Do you Understand How Social Media is Affecting your Business Model
We all know that having a strong social media presence is critically important in building and improving the bottom line of your business. Social media is where your customers are and where the conversation is happening and there are thousands of potential customers on social networks waiting to engage with you. If you do not do it, your competitors will. Research indicates that not only is it working for companies, but there will be explosive growth in the use of social media marketing in the next five years. Social media works and it can work very effectively if done strategically because it engages your customers by giving them value. A lot has been written on the value of social media for businesses such as:
- Increased visibility of the business in an increasingly noisy world
- Improve your standing on search engines like Google,
- Establish/enhance a brand and raise awareness
- Conduct market research
- Customer’s opinion and feed-back
- Segment and target market customers
- Generate new customers
- Bring attention to your products
- Sell your products or services
- Drive traffic to your website
- Increase customer loyalty and trust
- Great for gathering market intelligence
- More interactive with customers
- Building customer relationships
- Strengthen customer service
- Show case the company’s expertise and reputation
- Belonging to a community
Impact of Social Media on Business Models
Social media is fundamentally changing customer’s experiences. Historically customers were passive recipients of marketing content from organisations. Whereas today, customers and companies are increasingly co-creating content in real-time. With tracking and analytics capabilities, never before have companies had more data about their customers, enabling them to better target and position their brand and products in their customer’s mind.
However, social media means investing time, resources and people to engage existing and potential customers and when that happens, your social media is impacting on your business model. A business model describes the rationale of how your organization creates, delivers, and captures value (economic, social, or other forms of value). However, how social media affects business models is not understood very well. This is particularly true for SMEs. Numerous research studies show that most SMEs do not use customer relationship management software, email lists, do not know what their Return on Investment and when they do they are not recveing an acceptable ROI on their digital marketing. Part of the problem, is that companies engaged in social media marketing without really understanding how it affects the way that they do business.
Understand How Social Media is Affecting your Business Model
Utilising the business model canvas, companies can clearly analyse its impact on their business. While there are loads of business model frameworks and conceptualisations out there, we are going to use Osterwalder & Pigneur business model canvas to show you how to analyse the impact of social media on your business model. The business model canvas consists of nine basic building blocks of how a company operates. Mapping the canvas is a crucial process for the creation of concise business model. We will now go through each building block showing what you need to look for.
Customer Segment. There is a reason they call it social media marketing. When you enter this world, you are entering a very real community. Unlike advertising, which is a one-way-street method (push marketing) of delivering your message, social media demands that you enter into a conversation with your current and potential clients and customers (push and pull marketing). Do you know who your customers are? or what are their behaviors on-line? Do you have the capability to engage in push and pull marketing?
Value Proposition. Your success in social media will depend on your ability to make valuable engaging contributions, beyond simply promoting your brand or your product, to a community. Do you know what your strategic objective is? What you’re trying to do…generating awareness or creating new sales?. It is critical that you understand what your value proposition is and then choose your message and be consistent. What exactly are your trying to say? Keep It Simple! Don’t try to be overly “creative” and say the same thing a bunch of different ways. Simply say it over and over again. This can even just be as simple as repeating your slogan.
Customer Relationship. Social media demands engaging your customers and building a relationship with them. What relationship do I want with my customers? Do you have that skill set?
Channels. Which social media platforms are best suited for achieving my business’ goals? Are your social media effort integrated and designed to support each channel’s efforts? What will you use to drive people to your Twitter account? Your Blog? Your Facebook fan page? Blogs – Can I create valuable insightful content to potential and current customers about my business/services/products/industry that can delivered in blog format? Once I’ve created compelling content, how can I distribute it to the world? An easy way to distribute your ideas is through social news sites where the content speaks for itself. Users are given the opportunity to vote on news stories, links, and content:
Key Assets. The most important social media asset is content that you can utilise to engage with your customers. Do you have the capacity to produce content. It also involves interaction with customers. Do you have that skill set?
Key Resources. Effective social media requires time, resources and people. Do you have the time and personnel commitment to engage in social media activity? What time is allocated to social media? Is their training available? and do you have a budget?
Cost: Marketing budgets are finite. The money invested in social media campaigns must come from somewhere. Where are the sacrifices to be made?
Revenue: It is critically important that you understand how you are going to measure the return on investment for your social media activities. If you have set clear objectives, this will be easier. Detail specific ROIs such as percentage increase in mentions, followers, conversions etc. What are your key performance indicators?