This is a guest post by Samir Balwani, the founder of Training Social, a resource for those interested in social media training. Techipedia readers can use code Tamar for a 15% limited time discount when registering.
One of the most common questions in social media is – “is it worth it?”. Because of the nature of the marketing tool, each industry differs to the point that people just aren’t sure.
Many would use a blanket statement that it’s useful. They’re being disingenuous. Every industry can benefit from social media. No matter what, there is some way you can use it it. However, the question remains to be answered – is it worth it?
When it comes to profitability, increased revenue, and efficient use of time – the question of “is it worth it”, takes on a life of it’s own. There are two things we must understand before we can define if social media adds value to your business.
1: Opportunity Cost – Every time you spend a minute on social media is one minute you potentially lost revenue. This inherent cost needs to be included in any equations you make when allocating resources.
2: Social Media has Abstract Returns – It’s difficult to measure return on social media. It’s nearly impossible to forecast return on social media. This fact makes it difficult to quantifiably determine where resources should be spent.
Recognizing there is a cost to everything you do – time is money – and that social media returns are not only difficult to measure, but also impossible to forecast is an important first step.
The good thing about social media is that the opportunity cost tends to mostly be time. Whatever you can do to minimize the time you spend learning social media, and making your processes more efficient is worth it.
To determine returns, we’re forced to think in industries. Certain niches are more likely to see greater returns from social media.
High Return Industries
These industries tend to see high returns in social media marketing, quickly. Consumers are actively looking for and want to engage with most businesses that fall into the following categories.
1: Restaurants and Hospitality – Most hospitality establishments already understand that idea of good customer service. They realize how important word of mouth is to you’re their business model. Social media makes the word of mouth marketing that restaurants and hotels already profit from and makes it more efficient.
2: Businesses With Return Customers – Have a business that drives return customers? Social media can help you create a long-term relationship with your consumer that ensures they continue to visit you, and not a competitor.
3: Large Brands – Bigger brands have two things that smaller companies don’t: an already built community, and money. These two advantages make creating a high return not only easier, but also more likely.
4: Online Driven Companies – Social media can be used to drive traffic to online websites. Communities, social news sites, and online sharing can be leveraged to build a site following.
Low Return Industries
These types of businesses tend to take a long time to create return in social media. They also often require large investments to create an initial community. Nonetheless, in the long term, social media can be a viable marketing strategy even for these industries:
1: Small Clients / Large Profits – Businesses that only have a handful of clients that are under contract will see a low return in social media. Their communities don’t tend to be large, and if they are, are made up of non-customers.
2: Impulse Bought Products – Products that don’t gain anything from “recommendations” tend to see a small return from social media. Unless the product is a fad, it is doubtful that an online community will impact the buying habits of consumers looking at an impulse bought product.
I’m sure I’ve missed a few and that my generalities are just that. If you know of an industry or “return” that I forgot, please share it in the comments. Don’t forget to just share your thoughts.
Samir Balwani is the founder of Training Social, a resource for those interested in social media training. Techipedia readers can use code Tamar for a 15% limited time discount when registering. Don’t forget to follow Samir on Twitter.