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Is Social Networking a Cost Effective Marketing Strategy?

As a business, you need to “fish where there are fish”; to market your business wherever prospects gather.  More than 90% of adults in the US visit social networking sites.  At the beginning, many of these social networks were dominated by 18 to 24-year-olds, but no longer.  All age groups are participating in online social discussion, even the majority of 55 to 64-year-olds.

People are spending 3X more time on blogs and social networking websites than they do on e-mail.  It’s all about people wanting to converse with like-minded people.

With a brick-and-mortar business, you have the opportunity to have a conversation with visitors to your store.  With an online website, you have the opportunity to have a conversation with visitors to your blog.  Visitors can leave comments about your blog post or about another visitor’s comment, thereby having a conversation, albeit not in real-time.

People have always gathered for conversation at networking meetings, conferences and trade shows.  As the Internet has grown, the conversation has moved to online social networking websites, webinars and virtual tradeshows.

Spending On Social Media is Skyrocketing

Social media marketing has become the “must do” strategy for many businesses.  As a result, businesses are spending more on social media marketing and less on other traditional marketing services.  Like any marketing service, social networking can either become the best marketing you’ve ever done or the worst mistake you’ve ever made; it all depends on how you manage it.

Engaging in online social networking is analogous to engaging in offline networking, such as conferences and trade shows.    You attend these networking events in hopes of engaging potential prospects.  You can’t possibly afford the time and money to attend every possible event!

Will it be cost effective?

Regardless whether you are trying to generate business from a conference, a trade show or a social networking site, the business decision process is the same.

To be effective, you have to choose the venue that you think might give you the most cost effective approach to generating sales leads.  Your time is valuable, so to maximize your ROI, you must take advantage of any available “promotional” opportunities the venue offers: being an expert speaker or participating in a panel discussion, advertising, sponsoring contests, etc.

Most importantly, you must continually determine how much you actually paid per sales lead in terms of both expense and company time.  This is the only way you can figure out whether tradeshows or conferences are more cost effective at generating leads then social networking or blogging.

Pick a Promising Social Media Site

There are numerous social networking sites to choose from, and more are launching every day.  A wise strategy is to just pick one or two of these sites to focus on initially.  You could choose one of the top three sites or a promising emerging site or a site that aligns best with your type of business.

  • For business-to-business (B2B) marketing, consider a business oriented social networking site such as LinkedIn, Reddit or Squidoo.
  • For business-to-consumer (B2C) marketing, consider Facebook, Twitter, Google Youtube or Google Plus+ .
  • If you have a local business, consider choosing a location-based social networking site such as Foursquare, Gowalla, SCVNGR, Facebook Places or Google Places.  More and more people are shopping with their smartphone, so your need to be found by them.
  • If you have a service business, consider choosing a review oriented social networking site such as Yelp or Angie’s List.
  • Many of the larger networking sites can cover both B2B and B2C such as Facebook, Twitter, LinkedIn, YouTube, Google Plus+ and Myspace.
  • There’s a never ending list of popular or emerging sites including StumbleUpon,  Delicious, Penterest, Bebo and Orkut.

Social Media Marketing – The Basics

A lot of people think that social marketing is free, and it definitely is not.  Like any effective marketing strategy, it takes time, energy and dollars to make it successful.  Fortunately, the majority of your marketing efforts for social networking can be outsourced to marketing specialists.  This allows you and your staff to focus on other activities that are not as easily outsourced.

The following is an overview of the types of activities you will need to get done, regardless who actually ends up doing the work.

  1. Create your Company Page on the social networking site using supporting images and video.
  2. Link your Company Page to your website.  Have your company blog feed regular content to your new Company Page.  Include a social media share button on your company website.
  3. Invite all your existing customers and contacts to follow you on this new social site.
  4. Be active by provide 2 to 6 interesting updates per day.
  5. Respond to follower comments and questions in a timely fashion every day.
  6. Monitor and remove any spam from your page.
  7. Engage your followers with polls, contests, images and video.  Get them to take action towards becoming a satisfied customer.
  8. Engage other social site members through participation in available group discussions.
  9. Create and manage an advertising campaign within the social media site.
  10. Performance reporting.

Avoid The Trap

In the end, marketing is about generating profitable revenue.   A great advertisement is not measured based on how many people liked it or how many awards it won.  Advertising is a subset of marketing; a great advertisement is based upon how many people actually ended up becoming a customer as a direct result of seeing that ad.

Having an increasing number of Facebook “likes” is not a measure of success for your Facebook campaign.   True, the more “likes” you display on your website, the more likely a new visitor will take your information seriously.  That’s a side benefit. The real measure of cost effectiveness is to know how many “likes” visited the landing page on your website and were actually converted into solid sales leads or customers.

Having an increasing number of Twitter “retweets” is not a measure of success for your Twitter campaign.  Yes, “retweets” can cause your marketing message to go viral and improve the search engine optimization of your website.  If that happens, it’s a great opportunity that hopefully was not missed.  The measure of your Twitter campaign is how many of those visitors to your website became solid sales leads or customers.

Companies are successfully at generating sales leads through social media marketing.  At Marketing Outfield you can find social media experts who can help you launch and manage your social networking activities.  Focus on the social networking site that has your target market represented best.  Grow and engage your followers.  As with every marketing service, measure the results achieved in growing profitable revenue, make adjustments, then rinse and repeat.

About David Hubbard

David Hubbard is a Revenue Growth Expert, a pragmatic Marketing and Sales Consultant, a proven business leader and the CEO of Marketing Outfield. He has helped both private and public companies grow by 25-50% per year by properly enhancing their revenue strategy, sales and marketing activities, and incentive compensation plans to better align the company with their target market buyers. With a unique professional track record within the Sales, Marketing and Product Management functions, he brings a frank and unbiased perspective to his clients. Request a Complimentary Audit Consultation from Dave and his team and follow him on LinkedIn.