It has been the elephant in social
media’s room ever since Facebook opened its business pages and
corporations started to pile into Twitter. It is the question that
prompts more embarrassed shuffling of feet and more mumbled mentions of
the benefits of branding than a barn dance at a cattle farm.
How do you make money out of your followers?
That was always the goal of companies who built pages and created
Twitter accounts, especially small firms with little need for PR. They
wanted to extract cash from the followers their accounts were building
up and when they tried, they found the results disappointing. Even when
Dell, in the early days of Twitter, boasted that it had made $10 million
out of its Twitter presence, critics were quick to point out that those
were not new sales. The company’s customers were following the timeline
for news and making purchases that they would have made anyway.
That might have been true but it is certainly true that monetizing social media followers directly is notoriously difficult.
Richard Millington is an expert in online communities. He has been able to list no less than nineteen different ways
in which owners of forums and other community platforms can extract
money from their members.
From charging for premium services and
offering affiliate products to organizing events and putting together
focus groups for advertising companies, there is no shortage of ways to
get cash from a crowd.
Few of those methods, though, apply to the business user of a social media site.
Advertising Does Not Pay On Social Media
Although various companies have tried to pay users to tweet ads, for
the most part, the number of followers has to be high, the money has
always been chump change, and the opportunities have been few.
You cannot charge for membership or offer premium services when you
are using someone else’s platform, and as for organizing events, focus
groups and selling merchandise on social media, in practice, you would
probably make more money performing.
If you are looking for direct sales, then the most obvious and the
most likely method is to make special offers to Facebook and Twitter
followers. Even here, though, the difficulty of reaching followers whose
timelines scroll dozens of other tweets every few minutes or whose news
feeds are filtered by EdgeRank means that the conversion rate of
follower numbers to sales figures would be embarrassingly low. There is a
reason that affiliate sellers are still using one-page sales letters
rather than putting links in tweets.
But that does not mean that you can never extract direct sales from
your social media followers. It just means you have to be a little
indirect. Thriller writer Martin Rees,
for example, has been using his Twitter account to promote his free
ebook about the death of Yasser Arafat. He sends readers to Amazon where
they will also see his other books and read reviews. Other businesses
send ebook readers to a download page where they have to enter their
email address. That gives the business a chance to make all sorts of
other offers through email marketing, a more effective channel for
direct sales.
Social media is not the best platform for turning leads into
customers. But it is a great platform for finding prospects, gathering
them together, building their loyalty, and turning them into leads. That
is when the business can really make money out of its followers. The
secret? Building their loyalty.
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