As marketeers, we constantly get measured by our results, especially how much return on investment we can generate from our marketing efforts. A lot of people ask the same question about social media: “What is my return on investment through social media, and how do I calculate it?”
There have been hundreds of blog posts written on the subject and the general response is that there is no defined formula for measuring return on investment from social media.
Why” Simply because the tools for tracking and monitoring social media are still being improved and developed. If I had £1 for every new social media monitoring tool or application that was launched this year, I’d be a very rich man.
Social media doesn’t just have to be about return on investment, there are other ways to track your ROI through social media. Allow me to explain.
There is more to social media than generating sales and profit
Yes, believe it or not, a lot of brands get involved in social media for very different reasons than just monetary gains. Brands have been using social media to build communities around their products or services, giving customers a platform to voice their opinions and ideas, raising brand awareness and launching viral ad campaigns. I could list more.
Starbucks, for example, successfully launched My Starbucks Ideas to allow customers to voice their opinions and share their ideas to improve the Starbucks experience. Or take a look at this example by Jeep, where they created their own space for fans to share their love and passion for their cars.
When defining the return on investment for social media, we first must defined what “R” or return actually is.
Defining Your Return
A return on investment could be one of following:
- Return on Engagement – How many people are you engaging with” Is this engagement showing results in terms of the number of retweets, website sales, @mentions, Facebook likes, inbound links or traffic
- Return on Participation – If you’re promoting a launch or competition, how many people are participating through your social media campaign” Think about participating in conversations where you don’t already have a voice. Have you moved from a running monologue to a meaningful dialogue with your customers?
- Return on Involvement – This can look at the number of sign-ups or the number of people who are actively involved in your social media campaign. A lot of marketeers measure involvement on blogs – for example, how many comments do you get” Are users actively adding to your blog community” You should ask yourself whether your company is currently playing a part in the conversations about your products/industry” If the answer is no, then get involved in them.
- Return on Attention – Are people listening to you more than they are listening to competitors” How are you currently talked about compared to your competitors” Are you receiving negative or positive attention?
- Return on Trust – This is key. I can’t stress enough how important trust is online. Think about all of Toyota’s problems with its recalls. Toyota are turning to social media to build trust and to reassure customers about their message that they deliver quality cars. Nearly all brands and companies should be looking to build better relationships with their key audiences. Trust is what makes a brand powerful.
Measure Your Success
There are many reasons why you might start a social media campaign, so let’s look at how you might measure success. If you can generate sales and profit through your regular efforts, then that’s brilliant; but social media can do so much more for you. A lot of the world’s best bloggers that I follow have used social media successfully to drive significant inbound links and traffic to their website.
Let’s look at some key success factors:
- Improve your corporate reputation
- Improve the number of conversations
- Increase website conversions
- Improve your customer relationships
- Generate inbound links
- Increase your website traffic
So remember, if you’re thinking about getting involved in social media, set out what it is that you’re going to measure and remember that return on investment can defined by more than just profit.