Social media is a phenomenon - how else can you explain that approximately 10 percent of the world is on Facebook? Still not impressed? Then add Twitter, MySpace and the host of others, and you're on the fast track to a billion...that's billion with a b. In its infancy, as the potential was understood, it was all about how these companies could make money, attract investors, and go public. For other companies it was how to monetize participation on these sites - sell, sell, sell.
In my opinion, both have failed. The vast majority of social media sites, if not all, have struggled wtih advertising-driven models, and the vast majority of companies haven't sold anything. In most cases, the challenge has been about walking the fine line between making money and respecting privacy.
I have no doubt that eventually somebody will strike gold and create a business model that will lead to the big IPO...but I'm not holding my breath, and neither should you.
Some companies have approached social media in a very simple and straightforward way, leveraging it to keep a continuous dialogue with their customers and as part of their SEO strategy. It's these companies that have benefitted the most, and ironically, usually turn a better profit. It's these companies that small business owners can learn from.
One of the fundamental rules you're taught from the get-go in any college marketing course is something I like to call the law of customer service. The law of customer service teaches that it's roughly eight times less expensive to keep a customer than to go out and get a new one.
Think about what it costs you to get a customer - and don't just consider hard currency, think of other resources like the time it takes to nurture that potential customer, to sell to them, to convince them to pick you rather than a competitor, or alternate service/solution. Now think about your best customer - the one that loved your service so much that he or she not only keeps coming back, but refers people to you. Now imagine an army of customers just like that customer.
Large companies obviously can't be on a first-name basis with every customer at the same level that a small business can be - but they certainly have been trying with social media. These companies understand that customer service must be 24/7 - done by phone, email, etc. Sound familiar? It's what is offered to you as a MyFax, my1voice and/or Campaigner customer. But with the average US Facebook usage at over six hours per month, social networking has become a natural extension to that. So these companies "take to the streets" so-to-speak, and ensure that customers (both happy and unhappy) are heard and engaged.
So where's the lesson to be learned here? For small business, social networking can be great for networking, and trying to sell your business products or services, but its true value for your business is keeping you in touch with your customer base.
I encourage you to join in the conversation on our own social media pages - Twitter, Facebook, and LinkedIn. We look forward to continuing the discussion here.