As you will have seen in my recent blog entry, most companies have increased their budget for social media. In fact, as my recent entry showed, 75% of companies were planning to increase budgets for off-site social media. When considered alongside this, it is shocking, therefore, that a recent report by One Poll shows that of 250 businesses, less than 10% actually measure the ROI (Return on Investment) of their social media activity.
It is vital that organisations understand ROI, as it helps them to understand how much they need to invest in social media. It is important to ensure that money is not being wasted, and that budgets are being managed effectively. ROI is also an important factor in deciding whether your social media campaign is effective, or whether your strategy needs to be re-evaluated.
I always recommend building key metrics and deliverables into a social media campaign, to ensure that your budget is being used effectively. There are a number of different ways ROI can be tracked; it is easy to ascertain whether or not traffic to your website has originated from a social media platform, for instance. You can also your customers and prospects; where did they hear about your organisation? If they did find your organisation via social media, how many of these prospects became customers, and in each case, what was the value of their order?
At this stage, what I would like to highlight, however, are some of the benefits of social media that are less measurable. For instance, social media can be very useful in raising awareness of your organisation. Not everyone who finds and connects with you online will become a customer, but will still develop recognition for your brand. Also, the back links that will feature in your various online profiles will have a great indirect benefit on the organic SEO of your website.
Some organisations feel their social media can be measured purely through their number of Facebook ‘likes’ and Twitter followers. I always advise caution when paying too much attention to what are frequently termed ‘vanity metrics’, as it is important that these numbers represent people who are genuinely interested in your products or services, and that they are the demographic of your target audience.
Instead of this, we recommend tracking the traffic to your website. Platforms such as Google Analytics make it very easy to ascertain where visitors to the site have been directed from. Providing that your social media profiles contain sufficient back links to your website, you should expect to see increased traffic from these sources. We also monitor the number of enquiries coming via social media, in order to ascertain its value as a customer service mechanism.
Finally, we regularly monitor posts from third parties, to gain a sense of sentiment about the brand. Beware, however, of sentiment scores that have been calculated by software applications; this really needs to be monitored by a human being, as software applications cannot interpret sarcasm or humour.
Even though the businesses are not proactively tracking ROI, the survey does report that 21% of the businesses reported an increase in sales, directly linked to their social media presence. This is clearly illustrative of the impact that effective social media usage can have within an organisation. Even so, only 22% of the businesses claimed to employ somebody specifically to take control of the social media management for their business.
Social media is a very powerful marketing tool which we feel should be embraced by organisations as a cost effective way of improving their business. My general rule of thumb, however, is that, as with any investment made by a business, performance and ROI needs to be monitored.
Do you measure the ROI of your social media usage? Have you got innovative ways of managing your online presence to maximise ROI? Get in touch; I’d love to hear from you!