Why Social Media Is Important for Growing an Online Business
Updated on February 29, 2020
Growing your online business used to be easier.
A few blog posts here, a tweet there, and a peppering of targeted keywords were all it took to dominate page one of the search engines and drive traffic to your website.
Ok. Maybe it wasn’t that simple, but it was far less competitive than it is today.
In the past several years, social media has played an increasingly dominant role in our society. We wake up, login to Facebook, scroll our Twitter feed, snap a selfie for Instagram. You get the drill.
Since our lives revolve more and more around social platforms, it only makes sense that businesses make the shift and follow their customers’ lead.
But you’re probably wondering, how does social media affect the valuation of your website? Is it really worth your time and effort, and if so, why? Well, let’s break it down.
The Value of Social Media When Brokering Your Website
As website brokers, the only value social media drives to a business that we list or sell is the specific amount of value it adds to the site’s profitability.
For example, when we value a website, it is based off your monthly net profit. If your website earns $2000 net profit per month and we value it at a 30X multiple, this values the website at $60,000.
Now, some website owners would say that they should have a higher valuation because they have, for example, 1 million followers. The truth is, we don’t care if you have 10 Facebook followers or 10 million. We already assume that if your Facebook followers add profitability to your business, then it is present in your monthly net income reports. If it’s not adding dollars to your bottom line, then where’s the proof that this social following should increase the value of your website sale?
Setting Up Social Profiles
If you aren’t already in the social realm, it’s time to get with the times and set up your social profiles.
Quick note – not all platforms will be conducive to your audience. Do some market research to find out where your people are. If they are attracted to Facebook, but not Twitter then don’t feel the need to set up Twitter because you will have to maintain these profiles. Be smart.
On the other hand, if you are unsure of where your target demographic is, and you’re starting from scratch, test out a few platforms. If some perform better than others (i.e. get higher engagement, more followers, click throughs, etc.) then start to shift your focus to those instead.
Setting up social profiles is simple and often requires only an email address and a few personal details. Here’s a quick guide to some of the top platforms:
To setup a Facebook page, you must have a personal page first. From there you must:
- Go to facebook.com/pages/create.
- Click to choose a Page category.
- Select a more specific category from the dropdown menu and fill out the required information.
- Click Get Started and follow the on-screen instructions.
- Go to www.twitter.com/signup
- Enter your full name, phone number, and a password.
- Click Sign up for Twitter.
- In order to verify your phone number, we will send you an SMS text message with a code. Enter the verification code in the box provided. Learn more about having a phone number associated with your account here.
- Once you’ve clicked Sign up for Twitter, you can select a username (usernames are unique identifiers on Twitter) — type your own or choose one they’ve suggested. They’ll tell you if the username you want is available.
- Double-check your name, phone number, password, and username.
- Click Create my account. You may be asked to complete a Captcha to let them know that you’re human.
- Download the Instagram app for iOS from the App Store, Android from the Google Play Store or Windows Phone from the Windows Phone Store. Once the app is installed, tap to open it.
- Tap Sign Up, then enter your email address and tap Next or tap Log In with Facebook to sign up with your Facebook account.
Once all of your accounts are setup, you need to make sure that you are checking your Google Analytics regularly to ensure new traffic is coming in from these sources. You can get even more specific by creating customer URLs to track conversions.
Custom tracking works twofold; to help you identify diversified traffic sources, as well as quantify your potential for profit. The more you can understand about your audience and their behaviour, the better you can tailor your posts and updates to suit their needs and increase profitability.
Now that you’re all set up, you’re probably wondering what is it exactly about social media that gives businesses a competitive edge?
5 Ways Social Media Will Help You Grow Your Existing (or Recently Purchased) Online Business
- Connect with your Audience
Let me start this off with a hypothetical scenario.
When most high school graduates start deciding which college or university they want to attend, they take the time to visit campuses. Ideally they are looking for an environment to thrive in; but they also want one that makes them feel like a valued individual, not just some number on a Student ID card. Ultimately, they are looking for a more intimate connection.
Not surprisingly, people expect this behavior from businesses and companies as well.
Social media is a great outlet to make a deeper connection with your target audience. You can personally interact with customers, share value, and build rapport and trust, all of which keep your business in the forefront of customers’ minds when they’re in the market to buy.
So how can you make this connection even deeper? There are several ways to connect with your audience, but for starters, you should make it a point to respond to customer inquires or comments on your profiles. Offer valuable, actionable, and free information as often as you can. Give them a reason to want to be a part of your community.
- Broaden Your Reach
Before social media, the only way to grow your audience was through traditional methods such as advertising or word of mouth referrals. Social profiles, on the other hand, allow you to connect with a more global audience.
Over 1 billion people worldwide use Facebook on a daily basis and 100 million active users login to Twitter each day. That’s an impressive number of individuals, and they are all looking for what you have to offer — they just don’t know it yet!
Your online business now has the ability to connect with people from all over the world, as long as you employ a smart social marketing strategy. With tools like Facebook and Twitter ads, even LinkedIn and Instagram advertising, you can now target users based on geography and interests. Tempt your new audience with enticing copy — a can’t miss opt-in — and voila: you’ve just bettered your business and broadened your audience.
- Improve Customer Service
Most of us have had a truly horrendous customer service experience before. Whether it was being completely ignored in a retail store, being badgered over a telephone call, or worse, these experiences probably left you with a bad taste in your mouth. Chances are you took your future business elsewhere.
As an online business owner, you want to learn from other people’s mistakes, and the one area we recommend you focus on is customer service.
Regardless of your best efforts, you will encounter unhappy buyers at some point in your online business career. How you handle these situations is what will set you apart.
Social platforms are a great way to do this. Often times people will leave unsolicited reviews on your Facebook or Twitter accounts. If they’re positive, great — but if they’re negative you need to handle it. Resist the urge to just hide or delete the comment and take a moment to really read their message. Are they angry or complaining about something you can improve upon (i.e. quick delivery turnaround, quality of product, etc.) or are they being petty or unreasonable?
If it is something you could better, respond and say so. Promise better and deliver on it. Ask the customer how they think you could improve and if you can offer them anything as a consolation in the meantime. Do your very best to turn around their experience.
Unfortunately, if they are being unreasonable, there is not much you can do other than offer your sympathies or inform them that xyz is out of your control and/or policy.
When other potential customers see how you handled the situation with maturity, empathy and grace, they will be more likely to respect you and feel comfortable giving you their business.
- Increase and Diversify Your Online Exposure
Your online storefront is not limited to just your website. Your social platforms all represent your business in the eyes of your customers, but more importantly, customers expect you to be on these social platforms.
Platforms like Facebook, Twitter, or Instagram help legitimize your business in the eyes of potential customers. It is social proof that others feel your business is worth investing their money in.
In addition to the more obvious ways social media improves your exposure, it’s important to note that having active profiles also helps you with search engine rankings.
According to Matt Cutts (Google’s former head of the web spam team — currently on an extended leave), Google sees social profiles as any other web page on the internet. While their ability to crawl every single post or status update is limited, the important thing to take away here is that your social profiles send valuable link juice (i.e., equity passed to your website via external or internal sources) to your website, which can improve your rankings.
He also suggests that the best way to utilize social media for ranking is to not focus on using it for ranking alone, rather use it to build brand awareness and send qualified traffic to your website.
Which brings us to our final point…
- Affordable Brand Awareness
Your brand is a critical aspect of your business. It defines who you are, what you stand for, and it’s what allows your customers to distinguish you from your competitors.
Brand awareness is an incredibly powerful tool, and one that can be bettered thanks to social media.
You can share thought provoking posts to keep followers engaged, or use highly visual posts that will make your fans want to share it. The key is to contribute information that is aligned with your brand so there is no confusion.
For example, if you run an ecommerce store selling custom flutes and use your Facebook page to promote your new products, share video clips of lessons, or clips of talented musicians jamming on their flute, this all promotes your brand.
If instead, you also share posts about the environment, your personal views on politics, or pictures of other instruments, you will be confusing your audience.
Brand awareness relies on consistency and coherency. Use your platforms to be crystal clear about what it is you are providing and do not stray from this.
For example, when you think of dandruff or a flaky scalp, what shampoo comes to mind? It is our guess that most of you would instantly think of Head and Shoulders. Everything from their commercials to their Facebook posts revolves around being “flake-free”, and there is never any question. When you think of Head and Shoulders you immediately think of anti-dandruff shampoo.
Moving Forward…
Humanize your business with your social profiles and use them as additional resources for bettering your product and service. The more you place the focus on your customer, the better your business will do.
If you can take away one core message from this, it should be that social media allows you to focus on your audience. Use it to gain invaluable insight into their wants and needs, so you can improve your service and, hopefully, improve your profitability.
Ultimately, the more you can show profitability from your social profiles, the higher the valuation of your website should you choose to sell it. Whether or not you are interested in selling — or have just bought a website and plan on keeping it around for a while — social media can be a powerful tool for both traffic and revenue growth when used correctly.
So tell us, how is your online business using social media to grow? What are some of your strategies? Share in the comments below.
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