Monetizing Social Media - Part Two

Whenever I hear someone say that social media has no value as a marketing tool, or that Twitter, Facebook, YouTube, Flikr, etc. are a waste of time, I suspect these are the same people who, ten years ago, were saying there was no reason their business needed a website.

Yeah, this internet thing is just a passing fad.

But when it comes to social media, I have to admit that a lot of people are not getting results, and for them it IS a waste of time ... so far.

The problem is that a lot of people are acting like party crashers on social media. They butt in on conversations and pitch their business, regardless of whether the listener is interested in hearing about it.

Contrast this to the person who gets on Twitter and other sites to make friends, to build name recognition, to add value or to build trust and credibility.

These people understand that they can form relationships that can lead to business down the road, but they aren't out to spam anyone and everyone who comes within "tweet shot" of their messages.

The fact is that social media tools CAN be monetized and can produce business, but it is above all else a form of relationship marketing.

Take a look at the diagram I created at the top of this article. It is a funnel in which social media activities gently lead contacts to Opt-In to an email list.

Forming relationships on social media that then progresses to a form of Permission Marketing is the key to doing business on social media. Once someone opts in to receive your email newsletter, they have given you permission to market to them. They have "raised their hands." as Seth Godin puts it, to indicate that they have at least some level of interest in receiving information about your product or service.

In order for this to work, you must build social capital at every step of the process. You build social capital by adding value, by offering free information that solves problems, by being generous, and by making friends along the way.

And occasionally (very, occasionally) you offer them something of value in exchange for opting into your email autoresponder system. This allows you to build a list of interested people, who trust you and with whom you have a relationship.

From that point on, you continue to build social capital and add value. Become a valued resource to them. I suggest to my clients that their emails come in some sort of "tip of the week" format that offers valuable information each week.

A weekly, informative email contact system adds to subscribers' view that you are someone who knows a great deal about your topic and it builds both trust and credibility.

This last ingredient of this "Permission Marketing Funnel" - offering something of value to induce your contacts to subscribe to your emails - is often in the form of ebooks, white papers, videos or list articles. It can be anything as long as it has a high perceived value. Whenever an email marketing campaign fails, I suggest you look first to your free offer. If it is not attractive enough, it will not pull in subscribers.

Getting back to the party analogy, social media sites like Twitter, Facebook and others are a place to mingle, form new contacts and make friends. But you never want to be the guy who incessantly talks about business at social gatherings.

That said, there is everything right about moving relationships you form at social functions to another location that can result in business. It's done all the time at country clubs, golf courses and social clubs of every sort. Just take care to build social capital at every step, and you will be very pleased with the results.

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COPYRIGHT © 2009, Charles Brown
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January 22, 2010 at 8:41 AM Larry Kunz said...

Good article. I completely agree that social media is about building relationships, not about crashing the party and self-promoting.

What I've never seen, though, is an estimate of how long this process takes. From the day I first establish a presence Twitter, for example, and assuming that I follow all of the best practices, how long will it take until I see a significant increase in visitors to my website? In qualified leads? Is it a month? Six months? A year? Longer?

I ask these questions to help me measure my own effectiveness, and also to manage the expectations of my bosses and the folks in marketing.

I'd be interested to hear your thoughts.

January 22, 2010 at 9:43 AM Charles Brown said...

Excellent question. I think the best answer is "it depends." It depends on how well your content is received, both before and after people opt in to your list.

That said, I have read in multiple places that most autoresponder systems result in at least 50% of opt-in subscribers buying something in the first two years after they subscribe.

Of course there are a lot of variables: How often do you send out emails? How good is the content of those emails? How high is your open rate (which is a factor of how well-written the subject lines are)?

It also matters how they were brought into your autoresponder system. What was your "bait" to get them to opt in.

I know this is a vague answer, but if you work at building social capital with your subscribers, you should expect some good numbers.