Is Social Media Marketing exempt?

 Must Social Media Marketing generate an ROI?  If it requires a negligible amount of resources, maybe not.  But I don’t think you’re going to find a social media marketing platform which can be effective without a substantial commitment.

There is a mental pathway you must follow to determine the ROI of a particular platform: 

1) What is your goal?  Decide what ultimate contribution you want your marketing to generate.  Awareness? Incremental sales?  Sales leads?  Increased customer dialogue? Building a mailing list? Increased customer satisfaction?  Stronger branding?

2)  What factors will demonstrably lead to your goal?  “Likes”?  “Friends”? Inquiries?  “Posts”? Orders?  You can’t measure ROI without quantification, and that means something that can be counted.  Creating a verifiable link between goals and factors is almost always the most difficult step, but can generally be achieved, although sometimes requiring more advanced techniques like pre-post comparisons or split panel testing. 

3) How many of each of the factors from #2 are you generating?  This is generally the most easily secured information in this process.

4)  How much is the marketing costing you?  There is a tendency to think of social media as being free, but there is always a significant investment in time, and sometimes in technology.  You need to be sure that you’re capturing all the dollars and hours that go into the marketing.

 At this point, it is a simple matter to calculate the ROI.  

Why bother? 

1) Because it will help you keep your  job if you can prove you are contributing to the company’s success.

2) Because company’s don’t cut budget for programs that can prove they’re making money.

3) Because knowing the ROI of your programs can help you dump losing programs and prioritize winning programs.

If you’re having trouble calculating the ROI of your social media marketing, give me a call.  Your CMO will be happy to help!