It's time once again for us to talk about the importance of building a strong community of brand advocates. Whether you are running a law firm, a financial services firm or a business, your brand is everything.
Whether you're positioning your brand as something credible, trustworthy or customer service oriented, one thing is certain, people gravitate to businesses that actively brand themselves. And, the existence of an active, engaged, social media community is more important today than ever before.
The ROI Of Social Media
Professionals and business leaders used to tell me "Social media marketing is a fad. This will all blow over and we will be back to business as usual." This was a common excuse for burying one's head in the sand.
Today's excuse for avoiding the development of a social media strategy and its implementation is, more often than not, the desire for a guaranteed return on investment. Or the feeling that the determination of the ROI of Social Media is too hard to determine.
A quick aside, because I find this argument so interesting. Though ROI is generally considered a formula used to determine the rate of return on a capital asset (something shown on your Balance Sheet, not your P&L Statement) some businesses determine ROI at the department level. This is one formula often used:
ROI = (Gain from investment - Cost of investment) / Cost of investment
What I find interesting about this is when it comes to social media marketing, CEOs and Marketing Department leaders are drilling down to the actual task and demanding to know its ROI instead of looking at the ROI of the department as a whole, as the formula above would infer.
When I ask Marketing Managers, "What is the ROI of the ad you placed in the Business Journal?" "What is the ROI of that direct mail piece?" "What is the ROI of your email newsletter?" 100% of the time the answer is, "We do that for brand awareness. We want to always be top-of-mind. I have no idea what the ROI is."
Why is social media marketing treated differently than other marketing when it comes to the expectation of ROI? Are you using ROI as an excuse not to innovate, engage or invest in developing your online presence?
The answer to these questions are critical because they determine how you look at the importance of building a community and the metrics you use to judge the success of your community building efforts.
The Importance Of Community Building
The fact is that people hire and purchase from brands with robust engaged communities. Social communities boost a brand's retention numbers and retention is important in any business. A number of different studies have been conducted and provide us with an abundance of information on this topic, including:
- It costs 80% more to gain a new customer than to retain one
- Profits over the long-term can increase up to 95% if a business can increase customer/client retention by just 5%
- Revenue increases can correlate to increased engagement on social media sites
- Buyers of services and products rely more on the recommendations of their peers than they do on the advertising of the business
Are you a believer in the need to build a robust engaged social community yet? Are you prepared to measure the success of a social media marketing campaign by client/customer retention numbers? How about measuring engagement in your social sites? Do you agree or disagree that it is beneficial for you to invest in the means necessary to obtain more qualified Facebook Likes, Twitter Followers, etc.? Do you agree that an engaged community, loyal to your brand, is more like to stick with you when the going gets tough?
Do you agree that people, in general, like being a part of a community and that it makes them feel special? Do you understand the need to engage with the members of your community regardless of its size?
Case studies abound on companies that have profited from the development of engaged social communities that advocate for the brand.
Are you ready to be the next successful case study?