A different way to think about social media ROI

A different way to think about social media ROI

By Mark Schaefer

No matter who I am consulting with or where I am speaking, the “social media ROI” question is bound to come up.

I have a different view of the ideal role of social media in the marketing mix that might be helpful to you, whether you are just starting out, or whether you have an established program.

Before I get to my perspective, I would like to declare two caveats.

First, I am going to give you ONE view. There is no one-size-fits-all social media plan or best practice for an organization.  So consider this as one helpful suggestion.

Second, you MUST measure and continually seek to refine your measurement. Do not use the following perspective as an excuse to not measure.  Even if you cannot precisely measure the financial return on a marketing effort (which is not unusual) we need to be alert to the key non-financial indicators that demonstrate that we are contributing to stakeholder value.

OK, here we go.

The complex media world and social media ROI

I recently had the honor of speaking at a national automotive conference and learned about the incredible challenges involved in selling a car these days. Yes, buying a car is a big deal, but the purchasing decision is probably complex for any business these days.

Did you know that, on average, it takes 75 days from the point an interested consumer first visits a dealer website to the day a car is purchased? At the point where social media marketing first begins to touch a potential customer, they may be far away from making a purchase decision — maybe years! This makes it menacingly difficult to determine what ultimately led to a purchase. Was it something they saw on Twitter or Facebook a month ago, a newspaper ad, a drive-time radio spot, or a powerful recommendation from a friend? And how was that friend influenced?

Most likely it is a very complex stew of ALL these things that build up over time, and this is precisely where social media fits into the equation. It is a legitimate part of a mix of communications that leads to a customer relationship.

The importance of small, consistent interactions

We build our emotional attachments with companies and brands like the way we build our friendships — through lots of small, consistent interactions that lead to deeper forms of engagement.

nike tattooIn my social media marketing workshops and speeches, I have fun referring to a photo of a person who has actually tattooed a company logo on their body.  Isn’t that kind of like getting married to a brand?  Isn’t that the ultimate commitment?

Some marriages, like some tattoos, may occur after a night on the town that got out of control. But more likely, these events occurred after months or years of connection through lots of small interactions that lead you to believe that, yes — I am totally in love with this experience.

The drip, drip, drip of content 

The biggest measurement problem companies face is that they have been conditioned to think of social media as advertising. You put some ads out there, create attention and awareness and wait for something to happen. And, while it is possible to achieve some fast results with social media, it is unlikely.

The more accurate comparison is not to how ads work, but to personal networking initiatives. Have you ever tried to sell your products and services through networking at a trade show or local networking meeting?  It might take months or even years before you connect with people in a deep way that leads them to actually buy something from you.  You keep showing up, showing up, showing up. You liesten and learn about their wants, needs, and opportunities.  And you patiently try to be helpful over time so that when that purchasing event takes place, you are at least on the radar screen and part of the conversation.

Through our content marketing — and I use that term somewhat interchangeably with social media marketing because content makes the social world go round — we provide this constant drip, drip, drip of small provocations that create opportunities to engage. The goal is to drive that level of interest and engagement up over time until they take some action like a purchase, a registration, a call — whatever you are trying to do to support your business goals.

Think in terms of qualitative measurement

Whether you work in sales, PR, HR or service, I believe this is the most likely benefit of a social media initiative — creating relationships that lead to trust, action, and eventually loyalty. Here is a partial list of tangible benefits social media relationships have created for my business over the last two years:

    • Became a contributing columnist to my blog
    • Co-authored a book with me
    • Provided an invitation to speak at Oxford University
    • Hired me for a corporate social media workshop
    • Helped me create the Social Slam annual conference
    • Donated to my charity
    • Helped me get a government contract
    • Hired me as a keynote speaker
    • Gave a copy of my The Tao of Twitter book to will.i.am
    • Became  a regular cartoonist for {grow}
    • Became a strategic business partner
    • Assigned all of my books as required reading for his college classes
    • Contributed a positive review for my book on Amazon
    • Became an intern
    • Took a day out his time to take me on a tour of his home town of Stockholm

Some of these important and undeniable business benefits — like speaking at Oxford or a positive book review — are exceedingly difficult to record in a financial spreadsheet!  Those types of benefits are “qualitative,” not quantitative, because they are a measure of relationships, not sales. And yet, it IS a value, isn’t it?  We would be pretty dumb to ignore that and yet most companies do.

Of course, the ultimate goal is to measure true Return On Investment but that is not always practical, especially for a small business with limited resources.

And even if you CAN truly measure ROI (a strictly financial measure) to accurately demonstrate the complete value of social media, you should still establish an ability to record and acknowledge these powerful qualitative benefits or you’re going to miss the whole picture. This is why small and medium sized businesses may have an advantage in this space. If they are closer to the customer, they may have a better ability to be tuned into these benefits.

Again, this is a short blog post and of course there are many, many other values of social media and measurement strategies. This is just one idea, not a prescription for social media measurement for your business and I would really value your perspectives on this in the comment section. Thanks for reading today!

SXSW 2016 3Mark Schaefer is the chief blogger for this site, executive director of Schaefer Marketing Solutions, and the author of several best-selling digital marketing books. He is an acclaimed keynote speaker, college educator, and business consultant.  The Marketing Companion podcast is among the top business podcasts in the world.  Contact Mark to have him speak to your company event or conference soon.

All posts

The Marketing Companion Podcast

Why not tune into the world’s most entertaining marketing podcast!

View details

Let's plot a strategy together

Want to solve big marketing problems for a little bit of money? Sign up for an hour of Mark’s time and put your business on the fast-track.

View details

Share via