The Business Case for Social Media – Part 3: Opportunity

Before reading this you might like to read Part 2: Challenge

While the challenges posed by social media are clear, the opportunity for traditional bricks and mortar businesses is not so obvious. Practitioners of social media, Neville Hobson included, tell us to focus less on Return on Investment (ROI). Instead they tell organisations to identify concrete measurable goals which they feel can be delivered by social media. Social media is not traditional advertising. Social media doesn’t work like direct response advertising where there is a clear call to action to buy product, ring a phone number and so on. It is in the first instance a social activity and hard sell simply does not work.

We do need to identify the business opportunity presented by social technologies. Consider social media not as a money maker but as a relationship builder. You won’t make money through your social media activity but because of it. There does need to be a return on investment, but how the return is measured needs to change to reflect this new way of connecting with customers.

Here’s my C.R.A.B. 🙂 model for considering where social media fits within your marketing and communications mix, and how it will ultimately deliver on the bottom line, whatever that mean for your business:

1. Conversation  
2. Relationship  
3. Advocacy  
4. Bottom Line  


Think of this as a sales funnel. The basic premise is that open, transparent, two-way conversation (stage 1) will lead to the development of a relationship between your customers and you (stage 2). Your business will not  make money  per se out of stages one or two, having conversations or building relationships. However  once a relationship exists  then the customer is far more likely to be an advocate (stage 3),  to speak and act positively towards your brand, and this is what will ultimately deliver on the bottom line (stage 4).

So, for example I converse on behalf of my business with people on a blog, on Twitter or some other social utility. I do so first and foremost to build a relationshipbetween them and my business. They might not head over to my website straight away to buy my product, or do  whatever it is that I ultimately want them to do. However, I know that because of the relationshipI have with them, when they are next considering a purchase in the area I service that they will visit my site. Also, I know that if one of their friends asks about the type of product I sell, that they will be directed to my site. We know this is how business relationships work offline – good sales people have for years been bringing clients to football matches or golf outings. And there’s no reason why relationships should work any differently online.

In the C.R.A.B. model above, stages 1 and 2 revolve around a business’s engagement with social media. Stage 3 is the outcome – the shift in the customer’s attitude towards my brand. This advocacy will in today’s world occur increasingly in spaces facilitated by social technologies. Stage 4 is the ultimate desired result, and good business practice will make it easy for customers to transfer easily from social utilities to their own website where the desired transaction or interaction can take place:

1. Conversation = My Social Media
2. Relationship = My Social Media
3. Advocacy = Other Social Media

v  seamless transfer  v

4. Bottom Line = My Website


Since much of this activity is now taking place online it is infinitely trackable and measurabe. The success or otherwise of each stage can be readily measured. Remember that the investment is different and so the return will be different. The following table identifies the types of metrics that can be used for each stage:

1. Conversation – Number of visits/comments
– Tone of comments / feedback
– Quality of conversation
2. Relationship – Number of subscribers
– Number of repeat visits
– Number of repeat comments
3. Advocacy – Conversations on other sites
– Tone of those conversations
– Net promoter score
4. Bottom Line – Referring links to your website
– Results generated from links
This approach, while certainly not perfect, does I believe outline the opportunity that exists for businesses engaging with social media and hopefully shows how the ROI can be tracked and measured. Since this is the nub of the issue for business I’d really appreciate your feedback.

3 thoughts on “The Business Case for Social Media – Part 3: Opportunity

  1. Hi Brendan

    I’m glad you decided to digest this subject into a series of posts – and I’m guessing that you shouldn’t stop there.

    When you get down to the brass tack measurement – and I appreciate and understand the difficulties that arise with measurement for social media – you are moving to acceptance of it as a another tool to use for your business.

    Giving a throw-away real world example – I might be correct in saying that somebody in retail that considers being friendly and affable with customers as a step to far, in the same way would scratch their head at the notion of social media being a relationship builder?

    Having not been been at event last week – I’m wondering did economic downturn come into any of the discussions? I think this might the lightning rod for many traditional businesses to engage and interact online – both to retain existing customers and to engage with potential new ones.



  2. Fair point Kevin. For some businesses, being friendly and affable, as you put it, IS important in to them in how they deal with customers. If that ethos isn’t there in retail or telephone channels then you’re right that social media won’t make sense to them. If having a relationship with your customers is important then moving toward social media is the logical next step. To be fair, there are companies where relationships don’t matter or against the ethos of the company.

    Certainly as a low cost strategy for engaging customers social media should not be overlooked at times like these. You cannot throw a few thousand at social media and hope it flies. You have to invest (personal) time.


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