Social Media ROI: HmmmLet’s dissect this article’s title: A) Social Media: Often associated with social networks, which according to Wikipedia “facilitate the building of…social relations among people who…share interests, activities, backgrounds, or real-life connections.” Somewhat boring but sensible. B) ROI: Return on Investment, defined by Wikipedia (who else?) as “the ratio of money gained or lost on an investment relative to the amount of money invested.” Now you’re talking—money out versus money in. C) Hmmm: “Sound made when one is attempting to sound reassuring yet non-committal,” per urbandictionary.com. So, Social Media ROI = the money gained (or lost) on the money invested in networks that facilitate social relations among people. And Hmmm, well it does seem that most businesses start with “hmmm” when discussing Social Media ROI.
Today, social media is everywhere. People are sharing more than ever—on their computers, on their phones, from one social network to another, sometimes more than they really should. The “social media” part of Social Media ROI is going strong. But how is the ROI part doing? Are businesses who participate in social media getting a positive return on their social media investments? According to a recent study by Nectar Online Media, more than 70% of businesses aren’t even measuring social media ROI!
Virtually every consumer brand seems to be on Facebook, trying to connect with its over one billion regular users, trying to reach and engage actual and potential customers. And many of these same brands are tweeting away, trying to stay relevant within the twittersphere. Some also use Youtube, Pinterest, Instagram, and the list goes on. Because social media is such a recent development in the evolution of marketing, we are in the throw-spaghetti-at-the-wall phase, just hoping something sticks.
When Nectar Online Media asked the less than 30% of organizations who do measure ROI how they measured it, the top three responses were: 1) followers/likes, 2) click-through rates, and 3) brand mentions. It’s difficult to measure ROI if the money-in portion of the ratio is not quantifiable.
How then does an organization realize the benefits that are surely inherent in engaging customers where they [virtually] live—on their social networks? By using the information that your customers are sharing with you in the social sphere to boost what you already know about them from your traditional interactions (purchases, clicks, etc). With predictive social commerce software, your business can integrate social data into existing customer purchase history and online/email clicks to develop a holistic, individualized profile for each of your customers, which in turn, enables you to develop hyper-personalized messages. The more personalized the message, the greater the customer’s engagement and loyalty to your brand and the more they spend with you.
By integrating social data in this manner to hyper-personalize your customer recommendations and offers, you can begin to measure the revenue increases driven by social. It’s the A/B test of customer communications: A) without social versus B) with social integration. Our money is on B. Every time. No Hmmms.
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