Social Media: Is it giving my Company any ROI?

A recent survey by Mashable found that 84% of companies running social media programs don’t measure return on investment (ROI). A lot of brands both big and small are starting to leverage social media, but how do you measure the impact that social media is having either on sales or in brand lift? Assessing social media ROI is fairly hard due to the nature of the medium but it is not impossible.

Key Performance Indicators

At the launch of any social media campaign, you need to define some key performance indicators which are your measures of success. If you are putting in X dollars into a social media campaign what do you want to achieve? i.e. If you are going to setup a Facebook fan page for your service or product and then purchase some Facebook ads to drive to it,  how many fans do you expect to get in return?  Is  5$ per fan a reasonable amount for your brand or is it simply to expensive?

Some KPIs anyone running a social media program should monitor are as follows:

  • Which social media tactics are reaching the most people and in turn producing the most traffic (twitter, blog, forum, etc)?
  • Which  tactics are  driving the most engaged visitors (most time on site, most page views etc.) and the most high value tasks on site?
  • Are your efforts attracting the right people? (measure with surveys, monitor user engagement on site).
  • Based on you social media efforts, are you seeing any brand lift, positive comments in the blogosphere or increased intent to buy?
  • Use  a social media monitoring tool like Radian6 to monitor increases in mentions of your brand
  • Use a back link checker to see if the number of hyperlinks to your site / blog / twitter etc. are increasing with time.  Social media can lead to more incoming links helping you increase your organic search ranking.
  • Take a look at branded search volumes that are driving to your site by looking up data in your analytics tool

If your company has not traditionally been part of the online conversation, what are you aiming for? Set some high level goals in terms of how many customer problems you want to address on forums and on Twitter on a weekly basis.   If you have a dedicated Social PR resource set expectations ahead of time.  You need concrete goals and then you need to work towards them. Take a look at how customers are responding to your Social Media PR efforts. Is there positive feedback when you help a customer using Twitter when other channels such as a call center support failed to address the customers issue?

The Bottom Line

In short, measurement is all about the numbers. If there is any way to assign a number to some facet of your social media campaign you need to know that number, take a measurement as a baseline and work to improve it.  You also need to set goals ahead of time and works towards them.  Don’t spend money on a campaign or social PR effort without having defined your success metric and defined some type of budget per high value task.

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6 responses to “Social Media: Is it giving my Company any ROI?

  1. First off, companies are missing the point when it comes to social media. The bottom line is not numbers, it’s “QUALITY of realtionships.” A company doesn’t need to necessarily spend money on social media campaigns to build brand recognition. In fact, it’s the only reason they are using social media…they need to get out NOW! Social media requires people to be SOCIAL. If a company interacts with its customers on a regular basis and actually gives a crap about what they want, then their bottom line will increase without them having to ask for a sale.

    It’s understandable that companies want to make money. Who doesn’t? However, if the believe for one second that social media sites are simply a broadcasting tool and used for money, they are sadly mistaken and are going to be eaten alive by the individual who actually CARES about his customer base. Companies need to use search.twitter.com search the keywords for their business and interact constantly. Then they will see their customers interested in what they have to sell. It’s simple, if they care, the customers will care in return!

  2. Well put Frank. Social media and customer care (service) go hand in hand. You can do all the social media you want but if you don’t back up your online interactions with great service it may just backfire on you. Word of mouth marketing works both ways. It can be advantageous but it can also destroy your business.

    I agree with Ammar about putting benchmarks and defining your indicators in order to measure your SMM efforts. Without it is just a waste time and money.

  3. What a great post to start off the new year! You are spot on…it is about assigning measurable objectives and aligning those with your organization’s bottom line. Thank you for the shout out.

    Lauren Vargas
    Community Manager at Radian6
    @VargasL

  4. Let’s not forget that social media marketing efforts must be maintained at all time once begun. This should not be used as Q4 strategy to increase awareness and sales.

    If you’re a big company, I suggest you hire a resource to maintain your social visibility, but like Frank said, use social media marketing for the “right” reasons.

    Also, find the KPIs that best suit your business goals when measuring the effectiveness of your social efforts.

    Tools such as Radian6, TweetDeck, and HootSuite are great on tracking and measuring your social presence and effectiveness.

    Joe Machalani
    Senior Interactive Acquisitions Consultant

  5. What’s the going rate for a 12-24 month social media strategy?

    • It really depends on the client and the type of strategy you put in place. You may be putting together a social media PR strategy in which you help the company to respond to negative comments and support issues in the social media space like forums, you may help to devise a social media monitoring strategy to help a company learn what it being said about them in the blogosphere or you may help them with a social media marketing strategy to help create buzz about their products. It really depends on the clients objectives and the size of the mandate.

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