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How Social Media Can Rev Up Revenue

Social media helps local businesses better engage customers and boost revenue. Here's how to make it do the same for yours.

Joe Sorge is a soft-spoken guy with a fast smile. He runs a couple of restaurants in Milwaukee, including the AJ Bombers burger place, which is where I met him. But how I met him is the real story: I tweeted that I was visiting Milwaukee, and Sorge was fast on the response: "Well, if you're hungry, we have a burger waiting for you at AJ Bombers."

It turns out Sorge does this a lot. By listening to people talking on Twitter and Facebook about visits to his city, mixed with customers' word-of-mouth on the quality of their experience, Sorge is seeing great results. How great?

  • Business gross revenue doubled in six months. (He hit his five-year goal in one year.)
  • He accomplished a one-day gross sales increase of 110 percent from a social media-only event promotion.
  •  Sales of one item, the Barrie Burger, increased by 30 percent--when the burger was advertised only on social media.
  • He has spent zero dollars on traditional advertising.

His success isn't an isolated experience for small-business owners. Here are two more telling examples:

How to Stay Plugged In
Mick Galuski runs the Toy Soldier Games and Comics store in Amesbury, Mass., which is directly below my new office. When I ask him how social media is working for him, he says:

  • He reads blogs and follows other businesses on Twitter. "Seeing how people are being creative in their business helps me develop new ideas," Galuski says.
  • He uses social media to engage his customers more often. That increases sales opportunities and keeps him "top of mind" to his customers.
  • Sometimes, running a shop can feel isolating. Social media is one way to keep everyone connected.

How to Polish Your Image
Brian Simpson and Adam Wallace have been using social media to grow relationships for the Roger Smith Hotel in New York City. July was one of their best months in recent years--attributable, in part, to their social media efforts. "As soon as you realize all of your customers and guests have an audience--on Facebook, Twitter, Flickr, Foursquare, etc.--you start to focus on the little things more, improving both your business and the customers' experience," Simpson says.

He offers a few things to keep in mind when using social media:

  • Train your staff about the "being-on-stage effect" that social media adds to business transactions.
  • Knowing that their actions could go public helps staff members perform better.
  • Build relationships to lessen the number of public criticisms. If your customers know who is behind the brand, they will reach out to you personally vs. just "yelling" at the brand.
  • Stay in touch to keep customer retention up.

It will cost you time and effort to embed a solid social media strategy in your business, but the effect it can have on customer relationships makes it all worthwhile. Don't let such a low-cost opportunity pass you by.

Chris Brogan is president of Human Business Works, a small-business education and growth company. He is also co-author of The New York Times bestselling book Trust Agents, and author of Social Media 101. He blogs at chrisbrogan.com.

Like this article? Get this issue right now on iPad, Nook or Kindle Fire.

This article was originally published in the November 2010 print edition of Entrepreneur with the headline: Talk of the Town.

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