When you have “FREE” in the conversation, one thing usually happens – everyone wants it immediately. Social Media is no different. Virtually all the social media tools are free to sign up for and start using immediately. And most are quite easy to get started with after only a few clicks. But are they “really” FREE? Let’s take a look…
If we define the cost to be for “product cost” only, then social media is definitely free. The tools like facebook, twitter, Linkedin, YouTube, etc. (there are approximately 365 of these out there today) are all free to sign up for the initial base level. Some, like Linkedin, charge for the more robust version to allow you to do more things but these are more the exception than the rule. The real issue comes along in terms of “TIME”. This is where the conversation gets interesting.
Years ago when I started doing speeches on social media – what it is, what are the tools, how do they work, etc., everyone wanted to know how much they cost. Today, most know the tool is free but it can now take up incredible amounts of time, if you allow it to. This is the new conversation and question, “How much time will it take to get social media working and a return?” This is the new “free” question – how much time will it take.
If you factor in your personal time, you can figure it out quite easily. How much time you spend engaging and how much is your hourly rate – done. Even if you have a staff to do all this tweeting and facebooking, you can figure out how many people, what percentage of their time they spend, and what is their hourly rate – done. But what about the “other time” that is required? If you use social media the way most are using it today – to promote themselves, then you have to factor in other production costs in regard to messaging, promotions, campaigns, etc. Still not too difficult, but a little more complex.
Now comes the harder question, “What are the the costs of engagement?” How much does it cost you to engage with your customer, outside of using the tools? This involves looking at where they are, what are they doing, what are they saying, what do they want to hear, what do they want to discuss, etc. How do you identify these costs? Not as easy any more. The point is that as you get more and more engaged with using social media for its purpose, engagement and interaction to build stronger relationships, how do you identify these costs? It isn’t easy – almost as difficult as figuring out the exact ROI of social media.
My counsel to my clients is to start with the end in mind of what you want it to accomplish, a strategy. If you know what you want to accomplish, then you can identify the costs associated with getting there – incorporating all aspects of what it takes to make this happen. This includes more than just social media and the associated tools. It involves understanding the customer in more detail, identifying market opportunities, engaging in industry conversations, etc. The cost is not always easy to identify because beyond the tools, it integrates and intertwines with every aspect of your business. But you can get a much better handle on it if you just start with a strategy and focus on the pieces, not the tools. I will talk more about strategy and ROI in future posts.
