In Part 1 of this column, I explored the principles of “social profitability.” These principles, unlike traditional social media, emphasize driving profitable growth, ROI and EBITDA (earnings before interest, taxes, depreciation and amortization) through the use of social networking both inside and outside a company. I also wrote about how a number of leading companies, including RBC and Cars.com, have achieved impressive bottom-line results by applying these principles.
That’s all well and good. But how can you apply these new principles to your company to drive profits and reduce costs?
Driving ROI through social profitability
To start, every department within your company that is important enough to have a vice president or someone with a comparable title should be responsible for leveraging the principles of social profitability to improve their contribution to the bottom line.
At your own business, consider how the questions below could lead you to incorporate social networking across various departments to deliver enhanced profits:
- Logistics (inbound and outbound): Do you incorporate data from social networking to help you plan the volume of inputs you require? Do you plan how much product to ship to various regions based in part on online sentiment?
- Market research: unlike traditional focus groups and other quantitative research surveys, which may be comprised of both customers and non-customers, a higher proportion of people that communicate with you online are actual customers. What are they telling you?
- Price testing: Do you test for price elasticity among your various customer segments, from loyal to occasional customers, using social networking?