Image courtesy of David Castillo Dominici
Difficulties in measuring traditional ROI pose a dilemma for businesses to invest in social media. CEOs want to see social media ROI on bottom lines before they are prepared to take social media seriously. Unsurprisingly, some CEOs still think social media is nonsense.
On the other hand, recent developments in social media promise direct purchases and conversions. For this reason, marketers feel optimistic about the odds of measuring traditional ROI in the near future. However, much of social media’s role today for marketers still lie in monitoring and listening to relevant conversations, generating leads, analysing brand sentiment, obtaining product feedback, providing customer service and the like.
Evidently, none of these functions seem to impact profits directly. None of them spell lead conversion. But businesses that win at social couldn’t have invested in social media if they didn’t see value in it. So why are they spending so much time, money and effort at social?
Here’s the truth.
Brands find other social media goals worth pursuing
What if you redefined social media ROI in your own terms and adapted it to your business? Here are some of the ways successful businesses do it:
1. Customer-side expenses saved for using social media
Don’t forget that Profits = Revenue - Costs. Yes, you heard it right. Revenue AND Costs. Excessive emphasis on revenue figures leads you to conveniently forget that you can cut costs to increase your profits and improve your bottom line.
So, think about possible cost reductions for your company. A common example is the amount of money saved for operating a social media help desk, compared to a traditional call centre.
Running a traditional call centre involves lots of manpower, office space, costs of telephony services and not forgetting the endless complains you often entertain for slow and inadequate responses.
Replacing a traditional call centre with a few staff members dedicated to responding to customers on social media greatly reduces these costs. Responding to queries on social media is easy and preferred, since that’s where most customers hang out. Queries may be recorded and monitored easily to analyse customers’ difficulties with your product(s). You can also write answers to the most Frequently Asked Questions (FAQs) for your customers to refer to whenever they need help. Plus, you save money on manpower since a small number of staffs may attend to a large number of customers. No (or perhaps less) telephony services are required either. Do these highly probable savings improve your bottom line? Yes.
Besides, engaging in social media saves you money on obtaining product feedback, and gives you more accurate information about your customers and product than ever. Customers lie in incentivised focus groups, market surveys and everywhere you collect direct information from them. Sometimes they lie unintentionally. In controlled environments, their state of mind differs and feedback may thus be inaccurate.
Listening to authentic conversations customers have on social media gives you new insights about your product, brand and customers that you probably never knew. Social media serves a multitude of purposes for the average user - complains, compliments, product experiences, recommendations, review, feelings, thoughts, on and on. What better and easier ways to get accurate direct and indirect feedback from customers than to engage and listen to them on social media?
2. Internal expenses saved for using social media
Do your employees embrace and participate in social media? Do you encourage them to represent your brand?
Brands that do so benefit from the following:
- Greater reach and deeper brand impressions
- Lower employee turnover rates
- Greater credibility than traditional recruitment messages
Savings on both customer-side and internal expenses abound. Don’t limit your choices to the aforementioned. Be creative and explore how social media can help you save money.
3. Return on brand equity
Has your brand become more recognizable today because of social media? Or has your brand become trendier?
Brand equity is important because it drives sales. If you need to get body wash, what brands come to your mind? Probably Dove, Victoria’s Secret or Clean & Clear.
Brands that impress upon their customers will certainly be preferred when customers make a decision to buy. Making a solid impression is what social media can do ever so well, if you do it right.
Key to measuring brand equity is to first establish the zero-level before implementing and executing your social media strategy. Next, define your milestones. State specifically what metrics would determine whether your brand equity has improved.
For instance, would you calculate and monitor your Share of Voice (SOV)? If so, what consumer profiles would you report for SOV and what profiles would you segment or ignore?
Before I conclude
Social media detractors have a point in cautioning businesses adopting social media. Winning at social does not save your business. Social media’s unlike the staple bread and butter that keep you alive. Instead, social media is like the huge but exclusive club that keeps you relevant. Now that the ability to measure social media ROI (profits) is on the horizons and brands are benefiting from social media in a myriad of ways, it is a good time for your brand to pick up the speed and not lose out in this winnable competition.
What are some ways your brand is benefiting from social media? Share with us below.