This post is the first in a series dedicated to understanding how the ROI for Social Media can be calculated. The entire series will include many points for you to use this knowledge and understand the social media marriage with business objectives.
These posts will prepare you to demonstrate ROI before your management team knocks down your door and at the same time to make them understand the influence of social media.
Social media in itself is not magic and has no ready-made ROI models. The way each business uses it will depend on the specific strategies and goals of the organization. However, I have tried to come up with common themes for how businesses can measure social media ROI. To start with, few basic points to remember:-
Social Media will Save Your $ $ $
Identify places where social media can replace/enhance a business process or system. For example it is several times cost effective to serve a customer on social media (like Twitter, Facebook) than in a call centre. Virtual social media training can save enterprises tons of money. You can even use social media in market research, consumer surveys, and business intelligence and as a part of day-to-day operations that saves you considerable amounts of time & money.
Social media campaigns are cost effective in nature that will help you to replace or target better in advertising and PR, and save dollars from those budgets as well.
Business Leads from Social Media
Social media represents another evolution of media that allows two-way communication between customers and brands. Use social media to find new connections for your business. Share tips, resources and information that add value to your audience. Promote you brand in an interactive way and look for opportunities to partner with them.
Monitor conversations with people looking to buy what you are selling and interact with potential customers & past customers.
Strategic Objectives & Business KPIs
Social media reach & reputation of brand is a key success indicator. Insights from Social web not only give insights into day-to-day operations, but also directly influence business growth, innovation, revenue and profitability.
Insights from the social media can play a key role in reaching strategic business goals such as improving customer experience or understanding customer’s business problems. If you want to stay ahead of the curve and determine customer needs, you have to set specific business goals and track your progress.
It is important to understand the impact of reaching these business objectives, which in-turn will help you to quantify the ROI of social media easily.
Finally, report these business KPIs on a regular basis. Do good things and tell people what you’ve done.
Here is an interesting old post from Altimeter on business objectives and social media ROI – Social Marketing Analytics. Even Wikipedia provides a good overview on this topic – ROI of Social Media. This will set a good base to start with.
There is no single way to use social media, but if you don’t know where to start, focus on the “Big 3” – Facebook, LinkedIn and Twitter. Social media strategy isn’t a one size fits all solution, but with few basic things in mind brands can go beyond deploying social media from “awareness” & “engagement” to real “ROI” and save valuable marketing dollars while significantly expanding your reach on social media.
As this post has highlighted the basic things required for measuring “Social Media ROI”. In next posts, I will come up with attribution models and new examples of successful ROI calculations.
It will be very interesting to know your thoughts on this. What do you think? How do you evaluate social media ROI? Share your thoughts…..
And stay tuned for future blog posts…. 🙂