Is social media marketing worth the money? Data and analytics will tell you if you are getting a bang for your buck!
How to calculate ROI on social media marketing
By: Kevin Getch
Calculating ROI on social media marketing efforts can be tricky. Here’s how to find value beyond dollars and cents.
New clients often ask why they need to include social media in their brand messaging strategy. Most understand they should be active on these platforms, but at the same time don’t really understand why they matter. Time and again, we’re asked the same question, “How do you calculate the ROI?”
This is, of course, a perfectly valid question. Marketing budgets are often tight, and business owners rightfully want to direct those dollars to the efforts that will produce the best results.
I’ll admit, it’s not always possible to show a direct ROI from social media, especially when it’s not being used to drive online buying. But the lack of a clear ROI does not mean these efforts are without value. Instead, I argue that ROI isn’t always the right metric to use when judging social media’s benefit to a business.
The key to this new frame of mind comes from the social component of social media. These platforms create a tangible connection between buyer and seller in ways that were previously impossible. And to thrive, businesses must embrace this new dynamic.
Here are three important reasons social media marketing offers value beyond sales conversations:
1. It creates direct engagement.
An active social media presence allows business owners to directly engage their current or potential customers. They can respond to questions, receive immediate feedback or send targeted messages straight to their customers’ devices, which we all know are never very far away. No other platform offers this kind of personal access to the market.
2. It builds and reinforces credibility.
Consumers increasingly look to social media as part of their research process before they make purchasing decisions. If you’re not actively engaged on the platforms your customers use, you’ll be effectively invisible against the competition. Need proof? As part of a 2017 retail study, Price Waterhouse Cooper surveyed 24,000 shoppers in 29 territories. Thirty-nine percent of those surveyed said social networks provided the main inspiration for their purchases. And this number is sure to rise as Generation Z gains more market power.
3. It helps consumers find values alignment with your brand.
These days, how and why you sell matters just as much as what you sell. In fact, according to research by Marketing Charts, 86 percent of baby boomers said that a company’s transparency is an important factor in their buying decisions. Don’t leave your customer guessing. Social media offers an economical method of sharing these values directly with potential buyers.
Corporations no longer speak into a black hole, without any understanding about who’s listening. Instead, social media offers rich and actionable insight into their most valuable customers. At the same time, consumers want a more personal and personalized relationship with the brands they support. Social media’s real value lies in providing a convenient place for businesses to foster these relationships.