There is frequent raging debate concerning whether Social Media characterizes fluffy noise and hype or is a 
mechanism that truly drives revenue.
Surprisingly, both debating sides have valid points. Sure, if you go on Twitter and have a robust following, you will find that tweets fly by quickly, creating a lot of noise, similar to television advertising. In most cases, the tweets aren’t necessarily relevant to you. But you can quickly make a Twitter-list quartering tweeters that provide relevant information, products and services.
It can be argued that Twitter is transforming the news industry and has become an attractive news source aggregator. You can simply build a list of tweeters that channel your desired information.
In some ways, you will save time by having real-time information at your fingertips channeled through your LinkedIn, Twitter and Facebook community. Perhaps it can be argued that there is a soft ROI in terms of the time savings factor and centralization of information.
On the other hand, you may find that the time saving you hoped to achieve is easily crumbled as you are pulled into one interesting story after the other. You can burn up valuable hours on your social media sites hanging out without a purpose.
But the question still remains. Will Social Media drive revenue? Almost all social media sites are free to sign up. It will take time to build a community of loyal followers. You most definitely need a strategy tied into your business objectives.
It is important to engage your demographic and provide valuable and relevant information. It’s not wise to be selfish and one-sided in your engagements. Giving and receiving is an important component.
Developing a loyal following will provide a revenue source. In this case the revenue is measured regarding the effectiveness of your social media platform.
Define the following:
- Objectives – what do you want to accomplish?
- Quantity – how many followers, fans, etc. will meet the objectives
- Time-frame – how long will it take to reach certain milestones?
- Quality – what quality level represents meeting the objectives
- Budget – how much money are you willing to spend?
What is ROI?
Return on Investment (ROI) is a measure of a company’s profitability, equal to a fiscal year’s income divided by equity and long-term debt. It measures the organizations effectiveness in using resources to generate profit.
More ROI Chuckles:
It is very difficult to quantitatively measure brand recognition. On the balance sheet, the closest definition is perhaps the “goodwill” line-item, where goodwill is considered an intangible asset.
How will you develop an effective ROI for your social media presence and demonstrate a quantitative measurement for your customer engagement strategy and brand perception effectiveness? Profitability cannot be the only determinant of an effective ROI return.
Certainly soft accomplishments like engaging prospects, developing customer relations, building brand recognition and how well you showcase your value proposition on social media outlets are all commendable milestones. But truly, these soft intangible accomplishments aren’t considered ROI until they are turned into something your banker appreciates.
What Ways Can Social Media Drive Revenue?
We will have to table the banker quantitative ROI argument for now and look at ways in which Social Media can drive revenue. Okay, so we are going the softer route.
Brand Marketing
If consumers, prospects, stakeholders, etc., know your brand value and their peers are also reporting positive brand appeal, than chances are very good you will get the sale. Additionally, social media offers a low cost, quick, go-to-market platform.
Discover New Markets
Social media strategic development planning will surely open up new markets that you never thought of before. Since the Internet offers new marketing avenues, you will find an untapped goldmine of new apps that can drive your customer experiences and improve your market share.
Traffic
A well planned social media engagement will deliver new traffic to your website. A website designed to capture these new visitors and turn them into paying consumers will help drive your revenues. You may even be able to lower your advertising budget by improving your SEO through developing a sound linking strategy. Bots are all over Twitter and your tweets will show up on SERPS, especially Google.
Product Improvement
Your customers can give valuable feedback regarding your products and services. You can inform them with updated documentation, bundling existing products or services and better refine your value proposition. Having crowdsourced product feedback leads to improved customer retention and increased revenue. Most consumers will listen to the advice of their peers over company advertising. Crowdsourcing strategies will help grow appeal.
Customer Service
If you’re not on social media outlets chances are very good that consumers could be discussing you. Why not be a part of the conversation and offer valuable customer service at the same time? This will improve brand appeal and show the good intentions of your firm. By handling customer beefs via your social media outlets you could cut operating costs and build a company FAQ for all.
In Conclusion
Becoming a social media maven may not necessarily be your company’s top business objective. That’s okay. But having a social media strategy in this day and age is a vital component for your overall branding and business development success.
Many pundits feel that social media does not provide a measurable ROI. Perhaps there is some truth in that, however, many companies can drive more revenue by engaging in a strategic social media plan. With a good plan, social media will drive revenue, it can be measurable but needs to be planned and managed appropriately to fit your specific business objectives.
If you develop your social media strategy appropriately, your banker will smile.
This is a very interesting approach to social media and well thought out. I like the suggestion of developing a strategy and building the 5 components you mentioned. I have been reading on LinkedIn how certain members feel Twitter is mostly hype. Your post makes a lot more sense and seems to make social media marketing more approachable. Very sensible diagnosis. Thanks
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Anyway, I created a blog that gives away great resources for Twitter that are 100% free, so come and visit and don’t be a stranger.
Keep up the great work!
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