Many business executives would like to think that social media is free and/or believe that it just doesn’t work because calculating social media expenses can be tricky and a lot of effort. Also, if social media is free, then they don’t have the burden of calculating and attributing the costs appropriately. By not paying attention to these costs, they get hidden in other expenses.
Here are six major categories where social media expenses occur.
Social media is important to over 80% of businesses based on the finding of Social Media Examiner’s 2012 Social Media Marketing Industry Report How Marketers Are Using Social Media To Grow Their Businesses. This finding is consistent with other research that shows businesses continue to increase social media marketing spend. Yet despite this support, marketers still have a difficult time proving social media’s contribution to the bottom line.
If you’re like many marketers, you know how to determine your sales forecasts and whether your promotions are profitable, but not which customers are. Therefore it’s important to segment your customer base to determine its distribution in terms of: best shoppers, high potential shoppers, occasional shoppers (although it’s often only sale items), past shoppers who no longer buy, and prospects who’ve never bought anything. The rule of thumb is that the best 20 percent of customers generate 80 percent of revenue. In my experience, actual results tend to be even more skewed. To help you determine where you should focus your marketing efforts, here are four steps to assess your customer file.
Many businesses dive into social media without fully thinking through their decision because, after all, isn’t social media free? If your firm is one of these, don’t worry. You’re not alone. A lot of companies believe that the benefit of using social media is that it has no costs. Here are five common misconceptions about social media expenses.