Friday, June 12, 2009

Making Money on Twitter US$1,441.62 per tweet

This morning i read that Dell Sold $3 Million in sales through Twitter an accomplishment that should be acknowledged and is import for other B2C businesses to admire and try to replicate. $3 million is a small amount to Dell but still relevant (about .5% of their annual revenue of $61M )- since they are just getting started with the medium . {CORRECTION-thanks to Sandro: revenues 61B not $61M, and thus this is only 0.005% (one part in 20,000) of their revenue.] They use other social media channels as well so based on the viral nature of Twitter into other channels (Facebook, blogs, Youtube etc.) it probably is a combination of the originating points of the promotion codes on Twitter spreading out.

But let's say that the average PC purchase is $800 bucks. Using that average (i made that up) through Twitter they acquired ~ 3,750 customers. Depending on their retention and loyalty rates, long term these consumer acquisitions can be even worth more.

So i checked out their Dell Twitter accounts, and there are multiple Twitter channels- 34 of them on the Dell on Twitter page and that is not counting other Dell 'employees', 'fans' and 'followers' that are not listed that retweet. Just looking at the 'Dell Offers on Twitter' category, there are 10 separate accounts. Between theses 10 twitter accounts as of this morning about a total of 2,081 tweets had been published across those 10 accounts- so if my math is correct, Dell netted about $1,441.62 per tweet. Not bad for 140 characters.



Sandro said...

You might want to check your math. I suspect Dell's annual revenue is closer to $61B than $61M, and thus this is only 0.005% (one part in 20,000) of their revenue.

And I wonder, since these sales are of super deals, whether they're making any profit at all one them....

See you at SemTech!

Judielaine said...

I find myself wondering whether Dell uses Twitter to *listen* and how one would measure that effect. Do they look for complaints about their products, actively connect troubled customers with support? That must be a better use for service companies that have control of web aps than for a hardware manufacturer.

I must say that many twitter accounts seems excessive, but it matches my memory of trying to navigate their sales site, with so many different channels and the product offerings different in each. (An iBook and a MacBookPro ago, that was)

daniela barbosa said...

Sandro-- you are correct- (what's another couple 0s?? :-(

Judielaine- i did not look at the their other accounts so i can't comment on engagement but have heard they do support that way as well. Marshall over on Read Write Web posted an piece addressing the topic about the use of Twitter and the ROI that Dell is having with some other companies they think do a better job(

For this quick post, I choose to only look at the accounts that were created to broadcast promotions rather then 'actively' connect to customers. These accounts are opt-in, so if i was in the market for a dell (or believed in the brand and wanted to make sure my followers got notices)- i would then subscribe and not expect replies.

I think it is a specific use of Twitter (and by far NOT the only use that comapanies should use!)- it is the same with twitter 'news' accounts, i expect broadcast tweets from them but not engagement or discussion- that's my 'job' as a consumer of those twitter feeds.

Is there room for both to be used successfully by companies? absolutely!.