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What is the ROI of Social Media?

Social Media! The hot topic for the expanding frontier of technologically savvy businessmen. Why do we need it? How do we measure it? Is it really worth our time? What is it?

Courtney Seiter from Social Media Club prescribes a five step approach to tackling this beast.

Step 1: Understand your business' goals

Luckily, it doesn't have to be that hard. The best areas for you to focus on are most likely right in front of you in the form of your brand's current business goals.

Are you breaking into a new vertical? Launching a new product or campaign? Trying to increase traffic to your blog for the month? Looking to lower support calls, time and cost? Whatever the goals, chances are social media efforts can play a role in achieving them. Start here and begin to focus on the areas in which you can have a true impact.

Step 2: Align social media to your goals

Now that you know what your business goals are, the next step is to align your social media firepower with those goals. How can social media get you to your goal, and what channels and strategies will you choose to make the push? For instance: •If your brand wants to focus on reputation management, then your focus might be social media monitoring for sentiment, brand loyalty and share of voice. •If the goal is pushing out promotional campaigns and special sales, then you'll want to focus on click-through rate, conversions and sales. •If it's customer service your company is interested in, your social media marching orders might include answering questions, gathering product suggestions and creating content that answers frequently asked questions.

Step 3: Measure success

On to the big guns: Measurement.

If you're focusing on number of likes and follows because they're truly the best metric for you, that's fine. If you're focusing on them because they're the easiest number readily available, we can work on that.

It may take a little creative thinking, but there is a way to measure almost every social media goal. These numbers may not line up with the traditional (gains-costs)/costs definition of ROI, but they can satisfy the spirit of ROI: justifying the investment your company is making in social media, whether that's an employee's salary and time or an actual social media budget.

From our examples above, measurement might look like this. •For social media monitoring, measure sentiment in terms of volume, mentions of your brand's unique value add, number of positive reviews, number of brand advocates and share of voice. •For sales, measure leads generated or nurtured through social media, traffic from social media and conversion assists (you'll need a little help from Google Analytics' Multi-Channel Funnels on that one). •For customer service and product development, measure questions answered, product suggestions fielded and reduction in support costs and time.

Step 4: Break it down

Since we're bring a little liberal with our definition of "ROI" it's important to make sure everyone is on the same page. That's why I'm a fan of breaking down metrics to specific, realistic chunks we can all agree on.

Focusing on the ROI of a specific campaign with a finite beginning and end is a great place to start. If you can't do that, try to break it down to a time period – week over week, month over month, whatever works for your business. Then to the level of channel by channel and finally even down to the level of each post (campaign variables are a great way to get insights there.)

"What's the ROI of social media?" is a huge question. How much traffic did your lunchtime Facebook post bring back to your website? That's a much more reasonable question that begins to accomplish the same goal.

Step 5: Put tools to work for you (not the other way around)

Now that you've done all this work, don't lose focus. There are tools out there to measure all kinds of metrics, but you don’t need to measure EVERYTHING.

You've already honed in on the goals, KPIs and metrics you need. Now go out and find the tool or combination of tools that will do the job you're looking for."

Atish Ranjan from Tech Tricks World suggests every company takes a serious look at how their brand is being conveyed.

Your brand is the face of your company; therefore it is important to make your brand known with a positive influence. Your clients and customers will recognize you through your branding. This includes your logos, slogans, and beliefs. They help your audience to understand what your company is about, what it can offer to them, and what it stands for. These are all very important when it comes to your audience and clients. If they are unaware of the company, or do not know what it is about, then chances are they will show no interest at all. Your branding also helps you to stick out from your competition, so an impressive branding could steal the attention of those who could be viewing your competitors.

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