As we saw in a previous post, there were 80 million users of social networks in 2008, forecasted to increase to 115 million in four years. In addition, according to Media6degrees, a consumer who is connected to a customer is 2 to 30 times more responsive to promotions. These numbers alone should establish the benefits to a business. You need to be where your customers are.
Social Media is about relationships, about people talking to each other. Using Word of Mouth (WOM) marketing, you promote your brand by getting people to talk about your brand. The more people talk to each other, the further your brand will travel.
Joining conversations with your customers builds trust relationships and customer loyalty. Using honesty and respect, bidirectional non-marketing speak and a willingness to teach and learn on an equal basis is important because customers buy from the businesses they trust.
In addition to forming trust relationships with your customers, involving them directly in product development benefits innovation cycles. A community of a thousand passionate customers often generate out-of-the-box amazing ideas, which narrows the focus and speeds product development, (“wisdom of crowds”). The advantage of listening covers all areas of a business including product development, marketing and support. Customers have great ideas and you would be crazy not to listen.
Using Social Media, you send a strong message that you are a hot, cutting edge, forward leaning company, on the forefront of a social movement. You are willing to take risks. Depending on your market vertical and your products and services, this benefit might be more or less important to you.
An active social networking community help raise your search rank based on incoming links. This is important for driving new traffic to your web site.
The bottom line is that businesses today need to be part of the social media movement. This might be done in small doses like creating a company group and employee profiles on LinkedIn. Or, it might involve establishing large social network communities on all major social networks, employee blogs and customer forums. The important take-away is that if you are not Social today, you need to be Social tomorrow.
Comments is a fundamental part of social media, so do your social duty and add a comment with your thoughts.
2 thoughts on “Business benefits of Social Media”
Social media marketing is the next big thing in marketing. But the main point in social media marketing is that you should not try to calculate the ROI in terms of pounds and shillings.
Social Media marketing is all about innovation and it will add value to your brand.
There are ways to measure Social Media ROI and the Social Media ROI should be measured depending on the size of the campaign.
When the local coffee shop tweets a few times a week, an ROI is probably not necessary but if Nike creates a multi-million dollar campaign, the Social Media ROI has be measured, tracked and analysed.
If we don’t measure the Social Media ROI, how do we know if we are successful?
I agree with a poster above stating that part of the reason for not measuring the Social Media ROI is that it might not be known how to measure the ROI. Taking that thought a bit further, the reason why ROI is not being measured is that it is tough to determine how you define the ‘return’ and also how you define the ‘return’ in dollars and cents.
The investment (the ‘I’ in ROI) is easy to define (= technology + marketing effort).
This is a two-step process where step one is to define the ‘return’ in dollars and cents. That can be done by using offline costs and benefits. Step two is to use the offline benefits in a meaningful comparison with online benefits and you arrive at a dollars and cents value that roughly approximates the Social Media return.
Now, together with the ‘investment’, run the ‘return’ through the standard ROI formula and you have your Social Media ROI.
If you have done your ROI analysis well and assuming you measure, track and analyse the results, you will find that your ROI calculations will get better and better over time. This is useful for (a) your own budgeting, (b) for applying for money with your CFO/CEO, and (c) for creating Social Media campign proposals for clients.