The True ROI Of Social Media
There have been literally millions of blog posts, magazine articles, and lectures done on the methods that can be used to measure the ROI of social media. Which has me wondering – why?
ROI is really easy to calculate – you measure your input costs, measure the money that you made as a result of your actions, and then divide. It’s kind of business 101.
So why is this such a popular topic? Because people are trying to justify their salaries to their bosses.
This is mostly because their bosses don’t have a clue as to what social media is, or how it benefits business.
The simple fact is that social media isn’t simply a marketing tool. Sure, it can be used for marketing. Yes, it can be used for sales. But social media is also a customer service tool. It’s a word-of-mouth tool. It’s a research tool.
Let’s compare social media to a phone. People ‘man the phones’ all day long, but nobody says that a receptionist needs to close 4 deals per day to justify her salary. It is just considered the cost of doing business. On the other hand, if a company is investing in a telemarketing venture, you’d better believe that they are monitoring the cost of the program and the results that it is bringing in.
That’s pretty much how it should work with social media too. You don’t NEED to be involved in it, but given the numbers of people engaged in social media every day, you’re putting your thumb in the eye of millions of consumers by ignoring it. In many ways, having a Twitter, Facebook, or Pinterest account today is just a part of doing business. You can’t, SHOULDN’T bother trying to measure the ROI. BUT – when you want to launch a marketing campaign on Twitter – you need to measure those results.
I’ll say it again – measure the results of specific actions on social media – such as promoted Tweets, links you want people to visit, and posts directing people to items you want them to buy. However, ignore the cost of having the social media accounts. In 2013, it has become the cost of doing business.
If more businesses thought this way the value of social media as a whole would increase, as companies would stop endlessly and uselessly promoting themselves when nobody wants to hear their message. Instead, companies would just interact and be social, building relationships for the time when people are in the market to buy. A mortgage broker will never be able to convince someone who has no need for a mortgage to get one. However, a good mortgage broker who uses social media to interact will the be person that someone who does need a mortgage thinks of when it is time to renew or apply.
It’s time for you to decide: Are you a social company or not?