Let’s face it: one of the biggest challenges social media faces is the question of return on investment. If I funnel money to fund a social media campaign or presence, what will I get out of it?
Bloggers and researchers struggle to quantify fans and followers, with research company Syncapse releasing a study that quantifies them somewhere in the hundreds of dollars. But here’s another question for you: how do you measure ROI on any business promotion, plan or endeavor?
The answer: you set clear, realistic and significant goals, and success is measured by how well you attain them. Too often in social media, a Facebook page or Twitter account is created without any thought as to why, the goal it should obtain and the part it plays for your larger business objectives. Sure, you can create a page and have your intern post some press releases, maybe even some coupons. But without a clear understanding of the part social media can play, and where it fits into your overarching business objectives, you might as well skip it.
So step one: evaluate your business needs. Each business is unique, and so one-size-fits-all social media doesn’t make sense. Step two: determine how social media can help achieve your business goals, and set your own goals and ROI standards. And there are a few key roles, and corresponding measures, that can help you keep on track and see the value of your social media endeavor.
For a new business especially, simply recognizing and growing customer base can be a good goal. Luckily, this measure is translated in social media by easily quantifiable and obtainable numbers: fans and followers. If you have higher fans and followers, a regular and consistent growth in their numbers based on good content, the visibility of your company is increasing. Simple as that. However, too many companies stop here and fail to see the nuanced–and debatedly more valuable–function social media can fulfill. If you already have a large following, for example, there are entirely different goals and strategies you can be employing.
Many individuals stop at the numbers, and fail to understand that, on occasion, quality is more important than quantity. Numbers are great, but if fans aren’t listening or finding your content interesting, they may have tuned out, if not unfanned or unfollowed. Instead of focusing on the fan and follow numbers on how engaged your fans are: do they respond regularly? Post on their own? Facebook offers you these numbers, and Twitter can be tracked via Retweets and replies. If fans are commenting and liking or retweeting, they are sharing your content and brand name with their own friends, and becoming more engaged, invested customers.
Social media can be a venue to drive actual sales, as well. Specific coupon or discount promotions can be fan-only, and paired with the right strategy and campaign, spur purchases and visits. From Foursquare to fan-only coupons to secret passwords shared on Twitter, the opportunities to implement creative (and trackable) sales promotions are limitless.
Adweek reported on one survey in 2010 found that even back then, 37% of Facebook users joined fan pages in order to get coupons, specials, or discounts. Respond to that demand, and even the most rudimentary of specials are trackable. For example, Sprinkles cupcakes releases secret “passwords” on Twitter, redeemable for cupcakes via whispering to the cashier. All it takes is the cashier making tallies to calculate the sales driven by this simple social media campaign.
Many companies, airlines included (see movie below), have realized the immense potential social media has to respond to and resolve customer service issues–even when they’re not directed to you. Keeping your finger on the pulse of what your customers are saying about you allows companies to intervene before a rant gets out of hand, or respond immediately when someone asks a question. Set goals for how many customer service issues were identified and resolved via a social media endeavor. After all, a customer who’s bad experience has been turned into a good one is more vocal–on and offline–than someone who was simply content.
Customer service doesn’t have to be bad, either. Thomas Marzano of Digital Thoughts outlined a fantastic job the Four Seasons Palo Alto did at melding their offline commitment to excellent customer service with similar thought and attention online. The Four Seasons has a long history and brand tied to unrivaled customer care and service. Their thoughtfulness and attention to Marzano’s tweets while he was staying with them matched, and enhanced, that customer service brand.
Fans are inherently interested in your company, and are your most loyal and vocal customers. Social media can help answer research and development questions, and garner valuable feedback about your business. Strategic polls, ranging from the simple Facebook questions to robust third-party applications can help inexpensively answer your questions, from a new catering menu to thoughts on product design and buying habits. Make your goal for social media to learn something new, to garner feedback from your customers you can then loop back into your business practice.
Social media’s potential for sharing information and research has even been recognized by the academic community. If PhD scholars are using social media to learn, you should be too.
Developing brand content and PR materials can be difficult at times, but social media enables you to crowdsource your stories. A quick photo contest or query to share stories not only prompts your fans to interact, but (legal issues barring) hands you a package of genuine content. Clickz offers a fantastic rundown on how (and why) crowdsourcing your content is a huge benefit.
These are only six of hundreds of ways social media can work for you. What business goals and initiatives do you have on your plate? Approach social media like a tangible and important part of your plans, and you can use it to move forward in your broader business and development goals–with clear measures of ROI.