Understanding the Various Types of ROI for Social Media Marketing
Social media marketing is one of the most important tool available to businesses large and small. However, like all other forms of marketing, it’s vital that you are able to measure the ROI of your activities. Doing so allows you to refine your efforts, better target your core audience and build success. With that being said, it’s vital that you know the different types of ROI offered through social media marketing – it’s not all about cold, hard cash.
Let’s put this as simply as possible – your goals are your ROI. Your progress toward reaching those goals is how you measure the return you’re seeing on your investment. Sure, your goal might be to build overall profitability, but that’s a pretty nebulous thing. It’s not actionable. It doesn’t provide you with the means to really track your success. It’s important to set goals that align with SMART (specific, measurable, attainable, relevant, time-bound).
Let’s cover a few examples of goals that align with SMART: Increasing the number of followers Increase in online purchases Increase opt-in for mailing lists Increased visits to specific pages of your website Increased number of clicks in your status updates Each of these can be a goal in itself, as well as a stepping-stone toward other goals. Each can also be a return on your investment. If you invest 10 hours per week into social media marketing and gain 25 new followers during that time, then those followers are a return on your investment of time and effort.
If you spent time and money in content creation to be shared with your social media audience and gained 15 new opt-ins to your mailing list as a result, that is a return on your investment (whether good or bad). Another example of a return on your investment would be awareness with your target audience. This is one area where social media truly excels over other forms of marketing (consider the fact that almost 90% of TV watchers skip commercials when using their DVR). Awareness is essential, whether you’re launching a new product or a brand new company, but it is difficult to translate into monetary value. Can you actually put an accurate price on how well a potential customer remembers your company’s name or product? No, but the greater the awareness of your company in the wider market, the greater your success will be (when all things are equal, of course – low-quality products or poor customer service can easily derail high awareness). Before you leap into attempting to measure the return on your investment, you need to understand exactly what return you’re looking for. Each of the abovementioned goals will have a correlating monetary value (a cash return), but it’s vital that you understand not all returns will be monetary in nature, nor should they be.
Set clear, actionable goals for your social media marketing efforts. Know what you’re looking for in terms of ROI, and understand that tracking that return might be more complex than just adding up sales.
Understanding the Various Types of ROI for Social Media Marketing by Chris Tomlinson