Jay LeonardAre you struggling with generating revenue from Facebook or any other social media channels?
You are not alone.
A lot of business owners are not seeing the value in it. However, a lot of businesses are not using social media the way it is intended. Contrary to popular belief, it is not another avenue to push your sales messages. Sales messages have there place, just don’t do it too often. Typically, the more you are promoting your business, the less effective it is on social media.
Why social media should be used as a retention tool
I really believe that businesses would get a lot more out of social media if they used it as a retention tool. I am not just going to share my “beliefs”, but some powerful statistics that back up why customer retention is so important.
Too many businesses focus on “hunting” (new customer acquisition) and not enough are spending time on “farming” (customer retention). Customer retention is more effective, cheaper and happens much faster.
According to White House Office of Consumer Affairs, reported by Return on Behavior magazine;
- It costs 6 – 7 times more to acquire a new customer than retain an existing one – Bain & Company
- A 5% reduction in defection rate can increase profits by 5 – 95% — Bain & Company
- An average company loses between 10 – 30% of its customers annually – McKinsey
- A 2% increase in customer retention has the same effect as decreasing costs by 10% – Leading on the Edge of Chaos, Emmet Murphy & Mark Murphy
Are you seeing the importance of customer retention? Investing more time & money in your current customers and it will add to your bottom line, there is no doubt about that.
I share this statistic a lot of this site. It’s a stat I found last fall from Harvard Business School…
Increasing customer retention rates by 5% increases profits by 25% to 95%
So you could almost DOUBLE your annual profits by increasing retention by just 5%? Social media is a great place to keep in touch with these people.
How to use social media as a retention tool
Start by asking your current customers to join you on the social networks. Reach out (email) to each customer and ask them to join your Facebook community. Incentive them in some way and do not use the boiler plate – Become our fan on Facebook!
Boring!
Give them a reason to join and make it about them. Something like…
Come join our community on Facebook where we have monthly giveaways, share insider information, special promotions and funny pictures of Debbie, our crazy office assistant.
Make it FUN. I talked about this more in this blog post.
Start sending out an email like that to your current customers and see how your Facebook community will grow naturally. Be active and consistent on your Facebook page by sharing local happenings, current events, special promotions, motivational quotes and more. Here is a blog post of 11 creative ideas to post on your Facebook page.
Can social media be used for lead generation?
Of course, social media can be used to generate leads as well. It takes more of a strategy and a know-how to pull it off effectively though. People are not using the social channels to make a purchase. They are using it to be entertained, be social, catch up with family & friends.
There is a science to it, but I am going to let you in on how to do it.
Here is my 4 step approach to effectively selling on Facebook;
- Create offer – Using Facebook’s ads I can laser target my target market
- Collect email – The ad directs them to a landing page. This page offers a premium piece of content in exchange for their contact information (name/email)
- Build trust – Provide value through daily emails. These emails contain proven strategies that can be implemented into their business to increase their bottom line
- Sell – If we are a fit, this is where I offer my solution to their problem.
So, yes, you can sell on Facebook (or any other social media channel), but it’s not the typical “Buy Now”. Not saying that approach doesn’t work, but it’s much more efficient to collect an email first, for two reasons;
- It is much easier to sell through email
- You can continue to nurture the lead through email as they may not be ready to buy
Conclusion
I shared some facts with you on customer retention/loyalty. I didn’t just want to share my thoughts, but had some solid facts to back it up. Social media is a great place to keep in touch with your customer base. It is also a place to stay top of mind with them as well.
Try using social as a retention tool. Remember to have fun with it as well. Share your story and what happens “behind the curtain”. This is how to increase the frequency of transactions with your customers, in turn, you will see a growth in your bottom line profits.
This article was written for Business 2 Community by Jay Leonard.
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Hey Adam, great post! I especially like the bit about using social media for lead gen.
This is an area that is presently seeing huge development and growth, and we’re finally getting to a point where we can build relationships and drive traffic that converts!
I recently wrote post on social media interaction and how people can connect with a target audience to drive that high converting, relevant traffic:
http://marketaire.com/2014/03/07/buzzbundle-review-tutorial-traffic-generation/
Check it out and let me know what you think.
Keep up the solid content!
Brett
Hey Brett! Thanks for reading and leaving a comment. BUzzBundle looks like a pretty neat piece of software.