This thought has come up in about three different places over the last 24 hours or so, so I figured maybe I should talk to you about it in one place and get it out of my system.
Let me begin by painting for you a rather dire picture (yay!). Are you ready?
It’s one year from now, and your company is having to close and deadbolt the doors. The company is bankrupt. Your heart is broken and your mind is confused. How did this happen? You took in the advice that everyone gave you. You did everything the right way. You worked hard. You tried new things, some of which failed and some of which succeeded beyond your wildest dreams. You used social media the way all of the most expert practitioners told you to use it. You had tons of fans. You had tons of “likes” on your Facebook page. You, the head of your company, were extremely well-respected, maybe even admired, in the online world. In the words of King Theoden from Lord of the Rings, “How did it come to this?”
The answer is staring you in the face. Why is your business closing? You ran out of money. What were you not tracking while you did everything right in the online world?
If you said money just now, you are spot on.
The biggest lie is that social media is free
I still remember when social media as a marketing tool really started to take off. At the time, I was working as a media buyer at our family’s marketing firm, and already the chatter had begun about how this was going to change everything. It wasn’t just the power of this new suite of tools. It was the fact that they were all free. Instantaneously, all agencies, all other forms of marketing, and pretty much everything else were consigned to death. We don’t need you now. We’ve got the Tweeter thing. And it’s free.
Except, as we now know, social media is not really free, just like having a receptionist to answer your phone isn’t free. Having someone to monitor your inbox for you is not free (unless your family has really been brainwashed by you). Somehow, in all of the excitement created by the onslaught of these new tools, we forgot a very simple and basic business concept.
Time = Money
Let’s say that again. Time equals money. You pay people for their time. People pay you for their time. If you are spending time tweeting, it’s still time. If you are spending your time writing a blog post, it’s still time you are spending on the clock. If you are paying someone and they are doing that stuff for you as a social media manager, social media director, or community manager, you are still paying them for your time.
The platforms you use online may be free. Social Media – it’s not free.
I’d like to pay you everything I have. Keep the change.
Now, let’s talk about another pretty basic business principle that seems to have fallen by the wayside. Expenditures matter. You need a way to make sure that what you are spending does not exceed what you are taking in. Centuries of business have proven that this is a good path to follow. It is generally considered best practice to make more money than you are spending (I know, tell that to the US government).
Have you ever tried to sell someone your Twitter followers your business has accrued? How much money have you been offered for the fans of your Facebook page? What about comments on your blog? Ever had any offers to buy those? Did that ever work?
My guess is probably not.
So, your company has been paying someone x number of dollars a year for 2-3 years, let’s say, to run your social media marketing. They are reporting to you that they are engaging really really well with people. They have gotten 60,000 Twitter followers and your Facebook page is up to 5,000 fans. You’ve been really excited about this, but your company is now having to let that person, and everyone else, go. Why? None of those happy shiny metrics were actually putting money in your pocket, right? You were paying that person money and they were giving you multi-colored air in return. That’s not the lifeblood of most businesses. It’s all about the benjamins, as some wise philosopher once said.
Now, had you been aware of this, your situation could have been salvaged. You could have started asking questions like, “OK, but how many of our Twitter followers are buying from us?” “How many leads can we nurture that have their foundation in our Facebook presence so that we can turn those into sales?”
If you weren’t getting any buyers from these channels, if you weren’t making any sales, or only a small percentage of sales as compared to what you were paying your social media maven/jedi/expert/guru, you could have saved your company, just like King Theoden could have saved his people if he hadn’t let Grima Wormtongue and Saruman ruin his mind.
Hey, we all have problems.
There are Gandalfs out there you should listen to
Theoden King was saved in the end, to a large extent, by Gandalf the Wizard. Your company can be saved too, because there are some wizards out there that are telling you how to prevent this kind of catastrophe.
Talk to Marcus Sheridan about how to make sure your blog is helping you drive sales, for example.
Let these wizards point you in the right direction. There’s no reason for you to keep losing money on your social media efforts, and there’s every opportunity, in fact, to improve your performance and thus grow. But more Twitter followers and blog comments is not the way.
Think about it?
First Image Credit: http://www.flickr.com/photos/runran/4094527770/ via Creative Commons
Second Image Credit: http://www.flickr.com/photos/williamcromar/5000421162/ via Creative Commons