Social Media For Small Business

You’re in business to make money, not to make friends.

There are three important things small businesses should know about social media…

#1 Social Media is not about you; it’s got to be about them.

If it’s not valuable and useful to your target audience, why would they devote their time and attention to you? They won’t. So why are you pushing the same, old marketing monologue? You’re wasting their time…and your resources. Please, be brutally honest with yourself. What could you do that is genuinely valuable for them? It’s a hard question to answer but if you can’t do so in a compelling way, don’t do social media. There, I said it.

By the way, if your products aren’t totally awesome, if your corporate culture isn’t incredible, and if your customer support isn’t just unbelievable, well those are three other reasons not to do social media. It’s a world of mouth where word gets around…fast!

#2 The majority of the economic value of social networking will come not from external communication (read: marketing) but instead from internal applications.

These are new tools that can improve communication among your employees. That could be the biggest potential benefit of all. Even small gains in employee collaboration could result in major improvements in profitability. And that’s to say nothing about the improved recruiting results, longer employee retention, better product management and enhanced customer service that can result from smart application of social networking tools.

#3 Have you ever heard the saying that “None of us is as smart as all of us”?

Participating in social networking makes everybody smarter. For most companies, there’s at least as much potential benefit in listening and in asking for input as there is in talking. You can get new product ideas, learn about competitors’ weaknesses, discover new sales opportunities, and know what your coworkers know.

Engage, then Convert. And Measure!

I see many business people who engage in social media programs simply because others do. Further, they make no attempt to quantify the value of such initiatives and therefore tend to under-invest. In turn, social marketing brings few new customers to the company and, in a self-fulfilling prophecy, it’s not worth investing more.

Measuring the costs and benefits of your social media programs (and more broadly, all of your digital marketing initiatives) is critical. With a calculation of the actual value, you’ll have a basis for deciding which initiatives merit increased or decreased investment going forward. Otherwise, you’re just guessing and hoping. In business, we all know that “Hope is not a strategy.”

There is no guaranteed inherent value in having a LinkedIn Company Page follower, a Facebook “Like,” a Google+ member or a Twitter follower. Rather, value depends on your ability to motivate the participant to voluntarily execute your desired actions.

Consider the value of the following sequence of actions:

If (1) a LinkedIn Company Page visitor or follower clicks to (2) your “Products and Services” tab, then notices and reviews (3) some of the 83 recommendations for that product and clicks on (4) the description of your “welder repair service,” then sees and clicks on (5) the link to your blog post about that service, and finally reads (6) that post and clicks the button (7) to “Have a Salesperson Contact Me,” you’ve achieved the desired outcome for that person.

What I’ve described here are seven sequential “conversion” steps from being a random member of LinkedIn to being an interested prospect for your company.

Similar conversion steps are definable for any social media follower whether reading your blog, following you on Twitter, participating in your external Ning network, or liking you on Facebook. After all, you’re in business to make money, not to make friends, right?

Have you considered the conversion objectives and associated steps for your social media and digital marketing programs (including website and landing page visitors)? Once understood and explicitly defined, your conversion steps can be tracked, measured and even valued. Your marketing team or outside agency partner should be thrilled to tackle this task because they can then prove their value to your organization.

Google Analytics (free) can track much of what happens on your website and blog including, for example, where people come from (e.g., LinkedIn, Twitter, Google search, etc.) and what they do after arriving.

“Have a Salesperson Contact Me”

With conversion steps defined, conversion rates can be measured and improved. Let’s say that you post to your blog twice a month. Why blog? Every day, half of all Internet traffic starts with a search. Because Google favors newer content over older, companies that blog get, on average, 55% more web traffic. People are searching for what you do, even when they don’t (yet) know of your company. A blog helps you get found more often.

But what good are blog readers unless you can convert a meaningful percentage of them to customers, so you should have a defined sequence of conversion steps, perhaps as follows:

  • Read a given blog post.
  • Click a link near the end of that post to an associated landing page with details about the relevant product or service.
  • Click the gold-colored button that says, “Have a Salesperson Contact Me.”
  • Purchase your product (no doubt after additional good work by your salesperson).

Let’s say that your typical blog post attracts 1,000 readers in the first six months after posting (for simplicity, we’re ignoring the likely substantial benefits of the “long tail”). Your measurements show you that 5% of these readers execute the desired conversion action (clicking a link), meaning that 50 out of 1,000 of them visit your targeted landing page.

Of these, 10% of the landing page visitors click the gold-colored “Have a Salesperson Contact Me” button. Your sales team follows up as requested, making a total of five calls. Note: While the sample sizes in my example become small and therefore “statistically insignificant” across all of your blog posts, social initiatives and web pages, your numbers should be larger and therefore statistically significant (i.e., show less variance and be more predictive).

Of these five calls, over time (you have a 12-month sales cycle), one such prospect ultimately buys your product or service, equaling a 20% conversion rate. Now let’s work backward to calculate conversion values. Say that your average “lifetime customer value” for buyers of this product is $50,000 (net profit). Therefore, the value of a click on your gold-colored “Contact Me” button is $10,000 ($50K x 20% conversion rate). Checking the math: 5 clicks x $10K is equal to 1 buyer at $50K.

Backing up further, the value of a blog visitor clicking to your landing page is $1,000 ($10K x 10%). Checking the math: 50 clicks x $1K still equals $50K.

And backing up one more step, the value of a blog reader is $50 ($1,000 x 5%). Again checking the math: 1,000 readers x $50 still equals $50K. (See Table 1.)

If you’re doing one such blog post per month and seeing similar results across all posts, the total value of your blogging initiative on an annual basis is 12 x $50K, or $600,000. If the cost of your blogging initiative (and downstream conversion sequence including the associated percentage of payroll for the designers building land pages, the salespeople following leads, etc.) on an annual basis is less than $600K, then you’re making a good investment. Your social marketing initiatives are yielding a positive ROI. If that ROI is better than your other investment opportunities, you should invest more.

Specifically, if you can acquire additional blog readers for less than $50 without degrading your conversion rate, you’ve still got a positive ROI. Invest more.

You may be wondering why my example focused on blogging rather than the more stereotypical Facebook or Twitter. Easy answer: As those companies have searched for revenue models, they’ve reduced the visibility of your updates/Tweets, unless of course you pay to boost/promote them. Reduced the visibility? Try this math (I call it the rule of 1%): Each time you post to Facebook or Twitter, multiply your number of likes/followers by 1%. That’s a reasonable approximation of your actual reach. 10,000 followers? A given update is reaching roughly 100 of them. And you can’t even control which 100. Post an update every day for a month and not even 1/3 of your followers will see you once.

Regardless of your chosen medium, to maximize your profits treat each social initiative as an ongoing experiment. Know your intended conversion steps and measure their effectiveness. When the ROI is positive, increase your investment. When the ROI is negative, try a different experiment.

Gases and Welding Distributors Association
Dave Nelsen Meet the Author
Dave Nelsen is the founder of, an Internet radio/podcasting site, and is currently the CEO of Dialog Consulting located in Cranberry Township, Pennsylvania, and at Among other awards, he was recognized as CEO of the Year by the Tech Council and Entrepreneur of the Year by Ernst & Young.