There are many articles on the ROI of social media. Many of them talk about the ROI of social media not being revenue but more about extending marketing reach and connecting with prospects and customers. One I read recently was called Tackling the Question of Social Media ROI: Change Your Goals. It was probably one of the better explanations of social media ROI I have read but I wanted to add some of my own thought about it.
Fans Followers and Subscribers
The most basic and easiest metrics to put in place are counting the number of fans, followers and subscribers you have accumulated over time, or “skill level 1” as I call it. In the early days of social media for businesses, this was the only thing they cared about. Truth is that there are still many companies that still ONLY care about these numbers because they really have no intent on actually building their social media channels to be ‘social’.
Without being a social business and actually putting resources in place to be a company that wants to communicate in open channels with your prospects and customers, all social networks just become another platform to broadcast marketing messages. The more fans and followers you have the wider that exposure will be but the chances of you actually gaining anything from it worth measuring is slim to none.
The sad thing is I come across many companies that do this and it shows. The company executives just dont ‘get it’ or worse, they get it but still don’t see it as a priority to other marketing efforts.
Social Media Engagement
This is what I call “skill level 2” of social media ROI. It’s still fairly easy to measure if you use some great social media tools like these. In my post Social Media Engagement Drives More Followers I highlighted the hyper-growth of the InsideView Twitter profile when we started really focusing on engagement.
Some metrics for social media engagement
- Clicks: How many times are your updates getting clicked through.
- Updates made: How many updates are you sharing.
- Retweets/shares on Facebook: How many times has your content been shared online.
- Unique mentions: How many NEW people have mentioned you online.
- Influential mentions: How many people of influence have shared your content to their networks.
Though measuring engagement is fairly straight forward, it takes more work to actually engage with their prospects and customers and this is why many companies just dont do it. In order to do it right, it takes alot of planning and you will need some dedicated people resources to make it effective. Even with the above metrics being tracked, strategy needs to be designed and tactics executed on in order to build a sustainable and almost predictable level of engagement from month to month.
New Leads and Revenue
Leveraging social media to drive lead generation and revenue (Skill level 3) is a goal many companies strive for but ultimately fail to do. There are many reasons for this and the obvious one is that they have zero commitment to skill level 2. Even if they do have the commitment, they have not put anything in place to actually measure these channels and therefor have no way to track the effectiveness of anything they are doing online.
I’ve been in my current position for a year and it took some time to build the structure to actually track a new lead from social media. Without understanding the fundamentals of Skill level 1 and Skill level 2 there is no chance of getting here. There is a sense of accomplishment when you can run a report and see in any given period of time how many new leads have been generated from Twitter, when a fan on Facebook has started a trial of your product or when your company blog can be tracked to a deal with a big customer. How awesome would it be to see that social media is in the top 5 sources for new leads in your company?
Most marketing departments are trying to figure this out, few have. I believe this is because social media challenges the existing paradigms of most marketing professionals. Measuring the ROI of social media is like asking a sales person what the ROI is of a phone call. The only way to know is by tracking a volume of calls and seeing what the conversion rate is, understand why those converted and replicating the effort. Dialing in the actions that focus on the right messages at the right time to the right people.
Would a company put effort into marketing and then tell their sales teams not to answer the phone? On the same token, would you engage with your customers and then cut off lines of support? Of course not!
It takes work, experiments and commitment. Now, imagine a business that empowered all of their employees to be involved in social media. Sales people would be social selling and support would be providing social customer service. From the company blog to Twitter to Facebook and any other channel, they become a large community all focused on your product that can be leveraged and supported in real time.
Inbound marketing works and companies that are doing this now are going to be the ones reaping the largest rewards in the long run. Again, most companies are not ready for this yet.
The Real ROI of Social Media
I could have left the post off with the rainbow of generating revenue from social media but I dont believe that should be the end game or even the true focus of what your company should be doing with social media. Revenue is a byproduct of content marketing, expanding your reach and excellent engagement.
The real ROI of social media is the moment you realize that you can’t stop the spreading of your content even if you tried. It would be like trying to unpull a trigger. There was a moment when we had a paper that was being used for lead generation and distributing it primarily through social media and we accidentally broke the link. The link to the paper was getting shared for hours before someone alerted us to the error. It was an easy fix and all was right in the world again but it was surprising that during the time the link was bad, our fans and followers continued to blindly share the link with their network because we had become a trusted resource and our influential advocates passed along our updates without giving it a second thought.
ROI is most importantly the cultivation of relationships and capturing the positive word of mouth recommendations from your community. It’s the gift that keeps on giving. Engage with your community, capturing positive feedback, acknowledging the source and leveraging that feedback on a continuous basis.
1. Determine your influencers
2. Understand who influences your influencers
3. Determine how to help and support your influencers’ and their network
Social media ROI should be measured across all skill levels. Social engagement is NOT just a function of a marketing department. A social business is one that can leverage social networks for marketing, sales and support. Many companies focus one of these but lose sight of how the trifecta plays together and drives real interaction that builds awareness, creates new business and retains customers. Each company is different and in the B2B space that I’m in revenue is always the goal. Hitting that goal is made possible by spending 80% of the time engaging with the community, focusing efforts on sub-groups of that community to get more targeted reach and deliver focused content. Starting with marketing and training sales and support to ride the momentum of social engagement.
Businesses that want to win with social media need to break down the walls, create a social media policy and dissolve their fears around social media use and understand the impact it can have. Build a team of people focused on social engagement and community management. Start building communities around your customers and engage with them online. Identify who your top influencers and advocates are and build relationships with them. Stop using social media as a bull horn and start using it like a hyperactive telephone.