Why Social Media Marketing Pays Off: Dell and JetBlue

The direct sales case

Dell’s outlet division became one of the most cited examples of 2009 precisely because it converted attention into dollars, not just followers. The company had started posting refurbished computer deals to its @DellOutlet Twitter account in 2007, and by 2009 it was publicly crediting the channel with driving real, direct revenue, reportedly well over a million dollars in sales traced back to the account. That number mattered because it wasn’t an estimate of “brand awareness,” it was purchases that could be traced to a specific tweet.

The cost side of the equation

What made the case for social media so compelling in 2009 wasn’t just the upside, it was how little it cost to test. A national print or television campaign required a real media budget before you knew whether it would work. A Facebook Page or Twitter account required no media spend at all, just staff time to post and respond. For a small business, that meant the downside of trying it was limited to a few hours a week, while the upside, even a modest one, could outperform a traditional campaign that cost thousands before it produced a single sale.

Customer service savings nobody was counting

JetBlue had built a reputation for using Twitter to handle customer service issues directly and publicly since 2007, and by 2009 more airlines and retailers were following the same playbook. Every complaint resolved over Twitter instead of a phone call was a call center interaction the company didn’t have to pay for, and every public resolution was visible to everyone else who saw the exchange, turning a single customer service save into free, credible proof for anyone else watching. That’s a bottom-line effect most companies weren’t formally tracking in 2009, but it was real: fewer expensive support calls and word of mouth that cost nothing to produce.

Where the number is

The honest case for social media’s effect on the bottom line in 2009 wasn’t that every business would find a million-dollar Dell-style story. It was that the cost of finding out was so low relative to traditional marketing that even a modest return justified the experiment. A local business that picked up a handful of new customers a month from a Facebook Page, at the cost of an hour or two of a staffer’s time, was getting a return that would have been hard to match with a comparable spend on print or radio.

What to track

Businesses that made a credible case internally for continuing their social media efforts in 2009 tended to track a short list of things: direct sales they could trace to a post or a reply, support tickets avoided because a complaint got resolved publicly instead of escalating and referral traffic to their website from these new channels. None of that required sophisticated tools, most of it could be tracked by hand, but it turned “we have a Twitter account” from a vague hope into a line item with a real, if early, return.

The takeaway for 2009

Whether a specific business would see Dell-sized numbers or something far more modest, the math favored trying. Low cost, fast feedback and public, visible proof of good service made social media one of the few marketing bets in 2009 that a business could make without much financial risk, and the businesses that made it early gave themselves a head start their slower competitors would spend the next few years trying to close.

---

Worth a look too: other social media guides, the rest of 2009 on this site or the Digital Business Marketing Awards.