Recently we’ve seen interesting conversations on the value (+/-) of social fans. The Wall Street Journal published “Social Media Fail to Live Up to Early Marketing Hype” and the SFGate posted “Tweets and likes don’t translate into buys.” The Journal highlights how The Ritz-Carlton hotel chain is shifting its corporate social-media strategies. After “chasing fans,” the Ritz recognized the importance of quality over quantity as well as the importance of aligning social channels with business goals. SFGate features another brand story, Eat24 an online food delivery service, who “broke up” with Facebook after investing $1 million into Facebook advertising without seeing a clear ROI. Companies are rethinking their social strategy to ensure value to their brand and relevance for fans.
Since the late 2000s when company pages became popular, brands focused on vanity metrics to entice customers to join their social communities. If a brand page had 44 fans, it was difficult to convince the 45th fan to join. People want to be where the noise is, not a small place of 44. This led many companies to focus on fan growth, even if it meant adding fans who may not be the right target market, and set the tone for a focus on community numbers. If each fan equaled a purchase, then the fan growth metric would be extremely important, but brands haven not seen this type of conversion in the early days or today. Based on a recent survey from Gallup Inc., 62% of social media users said social media had no influence on their purchasing decisions. “Social media are not the powerful and persuasive marketing force many companies hoped they would be,” Gallup concluded. Now that companies have had a few years to understand social follower behavior, they are not impressed with the lack of influence they have over their online community.
Facebook has been open about the changes in its algorithm, making it more challenging (and more costly) for brands to reach their fan base through brand page posts. Not only are fans not converting the way brands had hoped, now it is more difficult to get content in front of the fan base they have spent time and money building. A spokesman for Facebook reminds us that companies need to adjust their priorities. “Fans should be a means to positive business outcomes—not the end themselves.”
If fans are not the means to an end, then what do we do with the large following we’ve generated? We need to remember what drives people on social channels. Think about what drives you personally. According to the SFGate, “Gallup’s findings … suggest that brands have just been using social media poorly. The survey found consumers are more likely to engage with companies that seem more genuine and responsive.” Content that is entertaining, inspiring, educational or informative drives all of us to the Like button. While social may not be the place to convert directly to a sale, it is a place to highlight your brand voice and promise.
If you can make your fans laugh, share knowledge to save them time or make them want to hug their families, then you have connected with a fan/potential customer. And think about the potential social channels have to offer: 1.28 billion Facebook profiles, 255 million Tweeters, 200 million Instagram photographers, etc*. All businesses do share the common goal of creating and communicating a positive brand message. While social media users may not click on your post to buy your newest product, the next time they are in the market for your offerings, they may remember the smile you gave them or the five minutes you saved them.
It is also important to think about risk or avoiding risk when talking about ROI. If your brand is not participating in the online conversation and your competitors are, what are the risks your brand faces? Additionally if fans have negative things to say and you are not addressing the comments, a Facebook post could turn into a crisis. When addressing the ROI question, be sure to discuss the risks you avoid by utilizing social channels and having the two-way communication with fans and naysayers alike.
The jury is still out on the value of a social fan and will continue to vary brand to brand, business to business. Remember to use social channels to showcase your brand personality, align with business goals and avoid risk by recognizing online conversation and becoming part of it, all of which will lead to more productive conversations regarding ROI. While you may not find the dollar-in to dollar-out ratio, it will allow you to think about your channels in a way that better benefits your business.
*Source: Digital Marketing Ramblings