Measuring Social Media ROI
So I’ve been in the social media marketing game for a little over a year now, and I’m starting to get the hang of it. Understanding the nuances is tricky, but there are some questions that most everyone asks. Every social media client I have spoken with, without exception, has asked me how to measure their social media ROI or return on investment. I have learned that there are several misconceptions about what a successful social media strategy entails, and I thought I ought to contribute my insights to help clear some of those up.
The Number of “Likes” is not an ROI Measure
Many people have the incorrect idea that a large number of Likes equates to a successful social strategy. It seems bizarre to me that people forget the basic ROI formula when talking about social media. A Like is not a gain. If you invest even $20 to get 1000 Likes, your ROI is still -100% if you do not convert those Likes into clients or increased business. The key to measuring what your real ROI is is to measure how much of that social media following is converted into actual transactions for your business. If you invest $500 into a Facebook page, get one like, and that one like hires you for a $1000 contract, then your ROI is 100%. Your investment was definitely worth it, even though you didn’t pile on the Likes as you wanted to.
Social Media is Not a Huge Time Investment
Many business owners I speak with are reluctant to begin social media initiatives because they feel it is a very large time investment to do it on their own, and they do not have the funds to hire somebody. There are several ways these concerns can be mitigated. Social media does not have to take up a significant amount of time, especially once you have refined and developed your strategy. There are programs like HootSuite which allow you to pre-program all your posts for the week, and they are automatically posted. With the advent of smartphones, there is really no reason you cannot accomplish your social media activity while you are at lunch or on the toilet. People also often make the mistake of not connecting their social media outlets and posting on each one individually. Instead, everything should be connected so that one post anywhere is instantly disseminated to your entire network. If you do not have the funds to hire somebody to actually do the work, then consider hiring somebody to teach you the ins and outs of it. Conduct a one time seminar for you and your employees, and then develop and implement the plan on your own. This reduces your front end investment to a one time cost, and you don’t have to worry about making recurring payments to somebody who doesn’t deliver. If you do it right, social media does not have to be a large investment.
You Cannot Expect Instant Results
Social media is not like the Yellow Pages used to be. You do not place an ad and expect calls within a week or two. The first three months of any social media initiative are investigatory. They are used to develop a following and understand that following. You conduct tests to see how often you should post, what days of the week you should post, and even what time of the day you should post. You develop and understanding to the content which generates the most interaction and increases your reach the most. None of these activities will instantly generate you leads. Rather, they are designed to develop an understanding and long term plan which will consistently generate leads for you. Any social media initiative should be tried for at least 6 months before it is given up.
Social Media is Not for Everyone
The news that GM has pulled its Facebook ads has gone viral across the marketing world. People are taking it as an indication that social media marketing does not work. What surprises me is that people are surprised that social media didn’t work for GM. Who the hell goes to Facebook to buy cars? Not only that, people buy cars locally, so why would a national company website concern them? Rather, if you measure the performance of local non-branded auto dealerships on social media, the numbers are quite remarkable. Social media was not for GM. Rather, GM probably should’ve hired a company like Mr. Youth to popularize its brand, because that’s what it really needs right now. Knowing your industry is crucial to having a successful social media marketing strategy. Social media may not be for you, and you need to be willing to admit that.