The Value of Social Media – A Business Owner’s Guide
You’re probably sick of talking about it. Social media is everywhere.
Spend any time on the internet and you’ll be reminded that your business ‘should’ be doing it. What’s more frustrating is that you probably agree! You can see how it could be of use. Communicating with millions of potential customers, building a community and expanding your reach – what’s not to like!
The answer you keep coming back to? – The cost.
It doesn’t matter how you look at it, for business owners, social media isn’t free. Whether it’s one of your team taking it on, a freelancer who’s running your social media accounts for you or a social media agency, using social media in a deliberate, effective and sustainable way costs time and money.
So, is it worth it?
The Value of Social Media – Putting a Figure on It
The most difficult thing about determining the value of social media is putting a figure on it. I don’t mean putting a figure on what it will cost, that part’s easy. I mean putting a figure on the value of social media. After all, without that, how can you assess whether the cost is justified.
Unfortunately, social media causes a bit of a problem here. Even some of the best marketers in the country struggle with accurately attributing leads and sales to social media. It’s so diverse, dynamic and free, that it doesn’t respond well to traditional reporting. The other factor is that different businesses use it in completely different ways.
Let me show you what I mean:
What Are Your Aims?
Most customers discover companies through social media, then take some time to get to know their products or services — subscribing to emails or returning again through another channel.
The first thing we always get our clients to do is to work out what success looks like to them. Quite often, this throws up some interesting insights.
What we often find is that their ultimate aim is slightly different to what they are expecting to achieve through social media. Let’s look at an example.
If you were a car dealership looking at your monthly marketing budget, your aims will be quite clear. You’ll want to sell more cars. However, it’s completely unrealistic to expect someone to come across your company on Twitter, email you and buy a car right there and then. It’s just not going to happen. More realistically, you could aim to simply get more people to walk through your showroom doors. So, let’s say you were spending £600 each month on social media (our ‘Done-for-You’ package costs £599). How many cars would you need to sell in order to make that monthly spend worthwhile? Depending on the margin on the cars you sell, I’m thinking that figure is probably 1 or 2. So, how many people would you expect to have to walk through the showroom doors for you to make 1 or 2 sales each month? 20? 30? 50?
Whatever that figure is, that should be your aim. Let’s say it’s 30 for argument’s sake. From what we’ve experienced through running hundreds of social media account and publishing thousands (yes, thousands) of blog articles for our clients, this is a VERY achievable goal, and clear evidence that social media could (and should) offer great value for your company.
The Social Media ‘Value Equation’
[Tweet “There is no ROI in anything if you don’t learn how to use it.-Gary Vaynerchuk”]
Before you start trying to calculate the potential value of social media for your company, you first need to decide what ‘great value’ looks like for you. What we often find is that our clients are pleasantly surprised at how achievable this ‘value’ is.
Also, once you have a clear objective for your campaign (people walking into the showroom in the above example), you then have a much clearer brief for whoever is running your campaign. This allows them to then revise the strategy in order to meet these aims.
Going back to the car dealership example, this will almost certainly involve a campaign to build a large number of local followers. This may then also be coupled with an incentive for these followers to walk through your showroom doors. Without a clear idea of an achievable and value-driven goal, you can never hope to calculate the value of social media.
What About the Other Benefits
“Word of mouth is a currency that affects your bottom line, and social media allows word of mouth to scale.”
What makes the value of social media so difficult to measure is the large number of secondary benefits that can come from it. It’s vaguely comparable to networking in a face to face environment. You might meet someone, tell them what you do and then hear nothing from them. However, they might have then been busy telling everyone they knew about you and what you offer. You could even have two or three clients now that came through word of mouth, and you might have no idea! It’s impossible to attribute everything.
Another often overlooked benefit of social media is the connections it will help you make. Going back to the car showroom example, although the primary goal of the social media campaign is to get more people through the showroom doors, it will also connect you with other professionals and companies. You might find new suppliers, new contacts or people who can recommend you to their audience. These can be hugely beneficial to a growing business and should certainly form a part of the equation that helps you determine the value of social media for you.
Measuring the Value of Social Media
What makes measuring social ROI so difficult is not a lack of data, but identifying which pieces of data matter.
The reason so many business owners lack the confidence to commit to social media is the difficulty in attributing any success (or failure) they may have. What should you measure? Likes? Followers? Website visitors? It’s a minefield!
“56% of marketers still list the ‘inability to tie social media to business outcomes’ as the largest pain point of measuring social media ROI.” – Forbes
Unfortunately there’s no easy answer. Just as there is no universal blueprint for guaranteeing the value of social media, there’s also no blueprint for how to measure that value. It’ s all about the value of social media for YOUR business, and how you should be measuring that value.
Let’s go back to the car dealership example.
We’ve already identified that the aim they’ve set themselves is to get 30 extra people into their showroom each month as a result of social media and content marketing. Given that aim, what should they be measuring? How will they determine the value of social media for their business?
[Tweet “Word of mouth is a currency that affects your bottom line.”]
We already discussed how confirming the clear aim of a social campaign can have a really positive effect on how that campaign is carried out. The two primary examples I used was to increase the number of local followers (i.e. people who could conceivably walk into the showroom) and to offer some form of incentive for doing so. These two areas offer two very clear metrics that can be easily measured.
1 – Follower growth and locality – Are your followers growing each month? If so, where are your new followers based? There are lots of online tools that can help you measure this, like Twitter Counter, for example.
2 – Where did people hear about you? We mentioned running a promotion on Twitter that offers an incentive for people who come into the showroom. Measuring the effectiveness of this campaign could be as simple as asking people to mention Twitter in order to claim that incentive (whatever it may be). This will give you a clear idea of how many people are walking into your showroom as a direct result of Twitter, Facebook or your website.
You can see how identifying clear aims then makes accurate measurement of the value of social media much easier. By simplifying it in this way, all other metrics become much less important. Mentions, retweets, tweet frequency; they are all just small elements that lead people towards the two main actions you want them to take as part of your campaign.
If you are currently trying to assess the possible value of social media for your company, we’re here to help. We’ve helped hundreds of companies to determine the true value of social media for THEM, and how to extract that value as effectively as possible. We can do the same for you.
Why not get in touch. Don’t worry, there’s no commitment to use our services, we’ll just be happy to talk to you about your current challenges.