Can Social Media make my business money?

MoneyProviding a business benefit is essential to Social Media if its to be adopted as a business tool.  A statement of the obvious no less.  So the question for this article is "Can Social Media make my business money?", and the short answer is yes.


The power of Social Media for improving business sales is threefold:




  • There are large networks of people (or eyeballs) available to interact with.

  • People can share and distribute the information that you provide.  Broadening your reach for zero incremental cost.

  • Responsiveness is increased by the real-time nature of Social Media, reducing the interaction time with customers.


Selling the benefits of Social Media is a new practice.  As with any change, plenty of experimentation is required to work out how business can adapt to the change.  Experiments to sell using Social Media have had some measure of success through applying more traditional ways selling through a new medium (i.e. Social Media as a channel).

The traditional methods

 



Here are some examples of the traditional methods:

 


  • Advertising.  It's inevitable that where people congregate, a way to advertise will be developed.  A good example of this is Facebook.  Facebook allows advertising to be placed based on the demographic information provided by users in their profile.  This provides the ability to deliver specifically targeted advertising.

 


  • Promotions.  Businesses have also promoted specials or sales through Social Media.  Starting a Facebook Fan page to promote sale items or, as Dell has done, creating a Twitter account to deliver regular promotions.  This has resulted in sales to the tune of US$2m in the 6 months to June 2009 directly related to the Twitter promotions.

 

New approaches to selling using Social Media


The growth of Social Networks and Social Media has resulted in a large ecosystem of online interest groups (niches) and relationships.  This has given rise to strategies for selling to potential customers by leveraging the intricacies of the tools and social rules in the ecosystem. These approaches are still in relative infancy, however they focus on selling indirectly through advocates and influencers.

An example of influencer-based selling or marketing is the use of influential Bloggers to promote a product or service to their audience.  In fact this practice has become widespread enough that it is currently the focus of changes to the US Federal Trade Commission guidelines requiring disclosure of paid promotion of products or services by Bloggers.

Social Media is also being used to monitor the conversations that people are having online.  Businesses are proactively monitoring conversations to identify individuals in buying mode and, at that point, offering advice to help them make their choice.  The benefits to appearing at that particular point are obvious.

These are just a couple of examples of the new approaches to selling through Social Media.  As the Social Media tools and communities evolve, so will the methods for helping business improve their top line.

What about not-for-profit?


Obviously not-for-profit drivers are a little different to the for-profit world but selling still happens.  It's just selling to get funds.  Social Media is getting traction in the not-for-profit space due to the cost associated with getting your message out there.  A great example for not-for-profit purposes is the Obama presidential campaign (cynicism aside) in 2008 where Social Media was used extensively to help promote his cause and to solicit donations.

It has been known to be mentioned around the dinner table and bbq that he was successful because he was able to get small donations from a great range of people rather than relying on large scale donations. The Obama Social Media strategy leveraged a number of tools and the power of the online social networks.  Obama's campaign included such things as a Twitter account (small broadcast messages), Youtube (short videos), Facebook (fan pages) and a blog (long form commentry).  Through playing to the passions and desires of the people in those networks they were able to rally them to the cause and allowed the campaign to reach a large number of people.  It also allowed them to do it with minimal cost.

So what?


So, Social Media is definitely a tool for making money  in business. A young tool, but one that is changing and evolving very quickly. Businesses will need to monitor this space to make sure they're able to adopt these new methods or, better yet, get involved, experiment and create them.

The Caveat


While the answer to the question of the title of this Article is yes, the jury is still out on whether using Social Media as simply a channel is a sustainable approach.  Social Media is much more than a promotional tool.  It touches all facets of communications and many different business functions from Internal Communications to Customer Service.

It should be rememberd that the Social Media spaces that businesses choose to inhabit are ultimately personal spaces filled with individuals.  The effectiveness of Social Media in making money for business will be determined by the social norms surrounding those spaces.  Whether it is Facebook or Twitter, businesses will need to be conscious of the unwritten rules surrounding the Social Media forum they approach as these rules will determine what type of selling, if any, is acceptable.

Other Information


This article is part of a series on the different business facets to Social Media: