A discussion about social media and its use in sales and marketing often leads to a discussion about return on investment—the elusive ROI. One day you hear case studies proving the ROI of social media while another day you hear that Facebook’s organic reach is nearing zero and marketers should give up on the platform.
The fact that incorporating social media into sales and marketing can generate return on investment has been and continues to be proven. Just search “social media ROI” or “proof that social media marketing works” and you will have plenty of proof. That’s not the problem. The problem is the question about ROI is still being asked, and it’s because many people are still unclear about how to measure ROI and not about whether they can prove it can be measured.
That confusion is why the following five questions are so important when it comes to understanding where to start, what to focus on, and what meaningful social media ROI looks like. Many organizations start in the wrong place or focus on the wrong metrics. Hopefully the following will prove helpful.
1. What are our organization’s objectives for the next 4-6 months?
Organizations considering the use of social media often focus solely on social media and ignore their current sales and marketing objectives, when in fact they should be integrated. It sounds obvious, but it is not surprising to see a social media team operating independently from the rest of an organization’s sales and marketing teams with no coordination of effort and no ability to measure the impact of social media, because there is no integration. That is why organizations need to park social media on the side and ask, “What are our organization’s objectives for the next 4-6 months?” Without a clear idea of objectives for an organization’s product or service, using social media could prove fruitless and the ability to tie ROI to anything nearly impossible.
2. How well are we currently serving our customers?
If you were to survey your customers to gauge their level of satisfaction, what would you hear? Are you confident that the results would be positive? That their propensity to recommend your product or service would be high? You need to ask yourself, “How well are we currently serving our customers?” If you don’t, or if you are uncertain about how they feel about your product or service, you run the risk of drawing attention to their dissatisfaction as you embark on a social media initiative. Basically, if your product or service sucks then social media will only serve to amplify your suckiness.
3. Are we confident about how we measure the results of our current sales and marketing efforts?
Before burdening social media with proving ROI, you should ask, “Are we confident about how we measure the results of our current sales and marketing efforts?” How good is your organization at tracking and measuring its own performance? Do different departments and business units cooperate and collaborate to ensure that an action in one area generates an outcome that can be measured in another? For example, if a link is distributed in a tweet and that link is for a landing page within an organization’s website, can the click-throughs, bounce rates, and conversions on the landing page be tracked each step of the way so that you can see how an action in social media generated an outcome in another channel? Sometimes such information is difficult to compile because different business units are involved and they are unaccustomed to working together.
4. What is our organization’s readiness to adopt social media and the associated responsibilities and performance measurement processes?
By designing the ROI objective into your efforts and tying social media outcomes to the sales and marketing activities you are accustomed to tracking and measuring, you will be on the right track. It is that kind of situation that leads to the next key question: “What is our organization’s readiness to adopt social media and the associated responsibilities and performance measurement processes?” There is an element of change management at play here, and if measurement systems or processes are poor or non-existent or departments and/or business units are not accustomed or are unwilling to cooperate with each other, it could make proving ROI challenging.
Some suggest that social media can break down silos within an organization, but, while that might be possible, it is not without its challenges or the need for internal champions and executive support. If people feel their job descriptions or responsibilities have been changed without their input, winning them over will be difficult. Furthermore, if you have internal and external salespeople and you can’t properly attribute where the sales leads came from once you have integrated social media, you are going to have some very unhappy salespeople because you have potentially impacted their compensation in a negative way. Compensation dictates behaviour: you have to make sure that social media integration helps rather than hinders an organization’s compensation model, especially when it comes to salespeople.
So, you are clear on your objectives for the organization related to social media for the next few months. You have determined the current state of customer satisfaction. You have aligned different business units and departments. You have confirmed that the necessary processes and measurement capabilities are in place. You have identified and rallied a very willing group of people eager to take on this new challenge. What now?
5. Are we prepared to be wrong?
Well, the last question you should ask is, “Are we prepared to be wrong?” Like any other strategic initiative, you design a plan with specific actions and KPI’s based on certain assumptions, but all of those get put to the test the moment you begin to implement your strategy. As with a strategic plan, you can’t be rigid. You will receive feedback from the market that will inform refinements and dramatic changes to your strategy. You need to be prepared for that. You need to be willing to accept the feedback and adjust accordingly. One of the greatest benefits of social media is the near real-time feedback that it can provide. Sometimes the volume and velocity of that feedback can be daunting for organizations, but it directly relates to ROI, which is what we have been seeking all along.
Do you have other questions or thoughts on social media ROI? I’d love to hear them.
This post previously ran on Steamfeed in June.
A recognized senior social strategist, speaker, and blogger. He has held senior strategy roles with wireless, e-business, financial, and social CRM service providers, helping clients remain competitive by embracing social media and digital technologies.