Peer-to-Peer: “Is Social Media Worth the Effort?”

Readers weigh in on whether Facebook, LinkedIn and other content sharing sites is worth the work

Written by ProfitGuide Staff


The president of a Calgary–based company in the hospitality industry wrote to ask PROFIT readers:

“About a year ago, I gave one of our marketing reps responsibility for developing a social media presence for our company. So far, she’s developed profiles for us on LinkedIn, Twitter and Facebook. We seem to be developing a decent following, but I’d estimate she now spends at least 30% of her time maintaining these sites. I’m starting to suspect we might be wasting her time. Does anyone know of any reliable ways to measure how our social media use is hitting the mark with clients?”

Best reader responses

Garrett Saunders:

This is a classic case of a company trying to embrace new marketing methods as traditional marketing fades away. The new tools begin to seem irresistible to use to get one’s message out in a cluttered, saturated marketplace. Unfortunately, they don’t work well for brands that might be profitable but don’t attract the word of mouth that social-media users love to talk about.

The first question you need to ask yourself is: do you have a boring or remarkable brand? That is, do your customers and employees love to talk about your product or service offering whether they’re buying/at work or on their own time?

Second, what type of company culture do you have? Social media is most effective in bottom-up flat organizations than in traditional top-heavy organizations. The reason is that people like to talk about exciting brands in the social-networking stratosphere, and it’s very difficult to gain the right attention (conversion and engagements, not just awareness and followers). Otherwise, one can spend a disproportionate amount of time, as you’ve alluded to in your question, pursuing marketing channels that may not be worth the time and effort.

You’ve asked for metrics to determine whether you’re getting the right ROI on your social-media investment. Barring increased sales from people who have clearly told you that they have done business with you or heard about you through these sales channels, I would recommend focusing on the social-media trends below. If you can honestly say that you are following and supporting most of these trends, there’s a good probability that your investment in social media is worthwhile. Otherwise, it may be time to refocus your efforts.

1. Are you allowing direct communication and commerce between yourself and customers? Can your company create products for your customers instead of searching for customers for your products?

2. Are you amplifying the voice not only of your customers but of advocates of your brand as well?

3. Do you have an authentic story that can be integrated successfully across all online and offline channels?

4. Is your story or marketing message compelling enough to withstand the extremely short attention spans of social-media users due to clutter? (See No. 3.)

5. Can you embrace the long tail and aggregate niche markets that you would otherwise not be able to do offline?

6. Production of goods, services and ideas is no longer based on geography, but on talent and efficiency. Outsourcing certain activities can free up time for time-starved organizations.

7. Google and other search engines have broken the online world into tiny little bits. Very few people visit home pages directly; instead, they walk through the back door Google sends them to. By slicing up the world, Google has destroyed the end-to-end solution that most organizations offer, replacing it with a pick-and-choose solution.

8. With the rise of social media, there will be infinite channels of communication. You will have to choose wisely how to allocate scare resources for your online marketing, as you cannot be everywhere to everyone in every channel. Those who are prepared for this chaos will most likely win.

9. Are you allowing direct communication and commerce between your customers and other customers or prospects? As social networks become more powerful, customers will gravitate to each other, not just informing each other about their experiences but banding together to form larger movements that will pressure organizations for more of what they want. (Think eBay, TripAdvisor and discussion forums.)

10. The triumph of big ideas, bold products and unconventional services. What in your offering is so remarkable that it will cut through the clutter and not only gain awareness (or followers) but get those followers to try out your offering—or, at the very least, to raise their hand and give you permission to market to them in the future?

11. The shift from “how many?” to “who?” To focus on mass is understandable if you assume that all customers are the same or if you can’t tell them apart. But for the first time, marketers can use social media to see who is hearing and talking about their message.

12. New gatekeepers. Marketers no long control the message. At best, they can act as facilitators and collaborators. But make no mistake: the shift from the marketer to the consumer has been that much more pervasive due to the Internet. Those who are willing to take a seat at the table, rather than at the podium, will do well in a social-media environment.

All this is based on a new marketing philosophy that leverages scarce attention and creates interactions among communities with similar interests. New marketing treats every interaction, product, service and side effect as a form of media. Marketers can do this by telling authentic stories, creating remarkable products and getting permission to deliver personalized, anticipated and relevant marketing message to interested users.

Marketing is often a messy and complicated process, because we are dealing with human beings, who think more in images, stories and irrationality than in the logic and rationality of computers/software that process online activity. Social media and all marketing is only as good as it useful to your target market.

Chris Mallmann, The Wardrobe Workshop Inc.:

The main issue is the target market you need to reach, as there are many social-media venues that are effective with specific groups. Busy professionals are not likely to follow your tweets, but Gen Y’ers will. Top professionals and high-level execs will be on LinkedIn, but are less likely to spend time on Facebook. If you have a company that serves the public, a presence on Yelp [which features reviews by “real people” of local businesses] would work well.

Many of the newer sites—such as WAYN [short for Where Are You Now?, it’s a travel and lifestyle community] and Tobri [a social-networking site that promotes the quality rather than quantity of your connections]—may not yet have the follower volume to make them worth investing time in if you are trying to reach clients in your specific region. In other words, you need to identify who your client is, then find the social media they gravitate toward in sufficient numbers.

Catherine Mcquaid:

At 30% of her time, you could be gaining substantial indirect monetization (unpaid for advertising value), improved customer service and increased loyalty. But you would need the internal baseline metric prior to launching the program to know if there was an improvement.

On the other hand, 30% may reflect a significant waste of time if an investigation concludes that your marketing rep is busy but not effective. This is how I would review the program to date.

There are three ways to measure social media:

1. Effective vs. busy: Is your marketing person spending the time online communicating directly with constituents, answering questions or giving suggestions? If not, she’s spending her time doing things that do not lead to social engagement with your company.

2. What were the benchmarks for the program? If service improvement was an objective, for instance, what was the service level when you started, and has customer satisfaction changed since then?

3. Indirect monetization can be calculated. If you have a following of 5,000 people, for example, and it would cost $2 per person for a direct mail campaign, then the indirect value of your online reach would be $10,000 (5,000 times $2).

Social channels, if you use them to distribute your company’s promotional messages, are a lot like running an ad in the Yellow Pages. It’s not the size of that publication’s circulation that counts; it’s how many people find you, take action and build relationships with your company that gives you a return on invested time.

You may be asking how to use social media to meet business goals. The four objectives it can achieve are:

1. Improve search-engine rankings: Be found by potential audiences—and not just in searches for your company’s name or website, but in the words a buyer would use. High-traffic specialty sites may be where your audience does research. If you knew that to be the case, you might not post content on sites such as YouTube and Facebook.

2. Get better business intelligence. Integrating social-behaviour data collection with your own database will yield insight on your audience’s preferences around content and platform (public vs. industry sites, for example). You’ll be better informed about how to get your audience to take action. Social clues that show interest from users include commenting, sharing material or opening a link.

3. Cross-reference content to the “take action” point of your website. For example, if you have a coupon offer posted on an industry blog, include a link back to the redemption point so you can capture the incoming URL for your lead-nurturing activities.

4. Take a “test-lab” approach to using social media. Test responses to a variety of messages or calls to action. Sharing and link open rates, for instance, will give you clues as to which messages or calls to action are more effective. The data will start indicating what does and does not work so you can convert busy time into effective time.

Thirty percent of an employee’s time may generate results that are worth tens and even hundreds of thousands of dollars in value to your business. However, without clear goals…

For her answer, Catherine Mcquaid will receive a copy of Why Your World Is About To Get A Whole Lot Smaller by Jeff Rubin.

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