One minute social media is great for business, the next we get research telling us it’s a big failure. Indeed, not so long ago you were told to forget social media…! Now, wouldn’t you know it, there’s a new study telling us the opposite – that social media usage definitely leads to profits. So what is a business owner to believe? Is it worth spending time and effort on social media activities, or not?
The answer is that you should be asking a different question…!
The latest research shows that if your customers use social media to communicate with you they spend around 6% more with a business than people who do not relate via social media. The researchers found that social media customers are more profitable than those who don’t use social media to connect with a business. In other words, it appears that if you use social media to connect with your customers they will spend more money with you.
But earlier research found that 99% of all purchases had nothing whatsoever to do with social media.
So one study reckons social media lead to higher profits whilst the other implies social media is a waste of time.
Who to believe?
Both of them. That’s because they are both saying the same thing. And that’s why the question “is social media a waste of time” the wrong question.
The real question to ask is the one answered by the contrasting research studies – and that is “does forming deeper relationships with my customers help my business?”
And the answer, as shown in both pieces of research, is “yes”.
The people who spend most with a business are those who relate well to the company and have a stronger bond and affinity than those who only occasionally deal with the business. The reason why 99% of online social media fails to lead to a financial transaction is because there is little, if any, relationship. The 1% of sales are from people who have that strength of attachment to the business.
In other words, as if we didn’t know it, relationships lead to business – and social media are just one way in which you can strengthen and maintain those relationships.
If you are looking at social media as a way of getting business, without having to do the relationship building stuff, then you are likely to find social media activity is a waste of time. But if you believe that business is all about relationships and you want to use social media as a way of enhancing and strengthening such connections, then it certainly will not be a waste of time.
So, forget what the research says about the effectiveness of social media and the potential for sales. Instead, concentrate on building strong customer relationships, using social media just as one tool in your box of tricks.