Social Media – Social Tool or Sales Tool?

Author: Hamish Anderson

There can be no argument, Social Media is here to stay. Growth of medium’s such as Facebook and Twitter can only really be classified as exponential, both in terms of number of users, and more importantly in terms of user interaction and time spent utilising them. But for business, the question commonly asked is; can a social media presence or having your name mentioned in social media translate to increased dollar return, or an increase in perceived brand relevance?

Expectations of Social Media
Let’s assume that you are set up for ‘social’. Can it actually generate positive return for your investment of time and money?

In a previous blog article (Social Influence and your Customer) I asserted that not interacting with your customers via social media is the modern day equivalent of turning your back on a massive opportunity to engage your audience and create additional media/sales touch points. Thus, by inference, social media activity should be able to – assuming your campaign is run efficiently and maintains relevancy – create a positive ROI for you.

But what is ROI exactly? For each company it will be slightly different, although return could be widely classified into two categories – Time and Money.

Firstly, Time: As much as time is money, time is in many ways more valuable as it is finite, therefore, the opportunity cost of time spent should always be considered. That is, if you were not spending ‘x’ hours a week on social media, what could you spend it on in order to benefit your business? This should then be weighed up against how many positive brand impressions you created, how much conscious thought you created in your market and how many negative perceptions you addressed to help assert a positive one.

With regards creation of positive dollar returns, the equation is potentially simpler and simultaneously more complex. The simplicity of it is calculated by determining what your return is for every dollar spent on social media. However, the complexity comes down to whether or not there is a lag between positive brand association and transaction with the brand which can potentially skew your calculations. Only time will tell, but as your campaign evolves, (and if you have a good tracking system in place) you will get a pretty good idea of the purchase cycle of social media and thus be able to track return from your investment.

But does Social Media Work?
Quite simply the answer is yes it does. There are a number of examples where in recent times it has created a stream of brand activity and or increased dollar returns for the company. Here are just a few:

  • Toy Story 3 – Pixar and Disney released a series of Apps, viral video’s and a Facebook page which all generated large amounts of traffic and consumer led activity. (Source: Mashable)
  • Gap Clothing – Testament to the dollar value successful social media can generate, Gap (USA) launched a series of social channels including Foursquare and Groupon which led to traffic of over 400,000 people and generated over $11 million in sales in the first day alone. Many of these would be translated into future customers. (Source: Mashable)
  • Old Spice – Australia has not necessarily been a target market of Old Spice in the latest barrage of advertising. However, as with all social media, the reach is often beyond what was dreamed of. Australia caught the Old Spice bug, and from social media alone, sales in Australia increased in different stores between 150% and 420% (Source: Sydney Morning Herald). Think about how that translates world wide…

Sales Tool or Social Tool
At the end of the day, Social Media channels represent an opportunity to be either a sales tool or a social tool. In more general marketing terms associated with offline advertising, it can be either a tool to drive sales, or a tool to generate awareness. 

You can use it to communicate with your customers, answer and address feedback and notify them of product developments, or use it to generate a sales touch point and increase your ROI. But remember, as with all media activity, success will only be achieved if you plan for it correctly.


About 2binteractive
2BInteractive is an independent digital marketing agency, with all the experience and results of a global agency... without the unwanted overhead. We have the talent and individual expertise to meet all of your digital channel needs. For more information. Visit us at

One Response to Social Media – Social Tool or Sales Tool?

  1. Pingback: Your (Social Media) Party «

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