Dell Makes $3 Million on Twitter. What Can We Learn?

by on 14 June, 2009 - 22:01

by: Matt Rhodes

There’s been a lot of talk about Twitter so far this year - starting with the incredible growth in number of Twitter users to more recent discussions about a Harvard Business Review report that 10% of Twitter users generate 90% of activity. In all these discussions there is a significant debate about how to monetise Twitter - how they can make money from it.

Image by Alex\ via Flickr

Most agree that Twitter is currently not monetised, at least not by Twitter itself. But Dell tell a different story. This week they revealed that they have made a total of $2 million in sales thanks directly to @DellOutlet, and a further $1 million in sales that started on Twitter but were completed elsewhere.

So at least somebody is monetising Twitter, and quite successfully too. How is Dell doing it? What is the secret to their success?

Dell sells refurbished computers through @DellOutlet and has about 600,000 followers. And whilst $3 million revenue is a relatively small proportion of Dell’s overall sales, this does mean that they have taken an average or $5 for every follower they have on Twitter. A pretty impressive amount. If @aplusk could realise this kind of revenue per follower, he would make over $10 million. Even my few thousand followers at @mattrhodes would earn me almost $15,000 if I could realise revenue from Twitter in the same way that Dell can.

So how does Dell do it? The way it uses @DellOutlet is, like many of the the best ideas online, simple. They message their followers with deals, special offers and discounts. This is a form of real-time coupons - Dell can alert people to offers and discounts as they arise. And change the offers immediately when they sell out.

People love a bargain, they love feeling that they are the first to know something, and they love a personal connection and interaction. It is the combination of all three of these in @DellOutlet that makes it so successful.

• Dell’s approach to Twitter fosters a personal connection - rather than have a single corporate Twitter account, they segment their followers by having different accounts for different customers with different needs and interests. Those following are interested in what that particular Twitter account has to offer and will feel that it is meeting their needs.
• The use of a real-time update system like Twitter allows for offers to be promoted when they occur. It offers an immediate notification of any offer or discount and as such those who follow @DellOutlet are the first to know about deals.
• Through @DellOutlet, people can find out about genuinely good deals.

It is these three things together that make for Dell’s successful monetisation of Twitter. It’s a relatively simple formula that many businesses could adopt. Perhaps the more interesting aspect of this story is that whilst Dell uses Twitter to generate $3 million in revenue from its followers, Twitter itself asks for none of this revenue.

Some more reading

• Twitter is Not Your Average Social Network (mashable.com)
• What the Dell? Twitter Followers Get Bonuses (montysmegamarketing.com)
• Twitter to offer Facebook Page-like features for companies (or what)? (venturebeat.com)
• Dell Provides Exclusive Deal Offers on Twitter (shoppingblog.com)
• Dell joins those who ‘get’ Twitter marketing - who’s next? [VIDEO] (inquisitr.com)
• Dell Starts Offering Exclusive Discounts Through Twitter (techcrunch.com)

Original Post: http://blog.freshnetworks.com/2009/06/dell-makes-3-million-on-twitter-what-can-we-learn/