Truth be told, even the company I work for struggles with tracking and measuring return on investment when it comes to social media. To easily prove return on investment is pretty simple for social media – there are two ways:
- What would the volume of traffic to your business cost you in Pay Per Click? Since keywords and costs of pay per click are published, you can match your keywords in analytics to costs of pay per click for the same terms. Add up the numbers and you usually have a very nice story to tell your organization on how much money you saved the company.
- How much sales volume could you directly attribute to social media? Tracking direct sales from social media sources is a surefire way of proving return on investment. Included in this, of course, is search engines – which will typically drive a large amount of traffic to your company through social media.
Many online marketing and social media professionals are nearsighted. The impact of return on investment is well beyond those direct clicks. David Armano’s diagram is one that I share often (with attribution of course):
The ancillary return on investment is not as simple to measure, but it’s absolutely there. My messaging with clients is that we can start with measuring return on investment with the first two ways – but there will be many more ways in which your company will see a return on its investment in social media:
- Becoming a thought leader in your industry – if you don’t think sales can come from simply getting your name out in the industry, you are wrong. A key to social media is adding a human aspect to a brand because it builds trust. Trust is key to a business’ success. My friend, Doug Theis, likes to say that people rent from his data centers because they trust that, in working with Lifeline, they won’t get fired.
- Building a personal relationship with your customers – it’s difficult to leave people we grow to like. People are sometimes the glue you need in business relationships to retain customers. It’s not all facts and figures, many times its that little bit extra that people do. At The Bean Cup, the Indy coffee shop I hang out at, the great coffee isn’t the attraction – it’s the art displayed, the warm environment, but most of all – it’s the staff that makes the difference.
- Word of mouth marketing – has been proven to be one of the most effective means of marketing a business, but it’s not something that can be artificially generated (many try). In conversations of social media, I recommend companies, products and services whenever I can. Friend David Turpin is a connector. His official title is Account Manager with a recruitment and job placement firm… but what he’s exceptional at is listening, organizing and connecting people with companies. David is the kind of guy you want to connect to in social media… he will find you answers, companies, products, people, or a job because that’s what he excels at. He understands his value and is working for you – whether your know it or not.
- Building your Reputation – Reputation is everything online, and generating a great reputation on your site, in your social networks, and in your customers’ sites and social networks is the foundation of trust that will generate business. Through this blog, I’ve found speaking engagements, consulting engagements, a full-time job, business partnerships, etc. I have a pretty good reputation online – and do everything I can to maintain it. Whether or not you think you’re a competitor, I’m going to help you out however I can to maintain my reputation.
- Indirect Sales – Many people who research on the web will read, leave, read, leave, read, leave, then come back and engage. If the reading is done on a blog but the conversion happens on your ecommerce site or corporate site, it’s sometimes impossible with web analytics to attribute a direct visit to social media. The fact remains that many of us have connected via social media but you’ve done business with me directly without mentioning my blog… but it was there and it made an impact.
- Service Cost Savings – When your customers are reading your blogs, you can have a significant impact in the number of service and account management costs by educating them online. Social media is often a one-to-many medium. Instead of writing an email in response to a customer, you could have written it online and put it out for the masses. It’s difficult to measure work you didn’t have to do – but it’s there!
- Content and Messaging – every day your company participates in social media is a day of your employees learning, practicing the crafting of your message, and publicizing it. The more I speak, consult, and blog about social media and its impact on businesses, the easier it is for me to help new prospects and clients understand how to leverage it. I’m participating in the conversation, reading what other experts are saying, seeing what’s succeeded and failed, and able to apply that to my clients. There’s incredible value in this but it’s difficult to measure the ROI.
Promote Your Investment in Social Media
With all of these ancillary returns, promotion of your efforts is a key to successfully leveraging each medium and maximizing your Return on Investment. When I visited Walker Information a couple weeks ago, they shared their blog book with me. What a fantastic idea! They repurposed the content from their blog into a book to hand out to clients who were in attendance for a user forum.
When I shared the book with some co-workers, they looked at me stunned – some even criticizing the move. They did this because they don’t understand the ancillary return on investment of social media. They don’t recognize that, by distributing a book of their content to clients, Walker was promoting the value of the content they were writing – which will eventually lead to their customers being more successful, more customers reading their blog, which will – in turn – continue to improve their customers’ success.
By improving their customers success, Walker is providing the value that it promotes as a company and becomes more valuable to its customers. This will lead to increased retention and acquisition. Brilliant. (Not to mention the savings in time and resources in simply repurposing content rather than writing a customer service guide or book from scratch!).
It’s not ALL or NOTHING.
Some experts within social media and even at the company I work for don’t recognize the value of other social media and social networking sites like Twitter, LinkedIn, Facebook, etc. They believe you should spend all your time doing one thing or the other. They like to compare the platforms and the strategies to point to their strategy as the only one to spend all your resources on and that you should spend nothing on others.
What I’ve witnessed in social media is the effective use of each medium to promote its strengths and avoid its weaknesses. Twitter is a great means of reaching a lot of people with very little effort…. but it’s not an effective medium for topics (like this post) which require detailed explanation of a topic. My blog is a perfect medium for the detailed explanation. So – in a few minutes a tweet will automatically be posted, via Hootsuite to over 6,000 of my followers on Twitter that lead them back to my blog to discover this information.
I also send it out via a Mobile Alert to my text club (sign up in the sidebar). It’s a perfect use of each of the mediums to leverage their strengths.