I was asked recently by a client to “explain why social media is critical to marketing and PR – and indeed to the organization as a whole.” The person in question worked for an organisation in which YouTube, Twitter and Facebook were all banned and they were looking for a compelling argument to persuade their senior management team to reconsider.
I’m always amazed and saddened when – all too often – I come across companies that are taking the view that social media should be avoided and that it will eventually go away. Believe me, it won’t.
Here’s what I sent my client:
Social media is not a fad. It’s a new way of communicating that has the potential to have a huge impact on your corporate reputation and bottom line. It can benefit almost every part of your organisation and has very tangible advantages over traditional media – not least the fact that it’s cheap, measurable and inclusive.
- Social media is not a fad.
- Interaction entails reputational impact: While the channels and technology may be new, the principles are not. Social media is ultimately about reputation. It’s about what key stakeholders in your business – your customers, your employees, your competitors, regulators, press and the analyst community – think of you. And reputation, as the world’s most successful investor will tell you, is all. “Lose money and I will forgive you,” Warren Buffet once said “but lose even a shred of reputation and I will be ruthless… We will not trade reputation for money.”
- Wall Street is sitting up and taking notice: Earlier this year, JP Morgan Chase raised $1.22 billion for a new fund to invest in the social media sector. The revered Wall Street firm and its clients clearly take social media very seriously indeed. It’s easy to see why.
- The importance of social media is going to continue to grow exponentially.
- Your customers will use it: If your customers and prospective customers are not using social media today, you can be sure that they will be tomorrow.
- The press and analysts already are: In the meantime, other key influencers – press, analysts, investors – have already embraced it and, every minute of every day, are publishing opinion-shaping content, content that you could act on, content that could affect your reputation.
- The network effect has significant impact: The numbers behind opinion-shaping word of mouth are compelling. In 2005, the London School of Economics famously produced its study on “The economics of buzz”. It revealed that:
- A 7 per cent increase in word of mouth advocacy unlocks 1 per cent additional company growth;
- A 2 per cent reduction in negative word of mouth boosts sales growth by 1 per cent.
- Social media can be beneficial to almost every part of your business. It allows you to
- Track your competitors: Your competition is filling the void you’ve left if you’re not on social media. They promoting themselves and might be talking about you too.
- Understand your clients: By listening to and engaging with your customers directly, you’ll better understand what drives them towards buying decisions. It’s the most effective way to conduct customer consultation.
- Evaluate your suppliers: Listening to what potential suppliers are saying on social media will give you an important additional data point when making buying decisions yourself.
- Drive sales: Paul Dunay of Avaya closed a $250,000 sale by responding to a tweet that said “Time for a new phone system very soon.” In this case, monitoring the phrase “new phone system” resulted in an opportunity.
- Improve your media relations: Journalists and analysts have been quick to embrace social media and it’s therefore an excellent way to build relationships with them and – when appropriate and relevant to them – share your corporate news.
- Hire new talent: People are spending more and more time on social media channels. They’re also relying increasingly on recommendations from their social networks. As a result, a positive presence in social media is becoming essential in order to reach and attract the best talent.
- Social media has distinct advantages over traditional media. It’s
- Cheap: Getting started with social media doesn’t have to cost a penny. Most social media channels and many of the software tools are free to use.
- Measurable: Social is probably the most measurable form of media out there. Every view, every click, every transaction is captured, and that data provides better insight into the wants and needs of your customers than ever before.
- Inclusive: In sharp contrast to traditional channels, social media gives your stakeholders a voice. Rather than pushing out information to them, you’re including them and enabling a conversation. As Chris Brogan says: “Your community is a gift. Loyal connectivity between whatever you represent and the people who are drawn to it is a huge boon that you must nurture and feed. […] Twitter is a chance to understand your buyers’ moods in between purchases, to support their goals, to listen to their concerns. It’s fascinating how many businesses pay for customer opinion surveys but don’t listen to the free opinions given via the social web.”
- Easy to build into your existing corporate culture: If you want to maintain strict oversight, social marketing can be channeled through marketing or PR. If you’re more exploratory and curious, you can develop a social media policy and increase social media literacy throughout the ranks of your organisation.