There’s a question on the minds of most marketers in today’s rapidly changing world of media. The answer to that question can be somewhat difficult to define, and for that reason is sometimes avoided or ignored. But it’s about time we talk about the elephant in the room. Many businesses believe in social media as the fuel to their omnichannel business, and on that belief alone have continued to invest in their social media presence. However, there are many ways a marketing budget is allocated, and without an ROI it can be difficult to justify the advertising spend on social media as opposed to other digital and print media types.
Many businesses are realizing a wealth of traffic being generated from their social media pages. Some small businesses are realizing brand awareness through engagement and even new customer acquisition through followers & page likes. These are all good metrics to prove your social media efficiency and may drive your marketing team to further believe in the power of social media. However without the direct results that prove social media is driving profit, it can still seem unclear as to why your business should continue investing in social media.
That’s why it is important to understand what exactly your business is investing in. Every business survives on sales and profit, but sometimes the direct objective can vary between creating brand awareness, building brand reputation, creating brand advocates, acquiring new customers, or getting increased traffic to your website.
The simple equation to find your ROI is Profit/Total Investment x 100. However, the tricky part is defining profit. Realizing the direct profit from most digital media channels can be a bit foggy. This is because many digital media forms move the prospective client or customer through the sales funnel, but doesn’t always capture full credit for the sale. For example, your social media page may acquire a customer who may begin following your social media page. Maybe they land on your website and subscribe to your email list. Some day in the future this customer may uncover a need for your product or service. They are reminded of your brand via email, which prompts them to visit your nearest location and make a purchase. Without social media, you may never have gained that customer, and the many forms of media worked together so synchronously that a valuable new customer has been obtained. Because transactions such as the above example are difficult to track, In order to understand the profit variable to complete the above equation you will need to take a close look at your new and existing customer purchasing cycle. This will help you understand what your primary objective should be from social media.
A reasonable approach might be to learn the conversion rate of your website and multiply it by the amount of inbound traffic coming from your social media pages. This will provide a rough estimate of your actual revenue to your website. You will need to take that number and add an assessed value of the other benefits gained from your social media presence before you assign the actual dollar amount to your business social media ROI.
Whether you’re installing conversion pixels, appending tracking links or using other back-end analytic techniques you will still need to assume some value gained by social media left to be untracked. For this reason, analyzing the below social media gains into tangible values will help you see a more clear perception of your total return on the investment of social media for your business.
Many of today’s consumers will research online before making a purchase. By creating a social media presence for your business you are providing the information that is needed for your customer to make an educated decision to patronize your brand. Simply creating your social media pages with complete profile information will assist with boosting your search engine ranking. Furthermore, using your social media channels to share content from your website or blog will drive additional Search Engine Optimization (SEO) benefits.
New Customer Acquisition
Through exposure of your business and engagement among your customers peer set and your brand, a new customer can be acquired. New customers can be derived from simply admiring your brand on social media. Some customers may like your page even though they’ve never been to your location or have ever made a purchase from your business. You are fostering the perfect environment to grow your potential customer base through social media by providing a positive and valuable experience on your social media pages. Your social media audience has been pre-qualified as some of your highest value leads for new and returning business.
Gaining traffic to your business website or storefront location(s) is likely an integral part of your sales processes. Whether you are B2C or B2B, we can assume that traffic to your website is an important step in leading the prospective client through the sales funnel. Most websites are built with the functionality to capitalize on your inbound traffic with various call-to-action triggers. Even if the initial website traffic does not convert into a sale within the first visit, the potential for a return visit and purchase has increased.
After you have acquired customers for your business, you can ensure their satisfaction through a social media relationship. Staying in contact with your customers and offering additional assistance on a personal level through planned content is a great practice to keep your brand top of mind. Some customers will engage positively with your brand and through social activity on your pages may take on the role of a brand advocate. Customers such as these will willingly pass along positive word-of-mouth advertising by the use of social media. These valuable customers are the highest form of loyal customers, in which they grow future customers for your brand by social advocating their satisfaction with your business.
Understand your business’ value of brand awareness, new customer acquisition, traffic and loyal customers, and consider this value when calculating your return on investment.
By carefully considering the objective of your business’s social media presence you can evaluate your social media gains and feel confident when walking into your next marketing meeting. Pull up a seat right next to the elephant in the room, and know that you have the answers that you need to prove your social media ROI.
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- 12 Jan, 2016
- Katrina Parr
- 0 Comments
- Digital Media, marketing, Return on Investment, ROI, Social Media, social media ROI,