Wow, it’s week fourteen, and my Social Media Marketing class is over. I have learned so much. This is the way to go, in business. It is targeted, clever and effective, all the analytics say so. Nothing left to do, but get back on Twitter. Oh yeah, it is also affordable. Anybody can do it and should. But wait, does it work? How much money did I actually make on my activity?
(Cartoon Money Clip Art)
Ultimately, if you are in business, you are there to make a profit. The final goal, make money, pay your bills, mortgage, etc. So, you better make sure your social media marketing efforts have paid off. This week’s lesson, the final one, is called “Social Media Marketing-ROI.” ROI (return on investment) is the ultimate analytic; no matter how well your marketing is doing, if it isn’t making the cash register ring, it isn’t worth it.
It was explained, that to determine ROI, you first have to understand the link between business strategy and Social Media. Strategy is a long-term plan of action to achieve a goal. Our instructor talked about “Ansoff’s Matrix.”
- Market penetration: sell existing products to existing customers.
- Product development: sell new products to existing customers.
- Market development: expand into new markets.
- Diversification: sell new products to new people.
Next, you need to understand your analytics as they pertain to your strategies. Which posts worked, which has the most impact, which posts were SMART?
Yeah, a smart way to remember what SMART is. Next, you want to think of your objectives. What are you going to do on Facebook, or Twitter, or whichever social media platform you use? When, how much and to whom? And what do you want to accomplish? Be specific, be real. You want to sell more, is probably too general. You want to sell 10% more, now that is measurable. It’s important to have reasonable objectives and a time frame. It is hard to determine ROI because you never know when a like, turns into something tangible.
We can’t forget vanity metrics. The likes, they feel so good; they are very rewarding and, according to the instructor, mean nothing when it comes to business. The metrics that matter are measurable. That seems harsh, but I get it. If it doesn’t result in more sales then maybe, I am just playing. So someone needs to hire me to do a safety video, now. That way I can justify spending seven hours on Facebook yesterday.
With social media marketing, it is quality over quantity. Your message needs to stick and motivate action. Here are some metric terms that you need to know: volume metrics are important because it tells us how far our content circulates, while still reaching a qualified audience.
Most platforms help with determining your ROI. For example, to determine reach on Twitter, take the total number of followers that get your posts, and divide by the number of followers that were on Twitter at the time of your post, and that equals reach, or impressions.
Amplification can be determined by taking the number of shares or retweets and dividing them by number of posts over a period of time. Engagement is to attract interest. Social Media is a two-way dialogue, so never forget to talk. Applause lets you know how many people are sharing your message. You can quickly figure out which content is the most popular and then can share more of the same. There is analytics on Facebook, Twitter, Instagram and LinkedIn. Again I reiterate explore other people’s profile, even competitors; it will help you determine the content you want to share.
This almost seems like a recap, but it isn’t, it is important to understand how each platform is performing, to come up with a realistic ROI.
Let’s define ROI. It is the value you receive from your social media investment. Are you making a profit or fair return? You have to keep in mind that Social Media Marketing will take a great deal of time, so you need to consider this, as well. Don’t forget to have a system to explain the unknowns. For example, I can determine my ROI and think, this isn’t as good as I was hoping, but when I take into consideration that the province has been in a recession for the past three years, it may not look so bad.
To determine ROI, you first need to know the revenue that was generated from a specific campaign, subtract the cost, then divide by the cost. I have to use the instructor’s example here because I don’t have enough relevant data yet to do my own. So let’s say you have 1,000 clicks from 10 social media campaign posts on Twitter. Of those 1,000, 500 became leads, and 100 made a purchase. This is to say that, the traffic to leads ratio is 50% and leads to sales is 20%.
You know when someone buys your product or service it is worth $100.00, the cost of the campaign is $500.00, and the campaign generated $10,000.00. The ROI is 19 to 1. For every dollar spent you made nineteen.
Keep in mind, this is based on a financial ROI and doesn’t take into consideration non-financial benefits, such as goodwill, brand awareness and loyalty. These can’t be quantified by money made.
This was probably the least enjoyable lesson in the course, but maybe the most valuable. As an artist, I often struggle with business. It isn’t my natural leaning, so I have to work at it. I feel a little more confident going forward now. So watch out for Hired Gun, I will be landing in your feed shortly.
I will be taking a blog break over the holidays, but watch for my new posts in the New Year. It is time to take what I have learned and turn it into mesaurable marketing activities that help my business and my bottom line.
Ansoff, I. (n.d.). Ansoff’s Matrix.
Cartoon Money Clip Art. (n.d.). Retrieved from Clipart Library: http://clipart-library.com/clipart/1114433.htm
John Atkinson, W. H. (n.d.). Social Media.
Wise, L. (2017, 1 12). Social Media Marketing-ROI. Retrieved 12 11, 2017, from Lynda.com: Lynda.com
Yankelovich, G. (n.d.). Vanity Metrics.