We take a look at how social media sites like Facebook and Twitter have changed the way businesses market themselves and connect with customers.
In mid-June, when computer maker Dell announced it had earned $3 million in revenue from using Twitter, a popular micro-blogging site, the Internet and blogosphere were all atwitter about the news. Finally, proof that social media had the potential to not only increase traffic but also sales. Though as Dell was quick to mention, it took 18 months to make that first million via Twitter, albeit only six to earn the last.
While Dell is a large corporation, with revenues of more than $61 billion in 2008 alone, smaller businesses significantly smaller businesses can also benefit from using Twitter as well as other forms of social media, such as Facebook and MySpace. It also includes blogs, particularly community blogs aimed at entrepreneurs, like The Toilet Paper Entrepreneur, which features hundreds of small business owners every week and sites like Help a Reporter Out (HARO), which links businesses with journalists for free. (Think of it as PR 2.0.)
Thats because unlike traditional PR and advertising, which can be costly, the main cost associated with social media is time, not cash (though this may be changing, thanks in part to success stories like Dells). And any business willing to spend some time on social media/networking sites, building a community or fan base can benefit.
Thats the beauty of social networking. It levels the playing field and provides small business owners another platform or medium to leverage from a marketing perspective, said Scott Bradley, a social media strategist who runs the blog Networking Effectively. Social media also fosters closer and better company-customer/prospective customer interaction call it Word-of-Mouth 2.0 than do the more traditional print advertising and PR he said.
To find out how small businesses are using social networking sites and tools to market themselves and to build better relationships with their customers, we spoke with three retail business owners. While their products and audience may differ from yours, their tips and advice regarding social media can be applied to any business.
Old-Fashioned Boutique, Modern Marketing Strategy
The James Store is a 63-year-old clothing boutique located in Granville, Ohio. With its charming brick façade, big bay window and colorful awning, the store seems the product of another time. And in many ways it is or was, until just a couple of years ago. Thats when the James Store set up shop online and shortly thereafter began using Facebook, YouTube and Twitter to attract new customers and build relationships and communicate with customers both locally and around the country and the world, said Peter Morse, the James Stores marketing director.
So many people use Facebook every day that it seemed important for the James Store to have a presence there, explained Morse. It wasnt exactly clear how wed use it initially, but it seemed like only a matter of time before it was widely adopted and the value became apparent. In the meantime we began building a fan base. And our customers (who love our store and are very loyal) happily become fans.
The James Store rewards its fans by offering store coupons that are only available via the companys Facebook fan page. It drove new fans to our Facebook page which in turn drove foot traffic to the store, said Morse.
As for Twitter, the capability to instant message store updates to customers and followers in real time appealed to Morse, and hes been using the service to alert customers to sales and specials.
Recently we tweeted about a sale on Vera Bradley handbags. When Vera Bradley retires a handbag style, they discount the price and many people wait for the day this occurs to get a deal, explained Morse. When we tweeted about the sale, we received phone calls from customers from all over the U.S.
Moreover, every time the James Store posts a new tweet, it automatically becomes an update on the stores Facebook fan page, driving even more traffic to both the physical and virtual stores.
The reaction has been great, said Morse. Facebook keeps the store feeling up-to-date. And we have found these social media tools to be more effective than e-mail in getting out the word about sales and events and much cheaper as well.
Twitters Gone to the Dogs
The Nauti-Dog Company, a small two-year-old retail dog-apparel business that sells both direct/online and through select retail outlets, started off using traditional print advertising and PR. And for the most part, Nauti-Dog Founder Nate Staples said they were breaking even or better on their investments. That is until the economy tanked.
As a result, Nauti-Dog slashed its advertising/PR budget by 80 percent and turned to Facebook and Twitter to help get the word out and realized a 50 percent increase in direct orders. Getting a mention on Twitter triples our Web traffic and increases sales, said Staples. And Nauti-Dog experienced a similar bounce from being on Facebook, where it, like the James Store, has a fan page.
Facebook and Twitter really allow us to quickly reach out to not only our existing customers but to potential customers with promotions, product releases and news, said Staples. And its a lot cheaper than traditional print advertising and PR.
However, just being on Facebook and Twitter is not enough, he said. You have to actively engage customers and offer them something of value, which could be a coupon but could also be something fun and memorable.
For example, every month Nauti-Dog features a Dog of the Month (wearing a Nauti-Dog collar or piece of apparel), which is chosen from customer submissions. In addition to posting a picture of the pooch on its Web site, Nauti-Dog posts it on Facebook and then tweets customers that another Nauti-Dog has joined the pack. Fans and followers re-tweet or e-mail the news with their friends and followers, who often wind up visiting Nauti-Dog and making a purchase.
Nauti-Dog also uses Facebook and Twitter to alert fans, followers and friends to Nauti-Dog events, such as its Dog Beach/Street/City Walks and offers them free product if they use the code phrase, Is that Nauti-Dog Sampson? A charismatic black lab and Nauti-Dogs chief executive dog, Sampson has a thing for tennis balls and is the voice (at least on Twitter) of the company.
Picture-Perfect Social Media Strategy
HoodiePeople.com, a startup e-commerce retailer selling premium branded hooded sweatshirts, officially launched in September 2008. But it had a blog, a Twitter account and a Flickr photogroup up and running two months beforehand. Thats because the founders of HoodiePeople understood the power of social media/networking and felt it would be a great tool for building awareness and buzz and sales, explained Co-founder Hasan Luongo. Moreover, we are a bootstrapped company, so the free marketing tools and massive audience available via social media has been a huge help to us.
Thats why soon after officially launching, HoodiePeople had Facebook and MySpace pages, too.
Just eight months into its social media experiment, HoodiePeople had more than 600 Twitter followers, 658 MySpace friends, more than 300 Facebook fans and 262 people in its Flickr group and was generating a fair amount of buzz and sales. And the company is constantly coming up with new ways to use social media to its advantage.
The most effective marketing method we have done so far on Facebook is to use our friends as models for our hoodies then post those pictures to Facebook and tag them in the pictures, said Luongo. Photo tagging is a huge viral hook on Facebook because the pictures are published to the news feeds of all their friends. So its a great way to reach new people in a very engaging way. Each time we post pictures of a new model our fan and page views numbers jump significantly.
HoodiePeople uses Twitter to let followers know about specials, new products and cool hoodies. Case in point, the Hoody Dealz of the Week, where the company selects one hoodie, marks it down by as much as 60 percent, and offers it for one week only or until it sells out a great way to clear our slow moving items.
HoodiePeople posts the Hoody Dealz of the Week on its blog (another important social tool), Twitter, Flickr and Facebook, as well as featuring it on the homepage, and its been very successful, said Luongo. People love to spread the word when a killer deal comes along, so we get some re-tweets and people blog about it.
As for advice regarding how to best use social media and networking tools, Luongo said, If there was a golden rule of social media its be authentic. Small businesses especially have a huge opportunity to really stand out among larger competitors by using social media as a channel to express their voice and engage with their audience. An authentic voice in a crowd of corporate marketing is very attractive to buyers.
However, he cautioned business owners to be careful about crossing the line between connecting to customers and spamming them. If you bombard them with sales and marketing stuff they quickly loose interest.
Added Nauti-Dogs Staples, to be successful on the social media sites, you want to resonate, not dominate. Its not about beating your message into people over and over again. Its about connecting with them on a more intimate, social level. The social media world is like a big small town. Good news travels fast, bad news travels ten times faster. So you need to be mindful and make sure youre really providing something of value to your fans and followers.
Jennifer Lonoff Schiff writes about IT and small business issues and runs a blog for and about small businesses.
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