Social media is everywhere in our culture. We are constantly aware of it and have become increasingly accepting of its overreaching bounds into our personal space. We as marketers know this all too well. In today’s modern world of advertising and customer relations, it’s paramount that companies connect with their customers on a social and interactive level. Long gone are the days of simply advertising to consumers and expecting the to purchase products just because we told them to. Instead, now we are faced with new challenges of interacting with customers on a one-on-one level. Never before has the consumer held such high power and influence over what companies do and what they make. One bad review or one horrible tweet can expose a company to tons of bad PR and require them to spend millions in explanation stories. To us, this fact is obvious, but to many old school company executives, social media is nothing more than a game and a rat hole. How do we actually show the value of social media to corporate America?
The first thing that you need to understand when talking with companies is that they view things through a business mindset. They want to see the financials and understand the accounting behind transactions. They want to know how much customer acquisitions costs are and how social media can improve that. This subject of accounting and finance is where many social media marketers tend to fail. It’s important to be able to speak their language if you want to convert them as clients and help them grow their businesses. For instance, it’s not a bad idea to brush up on your accounting theory and financial vocabulary. Understand financial ratios and know how to use them to sell your services and ideas about how to market to customers appropriately. A good example of this is using the accounts receivable turnover ratio formula. This financial equation measures the amount of times a company and collect money from customers. If social media is used to attract better customers, the receivable ratio with increase as the company is being paid back faster. Explaining this to a company executive will make them value their social media efforts much higher.
Another key measurement in the marketing space involves the accounts payable turnover ratio calculation. Directors and accountants like to look at this financial ratio to measure how well any marketing campaign is doing because it shows them how able they are to pay off all of their vendors on time. At first this might sound kind of counter intuitive, but it isn’t. Being able to pay off your creditors is a by-product of collecting money from your customers on time. To put it a different way, when companies attract quality customers, they are paid back faster. In turn, the company has the cash to pay back its creditors on time. It’s all one big cycle.
As you can see, this is how companies and executives tend to value social media in the marketing space. It’s important to keep that in mind when you are out trying to sell your services.