Top 10 ways that social media can save your organisation some money

19 May 2011

I thought some healthy debate is in order on whether social media wastes time or saves money. I learnt last week in the social media success summit #SMSS11 with Mari Smith that Thursdays and Fridays are often good days for making Facebook posts, showing we use Facebook more as we approach the weekend.  As so many of the UK population already has smart phones (see myblog last week with all the usage stats) there is nothing that any employer can really do to police this other than ban mobile phone usage. This has happened in some contact centres as companies are told to comply with the new payment card industry (PCI) processing regulations to minimise card fraud.
However there are a lot of organisations which have not just banned Facebook but have banned all social media channels, including Linkedin. This means that they are missing out on key opportunities to harness ideas from their customers and partners, save money and to bring in more leads and revenues for their business.
From the evidence emerging from the US which is further down the social media learning curve, it is only when most employees are empowered and trained to use social media that they are seeing huge increases in productivity and revenues, especially in retail. A recent social media summit seminar[1] showed how a Nordstrom front line employee was able to tweet his customers on the latest stock and deals most relevant to them, by knowing his customer preferences. This helped conversion, repeat purchase and provided a much more personal service.
Here are the top 10 ways that social media can save your organisation money:
1. It can save you a fortune on hiring people – those companies using Linkedin to advertise their vacancies are saving recruitment fees of 20-30% and are able to tap into a much wider pool of 100m users worldwide.
2. You can pre-test products and services before launch or as Guy Kawasaki[2] would say to “premortem” your launches so you never have to do a post-mortem and wonder why your product or service launch failed. I’m amazed how many companies are still paying for expensive indepth face to face research with customers when they can do this online by engaging with their social media fans and followers.
3. You can “crowd source” and test ideas and designs for your marketing materials with your target audience which will save you time and effort which is what Guy did when he launched his book Enchantment[3].
4. You can use features like the Facebook “reveal” tab to build loyalty and repeat purchase by offering them more content in exchange for sharing more information about themselves or with their friends. This brings more customer intelligence to tailor your products and services and more leads and market exposure for your services. If you assume that the average fan has 120 friends that can soon make a big difference to awareness. If you are starting out, those first 500-1000 fans and their 60-120,000 friends can help you reach the “tipping point” when referrals start to multiply more quickly as the “network effect” kicks in. That’s if you have given them enough value to want to share it.
5. You can use features like “Recommend” on Linkedin to do the due diligence on your prospective employees, partners and customers to review their networks and partnerships to check if they will be suitable for your business. You can use this same feature on your Linkedin company page and your website to show reviews and recommendations for your products, services and company which Dell has rolled out. This shows me they have 187 recommendations and 7 of my connections have already recommended them which builds trust.
6. You can use the Facebook Connect and other plug ins on your website to enable your guests to
- like, share and tweet about their shopping experience with their friends across all
 their social media channels
- view what is the most popular product and service
- see who in their network has also recommended your product or service

This helps to build trust to drive up conversion rates. Your Facebook Insights area also shows you the profile and location of your fans and appeal of your posts to help improve the efficiency of your marketing and communications.
7. You can use the Linkedin events feature to save money and build awareness of who is coming to your events – this transparency often drives more sign ups as users see that their connections are coming so they book too.
8. By creating and joining Linkedin groups, forums or blogs you can support your customers, partners and staff to blog, ask and answer questions, thus building engagement and learning more about your prospect needs and questions, during the all important pre-purchase phase. This helps lead generation.
9. YouTube videos can show how your products and services are being used. Organisations are starting to see reductions in their customer call servicing costs as experienced customers and partners are empowered to share their insights which are watched by others. This benefit is as relevant to B2B companies as to B2C ones.
10. You can use social media channels to “crowd source” offers which mean that your customers put in the effort to find the additional raft of customers to create a volume driven step change in sales.

Sites such as Living Social and Groupon are not the only sites doing this. FMCG companies such as Proctor and Gamble are now actively encouraging the sharing of coupon offers in customer communities like Supersavvyme to drive up volume sales and to gather more data on their end customers. This improves targeting and saves them investing in expensive “above the line” campaigns such as radio and TV.
So how do you minimise the risk of social channels wasting your employee time and generate revenues and cut costs? The key is to ensure that you have a usage policy that everyone understands. You need to train staff, partners and customers on how to use the tools to add value to their relationships and make their lives easier. They need to be ethical in how they use social media so that disclosures are made if they need to be. Otherwise your hard work could unravel quickly and destroy trust – the most fragile aspect of any relationship.

[1] Source: Social Media Success Summit 2011 - David Meerman Scott
[2] Source: Social Media Success Summit 2011 – Guy Kawasaki
[3] “Enchantment - The art of changing hearts, minds and actions” Guy Kawasaki
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