Social media skills pt 7: Making a return on investment with social media

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October 26, 2011

Social media skills pt 7: Making a return on investment with social media

Are your social media efforts worth it? Colette Mason looks at how to measure the effectiveness of your social media activities.

The whole point of your social media marketing campaign is to make your business more profitable – otherwise why bother?

That means you to need to measure the cost of your campaigns against the additional profits your business receives as a result of the uplift in sales. Costs are relatively easy to track accurately, effectiveness less so.

"There is always an opportunity cost to doing free social media marketing – don’t forget that."

Your return on investment can be difficult to measure with extreme precision because there are often no real clear-cut answers to what finally convinced the customer to complete a purchase or make an enquiry with you.

Let’s take the following example.

Day 1: Customer searches Google for "office stationery next day delivery", clicks on a search results link to your site.
Day 2:Customer follows you on Twitter, clicks several special offer links in your emailed newletters over the course of a month.
Day 15: Customer views some testimonial videos from your other satisfied customers you posted on your Facebook page.
Day 30:Customer searches Google again for "office stationery next day delivery", this time clicks on your paid advertisement on Google then purchases a widget for £200.

Which marketing program should get “credit” for the conversion — SEO, email, social, or paid advertising?

Effort vs other forms of advertising and marketing

Don’t forget, just because all the techniques listed in this mini-course are free to try, it doesn’t mean there isn’t a cost attached – for example, whilst you are updating your profile information you’re not networking at a face-to-face event, or calling your existing customers to see if there’s something else you could be doing for them.

There is always an opportunity cost to doing free social media marketing – don’t forget that. If you're a startup you'll be used to burning the midnight oil to save money, just be careful it doesn't take over.

Things to track

When you're running your campaigns, check that you're heading in the right direction with these key statistics:

Increasing traffic: if you're an advertising revenue supported website, you care a lot about eyeballs on your site. More eyeballs mean more advertising dollars. You want to use social media to drive a larger and larger audience to visit your website. Similarly if you run an online shop, the greater the number of visitors, the more likely you are to make a sale.

Increasing leads and enquiries: You want to use social media to drive people to your website to download free advice or place an enquiry and become a lead.

Increasing reach: reach - the number of people you're connected to - is not usually a primary end goal but rather a means to one of the other two goals of traffic or leads. That's because the greater reach you have, the easier it is to get significant traffic or leads from social media channels. Reach is very important when you’re a startup business, or trying to boost your own authority and carve your own niche in the marketplace.

Increasing social proof and buzz: the more positive mentions your business, staff, products and services get means more social proof for you and the great products and services you offer. Other people’s positive comments and status updates are like mini-testimonials for your business.

If buzz or awareness is important to you, you will want to measure mentions of your company name, experts, and brand names in social media over time, which you can track for free with Google by setting up a Google Alert which catalogues all the mentions of your brand and emails it to you.

Increasing customer happiness (customer support): I often tell my clients who are still too scared to start their social media campaign that people are talking about them whether or not they want them to! Social media allows you to tune into conversations your customers are having, be they positive or negative.

By participating, you can control what they find first about you. For many businesses, social media has turned into a particularly great tool for responding to customers directly and quickly when they're having problems with your product. Check out some big PC or mobile phone suppliers to see how they handle this situation.

You can combine analysing your social media efforts with your website statistics, your CRM system, people on your helpdesk and so on, to start tracking how effective your campaigns are and which ones are working best for you.

In our final lesson we’ll look at what it feels like to run a campaign in the long run and how you manage your campaigns.

The social media skills series so far:

Colette Mason runs an international online consultancy which shows businesses and entrepreneurs how to use the internet and social media to boost their business online. With an IT background, which started in support and development and moving on to usability and online marketing techniques, she has worked on some of the biggest projects in Europe. Colette is also author of Social Media Success in 7 Days. For more information please visit: www.socialmediasuccessin7days.com