Most people fail to realize the true cost of social media – Time! While it is free to sign up for and use Facebook, Twitter, Instagram, etc., things do not post or tweet themselves. The user must create content. Who is going to do this at your business? The same person who barely has time to sleep, eat, spend time with family, or run the business…You. Either you’ll need to commit time to these free tools, or you’ll need to hire/assign someone, both of which have real costs.
Further, the marketing value and effectiveness of social media can certainly be argued, even when used properly, but when used improperly, they can have a negative impact. An outdated Facebook page with no posts for 9 months not only looks unprofessional, people may question if the business is still around. An ill-advised tweet about a given topic may offend a portion of your customer base, and cause negative pushback against your business.
Before you decide if “Free” social media tools are right for your business, know their real costs. While free in upfront costs, there are real costs associated with their use and upkeep – time – arguably the single most valuable item to small business owners. Further, improper use, including lack of use, has a negative impact on your business, another real cost.
Of course, you shouldn’t really guess. Much effort is spent on tracking and proving which half is working. As a small business owner, if you’re spending ad dollars and NOT measuring basic key metrics yourself, I urge you to start. If an outside firm is showing you the “power” of your ad dollars, don’t be afraid to ask questions.
If you own a small business, never spent ad dollars before, hired a firm to help you advertise, then spent what you view as a small fortune on advertising, you would expect results, correct? Other marketing firms boast how their approach “doubled customers” or “increased sales 50%!” Can’t argue with those results… or can you?
Let’s say a small business normally has 10 customers a month, and want to grow that number. They listen to the advice of a marketing firm (or media outlet) and start advertising. They spend $5,000 on radio spots. This advertising brings in 10 new customers that month, and each customer spends $225, which we’ll say is 50% more than a normal customer would spend. The marketing firm has doubled the customers to 20, and increased sales by 50% ($2,250) for this business for the month.
Wow – Doubled customers and increased sales by 50%! However, if we REALLY look at the numbers, you see the business actually LOST $2,750 in acquiring those (10) new customers. They spent $5,000 on ads, which generated (10) new customers, and $2,250 in sales, for a net loss of $2,750. The “headline” is – “Doubled Customers, Increased Sales by 50%” - but when you read the article, you realize the news isn’t so bright.
Don't be misled by fantastic headlines and gaudy numbers. There is no magic formula. Going from $0 ad dollars to ANY ad dollars should have an impact on your business. Make sure you look at the numbers carefully, and be sure you have a marketing partner you can trust.
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