When you translate the famous quote ‘The King is dead. Long live the King’ to French it becomes ‘Le Roi est mort, vive le Roi!’ this seems a very suitable line for recent discussions about the value, and more important, the return of Social Media activities for your company.
In earlier posts I wrote about the struggle companies have with implementing Social Media in their day-to-day business and how to use it to interact with (prospective) customers. But what if you’re a marketing employee and see the value of Twitter or YouTube for your company but don’t have the budget to start these new channels effectively? What if your superiors say they want a plan worked out with a financial overview and the expected ROI…
Social Media applications, tools, platforms, channels, and Social Media marketing becomes more and more accepted by companies as a new and effective tool for communicating with (prospective) customers and providing an interactive conversation between the organization, brands, or products and its users. But what defines “effective” in Social Media? An important condition for any investment for top managers is the investment’s return in monetary value. However, measuring this return from Social Media investments is difficult or may even be impossible.
First of all, it’s difficult to measure what percentage of the conversion on your website comes from Social Media sources. Second, there’s no clear tool to measure your reputation and publicity. Although companies like Radian6 or Buzzlogic offer expensive tool to gain insight in your Social Media campaigns, it is still unclear how these results contribute to your rise or decline in conversion, sales or revenue. Third, a positive ROI can never be your goal for Social Media. As discussed in an earlier post, we can define three broad goals for your Social Media strategy:
- Social Media as a service channel
- Social Media as a marketing channel
- Social Media as a communication channel
None of these goals provide a direct increase in sales or revenue. Even the traditional means like telephone contact, mass marketing, and an ineffective service desk didn’t provide direct value or a clear ROI. So why bother with Social Media?
…Because Social Media isn’t free!
Self-proclaimed Social Media marketers and popular blogs describe Social Media as a free and innovative tool to make other channels obsolete. But this almost utopian description of these new tools defines Social Media as a goal instead of a means. Starting with Social Media, and continuing with maintaining and innovating your channels, profiles and tools, cost time, money, and persistence.
So ROI is important for Social Media investments! But don’t forget ROA (Return of Attention), REP (Return of Reputation/Publicity), and WOM (Word of Mouse).