X # of ?’s on Business and Social Media
Just some random thoughts to be fleshed out more later.
What is the probability that someone will do business with your company?
Many different factors contribute to the buying decision. In this document, I will attempt to quantify the different influencers, in able to better identify the potential influence of social media, and thus, identify an ROI for Social Media.
3 Areas of Influence
There are three areas that influence the purchasing decision (I use the phrase ‘purchasing decision’ in a global way, meaning also the decision to hire a service provider as well as the seller of goods):
1. Awareness
2. Value
3. Trust
Awareness
Awareness is de rigueur. A customer cannot buy your product or service if they are not aware of its existence.
In EMyth Mastery, Michael Gerber shows the Purchase Decision Chain as beginning with awareness.
Do they know you exist?
There are X amount of potential customers in my market (see Market Expansion).
How is ‘Awareness’ different than ‘Brand Awareness’?
Value
The value that a potential customer may desire in a product or service will vary. Value propositions tend to be a mix of attributes, such as cost, quality, and timeliness. Depending on competition, a potential customer does not need to have a perfect value match with your offering – it might be that if they are in the right zone, it is enough.
Trust
What is the influence of Trust on the purchasing decision?
Given customer awareness (they know about us!), and a perfect Value fit in an environment where there are other providers of the product or service that have a perfect Value fit, what is the influence of Trust
Market Expansion
Your market might be x% of the total population, or might be 100% of a specific population.
Model Train buyers might represent 0.001% of the entire population, but your target market . The distribution through the gross population, though, is not smooth. Your market could be 100% of that specific population.
Social Media Influence
Can influence Awareness
Can influence Trust
September 16th, 2009 at 5:49 pm
Social media also has a regional component. For example, the whole aspect of social media such as facebook and twitter is that users post about what they are doing WHEN they are doing it. Using their cell phones and portable computers, their always updating.
This makes social networking a very good fit for places like NYC and a very bad fit for, oh, say Ulster County.
When your cool iphone gadget that tells people about all the nearby wineries based on the GPS in the phone suddenly stops working just as one is driving past the ulster county wineries…well, social media is not a help there.
There is also the marketing aspect of social media. There are people who make good money posting articles to their blog, and running ads down the side for income. The trick is, these people have to have at the very least citywide, and preferably worldwide appeal. They make fractions of a cent per viewer, so they need hundreds of thousands, if not millions, of viewers to make money.
Wheras is rural areas, again such as Ulster, what you have is hundreds, maybe thousands for an audience. As such, marketing must shift focus completely from “social” to “community”. For rural regions the key is rebranding social media as “Community media” – people understand what that means. They automatically know that a community is a small group of people of like minds, not thousands of people where a small fraction may find something appealing.
September 16th, 2009 at 6:50 pm
Great comment, Gary. Although It does seem that aspects of Twitter and especially Facebook fit in the regional model quite well. For instance, there is a strong contingency of Ulster County people on Twitter. I’ve been coming to the belief that smaller social networking groups of more relevant communications is very powerful.
September 16th, 2009 at 9:47 pm
In marketing terms[being involved with email advertising/content I tend to think that way these days] smaller does have it’s benefits, the downside is selling. With webadvertising, people are used to selling based on large numbers of views. So in the city, they have no problem selling at a 5 cents per thousand views, you get one hundred thousand views and that’s 500 dollars.
But up here, you won’t get that sort of traffic[for example, the berkshires.org website has something like 10,000 subscribers]. Generally, ad-revenue wise you still need that same 500 dollars to even be worth the time sending. So selling can be difficult and has to move towards “are we your target market” – out of 100,000 people interested in travel in the northeast, you might get 10,000 good hits, so the 500 spend was ok. So the people who should be paying for ads on a newsletter about the Berkshires are the people who specifically want to reach 10k of people interested IN the Berkshires.
It can certainly work, and there is no reason not to pursue it, I just feel that the terminology has to shift to reflect that your dealing with a focused community – where advertising for Starbucks might not be appropriate, but for the local Williams Lumber IS appropriate.
I find, for this area at least, that talking about “social” media is a turn off for many simply because they view it negatively based on preconceived notion. Shift the topic to “community” media, just a wording change and an emphasis on what one actually wants to build – and it brings it into focus.
September 17th, 2009 at 1:27 pm
LOL – sorry, this may have come across as more argumentative. The truth is I’ve been mulling over social networking and rural regions for a few months now so it’s nice to see someone else having similar thoughts.
I moved to the Ulster area a little over a year ago, and Kingston specifically[currently working over at the 721 Media Center] just this year. Coming up from the city requires some rethinking of designs and such, and when talking to people in this area I tend to run into those who have either tried “social media” and found it a failure because it doesn’t provide the same level of benefit, or those who are against “social media” because they are against the internet in general[prizing actual physical human interaction over interaction over a network].
So I mull and think about what social networking really is, and how it can help and what aspects are irrelevant for a rural area.