All you doubting Thomases can shut up now: Lifecasting/social net Twitter really does work as a marketing tool, as confirmed by PC retail leviathan Dell.
Dell started Tweeting about two years ago, when the system was pretty new. They don’t get into how exactly they traced sales directly back to Tweets, but they’re committed to the correlation. So given what they say are $6.5 million in Twitter-driven sales, the company’s yearly return from Tweets is around $3.25 million. Dell also notes that its follower list has risen 23% in the last three months alone–which will likely correspond to a hefty skew in the number of PC units sold this year. Dell’s Tweets also reach followers in 12 countries, and sales are happening in places that might be a surprise: $800,000 in sales over the last eight months alone came from Brazil.
But with Dell’s turnover ticking upwards of $61 billion dollars in 2008, isn’t this figure just an insignificant drop in Dell’s ocean? Yes, if you’re talking pure dead numbers. But according to Manish Mehta, VP of Dell Online, Dell apparently sees Twitter as a “very vibrant channel” partly due to its aggressive growth and partly due to the potential global reach, on a per-second basis, of a single Tweet.
And Mehta’s point is made with good reason: How little did it cost Dell to send out those Tweets? It’s got 100 employees Twittering in total, over 35 different Dell user identities. We can imagine that these guys are busily involved in Dell’s greater PR effort, so they don’t spend 40 hours a week Twittering. Imagining they spend 20% of their time writing Tweets, and factoring in a bit of basic math about wages etc, we can guess it cost Dell about $500,000 in man-hours per year to address its Twitter audience (and man-hours are about the only cost associated with using Twitter). That equates to a 1,300% return on investment when you look at the sales the effort has generated–a staggering figure. Assuming Twitter’s popularity continues to rise dramatically, and knowing Dell’s costs of Tweeting aren’t going to rise as fast, that number is only likely to get better and better.
Obviously it’s not all easy, and there are pitfalls associated with using Twitter as a PR tool. One of which is being careful not to over-saturate the system with advertising: Twitter users will quickly be turned off the social net if all they see is PR fluff. But that’s also the joy of Twitter as far as sellers like Dell are concerned–it’s a consumer opt-in PR mechanism, and you only see Dell’s Tweets if you follow the company’s feeds or do a search. That means its a highly targeted channel and a means of garnering customer feedback too.
[Via Bloomberg]
