3 Kinds of Returns from Social Media Investment

Peter Roesler, President - Web Marketing Pros

By Peter Roesler

President, Web Marketing Pros

social-media-3d-redIt’s not uncommon for brand managers and business owners to hear social media spoke of as an investment, but it may be unclear what social media is an investment in. Unlike investments in equipment, training, or personnel, the value of social media can be difficult to quantify. It can be valuable to an organization in multiple ways and the eventual return on investment depends on how wisely an organization chooses to use the investment. When done properly, social media can be a great investment in brand awareness, customer service, or increased sales.

Social Media and Brand Awareness
Social media is always a good investment in marketing, because just the act of being on social media increases awareness about a brand. By posting and commenting on social media channels, an organization engages in a conversation with their target audiences. These conversations can help customers develop a better opinion of a brand and it can help new people learn about an organization as people spread the social media messages.

The brand awareness value of social media is even more pronounced among the younger generations. According to recent research, 66 percent of young people age 13-24 look up a store or location after learning that their friend has checked in and 71 percent report liking a brand on Facebook just to receive an offer. Social media also improves the SEO efforts of an organization, which in turn improves awareness of the brand in the community.

However, don’t assume that social media is just for the young. More than half of the online population under the age of 55 years old in America uses social media. And the internet itself continues to grow on a national level, reaching rural areas, and on a global level, connecting every part of the world. Regardless of an organization’s target audience (well, maybe not the Amish), social media and internet marketing will be the tools of the trade for future of business.

Social Media and Customer Service
It’s taken a few years to get everyone on board, but almost everyone in business management agrees that customer service is an important factor in a company’s bottom line. For anyone who still doubts this, here’s something to consider: about 60 percent of customers will switch brands just to get better customer service. More and more companies are are using social media as a way to invest in better customer service. In 2010, one in four companies were using social media to respond to service inquiries from customers and partners. Some industry commentators believe that rate will rise to nine out of 10 enterprises, by the year 2020.

Statistics have shown that customers prefer to engage companies online and on social media. As more companies move customer service and technical support services overseas, expect more people to engage social media as their primary way of contacting a company.

Social Media and Sales
A common, and legitimate, concern of business owners is that they don’t see how social media can help them make more money. Part of the challenge is that most companies can’t sell their product through a social media channel (the obvious exception would be game and app developers). The trick is to remember one of the golden rules of economics: People respond to incentives. Whether the incentive is eye-catching photos, product specials, or just timely reminders, an organization must craft posts that give consumers a reason to take action.

For businesses with online stores, this can be relatively simple. Posts on social media channels can be used to drive business back to the retail site. Artists and clothing designers can easily spread increase public awareness about their products just by getting their fans to share the images. Just by showcasing a product and price, the message has a good chance of finding its target in the vast demographic makeup of the users of social media platforms.

Even stores that don’t do business online can benefit from social media by employing check-in specials. Check-in specials, which would be run through a social media channel like Facebook or Foursquare, work on multiple levels. Not only do specials bring in customers, but the check in serves as free advertising to the customer’s friends. Similarly, fan-only coupons can boost sales as well as increase the number of fans who follow a social media channel.

Because social media is a tool that affects so many of the factors that determine an organization’s success, it’s important to use it as part of a complete business strategy. In fact, brand awareness, customer service, and product promotion have been on the minds of successful business owners for years. It’s just now time to apply these skills to the world of social media.

“This is a classic example of where consumer behavior is changing much faster than companies are adapting. Companies are still seeing social media through the lens of marketing, not as part of an overall brand execution strategy,” said on marketing professional in an interview with Forbes

For those who are looking for ways to use social media, the options are almost limitless. Social media can have a significant and meaningful return on investment when it’s properly applied to a business’s strategy. By engaging with clients online, organizations can grow and protect their brand. Any investment that brings a business closer to the audiences they serve is never an investment made in vain.


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