Whenever I’m pitching new business, one of the first questions or concerns I hear is, “What’s the ROI for Social Media?” Of course businesses want to know what they will get for their investment in this new medium. Fair enough.
After reading a post this morning by Brian Solis: Social Media ROI: ROI Doesn’t Stand for Return on Ignorance. I decided to delve into the subject myself.
Like me you’ve probably heard the arguments that social media ROI is based on a “soft ROI”. Or, maybe you’ve heard the new acronyms: ROE (Return On Engagement) or ROP (Return On Participation). Yes, there is some merit in ROE or ROP, but these metrics don’t show the full picture. Furthermore, because many of the tools used for management of the social media platforms, as well as the platforms themselves are free, people are tricked into thinking that there is no cost. That’s just not the case. The expression “time is money” comes to mind. Social media management takes time. So, either companies need to allocate their employees to take the time for management, or they need to hire an outside company to put the time in for them.
What does all of this mean? Well, the biggest thing that you need to consider is, what is your plan? As the old saying goes: Failing to plan is planning to fail. Below are the steps we use when planning a social media campaign for clients.
- Define your goals and objectives. This is by far the most important single piece of the plan. If you don’t know your objectives or if they aren’t realistic, you’ve failed before you started.
Let’s face it we are not all Charlie Sheen and more than likely won’t reach 1 million followers in a little over a day. Besides we’re looking for quality here not quantity. So, what’s a better goal for us lesser folk?
Let’s take a look at an example. I do work with a number of staffing companies. With one of them their objective is to get more qualified candidates in the door. They know that statistically if they get 10 candidates 4 of them are qualified and they can place them. Goal: Get more candidates in the door and get more placements, or get more qualified candidates in the door so they can place 5 out of 10 or 6 out of 10.
Most importantly define a measurable goal.
- Find out where your target market hangs out? This is critical because not every platform is good for every objective.
Looking at the staffing company again, think about where people looking for jobs or people who are unemployed hangout? LinkedIn, Facebook, maybe somewhere else? Figuring this out will save you wasted time and resources trying to get traction somewhere where your target just isn’t active.
- What’s your investment? Remember, time is money and social media management takes time.This is where most companies lose site.
At this point you really need to take a hard look at your resources. Does your organization have the staff to effectively manage your efforts? Can they really spend the time on social media, or are they already overloaded with other duties. Also, do they have the knowledge? You need to be honest here.
Something I’ve seen often are companies that think they can do it internally, but months later they realize they don’t really have the resources and their campaign needs a shot in the arm. Worse yet, is when they give up, decide there is not value in social media and the whole thing falls on the floor.
Either way you need to allocate time internally or with outside help. I recommend at least an hour a day for a healthy campaign, but definitely more in the beginning. But also keep in mind this is not a quick fix that you can invest time for a month and suddenly you’re on top the social media world. Remember, Rome wasn’t build in a day.
Here’s a link that will help you judge how much to budget for your campaign: How much do you need to budget for Social Media in 2011?
- Monitor, tag, track and analyze. This is how you know if you are meeting your goals and objective.
There are a number of free and fee based monitoring tools out there for social media. Here are just a couple: SocialMention.com, Radian6. With these tools you can track where and when people are talking about your product, brand or company. Also, be sure to tag your links for the various platforms. You can use bit.ly to shorten the links and Google’s link builder to tag them. This tells you where people come from when they visit your site. Then combine all this with good old website analytics and offline metrics.
In the case of the staffing company, we track the number of applications filled out, how many people viewed the job postings, where they came from when the filled out the application, etc.
- Calculate Return On Investment. Now that you know your objective, target market location, investment and results, you can calculate the return.
With your well defined goals, your knowledge of your target audience, and the analysis of your traffic and interactions, you can follow the path from initial action, all the way through to conversion.