The calculation of the return on investment of social media is a constant battle for internet marketers and those who are outsourcing their digital marketing needs. For this reason, many will bail out on their social media campaigns before they are able to establish themselves properly. And likewise, many web marketing companies are struggling or simply unable to explain to their clients just exactly how their social media efforts are impacting their revenue and bottom line.
As the old saying goes: “Show me the money!”
Many businesses attempt running their own social media campaigns, before running into a brick wall and deciding to outsource their efforts. This is because social media marketing typically requires a knowledge of technologies that the company looking to outsource does not have. The ideas that they come forth with on their own are often driven by hearsay and wrong information they read on blogs, resulting in a seriously flawed implementation strategy.
Many people are the victims of shady marketing firms or quite simply wrong information and are quite relieved to receive the correct information when it is present it to them. From my experience, one of the best ways to get customers is not to compliment them or hit them with a hard sell, but rather to point out what they are doing wrong and what the company they hired to handle their digital marketing did wrong.
This is what I like to call constructive criticism…
Oftentimes, short-term but quality training or consulting is often enough to understand four basic themes: SEO, PPC, Web Analytics and Social Media . From here, one is faced with the difficult task of defining the project objectives and how to measure the return on investment. As business owners we know very well it’s all about that bottom line, however this is a step many companies will unexplainably skip. One of the first questions you should ask yourself when starting any business is: “How many cents will I have to spend to make a dollar?” Often times, people spend too much time thinking about the cool idea they have, and not enough about long term profits, but the same can be said for the opposite position.
Whether you outsource to a quality virtual assistant or a pricier digital agency, they should be able to explain to you very clearly the long-term investment in social networks as well as how to implement and measure your success.
Social networks are here to stay but the problem of ROI in social networks is knowing how to monitor your results. The first step for any business should be to clearly define the objectives of the online marketing strategy as well as the tools and web analytics that will measure if, when and how the return on investment is achieved.
Although this may take some extra work or money, in the long run it will pay off and prevent you from unknowingly throwing your marketing budget down the drain. When I work for my clients I make sure that all the progress I achieve for them is well documented, so they can be confident they are achieving the results they are aiming for. Even though digital marketing and social media seems to be the new gold rush, we can’t abandon traditional and conservative business practices in the process of moving online. We must also remain very conservative in our social media efforts whether we are spending the time to do it ourselves or working with SEO agencies or virtual assistants and IT/BPO outsourcing companies.
Sure you have 5000 Facebook likes, but how much time and money did you spend to achieve them? And most importantly, how much money were you able to generate for your business as a result of your financing and hard work?
And no I am not saying you should refrain from investing in social media…. Although getting started takes a lot of patience, at this point you would be crazy not to use it to your advantage. What makes social media superior to other forms of advertising is that once you build your network up, you don’t have to continuously invest in advertising the way you would for ads. A good size social media following will only snowball and grow bigger as long as you provide those in your network with quality content, and this is in my opinion the key to making sure your social media campaign is a worthwhile investment. The important thing to remember is that when you do build up a good size following, the battle is not over. At that point you have the important task of giving back and engaging your clients and potential customers.
In the following video, internet entrepreneur Gary Vaynerchuk discusses his frustration with a very real problem: old school business types who refuse to look into the future and simply don’t understand the benefit of something which does not produce a return of investment immediately.
I leave you with this: though the world of media is quickly changing, one thing that is not is the importance of a well documented and fruitful return on investment. As exciting and new as digital media is, knowing your cost of customer acquisition and being able to generate profit from your investments is still the most important factor to any growing business, and that’s something we can’t forget as marketers and business owners.