People love social media for different reasons. For some, it’s all about the networking.
For others, it's the branding. Whatever the case, the downside to social media is that it is sometimes difficult to know if your time with it is well spent.
So, as with the rest of your business, it is important that you periodically review the ROI of your social media efforts.
How do you do that?
Here are seven ways, some quantitative and objective, others qualitative and subjective, but all useful to some degree or another.
1. Money: If all of your tweeting and posting and blogging and updating is not making you more money, why do you do it? Yes, there are other indicators (below), but a prime and main one should be the bottom line.
It’s called social networking for a reason, and the point of networking is to meet new people and get new business. Are you?
2. Traffic: Here is another quantifiable result. One way to know if your social media efforts are paying off is if you can see a significant uptick in traffic, and, even better, conversions.
Traffic can mean many things. It can be unique visits to your website, page views, actual traffic in the store, increased sales, more blog readers and more comments on your site. The important thing is that, however you measure traffic, your social media efforts can elevate it.
Here are a few tools you may want to check out for measuring your online traffic patterns:
- Google Analytics: Allows you to track incoming links, sites, etc.
- Wordpress: You can add Google Analytics to your dashboard with a plugin.
- TweetMeme: If you have re-tweet buttons on your site, TweetMeme Analytics are very useful.
3. More fans and followers: Having Facebook fans and Twitter followers is great and certainly creates some brand equity and online bragging rights – but here’s the but – those followers better be doing more than stroking your ego for you to say that your social media campaign is a success. Are they re-tweeting your links, for example?
4. More real relationships: The woman who opened my eyes to social media taught me that the point of it is to meet people with whom you can do business. By tweeting smart, she did just that. She created relationships with people she otherwise would not have met, and, as a result, boosted her business 34 percent in one year.
But she didn’t do that by playing a cynical numbers game, looking to just create as many Facebook fans as possible. She did it by engaging people online in such a way that they wanted to do business with her offline.
5. Increased brand awareness: This one is a little more amorphous, but maybe no less important. Social media is fantastic for building your brand and getting you and your business better known. So this is one area where getting more followers for its own sake is in fact OK – the more people who learn of you by following you, the better.
How do you measure this sort of brand awareness? I suggest three ways:
1. Followers, fans, and connections. As indicated, for this purpose, more is better.
2. Re-tweets and similar links: People re-tweeting your tweets or linking to your blog or other posts is the ultimate compliment online. It means they like you, they really like you.
3. Positive online mentions: Products like Viral Heat and Twendz can help you analyze online mention of your business and where those mentions are coming from. As such, you will be able to see, for instance, if all of your tweets twanslate into positive online buzz.
6. Budget savings: Ideally, your social media efforts may lead to a reduction in other marketing expenditures. If your social media efforts cause you to spend less on marketing, that is a tangible and valuable ROI.
7. Better customer relations: Again, this is much harder to quantify, but as Supreme Court Justice Potter Stewart famously wrote in a case seeking to define obscenity: “I know it when I see it.” It is no secret that companies are turning to Twitter in a bid to handle online complaints in a better and more timely manner. So if your social media efforts mean fewer complaints and happier customers, congrats. That’s real ROI.
While it may seem as if the ROI on your social media is difficult to calculate, in reality it’s just like the rest of your business. You need to track it, analyze it, and tweak it when necessary.