- What is it?
- Should I have it?
- Will I make money?
I’m often asked this and having just spent 2 days at a local business expo talking to small businesses it still seems a baffling question to most.
(1) What is it – it’s a fancy new term for, information shared by word of mouth. Before mobile phones and the Internet we used to talk over the fence to our neighbors or go off to kids sport and spend some time talking to the other parents. “what are you doing this weekend” we would say. “I’m getting some plumbing done in the bathroom” they would reply. “Oh do you know a good plumber?” we would ask. There it is, Social Media in action. Now we have mobile phones and Internet and applications on them that allow groups of people to find and talk to each other. It’s just word of mouth using a different medium where people discuss, recommend or voice their dislike of certain things.
(2) Should I have it? Yes – but like a good wine – in moderation. We want people talking about our business and recommending us to others and the more people are doing that the more likely we will make more sales. Social media (promoting word of mouth) has to be part of your overall marketing plan and the amount of time spent doing it must be in portion to the time you spend on other promotional activity and what the return is from that. Here is an example: one of my clients is a retail franchise, they want people walking through their doors and their franchise agreement does not allow them to have their own retail web site. There are 21,000 households in their store footprint and currently they have 198 “likes” on social media. Spending time on social media talking to the 198 is talking to less than 1% of the local community so as a rule of thumb 1% of their marketing time should also be spent on Social Media or 24 minutes a week. To spend time on social media when you could be dropping a brochure in every household’s letter box is just silly. Yes, I hear the screams about spending time where the greatest potential is but I also hear the boss saying – show me the money.
(3) Will I make money? Maybe - Just Google – Pepsi & social media disaster, you will see even the big boys make mistakes and loose money. Social media can be an efficient cost reduction mechanism as well as a revenue generator but also like Pepsi you can loose money, market share and direction if you get it wrong or do it while forsaking other marketing activities. (a) If you simply posted tips and tricks how to use your products and asked customers to follow you for that reason you may reduce incoming service calls and save money. (b) If your prepared to spend the time posting at least 3 items a week, reviewing results, building links to your web site which will also need the same updates, replying to customer comments both good and critical and you have the patience to build a following then you will make money. If your social marketing is not integrated with your overall marketing plan, if you over resource it or start without an understanding of it then invariably – you will fail.
Summary – Seek first to understand, do your research, make a plan, look at how you will measure it and the possible returns then look at the cost trade off of not doing something else. Do not fall for the “oh every one is doing it”. Word of mouth is important to your business and there are several ways to fuel it, social media is just one of them.