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Mar 15

Social Media and ROI – not a dirty word

Two big terms and two big words bundled together alongside ‘KPI’s’ and ‘results’. I have read posts that say you can’t measure social media, or it’s too hard to measure ROI. I don’t believe this is true, there are metrics, and it’s a matter of finding the right metrics that can explain what the specific activity for you is trying to achieve.

But this is all a bit too late if you don’t actually know what it is you are trying to achieve.  Are you Business to Business (B2B) or Business to Consumer (B2C), are you trying to warm up leads for your sales team to follow up, are you trying to create a community to find out more about your products/offering, are you wanting to inform and engage with current clients, are you wanting to shift your support activity to a faster, leaner online version using social media, are you wanting to drive traffic to your website, are you wanting to become a source of information, or a ‘go to’ website.  You can’t be everything to everyone so you have to decide what your approach to your social marketing is, so you can then determine the best strategy to use to start achieving your goals.  By determining what it is you are trying to achieve you can then determine the best set of metrics to use to map your progress.

There are many made up equations for social media ROI, based on the simple financial calculation of investment vs gain from investment.  That’s where it can get silly…

Social Media ROI = [(tweets - followers) / (comments x average monthly posts)] / (Facebook shares x Facebook likes) / (mentions x channels used) x engagement

One word …’Seriously!’ This is far from a true indication of how your specific campaign on your specific social media channel is performing.

 

 

Yes, gaining followers is a nice to know, but what are you doing with them, do you know who they are? What they like? Where they are based? Could you then perform a relevant specific campaign around groups of your Facebook community.

Yes you can measure a lot of statistics on social media, traffic to your website, blog traffic, engagement, communication etc.  But if it’s not specific to your actual planned strategy you need to take a step back and look at why.

Return on Investment isn’t a dirty word with social media, if your end game plan is to sell products then you have to take it on the chin and harden up.  But remember there are a lot of activities within a business that ROI isn’t applicable too, that social media marketing could also fit into. Customer service, crisis management, R&D, reputation management, technical support, sometimes we just need to broaden our horizons on the uses that social media opens up within an organisation (please see the list of social media impact areas in the image on the left).

 

Two questions I think are really important to the impact and assessment of ROI for a company I found in Olivier Blanchard’s blog.  He writes,

‘For an organisation, the value of social media depends on two factors:

1. The manner in which social media can be used to pursue a specific business objective

2. The degree in which social media activity helped drive that objective.’

So if it is about investment and gain and that is where the marketing KPI’s lie, then that needs to be assessed as ROI. But this is not always the case, and if financial gain isn’t relevant then ROI doesn’t matter and there are other metrics more suitable to assess the social media impact. These should be dependent on your organisation but along the lines of:

Are you converting leads?

Are you increasing your following?

Is your engagement going up? Are they coming back for more? Phone, email or web?

Are people viewing and sharing your content? If so what? Do you need to focus on your content in this area?

So, if you have a social media plan you will be able to effectively map the metrics and/or ROI as it relates to your company. If you don’t have a plan, then how can you even measure the effectiveness of your non-specific objectives.  My advice, sometimes it pays to slow down and get the basics right, before leaping in and trying to be everything to everyone.  Focus, work on your objectives, determine whether ROI is appropriate, and start making a proper impact with your social media marketing.

Other blog posts of interest:

Google Plus for Business

Personalising your LinkedIn Profile url

The expansion of Customer Service

Profile Fatigue

Responding to negative feedback