Ways to Amplify Your Social Media ROI
Social media is evolving quickly, but marketers aren’t moving at the same speed when it comes to building viable social marketing business cases, Forrester Research noted recently.
In its “Amplify Your Social Media Business Case Beyond Marketing” report, the firm concludes that social marketers “struggle to prove return on investment,” which is leading to a disconnect between their perception of the technology’s value and that of their companies’ executives. That could affect their ability to get buy-in for future social media marketing initiatives. It’s also been affecting their ability to get the most out of their current social media efforts.
“For the past 11 years, we’ve been on this journey with social media. Now we’re beyond the hype stage, and executives want to see what effect it’s been having on the business,” says Erna Alfred Liousas, a Forrester analyst covering the B2C marketing industry. “Social media is in a constant evolution; there’s always something new to invest in, and you might not be able to do that without a business case that is solid.”
Marketers are now being asked to justify their expenses, and it hasn’t been easy, she maintains.
“You can put a definite figure on the cost, but it’s difficult to put an exact figure on what you get back,” Alfred Liousas says. “There are just so many variables in play.”
The costs include seat licenses, professional services, dedicated staffing, content and media support, measurement, and reporting.
To help strengthen their business case arguments, Alfred Liousas suggests that marketers expand their social media data inputs to include audience insights, competitive industry benchmarks, third-party research, and internal pilot data. Audience insights include volume data that suggests consumer interest, sentiment data that sheds light on the company’s reputation, and audience data that could identify brand influencers. Social listening tools can provide data about competitors. Independent third-party data builds credibility with stakeholders. Small, low-risk pilots can help surmount funding hurdles.
To build the strongest business case, Alfred Liousas suggests linking social media marketing to larger business objectives, such as reaching new audiences or creating stronger customer relationships. It also helps to compare social media efforts to the larger marketing ecosystem and to identify specific impacts to the larger overall customer life cycle.
Marketers can also develop their own metrics to show how social media is driving business. This can include audience reach and the actions that customers take after viewing an ad, for instance. Other metrics could include the increase in sales volume on the company’s e-commerce site, increased customer loyalty, increased customer lifetime value, or decreased customer service and support costs.
“You don’t necessarily need to provide an exact number, but if you can, provide a range that will go very far,” Alfred Liousas suggests.
It also makes a very strong statement if you can identify the risks of both implementing and not implementing any social media marketing initiative, she adds. Here, too, statements about the competitive environment will have a big impact.
Alfred Liousas recommends tailoring the ROI message to each individual stakeholder. The chief information officer, for example, cares about the technology needed to implement the strategy and the integrations involved; the chief marketing officer cares about the impact on the brand.
But in the end, to sell company executives on social initiatives “you need to articulate very specifically what you will do with social and how it will affect the larger business objectives,” she says—because benefits will span across the company if social media marketing is done right.