Tuesday, January 1, 2013

Measuring Social Media ROI

The goal of a business is to make a profit.  Therefore the strategies, tactics, and tools it uses should be used to help achieve that goal.  The question a good business owner asks is how do you measure the Return On Investment?  The same should be said when it comes to social media marketing.  Many so called "gurus" speak about brand engagement, gamification, and engagement as if they were a snake oil salesman.  However, you're running a business and not a social media frat house.  So how is social media ROI measured?  Below are a few social media metrics to go by:
  1. Website Traffic - Your company's website serves as the online storefront for your business. The quantity and quality of traffic that social media sends to your website is an indicator of sales opportunities being sent to your company.  
  2. Market Reach - The more people that follow your business on social media signifies your business is getting more visibility.  In essence, these are sales potential sales opportunities that need to be cultivated and converted.  
  3. Sales - This is typically the ultimate metric of success for any business using social media. Depending on the type of business you're in, there are a few ways to track sales. Either by asking customers how they heard about you, tracking form fills on your website, or asking your customers when they come into your business how they heard about you, tracking revenue from social media is highly dependent on the type of business you are operating.  
Determining the ROI of any initiative is crucial to determine if a company's dollars are being spent properly.  Social media marketing should be approached the same way to determine if it's actually effective for your company. If you can't measure it, why do it?

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