I may as well have put, “Lions and Tigers and Bears – OH, MY” as the title. It’s a safe bet that’s what most people think when they start talking about a return on investment (ROI) for their social media efforts.
It’s kinda like the Wicked Witch of the West has sent her Flying Monkeys after you … AHHHH!
It’s going to be okay. Consider me your Tin Man, Cowardly Lion, and Scarecrow all wrapped up into one. Together, we can make it to OZ, where the Wizard (still me) has the answers to some of your ROI questions.
Admittedly I’m not a numbers person, so I must have been up for a serious challenge the day I decided to base my honors thesis work around proving an ROI for brands and their communities on Facebook.
Let me be clear: The ROI was a soft ROI; my hypothesis looked at building a large and loyal community based on conversation – or better stated – if relationships could be formed through online conversation.
The answer was, of course, yes. But to pass my thesis I had to prove it with steadfast metrics.
Hard Metrics vs Soft Metrics
I think it’s imperative to understand what “hard” and “soft” mean as a social media strategist. Soft benefits can be just as important as direct benefits, even though they don’t necessarily add to the bottom line.
Let’s break it down:
A soft benefit or soft ROI may encompass intangible things, such as:
- Brand sentiment
- Brand awareness
- Reach
- Fans & Follower counts (some people may disagree with me here, but I’ll explain why this is “soft” down below)
- Customer experience & satisfaction
- Competitive advantage
Whereas a direct benefit or hard ROI would be gauged by adding to the bottom line, like:
- Sales dollarsBottom-line savings (i.e.: save time or money using SM for market research)
- Time savings (i.e.: customer service efficiency through SMM)
- Addition of any other tangible assets
Most of the companies out there are looking for a direct benefit of their social media efforts, while most of us (social media marketers) can agree we’ve got ways to track our soft returns with social media.
In my opinion, this is where the disconnect on ROI is taking place.
It’s your job to show why both indirect and direct benefits are important. It’s also your job to deliver – ON BOTH.
Fans and Followers are one of the biggest ways I see social media “experts” prove they’re doing well.
Here’s my problem with that: if those Fans and Followers aren’t active on your Page, and worse, they’re not buying what you’re selling, there really isn’t a soft OR hard return.
ROI Should Be Tied To Goals
Furthermore, ROI should be directly tied to your social media goals.
If your “expert” hasn’t asked you what your goals are, both hard and soft, I’d start shopping for someone else. And I’d do it quickly.
With the clients we serve, I’ve seen three major goals emerging:
- Brand Awareness
- Brand Loyalty
- Direct Sales
Being that it takes time to explain each one clearly, I’ll break each one down into a separate blog post (parts Two, Three, and Four).
Each post will give you examples of how to measure each Goal and its related return on investment.
Come on, Dorothy, don’t be scared! I’ve got a nice paved, yellow brick road for you to follow all the way to your ROI “ah-ha” moment.
Next up, Brand Awareness and ways to track the soft benefits associated with this goal.
See you in the social sphere!
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