Social Media Marketing and Your Business ROI

by | Social Media Marketing | 3 comments

Think about the last time you were consciously influenced by a television commercial to buy something. Maybe when you were hungry and saw a pizza commercial so you ordered one right then. Many may have not purchased a product because of a commercial but rather because they have heard about a product via word of mouth.

Not when you compare it to the number of times you have been influenced by a neighbor telling you that the recipe she just gave you won't come out right unless you add Campbell soup. Or your brother-in-law saying he has found the best mechanic. Or your best friend scolding that she would never give her kids that flu medicine. You are much more powerfully influenced by the spontaneous product recommendations and reviews of your own social circle than by a million-dollar commercial.

Businessmen have known this for years and have been longing to harness the power of peer pressure and channel this mighty force to their own gain. Finally, less than a decade ago, the Internet gave rise to the world's largest virtual social network, Facebook and then others such as Twitter, Myspace, etc.

It is amazing that it took so long for the business world to realize the potential here. Facebook is a secret weapon for small businesses owners who can use it to grow their business. It is inexpensive to join and maintain a fan page that can reach unlimited number of customers. But how to do this successfully? Check out the tips below to get an idea of how you can do this:

  • Offer coupons to customers that purchase your product or services on a particular day.
  • Create a special landing page that includes a sign-up form to grow your database.
  • One thing such firms do not do is help you measure the return on your investment – your ROI.

In fact, many successful big businesses still practice marketing without strategy and do not measure ROI. They advertise on the shotgun principle by sending out a lot of messages by various media like the pellets from buckshot and hope something hits. When their sales start to rise, they have no idea which advertising strategy paid off. Many have added social media marketing to the mix but the venue is still experimental and no definite model is in place to measure its effectiveness.

A small business cannot afford such carelessness. In order to measure the ROI in social media, you must first decide what you want to measure. It is certainly easier to see how many Facebook friends you have following your coffee shop than how many sales have resulted from this activity. Even businesses that rely on online sales don't necessarily know what brought customers to them. Was it that e-mail campaign, or the daily Twitter, or the blog from an affiliated site?

One easy way to track the ROI in social media is to do a survey at the time of the sale and ask customers what brought them to you. The drawback there is that if you are using several advertising media, even the customer might not know. A growing awareness of your product or service might have gradually reached a tipping point.  If you are using a social media marketing firm, ask them about the feasibility of putting some type of tracking into place.

You should also watch for comments and reviews on your social media sites. These often indicate the popularity of the site and might be an indication of its role in boosting your sales. Finally, You might also try advertising a sale or product on only one venue. Don't mention the sale of Green Bean Tea on any site except Facebook or Twitter and count how many people come into your shop to ask for it. The drawback here, too, is that the power of cumulative affect is negated, so sales might be less for that item than that particular social site can usually generate if it is assisted by other media.

Finally, keep in mind that when you are determining the method you want to use to measure your social media marketing ROI, have an open-mind to the results. If something isn't working, then either revamp what you are doing or try something new. Your ROI is important to your success in social media marketing so monitoring your efforts should be part of your online business model.