Let me preface this article by saying that social media can work as an acquisition channel. In fact, it is used by many businesses every day. And for some businesses, it is a better channel than average. But on the whole, other channels are more effective at acquisition, and time and money can be spent better elsewhere -- especially for those on a limited budget.
The crux of the matter is that people are in passive content mode when using social media, mixed with a little communication mode. When looking to market to people who are currently looking for your product, companies need people who are in task oriented mode. So while we can spend money finding and tempting people that are in a different mode, it is more effective to do so when they're in the right frame of mind.
The above chart is just for illustration to help visualize the difference in "mode" that people are in when on social media channels. When it comes to aligning your marketing channels with a specific goal in mind, typically social media is where the passive content mode is most used. People are actively communicating in forums and via email, and of course also via social media. And when it comes to users achieving task oriented objectives, you might find most people are using search, comparison, and shopping sites.
There is of course a fair bit of overlap. But in broad strokes, if you have a direct marketing strategy, you want to be where the task oriented people are. If you want to affect brand attitudes, you want to meet with people in active communication mode. And when you want the general audience to know of you and affect brand awareness, passive content mode is where it's at.
When you look at companies that are successful in social media, they are not directly marketing their products. They are providing customer service and thought leadership, helping retention and awareness, and shaping brand perception. They leverage this large and attentive audience to gain business, but it is an indirect (yet cost-effective) way of doing things. The small to mid-sized companies (without a disruptive product) that we do see succeed at this (without further direct marketing) are needles in a haystack.
If you want to use social media as part of your marketing strategy, it is imperative you do so from a place of offering prospective customers value -- producing content that is of interest to your target audience and being a thought leader in your industry. When you do that, you receive the deserved attention from your target audience -- not to mention picking up some new business along the way.
Similarly, social media is an excellent place to provide customer service to prospective and existing customers. It will show (publicly) that you provide the service needed to gain the respect and attention of your target audience, while increasing retention of your current clients.
Accordingly, you will gain a lot of benefits from providing both thought leadership and customer service on social media. But when it comes to generating new clients and getting the highest ROI, social media (paid or unpaid) should be an additional channel -- not the main part of your marketing strategy. Of course, I'd love for you to prove me wrong. Make a comment below with your thoughts and examples.
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