This is made clear in a fresh report by the Altimeter Group, which highlights that developing return on investment measurements is the hottest topic of 48 percent of social strategists. This is also shown by a recent report by an e-marketer that demonstrates the grown focus on return on investment metrics. The report highlights the increased focus on measuring conversions and benefits from social media efforts.
Return On Investment In Social Media
Before diving into the difficult method of trying to determine your social media return on investment, it’s better to take a step back and analyse what the real return on investment is and what the other advantages of social media can be, however, this may not drop into a direct return calculation. Return on investment can have various significations to several people but it’s still a financial calculation and must be treated as one when looking at social media metrics.
If you have correctly measured your social media results with web analytics and tied it in with your customer relationship management statistics, you can measure the direct gains from social effort. Having your web analytics configured correctly will also help as you will usually be required to add to the data with supplementary metrics to help bring together a more wholesome image of your benefits.
Tracking The Checkout Process
This is where some questioning in the checkout process (How did you hear about us? What drove your purchase decision today?)can add additional insight. In the last question, it’s usually a fine idea to permit for various selections since clients are likely to have had several touch points with your products that drove their purchase choice. This kind of measurement can assist and uncover the direct impact of social media investment and help in your social return on investments calculation. Nevertheless, social media concerns much more than just the direct gains from your investment.
There are lots of benefits that come from social media that might not impact you directly but they may impact the short term and long term health of your company. As a consequence, these may not fit into your return on investment calculation; however they shouldn’t be uncared for when assessing the value of social media. Four of these benefits are discussed below, but there are likely others that may play a position in your brand’s health.
Benefits To Help Your Company’s Image
BrandingBrand knowledge is important to the long term success of your social media campaign. If you haven’t put investment into building awareness, you don’t stand much of a chance when client’s consideration is set when they are looking to make a purchase. If you are not in the consideration set, then the charge of your investments is more often than not going to result in a negative return on investment. So whereas branding efforts aren’t going to have direct results, they are important to the long term health of your brand.
From a branding point of view, a big advantage of social media is that your loyal clients will often be more than glad to help build awareness for your company. By engaging in social channels on behalf of your company, these loyal clients, turned ambassadors, can help to decrease the weight placed on your shoulders whilst adding credibility to your brand communication. Nevertheless, this doesn’t signify that you shouldn’t pay close interest to the conversations your ambassadors are engaged in. You always want to maintain a finger on the pulse of your company by understanding how it is perceived and the conversations that are taking place about it.
Public Relations
Nobody wants to spend their own time, effort, and resources building a successful company only to have it come crashing down due to a situation that spun out of control. That’s why public relations is one more element of social media that ties into the long term health of your company but might have a direct impact on return on investment calculations.
Instead of building instant return on investment, your public relations efforts in social media will play a more prominent role in the prevention of a negative return on investment in the future by defending the brand and managing risk.
Customer Service
Maintaining your existing clients is another important element of building the long term success of your company. Not only will happy clients tell their friends about their good experiences with your company, they are also more likely to turn out to be a repeat client and a repeat client is much cheaper to keep than generating new ones. A satisfied client won’t be talking negatively about your company in social media. In fact, a rather pleased customer might advocate on behalf of your company if negative conversations happen.
So whilst social media might not be your main customer service channel, it absolutely should be included into the mix to help heed off any negativity that may arise from a disappointed consumer. This in turn can generate a more positive overall tone of the discussion that may dissolve a negative rising that could bubble up into a public relation nightmare.
Every one of these can lead to long term health advantages for your company whilst having the potential to decrease the burden on your call centres in the short term.
Consumer Insights
Social media can also be a good channel to gain insight into customer minds about your company or product. These can be extremely helpful when developing an innovative product or improving on a current product.
Whilst these insights won’t have a direct impact on your results, they can help ward off costly mistakes where time and resources are dedicated toward a product or product progress that doesn’t satisfy client’s requirements and as a result isn’t adopted by customers.
Social Media Value VS ROI
These are just some examples of how social media can be a great advantage to your company without directly tying into a return on investment calculation. Just because these aren’t elements of a return on investment calculation, it doesn’t mean they should be dismissed. Whilst the calls for the justification of social media budgets are ongoing, in several cases an answer to those calls has yet to be heard because people aren’t certain how to respond, what ends up being heard might well be a mass of different replies that varies depending on the goals and objectives that are outlined for every social media campaign.
Examples, like the four given here and others like them show efforts that will profit the long term health of your brand and over time it will impact your return on investment. The real impact won’t be felt instantly but it is still usually a good idea to try to establish a measurement framework that can be used to determine their value.
An analogy can be drawn with your own personal health. When you eat well and exercise frequently, you will see several short term benefits, but it’s the long term benefits that will offer the most value to you. If healthy eating and exercise are an element of your daily life, you’ll be less likely to contract a chronic illness that reduces your quality of life, or worse, kill you. In other words taking care of the health of your company in the short term will have a huge impact on your company’s long term health.
When looking at the value of social media don’t be limited and look only at the immediate return on investment but instead look at how social media can impact the long term health of your company. This is where you will find the real value of social media that goes further than the immediate return on investment.