Increasing Revenue with Social Media?

Increasing Revenue with Social Media?

I pitch to a handful of new clients each week. Some already understand they need a social media strategy, but for a variety of reasons they’ve been unable to implement it on their own. Usually it’s because they don’t have someone on staff that understands the intricacies of new media and they would rather roadtest a lower-risk campaign with an outside contractor rather than hire someone full-time to create and implement their strategy. That’s where I come in to help.

The question I’m asked most of the time on the first phone call is “How much will this social media campaign increase my revenue?” Or, they phrase it another way, usually something like “If we see financial gain from this in the first month or two then we’ll continue it indefinitely.”

This is where I close my eyes on the other end of the phone, calm myself and politely deliver the response that I’ve delivered a thousand times before. I explain that it doesn’t work that way – social media is not a quick fix to increase sales. In fact, if that’s your only objective then the money you’ve earmarked for a new media campaign would be better used on search or affiliate marketing. Both of those channels are optimized for sales and have a proven track record in increasing revenue. Social media, not so much.

WHAT SHOULD I EXPECT FROM SOCIAL MEDIA?

For many potential clients, the call is over after I finish explaining the points noted above. For them it was only about short term sales and if that isn’t possible, there was no point in spending money on all that new-fangled Twitter stuff. But occasionally, I talk to a client that gets it. They understand that social media is an investment in their brand. Below I’ve outlined four things that you should care about when envisioning your social strategy:

1 . RELATIONSHIPS: Social media’s biggest benefit is its power to help build lasting relationships. Sure, you may not make a sale in the first month or the second month – but someday when a member of your social community is in the market for your product, chances are they will buy from you as opposed to your competition. Why? Because you took the time building a relationship, sharing information, offering knowledge and not being sales-y. Chances are they trust and respect your brand and making a purchase from you is an obvious choice. Heck, even if they don’t buy something from you, if you’ve made an impression on them they are likely to share information about your business with their social circle. Nothing beats that trusted recommendation.

2. LISTENING: Most businesses using social media miss out on this one, yet it can be one of the most valuable tools you have in your marketing arsenal. Companies pay thousands of dollars for focus groups and market research – social media has these things baked right into it. By monitoring your social channels for industry keywords and your business name you can learn a lot about what the marketplace is saying about you. What do they like about you? What can be improved? What products do they want that you’re not providing? How much is that information worth to you?

3. CUSTOMER SERVICE: Social media has become a great way to provide excellent customer service to your customers. Companies like Comcast were pioneers in using Twitter to address customer issues. This not only led to Comcast’s search results becoming more positive, but also changed the dynamic of the company. Consumers have become increasingly vocal in social media when they like or don’t like what a brand is doing. These present new opportunities, not only for a business to get involved in the conversation, but also to right any wrongs that may have been done. As a bonus, by keeping your ear close to the ground and monitoring keywords from your industry you may be able to step in and help a disgruntled customer of one of your competitors. How’s that for new customer acquisition?

4. THOUGHT LEADERSHIP: This is usually the fuzziest item of the bunch for most businesses to understand in terms of need. Many businesses simply don’t believe that a blog (your platform for thought leadership) is a must have. I’m here to tell you, it is. Sure, if you’re Coca-Cola you probably don’t need to become a thought leader in soft drink space. But if you’re a business trying to stand out from your competitors, thought leadership is a great way to do it. The best way to build trust in your brand early on is by showing the market that you are an expert in your market segment. The best way to show them that is by creating content: blogging, video, audio podcasts and white papers are all great ways to demonstrate that your people know what they’re talking about. Creating this type of dynamic and shareable content also increases your SEO juice around keywords you care about.

SLOW AND STEADY WINS THE RACE

Social media is not a sprint. It’s not a quick fix. It is an undertaking that has to be integrated into your overall marketing strategy in a thoughtful way. It demands buy-in from the highest levels of the organization and requires genuine intent and transparency from all those participating in the project. I believe eventually a great social strategy does lead to an increase in revenue, but it shouldn’t be the primary goal. Instead focus should be placed on the longterm growth and health of your brand by being cognizant of the four tenets listed above.

Do you coordinate the social strategy at your company? How long have you been doing it? Was it hard to get buy-in? Does executive management see the value in it?

  • This is brilliant. I wish more folks would be as honest about the short term revenue impacts of Social.

    • Hi Kate,

      I think many people that sell social media services exploit this angle. It’s easy to tell clients what they want to hear and take their money. The problem is that this damages the image of what social media can be when done correctly. I can’t tell you how many prospective clients I’ve talked to that say “I’ve already tried social media and it didn’t work.” After I dig a bit deeper, it’s usually because they hired someone inexperienced – or just plain unethical – that told them what they wanted to hear.

      I earn my living this way. It behooves me and everyone else that works in this field to be genuine about the strengths and weaknesses of a given medium. Yes?

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  • Scott, I agree with your short anecdote regarding prospective businesses looking to get involved with social media. I find that most business owners are not thinking enough about –why– they are communicating with their customers online. Instead they are thinking about what benefits they will receive.

    Over time, the companies that are acting with a purpose in their social media plan will see an increase revenue as a positive externality.

    • Agreed – it all goes back to purpose. Then you fill in your goals and how you plan to measure your success.

  • Petra

    Hi Scott
    I like your article a lot….I have been working on marketing strategy for one of the Law firms….as law firm in my country is not allowed to advetise in any way I see social media as one of the very limited ways to do so…
    Lawyers success is based on trust relationship between client and them..therefore I think where trust is the core of the success….social media are necessary marketing tool…

  • Anonymous

    It’s great. I wish more people would also be honest about the consequences of short-term revenue of the company.
    SEO Company India