Q: I know our business needs social media marketing, but how do I know if it works?
A: Return on Investment. ROI. The thorn in the side of every social marketer. This isn’t because it’s impossible to figure, but because it’s difficult to help businesses see the value of a new approach when measurement techniques are still being developed. The C-suite wants numbers, and sometimes hard numbers are difficult to generate with social marketing.
Once upon a time, one could simply calculate expenditures vs. an increase (or decrease) in customer gains and retention, and know whether their efforts were paying off. Given the relative newness and confusing nature of social marketing’s tracking tools, even those experienced with interpreting data can get bogged down.
So does it work? I offer you an unqualified yes. How do I know? I’ll offer you both an anecdotal and a factual response.
One of our clients, after just a few months of working with us, watched the action on her Facebook page skyrocket. We could use Facebook’s Insights tool to see just how much more engagement she was getting on her Facebook page and it was significant. The question remained, did that translate into sales and loyalty? She compared her sales figures to the same period from the previous year and noted a 9% increase. Could she attribute other factors to that increase? Absolutely. She’d upped her activity on other digital channels as well – notably ValpoLife.com. Nonetheless, she attributed the growth to her online marketing efforts.
Factually, according to Michael Stelzner’s 2014 Social Media Marketing Industry Report, “92% of marketers said that social media was important to their businesses. This is an increase from 86% in 2013, where only 49% strongly agreed and 37% agreed.” By “marketers,” Stelzner isn’t referring only social marketing companies like D. Cohn Communications, he means the internal personnel responsible for their organization’s marketing. The trick is that rather than an instant return, developing a social following takes time and consistency. Few businesses will see an instant return. The payoffs are clear, though.
Business leaders often forget that the benefits of social marketing go beyond sales. The primary payoffs are exposure and customer loyalty. We all know that word-of-mouth is the most powerful advertising tool, and that’s exactly what social marketing encourages. Stelzner says “The top two benefits of social media marketing are increasing exposure and increasing traffic. A significant 92% of all marketers indicated that their social media efforts have generated more exposure for their businesses. Increasing traffic was the second major benefit, with 80% reporting positive results.” He’s clear that the more time invested in social marketing, the better. “More than half of marketers who've been using social media for at least 3 years report it has helped them improve sales. More than half who spend 6 or more hours per week find the same results and 74% of those who spend 40+ hours earn new business.”
Three years! 40 hours a week! That time cost is a major factor in determining ROI. Because most businesses choose to have internal staff maintain their social accounts, often the amount of time invested in those efforts is not calculated. Because most social accounts are technically free (unless paid advertising is used), many businesses forget that the primary cost of social marketing is personnel hours. Because most communications staff have not been trained to create or manage ongoing social marketing, it takes them even longer than experienced teams. This is one reason to invest in a marketing company who really understands how to use social marketing effectively and efficiently. With patience, most businesses inevitably see the return on investment. They simply need to adjust how they define ROI.