Is Social Media for mid-sized business worth all of the effort? This thought struck me recently when we were in a meeting with a client. We all got into a feverish discussion about Social Media when the client looked at us and asked simply, “does this work?”
And boy-howdy that got me thinking.
What are some of the wrong reasons for your business to use Social Media?
- “Because my competitors are doing it.” So? This is in no way a measure of whether Social Media will help your business meet its marketing objectives.
- “You have to be there.” This argument is similar to the one above. I’m always asking Social Media consultants and “experts,” what exactly does this mean? And I’ve yet to receive an answer that equates to anything.
- Social Media is “a great way to build a brand.” Okay, this one is trickier. It is certainly possible to use SM to help build a brand and drive awareness. But – look up – I’m speaking more specifically about social media for mid-sized companies, not national brands or CPG’s. In this context, the ROI isn’t there.
- “To increase sales.” Probably the worst of all. With rare exceptions that are typically highly promotional in nature, Social Media marketing isn’t going to drive direct online sales. It just isn’t. This begs the question:
Why doesn’t Social Media drive sales?
To understand why clicks that come from Social Media channels almost never convert into online sales, we need to dig a bit into the online psyche. You may never have thought about this, but people go online for only four reasons:
Internet Usage Reasons
- To communicate. Email, text messaging, Facebook messaging – whatever. All of us use the Internet for both personal and business (or academic) communications.
- To be entertained. YouTube, websites, video streaming, online gaming, etc. Most of us use the Internet to access many types of entertainment.
- To get information. News, weather, stocks, directions, research — you name it. It goes without saying that everyone uses the Internet to look things up.
- To shop. Reservations, tickets, multi-billions in goods purchased. Obviously most of us shop online.
But here is the key thing to remember: People will almost never slide from Internet Usage Reasons #1 or #2 above and over to reason #4, online shopping.
These are distinct, purpose-driven activities, and no online text ad or banner is going to take someone out of a Facebook chat, for example, and all the way through the online sales cycle. It just doesn’t happen. Or, for a second example, have you ever been using Gmail to read email, saw a Gmail text ad, clicked it, went to another website and actually made an online purchase then and there? Of course you haven’t — because that would be disruptive of your intended user experience — in this example you went online to (#1) communicate, not to (#4) shop.
There are minor exceptions, of course, like if a friend is sending you a product to check out using IM or email. But overall, folks engaged in communication or entertainment activities online have their wallets closed and aren’t going to do any business.
There have been a number of interesting social shopping experiments. I’ve loved Polyvore for years, and Wanelo is an interesting social shopping site/app showing promise. But there is a reason almost all social shopping experiments have failed — the “cross over” explanation above.
On the flip side, this is why Google Adwords is so successful: this channel operates in the opposite spheres (#3 and #4) — when people often are looking to shop and purchase something. And this success gets annoying and disruptive in precisely the opposite manner — when you’re trying to get information online, and instead get bombarded by ads and e-commerce websites.
But the point is, since Social Media exists almost completely in Internet Usage Reasons #1 and #2, while sales leads and online sales occur almost exclusively in Internet Usage Reasons #3 and #4, you can hopefully now see the disconnect here.
When does Social Media work?
There’s some irony here, in that we see Social Media performing adequately for A) Large, national brands and B) Very small (one person) business owners or consultants. It does not perform well for companies in the middle though: mid-sized organizations of, say 5 – 100 employees.
Large, national brands – Brands held by large companies or multi-nationals have enough budget and resources behind their Social Media to make it work. Even if a click percentage is .5% and sales conversion is 1% of that, if you have six million active followers the numbers can still shake out into the black. Even these sorts of scenarios typically offer promotions to try to move conversion rate though.
Small business owners or consultants – One could argue that these are the businesses Social Media was made for. Here we have the business owner, who we assume is passionate about her business, able to connect and communicate directly with customers, often on a local level. Her passion will enable her to find the time to post meaningful, heartfelt content — not content purchased from an agency looking to rack up hours, and her customers will easily slide into an active fanbase. Everything is genuine.
Mid-Sized organizations – Here is where the struggle is. These companies don’t have the budget for a full-time Social Media manager or to hire a reputable Social Media agency for the, say 40 hours minimum / month required. But the user expectation is the same whether you’re a company of 50 or 50,000. A user doesn’t go to your Facebook or Google+ business page and say, “well, this company isn’t too big, so it’s ok that they aren’t posting a lot of fresh content or using this channel creatively.”
So you can see mid-sized companies are once again at a disadvantage – they can’t afford Google AdWords and they can’t typically justify large spends on Social Media either. Darn it.
So should my company use Social Media?
If you don’t have a large budget for online marketing, Social Media can be a part of your marketing mix, but it shouldn’t command the lion’s share. And certainly don’t rely on it for sales or leads. We steer our clients to one or two social media channels only, and these are never the first priorities.
In the B2B space, Google+ is a requirement for SEO if nothing else, and LinkedIn is the de facto B2B Social Media channel, though it could be doing a lot more to drive meaningful lead generation. In consumer marketing, Facebook still reigns simply because of the staggering number of users. That said, depending on your objectives, we might advise Instagram or Pinterest instead, because they require almost no copy and are therefore are far less labor intensive. Every company is different.
If you’re a mid-sized company, however, ultimately we advise you to work with
- Email marketing
- Well-honed, narrow or local paid search
- Research-driven SEO and content
to drive your online leads or sales. You hate a telemarketing call in the middle of dinner, right? So does every other person in the world. So spend your marketing dollars and time where potential customers are and, more importantly, when they are open to hearing from you online. Good luck!