Everyone knows that you need to incorporate social media into your startup’s marketing strategy. It’s a no-brainer, right? Social media builds brand awareness and increases revenues. Or does it?
Several months ago General Motors and its $10 million marketing budget walked away from Facebook, announcing that advertising on the largest social media platform in the world had “no value.” (As I write this, however, GM is considering returning to Facebook, and the man who made the decision to pull the ads was just fired.)
You won’t get many arguments that having a social media presence indeed builds awareness. But just because someone “Likes” your business on Facebook, checks in on Foursquare, gives you a rave review on Yelp or tweets nice things about your company doesn’t necessarily result in a sale or more revenue to your bottom line.
Measuring the Impact of Social Media
Alteryx says it has the solution. Paul Ross, Alteryx’s vice president of product and industry marketing, says the company’s strategic analytics program has found a way to “capture core social media activity and marry it with what actually happens in a business” to measure if a “customer who likes your company on Facebook is more likely to purchase your products.”In fact, it’s not easy to actually measure the return on investment (ROI) of these activities. But analytics software provider
The data indicates, according to Ross, that 1,000 check-ins on Foursquare equals a 1% to 2% impact on a company’s sales. For Facebook, it’s a little more complicated, with results dependent on specific demographic breakdowns. For instance, the research shows that people who “Like” your business on Facebook are more likely to purchase “high-value items.” Armed with that knowledge, you can more intelligently target your prospects.
Ross says that the more “big data” you have, the better prepared you are to make strategic decisions. But the key for startups is the ability to easily understand what the data is telling you. As Alteryx President and COO George Mathew notes, most entrepreneurs aren’t armed with Ph.D.s in data science and statistics. But they “know [their] business, know and understand the data that surrounds their business and are smart about what they need to get done.”
Mix Social Media With Metrics and Traditional Marketing
Ross believes “data adds deeper context to [a company’s] social media engagement.” The bigger trend is the continued convergence of social media and traditional marketing, with information being central to it all. Ross says there are some other emerging trends startup entrepreneurs should pay attention to:
• It’s important not to get enamored of social media analytics all by themselves. You need to tie them into business performance.
• Find the connections between your virtual world and your actual customers.
• There’s a shift underway from investing in social media for building awareness to driving behavior.
• For many businesses, there’s a new emphasis on location-based actions. Will your customers in Washington act the same as those in Wyoming? (This is important whether your business is in a physical location or online.)
The more business intelligence you have at your disposal, the more successful you are likely to be.