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Social Media ROI – You're Going About it All Wrong

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I’m going to state this three times so you understand:

 

ROI is always a dollar amount

ROI is always a dollar amount

ROI is always a dollar amount

 

OK, now that we have that out of the way, let’s talk about ROI as it relates to your social media plans.

 

Any successful business should want to know how any specific activities by the company and/or its departments and staff translates into success, however, that success isn’t always determined by ROI. For example, I would imagine your company has a website. Now, you may have created your website back in 2005 and haven’t updated it since, but if it’s live, you’re paying money to host that site on some server somewhere. If you’ve been keeping it updated, there’s an amount of time/resources that you’ve spent updating it. So between initial design and programming, updating, and hosting, over the past eight-plus years, you’ve invested significantly into your website.

 

So what’s the ROI of your website? You probably don’t care. Most businesses don’t worry about the ROI of the website because it’s simply a cost of doing business and often overlooked. The same philosophy applies to your telephones, your email service; your business cards, your new company shirts, etc.

 

All of these things are part of being a successful business in 2013. Your business can’t afford to neglect the tools available that will help you reach and interact with your customers. So why would you avoid utilizing a tool as powerful as social media because you can’t determine ROI?

 

So if you shouldn’t focus on ROI as a measurement for social media success, what should you focus on? The key here is to change your thinking about social media. Social media is not a campaign in and of itself. It’s a tool, a very powerful tool that you should use as a part of an overall strategic initiative. Use it to support your advertising, bring attention to your blogs, and show your stellar products and services.

 

You’ll have an ROI on your overall campaign, but by and large you can’t with social media. This does not mean that you can’t measure the success of your objectives with pre-determined measurable.

 

If your company is like most businesses, a great use of your company’s social media accounts is customer service (note: this should only be a part of your social media efforts, not all of your efforts). This includes monitoring networks for people who may need help with your product or service, people who are coming to you directly for help, people in search of a product or service that you may offer and/or people that just want to tell the world how awesome your company is. If you’re doing social media right, you’re on top of these things the minute they happen and attempt to be as responsive as possible.

 

Thus if part of your social media activities is centered on customer service, how do you determine if it’s successful? By using the same metrics you use for any customer service function. Track things like response times (note: many studies have shown that most social media users expect a response from an interaction with a brand within 60 minutes), issue resolution times, first contact resolutions times, etc. Treat those efforts on social media just like you would on any other platform.

 

When you do utilize your social media networks as a tool to generate cold hard cash, again, measure the results of those efforts like you would any marketing campaign, with goals and objectives laid out in advance (Note: “Facebook” is not a campaign, it is a tool). The success of your campaign should be judged upon those results.

 

Now, that’s not to say one of your goals can’t be to bring in a lot of sales, but if you want to measure those goals, then your specific objectives need to address how social media will be utilized. For example, your goal could be “To increase online sales of Awesome Products by 25%” and one of the objectives would be  “Increase traffic from Facebook to our Awesome Products online store by 25% from Q1 2013 to Q2 2013”. Your objective is clear and measureable and you see how your company is using social media as a tool rather than trying to force some unfair measurable against it.

 

Social media is ever evolving and as it does, we are constantly changing the way we utilize these tools for our business. We all know that if you can’t measure it, you have no way of understanding if it’s successful, but it’s also important to understand what function these services provide. Understanding how they integrate within your business and its operations is the key to success.