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How Can Social Networking Be Cost Effective?

Unfortunately there’s been a lot of hype about social networking.  Big companies are increasing their investments. Is it the right strategy for small and medium business?

Social Networking For Business

Social Networking For Business

According to The CMO Survey, Duke University’s Fuqua School of Business, marketers are expected to increase their share of social networking spending from 6.6% to 15.8% of their budgets by 2018.  

Proponents say you need to be everywhere that your customers and prospects gather.  Big companies seem to believe that.  The average large company has 178 corporate-owned social networking accounts, according to Marketing Pilgrim.   

Yet, according to recent Forbes article, 85% of CMO’s surveyed HAD NOT seen a proven quantitative impact for their companies.

While joining a social network costs nothing, a business needs to divert time and energy from other marketing efforts.    There’s a significant lost opportunity cost if your social networking strategy is not yielding compelling results for the business, like increased market share and profitability.

Is Social Networking the right Marketing Strategy for you?

Small and medium business should “walk before they run” and target the “low hanging fruit”.

Here are real life examples of two companies that focused on one or two social networks to substantially increase their customer referrals and sales.  They did it in a way that delivered an outstanding ROI.

Social Networking Customer Reviews Increase Referrals and Sales

I was recently looking for a consumer computer product to purchase.  Like more than 75% of consumers, I searched for online reviews to help me make the right decision.  I found a product on Amazon that met my needs and budget, but I had never heard of this particular vendor before.  I needed a hassle-free, reliable product and had concerns whether this no-name vendor could deliver.   However, my fears were allayed when I saw hundreds of reviews from happy customers.

Those customers convinced me to buy!  Here is the formula this company used.

  1. Just before I received the product, the vendor sent me a nice email thanking me for the purchase and assuring me that their customer support group was standing by to help if needed.  They included all the support information I might need.
  2. About a month after I received the product, the vendor sent me another thoughtful email with three key messages.
    1. Please let us know if you have any questions or concerns about the product.
    2. We would like to invite you to post a Product Review so that others can benefit from your experience. Your opinion is invaluable to not only us but to other shoppers and we greatly appreciate your time and input.
    3. Click on this direct link to the company’s product review page on Amazon.

I clicked the link and wrote a very positive review about the product, which undoubtedly referred more customers their way.

Not using Amazon to sell your product?  You can use the same strategy with Google Shopping or eBay.

Take Social Networking To The Next Level

Recently, a NY Times article told the story of a Seattle service business that used a similar approach to get referrals.  Here is their formula:

  1. At the time of customer purchase the company gets the customer’s email address so they can send a paperless receipt.
  2. Two weeks later the company sends another email with three key messages:
    • A reminder of the company’s 90-day warranty
    • A request for the customer to write a review of the service received
    • A direct link to the company’s page on Yelp and Facebook

As an added bonus, their rankings in Google increased.   Their company listing on Google Plus Local ranked higher, generating 25% more sales!  More prospects discovered their website through Google search than ever before.  What did they do different?

  1. Created a Google Plus Local Listing.
  2. Listed their business in multiple online directories and social networking sites.  The more, the better.  Just be sure all the company information is identical on all the sites, including your own website.

Integrating search engine optimization (SEO) into social networking is a very powerful and cost effective way to increase prospects to your company website and Social page(s).

Managing Negative Customer Reviews With Social Networking

You can’t stop people from posting negative things about you on the internet.  Nor can you expect to always receive an excellent rating from everyone, every time.

You can however deliver good customer support, respond to customer issues in a timely and professional manner, and proactively manage your brand.

  • Regularly monitor your online brand.  Use Google or Bing to find negative customer reviews by searching for your “company name” or your “product name” in quotes.  Also, directly check out some of the social sites that may not appear in a Google/Bing search.
  • Don’t let a negative review define your business.  Monitor the internet for negative reviews and quickly respond to them in a professional and thoughtful manner.  Give the other side of the story.  Sometimes all it takes is a response that your heard the customer and will try to do better in the future.
  • Encourage customers to write reviews.  If you are delivering a quality service, then you’ll end up with mostly positive reviews.  These will far outnumber any negative reviews.
  • Point customers toward those review sites that you are prepared to regularly monitor and participate in.  Give them the right link to click on.
  • Don’t get lazy. Most people look at 2-10 reviews to establish which company to do business with.  However, reading two reviews out of a possible 54 reviews is much more compelling than reading 2 or out of a possible 8 reviews.  Having a large number of reviews give users more confidence in the legitimacy of your star ratings.

You have limited employees, money and time to invest.   Use these resources wisely.  Focus them on those marketing techniques that deliver the best ROI for your particular business.  

 

 

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.