Social media is a major pain. Everyone appears to tout how important social media is, and all the major accounts prove it. 3,000 followers, hundred likes, fan of this and of that. However, when looking into conversion ratio, the truth is far from appealing.
This year, the largest cyber Monday ever recorded in the US, the average social media conversion rate was around 1.7% – 2%. However, each of those conversions was about $100+ according this report from IBM. So that means that an outfit like Walmart, who has 617k followers on Twitter alone, ended up converting 6,000 users. If an average “top out” at Twitter is around 2k users, a small to medium business can expect about a conversion of about 40 users.
To reach that “top out” a small to medium business needs to be actively adding people every day (and providing great content) for a year+. Assuming they need 5 new users a day, and 2+ tweets per day, they would get 2k in a year. However, Twitter is not a 1 to 1 ratio. Adding a user doesn’t mean they will add you back. Instead, you have to add 5 users or so for every 1 user that adds back. Also, you can’t just gather up spam accounts, which now plague the system. A company needs to screen each account they want.
Say a company takes 15 seconds to screen an account, and 10 seconds per tweet. That is 25 users (6 minutes) and 2 tweets (20 seconds) every day. Multiply that by 365 and you get 38.5 hours of labor. Since this labor is so fragmented (it’s not just a straight 38.5 hrs) you can expect to double that time estimate switching between tasks. That can easily mean a small business needs to invest 77 hrs to build the potential. For those 77 hours, a business can expect about 40 sales. Hopefully the hourly wage it cost the business fits into the profit margin.
Here is the amazing thing though. These followers are not just “Christmas Followers”. A company can target these individuals throughout the year with different sales. Furthermore, many fans stay with a brand for multiple years. With that being said, it is easy to see why investing in social media is well worth it. However, social media requires a close eye on fan acquisition and conversion ratios. Some social networks are easy to waste time in. Furthermore, some pay well after acquisition, but are extremely difficult to maintain.
The trick for social media, for small and medium businesses, is to be as effective as possible, without expecting much in return. After a year of building the following, then the investment can start to pay off. Social media is a long game and one we all hope to win.