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How Successful Brands are Monetizing Social Media
Ask a marketer in any industry where he thinks that he is investing the most time and money, and you’ll likely hear “social media” without hesitation.
Over the last several years, brands have increasingly turned to Facebook and Twitter to engage consumers in “conversation” and to build “relationships.” According to reports by Gartner, 41% of surveyed businesses indicate that they save money by replacing traditional marketing tactics with digital practices, leaving more of their budgets on the table to fund further online investments. The report states that companies spent 10.4% of their revenues on marketing activities last year (this number isn’t surprising), 2.5% of which went to digital media. These numbers are only predicted to grow.
While brands pump more and more money into Facebook and Twitter, the question remains: How can marketers get the most ROI from social media? Is it worth it to shift a company’s marketing budget to build and maintain a social presence?
According to Forrester, even the most established brands reach only 2% of their fans and followers on Facebook and Twitter. What’s more, a paltry 0.07% of fans interact with these brands’ posts on a regular basis. Thus, the ultimate goal for companies is to figure out how to transition from merely getting eyeballs on their products and services to actually generating sales by leveraging this medium.
Here are a few guidelines to start monetizing your brand’s social media efforts:
1. Create an authentic online audience. First of all, it’s imperative for brands to focus on quality vs. quantity. Brands often focus on the number of likes as a metric for success vs. the authenticity of the community. Identifying consumers who are truly interested in engaging with the brand can be a valuable asset. These consumers can provide endorsements, reviews, insights and feedback—all critical information that brands can leverage to craft effective messaging.
Take Airbnb, for example. The company has fun with social media by offering tips to travelers and hosts, and by asking engaging questions that make people want to chime in. Perhaps most effective is how the brand encourages users to share their Airbnb stories, which has created an authentic community that generates a sense of camaraderie.
2. Get to know your audience. Social media offers a great opportunity for brands big and small to glean insights into consumer behavior. Every interaction a consumer has on social platforms leaves a trail of useful information behind. Successful brands simply follow the crumbs, and translate these insights into actionable and carefully crafted messaging, Web copy and even ad targeting intelligence.
Uber, for example, uses Facebook and Twitter to launch creative campaigns. Last year, the brand implemented a social media campaign that involved partnering with local animal shelters to deliver kittens on demand. The campaign generated millions of impressions and raised nearly $15,000 for animal shelters.
3. Leverage your audience. Once you have successfully identified your audience and messaging, why stop there? Leverage your audience to identify other consumers like them, and use your social media profiles as sales channels to generate leads. Every existing lead can potentially create new leads.
Lead generation is especially successful for B-to-B companies whose ultimate goal is to get social fans and followers to not only engage with the brand, but also to perform an action (download a whitepaper, register for a webinar, sign up for a newsletter, etc.) in order to get them into the brand’s sales pipeline.
B-to-C brands also use referral programs to get their existing user bases to bring in new customers. Rue La La is a perfect example. The members-only flash sale site draws in new leads by encouraging users to share a unique sign-up code on their social profiles. The existing user gets a $10 credit when someone clicks the special link to join the Rue La La community and makes her first purchase. By leveraging its most active members, Rue La La is able to generate new business through the power of social media.
4. Transition your audience from online to in-store. Brands can also track the success of their social media efforts by offering exclusive coupons and other incentives that are easily measurable. Not only is this is an easy way to reward fans and followers for engaging with a brand on social media, but also it’s effective for tracking the success of any given social media campaign. For example, Sephora often runs sales that are exclusive to Facebook fans called “Fan Friday.” Limiting the promotion only to a social audience allows a brand to measure the success of its digital marketing efforts in a singular channel.
Social media requires significant resources. Thus, it is no longer about merely generating brand awareness or the most “likes” on a Facebook page. It’s about generating sales and justifying ROI. Successful brands already know this, and are defining their audiences online, optimizing their content and turning their social media communities into lucrative sales channels.
Mitch Duckler is the managing partner of FullSurge, a strategic consulting firm based in Evanston, Ill.