How to use the social networks to increase profitability?

by Linda Parkinson-Hardman on March 22, 2013 · 0 comments

Side view of a young boy using laptop isolated on white backgrouMost people believe that the social networks are only about attracting new clients and customers. I’d beg to differ and thought it might be helpful to share a few of my own guidelines about how you can use a social network to increase your profitability.

First of all, I’d like you think about what you want to achieve from your online activities? I’ll bet it’s almost certainly increase the number of customers you have. After all the purpose of marketing your business is to grow it, right? But as you already know there is more than one way to grow a business, and increasing profitability is just one of them.

Let’s think about the basics first. Profitability is reflected in many different ways but essentially it is your turnover less your costs. Of course, the accountants will say there are many different permutations and factors to take into account, but we’ll just stick with simple for these purposes.

So, you have two choices, either increase your turnover or decrease your costs. Let’s look at the second of these first and explore a couple of very simple actions you can take online.

1. Search for new suppliers. The perfect network to do this is LinkedIn and you can search the network by using keywords in the top right hand corner of every screen. You can also do some company background checks and find out more about the suppliers you might approach to help you.

2. Find other companies who are allied to your industry with whom you could collaborate. Let’s say you are a specialist printer but most of your work is local; you can expand your operation just by finding other printers in different areas who don’t do the specialist work you do. Once again, LinkedIn is the perfect network for this type of activity. You have now reduced your marketing budget.

3. If you employ people then you can minimise disruption to the business and increase the ability of new people to contribute from day one by ensuring that your recruitment tactics are the right ones. How about using all the social networks to see what your potential employees get up to online, do they have a strong business network that can help your business grow, are they considered good at their job or are they likely to bring your business reputation into disrepute? Each of these questions can be answered for many jobs, from the most junior to the most senior.

Let’s look at the first choice of increasing turnover.

You don’t just get new customers because they come directly to you, often we work on referral business in other words people tell their friends, neighbours and colleagues about the products and services they have valued. One thing you can do to increase this sort of business is to work more closely with the intermediaries, those people who already know the customers you would like to have.

A simple example would be a solicitor and accountant working together to cross refer. Often we tend to work with the people we know who are local to us, however what about spreading your net wider by identifying those intermediaries who are further afield. Once again the perfect network for this type of activity is LinkedIn.

Your activity on the social networks does not have to be confined to reaching new customers, it can be more effective to work with other groups such as those I’ve outline above. In my own business life, I know that my books help to spread awareness of my business and they help to increase my credibility; as a result of knowing this I made a conscious decision to work with other authors, after all authors are readers too. I support other authors by sharing my blog with them, I converse with them on Twitter, LinkedIn and Facebook and they in turn support me. As a result of taking this action, my book sales have gone up, my consultancy work has increased and I have an audience of people who are waiting for the next thing I publish.

Linda Parkinson-Hardman
Linda is social media strategist and trainer with Internet Mentor working with clients to help develop realistic, appropriate and sustainable uses for social networking sites like Linkedin, Twitter and Facebook. She is an avid networker both on-line and off-line and loves meeting people to share her knowledge and expertise with.

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