Tax Deductions for Online Sellers: Learn what you can write off for next year's tax season

As an online seller, you have expenses throughout the year for new inventory, packing supplies, postage and more. When these expenses pop up, you make note of them—and tuck away the receipts in a safe place—so that when April rolls around, you have a few deductions you can enter to reduce your tax bill. You do this, right?

We know taxes can be, well, taxing, so we came up with a few deductions you can use, should you be unsure of what qualifies as a deduction. We talked to business attorney Cliff Ennico, the author of "The eBay Seller's Tax and Legal Answer Book," to get his insights, and we did a little research of our own to see what you can claim to help keep both you and Uncle Sam happy.

First, the basics

Ennico tells us that sellers first need to figure out if their online sales are a business or a hobby.

"If you treat your selling as a 'business,' i.e. you file Schedule C on your federal income tax return, or form a corporation or LLC for your business, you may deduct all 'ordinary and necessary' expenses of that business," he explains. "If you treat your selling as only a 'hobby,' you can deduct hobby-related expenses, but they will offset only any income you derive from that hobby."

This means you can't claim hobby-related deductions against your nonhobby-related income (for example, your salary from your day job) if you had a net loss. For instance, if you sell an item for $50 that cost you $100, and that was your only income from your hobby during the calendar year, you can't claim a $50 loss as a deduction. However, if you do make a profit, you may deduct expenses related to that sale, for instance, shipping costs or selling fees.

As for businesses, what does "ordinary and necessary expenses" mean? According to the U.S. Small Business Administration, "an 'ordinary' expense is one that is common and accepted in your field of business. A necessary expense is one that is helpful and appropriate for your business." Basically, these are expenses you have to make in order to operate your business.

Now, let's now look at some specific expenses you can claim as deductions, whether your sales are a business or hobby. You'll notice that all the expenses we discuss below have to do with online selling, as they should. You can't just write off anything. It must be related to your sales.

“If you are selling on eBay out of a home office, you are absolutely entitled to take the home office deduction”

Zeroing in on write-offs

The list of items that qualify as tax deductions is quite long, and can include a variety of expenses, so don't let our examples limit you. Look around for other possible deductions, and always be sure to consult with a tax professional. Remember, we do our research, but we're not lawyers. Let's get to it.

Your workspace: Many online sellers use a room in their homes to photograph items, pack orders, store inventory, etc. And believe it or not, you can claim this space as a tax deduction. In fact, this type of deduction even has a name: the "home office deduction."

To qualify for this write-off, you must regularly use part of your home "exclusively" for your online sales, and you must conduct most of your sales out of your home, according to the IRS.

"If you are selling on eBay out of a home office, and you have no other place of business, you are absolutely entitled to take the home office deduction!" says Ennico.

You can write off a percentage of your mortgage or rent, Ennico continues. This percentage is "basically the square footage of your home office, including inventory storage space, divided by the square footage of your home."

Just don't go overboard and try to write off everything that's in the space.

"By far the biggest mistake is to include furnishings, artwork and other decorative items in your home office that are not related to your eBay selling business," he adds.

To claim the home office deduction, you will need to file an IRS Form 8829, along with your 1040 form. But we think it's worth the added work.

Utilities, repairs, office expenses: You can also write off a portion of what you spend on your utility bills throughout the year. After all, you can't sell online without plugging in your computer, printer, camera and so on. These are necessary expenses. How much you deduct should be proportional to your home office deduction. For example, if you deduct 1/10 of your mortgage for your home office deduction, you should deduct the same percentage of your utility bill.

And if your computer or printer goes on the fritz and you have to repair or replace one of these, or another device you use for your sales, make note of these costs, too. They're necessary expenses and deductions, as well. So are any office supplies you buy for your business like tape, business cards and ink cartridges, for example.

Operations fees: Don't forget about listing and payment-processing fees that you pay. These are often a must to sell online, and they're also deductions. Also note any subscription fees you pay to third-party services to launch listings or host images, or any store or Web hosting fees you pay for your online shop. You can deduct these, too. You can even write off what you spend for shipping insurance for the items that sell.

“You can write off what you pay to get your taxes done—whether you hire a professional or buy a tax preparation software package”

Postage and packing: You have to pay postage every time you ship, and you have to ensure you have the right packing materials to get your items to their destinations safely, so it shouldn't come as a surprise that this expense can really add up at the end of 12 months. Even if you use mostly recycled materials, odds are you still buy tape, shipping labels, tissue paper, even a few freebies to include in your packages, so write down how much you're spending on these and keep the receipts! This could be a substantial deduction.

Sold items: You can also claim the cost of the products you sell as a deduction—as long as the items have sold, Ennico says. You can't write off what you've spent on inventory that hasn't sold.

"Any inventory that remains unsold at the end of the calendar year is an asset of your business, the cost of which cannot be deducted until it actually sells (or is given away and written off as worthless)," he explains.

Tax preparation: Finally, you can write off what you pay to get your taxes done—whether you hire a professional or buy a tax preparation software package. As we did our research, we saw this deduction listed among the "most easily forgotten tax deductions." But don't you forget it. It's definitely a good one, because it can give you peace of mind that you've prepared your taxes correctly—and it can prevent a lot of problems with Uncle Sam. Plus, this expense means you can let someone else crunch the numbers while you focus on selling.

We'll leave you with one final piece of advice as you're going through the rest of the tax year: Whatever deductions you decide to claim, make sure to keep good records—and keep them organized. This will make tax preparation a lot easier, notes Bruce Langston, Auctiva's controller. He suggests using a filing cabinet to keep all your business records, and using that cabinet only for your business. Don't put anything else in there.

Aim to keep recordkeeping "simple, accurate and up to date," to make bookkeeping as easy as possible, he adds. So start going through those receipts you've accumulated, and start filing.

via auctiva.com

For more information on taxes and streamlining your online business, take a look at my eBay Business All-in-One For Dummies 2E. Covers taxes and so much more.

New Report Finds Photos Generate 50% More Impressions for Small Business on Facebook; Twitter: Quotes

Roost, a tech company committed to helping small business go social, today announced the findings from its second quarterly report on the state of local business and its use of social media. More than 10,000 Facebook and Twitter posts by small businesses across over 50 industries were evaluated, indicating that the most effective post types for small businesses to drive meaningful interactions were photos on Facebook and quotes on Twitter.

• Not All Posts Are Created Equal: The Roost social marketing platform for small businesses provides impression and engagement metrics beyond the standard Likes, Comments, Shares and Retweets. Roost takes a deeper look at the various types of posts for each platform and determines which ones yield the highest levels of interaction amongst local business fans and followers.
  
• Photos Rule on Facebook: The two greatest engagement tactics on Facebook are Likes and Comments, with Likes leading the charge. Roost finds that the best way to achieve Likes is through photo posts, quotes and status updates, with photos providing 50 percent more impressions on average than any other post type and quotes providing 22 percent more interactions when compared to all post types.
  
  Findings also show that questions generate almost two times as many comments as any other post type. The second most popular way to get fans commenting is through a compelling business status update. Facebook Shares are a great way to disseminate business and product messages across fans’ networks and links are 87 percent more likely to be shared than any other post type.  
  
• Quotes Rule on Twitter: Roost’s report finds that the most effective engagements for local businesses communicating on Twitter are Retweets. Quotes drive, on average, 54 percent more Retweets than any other type of Tweet, with status updates being the second highest driver of engagement.

“These results are telling for the small business community and provide direct guidance on how to achieve the highest level of engagement with their Facebook fans and Twitter followers,” said Alex Chang, CEO of Roost. “Facebook is inherently visual, so it follows that photos would ignite more activity here, while twitter began, and largely remains text-driven, the home of the pithy soundbite, so it makes sense that quotes create the most engagement on that network,” added Chang.

The study was conducted in September of 2011 by analyzing Facebook and Twitter posts created on the Roost platform by over 8,000 small businesses across over 50 industries.

Six Key Ingredients for an Effective Website: Companies Need to Communicate with Customers

Book Excerpt: Companies need to actually communicate with customers via their website, especially if they are using it for online sales and want to ensure customer engagement and conversion.

"When customers with an urgent issue want to get hold of you and can't, they may become frustrated and angry," writes Marsha Collier in The Ultimate Online Customer Service Guide: How to Connect with Your Customers to Sell More!   According to Collier it is imperative to let customers know that they can reach you easily and in a variety of ways, since this "goes a long way towards preventing them from reaching the boiling point."

Companies can include limitless information about themselves on their website, but to ensure an engaging customer experience there are six key ingredients that are imperative to have on the site, including two things far too many companies hide from customers: a mailing address and a phone number.

In this excerpt from The Ultimate Online Customer Service Guide, Collier describes the six website must-haves:

Using Your Web Site to Connect With Your Customer

No matter how simple it may be, most businesses need a Web site. If you don't have a Web site, you should begin creating one today. If you do have a Web site, you are either selling your products or services there—or you're not. Being online (even if you're not selling products) is important so your prospective clients can get a clear picture of you, your staff, and your offerings.

If you're selling on the Web, your site is your home base for customer service connections. And since shoppers are notorious for abandoning orders pre-checkout, you must make sure you have done all you can to ensure that they click that Pay Now button. It's not just about offering quality merchandise; it's about establishing trust with, and inspiring confidence in, your buyers.

Here are a few things you should make sure to have on your Web site to help you gain your customers' trust:

• Include a mailing address. Web sites that do not include an address tend to look suspicious to prospective buyers. And, note, an actual address is often better than a post office box number. If you run your business from home and have security issues, you can always rent a mailbox at a UPS store or the like. This will give you a physical location to attach to your business name; and the reassurance that you work in a physical space really helps customers regard you as a reputable business.
• Provide a phone number. People like to know that they can reach a human being if they have a question on an item or a problem with an order. A Live Chat button is a nice addition for those who don't want to pick up a phone. (Don't forget to post the hours customers can reach someone through chat or phone.) More on how to set this up further on.
• Include pertinent company information. If yours is a family-run business, say so! Tell the background story of your company, and provide information about the people involved. Customers like doing business with individuals like themselves. Also, tell them you are focused on customer satisfaction.
• Link to a page of frequently asked questions (FAQs). Many Web shoppers have questions about the policies and logistics regarding how, when, and where you'll ship their purchase. Include information about your return policy as well, and whether you offer gift wrapping.
• Feature testimonials from happy customers. Including previous customers' positive comments on your site makes current and potential customers feel that they're in good company when they shop with you. Of course, to accomplish this, you need to . . .
• Encourage customers to post reviews. Many sites contain a special section for customer reviews. If that's too complex for your site, consider linking to a noncommerce site that posts product reviews for your industry. If, for example, you sell cameras, you might link to sites like www.ivillage.com, cnet.com, or steves-digicams.com, where your customers can read unbiased reviews of the experiences of others, then click back to your site to order from you. Keep in mind that while it's critical to allow customers to comment, you must be sure to moderate this feedback. Respond when necessary, and don't take negative remarks personally; simply try to view criticisms as suggestions for improvement.

Whether your online presence is an e-commerce site, a general site about your business, or a blog about what you do, you must always include a "Contact Us" or comment form. Do customers have the option of getting in touch with you in a variety of ways, beyond a phone number? Providing e-mail addresses and social media links are important, as well. Keep in mind there's a growing trend away from placing phone calls to companies, so show customers where they can reach you for swift attention when they want to solve a problem.

Web Site Alternative

If you're a professional who feels that having a Web site is not something you'd like to do, there is an alternative. You can have a Google profile. A Google profile can serve as your online resume or calling card—however you wish to format it. Anyone who searches your name on Google will find it on the first page of search results. It features a "contact" link that, when clicked, opens an e-mail window and sends the resulting e-mail to a free Gmail account, which you can set up to forward directly to your computer's inbox.

Go to www.google.com/profiles and fill out the form; your profile will be live in moments. As a matter of fact, having a Google profile is important for anyone in business, as it gives people an alternate way to find and contact you. For an example, check out mine at www.google.com/profiles/marsha.collier.

Excerpted with permission of the publisher John Wiley & Sons, Inc. from The Ultimate Online Customer Service Guide: How to Connect with Your Customers to Sell More! by Marsha Collier.  Copyright (c) 2011 by Collier Advertising and Promotion, Inc., and Marsha Collier.

via 1to1media.com

 

Top 10 Tips For Using Social Media Well from 10 Top Business Authors

If you’re at all concerned with marketing yourself or your products, by now you’ve probably heard a million times how important Social Media has become for marketing yourself and connecting with/building an audience of customers. The challenge can be knowing exactly how to go about it without coming across as pushy or self-centered and alienating more people than you draw. Here’s ten tips from successful people who use social media on how you can approach it with greater success:

1) Be The Best You-- “But you can still be you. Uhh, unless “you” just so happen to be some kind of Nazi-sympathizing donkey-molester. In which case, please back slowly away from the social media.” – Chuck Wendig, Author He has a great sense of humor but mixed in is great advice. His point is that you should present yourself well but not whitewashed. Readers want to know YOU not the person you project yourself to be. Don’t be a jerk. Don’t be a salesman. Just be you, but a good, likable version. Warts are okay within reason, after all, the human you is the you people want to connect with, but put a little makeup over the warts so they appear their best. The human but attractive you is still the goal.

2) Have The Right Conversations– “Conversations among the members of your marketplace happen whether you like it or not. Good marketing encourages the right sort of conversations.” – Seth Godin It’s not just whom you talk to but how you talk to them. People are talking about your product already. Being a part of the conversation means learning how to talk to them. Don’t be pushy. Don’t sell. Just talk and listen. And listening may be the most important part. Whether you’re a writer or in another profession, finding the conversations you need to hear and engage in, listening first, then joining is the best way to discover the audience for what you sell.

 3) You’re Not In Control– “If you think you are in control, you’re fooling yourself. As soon as you start listening, you realize you’re not in control. And letting go will yield more and better results.” – Charlene Li, Author Whether you’re an introvert or extrovert, Type A or not, the tendency is to want to control everything about your marketing, sales, etc. You want to control how people respond. But in truth, you can’t. Of course we all want to sell books and build our audience as authors. We all want to build product awareness and desirability as sales people. Social Media is a great tool. But it’s also a tool you don’t produce. Instead, you use it by participating. And that means, you can’t be in control of anything but yourself. How you act, what you say, how active you are–you can control. But everything else is out of your hands.

4) It’s About Passion–  “Don’t worry; skills are cheap, passion is priceless. If you’re passionate about your content and you know it and do it better than anyone else, even with few formal business skills you have the potential to create a million-dollar business.” – Gary Vee, Author of Crush It It’s less about how skilled you are than how passionate you are. You can build skills, but you can’t build passion. So don’t worry about developing skills, worry about getting across your passion. That, in the end, is what will hook people’s interest in you and your words. There’s nothing more compelling than someone passionate about what they’re selling or discussing.

5) Learn About Them First– “On Twitter, Search is your friend. Are you writing a book about archaeology? See who’s talking about it. Looking for Buddhists? Oh, they’re there. Look for them. Start following them. Start seeing what they’re talking about.”  – Chris Brogan, Author/Speaker on Marketing This goes hand in hand with what I said above about how listening may be the most important part. How can you engage with people if you don’t understand what their interests are? Social Media is about conversation and networking and that involves give and take. It’s not about you. It’s about the community. Take the time to get to know the community. Who’s out there? What are they interested in? Why?

6) All Users Are Equal– “There aren’t very many things you can do as a marketer to attract a huge number of highly followed influencers to your content beyond the same tactics that you would use to attract a huge number of ‘normal’ users.”  – Dan Zarrella, Social Media Expert Don’t focus on attracting celebrities or people with big lists of followers, focus on attracting people period. All followers will be attracted the same way. There is no short cut to get the big users. All users become followers for the same reasons, in the same ways.

7) It’s About The Long Term– “’Build it, and they will come’ only works in the movies.  Social Media is a ‘build it, nurture it, engage them, and they may come and stay.’” – Seth Godin If you’re not in it for the long term, why should your followers be? It’s not about today, it’s about tomorrow. Like building a good marriage, a house, or a career, Social Media is a long term effort and strategy to be worked on daily. Don’t make it about today. Make it about the long term.

8 ) It’s Called Social NETWORKING– “The most successful marketer becomes part of the lives of their followers. They follow back.” – Marsha Collier, Author Do you remember me mentioning community? It’s called Social NETWORKING for a reason. It’s about interaction, two way. Hand in hand with listening, people will invest in you as much as you invest in them. Yes, celebrities don’t have time to engage with everyone. I get that. Neither do those with thousands of followers. But when you have something to say in response then respond. When you see a cool link someone passed around, share it and credit them. Find ways to encourage and thank your followers for their interest in you by taking an interest in them.

9) It’s Not About Numbers– “Quit counting fans, followers and blog subscribers like bottle caps. Think, instead, about what you’re hoping to achieve with and through the community that actually cares about what you’re doing.” – Amber Naslund, brasstackthinking.com It’s not about how may, it’s about what you say, how you say it and how they connect with it. People who feel that you care about them will care about you. So don’t worry about stats as much as content and interaction. And make every word count. Be real with people above all. They’ll respond to that more than anything.

10) Keep It Informal– “Informal conversation is probably the oldest mechanism by which opinions on products and brands are developed, expressed, and spread.” – Johan Arndt It’s not a website or marketing brochure. It’s not a commercial. It’s not a news feed. It’s your social media feed. Relax and be a real person. Of course you need to watch what you say. The internet, after all, is public. Things can come back to haunt you. But that doesn’t mean you have to be stiff and formal. Relax and enjoy yourself. If you don’t, you won’t fit in, because that, above all else, is what Social Media are about–relaxed conversation.

A few inspirational quotes which have inspired me from various sources. How do you use Social Media? What lessons have you learned? What great quotes do you have? Feel free to share below. I’d love to hear them.

For what it’s worth…

via bryanthomasschmidt.net

Good words!

Small Business: 7 Essential Elements of Effective Social Media Marketing

How are savvy businesses using social media effectively to find more customers, boost their reputations, and make more sales?

Here are the seven essentials that will turn your social media marketing from an annoying time-waster to an effective bottom-line booster.

1. Get your home base together

Your home base is your blog or web site. It’s on a domain you own. You control the user experience — from the content to the site design to the user interface.

This is where you show that you know your stuff. That means building a nice cornerstone of high quality content that demonstrates your expertise in a likable, accessible way.

First impressions matter, so make sure the design is clean, professional, and smart. It can still be stylish or funky, if that’s your thing, but it shouldn’t look amateurish or confusing.

Your home base is where you post content to answer your readers’ questions, give them interesting tips, and help solve their annoying problems. When someone wants to know more about you, this is where you send them.

Your home base is a marketing tool, which means you need to be communicating primarily with customers, not with other experts in your topic. Don’t just pontificate to show what you know — tie your news and opinions back to how those things affect your customers.

2. Who’s the face of your business?

If you want to use social networking platforms like Twitter, Google+, or Facebook, you need a human face to make your social media marketing work.

So does that mean potential customers want to know about your personal struggles finding high-quality organic dog food? No. (Unless your company sells organic dog food, that is.)

Just like people have always done in public settings (work, church, volunteer activities), you’re going to adopt a persona — a selected range of your thoughts, emotions, and observations.

You’re going to be social and informal, but in a way that’s relevant, appropriate, and interesting to who you’re talking with.

Just like you don’t (I hope) wear your “I spent the night in Paris, Hilton” t-shirt to your grandma’s house, you’re also not going to share absolutely everything about the “real” you with your social media connections.

That doesn’t mean I want you to be a fraud. I want you to be friendly and genuine. Sound like a human being, not a corporate robot. And you certainly don’t have to stick to business all the time. It’s fine and good to show that you have a life. It’s not so good to show the world you’re careless, rude, or boring.

The truth is, the definition of “appropriate” depends on your audience. Lisa Barone has a very different persona from Ann Handley’s. If it works for your customers, it’s appropriate.

Authenticity for a business doesn’t come from oversharing or boring your audience to death — it lies in doing what you say you’ll do.

3. Who else has your customers?

Social networking platforms were designed to make it easy and fun for people to hang out together. That means you’re going to use them to build relationships that will help your business.

Look for people who have healthy-sized audiences who are a good fit for your product or service. They may be bloggers, they may be authors, they may have a popular podcast or column in mainstream media. They may simply be social media mavens who have lots of friends and like to share good stuff.

These are the people you want to share and promote your excellent content.

Cultivating professional relationships isn’t rocket science. Stick to the basics — link to them from your content, comment intelligently on their blogs and on social platforms, and be a nice person.

Don’t think that picking fights or manufacturing controversy makes you stand out. It doesn’t, it just makes you look like a troll. If you’re going to take a controversial position, make sure it’s one that really matters, and express it with respect.

4. Pick a primary platform

Again, think about where your customers are.

If you love Twitter but your customers spend hours every day on Facebook, you need to recognize that Facebook is probably a better venue for your business. It may not be as fun for you — but that’s why they call it work.

Only move beyond your primary platform when you’re sure you’re handling it well. A lot depends on the industry you’re in. If you’re a copywriter, social media consultant, or online marketer, your customers spend a lot of time in these venues, which means you probably will, too.

5. Manage your time

If you don’t decide how much time and focus you’ll put into social media, the default will be “all of it.”

Sites like Twitter and Facebook are seductive places to drop in and just check what’s new. When your five-minute check turns into 25 minutes, and you’re doing that 4 or 5 times a day per site, you’re going to find your productivity taking a dive.

Remember your home base. That (and actually delivering whatever it is you do) are where the bulk of your time and energy need to go.

The best tool I’ve found for managing social media time is a $3 kitchen timer. Decide in advance how much time you’ll spend checking in and being social, and stick to that.

6. Content first, conversation second

You’ve been told again and again by social media “experts” that your entire business should revolve around something called “The Conversation.”

Too often, this form of Conversation leads to business owners spending hours every day chattering with potential customers and hoping someone will buy something. (Or, more often, chattering with peers and friends and hoping this counts as work.)

Yes, be personable. Yes, keep an ear out for customer complaints so you can respond appropriately. And yes, network with peers in your industry to keep your links healthy.

But if it feels like goofing around all day instead of working, it probably is.

Instead, spend the bulk of your time on content, whether it’s on your own base or used as a guest post to find a wider audience. Use content to educate your customers about what they need to know to make an intelligent purchase. Focus on customer objections, questions, and problems.

When you find someone else’s content that your customers will find valuable, share that too — and add a few insights of your own, if you like.

Even a 100-character tweet can have content value. Think about what you can say that makes readers’ lives better, rather than just filling up time before you run to Starbuck’s. Make sure your reader has a good experience every time she hears from you. Keep it both useful and entertaining.

Social media conversation is a seasoning that makes your content more appetizing. It’s not the main dish.

7. Don’t forget SEO

Too many people think that social media sharing means they don’t need SEO any more. The fact is, social media marketing is a superb complement to SEO.

Play the long game. The same elements that make social media work (content that’s both useful and user-friendly, doing what you say you’ll do, healthy relationships with others in your industry) are the elements search engines would prefer to serve up. Search engines want to find the content that’s a widely-valued resource, and one of the signals they use for that is social media sharing.

Twitter and Facebook are already search engine signals, and there’s no doubt that Google+ is, too.

For too many businesses, social media is a time-wasting ego game. But use the tools strategically, with a focus on content and on getting a useful message in front of a wider audience, and it can be brilliantly effective.

via copyblogger.com

Never take your eye off of the prize: A happy, loyal customer!

Customer Service Through Social Media: My, How The Game Has Changed !

The rise of social media has changed customer service beyond recognition.

In today’s competitive landscape, customer service is more important than ever. A company’s reputation for satisfying their customers has never been so valuable.

It’s worth pointing out that it takes three times as much internal resources to acquire a new customer as it does to retain one. In these lean times it puts an awful lot of pressure on companies to ensure retention rates are as high as possible. And good customer service is a great tool to do this.

But are companies getting it? Does it look like big corporates are responding to this change in the landscape?

The short answer is no:

• Over 58% of tweeters who have tweeted about a bad experience have never received a response from the offending company
• 55% of consumers expect a response the same day to an online complaint – yet only 29% receive one
• 43% of consumers say that companies should use social media to solve customers’ problems

These statistics lay out clearly how the game has changed. Customers will no longer be happy with ‘old style’ customer service. To satisfy your customers, it’s essential to have a responsive social media presence.

To be fair, things are changing. By the end of the year, 75% of US-based companies expect to use social media for customer service. It’s a reaction to the changing game. Gone are the days when social media was all about marketing through Twitter and Facebook. It’s now an integral tool to ensure you are responsive not reactive, contactable not aloof and authentic not robotic. And increasingly, it’s about solving customer’s issues in real time through social channels, showing your dedication and transparency to your customers.

via thesocialcustomer.com

 

Time for Customers to Connect: "Social Business And Your Brand"

What is the power of social business to your brand? There are multiple answers to this question and your forerunner answer varies, according to where the focus of your brand is. Let’s run down some of the answers.

• Brand awareness – the use of social platforms to message the key qualities and attributes of your brand.

• Market research – the use of social tools to identify demographics, including geolocation data, contact information, brand sentiment and expansion/contraction opportunities.

• Brand marketing – using social and digital content to market your brand’s products and services directly (and indirectly) to existing and potential customers, with “sharing” abilities.

• Customer service – identifying and resolving issues at or near point of source, often converting an issue into a positive that is public.

• Public relations – timely crisis response, broad distribution of news and message and shaping brand sentiment.

• Brand loyalty – identification of Centers of Influence and thought leaders, relationship building and grooming brand ambassadors.

• New opportunities – related to market research, the use of social tools to identify new markets and discovery of new opportunities.

Which of these are most important to your brand at this time? The power of social business directly influences each of these and more. The tools available in social business become increasingly robust with each passing day. For example, Digital Coco has indexed the social profiles of more than 23 million consumers, monitoring what restaurants they frequent, what they “like” and their sentiments on particular brands.

Another example: in YouTube, brands can search for people that are viewing videos with similar lifestyle qualities, and then send a suggested video to them.

Creative teams that effectively use robust social web tools, produce compelling content, distribute effectively to the right targets and warmly engage/build relationships for brands provide brands greater ability to influence future business than any traditional marketing or public relations firm.

What I’d really like to focus on here though, is return. What is the ROI of social business? We can easily count both hard and soft metrics that determine a brands return on investment in social and digital media. Hard data such as attributable sales, conversions, guest experience and customer retention are easily quantifiable. But there’s a longer tail return to consider - ROR, or, Return on Relationships.

I suggest that Return on Relationships is the key factor to consider in social business. By using the tools available in social business, brands are able to identify geolocated (and vetted) centers of influence, introduce themselves to these community leaders and build strong relationships with them, that influences other decision makers.

Return on Relationships is what I consider a “soft metric” return. It’s harder to measure. But I posit that it is measurable and that its value is immense.

I’ve been building a personal brand online for years. Through using social media, publishing as much compelling content as I can, being transparent and promoting others who I admire, I have built a significant community of individuals I respect and admire. Often, these folks challenge my thinking and expose me to new ideas and new learnings. Often, these folks lead or spark great conversations that introduce or build upon concepts and ideas that inform me.

The most important facet – the most important return – of these relationships is that I meet and get to know other highly interesting folks; people I would likely never have met in real life. The return on relationships for my personal brand is immense.

For a businesses, this process is the same. One relationship in development introduces other new relationships to develop. I hesitate to say it’s like gold-mining, but in a way, it is.

by Jeffrey J Kingman

 

via digitalcoco.com