Do you own a business? Unsure if you should get into social media?
In this post, we’re going to discuss the value of social media for different types of businesses.
In sum, social media can be useful for any business under any circumstance. Why? Because anything done with clear motives/goals and done correctly can be successful. However, the cost/time of social media versus the value it produces might not make it worthwhile.
In general, a business is either a product business or a service business. Also, a business can be small, medium, or large. Moreover, a business can operate strictly locally (in different sizes of cities), nationally, or internationally. And finally, a business can have a small, medium, or large customer base. These business characteristics matter in deciding whether social media is a worthwhile marketing endeavour. In the following sections, we’ll explain under what circumstances social media is most effective and if/how social media can be effective under other circumstances
The Ideal Situation for Social Media
In our opinion, the situation where social media is most effective is if a business:
1. is large (i.e. has people and money);
2. operates on a national/international scale;
3. has a large customer base; and
4. involves the sale of a product.
Besides these characteristics, a business needs to have an audience that participates in social media in order for it to be an effective marketing tool. In this ideal circumstance, you have a large and geographically dispersed customer base, and using regular media marketing would be quite expensive; that is, if you were to pay for TV, radio, print, and other regular forms of advertising everywhere you sell, you’d have to spend a fortune. Instead, you could pay the salary of one to a few people—to manage your social media accounts—and have access to most or a large portion of your customer base. In other words, look at it this way: Facebook apparently has over 1 billion active users—that’s about 1/7 of the world’s population in one place (1; 2). Is there a more cost-effective way to market your business than paying a few thousand dollars in salaries to sell to over a billion people? Definitely not.
Why It’s Easier to Sell Products than Services through Social Media
So, we’ve explained why social media makes sense for a large national/international company with a large customer base. Now, why does it have to specifically be a product-based company?
Products are tangible. You can see a product, feel it, and sometimes hear, smell, and taste it. Oftentimes, you don’t need to physically be in front of it in order to determine that you want to buy it; that is, you can guestimate that a product is right for you without having it in your hands. That’s why online retailing is so huge nowadays. Universally, this fact is more or less understood.
On social media, not only will you likely have access to a big chunk of your customers, but you can seamlessly direct people to your online store and get sales on the spot for products. It doesn’t get more cost-effective and efficient than that. Conversely, since services are largely intangible, customers often need to experience them in some way before they make a purchase. Therefore, no matter how much you can interact and build a rapport with your customers through social media, you’ll still have to spend on in-person sales, telephone customer service agents, and/or others. Consequentially, it’s not a simple “point and click” sort of sale, and thus social media can’t do it all for you. All the same, the ability to build a rapport on social media is definitely a benefit to the sales process, so it obviously has value and is worth consideration.
Other Circumstances Where Social Media Marketing Makes Sense
As we’ve mentioned, the general characteristics that we believe determine the value of social media to a company are company size, the size and location of the customer base, and the type of business. Obviously, you don’t have to be a massive international corporation selling products in order to find value in social media. For example, social media (and online marketing avenues in general) would have great value to a small clothing company—it gives them nearly the same marketing opportunities as much larger companies, helping them better compete. That being said, if you’re a company of one or two people, can you spare a person to sit on Twitter for a chunk of each day?
As a result, it’s not so much a question of if social media has value for a company—because it often will have value—but more so if it’s the best use of the company’s limited and valuable resources. This is where the answer to the social media question is: “It depends.” It depends on how much of your target market is active on social media, if they want to be reached there, if you have someone who can commit time to social media, and so on. Altogether, if you can clearly prove that social media provides more value than it costs and you have the means to do it, then it makes sense. However, this should never be a guessing or hoping game; you need to measure its value and know.
Circumstances Where Social Media Marketing Isn't as Effective
The easiest way to answer when social media marketing isn’t as effective is to look at the opposite side of the ideal situation: If a large company with a large market, selling products internationally is perfect for social media, a small company with a small market, selling locally is not a very good situation for use of social media. For example, if you provide services in a small town to a small customer base that doesn’t use the internet, social media obviously doesn’t have any value. Now, as mentioned earlier, social media can be successful in almost any situation if done well, but less-than-ideal situations would obviously provide less value; if you’re a one-person company in the aforementioned situation, personal selling would be a much better use of a company’s resources than using social media.
The biggest thing we want to emphasize is social media isn’t right for every business. First, in order to produce value from using social media, you need to be able to devote enough time to the endeavour. Also, just because it produces good value to some businesses, it doesn’t mean that it’s the best option in your situation. And finally, we have to emphasize that there are lots of people out there who will try to sell you on the subject because they want to make money off of you. Remember that if they’re not echoing what we’re saying here, they’re lying to you and you should speak with someone else.
We hope this helps! Good luck!
(1)- Facebook company information:
(2)- United Nations Population Fund’s “Population Trends”:
Links to More Information
Check out the Twitter page of “Blame it on fast foods,” managed by Ostrich Canada and found here.
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