Let’s talk about real value. Forget about the lifetime value of a social media relationship. Don’t worry about supposed comparisons between the value of a contact on your house list and a person who likes your company’s Facebook page. Let’s talk real money. You (feel that you) need to grow the number of people who like your Facebook page or follow you on Twitter. That means marketing for growth – i.e., driving people to your environment with the hopes that they’ll convert. Now, it’s time to talk about just how much you’d sacrifice to make that happen.
Simply put: you can’t spend the same dollar twice.
Once you invest part of your budget in a direct mail campaign, you can’t use that same money to invest in social media. It’s already been spent. Gone. That’s the nature of capital, unfortunately. This same thinking can be applied more broadly, as well. Sometimes, you have to choose one opportunity over another. If you have a crowded email marketing calendar, for example, you can’t just stick in one more to drive fans and followers. Rather, you may have to give up a lead- or revenue-generating email campaign in order to increase your social media fans and followers.
This is where tough choices become a reality.
Maybe I haven’t been looking in the right places, but I haven’t read much about the opportunity costs involved in social media marketing. In some environments, the decisions aren’t all that hard.
Two jobs ago, I worked for a company that, counter-intuitively, was ideal for social media marketing. The best call to action available was to a blog that had many calls to register for daily email (with a relatively high rate of conversion). We didn’t have a product that could be sold online, and our blog generated better sales intelligence than our corporate site. We used LinkedIn and PR, for the most part, to drive traffic – and it worked.
Today, as the head of marketing or a small (but global) financial media company, I find it difficult to commit much hard-dollar budget – or even soft-dollar resources – so social media marketing. I’ve run some Facebook ad campaigns and have invested in some targeted and mass PR. At the end of the day, however, I really do need to see revenue for my efforts, and social media marketing has been the longest route to it. Email, however, has been less expensive and more powerful – and it generates more intelligence for me to send over to my telemarketing team.
I’ve thought about growing our Facebook and Twitter environments. The former, especially, do well with logged-out pageviews, but tends to be a standalone product (rather than converting aggressively to a sponsored section of our website) – though LinkedIn has been quite effective in driving traffic to sponsored online products. The problem is simply that I’d have to give something up. If I’m going to push out an email with a “like” call to action, I have to give up an email that would send people to a subscribe page or an event registration action. I’m risking revenue for later gain, and the revenue potential isn’t that much greater than an immediate sale.
As a result, there’s a real cost to promoting my Facebook or Twitter environment through the most effective tools available. I’d have to make a decision about generating revenue … and I’m just not likely to give up an opportunity to generate revenue!
So, when you are talking to your CMO or other marketing leader about generating likes or followers, you should walk through a very real business case: figure out how much it is going to cost you.
Think about the cost to acquire a click-through to your Facebook or Twitter page. Then, consider how many of those clicks actually convert. After that, put some thought into how many impressions generate a click-through to your buying environment (divide total impressions from Facebook Insights by the number of click-throughs from Facebook in your analytics platform). Now, it’s time to see how many of your Facebook-referred visitors entered the sales process and then ultimately converted.
All of this is measurable using tools you should have in place already, and it really is the only way to determine how much all this squishy social media love is really worth. Compare it to costs to convert using other channels. This is the only real way to find out if your social media efforts are worth the money.
Does it make sense to trade in a sales email for one to send you potential Twitter followers? The only way to know is to crunch the numbers!