Tuesday, March 27, 2012

Social Media ROI

When we consult with clients for the first time, many of them ask, “What’s going to be my ROI with social media?”
Let’s start with a big disclaimer. Social media is not magic. It’s not a silver bullet, a cure for the broken business, another advertising channel, a membership to an exclusive club and it’s certainly not a one-way ticket to immediate profits. Social media is a form of communication; a platform for building relationships. And, like most relationships, it takes time, effort, and energy.
Social media shouldn’t receive a separate distinction or category in any business marketing strategy. In my  own personal marketing pie, social media does not have its own slice. When used optimally, social media is combined with the other slices of the pie. Those other slices include functions like public relations, advertising, and direct marketing. Put simply: social media does not exist in a vacuum. It should be integrated with your current efforts to enhance your overall marketing presence.
In a recent conversion I had with a colleague, we discussed the two different marketing mindsets. The first: a company decides to invest money on an advertising campaign. Once the money is gone, the campaign is done. If the business has more customers at the end of the campaign than when it started, the marketing efforts have usually paid off. The second mindset: a company decides to invest time into relationship-building.
The business offers value by giving its audience solutions to challenges and problems. The result: the audience is naturally attracted to value and soon begins to know, like and trust the business. The audience is more likely to inquire about the business’s products and services.
Until social media evolved, the latter was likely done via networking, referrals, and WOM. Social media simply takes this a step further and includes an online component. This is powerful because we now have the opportunity to reach more people in less time while still enhancing our existing relationships. Here’s another way to look at it: leads come from WOM, WOM is social, social media is social, so leads can also come from social media.
So, where are businesses going wrong? They are viewing social media in the first mindset! Social media is not an advertising campaign. It’s not a one-way channel that starts and stops with the single hope that there is more business at your doorstep at the end of the run. Social media is a way to build the relationships that establish trust and enable people to feel comfortable buying from a business.
Another layer of complexity is that the lead sources from social media area difficult to pinpoint and is not always tied to one thing; it’s not black and white. Rather, it’s a combination of things that ultimately supply the lead; it’s a gray area. Executives don’t like gray and are hesitant to invest time or money into ‘gray.’ But this gray is no different than the second mindset. Or is it?
What do you think? How do you evaluate social media ROI?

No comments: