Social media is a veritable treasure trove of data-driven insight if you’re conducting due diligence on a business for sale – both quantitatively (number of followers, likes and so on) and qualitatively (the quality and positivity of interactions).
Because social media interactions exist in the public domain, they are there for all to see. Misjudge your approach to Facebook, Twitter and other platforms and you’ll not only alienate customers, you’re essentially advertising your business’s weaknesses to prospective buyers.
Building a brand
Would-be business buyers will see a strong brand image as a reliable indicator of future sales potential. Developing an effective social media presence is therefore an effective way to boost brand recognition and drive up your asking price.
According to brandwatch.com, 2.3 billion people (more than a third of the global population) are active on social media. These numbers rose by 176 million in the last year alone, and mobile users are signing up to social accounts at a rate of one million per day.
Given that 91 per cent of retail brands report using two or more social media channels, according to Yesmail, any business that overlooks this key marketing channel will seem prehistoric. That said, if a business for sale has a healthy balance sheet but a negligible social media footprint, some buyers might ponder: ‘Imagine what I could achieve if I scaled up its social media operation?’
Repairing damage wrought by a badly executed social strategy will be a less appetising prospect. So get your social strategy right – or don’t do it at all.
Attracting followers and prospective new customers
Besides providing a convenient method of communicating with existing customers, social media channels also provide indispensable market intelligence.
Tracking what customers say about your products and services on Facebook or Twitter can inform your marketing and product development. And you can attract followers by sharing stories and advice relevant to your target customers, as well as discount coupons and much more on social platforms.
Done well, this generates brand enthusiasm that spreads by digital word-of-mouth, beyond your own networks. Boosting your likes, recommends and followers this then gives you a larger audience for your tweets or posts.
Marketers describe online conversions in terms of a ‘conversion funnel’, with prospective customers expressing growing interest in buying products and services as they move down the funnel. A social media post therefore needn’t directly result in a purchase.
On the contrary, people often desert social media accounts that simply bombard them with unimaginative, nakedly commercial calls to action.
Instead, social media posts can trigger actions like visiting your website or signing up to your newsletter, widening the number of platforms through which you can reach customers.
Incentives such as promotional codes can accelerate the conversion process, but building a strong brand should be the guiding rationale. Even if someone doesn’t buy from you after your initial interactions, you’ll hopefully be uppermost in their mind when they’re finally ready to buy.
So profound is the influence of social media on the cultural and commercial landscape that evidence of a creative, intelligent approach to these platforms will instil confidence in prospective buyers of your business.
It can, for instance, illustrate marketing competence through the use of industry-appropriate social channels to reach a target audience. The tone and quality of your interactions can show that you understand your customer. And the calibre of customer care will be evidenced by your responses to customer requests and complaints.
The business’s pronouncements on the industry’s dominant trends and interactions with its thought leaders will also offer insights into the company’s standing as an industry authority. And again, it’s all in the public domain and easy to analyse with analytics tools like Hootsuite or Buzzsumo. It’s very difficult for sellers to hide a toxic relationship with customers from buyers in this environment.
It’s easy to see, then, why a strong social media presence could be a source of great reassurance about the business’s credentials.
Quelling the buyer’s doubts and accelerating the due diligence process, this transparency can feasibly effect a quicker sale and smoother transition to new ownership.
The buyer doesn’t need to sign a non-disclosure agreement to, say, discover that the business has 2,500 Twitter followers, including some of the industry’s biggest influencers, as identified through a platform like Little Bird.
Social media also provides the buyer with an invaluable window into the business’s values, strategy as well as its strengths and weaknesses.
Studying your social activity in advance of the sale, the buyer can analyse the business’s approach, develop ideas on how it might be improved and hit the ground running when they do take over.
Adam Turnbull is managing editor of BusinessesForSale.com.