But even they would struggle when attempting to quantify the Return on Investment (ROI) of a social media campaign.
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Our interwebs are littered with blogs discussing the impact social media on companies. In most cases, it’s been fairly positive and few product managers today would fail to recognise the impact and influence that social media has on brand identity with regards to marketing.
The limiting factor for a number of years now has been how to justify ROI for social media in a way that makes it quantifiable. Because, for the most part, attempting to isolate and measure returns via your company’s successful Facebook campaign is akin to allocating resources to measure the amount of chocolate milk being formed off your Coco Pops at breakfast.
Some corporations have attempted the impossible and won. Dell’s 2008 SM strategy springs to mind where the @delloutlet Twitter account yielded millions for the company. But, Dell is a giant of an organisation and fully capable of providing its younger marketing initiatives with the support they require without over-capitalising on resources. A smaller company could mirror Dell’s SM strategy and would in all likelihood not generate even a fraction of that revenue.
Furthermore if one compared the company-wide costs involved in social media training and materials with bottom line results, then most business owners would wisely steer clear of such ventures altogether.
Of course this is not the case today.
Business owners, CEOs, CFOs, CMOs, white-collar executives, managers and even the office tea lady are not about to give up on social media. It’s way too much fun. It’s an amazing platform for the candid spokesperson. The right message at the right time can start a movement that changes the world (at least until the next brilliant message gets posted, tweeted or blogged about). And this is something that marketers, advertisers and business owners simply cannot choose to ignore. The medium is ripe for exposing your brand.
So, to what extent can a business successfully produce ROI through social media in a way that is quantifiable, tangible and authentic?
The answer? Redefine your outcome and expectations.
Unlike most real world business performance metrics, the programs used are a lot less measurable and are driven more by existing trends and people’s behavioural patterns. Yes, people, not sales. Sales may generate more revenue for your company, but following trends and engaging in social media may expose niches within existing markets that you may have overlooked.
The important point is to determine what to include in the ROI. We know there is value in social media, but how to quantify it? Well, that’s a little trickier:
1. Begin with a very simple formula: Social media success is married to popularity.
Essentially it all boils down to how many followers and fans on Twitter or Facebook you may have acquired. Or how many subscribers to your blog, the volume of conversation being generated under your comments or forums, inbound traffic, the number of retweets and how often a post directly (or indirectly) relating to your business/ brand is being shared. All of this is quantifiable and the metrics for measuring all of this already exist.
2. Don’t expect to see revenue just because you have successfully achieved a strong social media presence (as in 1 above).
The average user is more of an engaging participant than a brand consumer. You need to follow trends and topics and be aware of news and media. Use this subtlety to your advantage but be careful not to fall into the hubris of over-marketing as this will only work against you. The last thing you want is to be blocked as a potential spammer.
3. Consumer Loyalty: Competitions are a great way to ensure user participation in your brand.
Everyone enjoys the thrill of winning and social media is a perfect platform with which to drive this. But ensure that your loyalty scheme — be it a competition, survey or an awards accolade doesn’t fall into a slump. Ten users entering a competition may not seem like much and you may be sorely tempted to extend the deadline to get more traffic. Don’t. Start with smaller loyalties first. Announce winners and prizes on time and then run another scheme but this time, increase the overall end value of the prizes. It’s a simple strategy but if you keep it consistent, more users will be willing to engage.
4. Accept it.
You’re never going to know what specific financial value Facebook has created in sales for your company. But that does not mean that Facebook is not generating any revenue (The same holds for Twitter and other social media). On the contrary, your Facebook page may already be generating revenue for you on an enterprise level, albeit it in a complex, roundabout manner. The process is not effective immediately and expecting absolute instantaneous results is both unrealistic and foolish.
In a nutshell, our current business metrics which present ROI as scalable and fully quantifiable do not work within the social media paradigm. We cannot equate sales and commodity with the immeasurable cacophony of trends and opinions. But what we can do is consolidate, engage and understand the consumer from a non-business related angle — the social angle.
