It's a good point. I wonder how companies put value on building brand recognition....I don't know if you can put a quantitative value on it. Social media builds up goodwill and brand identity.
Local Business - How Do You Measure ROI on Social Media?
ROI is a crucial aspect of your social media strategy but it can be a bit of a challenge for local businesses to truly capture the ROI of social media especially given there are so many intangible benefits.
Social media is an important area of focus to build visibility on the Internet for any local business. When our clients take our advice and work with us, they always receive positive results. One client received his first lead via Facebook within minutes of posting a Facebook form, for example, and another saw a significant increase in Google rankings within a month of using Panoramio, YouTube and other forms of social media.
With all that being said, I understand that it can be a bit of a challenge for local businesses to truly capture the ROI when using social media, especially given there are so many intangible benefits, such as brand exposure, customer engagement and building expert status, that are hard to put a dollar value on. But we must do our best, because if it’s not working for your local business, then you need to look at changing up your strategy to stop wasting your time and money.
Ask yourself the following three questions to get to an accurate assessment of ROI when using social media for your local business.
What are the costs associated with social media? Cost is always a great place to start when it comes to evaluating ROI, but be sure to capture all costs associated with social media. First, how much do you actually spend on social media networking, advertising, content writing, etc.? Second, assess how much time you spend each week using and applying social media for your business. Some tend to leave out this second part, but it’s extremely important because your time is money, and it’s your most valuable resource. If your hourly rate is $150/hour and you spend 10 hours per week on social media, then you spend $1500 per week plus whatever outgoing costs you have going towards social media each week.
How many new Leads and Conversions are you generating? Use an analytic tool, such as Google analytics, to determine how many leads and conversions you’ve achieved via social media. This is the primary goal of social media for local businesses and directly impacts the bottom line. (To learn how to use analytics to monitor your social media success read: How To Use Analytics To Determine How You Are Doing With Social Media)
What aspects of your business has social media replaced? With the advent of social media platforms, many businesses are finding they have been able to use social media to complement, or replace (in part or completely), customer service functions, advertising, and corporate branding. It’s important to try to get a good handle on how much savings (and in some instances, costs) social media has created for a local business because of this.
It’s my belief that every local business will benefit from social media if the right strategy is executed correctly, and each business has different needs. By evaluating ROI, it will give a local business owner a good vantage point to work from to decide where their social media strategy needs tweaked for optimal results. For more great tips on this topic, consider reading 5 Simple Steps to Measure Social Media ROI.
Learn more about the author, Chris Marentis.
Comment on this article
Posted by Lara Fabans, Los Gatos, California |
May 24, 2012
Posted by Annastacia Tooke, Gastonia, North Carolina |
May 25, 2012
Good article. I agree with Lara as well. Social Media can help improve a company's reputation or it can go the other way. Either through your company's social media work or by consumers using social media to talk about it, and customers are still more likely to comment negatively about a product online than they are to rave about it.
Posted by Vicki Campbell-Mensah, Auburn, Washington |
Jul 06, 2012
Good Article Chris, You make everything sound so easy.
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