6 Ways to Measure Real ROI in Social Media
The common question from businesses when considering launching a social media campaign is ‘What will be the ROI if we invested in social media’ ?
In our experience there isn’t just one answer, as ROI can mean different things to different businesses. What needs to come first is to establish what you want to achieve from investing in social media and how this aligns to the overall objectives of the business.
Considerations need to be given to brand or product awareness, digital influence, customer feedback and service improvements, database development and of course product sales.
Understanding the process of the ‘social media sales funnel’ is also important. If it is purely sales you are after, understanding that with social media, this develops over time as a result of a well developed digital strategy.
So what does real ROI look like?
1. Cost Reduction –Many people don’t consider social media as a means to help your business operate more effectively resulting in measurable financial savings. For example, a social media platform can save you having a large customer service team answering daily emails and phone calls.
Reduced staffing costs come about companies using their social channels as ‘customer service channels’ where customers can tweet or post up their questions for a company rep to answer.
As a result of the reduction in calls and emails, less staff are required to manage the customer enquiries. Social media can provide positive market exposure about your customer service professionalism and it is a great way to show your business cares about its customers.
2. Social traffic to Sales Conversions – A business that sells products/services online can easily measure sales traffic off their social channels specifically directed to its e-commerce store.
Google Analytics has some great tracking tools to measure these activity levels.Sales tracking funnels can be set up to explore where purchasers came from, whether traffic is directed from your facebook, twitter, linkedin or any other social channel.
3. Brand Awareness – Obviously you want people to know about your brand and existence otherwise why do social media in the first place?
As you progress with your social media efforts you should be building your audience engagement all the time, as the greater the number of eyeballs you have, the greater reach of your message.
People talk to people whether that is in person or online, so having more people aware of your business through the ‘noise and buzz’ you create will have positive long lasting effects. How can people buy from you if they don’t know about you?
4. Social Engagement – A key to having a successful social media presence is people talking about you and interested in what you are saying from the content you are providing.
Your ‘message reach’ will be enhanced when people are liking, commenting or sharing with you on facebook or re-tweeting you on twitter for example.
My last blog talked about ‘digital influencers’ and if you are getting engagement from people with large social communities themselves this can amplify your content in a big way.
5. Measuring Customer feedback – Perhaps you are considering offering a new product or service and traditionally your business has spent large amounts of money in gaining and measuring feedback from customers and target markets.
Why not use your growing social audience to run feedback surveys? People are often prepared to give you their opinion ‘if you ask them’. You could ‘tie this in’ with a competition or campaign as an incentive for people to participate and again is a great way to engage your audience. Once again, a significant ROI if correctly implemented.
6. Increasing Email Subscribers – A targeted email list can be very valuable to a business and if you do not have a email database it is possible to convert your social audience into valuable email subscribers.
A great tactic is to again consider running competitions/offers where people enter their contact details as part of the entry process. Just ensure as part of the terms & conditions that you tell them how you are intending to use the information they provide.
By clearly understanding your sales lead and new customer acquisition costs, service process costs and current market reputation realities, a business can then measure real ROI from social media.
Written by Social Media Temps (SMT) Head of Strategy & Development Gareth Lloyd. For an initial free consultation on your social media marketing contact SMT on 02 9386 0011. Follow us on twitter @socialmtemps