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Social Media Marketing Salvation?

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As a marketing consultant working with a lot of small and micro-businesses, I come across many small biz owners that want to drive sales to their company the cheapest and fastest way possible, even if that means taking a few short cuts here and there.

OK, I get it, times are tough and no one wants to waste a penny and everyone I talk to needs more customers. Many folks hear that Social Media Marketing is “Free” or nearly free and therefore, they want in now, quickly and with immediate results (meaning sales). Hey, don’t we all if this option is at all possible? I mean, sheesh, there’s at least a 3 offers a day for a seminar that is going to teach me “the secrets to using social media for FREE and FAST incremental business”. If they offer a class in it, it must be “real”, right? To which I answer, yeah, sort of.

Assuming you:

  1. Have a grasp of marketing fundamentals. Otherwise some of these classes can make you really good at spamming and actually driving people away. If you want to be a good Social Media Marketer, you still need to be a good marketer in general. People that say the “old ways” of marketing are extinct are wrong. Marketing fundamentals still apply – even in this brave new world.
  2. Have a significant amount of disposable time on your hands (which most of the business owners I talk to do not). I am not saying that if you have a limited amount of time, you can’t do social media marketing, but, you must have enough time to develop a strategy and implement this marketing just like any other marketing. If you don’t have time to plan a marketing campaign “off line”, you won’t have time to plan one online either. If you don’t have time to spend on advertising, you probably don’t have time to build relationships through social networking either.
  3. Have a realistic expectation that social media is more like farming (you plant the seed, nurture it with sun and water, and reap what you sow) vs. expecting instant high volume results with minimal effort. Can you get some instant traction with social media marketing? Yes. Will it be high-volume and instantly convert to sales? In most cases, especially if you are a professional services company or brick and mortar company, probably not. But, you can definitely increase the leads you generate and the loyalty of your customer base.

Is Social Media Marketing the salvation for cash strapped business owners looking to drive in more business? Maybe, depending on whether your prospects hang out online, how much time you have to invest, how well you build your relationships with them, and whether you engage them and market to them or spam them.

How Did I Get Here?

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Ahhhh, the joys of Social Networking! Finding long lost school and work friends! Meeting new people! Access to experts in every field imaginable (and some I bet you never imagined)! The great portal to finding answers and building connections!

Only, if unmanaged, this exciting new frontier will be the only frontier you have time to explore on a day-to-day basis (eh, who needs to go to work, spend time with the family or tend to our basic daily responsibilities really?). One day, if you are not careful, you will look up bleary eyed from your computer screen at 2 AM and ask yourself… how the heck did I end up here (looking at the average rainfall in December in Swaziland)?

So, my most sage advice is: Determine why you are interested in using Social Media. Once decided, give yourself a time budget that you can actually afford to allocate (without detrimentally affecting your other interests and responsibilities) to this exciting new territory. Determine which 2-4 sites are most likely to give you the most bang for your time and develop your relationships there. All sites can offer you new friends, colleagues and access to more information that you can likely humanly keep up with. Some do it in a professional environment and some more casually, but in the end, they can all get you “there” (connecting, learning, educating, working, playing, etc.) But, none of them can if you can’t focus your efforts to grow and nurture your accounts, friends, colleagues, and purpose for being there in the first place.

Like a kid in the candy store, we want to taste everything, but, in reality, we can only physically handle so much without going on “overload”. So, like your Mom said, pick a few favorites and enjoy!

In an Industry of Change

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One of the most important assets a small business possesses is the ability to quickly change direction when its market changes. Usually, there are not a lot of chefs in the kitchen deciding how to best proceed, nor are there many departments fighting to keep their budget dollars.

Instead, an owner can make a decisive move that changes the company’s focus quickly. Sadly, many small businesses that have success cling to a model of, “If it ain’t broke, don’t’ fix it!” even as they watch their industry move through change, driven by a maturation cycle.

I recently spoke with a small manufacturer that was selling direct to large national retailers in an industry that had been going through consolidation for the past 10-15 years. Last year, they lost their large retail customers who were going through the process of vendor consolidation in order to reduce what is called “soft costs” in the inventory cycle. Soft costs savings are real and significant, especially for large companies selling a significant number of SKUs. These savings drive industries working with commodities to go through consolidation, and it is a typical part of an industry’s maturation cycles.

Understanding this maturation cycle and where the industry is at when you enter can help you anticipate the future, and determine the best way to steer your business as you see signs of change within your industry. Planning for what is extremely likely to come positions you to treat these changes as an opportunity, instead finding yourself in the reactive position of trying to find new sources of distribution when all the eggs in your basket have matured, and flown from the nest.

The Profitability Question

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As a consultant, I look at it as my responsibility to help drive business for clients, but more importantly, profitable business. This leads me to ask many questions when I first speak with a client, which include:

“What are the most profitable products or services you offer?”

“What do your most profitable clients look like, meaning; what are some of the commonalities among them?” (Such as, they are almost all women, between age 18-35 who love to go dancing on the weekends, etc.)

And in nearly 90% of my conversations, my clients have no idea. I am a firm believer in 1) following your passion and 2) servicing your client’s at a superior level and that these should be credos for any company. Nor do I think that all business has to be driven by chasing highly profitable opportunities if they clash with numbers 1 and 2 above. However, I do believe that to have the resources to “work at what you love”, a client needs to be pursuing the opportunities that will fund their company. Which leads me to:

Business owners need to take the time to identify where their income is truly coming from and what products, services, and/or clients are helping or hurting them. At this point, they can re-evaluate the need of practices that actually slow down the success of their company.

What if the client LOVES their unprofitable services, products or clients? Well, if they can identify the starting point for these unprofitable areas (for example, 5% gross profit margin on all sales of product A) they can start to work on a strategy to improve product A’s profitability. This could mean reducing costs and/or increasing sales volume, as well as other considerations. By focusing on goals for specific products, services and clients, in time, these least profitable, but most beloved aspects of their business, can become the ones that reward them for their efforts.

However, the result of not knowing the answers to these questions, and therefore taking no action to rectify a troublesome situation, can be a death spiral for a company.