According to Nielsen, roughly 80 percent of Americans who are active on the internet use social media. The realm of social networks is primed for involvement from businesses both large and small. Benefits like open lines of communication to customers, building relationships with both old and new customers, and cultivating brand presence are too big for businesses to ignore. No matter the industry – whether a B2B online payroll provider or an online shoe retailer – your company can grow by making use of social media – if careful analysis of cost/benefits bears out the profitability of the channels.
In fact, it has become clear to many businesses that refraining from entering social media could actively damage their reputation and hurt their profits. Customers want to be able to contact the companies they use and have an open dialogue about any problems that come up, and social networks like Facebook and Twitter allow them to do so easily. If a business is absent from that space, the customer will likely either complain about the company or find a competitor who is willing to communicate with them.
In addition to providing a clear line of communication between company and customer, services like Foursquare help actively attract new customers, though it takes careful planning and tracking to ensure that these promotions end up providing a net benefit. From a Radio Shack case study that tracked Foursquare’s effect on consumer behavior:
Some businesses provide discounts to customers who check in on Foursquare in a given time period, hoping to bring in new clients and retain established ones. If, however, the company is spending more on managing the promotion and losing more money on the discounts than new customers provide with their business, the endeavor has failed. Sure, maybe a few more people are coming in, but how many will stay when they no longer receive a discount? And how many new customers have to come in before the promotion can be deemed profitable? Clear attention to detail and diligent recording and reporting of statistics are the only things that can suss out exactly what kind of impact Foursquare, Groupon, and other online discounts produce.
The results of campaigns on services like Facebook and Twitter are even more difficult to analyze, often requiring dedicated social media managers to control, shape and direct. Determining how the sites affect profits and profit margins takes an even keener eye. As with any form of advertising (even the most indirect), it’s important to be able to detail exactly how much money is spent managing social media, gaining Facebook likes, Twitter follows and Google+ +1s. Without being able to break down exactly how much money is being spent per desirable action, it’s impossible to tell whether social media is making a positive impact on the business at all.
Luckily, Google Analytics measures referral clicks from social media, and Facebook and Twitter have relatively robust interfaces to track engagement:
Twitter and Facebook are all about communication, building a brand, and fostering relationships with users. Contests and promotions can be offered through or using these services, but their primary purpose in business is to focus conversations with a company, helping customers resolve any disputes with the company and giving the business as much data as possible concerning how pleased clients are with their services.
Becoming part of the social media revolution is an integral part of surviving in today’s ever-more-digital world. People want to be able to contact companies in a wide variety of ways and receive consistent, reliable response. But without collecting and analyzing the data from social networks, no business can get an accurate sense of how well their efforts are being received. By relying on hard facts and numbers to guide social media decisions, companies can decide whether a specific campaign is working out and where they may need to shift focus, giving them much-needed consumer-based feedback.