I listened in on a group conference call a few days ago in which a number of small business owners were complaining about how much work social media marketing was and how much time it actually took to implement a social media marketing plan. One of the questions I asked the group was, “What is the cost of your current social media marketing plan and how much money were you making when you implemented the plan?”
There was a sudden lull in the conversation ….. it was like I had asked a really rude question.
Eventually one of the small business owners piped up and told me that they didn’t think it was really important to measure these things cause there business was growing. What do you think my question was?
Here it is…. “How do you know that its the social media marketing that is bringing in you new business?”
Once again the conversation went quite……
The reality is this, whilst social media is the darling of the media marketing world at the moment, it is no different to any other marketing type. You must always measure the effectiveness of your social media marketing and evaluate the return on investment. I guess the key statement is this, “Test and Measure”.
I will admit that measuring the ROI on social media marketing is a little bit more difficult than say, direct mail marketing but it is still possible. In fact, social media marketing is probably easier than other traditional methods as you can see in the case of Facebook, when a fan has liked a page or commented on a product or service.
The fact that Facebook and Twitter identifies who has commented on your products and services makes it easier to trace through to your sales register who bought your product, who didn’t and how long it took.
In the end, social media marketing should be measured in the same way as any other traditional form of advertising and most importantly it is important that at the point of sale you ask the client how they heard about your business.
Whilst I focused on a direct financial return on investment in the paragraphs above, there are other Returns on Investment that you need to evaluate when measuring social media marketing. For example, social media marketing directly affects other aspects of your business such as goodwill and brand recognition. These two aspects are normally known as intangible assets and the value (which can be subjective) is just a important as a direct financial return as it can also impact on future sales and the overall value of the company.
No matter what the size of your business, if you are investing in marketing your business then you must continually ensure that you evaluate the effectiveness of that marketing and whether you are infact achieving a return on investment or just simply pouring money down the drain.
In the end, in a tough economic climate every dollar you spend must be providing you a return on investment and if its not then you may as well just put it into the bank and earn interest.
The author, Chris Le Roy is the Managing Director of One-on-One Professional Business Training and regularly submits articles to a range of Business sites. He also provides Business Coaching services to a range of clients to help them acheive their business goals. If you need help why not visit eBusinessCoaching.com.au to gain access to over 150 hours of business coaching videos, marketing, sales and business advice.
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