Many marketers struggle to justify their social media activities for one main reason – they can’t show ROI (return on investment). While there are some obvious benefits to using social media, such as SEO, audience engagement, and product promotion, there are no dollars assigned to those metrics. ROI deals with financial impact, not benefits. From an economists’ standpoint, it is the opportunity cost (comparison of what you could be doing vs what you are doing) divided by the cost of your investment.
At the end of the day, things like website visitors, community engagement, or number of people submitting employment applications means absolutely nothing unless you can assign a monetary value to the data. However, connecting the dots can sometimes be convoluted.
Ask yourself, “So what does all this non-financial data mean?”
For any business, cost reduction and revenue growth are the focus for all short-run and long-run activities. Thus, if you can show that your social media activities directly affect one or both of those two performance indicators, you can justify using social media for your business.
How to Justify Social Media for Your Business
To justify using social media, you must establish a baseline for comparison. What are your current monthly sales? How many hours per week does your customer service department or representative spend on issues? Taking the time to gather these metrics will make showing ROI easier. Moreover, they actually give you something to show a correlation to your social media marketing activities.
For example, instead of just showing an increase in the number of hits to your website since you began your social media efforts, show the correlation between an increase in sales and the number of people visiting the website. Have you had more sales inquiries? What is the total for net new customers? Assign a dollar amount to those potential sales and then you’ve got something.
The Bottom Line: Use trend analysis to make correlations with your social media activities. You must assign dollars to the data you collect.
Have you used or seen good examples of trend analysis to justify ROI for social media activities? Tell others in the comments.