Understanding the Two ROIs of Social Media
The business benefits of social media aren’t limited to the realms of marketing and brand equity. Major efficiencies and productivity gains are to be had from faster and more interactive communication—between companies and consumers, among consumers, and in social-media-driven collaborations within a company.
Awareness, Knowledge, Consideration, Selection
Before purchases are made, conversations about what brands to buy take place online, and the proliferation of customer ratings and reviews influences buyers, along with the sharing of purchases and recommendations. Companies profit through increased online visibility in search, video, mobile, and the blogosphere. More and more companies are profiting from free sampling campaigns, coupons, and sweepstakes. Increasingly, social media are driving customer awareness, influencing customer research and willingness to try new products, and inspiring purchase decisions and recommendations.
Beloved Brands Thrive in Social Media
As an employee or consultant, I’ve been fortunate to work for a number of beloved brands, including The Vermont Teddy Bear Company, Green Mountain Coffee, Wine of the Month Club, Terry Precision Bicycles, and others. Brands like these resonate with consumers because they have a unique story to tell, a story with an emotional dimension. Such brands are positioned to thrive on social media.
I mention this not to boast but to acknowledge that bigger, better-known brands enjoy some advantages in social media over smaller, lesser-known ones. Consumers often come to Facebook or Twitter seeking them out, perhaps driven by a customer service need, desire for exclusive discounts, or mere curiosity.
Leveraging the Network Effect
Thanks to what’s called the “network effect,” initial awareness of your brand and its reach will be multiplied many times over by participation on social media websites. Here’s an example of how it works: for the Café Express Savings Club, we have a Facebook community of about 80,000 fans. Each member of Facebook has, on average, about 300 friends. When our fans see our posts in their Facebook news feeds, if they choose to “like,” comment on, or share them, our reach begins to extend to all their friends. As a result, our 80,000 fans give us a network reach of about 23 million people
Three Vital Ingredients and “Social Proof
Awareness, personality, and relationships are the first three vital ingredients for social media success. It’s not much different, really, from what makes you willing to confirm a Facebook friend request from an individual person:
(1) you know who they are,
(2) you like them, and
(3) there’s some form of bond between you.
These are the same assets a brand brings from the outside world and uses to establish its social media program.
Setting Goals and Tactics
Different businesses will have different goals or priorities. Nonprofits may replace sales with donations. Entertainment companies, online games, or other applications may be more interested in views or downloads to drive ad dollars. For each goal, you’ll deploy a number of social media tactics. For instance, sales goals can be served by promotional wall posts, member-exclusive discounts, social couponing, refer-a-friend campaigns, ad campaigns, social shopping integrations, or full-fledged Facebook commerce.
One-to-one customer relationship management fosters repeat buying and advocacy from your best customers. It detects and defuses potential customer service and public relations problems before they turn nasty. Since much of this customer care occurs in public, on your Facebook or Twitter wall, it bolsters the reputation of your brand, showing that you’re trustworthy, ethical, and able to appeal to prospective customers.