Guest Wise Dame Susan L. Brown for Brown & Associates
ROI for social media and communities is the “elephant in the room.” Everyone wants a definitive answer to how to evaluate return on investment. Also how much investment is enough? What are the resources needed? What kind of social media is effective and why?
“The most socially engaged companies typically enjoyed revenue growth of 18% on average over the last 12 months, while the least socially engaged brands saw revenues fall 6%.”
- The study also showed that social media reach alone may have a positive impact: BUTTERFLIES enjoyed significantly stronger revenue returns than SELECTIVES or WALLFLOWERS. Why? Because more touch points can present a ripple effect, inducing viral marketing, boosting brand recognition and driving sales volume.
- SELECTIVES delivered higher gross and net margins, suggesting that deep engagement in a few channels can be a rewarding and effective social media strategy. Focusing on depth over breadth present an opportunity to better understand the customer, react quickly to customer demand, and improve satisfaction – which in turn generates pricing power and drives business success.
- Engagement via social media IS important — and we CAN quantify it.
- It pays in both revenue and profits to engage meaningfully in social media. Emphasize quality, not just quantity.
- To scale engagement, make social media part of everyone’s job.
- Doing it all may not be for you — but you must do something.
- Find your sweet spot – it is better to be consistent and participate in fewer channels than to spread yourself too thin.
How Companies Judge Social Media Success
The amount of web site traffic generated is the most popular way that companies in this study measure the success of their social media initiatives, followed by engagement with prospects and brand awareness.
Figure 1: Top Social Media Success Metrics
The next figure shows the bottom two box (Not at All, Barely) and top two box (Well, Very Well) percentages for respondents using each of the success metrics
Respondents were asked how well they can see the impact of company social media initiatives on the success metrics they use today using the following scale:
1. Not at All – Unable to Measure
2. Barely – May or May Not Have the Data
3. Somewhat – Data is There but You Have to Dig
4. Well – Most of the Data is Easily Accessed
5. Very Well – Part of Standard Reports
Figure 2: Ability to See Impact of Social Media Initiatives on Success Metrics
(C) 03/2011, updated, 1/2013; all rights reserved. This article may be shared in part or whole with credit given to author and link to Brown & Associates