Businesses need to get smart about social media

Editor’s note: Michelle Stockman works with Little Rock-based Arkansas Capital Corp. to promote entrepreneurship development around the state. Stockman earned a bachelor’s degree from Loyola University-Chicago in communications and fine arts, and earned a master’s in entrepreneurship from Western Carolina University. Her thoughts on business success appear each week on The City Wire.

Burger King spent $50,000 to develop a Facebook application to reach out to customers through social media. The $50,000 spent resulted in 3,200 free media impressions, which resulted in a $400,000 return on investment (ROI). A year ago, this very column addressed the issue of social media and business with mixed acceptance of the rapidly changing marketing world. One year later, social media has proven its importance and demand for businesses to get online or be left out.

Social media has shown that for little to no investment, a company’s ROI will grossly outweigh any other means of advertising or marketing. Before social media, the average business could spend roughly $15,000 on a direct mail campaign that would result in an average of 200 new customers. Meanwhile, a business could invest $7,500 in billboards to gain 300 new customers. Today, a business does not have to spend a dime (except their time) on Twitter and easily gain up to 1,800 new customers.

Less than five years ago, Facebook was something high school students were enjoying to themselves. Today, there are more than 300,000 businesses that have Facebook profiles. However, Facebook is not the only social media source. There is so much happening with social media that businesses need to start learning about the opportunities and make the best decisions on what social media outlets to engage for the company.

From Twitter, Facebook, MySpace and blogs to Flickr, Delicious, YouTube, Slideshare, Digg and Technorati, the opportunities are growing each day. Chris Brogan spoke about business use of social media at the Oklahoma State Entrepreneurship Conference. He noted businesses do not have marketing budgets in down economies, so social media has given small businesses opportunities for little to no money.
www.chrisbrogan.com

Brogan said that while all the traditional methods of advertising are down, human apathy has been way up during this recession. Human apathy gives businesses the opportunity to tailor their messages to appeal to this feeling in venues that reach them personally. In short, by humanizing your business, the business will be able to build strong relationships with customers. Strong customer relationships grows trust as trust is the new business currency that gains the returns on investment businesses seek.

Social media is about listening and communicating. To be successful, businesses need to develop channels, increase engagement, build relationships, convert the relationships into sales then improve customer service. As Erik Qualman said, “Social media touches every facet of business and is more an extension of good business ethics.”

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