Maybe you have heard many times that “social media are conversations” and that, consequently, they can not be attributed ROI because you can not measure the benefits of your customers or users talk about your services or products, on your brand, or that it is impossible to measure engagement.
One reason why many people say that you can not measure the ROI of social media is because people are unable to measure the benefits. I tell you now: it IS possible, but it will not be easy.
If we explained in another entry how you can calculate your costs in Social Media, it will serve as a guide to show that they can make a profit by using social media.
Benefits of social media
Before listing the possible ways in which social media can generate profits, do not forget that social media is a channel of marketing and communication. Although it is also true that social media is not a channel that should be treated the same way as the other channels. Anyway, does TV have the same characteristics as external ads, or has radio the same features as a trade journal (to name a few)?
In addition to the interactivity of this new channel, you must keep in mind that:
- It is very dynamic
- It is much faster and flexible process in which the transmission of messages, information and content are developed.
- It is rampant in many cases.
I will propose that from the foundations proved throughout the last decades using traditional channels, experiment to test what benefits can really bring social media to your company, brand or project.
Here are four aspects that you should pay attention.
1.Attracting new customers.
2.Increasing sales from current customers.
Measuring in social media
Unfortunately, if something bad has given us the social web is the bad habit of “plug” our accounts on Twitter, Facebook, Google+, LinkedIn, etc.. a web service that shows us a range of statistics and charts, in most cases, only a description of our activity on social networks.
We said before that many people believe that it is not possible to measure the ROI of social media. Partly also precisely because these tools do not provide reliable indicators. Fortunately, however, these same web tools that have taught us to be lazy in our work measurement facilitate the task, since some of the information we will need is provided by these tools.
Calculating the ROI needs a mathematical formula, so we need both the benefits and costs to be expressed in the same unit. This is easier if the common unit is going to be currency (euros, dollars, pounds…), rather than ‘Likes’, ‘RTs’ or the length in characters of positive comments.
Once we have all the benefits identified, measured and translated into local currency, and also the costs, we will be ready to apply the famous formula of ROI to assess whether our campaign has been profitable. In short, if the value of the benefits exceeded the costs, it will be positive.
In this entry we have mentioned the most important sources of benefits in social media, but these are not the only ones. Surely you are now thinking that X or Y are benefits too. Then, you need to questions yourself: can you measure these sources of benefits in currency?
* A version of this post was first published on Socialancer.com, 6th September 2012. Original in Spanish.