It seems as if every social media expert is advising how to measure the Return on Investment (ROI) with relation to hours and costs associated with marketing using social media. ROI is important to justify the budget for consultancy costs or additional personnel to big business. I contend that social media ROI for the small business owner means something entirely different.
The biggest cost to small businesses using social media as a marketing tool is time. So the question becomes less about money and more about the value of their time. This doesn’t mean that ROI isn’t relevant, it just means it has a different meaning and different metrics to the small business owner than it does to big business.
Measuring Social Media ROI
As a small business owner, measuring Social Media ROI may leave you feeling like you are chasing an elusive number. The reality is you are. Instead of measuring ROI, set goals around things you can actually measure such as:
- How many customers converse with you through your blog or Facebook page?
- How many customers made a repeat purchase last month?
- How many customers reviewed your business or product on Yelp?
Customer engagement is something that is important to the success of your business and is pretty easy to measure – as long as your goals are specific. For instance, the number of likes on a Facebook page are not as important as the number of customers that take the time to like or comment on a post.
Key Performance Indicators
When you measure items that speak to customer engagement you are actually measuring Key Performance Indicators (KPIs). This is different from ROI and there is a strong case for the small business owner to use KPIs instead of ROI to measure the effectiveness of their social media efforts. A small business owner is involved in every aspect of the day to day business and as such will be able to make a correlation between an increase in certain KPIs and the value it adds.
As with anything new, it can seem overwhelming and impossible to add another thing to your already over-scheduled day. Tracking this type of information can help you hone your social media efforts to activities and networks that actually add value. After some time, you will see patterns emerge that will prove helpful. Look for information that will point you towards the type of content, time of day and the social networks that increase your customer engagement. With this kind of valuable information, you will know where, when and how to spend your time. In the end, you will know you are getting your money’s worth and isn’t that what ROI is all about?
Your Action Item
Choose three customer engagement measurement goals and track those goals every week for three months. At the end of three months evaluate the data and determine if your efforts are resulting in increased engagement. If not, it might be time to alter your strategy.