reception.  Summarized below are a few statistics buttressing the explosion of this social media trend, and detailing how Corporate America is leveraging it to realize significant revenue and market share growth going forward.

  • In the last 7 years, Internet usage has increased 70% PER YEAR. Spending for digital advertising this year will be more than $25 billion and surpass print advertising spending (forever)
  • Lenovo has experienced a 20% reduction in activity to their call center since they launched their community website for customers
  • Blendtec quintupled sales with its “Will it Blend” series on YouTube
  • Only 18% of traditional TV campaigns generate a positive ROI
  • Naked Pizza set a one-day sales record using social media: 68% of their sales came via twitter and 85% of their new customers
  • Software company Genius.com reports 24% of social media leads convert to sales opportunities
  • Dell has already made over $7 million in sales via Twitter
  • 37% of Generation Y heard about the Ford Fiesta via social media BEFORE its launch in the US and currently 25% of Ford’s marketing budget is spent on digital/social media
  • 71% of companies plan to increase investments in social media by an average of 40%
  • A recent Wetpaint/Altimeter Group study found companies that widely engage in social media surpass their peers in both revenue and profit

(Sources for Statistics: meyersreport.com lenovosocial.com George Wright Blendtec Mashable.com econsultancy.com businessweek.com )

Obviously we’re not hearing about the “also-ran’s” and the flops, but this offers a clear indication that, when done right, social media can play a key role in a company’s marketing. But these figures also suggest a few important caveats:

  1. It takes money to make money: If Ford devotes 25% of their budget to social media they’re not using it to leverage the “free” aspect or get by more cheaply.
  2. You have to have a goal: Lenovo set out to decrease their customer support calls specifically, not just “Let’s do social media and see what happens”.
  3. If you don’t measure, you don’t know if it works: I doubt any companies could quote such statistics if they weren’t measuring the results of their campaigns.
  4. Be wary of statistics: All of this looks nice. But this list of statistics was compiled and published by a social media company. While these statistics show there is a good reason to look at social media more closely, it’s best to remember they didn’t post anything that suggests that social media is anything less than wonderful.

Can you expect results from social media? Yes. Is it a guaranteed fix-all for your business? No. It should never replace your over-all business or marketing strategies, only support and enhance them. You should know what you are doing and why before engaging in any social media campaign or effort.

That said, and lest one get the idea that I don’t believe in social media, a consistent, focused social media plan, well-executed and given sufficient time, will produce results. Just make sure you’ve got all your ducks in a row first.

Which SM service is right for you?

There are a lot of social media services out there. Far too many, really. No one can really hope to know about them all, let alone understand them and use them. But over time several have risen to the top as the de facto leaders in the field. Services such as Facebook, Twitter, LinkedIn, YouTube, Flickr, Blogger, and some others have gathered the most attention and the most users, and since social media is all about the number of eyes you can draw to your information, it’s all about users.

But even that many services may seem daunting. Businesses looking at getting into social media may be asking themselves which is right for them. The answer is usually: Yes.

The trick, if there is one, to social media is only partly picking the right one. More important than the service you use is the content you make available. Just being on Facebook will not guarantee that any of it’s 500 million users will even look at your page. Using Twitter could be like the proverbial tree falling in the forest–if no one hears you, you won’t make a sound.

Ultimately the real question of which service is right for you comes down to this: Which one do you most enjoy using? It’s as simple as that. While you can be successful on multiple services at once, you’re likely going to be the most successful on the one you use most.

If you understand Twitter and enjoy conversing in small, concise bursts, then by all means, focus on Twitter–at least until you get a good following built up and want to try some other services. If you like the various features of Facebook and can spend hours in there posting and talking to people, then use Facebook.

You will invariably perform your best in the places where you’re the most comfortable. It’s true in business, and it’s true in social media. Experiment with the various services and find out which one you’re most drawn to. Then dive in, use it, and start engaging with your audience.

Doing one social media service well will always be more beneficial to doing a half dozen of them poorly.

Measuring ROI – Some thoughts

Measuring ROI of any marketing effort can be more difficult than measurements in other areas of a business. You can usually measure quite accurately how many dollars were spent on a particular project. You can measure the number of units produced per day or the number of employee sick days. You can measure your sales versus profits.

Marketing is a bit more hazy. Yes, you can measure the number of leads collected in a particular month compared to the amount of money spent on advertising. And if you have exceptionally strategic-minded salesmen you may even get them to regularly ask their contacts how they heard about you to further narrow down your marketing effectiveness.

But it can be more difficult to measure customer loyalty (ie. who thought about switching and didn’t) or determine whether an increase in repeat sales is due to your marketing or due to som other factor. Customer buying habits are complicated, and usually the best you can prove is correlation, not causation (ie. “when we increase marketing spending 20% our sales increase  between 8-14%” vs. “we can make sales increase 1% by spending $10,000 on marketing”).

That said, there are certain relationships that can and should be tracked. Any marketing executive who claims you can’t measure the effects of marketing should be watched closely. The same goes for social media. There are certain results that can be measured if you are willing to make the effort.

The problem is that many businesses are not always collecting good data to begin with. Regardless of whether you use Social Media, can you say what the cost of acquiring a new customer is for your business? Can you say what a customer is worth to your business?

For example, it could cost you $500 to attract a single customer. That customer on average may spend $200 per year with your business. At that rate it will take 2.5 years to realize a profit on that customer. If the average customer only stays with your business for three years you’re not going to have a very good return – only about $100, or about 6.6% per year.

However, knowing that information, you are now in a position to measure the benefits of any specific marketing effort. Suppose you decide to implement social media marketing in your business. After a period of measurement you determine that customers gained through social media cost only $400 to obtain. Assuming the other factors are equal, you now break even within two years, for a $200 profit on that customer over three years, or 16.5% per year ROI.

Or imagine that it still costs $500 to gain a customer, but you can increase their yearly purchase rate to $220. Your three-year profits on that customer rise to $160, or 10.6% yearly ROI. That’s a significant increase over the original 6.6% ROI.

Or let’s say through a change in your marketing you are able to retain a customer for an average of four years instead of three. You now make a net gain of $300 over those four years, or a yearly ROI of 15%.

Now these results are for demonstration purposes, and not indicative of expected results. They are to make the point that there are several ways that any marketing initiative can impact your bottom line. But you won’t be able to know you are getting those results if you aren’t already measuring some very basic factors in your business.

Make sure you have metrics in place in your business. Without them you will never be able to be sure if your marketing is working, or whether you just have a very good salesman running your marketing–good at selling you on fronting the money for their experiments.

Don’t overlook LinkedIn

For many Net Socialites LinkedIn is one of those “also-ran” sites. It’s reputation as a job-search site causes many to overlook it in favor of more sexy, pure-social sites. But for both individuals and businesses that want to establish a business presence online or build their reputation, LinkedIn should be included in their social toolbox. Here are a few reasons why:

  1. Recommendations – Client, customer, or co-worker recommendations are Internet gold, regardless of the platform. Savvy businesses and consumers are learning to include LinkedIn when vetting contractors or other businesses. Always invite your customers to give you a recommendation on LinkedIn.
  2. Q&A – With a site full of over 20 million experts, one quick way to stand out is to be a regular in answering questions. It builds your reputation for being a “giver” and heightens your credibility. Don’t forget that asking good questions can also make you look good–and get you good, quality answers!
  3. Groups – Joining LinkedIn groups both helps define your online personality and can put you in touch with potential customers. Being an active, helpful participant can lead to business contacts, even if the group is completely unrelated to what you do. For example, if you contribute regularly in the Charlotte Bronte discussion group, people in that group will come to like and trust you. They will also see what it is you do for a living. If they happen to be looking for what you offer, chances are they’ll come to you first.
  4. Social Media Aggregation – Integration with several of the top social media sites are already in place on LinkedIn, and you can set up live feeds one your profile page. You can update your LinkedIn status from other platforms. You can keep your LinkedIn profile fresh with constantly changing content–with very little effort!
  5. Research – It’s easy to look in on what your competition is doing with LinkedIn, and you can find a lot of information that way. You can also look up potential clients, employees, or collaborators. The power of LinkedIn as a business directory, though not directly social in nature, should not be underestimated.

It takes very little effort to set up and maintain a LinkedIn profile, and provides one more line in the water to catch clients. Why not add LinkedIn to your social media mix?

Five reasons to use Facebook for business

Facebook takes a lot of heat these days–often deservedly. But sometimes that criticism echoes much of the criticism leveled at Apple, Google, Amazon, and Microsoft. Once a company reaches the top of the heap they become an easy target for everyone who thinks they could do it better.

None of this makes Facebook any less a viable option for businesses seeking to engage through Social Media. If anything, Facebook has been bending over backward to make itself more accessible for business. Here are five reasons I believe Facebook is good for business.

  1. Facebook does “local” better than most. While some people treat Facebook like “Twitter-with-longer-posts” and try to rack up as many friends as they can, for most people their Facebook networks mirror fairly closely their real-life networks. People friend people they know, which gives Facebook the ability to focus more locally. A car wash may push for followers on Twitter, but unless they live close enough to bring their cars in, it won’t do much good. The same car wash on Facebook has a much higher chance of its network living within their business area.
  2. Facebook is highly customizable. Between the myriad of plug-ins and the ability to use FBML to create pages and apps, Facebook is flexible enough to replace a company’s website. It is even possible to install an entire e-commerce suite on your Facebook page now.
  3. Facebook has reach and depth. Facebook has more users than most countries have population. Odds are at least one person in every connected household has a Facebook account. That provides a pretty wide reach for companies doing business inter-state or international. Businesses limiting themselves geographically can still access saturation better than most newpapers or television stations.
  4. Facebook is designed for interaction. Facebook posts can be three times longer than Tweets, and there is no limit on length for private messages. This is a lot of breathing room for businesses whose message doesn’t always fit in 140 characters. This allows for more branding and personality to come through, as well as more in-depth exchange of information. You can have full, rich conversations on Facebook as opposed to the truncated, abbreviated spurts that result from Twitter’s self-imposed limitations.
  5. Facebook, for now at least, is not seeking to milk (or bilk) business users. Certainly there are features Facebook would like you to pay for, but you can accomplish most of what you need to do on Facebook without paying them a dime. For now, too, they seem content to leave it that way. While many of their changes and new features are obviously aimed at attracting businesses, they’re being careful not to chase them away again by hitting them up for money.

There are several other reasons I could think of, but I believe these to be some of the most important. By accident or by design, Facebook has become the go-to platform for business social media. They hit the sweet-spot between ubiquity, brevity and substance in a way that Twitter has been unable to do, while providing the integration that almost ensures other platforms will need to “make nice” with them for years to come.

Certainly they have their weaknesses and foibles. Privacy issues have been the bane of their existence for some time, though most of these are more of concern to individuals, not businesses. And as time goes on and more exotic social media platforms appear they may have a difficult time being all things to all people.

But for all that, so far Facebook has played an amazingly canny game in positioning themselves, not just to become one of the top players in the field, but to potentially becomes the default infrastructure that supports most mainstream social media services and could potentially replace websites.

The next few years will be key for Facebook as they decide how to handle their success. It’s a question Apple, Amazon, Google, Microsoft, and many other companies have had to face through the years. How they choose to answer it will largely determine whether Facebook stays on top or gets knocked off by the next one to do it better. It’s their game to lose.

Seven reasons to hire a social media manager

This post is self-serving to the extreme. I intend to make the case for why you should hire me. Or someone else. The point is, if you plan to use Social Media in your business, you should consider a social media manager. Why? To quote Lucy, from Peanuts, I’ll give you five reasons! Unlike Lucy, I don’t intend to punch you.

1. Writing and posting Social Media content is not your business. Your business is your business. If you are a small business owner you have enough to do already. To do Social Media well requires regular, consistent attention. As a business owner that will be hard. There will be new fires to fight, new opportunities to pursue, and new plans to make. You need to stay flexible and able to devote your attention to where it is most needed.

Working with a social media manager allows you to devote time and effort when you can, while letting the manager establish the consistency that makes Social Media efforts successful. You can focus your primary attention where it should be: developing your business.

2. Social Media changes, and changes quickly. Social Media is a relatively new field, and major players appear practically overnight–and disappear just as quickly. New services and approaches are coming out all the time. Some are worth your time and some are at best flashes in the pan. Constant research is needed to stay on top of it all.

Chances are your business changes just as rapidly. New developments in your field appear constantly. It can be a full time job just to stay current in your area of expertise. Hiring a social media manager allows you to stay focused on your own core competencies. Let someone else keep up on Social Media. That specialization and division of labor will create powerful efficiencies in your efforts.

3. Social media managers keep you focused. Even if you are still contributing at least some of the content for your Social Media efforts, it can be difficult to stay on task. You’re the boss, after all. You answer to no one but yourself. That could be one of the reasons you went into business to begin with.

But with no one holding you to specific tasks and goals, however, it can be easy to let it slide. One of the ironies of Social Media is that since most of the services are free, you are under no pressure to protect an investment. No money is wasted if you don’t update your Twitter profile today.

But having a social media manager changes things. A good social media manager can keep you on task and make sure you come up with the needed content. And since there is at least some fee involved for their services, you will likely feel more of a drive to make sure that investment is not wasted. Not providing your manager with this week’s blog post in time costs you money. While lost opportunity can be hard to measure, someone sitting on their hands when they could be doing something for your business is easier to detect.

4. The devil is in the details. The difference between adequate Social Media and great Social Media is often small. It could be as simple as not updating a Twitter feed to let that audience know about a new blog post you just published. If could be the difference between only creating a Facebook campaign rather than also reworking that same content into a blog, a slideshow, a video, and a podcast.

A good social media manager covers the details. It’s their job to make sure every bit of content you create gets maximum exposure on your various channels. Because Social Media is their focus, they can get more results out of every bit of content than you can.

5. A lot of Social Media interaction is noise, and hides the real opportunities. When Social Media gets cranked up and running well you can spend a lot of time just keeping up on every customer interaction–and still you will likely miss the critical interactions: the dissatisfied customer, the customer with the million-dollar idea they give you for free, the unsolicited testimonial, or even the inquiry that leads to a big sale. You can’t afford to read every single interaction–but you also can’t afford not to!

But you don’t have to handle it all. A social media manager can sift through the chatter, tackle (or delegate to others) the softballs and low-hanging fruit, and redirect to you only to the important messages that need your personal attention. You save a lot of time that should be applied elsewhere, and you are less likely to miss something truly important.

6. Social Media is a significant source of information. Besides providing customers a venue to bring information to you, Social Media provides the means to proactively gather information that could help guide your business. But again, as the owner you don’t have the time to spend on proactive information gathering.

Your social media manager does. He knows the tools and knows how to pull the data out that you need. He knows how to actively search the web for information about your company, your products, or your people–or about your competitors. The Internet is a sea of free information that far too often goes underutilized because there simply isn’t the time for business owners to go get it. Let your social media manager get it.

7. Well-run Social Media gives you more for your marketing buck. Radio ads can easily run over a thousand dollars a month.  A single newspaper ad can cost several hundred dollars. Yellow pages ads can run into tens of thousands of dollars a year. A good social media manager can cost a few hundred to a few thousand dollars per month, and can give you almost 24 x 7 x365 interaction with your audience. They can give your business a unique voice and build your reputation in ways no other marketing medium can.

Not only can they reduce the cost of finding a new customer, they can increase customer loyalty to help you keep the ones you already have. They can also increase the frequency and size of purchases. Perhaps most importantly, they can leverage the endorsements and recommendations of your satisfied customers in ways that no other medium can.

Just as I’ve said that businesses can do just fine without Social Media, businesses can do just fine without a social media manager. But if you are going to use Social Media in your business, chances are you won’t be able to run your business and your social media at the same time and give both the attention they deserve. I’m biased, but I would highly recommend you consider hiring a social media manager.

What’s the big deal about Social Media?

You’ve probably been hearing for some time now that your business simply must get into Social Media. You’ve probably been asking yourself (and no one else, lest they think you out-dated) “Why?!”

Let me answer that.  You don’t! There, I’ve said it, and I hope I’m not the only one who will. You can have a successful business without Social Media. People do it every day. People are regularly making a living–and perhaps even making themselves rich–without ever having heard of or tried Social Media.

Social Media is a tool–a powerful tool, to be sure–but it’s nothing more than a tool. Or a set of tools, really. And with most tools, there is always a lot of hype surrounding it, often created by those who want to sell you tools, maintain your tools, teach you how to use tools, or rent your their tools. People like me!

It’s like years back when everyone told you “You just have to be in the Yellow Pages, or you’re doomed!” Today it’s the Yellow Pages that are doomed. It’s like when everyone got all excited about how you have to have a website. There is a lot of hype, and as often as not, the hype turns off as many as it convinces to try something.

So let me try to explain why you should pay attention to Social Media and at least look into how it could support your business. There are three main benefits of social media:

  1. Get your message out
  2. Build your business’ credibility
  3. Find out what your customers need

Let’s look at each of these in turn. But first of all, I am making one rather large assumption at this point: that you know what Social Media is. If you don’t, please take a few minutes to go read this. Then come back here.

Get your message out

Social Media allows everyone to get their message out to the world. While I won’t say that everyone is equal online, everyone has an equal chance online. Quimby Cola can be as big online as Coca Cola. This is demonstrated in how so many videos, sites, pictures, etc. go “viral”, in that they achieve phenomenal popularity seemingly overnight. Something just has to catch the attention of enough people initially and it doesn’t matter if it was made by Paramount or Paul McGilicuddy, suddenly millions of people are tuning in to see it.

Obviously “going viral” is hard to predict or achieve, but getting your message in front of your target customer group is much easier to do. You can get your message out in the way you want it, at the time you want it, to whom you want it at relatively no cost. Initial results can be slow, but given enough time and attention, they do come.

Build your business’ credibility

Considering how quick and shifting the Internet can be, it’s amazing how enduring information can also be. Write a letter to the editor in the newspaper, and within a few weeks every copy is in the landfill. Write an article on the Internet and people could still be finding it years later.

This is great news for building your personal or business credibility. Those who regularly put out informative articles, posts, or webpages, etc., build up an archive of information that can be found by someone at the time they want that information. When they stumble across useful information they are more likely to pay attention to other things that same publisher has said. You gain credibility with that potential customer and someday, when they’re looking for what you’re selling, they buy from you, because they know you know your stuff.

Social Media is a great way to establish yourself as someone who knows. With a little planning you can dangle free information in front of your audience–enough to let them know that you’re credible, but not enough that they won’t come back for more with money in hand later.

Find out what your customers need

Social Media allows you to know what people think of you and your business. This can come either directly, through their comments and interactions with your social media channels, or indirectly, by your actively searching for what other might have said through their channels. You can find people who are looking for what you have to offer and approach them. You can get feedback on your ideas very quickly.

Most importantly, you can interact with your customers and prospects. Social Media allows for dialogue instead of one-way communication. Customers love it when they can interact with the people they do business with. They continue to do business with those they have positive interactions with.

On the down side, people will not always say kind things about your business. You can’t control that. Someone who has been offended can raise a Social Media stink, and there is nothing you can do to stop them. You can, however, put your message out there to counter it. You can attempt to engage with that person to solve their problem and turn them into an ally. Not everyone will want to let you help them, but your other customers will appreciate that you tried.

In short, Social Media allows for public relations on the personal level, and it can happen in an amazingly short amount of time. Those who ignore this potential are at best failing to utilize a significant tool, and at worst shooting themselves in the foot.

So Why Social Media?

Social Media is nothing new. It’s public relations, word-of-mouth, marketing, customer service, and public communication. These are age-old business concepts.

But Social Media gives you a chance to do all of this inexpensively and quickly. It allows you to interact with your customers wherever they are, without having to wait for them to come into your shop. It gives you a chance to get in front of them on a more regular basis. It provides you the means to find out what is on their minds. It allows you to tailor your message to better fit your customers.

It’s not a magic pill that will turn your business into an overnight success, but it is a great toolbox for invigorating your customer interaction.

What is Social Media?

Social Media refers to Internet technologies that allow for individuals to interact with other individuals, groups, and businesses in an immediate, personal way. It allows people to create networks of people with whom they want to interact, in a way they most want to interact with them.

Social Media platforms include sites such as Facebook, Twitter, LinkedIn, Flickr, YouTube, FourSquare, Blogspot, and others.

Many have tried to compare Social Media to a giant cocktail party. I prefer to think of it more as a giant county fair. If you’ve ever been to a fair, it’s a big, crowded place with a LOT of different things to do. There are displays of animals, arts and crafts, produce, etc. There are areas where vendors can show off their wares. There are concert and entertainment areas. There is a food court. And of course, there are all the pathways that link it all together.

Now, what makes Social Media a bit different is that with the Internet, the state fair covers almost the entire world, but you can get to anyone or anywhere at the fair in less than a second.

So if I decide to join into this giant fair I can interact with it in several ways. First of all, I could decide to look for friends to see if we want to connect. Through the magic of the Internet I can find everyone I know, if they’re at the fair, within seconds. We can immediately tap into one another’s heads and talk to each other as if we were right next to each other, but still be in different parts of the fair.

Jane could be telling all of us about this cute dog act on one of the stages. Derrick could tell us about this beautiful angora rabbit that got a blue ribbon. Monica could be telling us all about The Best corn dog booth she just found. And Terry could be telling us in graphic detail about the after-effects of riding The Zipper.

Through Social Media we can get all these messages at once in a format that makes sense to us. We can use it to keep in touch with people we want to keep in touch with as often as we want. But it goes farther than that.

Suppose none of us knows about the livestock show, and you want to find out more. You may be able to instantly find a list about everything everyone at the fair has said about livestock today. You could find a list of livestock breeders present at the fair. You could find the official information posted by fair officials about the livestock section. You could find newspaper reports about different breeders or their livestock. It’s all there, and you can search through it in any way you can think of.

Suppose you happen to find a comment made by Jacob about angus steers. You could decide that Jacob is the guy to talk to about that breed, and instantly send him a request to tap into his head as well. If he accepts, you now can add his stream of thoughts to the stream you already have going with Jane, Derrick, Monica, and Terry. If you hear something from Jacob that you want to pass on to everyone else, you can! Instantly! Jane might like what Jacob has to say, too, and add him to her network as well. And your network grows and grows.

So how does any of this help businesses? Well, remember that there are vendors and food providers at the fair, too. People are continually passing by their booths, stopping to talk to them, or buying their wares. Remember how Monica told her network about the corn dog booth she found? Now Jane, Derrick, and Terry know about it, too. They know she liked it. If they visit the food court and see that booth chances are they’ll stop and buy a corn dog.

That corn dog vendor can also do for his booth what you did to learn about the livestock show. He could search to see what everyone at the fair is saying about his booth. If he comes across Monica’s comment to her friends he could perhaps reach out to her and say “Thanks for the kind review. Next time you stop by I’ll give you and your friends a free small drink!”

Or suppose he comes across a comment that says “I tried those corn dogs, and mine was undercooked. I think the hot dog was still partly frozen.” The vendor could reach out to that person and say “I’m sorry you had a bad experience. Come by my booth again and I’ll give you another corn dog, cooked to perfection, for free.”

This is, of course a bit of an over-simplification. For one thing, different Social Media platforms work differently. Not every service allows you to tap into everything anyone has ever said. For every Twitter, where everything you “tweet” is put out into the Internet for everyone to find, there is a Facebook where, if you so choose, only your approved friends will ever know what you say. For every YouTube, where any comment is published for everyone to see, there is a blog where no one can comment, or where comments are not published unless the blog’s editor approves them.

But the bottom line is that Social Media is a tool-set for connecting with everyone and everything you find of interest, in the way you most enjoy, instantly, and from anywhere in the world. Or right next door.

My new site is coming!

Please be patient, and check back soon!

I’m in the processes of reworking this site to match my new vision for what your business could become with the help of social media. I want to be your partner in getting your business out there and interacting with your customers.

If you need help mastering social media and can’t wait for this site, feel free to contact me at thom@thomstratton.com or call 208.321.5070!