Building on Part 1 and Part 2 of this series – where I discussed that social media isn’t truly free and highlighted the ‘Self Interest Problem’ businesses face regarding social media as a long-term investment – I promised to show Bluewire readers how to effectively ‘make money’ from social media campaigns.
“Making Money”
If you own or run a small business, or if you’re a Marketing Manager or Social Media Advisor, I want to highlight one important point – the easiest way to feel good about spending money is by earning it. Since you probably won’t ‘make money’ from social media right away, the next best option is to ‘save money.’ When you start to see the advantages of your social media investments, spending money won’t be an issue anymore. Fingers crossed.
So how do you save money for social media? As an accountant I learnt that the best way to read a Profit & Loss Statement (sorry if I lost anyone there) was from ‘bottom to top’. This is an unusual concept for some, as people generally read things from ‘top to bottom’. However, in finance, this makes total sense. Why? You have control over your expenses, not your income. You decide what money you spend, you don’t decide who buys your product or service (as much as Marketing Managers would like to think that they do). As the old saying goes – “Worry about the things you have control over. Worrying about things that you don’t won’t get you anywhere.”
I couldn’t agree more with this and this is why I genuinely believe in strong financial controls within a business – preferably controls that incorporate the marketing function as part of the entire business strategy. If the business you run or work for is ‘Customer Focused’ you probably already work with a solid social media budget. If this is not you, show management where you can save money in your own budget and others’, to save money for social media investment. When doing this be sure that you focus on expenses that don’t add value to the customer.
What do I look for?
As a small business advisor, I have quickly learnt that lowering overheads is the easiest way to increase Gross Profit (Income less Expenses). As an accountant, many files crossed my desk with expenses I didn’t even know existed. Other times I wondered why someone was paying me so much money to do their taxes for such a simple job. The long and short of this is – you must look at things like electricity, rent, insurance, stationery, accounting fees and recruitment fees. Look at all of the things that your end user doesn’t see benefits from. If you are spending an exorbitant amount of money on these think to yourself – Can we save money here?
In my personal experience I believe that one of the biggest expenditures for a business are recruitment fees. In fact, often businesses pay more for recruitment fees than they would for an internal HR Manager capable of logging into LinkedIn or creating a job ad on Seek. You have to think in today’s world where loyalty is coin-operated, why bother? Brett Kelly from Kelly Partners, an accounting firm in Sydney, preaches the benefits of LinkedIn in the recruitment process. Actually, his firm initially entered the social media arena for this sole purpose. Use this as an example to soften up the management team. Who knows, after a while you might even signup for a Facebook Page.
What’s next?
Okay, if you’ve wrapped your head around reading your Profit & Loss from the bottom up, and you are now aware that the easiest way to get started in social media is by saving money to spend on it, then you’re probably ready to read Part 4 of this series. I still have to write it, so stay tuned.