Determining ROI in Social Media
Undoubtedly a cohesive and integrated social media campaign results in new customers being generated and existing customer relations being strengthened, but without manually asking each new customer how they were alerted to your company how can you track this? 2010 saw the advent of a new terminology – ‘reverse ROI’. In essence this refers to the belief that being on Social Media (and doing it correctly) will result in your ROI not decreasing. Whilst you cannot (yet) measure the exact correlation between your online activity and your revenue, it is widely believed that not having active social profiles will alienate you from your modern digital customer base and will consequently dent your profit margins.
It’s certainly easy to see why this belief has spread to being considered a true reflection of the state of the market. Every major worldwide brand has invested heavily in Social Media and without being able to justify this in relation to monetary return, their investment is due to a need to stay up to date as the market evolves.
You may not be able to directly relate your social activity to revenue like you could with more old fashioned marketing and sales techniques, but one thing’s for sure – if you want to keep your company’s return on investment at its current state, you NEED to have a successful social media campaign.