A lot of contractors are reluctant to invest in social media marketing. They think it's a waste of time and money and they could very well be right. It's entirely possible that the world abandons Facebook tomorrow--just like they did with Myspace. But what none of them have considered is the cost of playing catch-up in the event that they're wrong.The Case of Three Facebook Likes
I have a contractor client in Virginia, let's call him Fred. Fred is a remodeler and his company's Facebook page has three likes (you read that correctly--three). One of his closest competitors has 1,734 likes. The other day, I was explaining to Fred that his web marketing strategy should be to be THE authority for what he does in the market he does it.
Is it possible to be THE authority and have three likes? Some of you might be nodding your heads, "sure" and I tend to agree. But, increasingly, to the 500 million people currently on Facebook (as of October 2013), the answer is "unlikely." Today, consumers expect real world authorities to have a substantial presence on Facebook, Houzz, Pinterest, etc.
After a brief review of Fred's competitor's Facebook page, I could see that the competitor was actively engaged in building an online community (not unlike what ContractorTalk is trying to do with their new rewards program). When someone in Fred's service area hops on Facebook to ping their friends about a good remodeler in the Virginia area, it's becoming increasingly likely that the crowd online is going to have Fred's competitor top of mind.The Opportunity to Dominate Social Media
So I explained to Fred that with a small investment in social media marketing, over the course of the next 9-12 months, he could absolutely crush his competitor. He could build a much larger and more engaged community and establish his company as THE authority for remodeling in Virginia (on Facebook).
His response reminded me of how people used to respond when I would suggest they invest in ad tracking, SEO, or PPC. Fred said, "I think Facebook is a waste of money. Let's wait and see if it really works for him (the competitor). If he's still at it in a year, I'll look at doing whatever you're proposing."The Cost of Waiting
When it comes to (speculative) marketing investments, Fred's "wait and see" approach is a common one. And this way of thinking represents a HUGE mistake. If you're a small business owner, cash is king, so I'm not recommending you bet the proverbial farm on speculative marketing investments.
In the May 2014 issue of Money
magazine, there's an article on emerging markets. The author of the article, suggests investors, "think smaller for bigger gains" by investing in the least-developed emerging economies. The author is quick to point out that "most people should put no more than 5% of their overall portfolio into emerging markets."
The same thing is true with marketing. The bulk of your advertising budget should be invested in the strategies you know produce a profitable return on investment (in my experience, these are SEO, PPC, and email marketing). But you're crazy not to at least be investing some money in social media sites like Facebook. Do you know what the cost of those Facebook ads is going to be by the time everyone realizes the value of building a large following on Facebook?
Not sure? Just ask someone that was doing PPC back in 2007 what they were paying for "roofer in Rockville, MD" or "Chicago furnace replacement" or "remodeling company in Charlotte." In Google's earnings calls, I often hear that the cost per click has gone down--and that may be true across the board--but it hasn't been true in the home service industry. The cost for those clicks has gone up, up, up as more contractors discover the power of PPC to generate leads and sales.
When I started Blue Corona in 2007, I had a really hard time convincing contractors that there were things that could be done to their websites that would make them rank higher in Google's organic search results. While their competitors continued to throw more and more cash at the yellow pages--with less and less to show for it--the guys that listened to me and invested in SEO made a TON of money.
Today, those that were asleep at the wheel back in 2007 are paying an enormous price to catch-up. Smart contractors, those that went "all in" with content-centric SEO (i.e. no linkfarms or "black hat SEO" tricks) back in 2007, are so far ahead that practically no amount of money will enable their (formerly close) competitors to catch them.Conclusion and Takeaways
You can spend $10K over the next 12 months and own your market on Facebook. It might turn out to be a complete and utter waste of money. You could end up being the king of nowhwereland. If you're like most business owners, this won't be the first time you've wasted $10K (and it definitely won't be the last time).
However, you can also wait... let that competitor of yours get to 15,000 likes (just like Four Seasons Heating & Cooling in Chicago has). Sit back on the sidelines and see if it works for them. It may not and you can enjoy a chuckle at their expense. However, if Facebook becomes the next Google, you and all of your other competitors are going to have to spend $100K+ playing catch-up and you probably never will.
Your competitor, the one that took a relatively small risk (in the grand scheme of things), will be the authority and you will be everyone else. When it comes to social media and other forms of speculative marketing, don't discount the cost of playing catch-up.