Working out the benefit of Social Media to your business

It’s already a cliche – every time you mention ‘social media’ you get a number of eye-rolls almost equal to the number of ‘gurus’ who pop out of the woodwork.  A lot of people I speak to have no time for it, or they may engage lightly with LinkedIn or perhaps Facebook, but they would never tweet what they had for breakfast, or what’s just happened outside their window.

However, I have had business through ‘social media’ in its various forms often enough for me to take it seriously as a route to market.  So then the question becomes one of how much time you devote to it, and how you can measure the benefits.  This, of course, is me with my operational hat on – don’t spend more time than necessary on non-revenue-generating activities!

So can you actually measure a return on investment from a business perspective?  Is it something you could sell to your Finance Director?  I guess the answer, as ever, is that it depends on the type of business you are, and the type of business you want.

If your main aim is to sell a product, then clearly you need to engage in the environments where that is likely to be possible.  If, on the other hand, you want leads for people that you can talk to in order to promote a service, the channels may be different.  Once you’ve worked this out (and I’m not about to advise you on which channels to use, as I am not a guru!) you will be able to work out how to measure them.

As you may expect me to say, it boils down to process.  If your sales funnel incorporates elements that are aligned to your social media activity then you can measure them as you can measure any other attempt to reach your audience.  It isn’t enough to tot up how many people follow you on Twitter, or like your Facebook page – that is no more valid a measure than the size of your last mailshot.

Your funnel is likely to begin by trying to engage with your potential customers, then establishing a dialogue, generating an interest, and bringing them into the conversion process to take them through to a sale.   There is a major problem, though, with identifying the source of a contact.  These days many people are everywhere, and you are typically connected to them in several places, so if you end up with a sale how do you know to what channel you should attribute it?

In my view, the answer is that it doesn’t necessarily matter all that much.  If you have social media activity integrated into your marketing processes, then it can be measured generically.  My own experience is that Twitter tends to bring traffic to your website in any case, so your normal online conversion processes can kick in at that point, whereas Facebook and LinkedIn have a tendency to create a dialogue, so you are likely to be able to catch any conversions made via those channels.

Interestingly, I have had business from both Facebook and LinkedIn, but not directly from Twitter, although I have not established whether any of the leads that have come through my website were brought there by Twitter!

So the answer to measuring the business benefit of social media is to integrate it fully with all the other ways in which you market your business.  It’s no longer an optional extra – it seems to be here to stay, and you will have to embrace it sooner or later.  Don’t go mad with it, but try it out one channel at a time and see what works for you.  I don’t buy the ‘everything, everywhere’ line (sorry Orange!) in terms of social media – try out what works for you and, if it doesn’t have an effect, don’t waste time on it.  I personally use only Twitter, LinkedIn and Facebook, and I would think long and hard before expanding my use of any other channel – I try them, of course, but so far haven’t been tempted to do more than taste!

I’d appreciate you sharing the ways in which you measure the ROI of social media.  Feel free to comment!




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