One of the most common advantages people cite about social media is the “fact” that it’s free. Your company can start a Facebook page, set up a LinkedIn profile, give your followers a place for pinning … and none of those things costs you even one cent.
Or do they? Granted, they may not carry the price tags that are attached to other forms of media, but if you think about cost in the economic sense, social media can easily become pretty pricey.
Far too many business owners and managers underestimate the value of their time. When you use your time for a particular activity, that’s part of the cost. If your time is worth $20 an hour, and you drive 15 minutes in each direction to save a nickel per gallon on that 10 gallons of gasoline you pumped in your car, that 50 cents in savings actually cost you 10 bucks. That’s because you could have used that half-hour in some kind of revenue-producing activity.
If you earn $50,000 a year at a full-time job or from a full-time business, you’re making roughly $25 an hour for every hour you work (based on the 2,000 hours and 300 workdays that are normal for a full-time job). If you’re in some kind of sales role, that means you need to generate enough revenue each hour on average to cover that $25 an hour plus any overhead costs.
So let’s say that you spend just an hour a day posting to or checking your Facebook and LinkedIn pages. That adds up to 300 hours per year. At your $25 an hour rate, that means you’ve “invested” about $7,500 a year in those “free” social media sites.
Is that a bad investment? It depends. Can you identify how much business you gained from your presence on Facebook and LinkedIn? If it’s about $7,500, congratulations — you’ve broken even. Anything less, and you’re actually losing money.