Facebook and Twitter isn’t enough

Social media applications like Twitter and Facebook have the potential to reach millions of customers at a relatively low cost. Unfortunately, having more Facebook “likes” and Twitter “retweets” does not always translate into increased sales and revenue.

Ritz-Carlton Hotel Co. bought ads to promote its brand on Facebook in May 2013, according to a Wall Street Journal article. After a few days however, executives of the company halted the campaign once they learned that having more Facebook fans did not help the firm reach its objectives.

“We were fearful our engagement and connection with our community was dropping as the fan base grew,” said Allison Sitch, Ritz-Carlton’s vice president of global public relations.

Ritz-Carlton currently has over 500,000 Facebook fans but some of their competitors have twice as many “likes.” Nevertheless, Ritz-Carlton has decided to spend more of its time analyzing key customers instead of growing its impact on social media websites.

Ritz-Carlton even reaches out to people who have never set foot in one of their hotels. Ritz-Carlton’s idea of what it means to market themselves as a company in the digital age may influence other businesses to ignore the hype surrounded by Facebook and Twitter.

Social media still matters, but businesses have to be very critical of the alleged impact the outlets have on purchasing decisions and customer retention.

A Gallup survey conducted in early 2013 showed that social media had a very small influence on all purchasing decisions.

Ninety four percent of people used social media for the purpose of connecting with friends and family but only 29 percent of people said that they followed information on new products using social media.

Overall, 62 percent of survey respondents said that social media had no influence at all on purchasing decisions and only 5 percent of people said social media had a great deal of influence on their purchasing decisions.

Gallup said that businesses incorrectly assumed that consumers would welcome brands into their social lives but that turned out to be a hard sell tactic that turned off many people.

Facebook in particular has changed its users’ news feeds and that has hindered businesses ability to reach their fans directly.

“Rather than a largely chronological stream, Facebook now manages the news feed to feature items it thinks user will want to see,” according to the Wall Street Journal.

Now brands reach only 6.5 percent of their fans with Facebook posts which is down from 16 percent in February 2012.