SCORE_logo_125x125 Last night I attended the Greater Phoenix SCORE 1st Annual Small Business Awards event, as a guest of Maryanne Weiss, 2010 Chairperson of the organization.

They launched the program to recognize those who have made significant contributions to the organization in promoting it’s mission and purpose.  The primary Honoree was Tom Horne, Superintendent of Education

At the event they distributed the December 2009 copy of SCOREBoard too and I was happy to see articles by Lon Safko and myself filling the issue.  I had submitted an article, but found out later that it was a bit long for the publication and left it to the editors to make the needed changes.

The result was it looked great and the message of the article was easily conveyed.  I feel blessed and flattered to have the article published by such a wonderful organization – I owe thanks to Maryanne, Lon and everyone associated with SCORE.

Those of you involved in social media will recognize the reference to Gary Vaynerchuk / WineLibrary.TV in the ROI example and the use of the analogy given by Marcel LeBrun as the ‘Social Phone’ in Episode 2 of my podcast interview.

As I said the article was edited to fit the space in the newsletter so now that they have it published in the edited format, I present the unedited article here for you to read and enjoy.

The question seems to be on many business owners mind these days – “should I be making an investment in social media today?

roi_money Admittedly, I’m a little bias on this answer as a social media evangelist and I would hate to be a guy with a hammer that sees everything as a nail, so let’s look at some of the most recent published statistics.

From them, we can get some sense of the impact and effectiveness of social media and take my opinion out of the equation.

  • A wine distributor in New Jersey grew their company from $4M to $50M using social media as a primary tactic to market

Consider these results –

  • A company invested $15,000 in direct mail offer and got 200 new customers
    • $75 acquisition cost per customer
  • They invested $7,500 in a freeway billboard, repeated the same promotion and got 300 new customers
    • $25 acquisition cost per customer
  • Repeated the same promotion again, using a popular micro-blog system ($0 hard cost) and got 1,800 new customers
    • $0 acquisition cost per customer? Well, $0 hard cost at least

hmm…

If those statistics begin to interest you, then yes, you might already be considering how social media might be used by a company of your size and in your industry. Now the question becomes not ‘if’ you should invest in social media but ‘where’ and maybe ‘how fast?’

‘Where’ is a question that asks, “of the several hundred or thousands of places on the Internet I might open an account and dive in, where should I start?” Choices include Facebook, MySpace, Twitter, but what about Blogger, Meebo, YouTube, FastPitch, or Flickr?

The answer is a bit deeper than I can approach here, but this may be a relevant statistic –

  • 300,000 companies (competitors?) have decided to already opened a presence on Facebook

As I see it, there are two investment variables in a basic entrepreneurial equation – time & money. ‘How fast’ questions the ability to invest in what it takes to create and maintain a presence in social media. If you have no money, be prepared to buy and read everything you can and to invest time in learning what works best for you – we recommend ‘The Social Media Bible’ by Lon Safko and David Brake. Self paced education will always cost less money, but will take a good deal more time.

If you are constrained with time, money is your answer.  With prudent investment, you can buy time by hiring the right people. Of course, it is your company and you get to make the decision about how much of each to invest, but investing in social media is something you should be doing now.

Why? A few more statistics for you –

  • Companies with the highest level of social media activity grew sales by 18%. Companies with the least presence showed a decline of -6%
  • Online advertising effectiveness increases over 100% when coupled with social media
  • 71% of companies surveyed are planning to increase investment in social media by an average of 40% because a) low cost, b) it seems to be getting traction and c)we have to do it

You may not be a statistics person though, so let’s put it another context then.

Imagine for a moment that a customer or prospective customer calls your company with a question, a comment, a request for help or maybe a complaint. Imagine picking up the phone and listening to them for a few seconds and then imagine you or your employee, carefully placing the phone on the desk, allowing the conversation to occur, but intentionally ignoring the customer or prospect.

They are talking to you, but you are not listening.

Sounds a little crazy doesn’t it?

TinCan_phone When we move that image to online media that involves a social component, the scenario plays itself out thousands of times a day in hundreds of locations. The ‘social media phone’ could be ringing off the hook and unless they have the tools and tactics in place, many businesses will not even hear it and with the speed of electrons, hundreds or thousands of other customers and prospects WILL hear it! They may also notice that you did not engage or respond – would they take that as a comment on your ability to handle their business?

In spite of those discussions, you may be thinking that “this social media thing is probably just a fad though; I mean how popular could this social media thing be anyway?” Well, it is pretty big. Social media is now more popular on the web than adult entertainment. The membership in some online services is huge; Facebook is now over 320,000,000 members in 170+ countries – hat’s more than the population of Norway, Finland and Sweden – combined. Usage statistics show that about a quarter of them log in everyday.

OK, so social media is big, but how is a statistic about Facebook relevant to my business in Phoenix?  The best estimates suggest that as of July 2009, Arizona had over 1 million people using Facebook. How would your business be impacted by connecting with a million of your fellow Arizonans?  Could you expand your shipping to other states with the extra business? How many of the 320,000,000 would you need to connect to grow revenue 5%? or another 50%? or a 150%?

You might find with proper planning and a few dollars that you can connect with new customers with a click of the mouse, regardless of where they are or what time they decide to visit your website and buy.

Should businesses be investing in social media? Yes – if nothing else, start listening. Create an account in Google Alerts (a free service from Google) and set a listening post up that can instantly let you know when and where you, your name or your industry are being mentioned.

If you are ready for something more, check www.TheSocialMediaBible.com, or look over my website here at www.StevenGroves.com, look for and read the post on ‘The Trinity of Social Media’. It is a very basic tactical strategy that will get you moving with some of the basic social media tools and, in virtually every case, those tools can be extended into a more robust and engaging strategy when you are ready.

Social media a fad? Yes, it could be referred to as a fad; one like the Internet, email, and cell phones once were. It is a fad that will forever change the way we connect to our customers, prospects and stakeholders in ways that will change our culture.

Welcome to social media!