Getting a return on your social media investment
Businesses large and small are rushing onto Twitter and Facebook in an attempt to engage with customers.
But unless your social media activity actually drives sales for your start-up, isn’t it just a waste of time? As a new business, it’s vital that the precious time and, yes, money you spend on social media leads to tangible results.
Young Digital Group, a company advising businesses on social media and digital strategies, has had strong growth since it launched in February this year.
Part of its success comes from the way its founder, John Young, has used social media.
The start-up operates on Facebook, Twitter, LinkedIn, YouTube and Reddit. It also has a blog.
Young works social media to generate business. For example, he will film a video of a product, stick it on YouTube, post that on his blog and then put that on Twitter and Facebook.
The result: clients from around Australia and the globe. Young says social media can work in the same way for many start-ups.
“When you look at start-ups, we have little cash but time to develop the product,’’ Young says.
“So with service industries, it’s a chance to show the world what you can do.”
“You start with no audience at all, so you have to build your list, and the way you do that is leverage off other people’s lists through social media.”
“It’s given me new contacts in Brisbane and WA. How else could I have got there to engage with them? They have led me to new clients.”
He says social media is perfect for start-ups offering such services as photography, yoga schools, business consultants and event management.
Social media rookie mistakes
Indeed, research by GE Capital has revealed that companies in the cultural, recreational and personal services are twice as likely to use social media to create scale.
But despite what most people are told, it’s not free. It requires an investment of time, effort and, most importantly, the company’s reputation is being put on the line. There are also risks.
Which social media platform is appropriate for your company? If you are a B2B, for example, it’s probably better to use LinkedIn and Twitter than Facebook.
LinkedIn is attuned to business professionals. Facebook, on the other hand, is dominated by the social crowd.
And the big risk for a start-up is that you only get one chance. Jump into social media with poor brand definition and badly presented content and you will be ignored, there will be no return on investment.
These need to be measured regularly, at least quarterly.
And finally, the start-up needs to make social media part of its overall strategy. The messages it’s putting out on Twitter and Facebook have to match what’s going out offline.
GE Capital communications director Anthony Spargo says social media can be used to build the start-up’s market.
Activating the social media conversation
“I’d say to develop a strategy, the first thing you want to do is really listen and respond using existing channels, gather some insights into what your customer base is to really help you take the next step – which is to go beyond the test and learn and going into activation,’’ Spargo says.
“Then you can look at establishing new, potentially dedicated communities where you can then drive that engagement and begin to tell your story using social media. For me, that’s the ultimate powerful piece because it does four things.”
“It allows you, first of all, to listen to your customers because they are the ones in the community.”
“Of course, [secondly] you get the chance in a brand sense to position what you do in the market.”
“Thirdly, on the commercial side, there’s the added benefit that you can potentially attract new customers and prospects. And then there is the key engagement and using influences and providing meaningful content.”
GE does a lot of work connecting with its mid-market customers on LinkedIn and Twitter, where it regularly posts thought leadership pieces.
Spargo says the company had selected its platforms carefully.
He says: “We saw straight away that they are on LinkedIn and the key piece there was creating community that had rich, engaging content on it so that they would then start to engage with it rather than just watch it.”
“That’s the advice we give to a lot of mid-market businesses that are starting off in the social space.”
“It’s critical that they don’t just operate a whole heap of channels because you can’t do them all. What’s better to do is do a couple and do them really well.”
“Then make sure you amplify your content between each of the two channels.”
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For GE, the return on investment is simply the number of conversations triggered by the material posted.
“We have 200 discussions on there, there could be 150 comments posted on it so what we’re seeing is these guys want to talk to each other using LinkedIn,’’ he says.
“For us, that feels more like success than a whole lot of numbers.”
“ROI for us is making sure we are connecting mid-market businesses and getting rich, engaging commentary. We also get a lot of mid-market businesses come to us and want to learn from other mid-market businesses.”
“We also use it to get our brand out there and use it in the mid-market. We are getting anything up to five leads a week from LinkedIn from businesses coming to us to find out who we are and what we do.”
“Some of them might have questions about funds and some of them might have questions about talent management.”
“We’re not a traditional lender, we’re a specialist lender and our whole value proposition is offering more than money.”
“We try to provide other tools; we provide talent management tools and provide access to a whole lot of expertise for our customers so when they contact us, those are often the questions they’re asking.”
Quantity is good; quality is even better
James Griffin, a partner at SR7, which advises companies on managing social media, says measuring the impact of social media is not that difficult.
He says it often depends on what is being sold, but quantifying the success of social media need not be difficult.
“When you think about it, it’s quite easy to quantify whether it’s working or not and whether you’re getting success.”
“I liken it to an extension of sometimes, when you check in or you do something in a hotel, they will say ‘where did you hear about us?’”
“If you do put a voucher on Facebook or something that’s redeemable through a tweet, if someone does walk in through the store, if it’s foot traffic, you can track that.”
“They print it off the Facebook page or redeem it from a tweet that was floating around there.”
“So it’s about putting in place some structure, so that the person on the ground knows the organisation has embraced social media and that when they put that sale through the register or the till that they understand where it’s come from.”
Griffin says that as well as quantifying, it is also important to gauge the quality of conversation being generated by social media about your product or service.
“We would argue that’s where benchmarking and quarterly reviews come into place. So you can get a bit of a sense of that over time, what has the change in conversation been about.”
“It does take a little bit of time and that’s no different from the typical focus group or watching percentage increase or decrease in sales in the last quarter.”
“If your ROI is to change perception about an issue or a product, then having qualitative examples of that conversation is a good illustration of we got a return on our investment in social media.”
Big companies get in on the act
Certainly many well-established companies are starting to use social media. Qantas and National Australia Bank, for example, are making good use of Twitter to keep customers informed.
The Raddison Blu hotel in Sydney uses Facebook, Twitter, FourSquare, TripAdvisor and LinkedIn.
The Radisson’s marketing manager, Daniela Roesch, says Facebook and Twitter are particularly effective for building business. She says Twitter is a very effective means of communicating with those already searching for similar services or products to those being offered by the Radisson.
“What we do sometimes is check people’s searches. How, for example, people look for a restaurant and now with Christmas coming up they look for recommendations for Christmas dinners, and you can get in touch with those people directly.”
“On Facebook, it’s different. We put our latest offers out there and see how the reaction goes.”
“If there is something special we want to offer for Facebook followers, we make some special arrangement or competition where people get interested in the product and inquire about it.
“We measure all of that. Facebook has its tools as well. We work with other online tools as well, not just Facebook and Twitter but wherever we have been mentioned on the internet or social media profiles.”
You’ve got the strategy, now to resource it
Russell Investments uses Twitter and is incorporating Facebook and LinkedIn into its social media platform.
The firm’s director of marketing and communications, Craig Morris, says any company wanting to use social media to create scale needs to first have a strategy in place, identifying who it plans to connect with and how much business it plans to build from these platforms.
Morris says resourcing these efforts and being able to maintain the strategy are the biggest issues.
“These things can start out with a bang and everyone gets excited. But it’s about how do you continue the momentum around it and keep the focus on it and make sure it’s integrated into everything else you’re doing and it’s not seen as a sideline exercise or something operating in an innovation hub or anything like that.”
“It needs to be quite well integrated and managed in with the broader suite of communication channels.
He says each social media platform should be viewed as an alternative channel, with its own clearly defined purpose, content and distribution.
“The key bit is about engagement and using it to get close to customers and provide them with value, not using it as a mechanism to spruik corporate messaging that no one wants to hear.”
No longer just a nice-to-have
That said, he believe businesses cannot afford to ignore social media as part of their strategy. It’s no longer a nice-to-have.
“It’s one of those things that if you don’t have it, that’s an issue as well. It’s a reputational issue in that it signals to people that you’re not necessarily up to date with modern communication mechanisms.”
“It can impact your reputation in some instances if you’re not seen as embracing these new technologies.”