In a world full of answers you start your journey by asking the right questions
You can feel a change of the seasons in the air and with each new season comes the change in fashions. This season I suspect we’ll see the old So.Me (Social Media) being replaced by the new So.Biz (Social Business). There was hints of it in the occasional displays of f-Commerce in last season’s passing parade. And over the past month or so, if you listened in the quieter moments, you could almost hear the faintly distant echos of So.Me guru’s practicing for this season’s rousing chorus. A veritable revival of that old broadway classic “There’s no business like Show Business” rephrased to expound the benefits of selling into the social networks.
“There’s no business like So.Biz… it’s like no business I know… Everything about is so appealing…”
Last month we have already seen David Armano’s piece for the Harvard Business Review on Why Social Media will evolve into Social Business. Today its the ubiquitous infographic illustration why it’s time to Get down to Social Business.
So to paraphrase “Bones” McCoy is this new wave of social shopping “e-commerce Jim, but not as we know it”? Should we really be talking about How Facebook could change the world economy in much the same way that we talked about how the web was going to change the world economy back in the 1990′s? or is it time to say been there done that. Let’s move on?
I think there are 3 key questions that the So.Biz Guru needs to address before we can move forward.
The first question is if the number one reason people shop online is to save time how is being social going to radically change or at least improve the existing paradigm?
The second question stems from this acute observation by Valeria Maltoni : “That database you spent social ad money to attract? It’s not YOUR database. It’s Facebook’s, too.”: If the objective of e-commerce was to channel all your activity into pushing traffic to your site and then converting that traffic into a sales why are you now in the business of pushing all that traffic to a third party’s site? Doesn’t that a. create an additional step in the process and b. adds rather than removes time from the equation?
The third question is simply why would anybody in their right mind contemplate a future of 74Me34U when today you enjoy having it All4Me?
Don’t get me wrong So.Biz does work and it can be a very effective way to drive online sales. But building a sustainable and profitable So.Biz strategy is a million miles away from the world of calculating the value of Facebook Fans or Likes or Tweets and Followers on Twitter. It’s all about using social media to drive customers to your site. Not driving your customers to follow you on the popular social networks.
Here let me show you the difference. Let’s say you want to create a new online Insurance business brokering Car Insurance. Conventional So.Me wisdom would suggest that the best strategy is to build an online community through Blogging, Twitter and Facebook and then convert all that social activity into sales. Unconventional So.Biz wisdom would suggest that the best thing to do is to build your own social media platform that is linked symbiotically with your website.
Your fans and customers can then use this social space to exchange photos, videos and blog posts about the interest they share in common with your business. Namely their car. The same principle would apply if you are in the pet insurance business or in the business of selling books. Put very simply if you’re in the business of becoming the next Amazon then you don’t need to just build a better online bookstore you also need to build and nurture a better online community of interest. You need to be the best book club on the net. That’s the mistake Borders made.
You’re thinking this sounds like hard work. Why not just let them do all this socializing on Facebook or just continue to run blip campaigns on Twitter (e.g. The Google Last Minute Conference TweetTixfest)?
Three reasons why this approach is better for you.
To prove this let’s do a quick “lunch napkin” calculation.
Let’s say you build a small social network of 10,000 Motoring enthusiastic who enjoy telling the world about their love for all things wheels. Now assuming that each of those 10,000 enthusiastic social media content creators attracts just 1 organic search page hit per day from Google to their digital nest (i.e. Blog or Fan Page) then you have attracted an additional 3.6 Million uniques per year to your sales pipeline. Now apply a CTP of 0.01% to that traffic and you’ll discover that those 3.6 Million organic searches translates into 360 new customers each year. Times that by the value of the average value of the policy (let’s say $500) and we discover that this So.Biz strategy delivers an addition $180,000 in revenue to the bottom line each year. In addition to that we have the increase in organic search engine traffic to the e-commerce site generated by all that social content pointing back to the company’s website. So you are saving on Search Advertising and increasing the traffic to your website.
That figure translates into a very healthy $18 per “Fan”.
Now compare that to the estimated value of gathering a following on the popular Social Networks or even the ARPU Facebook is achieving from putting your ads on it’s network.
Earlier this year Jeff Bullas suggested a Facebook Like was worth $1.34 to the Eventbrite ticketing agency. A Tweet was just $0.80. Would these figures translate into car insurance sales? Probably not. After all concerts are more social than insurance and Jeff’s data suggest that value of sharing Financial Service activity socially translates into about 10% of the value of sharing the news that you are attending a concert. But having said that the value of the insurance product is probably much higher (maybe 10x higher) than a concert ticket. So maybe a case could be made for a “swings and roundabouts” comparison which in turn would suggest the “DIY” Social Media strategy significantly outperforms the more popular build a fan club on Facebook approach.
Of course there is nothing to stop you employing both strategies. The key though is to figure out what the primary objective is and work back from there and not to pursuit a strategy of being the most liked Brand on Facebook and then figuring out what’s next.
In the end though I still think the So.Biz strategy is yesterday’s approach to doing business. The DIY Social Network = A new business pipeline was a great idea 5 years ago when Facebook was first getting started. Today it looks and feels like just another ME2 in the highly crowded Social media space. For your fans it becomes just another time sink. Which means it will take more effort from you to get them excited about changing platforms.
The key to the e-commerce equation was the simple idea that people shop online to save time. At the moment that idea is more attune to the future of Mobile Shopping (Mob.Shop). So looking past this year’s So.Biz fashion parade it will be interesting to see what happens when the So.Biz converges with the Mob.Shop. When the Feedback Loop meets the Time Wallet. You don’t have to look very hard to discover the signs that this is already happening. (e.g. How So.Me and mobile is helping advertising to evolve).
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