There was a study shared in a LinkedIn group I am a part of and wanted to address it in today’s blog post. I have seen similar studies and they are misleading and I will explain two reasons why this study is flawed. I will also explain the power of using social media and email together. These studies are usually conducted by an email service provider (go figure). However, this study was conducted by McKinsey & Company, a global management consulting firm.
The survey I am referring to was an article on entrepreneur.com, titled Survey: Email Is 40 Times More Effective Than Facebook and Twitter, definitely a catchy headline, huh?
Reason #1: Social Should Be Used As a Retention Tool
Too many businesses are using social media as a channel to sell/push their product and/or service. It doesn’t work like that. They wonder why they get horrible results and end up claiming “social media doesn’t work”. Social media is a tool, you have to know how to use the tool. Sometimes I hit my thumb when I am hammering a nail, it’s not that the hammer doesn’t work, it’s that I am not good with that tool (operator malfunction). A hammer works for Bob Vila. Social media works for the ones that know how to use it.
The real power in social is using it as a retention tool/customer service channel. In fact, a Harvard Business School study shows that an increase of 5% in customer retention can increase profits 25% – 95%. If you focus on customer loyalty, you’ll never question the ROI of social media again.
Speaking of the whole social media and ROI debate, I found this excellent picture yesterday;
Social media is a place to network, answer customer’s questions/complaints, ask questions, meet people, collaborate with peers, build relationships, get customer feedback, among many other things.
What’s the ROI of all that?
A ton, but some of it is difficult to measure.
Now, social media can be used as a lead generation tool, but there is a science to it. People are not using the social channels to be sold, so you have to have a strategy. It takes time, testing and tweaking to properly pull off sales on social. It can be done, but you must know what you’re doing.
This brings me to my next point…
Reason #2: Social is Dating and Email is the Proposal
I have become a fan/follower of a lot of brands, then became an email subscriber and then made a purchase. So I went from a fan/follower > email subscriber(lead) > customer (and if they are doing it right, an advocate). They “courted” me. It took time. They built that know, like and trust factor before pitching me and it worked. In this case, it would appear that email was what drove my purchase, right? I bought through email, but I first discovered them on social. So social should get the credit, but it doesn’t show that in these studies. I discovered them on social, but purchased through email.
[Tweet “Use social media to nurture/build the relationship and email to drive revenue”]
A Match Made in Heaven?
If you’ve followed this blog at all (first thing you read in the morning, right?), you know I am a big believer in using both — social AND email. Actually, it’s a must. I will not work with anyone that does not understand the two MUST work together. So much more effective and powerful when these two channels are used together. If you’re using social and not combining it with email, you are leaving money on the table.
A lot of it, too.
Don’t make that mistake.
Be in Control
Another reason you want to build an email database is you do not own your Facebook fans, Twitter followers, YouTube subscribers or your LinkedIn connections. However, you do own your email subscribers and you are in control of those. Your email database is one of the most valuable assets a business can have.
Depending on the size of your database, you could slash your advertising spend by up to 50%. Email marketing will be your best return on investment, if ran properly. (Hint: Don’t be like Groupon and spam your email subscribers too often).[Tweet “Social media is like exercise – the more you do it, the more you’ll get out of it”]
I think that quote above is from Gary Vaynerhuck, but am not sure. It’s spot on though.
As you can see the survey is flawed as it’s comparing apples and oranges. The two tools are not the same, but work great together. I love email marketing and use it everyday in all my online efforts. It’s the backbone of every effective online marketing campaign. A popular phrase in the internet marketing World is, “the money is in the list”. I use social to build up my communities, connect with thought leaders, brainstorm with colleagues, spread my message and build up my email database(sales funnel).
So if you’re not building up your email database with social, I hope this post encourages you to do so. It’s important. It’ll save you money AND it will increase your revenue.
When I can save money AND increase revenue, I feel like this…