Define Social Media ROI
Before businesses can calculate ROI, it needs to be defined. Eric goes beyond the Wall Street notion of monetary investment in his definition:
“ROI is more than ‘money in, money out’. It’s about efficient business success.”
While ROI is more than monetary success, Eric cautions that you have to go beyond measuring social media actions (fans, likes, friends) and look at real return.
Understand Real Return of Social Media
Return is any action taken by your customers that directly moves your business forward. One question to ask when determining whether an action provides value: If you had zero of these actions, would you still have a job?
While sales and commerce are the more obvious returns, there are non-monetary returns your business can measure, including brand health, thought leadership, and changes in perception. Eric provided three great examples of how FreeRice.com, American Airlines, and Geico are using digital marketing to encourage their customers to take particular actions. Watch the recording at the end of the post to get the details.
Find Your Investment in Social Media
Just as return can be more than financial gain, investment goes beyond money; it’s the decisions we make with our resources.
Eric defines investment as this:
“When an organization makes a choice to devote a resource to an effort.”
Some easy examples of investment are supplies and materials, media budgets, and travel costs. However, time, priority, and bandwidth allocation are also examples of investments your business makes on a daily basis.
It’s important to remember that investments have context. Businesses make different investment decisions depending on the situation at any given time (current projects, available budget/time/people).
How to Get From Return to Investment
Many businesses start with the investment and try to calculate the return, but it’s much more effective to start with the return and work your way backwards. What are your business goals? What do you want to achieve? In what time frame do you want to achieve it? From there, you can identify your online conversation pathways and the actions you want your customers to take.
To hear more about the above points, as well as some great examples of how businesses are achieving measurable success, watch the full webinar recording below. You can also view the presentation on SlideShare. Watch for part two of our webinar recap later this week, where we’ll cover the pathways your business can take to measurable ROI.