A Guide to Social Media

A Guide to Social Media ROI

It's vital that every business owner focus on the term "return on investment." ROI is the ratio of the amount of money earned based on the cost of an initiative, and it helps gauge the effectiveness of marketing campaigns, expansion plans and even personnel changes. To the extent possible, business owners should take the same approach with social media. Here are some suggestions for getting started with thinking about company's ROI from its social media initiatives.

Calculate costs. Assessing the costs of a social media program is relatively easy. They can be computed simply by using the weekly or monthly salary of the person who handles social media in a company. Or the total cost can be figured out by the number of man-hours it takes for other employees to stay on top of the company's social media efforts, and then multiplying that number by the appropriate hourly wage.

Align the social media initiatives with your business goals. This seems intuitive, but you'd be surprised how often business owners fail to do this. For example, if your objective is to increase sales from walk-in customers, it's a bad idea to institute a social media campaign that gives Facebook friends a 10% discount on merchandise they purchase from your e-commerce website. Or if you're trying to increase foot traffic on weekdays, don't use Twitter to promote college football game-watching parties (which usually take place on Saturdays).

Don't dismiss "soft metrics" out of hand. It's common for business owners to make decisions based solely on hard data. That's usually a good thing, but when it comes to social media, it's wise to widen the criteria into so-called "soft metrics." For instance, a video on a company's YouTube channel that goes viral may not show direct results in a business's bottom line, but it will increase overall awareness of the company's brand. It could also help improve responses to future social media objectives. Even though these kinds of returns are difficult to quantify, there's no denying that they do have an effect on a business's social media marketing program.

Allow for organic discussion to emerge. There's nothing wrong with promoting your brand or products via social media. But if your blog posts, Facebook messages or other social

...