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• The cost and value of social media

The Cost and Value of Social Media

written on May 31, 2011 by Katherine Bulava

I recently stumbled on an article via LinkedIn that talks about the “true cost” of social media and, believe it or not, shows that there is real value in running social media campaigns in terms of customer retention, increased customer loyalty, increased customer spending and as a referral base.  While the costs outlined in the article apply to larger businesses, the cost for small businesses and non-profits can be significantly less, depending on the length of the campaign and the amount of work that you outsource versus the amount of work that keep in-house. 

I encourage even those clients that completely hand over their social media to Hatha Communications to become familiar with the platform, to ask questions and to engage online.  If you understand how social media is generating attention and creating loyalty for your business online, you can duplicate this effect in your other modes of communications since, after all, social media is a tool for communication.

Check out “INFOGRAPHIC: How much does social media really cost” by Mariel Loveland below: 

Social media services are often the first thing a small business signs up for in order to promote their brand. It’s free to sign up and offers instant promotion and customer interaction, but what are frequently overlooked are the actual costs of a social media campaign. Sure, you can always have an intern manage your accounts or schedule posts during off-peak hours, but a well executed, thought out plan can be costly. Is it worth it?

This infographic by Focus outlines the actual costs generated from running a social media campaign and what sort of revenue companies see from their efforts. The true cost of the campaign is obviously dependent on its size and length, but there are still a few figures that are frequently not taken into account: staff salaries, external fees if you outsource your campaign, advertising and any add-ons you might need to help you manage your campaign. A campaign with a reputable company or experienced marketing executive could cost $210,600. For that price, many companies can’t afford to not get their money’s worth, but the truth is, if it’s well executed they probably will.

The main benefits of a social media campaign, according to a survey, is customer interaction. That customer interaction is almost a sure-fire way to bring in consumers and generate more revenue. When looking at major brands like McDonald’s, Starbucks and Coca-Cola, fans of their Facebook pages were 28 percent more likely to continue to use the product, 41 percent more likely to recommend the brand to their friends and on average spent $71.84 more on the products than non-Facebook fans.

In a case study that examined @DellOutlet‘s social media campaign, the company brought in $3 million from followers who clicked their posts on Twitter. The revenue generated in just 6 months from Twitter users was $1 million. There was a 2700 percent increase in Twitter followers and an 800 percent increase in fans on Facebook as well as a 300 percent increase in site traffic.

While the cost of social media campaigns vary, even a campaign that costs an upwards of $200,000 would be worth if it  holds the promise of bringing in millions of dollars worth of revenue, which @delloutlets proved is possible.

View the image here: http://www.scribbal.com/wp-content/uploads/2011/05/cost.png