There are financial benefits to social media, and while they there is investment to create a social media presence it can cover by the cost savings resulting from it. As always, in order to maximize the ROI for social media expenditures you need to have a plan and some level of understanding of your social technographic profile is for your target audience.
- Forums can reduce the amount of support phone calls or emails (Bernoff & Li, 2011)
- By having a Q&A site, Discussion Forum or Wiki’s you can allow customers to self-serve. This means they can find the answers to the questions without having to utilize the call centre or email support group (Bernoff & Li, 2011).
- In order to estimate this ROI you need to determine a few financial figures:
- Start-up and on-going costs – this is what those forums are costing you to support (Bernoff & Li, 2011).
- Calculate the potential benefits – be realistic in your estimating. Assuming 50% of you calls will be reduced is way too high. Look at the amount of people contributing and being reached by the forum, and then assume maybe 1-5% of those will be able to find their answers. Take that number and slice out one third, this is the potential volume of saved phone calls. Multiple the number by the cost per call to reach a dollar value (Bernoff & Li, 2011).
- The difference between these two is your potential ROI. You can also compare year to year support calls and see if a reduction has occurred.
- Measure the reach of social media campaigns in relation to new customer sign ups (LePage, 2017).
- Using analytic tools, you can determine the amount of new customers generated from you social media campaigns. As social media marketing is a much lower cost than traditional marketing your company is getting a better return on those products and offerings because they cost you less money to sell (LePage, 2017).
- With the total new customers via social media you can then determine the profit based on traditional sales versus social media.
- Set social media goals and use analytics to gauge your success (Gotter, 2016)
- Set realistic goals and how far you want to reach with social media. If you plan on have 200K new followers a year put a $ on what that is worth. If 5% of those buy your product and that is worth $28, then your ROI is $280,000. If your ongoing costs are less than that it’s an easy sell to the executive board.
There are many analytics tools out there to help make this process easier and can break down your ROI by social media platform, that way you can make the best decisions when you make your next social media decision.
Bernoff, J., & Li, C. (2011). groundswell. Boston: Harvard Business Review.
Gotter, A. (2016, June 23). 5 Tools to measure Social Media ROI. Retrieved from Social Media Examiner: http://www.socialmediaexaminer.com/5-tools-to-measure-social-media-roi/
LePage, E. (2017, March 30). A Comprehensive Guide to Social Media ROI. Retrieved from Hootsuite: https://blog.hootsuite.com/measure-social-media-roi-business/#measure