In my post last week (Would you pay for Twitter?) I got a comment from a reader who asked:

“Here’s my question, if you are a business and offer a lot of things for free, how do you parley that into appropriate revenue without disengaging your audience?”

That is a very good question, and one that every business (or would-be business) should be asking. I started thinking about this a couple of years ago, posting this article (How Can You Measure the Value of a Conversation?) in October ’08. Here is the heart of the message:

Make money “because of”, not with

The “because of” effect is much more powerful than the “with” effect. One of the commenters on Jason’s post, Mack Collier (The Viral Garden), hits the nail on the head with:

…companies that are NEW to social media, wanting to use metrics and measurements that they are used to when using TRADITIONAL marketing methods to ‘get their message out there’. Their thinking is ‘how do we make money from this?’, whereas companies that have been active in this space for a while, such as Dell, understand that by PARTICIPATING that they will make more money as a BYPRODUCT of their efforts. Dell has been in the game long enough to see the impact that their efforts are making, and as a result have shifted away from the ‘how do we make money with this?’ mentality.

Attempting to DIRECTLY monetize social media efforts is the quickest way to ensure they fail. But companies that aren’t familiar with this space don’t know any better. In a few years, after more companies are more familiar with these tools, I think we’ll see them looking to INdirectly monetize their efforts, while putting the focus on SM as a way to DIRECTLY connect with their customers.

One of the best lessons that I learned from the SOBCon event that I attended in May was that blogging (and Social Media in general) should be treated like a business. That business is the marketing of your products and services & establishing yourself/your business as an authority. The goal of that business is to make money because of your blog (or Social Media efforts), instead of with your blog.

Let me repeat that for you – “by PARTICIPATING [you] will make more money as a BYPRODUCT of [your] efforts”.

Money as a by-product of participation

How exactly does this work? Well, it is both easier and more difficult than it sounds. The very first thing that your business can provide for free to its customers is Value. Something above and beyond the products and services that gives your customers a reason to visit your place of business or website, or follow you on Twitter, or friend you on Facebook (this list goes on and on).

For a real-world example, using a “place of business”, look at Starbucks. The mental images of the starving artist or writer slaving away over a venti latte, or the entrepreneur using Starbucks as an office are so common as to be a cliche. But they are a cliche because Starbucks offers something that places like McDonald’s do not – a welcoming atmosphere with music and ambiance, access to coffee and snacks, and typically like-minded folks to chat with. That is the value. That is what makes people come back.

Now, this example is not representative of what you can do with Social Media, or is it? Imagine that your blog or website is the Starbucks, how do you go about inviting people to come and hang out there? Give away some cool, free stuff. I’m talking about your blog posts, or FAQs on your industry, or whatever it is that draws people to your site in the first place. Give them the answer or information about the solution to the problem that they have, then give them even more. Add value.

Then add an opportunity for your visitors to have a conversation.

If you let them speak they will come

Online communities are exploding in popularity and will continue to grow. As Clay Shirky discusses in his book Cognitive Surplus (review here Thoughts on Cognitive Surplus) people crave community and the online space has the lowest barrier to entry, ever. Letting your customers talk to you and to each other gives you a Starbucks-like place for your potential marketspace to congregate. Then, and only then, can you get involved in the conversation – providing that added value, building your credibility and authority, and finally creating a rapport that invites your community to ask to buy something from you.

Jeffrey Gitomer says “People hate to be sold, but they love to buy”

In his Little Red Book of Selling (which every blogger and business person should read by the way) Gitomer says, “If they like you, and they believe you, and they trust you, and they have confidence in you…then they may buy from you.” That is what you are doing when you build the community and marketspace. Do ask compelling and engaging questions. Don’t sell your product or service.

Ask the community what they think. Talk about profit and productivity. Remember, they are taking the time to be involved in their community, not your community, it all needs to be about them.

I trust that this has given you some ideas for your own business and how to apply this concept to create more sales as  by-product of your Social Media activities. If you still have questions and are interested in being the feature of a case study on this topic (to be published for free on this site), please send me an email and we can talk about your situation.

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