22 June 2016

Learning By Example How Social Media Promotion Works

Lesson #20: Learning By Example

This is internet income course lesson twenty, which like the course lessons before it, is also aimed at simplifying the difficulties of starting and running a profitable online business in today's global market by breaking down important principles in simple English. Course author, George Little, continues to reveal tips, real-world advice, and in-depth, step-by-step instructions on setting up your Internet-based business. Read the previous lesson 19 here.

In this lesson we will focus on one concrete example to get a good, concise look at how social media promotion works.

For the Love of Bar-B-Que

As I sat down this morning to write this next lesson, coffee in hand, I procrastinated by taking a moment to look at my Facebook newsfeed, when what to my wondering eyes should appear but a brand new Bar-B-Que restaurant in my town. Bar-B-Que is something I can't resist.

I know that Bar-B-Que is not the healthiest food in the world and many object to it for other reasons as well, but for me it is a guilty pleasure. I was quite excited to see this new restaurant. I made my plans to eat lunch there tomorrow.

As I tried to switch my focus to this lesson, I couldn't get the Bar-B-Que off my mind. So, I began to think of how this social media promotion had worked so well on me. Many thoughts came to mind.

One thought that came to mind is that this post was a good example of what I have said several times in these lessons. While advertising can often be annoying, it's a true pleasure when it provides the consumer valuable information about something they want or need. I don't really need Bar-B-Que, but I want it. Thus, having my newsfeed interrupted by this promotion was not at all aggravating, but a pleasant surprise. Good advertising is advertising directed at those with an interest in the product or service. If properly targeted, it need only provide the information needed to obtain the product or service desired.


That brought up the question of how the owners of this new Bar-B-Que restaurant knew I was interested. Could be they set the promotion to appear on the newsfeeds of everyone in the geographical area. Perhaps those who don't like or can't eat Bar-B-Que saw the post also and were mildly irritated to be interrupted by it. Perhaps the ad was directed to only those in the area who had posted about Bar-B-Que previously. That would be a much more focused ad. But, most likely, since Bar-B-Que is widely appreciated where I live and the population overall is not that dense, it was affordable to direct the post to everyone in the area.

Recall that in our last lesson, we discussed the different targeting options available on social media. Thinking about this specific example illuminates how that works. The more targeted your post or ad, the fewer exposures it gets and thus the less it costs you. The more targeted post is also more likely to yield a higher percentage of conversions. In my example, when I show up at the restaurant tomorrow and buy lunch there, I become a "conversion" for this promotion. I increase their revenue and thus increase their "return on investment." The restaurant's investment in this example is what they spent on promoting the post.

When setting up this promotion, the restaurant had to decide how targeted the ad should be. I suspect, as I indicated above, that they targeted it at the entire community regardless of specific interests made known from previous posts of individuals. Whether they made the right decision is determined by the number of people who show up for their grand opening or within the next few days thereafter. I suspect enough will show up to pay for the promotion. But, even if that is not the case, those that do show up (assuming the Bar-B-Que is good and the service is good) will tell many other people about the new restaurant. Thus, the promotion will also add value to the restaurant's "brand." If it is a good experience, I will likely mention it to several people whenever the subject of Bar-B-Que or a good place to eat comes up. Thus, this example also illuminates the value of brand and the value of immediate conversions and how they must both be taken into account.

Anticipating and Measuring Return on Investment

When the value of brand is considered, it becomes important to make a good impression on the first people to show up. They don't want more people than they can adequately serve on the first day as that might lead to delays or poor service. This result would hurt their brand rather than add value to it. Thus, going back to the targeting question, this consideration would counsel against two wide a targeting, at least in the initial promotion. Perhaps they limited the initial promotion to only people who live in town rather than everyone in the county. If there were a larger population in the city, perhaps they would have limited it even further. An initial promotion such as this one should, if properly planned and executed, brings the right balance of immediate conversions and brand enhancement.

As we said in the last lesson, it is easier to measure the value of immediate conversions than the value of brand enhancement. As restaurants are often discussed in passing among both friends and strangers (and given the propensity of many to post about restaurant experiences in social media), brand enhancement is somewhat more predictable in this industry than in others. From data or speculation (if no data was available), a fairly accurate average number of new customers resulting from one satisfied customer can be ascertained. For example, in the absence of any data, it might be assumed that over a year's time, each satisfied customer may send five more through praise, recommendation, or simply by providing the information. (Excuse me, sir. Is there a Bar-B-Que restaurant in the area?) If the restaurant did the math from there, they would multiple each immediate conversion by 6 to estimate their return on the initial investment. If they really wanted to be fancy, they could subtract a certain amount to obtain a "present value" of these future customers. The amount of interest for a year on the money spent for the initial investment divided by the number of conversations would provide the present value for per future conversion resulting from "brand enhancement."

After their opening weekend, the restaurant can sit down and count the number of customers they had. Then, they could multiple by 6, reduce to present value, and determine whether their promotion paid off. If the total is less than the expected net profit from these customers, they lost money. Their ad could have been better. If the expected net profit is much higher, so that the percentage of profit they have allocated to advertising was not exceeded, the ad was a success.

Free Social Media

Another part of this restaurant's promotion also caught my attention. In addition to just providing the basic introduction, they also generated a hashtag and a contest associated with the hashtag. (Remember that a hashtag is a word or phrase with no spaces and preceded with the pound sign #.) I won't use the real hashtag, but let's just say it was '#getmorebarbq'. The contest promised a chance to win several free meals at the restaurant if your name was drawn. You got your name in the drawing by using the hashtag on any of certain specified social media sites. That hashtag, of course, was preloaded with promotion for the restaurant.

Specifically, for those not already familiar, hashtags work like this. When you use the hashtag in a social media post, it becomes a clickable link. When clicked on, it takes you to a page with all the posts that used that hashtag. It is a way of extending the reach of your post to people who would not ordinarily see it and a way of directing your post to those most interested in the subject. Hashtags are free to use on social media.

In this case, the restaurant used the hashtag in a promoted post. That is, they paid for exposures for the post. But, a hashtag can also be used in similar fashion without paying for promotion--a post that is free to make. Hashtags are a great way to extend the reach of your posts.

Contests can also be promoted in free posts on social media. Thus, by combining contests and hashtags you can create highly effective promotions without ever spending a dime (other than the cost of the contest prize). Thus, those serious about using social media for free to promote their businesses should spend some time studying both hashtags and contests.

Trustworthiness – Living up to the promise

As I write this paragraph it has been a couple of days since I started this lesson. I have now been to the new restaurant and and can share my experience. Before I do, however, I need to provide a little background. I was born and have lived much of my life in the deep south of the United States. Bar-B-Que is a big deal here. One short block from my grandmother's house was a small, locally owned smokehouse Bar-B-Que "pit" (as we called them then). This one had a huge smoker. The folks who ran it knew what they were doing. They made milkshakes from homemade ice cream to go with the Bar-B-Que. They had a jukebox there--a really big deal in that place and time. I used to save my nickels and dimes and walk there every chance I got to get a milkshake and a snack and hang out with the teenagers (there for the jukebox), feeling quite grown up and cool. Having been raised on the best, I have become quite picky about my Bar-B-Que.

That said, this new restaurant was not bad, but nothing to write home about. It, being part of a chain, is designed like a fast-food restaurant. The meat, though, was acceptable and far above the quality of fast food meat in general. The service was friendly. I will no doubt send them some customers with those qualifiers expressed. But, my enthusiasm is somewhat dampened.

The point here is that no matter how good your promotions, your product or service ultimately stands on its own merits. As stated earlier in this course, the more efficient communication becomes, the more value and trustworthiness matters.

Another Example
I ran into another example today of a different way to use social media effectively. As my wife is extremely hearing impaired, this touched me deeply. By providing a message that can touch many people deeply you can reach many people. Although, I prefer not to share actual ads here, this one is worth sharing.

While the principles we discuss in this course can often sound abstract and impractical, they do lay the foundation for successful social media promotion. The best way to learn, after reviewing the principles we mention here, is to look for and analyze specific examples that you see in practice everyday.

In our next lesson, we will continue our discussion of social media. Read the next lesson here: Tapping The Power Of Social Media for Your Business.

By George Little, Panhandle On-Line, Inc. For more information on the Internet Income Course and other works and courses by George Little, see http://www.profitpropulsion.com

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