Surely, you’ve had a boss who was a bit gun-shy about social media. Perhaps you are that boss. If you think about it, hesitancy about expending company resources on Facebook posting makes a lot of sense. With ever growing “To Do” lists on the desks of their employees, employers want to ensure that company resources (ie. their employees’ time) are used as effectively and efficiently as possible. While most work tasks, such as sales calls, have a clear and measurable impact on company success, the value of creating and maintaining a social media presence has eluded many.
Social Media Value is More Than Economic
Let’s get one thing out of the way. There is infinitely more value in social media than simply the economic benefits it can provide a company. Through social media, companies can interact with customers and potential customers in real time, learn about, and participate in, industry trends, and assist customers with questions or concerns. Social media provides companies free opportunities to discover which products and messages resonate most with their consumer bases.
Social media also gives consumers to the ability to amplify your company’s messages. For example, if you have 50,000 followers on Twitter, but your second level network (the people who follow the people who follow you) is 6 million, your true reach is 6 million people. When your network of social media followers shares your messages with their networks, they are promoting your business. There is proven ROI in turning your customers into advocates for your business.
Aside from providing a worldwide platform on which your company can converse with consumers and on which consumers can share your messages with their private networks, social media also has a quantifiable economic value to companies. While it is true that it is not possible to track every single time your Tweet plants a seed in a consumer’s head and leads to an eventual sale, it is possible to track many macro and micro conversions, such as purchases, email marketing registrations, catalog orders, and product reviews on your site. The quantifiable economic value of social media is the sum of short and long term revenue and cost savings.
How Can We Quantify This?
So, how can we compute this? Let’s start with computing macro conversions. We know what the value is when someone buys a product from our site. We know what the value of a lead is. The macroeconomic value, which admittedly is rarer, is whenever social media directly entices the consumer to purchase a product from the site or submit a lead form.
Micro conversions happen when the consumer downloads a catalog, ebook, or other materials that may eventually lead to a sale. These micro conversions should be marked as goals in Google Analytics. Then you are able to track how frequently the achievement of the micro conversion leads to a macro conversion, whose value you are already aware of. The percentage of conversions from micro to macro can be computed as a ratio or percentage of the value of the sale.
So, if you value a lead form at $200 per lead, and the people who download your case study convert to leads 50% of the time, the micro conversion is valued at $100. If social media has enticed your consumer to make that micro conversion in the first place, then your social media channel has given you an ROI of $100.
How You Can Tell if Social Media is Giving You a Return on Investment
In a given month, track your macro and micro conversions using Google Analytics (and/or other tools) and determine the conversions that can be attributed to your various social media channels. Add all of the value of those conversions together. If the sum of the value of those conversions is larger than the cost of the time it took you to make those posts, then your social media channels are giving you a positive return on investment.
If you’ve analyzed your company’s social media and feel as though there is room for improvement, not to worry! At New Perspective Web Solutions, we are experts at optimizing social media. We are happy to review your social media strategy and help you get a better ROI from your social media channels.