If you’re an entrepreneur, social media may feel like a huge waste of time and energy. Pop in for a quick post, and it’s easy to be sucked down the rabbit hole of news, politics, friends and cat videos—so many cat videos. You understand how speaking directly to customers affects your sales. Did you know it can boost your business in other ways?
In less than a decade, business funding has changed dramatically. While traditional lenders are still in place and doing well, online technology platforms have made crowdfunding, angel investing and alternative lending accessible to anyone with ambition and an idea. Instead of depending on friends and family for funding, wannabe entrepreneurs can seek support from literally everyone online.
Unfortunately, since it has become so easy to seek funding, the natural result is that everyone does. Investors, lenders and the global public are inundated with constant requests. So, while it’s easier than ever to seek funding, it’s not always easy to get it. Even the most fantastic ideas can be drowned out in the flood.
Social media or, more precisely, social proof can give you the edge you need to secure funding.
What is social proof?
The shortest explanation is this: When humans see others doing something, it validates their own choices or influences their decisions.
Social proof is everywhere. In the days of traveling snake-oil salesmen, a shill was always in the crowd to announce that he’d used the product and confirm its miracles. Laugh tracks in sitcoms prompt you to laugh when a scene is supposed to be funny, even when it isn’t. Social proof in marketing is evident in pitches including McDonalds’ iconic “Over 100 billion burgers sold” and the many brands using “nine of 10 dentists/doctors agree …”
The hottest concept in the marketing industry is influencer marketing—the use of organic social proof in the form of personal endorsement to drive sales. And yet very few articles explore other ways a savvy startup can harness social proof to make things happen. Why wait to start the conversation after product launch when advance ground is so very fertile?
Why investors pay attention to social proof
Social proof is known by another name in the lending industry: qualitative data. It pays to know how well a potential investment is perceived by the public. Lendgenius details how lenders are moving beyond traditional risk assessment to make decisions based on data points unavailable a decade ago.
The number of people enthusiastic about your product or service is a solid indicator of the market for it, and investors are taking notice.
In 2001, researchers demonstrated how deeply social proof drives Wall Street transactions. In doing so, they showed that even data-driven, money-minded professionals are subject to the powerful psychology of social proof.
Your ability to build social proof determines the success or failure of your business. The method of delivery has changed, but the concept is not significantly different from old fashioned word-of-mouth.
Social proof is a powerful selling point for investors willing to consider all the angles.
In this detailed presentation tutorial, Slidebean points out the social proof value of a killer pitch deck. According to the article, when you’re presenting to investors, you should mention your Twitter handle and URL several times because, “If you can get them to tweet about you, you’ll be exposed to thousands of potential users or investors with similar profiles and interests.”
In other words, social proof: You reach the investors in the room, and other investors they are connected to, and now you have the power of social endorsement backing your pitch.
To grow your social media proof faster, author Josh Steimle explains how to make sharing drop-dead easy. When your business funding hangs in the balance, you want sharing to be as easy as possible. Even the cynical sharks will fight it out (http://www.businessinsider.com/shark-tank-fight-over-scholly-2015-2) if you convince them people are interested in your product.
Sherry Gray is a freelance content writer from Key West, Fla., currently suffering in the suburbs of Orlando. She is a science geek, a social media junkie and an unapologetic fan of all things bacon. Follow her on Twitter: @SheriSaid.
Image courtesy of IconicBestiary/iStock.