What is the monetary value of 1,000 Facebook Likes or 900 Twitter followers to a business? Nothing kills the social media love fest faster than the probing mind of a Wall Street fan.
As social media companies and practitioners strive to shed their awkward teenage years and emerge as adults worthy of a seat at the big table, this is a fundamental question that must be addressed.
How does one need to think about social media in a way that directly ties to the bottom line?
A company’s ability to build a social media engine, I believe, is one of the key areas of competitive advantage in the Digital Age. The problem is that many companies focus on the wrong goals.
Business Value is Built on Predictability
A fundamental truth of social media is that there is much a business can’t control. Social media’s greatest strength can also be its greatest challenge: the need for authentic actions and endorsements of people who feel passionate about you, your products and your services.
Spikes in the number of re-tweets, shares and trends can be extremely unpredictable.
Yet, businesses establish long-term value through predictability. Stocks that command premium prices show strong growth potential and high predictability of future earnings. Credit scores are merely an assessment of the predictability that someone will pay back on borrowed funds.
For social media to be a significant asset in organizations, it must become a predictable indicator of future earnings and potential growth. And for it to be a key element of sustained competitive differentiation, it must be something that can only build over time.
Don’t Confuse the Symptom with the System
As long as social media is measured by tweets and Likes, it will be nothing more than an interesting diversion in the marketing mix. CMOs will focus their attention on marketing spend that can lead to real revenue.
But tweets and Likes are only the symptoms.
The real business value of social is in helping to build sustained communities of passionate people like you and me, and a system that can amplify this to the edges of our digital universe.
While tweets, shares and Likes viewed in isolation are unpredictable, passionate subscribers to your brand versus those that are unengaged are predictable in their social activity. We all know that raving fans, when given places and opportunities to conveniently share their knowledge and fervor for a brand, product or service, are the most authentic and effective type of advertising, outreach and marketing for which you can hope.
Community as Capital
And here we come to the more mundane truth about social media, which can more generally be characterized of all technology. Technology is an enabler of human desires; it is not a creator of them.
Social media didn’t invent a new type of social capital, it just accelerated the ability for people to make connections, share passions and figure out what businesses were rock stars, and which ones were lacking.
For any social media effort to add sustained value to a business, it needs to focus on building a community of real people and measure social media activity within the context of those people.
Social Solutions Need to Help Build Sustained Communities
Any social solution worth its salt (back when salt was extremely valuable) needs to enable a unified approach for:
- Accelerating the organization’s ability to create and share relevant content with people who may not be aware of the brand. These places include Facebook, Twitter, Pinterest and other social media hangouts of your targeted segment. Various social media marketing tools have popped up to address this -- make sure these are integrated with the other two elements below.
- Converting social spectators to super fans by making it convenient and fun for them to share their passion with others through gamification, virtual status as the “Grand Poobah,” and authentic connections with other super fans. Think social across all your digital channels and properties. In the long run, you need to own this, but do not build a social community in a silo, otherwise you’re introducing artificial barriers for people to become super fans.
- Attributing social activity such as tweets and Likes back to individuals. A thousand tweets from random individuals is less valuable long-term than a thousand tweets from super fans who also create a lot of user generated content across blogs, review sites and your owned social communities.
When social becomes strategic, you need to own it
In this model, isn’t the community really your customers? Yes.
And do you want a social strategy that gives you a direct channel to engage with your customers and build a community? I think the answer is obvious.