Here’s the formula: R + iR + S/1.5 > 1.5 x I
Whenever this formula is true you should invest.
But what does it mean? Read below.
Many executives approach iSEE MarkComm and say, we want to ‘grow on social media’ while not knowing why and how. Surely, social media can add tremendous value to any business. Some have made multibillion dollar companies simply by using daft social media strategies, while others like Apple didn’t even use an official corporate Twitter account until recently.
So, when does it make sense to invest in social media, and how much should you invest?
The basic purpose of every business is to sell. Social media should be seen only as a tool to sell directly or indirectly. If you cannot sell via social media, don’t use it.
Apple didn’t sell iPhones over Facebook so it focused its ad dollars elsewhere and up until recently, it didn’t have an integrated social media strategy. Tesla deleted its Facebook accounts because of ‘ethical’ reasons but it kept its Instagram page, probably because of commercial reasons. Cars can be sold on Instagram.
If you are starting small and social media isn’t important to close sales, consider adding a few timeless posts on all major social media channels to get the SEO benefits. Updating it regularly can become a cost canter that doesn’t bring positive results but usually only inflates the ego or brings a warm fuzzy feeling. On the other side, if you are Apple and you have more than 13 million followers on your Facebook page, and 4.4 million on Twitter but don’t use them actively, you are creating a loss only because of habits that no longer make sense. So only as of mid-June 2020 Apple started using social media more actively. Here is their first and only post on Twitter so far:
However, you don’t need 4 million followers to start thinking that social media can be good for you. Look at the following mainstream scenarios for B2B and B2C brands.
LinkedIn and similar professional social media networks make all the difference in researching prospects, acquiring leads, and building meaningful relationships with potential future clients. Having a proper presence on LinkedIn is also important for finding and hiring talent, identifying suppliers, and building strategic alliances.
Case study: Meaningful data harvesting, connection building, and thought leadership on LinkedIn made one Aussie B2B company grow 40x in three years. What they did differently was the micro-focus on executives with multiple accounts. They understood that they couldn’t contact executives right away but needed to engage with them first. They developed the following methodology to ‘warm-up’ key potential accounts:
The simple tactic worked far more than any cold outreach they had ever done before. After all, CEOs and executives are just people like everybody else and they value human contact.
If you need to sell directly to consumers there are multiple ways to do so. However, to do it right, if you are just starting out or have limited resources it’s optimal to focus all your efforts on only one social media channel where you aim for depth over width of reach. Ads, likes, followers, content, everything can be focused on one channel that can create spill-overs to other channels but all with the goal of selling, rather than entertaining per se.
Case study: Many people want to be featured on social media. Imagine you get an email scrapped from your Instagram profile and are then offered a free product. Aside from the freebie you are also offered the chance to be featured on a social media account with a 100000+ following as a ‘model’. You would likely be surprised and feel honoured. Then you are offered the ‘$80’ product for free. However, you still need to pay the shipping fee of a ‘mere’ $14.
The real product price is $4 and the shipping is free, so basically the seller makes $10 out of each sale. But the consumers didn’t know this. They still felt special. Telling them the truth would insult them. They got the ‘superstar’ treatment so what the heck. They bought the ‘shipping’ and their fake positive.
These buyers PAY to appear as if they are modelling and there are hundreds of thousands of such clients on the social media pages of this company started by a 20-year-old Portuguese guy.
The business has been profitable since year 1, generating 30k-60k per month.
In his initial work, he was focused 100% on Instagram by growing the profile with a strategic following and through scrapping emails. In this way, he was able to target influencers with something they could not refuse. More influence and a ‘superstar treatment’.
This young entrepreneur’s strategy was Instagram-centric and he did quite well by appealing to users’ motivations and the reasons why they use the platform. However, the moment he tried to turn past clients into referrals he realized that he was too truthful by offering a referral fee and saw his recurring purchases temporarily collapse. No one wanted to hear the truth. They needed a sweet little lie they paid for without thinking they paid for the product.
Anyway, successful businesses are about creating lasting ‘tribes’ or partners:
Generally, the best way to create social circles is on social media. For B2B brands this would be LinkedIn in the Western world, Xing in the DACH region, and Ushi or Jungwei in China. For B2C brands it is WeChat in China and Facebook & Instagram in the Western world.
If your resources are limited, it’s better to focus on only one social media channel and do it right, instead of focusing on many, with shallow results.
Regardless of your chosen social media platform, it is crucial to understand the segments you are targeting and the value proposition you are offering to them and this cannot be written with a formula. However, a formula can be useful in assessing whether you invest too much or too little in social media.
Finally, here’s the formula again
R + iR + S/1.5 > 1.5 x I
R: annual revenues generated directly by using social media. These revenues are easy to measure as you can follow the sources of leads and attribute the revenue to social media as you acquire the leads on social media.
iR: annual indirect revenues generated by social media presence are the revenues that came to your business that you can attribute to social media indirectly by following the sources of traffic on your website. For firms that use Google Analytics, there is also a major traffic source usually labeled Direct traffic. 5%-15% of this traffic can be attributed to Social Media Accounts.
I: investment in social media made over one year
S: is the standard minimal value created only by having inactive but well branded social media accounts over two years. These accounts would slightly increase conversion rates by building trust and by sending more qualified traffic to your business.
1.5: it’s okay to make some return on your investment so 1.5 return is satisfying even if you only have well-branded accounts that are kept inactive.
What’s the best way to grow your social media presence? Through ads. Not just any ads, but ads that grow your subscriber lists, make sales (and get contacts), or get page likes so you can message people legally.
Automation to turn every like or follow into a potential client helps. Here we show the example of Zoho Social + Zoho CRM integration that can auto post, auto-reply, and integrate most of your social media accounts. This integration allows you to turn each like or comment into a potential lead in your CRM and even automate your responses to some of them.
In this way, growing ‘organically’ or with ads on social media can be directly turned into a sales channel. Why waste the opportunity? If you do social media, do it right.
Other platforms such as Salesforce and Hootsuite allow similar features and integrations, but what’s unique about Zoho is its whole-in-one package where with only one subscription of Zoho One, you get access to Zoho Social and Zoho CRM (and many other tools like emailing, and project management…). The only competing company offering similar off-the-shelf integrated solutions en masse is Salesforce.
Other platforms such as Salesforce and Hootsuite allow similar features and integrations, but what’s unique about Zoho is its whole-in-one package where with only one subscription of Zoho One, you would get access to the Zoho Social and the Zoho CRM (and many other tools like emailing, and project management…). The only competing company offering similar off-the-shelf integrated solutions en masse is Salesforce.
Here is how to compare them.
Salesforce only for the high-end Social Studio:
Zoho One for all Apps including Zoho Social:
Salesforce has better branding and it is considered a ‘safer’ option for many brands as they do marketing differently. Zoho is about massive value-added and rock-bottom prices but they are getting better at branding. In my recently published book One To Three, I recommended Salesforce for American organizations and Zoho One for international ones.
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