It's a question that tends to produce the sound of crickets chirping. While individual companies might be able to assign some particular worth to their social networks, no one's come up with a good, quantifiable answer.
"It's definitely harder to measure the value of having fans and followers and exactly what influence that has," Jim Milton, director of corporate strategy for SelectMinds, said in an interview. "What exactly is the impact when that fan base is out there? Are they more likely to make a purchase?"
SelectMinds is based around the concept of social sourcing, which could offer small and midsize businesses a more solid footing for defining social media goals. The SelectMinds version of social sourcing focuses on leveraging the networks of current and former employees rather than a public catch-all approach you might typically see on a Facebook Page or branded Twitter feed. A potential upside of social sourcing for SMBs: Deploying and running a social media strategy without having to hire additional people or allocate significant financial resources.
"You kind of get that work done for free," Milton said. "There's probably already an army of people out there ready to spread the word for you."
"That stuff's exciting, but especially for a small business with a tight list of priorities and where they spend their time and money, we would recommend a really practical use case," Milton said, adding that social media isn't actually free--at a minimum, an employee's time translates to real costs. "100% of the time, the first question should be: What's the business case for this?"
Milton points to two strategies that some SMBs have already had a good deal of success with: Business-to-business development and employee recruiting. Both involve rethinking social media as a source of referrals rather than a source of sales or brand marketing. That's good news for smaller firms used to relying on referrals and word-of-mouth--and not massive marketing budgets--to build business. It could also help nonsocial SMBs quell internal fears about making public mistakes or wasting resources.
"Referrals are intuitive to SMBs," Milton said. "The trick is: Re-imagine your referral programs in the realm of social media."
On the business development front, Milton recommends building a corporate alumni community. (LinkedIn is a good place to start.) Maintaining positive social ties between current and former staff can open doors and lead to competitive advantages and other business-building opportunities.
"We've seen some of our clients win millions of dollars in sales specifically by tracking where their former employees are going and then tapping them on the shoulder through the alumni community and saying: Hey, can you make an introduction? We'd love to sell to your company," Milton said. "The business development use case with corporate alumni is definitely a proven one, and something where you can measure tangible results in terms of sales, especially in the B2B space."
Applying a similar referral-based approach to recruiting and hiring is another proven social media use case. Milton said it can improve the quality and retention of talented candidates, as well as cut down on costs associated with advertising and filling opening positions.
"If you can get your employees to share your open jobs with their friends and see that network effect, you can get really wide and deep distribution and fill those jobs," Milton said. He added that on the SelectMinds network, an employee generates one job application for every three--3.4, to be precise--social contacts they share an opening with.
The impact of social referrals can be felt long after a position has been filled, too. Milton points to research from Dr. John Sullivan, for example, that indicates referral-based hires tend to perform better and stay longer than over-the-transom candidates.
Applying either or both the business development or recruiting use cases doesn't mean you have to shun the glamour of a growing public following, either--it's just that the popularity strategy isn't proven yet, and it's not particularly easy to quantify in real terms. Milton said that SelectMinds, for one, is interested in finding better ways to measure brand ambassadorship on social networks, but notes that it's still a hit-or-miss proposition.
"It seems like a lot of businesses really want to believe that social can rival PR and other forms of word-of-mouth, and really have an impact on sales, but it's been hard to measure," Milton said. "The last mile is going to be measurement and tools that really help companies measure the final result--not just the leading indicator, which would be fans and followers."
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