Social Media and ROI: The Million Dollar Question : Under30CEO Social Media and ROI: The Million Dollar Question : Under30CEO
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Social Media and ROI: The Million Dollar Question

| January 20, 2012 | 5 Comments

social media roiThere isn’t a day that goes by where I don’t get asked this question by someone, whether it be a potential client, a friend or family member.  To be honest at this point in time there is no concrete way to measure the exact Return on Investment you’ll get from paying a company to manage it for you or bringing on someone to your team to take care of it.  The key to investing in social media management is not to worry about the amount of sales it will drive but rather listening and communicating with your target market including your current and future customers.

1. Listen To What Your Market Is Saying

It doesn’t matter if they are talking about your product or a competitors, monitor the market place and jump into the conversation.  Ill give you an example of a personal experience I had where this holds true.  I had to bring my car in for an oil change and was trying to call the service center to see what was the latest I could bring my car in without an appointment.  I couldn’t get in touch with the dealer where I bought the car from until after 9 and I know the service center was open way before that.  I decide to tweet my frustrations with a hashtag of the car manufacturer I have.  Within five minutes of that tweet another local dealer who sells the same cars tweeted saying, “Hi Austin give us a call well be sure to pickup” and included their phone number.  I decide to call the number to see if they’re telling the truth and low and behold one ring later I was speaking to a representative.  I was thoroughly impressed and expressed my happiness to them and guess what next time they’ll get the sale from me.

In my opinion that is how you utilize social media to earn a return on your investment and grow your sales.  It didn’t lead to a sale for them that day but next time I need to service my car they’ll be doing the work for me.

2. Communication means everything

When it comes to social media and converting it into sales, sales should not be the sole or even the first objective of it.  Take this time to start chatting with your customers, get to know them and what they think of you and your product or service.  What do they like or dislike about it and what they would do differently.  Its through becoming friendly with your customers that you will convert your social media efforts into a sale.  If someone asks you something on your Facebook wall or tweets something to you, make the conscious effort to reply to them.  You’d be surprised how far this goes when it comes to making people happy, they get ecstatic when you reply to a tweet or comment on their post.  It lets them know there’s a personality behind that firewall and you are listening to what they have to say.

Through communicating effectively with your target market, you are one step closer to converting your social media efforts into a sale and seeing a ROI.

3. Dont Pitch Consumers Directly Through Social Media

This is probably the single worst thing you can do to hinder your social media ROI aside from yelling at customers through it.  In our daily lives we are bombarded with advertisements and pitches everywhere we look so the last place we want to be pitched to is when were trying to just enjoy ourselves on our favorite social media platform.  By doing this it will have a negative effect on your ROI and actually drive people away from your brand.  The point of social media is to allow first hand users do the pitching for you and that will lead to a sale.

Overall, the main idea you should take away from the idea of social media and ROI is that social media does not lead to a direct sale and return on your investment but rather is a way to help monitor the current market place, communicate with individuals and help facilitate future sales.  Use it as a tool and expense to help gauge what is working and what isn’t, and what consumers want from your company and convert those ideas into sales.  Social media isn’t going anywhere anytime soon and will only play a more prevalent role in the coming year and beyond so its time to figure out how to play it to your advantage and make some money off it.

Austin is currently the CEO & Co-Founder of The AFG Group a new age marketing and branding firm with a financial twist, owner of L&I Detailing and obtaining his MBA in finance from Hofstra University. You can follow him on twitter @FinsUp2120

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Category: Finding Customers, Startup Advice

  • Greg

    No concrete way?! Are you kidding me?!? How about:

    (revenue – investment) / investment

    That’s what ROI is. If you say you can’t calculate the ROI for a social media program, you are dead wrong. Well, maybe YOU can’t… But it can be done.

    If your social media “expert” or “guru” or whatever says they can’t calculate ROI, hire a different one.

  • Pingback: Social Media and ROI: The Million Dollar Question : Under30CEO | Extreme Social | Scoop.it

  • http://twitter.com/invpartnership Louise Woodbury

    Great post, Austin. I thought the car shop story was ideal for how to listen to the market. This has challenged me to pay attention more to the needs of the people we seek to reach. Thank you.

  • http://www.whitneysegura.com/ Whitney Segura

    This really is the million dollar question for 99% of people out there, trying to get ROI on their social media work. This is a good outline to how to go about doing it. I like to mix it up, say for Twitter you don’t just post about your company all the time, instead you post things about your niche / market, like jokes, quotes, links to awesome articles (not just on your site), retweets of other gardeners, and occasional company promotional items.

    Try it, it’s how I became top 5 for all terms related to gardening, and you do that by having the most # of RT’s.

  • http://twitter.com/CoachMcFadden Patrick McFadden

    I know many people may think social media isn’t for ”top of mind” positioning but think again. Are you tweeting constantly but never engaging? Be sure to respond to comments, post things that encourage interaction (questions, surveys, etc.), and go to your followers’ pages every once in a while to post something directly on their page or participate in their LinkedIn group. It’s a two-way conversation. With nurturing, we never suggest getting caught up in measuring numbers. By all means note your activity – just don’t make it the focus.