When starting a business, it’s vital that every business owner focus on the term “return on investment.” ROI is the ratio of the amount of money earned based on the cost of an initiative, and it helps gauge the effectiveness of marketing campaigns, expansion plans and even personnel changes. To the extent possible, business owners should take the same approach with social media. Here are some suggestions for getting started with thinking about company’s ROI from its social media initiatives.
Calculate costs. Assessing the costs of a social media program is relatively easy. They can be computed simply by using the weekly or monthly salary of the person who handles social media in a company. Or the total cost can be figured out by the number of man-hours it takes for other employees to stay on top of the company’s social media efforts, and then multiplying that number by the appropriate hourly wage.
Align the social media initiatives with your business goals. This seems intuitive, but you’d be surprised how often companies fail to do this. For example, if your objective is to increase sales from walk-in customers, it’s a bad idea to institute a social media campaign that gives Facebook friends a 10% discount on merchandise they purchase from your e-commerce website. Or if you’re trying to increase foot traffic on weekdays, don’t use Twitter to promote college football game-watching parties (which usually take place on Saturdays).
Don’t dismiss “soft metrics” out of hand. It’s common for business owners to make decisions based solely on hard data. That’s usually a good thing, but when it comes to social media, it’s wise to widen the criteria into so-called “soft metrics.” For instance, a video on a company’s YouTube channel that goes viral may not show direct results in a business’s bottom line, but it may increase overall awareness of the company’s brand. It could also help improve responses to future social media objectives. Even though these kinds of returns are difficult to quantify, there’s no denying that they do have an effect on a business’s social media program.
Allow for organic discussion to emerge. There’s nothing wrong with promoting your brand or products via social media. But if your blog posts, Facebook messages or other social media entries are constantly extolling the virtues of the company without incorporating public feedback, then your overall social media efforts will suffer in the long run. That’s because people who engage in social media do so because they like the idea of having their opinions heard. A social media plan without two-way communication of some sort is nothing more than an ad — and people get enough of those through other media sources.
Be consistent with content. Social media participants are fickle, so it’s vital to stay on top of your channels and keep providing fresh content. Many businesses have failed in their social media initiatives simply by posting sporadic blog entries after two weeks of daily updates, or by forgetting to address their Facebook community, or by neglecting their Twitter feeds. It’s up to those in charge of a social media presence to maintain a steady level of content on all channels — even during the lull between promotions and sales events.
Chris Martin is a freelance writer who writes about topics such as auto insurance, consumer finance and entrepreneurship.