12 Jan Fact: Social Media Can’t Save Your Business
I have been wanting to write this post for a while now after reading someone say that Dell is a case study for how companies should engage in social media. For shits and giggles I decided to look at Dell’s stock price, which once traded as high as $42 a share and now hovers around $14, and then though “if they’re the case study, what about those companies actually making money?”. And with the close of 2009 it’s the perfect time to look at the performance of America’s top companies and see how many of them in the top 10 and bottom 10 are using social media, and to what affect it has on their business. Without further adieu, I present my argument.
Since Shamable isn’t just yet a credible third party source, Yahoo has the entire list of the best and worst stock performers from 2009:
- XL Capital
- Tenet Healthcare Corp
- Genworth Financial
- Wyndham Worldwide Group
- Freeport-McMoRan Copper & Gold Inc.
- Expedia Inc.
- CB Richard Ellis Group
- Whole Foods
Of the top 10, only two are actively engaged in social media (Ford, Whole Foods). It’s also worth noting that Whole Foods CEO, aka “rahodeb”, was actually practicing unethical behavior, e..g caught astroturfing on message boards to drive down the price of his competitor before buying it. Everyone knows Scott Monty‘s work with Ford has been pretty public (even if Jalopnik calls “bullshit”) but how much of their turnaround can be credited as a social media “win”?
We all know that there are some table stakes of social media — being on Facebook, at a bare minimum reserving your Twitter handle (shout out to Streko‘s knowem.com) et al, but check out this Priceline app fan page. It’s horrific, and yet they’re profitable. Go figure.
Let’s flip the coin and look at the bottom 10 performers:
- Marshall & Ilsley Corp.
- MetroPCS Communications
- Huntington Bancshares
- Zions Bancorp
- Eastman Kodak
- Regions Financial Corp.
- Kimco Realty Group
* Citigroup is a Publicis/MS&L client
Out of the bottom 10 performers Kodak, Citi and MetroPCS are using social media in some form, with Kodak being the front runner of the group. I actually like their “Print and Prosper” campaign, albeit a decade late. Clearly the two industries hit hardest over the past year – finance and housing – are well represented on the “Losers” list for 2009. It’s pretty safe to say that having a vibrant Facebook fan page, Twitter account or blog wouldn’t have helped any of those companies. And for those who’ve folded up shop (Goldman Sachs, et al) – Tweeting wouldn’t have done a thing.
Here’s the bottom line, folks: Good business is what drives successful businesses. If you base your current income on future earnings and sales then you’re pretty much at the mercy of the market (read as: when the demand side drops you’re screwed). The fact that you’re @’ing someone will help that one person, which is great, but can you scale it to make a real difference in your offering?
And that’s when it should hit you – without a great product or service there’s nothing that social media can do to help you. Your bad business decision, like buying the wrong company in an effort to diversify your product lines, can’t be saved through blogging. “Just understand why our new offering sucks” isn’t a really compelling offer for readers, shareholders or customers.
Can engaging in social media help deliver outstanding customer service on a micro level? Absolutely. Can you reach large groups of people (large by customer service standards, not by marketing standards) and create movements online? Absolutely. Can engaging in social media save your business? As I like to say, sure – I can put a gold bow on a turd but ultimately it’s still shit.