The literal meaning of ROI is Return On Investment. However, it is commonly misused or at least misunderstood. Most business owners or marketing executives when they ask “What return on investment will I gain?” often mean “How much money will I make?”
As a leading social media agency in Preston, Lancashire we often encounter questions about return on investment for social media marketing.
In terms of social media, the strongest returns on investment will not be a direct monetary gain. In fact, the returns are often intangible. It comes down to the old problem of not knowing the difference between marketing and sales (a blog post for the future maybe).
It is a common and modern misunderstanding to think that marketing makes money. It does not. Sales make money. They are two different disciplines. Marketing enhances and improves sales. Social media falls within marketing and PR, not sales.
With this in mind we have put together six key ways in which social media will earn you a ROI. Mixed with a good marketing and a successful sales strategy the points below will lead to certain success.
Draw in more customers
Presenting your business as open and readily contactable delivers real value to potential and existing customers. It demonstrates that you are honourable and eager to provide an excellent service/product. After all, how easy are unreliable businesses to contact?
Good social media naturally provides a platform for communication. Spending time or money to facilitate this via social media is an often overlooked return on investment.
Appear on your customer’s digital radar
The development of digital marketing platforms has allows small and medium businesses to achieve what the multination brands do on a daily basis. How many times a day do you see the Apple logo? With regular updates on social media you can keep your brand, business and voice in front of your target market.
What is the value of being known to potential customers? It is a distinct competitive advantage because let’s face it, people will buy from those they know. Does your online target market know who you are? Being consistently on their digital radar is a strong return on time and monetary investment.
Be a thought leader
Being able to influence someone’s opinion is hugely valuable. This is the role of marketing and PR. Social media is a great tool for achieving this goal. If your brand is consistently present, ready to assist, helpful, friendly and delivering valuable content you can positively influence how your target market sees you.
What is the value of building up a long term relationship with possible customers? It is a return on investment that is very difficult to analyse or quantify but could double or even triple your overall sales.
Become a key community member
One of the most valuable returns from good social media is that of a community. With a great online presence you can build a community around your brand, service and products. This community serves as a modern virtual village of likeminded people who share the same value. As a key member in such a community you can influence change and development.
This is hugely valuable especially when launching a new product or developing an existing service. Look at the community Apple, Google and Microsoft have developed over the years. It ensures returning customers and leads to good referrals.
Gain market insight
A very subtle but valuable return from good social media is the insights your gain from key market members. Great marketing always begins with understanding your customers. Social media gives you a direct channel to listen to what they are talking about, how they use your product or service and to gauge their general mood.
Often overlooked by those that invest time and money into social media these insights can guide the future development of your brand and business.
Develop brand loyalty
If winning a customer is important to you then how much value do you place on keeping a customer? Social media is a great way of keeping in contact with current customers. Having an open dialog, digital or real world, allows you to rectify problems before they develop into serious issues.
Positive endorsements from current customers also carry a huge value, as it is a third party recommendation. Again, this return on time and money may not be directly recognisable but is very valuable. How much is brand loyalty worth to you?
The above points are often overlooked and not even recognised when talking about social media ROI. Understanding how subtle good social media is and how it can influence in very quiet but powerful ways is key to social media and business success.
Maybe it is time to reassess the return on time and money investment you place on your business social media. What are your thoughts?