It feels like every few months we revisit the idea of how social media matters in marketing, and if there is a good way to measure it. Partly, this is because traditional measurement metrics do not indicate that social media is great business. An ROI on most social media efforts – especially for small and mid-size businesses – is almost never going to clear a hurdle rate.
But then again, if measured specifically, plenty of things aren’t justified by direct ROI. We call them costs of doing business. Designing and implementing a sophisticated website, for example, doesn’t meet any ROI for a mid-size manufacturer, because how can anyone track sales directly the presence of a website? Still, try staying in business without a site – or with a bad one – and you will quickly come around to the fact that things can be worth money without direct sales.
So is social media like that? Just a cost of doing business in today’s world?
Maybe, but just saying that seems like the cop-outs that innumerable “social media gurus” have presented for reasons they should get tons of your business’ money. It feels like we should do better.
Klout certainly thinks so. The bay area startup that has been so roundly mocked for trying to score Twitter influence recently announced a revamp to its scoring structure. It bumped Justin Bieber down from a perfect 100 to a mere 92. The Klout CEO calls the new more nuanced Klout profile a “social resume,” something I’m not sure we needed more of. Kidding aside, there’s no question these social media quantifiers tell you something; it’s just not clear what.
A nice piece by Fast Company last week tells us that successful social media can be defined by what your consultant or team members are telling you, and that much of it has to do with using the various networks as tools. Is your business trying to drive SEO results? Sales? Foot traffic? Customer satisfaction and QA? Each of those could result in a very different strategy. The piece is punchy and has some good insight, but suggests that every campaign should have an ROI, and there are lots of posts on how to calculate one, but none of them seem to agree on the method.
Before you start trying to measure the ROI of your next Twitter barrage, it’s worth asking yourself some more basic questions first, like:
• What’s the lifetime value of my customer?
• Why do I usually lose customers?
• Where do my customers find me now?
• Are those all good things?
I see a lot of people wade into social media campaigns before they’ve even started to think about those questions, and whether they even know the answers.
To me, social media is first and foremost a branding tool. It establishes your brand and reinforces that brand’s voice. Secondarily, it’s incredibly valuable for making sure your customers are happy; if someone tweets a negative comment about your business, you have a direct line to fix it. Lastly, I believe there is marketing value, in the sense that clients who already know us are more likely to do business with us again. Just like an email blast can remind your customers that they need to purchase something, social media can be an intermittent reminder to your customers that you’re there and they like you, or it can be an introduction to someone who will grow to like you.
Just remember that it is still your job to engage with people and keep your customers happy.