In the last decade, the number of social media platforms has exploded. There are the mass market social networks (Facebook and Twitter), professional networks (LinkedIn), news aggregators (Reddit), video sites (YouTube), photosharing sites (Pinterest), review sites (Yelp), and on and on.
An important question for businesses is: where should they invest their very limited time and resources given this explosion of marketing channels? Should they choose a site because of its mass market appeal? Or should they choose a platform because their social media tools integrate with that platform? Or should they focus on a platform because their competitors have a significant presence on that platform? Simply put, no.
If these are the not the right reasons for selecting a platform, then what should drive the decision?
Return on Investment
The simple answer is that businesses should select the platform that provides the best financial return(s) on their investment (ROI). How much time is needed to effectively manage a presence on a platform and what are the financial returns from the time spent on this platform? But wait, it’s very difficult to measure the financial returns from using social media. Firstly, much of the effort on social media may support brand building and the financial return on this is very difficult to measure. Secondly, a business might use social media for managing reputation (e.g., negative reviews on Yelp) or for technical support (e.g., on Twitter). In this case, the financial upside might be limited, but the downside (e.g., ignoring negative reviews and questions) could be significant.
Where are your Customers?
If using ROI works well in theory, but not in practice, then what? You should select the social media platform where your customers congregate. Which platforms are your customers most likely using on a regular basis? Furthermore, where are your customers going when they’re are looking for a solution to a need or problem that your business addresses? Perhaps most of your customers are on Facebook, because everyone is on Facebook, but Facebook is not the place your customers visit when they’re about to make a buying decision.
For instance, when I’m looking for a restaurant to visit, I go to Yelp. Travel? Then I use TripAdvisor. Movie reviews? I like the site IMDB. If I see a post for a restaurant, hotel, or movie on Facebook, is this going to shape my decision-making? Perhaps in some way, but the return is going to be much lower than if the posting is on the social media site that matches my needs at that moment (Yelp for restaurants, TripAdvisor for hotels, and IMDB for movies).
As an example, consider a restaurant owner or manager that focuses his/her limited time on social media by responding to negative reviews on Yelp:
What did the manager accomplish here? The manager placated the reviewer (Nathan) and his/her guests. It’s now much more likely that Nathan will revisit the restaurant and give it another chance. The manager also turned a negative review into a positive brand building event by demonstrating to all Yelp visitors that this restaurant has excellent customer service.
Could the manager obtain as much benefit by posting photos of its dishes to Pinterest? Or by using another social media site in some other way? Perhaps, but I doubt it. Ultimately, the manager has a limited amount of time per week (e.g., 3-5 hours) to use social media and he/she needs to get the best return on any time invested.
In the end, the choice of which social media platforms to use is similar to any other business decision. Where should you deploy your limited resources to obtain the best return on investment? In the case of social media, if you can’t explicitly measure the return, then identify the social media sites where customers are most likely to regularly visit. And identify the site that customers are most likely to visit when they’re about to make a buying decision. Finally, you need to experiment because your hypotheses about which platforms are best for your business may be off the mark. You also might discover that your customers don’t use social media on a regular basis and in this case you should consider investing your marketing or sales time and dollars elsewhere.
by Michael Fern