How to Get Social Media to Work for Your Business

While investigating the "real costs" of social media for companies, I came to understand that social media success boils down to three elements that would apply just as well to a traditional marketing effort. Know your target audience. Set realistic expectations for inputs and outputs. And track everything, so you can chuck what isn’t working and pour your resources into what is working. I think these tips are good for newbies and social media wonks alike.

Know Your Audience

When Ice.com, a Montreal-based online seller of jewelry, launched a Facebook campaign last year called “Love Story” to sell more jewelry around Valentine’s Day, they knew their target audience: women between ages of 35 and 60 living in USA and Canada. And they knew where to find their target market to acquire more leads online: Facebook.

Participants in the campaign were asked to tell their love story on a custom-built Facebook page in return for the chance to win a piece of jewelry.

“We promoted the campaign on our website, via our email channel, in advertising on Facebook and via other social-media channels—wherever we had a voice,” says Dave Haber, director of search and social media at Ice.com. “Following the close of the contest, we sent an email to all participants giving them $50 off their next purchase.”

The result of their finely-targeted campaign? About 4,300 Facebook fans, 965 love stories, $4,000 in profit above the value of the redeemed email coupons as well as an estimated several thousand dollars in indirect sales.

They might not have broken even in the short term, but he is confident they’ve now got hundreds of new loyal customers who will keep purchasing from Ice.com in the long term. Success came from knowing their audience – and how to build on it.

Set realistic expectations

Setting expectations for inputs for your social media efforts is another key to success. Don’t bet on going viral immediately. Aim for growth, but be realistic about what different kinds of social media tools will get you.

Blogs are a popular (some would say critical) social media tool, offering the ability to boost brand and advertise deals to bring in actual sales. Remember that “funny” gets eyeballs and there’s no profit in “playing it safe”. The point is to get noticed.

Open Road Communications Ltd. are the Vancouver-based maker of social intranet software called ThoughtFarmer. The company derives 100% of its business from inbound leads to its website, with customer deals ranging from $10,000 to $200,000. The objective of their campaign was to boost the number of sales leads. They used a blog, targeted at IT workers and managers. It was funny, at least for IT professionals. And for $7,000 for an outside firm to set it up, it worked.

“Of those visitors, we can see that 474 then proceeded to our website,” McGrath explains. “At our typical conversion rate, those 474 visitors will result in about one sale, at an average sale price of $30,000. Our sales this quarter shatter all previous records and are a 270% increase over the same quarter last year,” suggesting multiple sales from the campaign.

The company had a creative campaign, a focus on their objectives and metrics to measuring ROI – and success followed.

“As a rule of thumb, we recommend that a company start by spending 25% of its web-oriented resources, which might include site design and development, email marketing, SEO, online advertising and so forth, on social-media marketing,” says Darren Barefoot, founder of Capulet Communications Inc., the Vancouver-based social-media consulting firm that worked with ThoughtFarmer. “They can always tweak it up or down based on their performance.”

Adapt and overcome

Successful companies don’t just set up a blog or Twitter account and let it run on autopilot until the phone starts magically ringing off the hook. You have to measure your success: web traffic, online coupons redeemed, shopping cart transactions, or whatever it is you want to grow.

Free software like Google Analytics is great. You can pay for sales tracking software through SalesForce.com. Or you can just track it manually in a spreadsheet. Track the data, ditch what isn’t working and plunge your resources elsewhere.

PostcardMania, a lead-generation firm that employs more than 150 people learned the hard way what works and what doesn’t. Thanks to tracking, they see real ROI.

First, they paid $15,000 US to a social media marketing agency to set up, create, design and manage all of their social-media profiles, says Ferris Stith, PR and social media manager for the Clearwater, Fla.-based firm. An additional $7,500 US per month went towards maintenance.

Stith was set to track incoming leads. But there was nothing to track. Not one lead. The outside firm had developed platforms but no real relationships. The “social” part of the social media effort was missing. No buzz meant no incoming eyeballs and no sales.

They cut off the outside firm and brought in an in-house sales representative. She produced blog posts and a few Facebook links. But the effort was tentative, infrequent and failed to present a consistent and confident voice for the company. Stith tracked the few leads coming in and after giving the lady six months, pulled the plug.

As the head of PR, Stith then took on the social-media role for the company directly, which generated more leads with little to no effort. “Last week alone, we received 10 new subscribers to our newsletter and five of them were new leads,” Stith says. “All I did was create a tab on our Facebook page where people could sign up.”

Now she’s putting more effort into Twitter and Facebook, gaining hundreds of followers—more potential leads. She’s actively promoting the company and engaging her target market. And they’re tracking success, noting that based on her salary, the company needs to generate eight new leads a week.

“Our CEO is very adamant about tracking leads and how many marketing dollars it takes for PostcardMania to get that lead,” Stith says. “She knew just how many leads she needed per week to make it worth the time, money and effort.”

That’s where businesses should start. Take a look at your past marketing efforts. Understand who you’re selling to. Set expectations and follow up with inputs matched to realistic outputs. Track performance. Success will follow.