Twitter is one application of a broader category called microblogging. You’ve seen it on The View, you’ve watched it creep into night time dramas, you’ve heard it in the news, you’ve seen Larry King take on Ashton Kutcher with their one million follower challenge. Ashton Kutcher got over one million followers and beat Larry King / CNN. Ashton had 1,230,000+ and CNN had 980,000+ where the match actually bought malaria nets for children in Africa. Isn’t this a great application of social media; helping kids?
Then of course, that led to the Ding-Dong Ditch where Ashton Kutcher “punked” Ted Turner the owner of CNN. If you’re not familiar with the Ding-Dong Ditch; you ring someone’s doorbell, then when answered, you begin throwing Ding-Dongs, literally. CNN lost, so they bombed his house with Ding-Dongs. I learned that even Demi was Ding Donging with the rest of them.
Back to discussing Twitter though. Twitter is text messaging on steroids. Recently, I was in Atlanta presenting to Jerry McGuire’s clients (Leigh Steinberg), and there were more Super Bowl rings in the room than I had ever seen before. I made the same statement and this crowd went dead. Steroids…not a good thing; the marketing moral is, know your audience.
At my most recent conference, we had a Twitter Roll on a separate screen at the front stage. It was a laptop connected to the Internet that simply received any text messages sent via Twitter that mentioned the conference. That way anytime someone in the audience had something to say about what was being presented or any questions, I could address them immediately in real-time. A phenomenon I recognized for the first time, was we had as many questions from the conference audience on the screen as we had from people from around the world, not at the conference. I’d answer their questions and people would Tweet my answers back out to the Twittersphere.
Everyone keeps asking me about Twitter metrics; how can you make money using Twitter. Whether it’s Twitter or any other social network, it takes time to build your trusted network, but when you do, they’re there for you. Here’s one case study that makes it easy to see the ROI. If you haven’t already seen Gary Vaynerchuk, you have to go and look at some of his videos. Gary has produced nearly 700 videos about wine. He’s a Jersey boy. He took over his dad’s wine distributorship, which had annual revenues at about $5M. He started using Twitter and creating short, self produced videos about wine and within 36 months built his company to $50M. And recently, he signed a $1M contract to write a series of ten books on social media marketing. That’s the power of this genre. Click here to listen to my conversation with Gary V: http://www.thesocialmediabible.com/2009/02/27/gary-vaynerchuk/
In December, Gary wanted to understand the value of his twitter relationships. He wanted to specifically compare conventional marketing that we are all comfortable with, with this new Tweet stuff. He started by creating three different codes that when entered on his wine Web site would give the customer free shipping on their next wine order. This discount would range from $9 on one bottle of wine to $49 on a case of wine. He then created a direct mail piece, which offered one of the codes. He did a billboard on one of the local highways with its own code and then he sent out a text message (a Tweet) on Twitter with the third code. Here are the results.
The direct mail piece cost him $15,000 to produce and mail. We’ve all been there; $15,000 is a reasonable cost for a decent direct mail campaign. This conventional marketing technique acquired Gary 200 new customers. He got 200 new customers for $15,000 using direct mail. The ROI or Cost Of Customer Acquisition was $15,000 divided by 200 or $75 per new customer. His billboard cost him $7,500 and he generated 300 new customers. His ROI or CCA here was $7,500 divided by 300 customers or $25 per new customer.
His one free text message, a Tweet using Twitter, brought in 1,800 new customers. This marketing was 100% free. What was the ROI here; $0 divided by 1,800 customers or infinity. That’s the power of Twitter. That’s the power of social networks. That’s why this stuff is so important. People follow you, people trust you. They’ll listen to you when you have something to say.
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Lon Safko is the co-author of The Social Media Bible: Tactics, Tools, and Strategies For Business Success. He is also an innovator and professional speaker with over 20 years of experience in entrepreneurship, marketing, sales, strategic partnering, speaking, training, writing, and e-commerce. He is the founder of eight successful companies, including Paper Models, Inc.
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