Social Media's Role Will Soon Shift From Driving Awareness to Creating Revenue Brands need to start actively transforming their social communities from cost centers into profit centers.
By Chris Bennett Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
Today, establishing a social-media presence for your brand has become a checkbox item, a necessary part of building brand visibility and connecting with the 1.5 billion social-media users worldwide.
And brands are spending a lot of money on it.
Companies are spending anywhere between $100,000 to $300,000 (and sometimes even more) to build and maintain their social followings. Between ads, salaries of social-media managers, and of course the requisite marketing tools and services to keep it all together, social is now a significant investment for most brands.
The past few years for brands have been about building their social communities and establishing brand loyalty through direct social channels. It's become a necessary expense of brand management and customer experience for companies. Yet now that they have established and integrated their social-media plans and begun developing campaigns to engage and increase their communities, the question becomes how can they begin to activate those social channels to convert followers to customers. How can brands actually make social a sales channel, and with a real, determined return on investment?
This is the new strategy today that brands are starting to adopt.
Where we are today with social is not unlike where we once were with websites. For years, websites were static pages that brands only updated every so often. They served as an online presence for the brand that was still focused on driving in-store sales.
Related: Brands to Spend Big on Social Media This Holiday Season (Infographic)
After Amazon debuted in 1995, ecommerce changed the role of the Internet, and websites became revenue drivers rather than just a place for branding. By 1999, online outlets had solidified as the future of shopping. And the same can now be said for social media.
The most effective brands understand that an "owned" audience is the future of marketing and is more captive than your social communities. Brands need to start actively transforming their social communities from cost centers into profit centers, which begins with understanding your audience.
Leverage existing data to drive advertising.
Successful brands on social media know who their audience is and how to speak to them. The secret to extracting those insights lies in the data contained in existing social platforms. Each interaction that users have with a brand's posts or updates contains meaningful information that brands need to use to their advantage.
On Instagram alone, there are more than 150 million active users, which means there is a wealth of data about user demographics and related engagement behavior that lives across all social channels. The data can be analyzed and translated into actionable insights, and consequently into carefully crafted tweets, web copy and even ad targeting intelligence. Brands can now plan what time of day they should tweet about a new offer to users in California.
Social data has never been more important, and companies are quickly entering the market.
Analytics-focused companies such as Umbel and comScore provide granular audience data that brands can segment and slice to generate highly targeted ads, down to the zip code and persona level. A newer platform, Insightpool, even goes beyond predictive analytics and helps brands create meaningful conversations and build relationships with the right people based on a brand's campaign goals, even converting to sales.
The most effective social advertisements are the ones targeted at specific audiences and have a well-defined intent. Brands can actively measure the efficacy of an ad performance before and after optimization through audience segmentation and targeted messaging.
Activate social media as a sales channel.
Once you understand what types of content are most successful in reaching your target audience, you can implement a number of ways to monetize your social-media channels.
Related: How Being More Self-Aware Can Help Your Brand Succeed on Social Media
There are many ways you can find new customers through social media. One of the earliest examples is through referral programs. Dropbox, Airbnb and Uber are examples of successful customer programs, where customers invite their friends to sign up for services through Facebook, Twitter or email. Customer referrals are powerful when executed properly. Friend recommendations dramatically increase the number of signups -- over 71 percent of people are more likely to make a purchase based on social-media referrals.
Comment selling is another effective method of using social media as a sales medium. Currently, online retailers experience a 68 percent cart abandonment rate on average. That's terrible. Comment selling streamlines transactions and shortens the sales funnel by leveraging social-media posts to address this problem.
For example, users on Instagram can purchase a product by commenting directly on the brand's post and are subsequently sent an invoice to complete the transaction. Instead of redirecting shoppers to your ecommerce site, they can buy within their news feed, uninterrupted. Once they are ready, they can complete their transaction through their email. Purchasing products directly on social media increases the demand and creates social proof, which lifts conversion rates.
Use customer support to drive top-of-the-funnel leads.
Social media has opened a new line of communication between brands and consumers, and it should be used to its full advantage to continue driving leads. While there are many brands that highlight repeat customers and compliments, there are also many that shy away from addressing customer complaints and end the conversation once it turns sour. But that doesn't have to be the end of the conversation. In fact, it's just the beginning.
Social media empowers every brand to turn fans and followers into advocates. Every interaction with a customer is an opportunity to earn and re-earn trust. JetBlue, an airline well known for its customer service, is one of the many brands that uses social media to resolve customer complaints quickly and efficiently. We see the social proof -- JetBlue continues to win over repeat and new customers by its consistent efforts to meet customer demands, a cornerstone of its brand. We can't forget the simple power of the direct interaction and excellent customer and community service.
Brands that continuously interact on social media will see an increased lift in customer engagement and leads as a result. Social media has a 100 percent higher lead-to-close rate than traditional outbound marketing. The key is providing real value to your community, and that value will come back as direct ROI for your company when you activate sales campaigns.
Social media lives in its own category that requires constant attention and resources, and it evolves daily as customer demand requires your brand's presence to be strong. However, the investment will pay off more than you think. Once you have defined your audience and optimized your content, the next step is turning your social-media channels into sales channels.
Social media is not just about generating awareness anymore. It's about generating revenue. The most effective brands already know this, and they are getting ahead.
