Wednesday, August 5, 2009

Business Truth about Social Media & ROI

Right now, small businesses have a huge advantage over big business in actually being able to convert social media conversations into dollars and cents. Here’s why:

Small business:

  • Can be less censored – They don’t have to wade through layers of social media do/don’t policy and legal sign-off on every tweet, update, post or comment. And, in social media, people respond to real and spontaneous. So, it’s much easier to build the conversation
  • Can have a personality – All too often, the voice of the company that filters through to social media is almost entirely devoid of personality. People connect with color, business proper gray.
  • Only needs to connect with hundreds or a few thousand, not hundreds of thousands or millions – If a small business connects with a few thousand people, that could make a huge dent in it’s business, making it worth the effort. A large business may need to connect with millions to feel the same impact and that may well not be worth the effort from an ROI standpoint
  • Can tap into local energy, events, traditions – By having a shared experience based on the local community, it’s a lot easier for people to bond with the voice of that business
  • Can implement instantly and tailor highly relevant offers – When it’s one person behind the mic, it’s way easier to carry on a real, spontaneous conversation and also create an ongoing series of highly local, highly-relevant and time-sensitive offers that will convert followers into customers.

So, if you’re a small business or entrepreneur and you’ve been wondering about the value of this wacky thing called social media, fact is you’ve got a huge advantage over large corporations right now. You have the ability to actually convert time spent on social media into money in the bank. And, have a lot of fun doing it.

Case Study: Mountainbike Madness

Mountabike Madness is a bike shop run by two college friends, Mario and Eva. It’s a real business with a great product and it’s growing nicely. But they’re always interested in finding new ways to get customers to the shop. Along with trying out street teams, the local pennysaver, mailings, sandwich boards and a bunch of other marketing ideas. Eva gets the idea to start to play around with twitter.

Actually, she already had a personal account. So did Mario, so they’re familiar with the nature of conversation in the communities, because they’re already regular users. So, they set up a Mountainbike Madness account and use Mario as the name associated with the account.

They use twitter’s search function and a number of other tools twice a day to find people in their neighborhood who either have some variation of the word bike in their profile or their tweets. They broaden it out to various forms of outdoor activities, too. They see what these potentially likeminded folks talking about, then follow them and join in the conversations they are having.

They also start to share all sorts of funny, quirky, edgy quotes, ideas, and stories. And, here and there, they throw out tweets about instant giveaways for the first person to tweet their favorite rider, grip or trail. They do daily or weekly specials on bikes, parts, clothing and other schwag. They share cool tips and riding strategies and aren’t afraid to show their personalities. They announce weekly Rave Rides where everyone has 4 hours to show at a particular trailhead for an epic group ride. And, once a month, they do a one-day 20% off twitter-only sale from the back of a truck and you have to be following them to know where it will be.

After 3 months, they can track twitter related sales to an average of 30% of daily sales and total sales have gone up 20% since starting on twitter. Not only is it great for their community, for customer service…they’re using social media to put money in the bank.

So there you have it. There are many ways to market online if you aren't considering adding social media to the mix your missing out on a big chunk of profits. Yes there is a right way and wrong way. Be sure to follow those who know how to do it the right way.

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