A lot of organizations are starting to ask “Where’s the beef?” in social media.Tweet
Having thousands of “fans” and friends and links and networks are intuitively good but just how good are they for the business? How can you demonstrate the business case for investing scarce time and resources into social media?
Just as traditional advertising over the years had to demonstrate that it could be measured, tracked and managed, social media must also prove that it drives real business results. The logical assumption is that generating lots of positive word of mouth communication and using new tools and platforms to increase engagement with your customers and communities must drive better results.
The goal is to get from point “A” (we know we want to leverage social media) to point “B” (we know what kind of real business results social media is delivering). So how do you get from point “A” to point “B”?
Be careful what you wish for….
Many organizations are approaching social media as a pure numbers game, but some of those numbers can be deceiving. It is common knowledge that most businesses and organizations experience the Pareto rule whereby 20% of the customer base generates 80% of the revenue and profit.
One of the first caveats about social media is that the “culture of free” attracts the wrong kinds of clients. What do I mean by the “wrong kind of clients”?
What would you rather have?
10,000 “fans” on Facebook that convert to paying clients at 1% on your lowest margin business….or 1,000 qualified prospects that convert at 7% on your higher margin offerings?
The numbers might look like this:
A.) 10,000 X .01 = 100 X $100 = $10,000 revenue (=$1.00 per “lead”)
- or -
B.) 1,000 X .07 = 70 X $250 = $17,500 revenue (=$17.50 per “lead”)
I will take option B every time.
The difference is have a solid strategy around social media that goes far beyond just getting more “fans” and followers. It is about getting the right mix in your customer community to deliver long term, sustainable results.
So the next time someone is asking “Where’s the beef” in your social media sandwich, think about the mix of clients you have in your social media community and how you can influence getting better customers and not just more contacts.
Click here to view the full slide presentation on this topic that was recently delivered to the American Marketing Association.