Do social networking sites really build revenue?

With Facebook nearing 150 million users, and Twitter boasting the title of fastest growing social networking site ever developed, there is no doubt that social networking has gained popularity at lightning speed. For better or worse, many businesses have joined social networking communities in search of boosting their revenues in the down economy. But how useful are these sites in creating revenue?

From a purely marketing standpoint, I give it an A+ for reaching my target audience, but a C+ overall because we still have work to do on our strategy, including measuring the true ROI. Social networking has been extremely effective at building the Naviga brand and creating strong value in the sales and marketing industry. It has allowed us to connect our core recruitment business with a solid resource (this blog) that provides thought-provoking ideas, challenges, thoughts and strategies on how sales and marketing professionals can be more effective and advance their careers. But in terms of true revenue gain, the verdict is still out for me.

Out of curiosity, I posed this question to my LinkedIn colleagues. To my surprise, there were a few who haven’t seen a referral, sale or other tangible opportunity they could attribute to social networking.  However, one respondent commented that if businesses are not seeing results, it is because they are not putting their all into the process.

“Merely throwing together a blog, or registering for a Facebook account and hoping the rest of the work will take care of itself will simply not do,” he wrote. “Active participation in social networking offers you the opportunity to reach out to potential clients/customers/leads on their terms, but you must commit to being a presence in the online community. Not unlike your website, inbound marketing efforts must be interactive and up-to-date. Create a presence, seek out the appropriate leads and offer engaging information that makes prospects want to continue communication with you.”

Leveraging social media in conjunction with other online marketing strategies has proven lucrative for companies like HubSpot, which reportedly receives 10% of its monthly leads from Twitter and another 10% from Facebook. Dell recently announced that it has made $3 million thus far using Twitter alone.

But these results don’t come of their own accord.  As the saying goes “you get what you give.” One LinkedIn respondent suggested that its best to get a feel for the site and its users before taking action, then join groups that share similar interests as the people who utilize your product.

“The main thing to avoid is blatant advertising in networking groups, this will likely lead people to avoid you and your product,” she wrote. “Instead, build trust by being approachable and talking with prospects like a normal person. If you are approachable, members will begin to like you and your product.”

Based on some of the reported results – and my own experiences – I think it’s safe to say that social networking sites, when used properly, do generate leads and even out-right sales. The trick is to approach them strategically and give them the attention they require.

What are your thoughts? Does social networking work for you?