Social Media Marketing - How To Determine The ROI For Business

Many business owners have a hard time getting their heads around the real value of social media. Some refuse, some are afraid of it, some are confused by it, many ignore it completely and others jump in just to say they have jumped in.

“What is the ROI of social media?” is a question heard more and more these days. The mindset of the successful business owner demands a fair return on investment. This is common sense and is frankly most likely the reason why that individual is the owner. The owner invests money or manpower to attempt to create a profit of a certain percentage. A fair return on investment is one of the measures of success. If we cannot measure that return on a particular investment, how will we ever know if we are being successful and, if so, to what degree? This makes perfect sense. It is business.

Social media marketing does not easily lend itself to such cold calculations. So let's ask a few quick questions:

What is the ROI in regards to having lunch with a potential big client?
What is the ROI in regards to a playing a round of golf with a trusted advisor?
What is the ROI in regards to having a drink with the new hire?
What is the ROI in regards to attending a social affair as representative of the company?

ROI cannot be calculated in the above cases either. Yet these are almost universally accepted necessary practices of nearly all business owners. Most owners do not think in terms of ROI in regards to these practices. All of these fall instead under the heading of PR or building relationship.

That is precisely what participation in social media accomplishes. It is an electronic version of lunch with a client, golf with an advisor, drinks with a new employee or attending a social affair. It is the building and solidifying of relationships between organization and customer; between business and client. Every business owner knows that many of the longest lasting and most profitable relationships are not build in the boardroom. They are often built on the golf course, over lunch or while having drinks. Social media is the same game, but on a much larger scale

Can we determine the ROI of a positive impression? Can we coldly calculate the value of a warm conversation? Can we determine precisely the amount of awareness a billboard on a busy highway creates? No, no and no.

Likewise, we cannot determine the ROI of social media.

Of one thing every business owner can be certain. According to the hundreds of studies available out there, a huge percentage of the general population now participates in social media on a regular basis. If your company is not there, it may end up being virtually invisible to that huge percentage of your potential new clients.

Forget ROI in regards to social media. Look instead at what your company stands to lose by not being there.