With continued developments in analytics, it is now easier than ever to connect our current marketing efforts to direct revenue. This is both an excellent and an unfortunate thing: it’s excellent because we can prove that marketing has worth to a business. We can track these efforts to show that what we do today can affect revenue streams of tomorrow (or, more likely, in a few months.) However, when we start to get used to analytics and attaching revenue to our efforts, it can be an easy assumption that we shouldn’t spend any time or money on things that aren’t directly–and heavily–contributing to our revenue. Makes sense, right?
What does this mean exactly? It means that social media, by its nature, is designed to a) capture new audiences who have never before heard of your company, and b) provide a platform for current customers to talk about your company. It also means that, while social media can drive revenue and ROI, it may not do that, and it will likely not do it quickly.
Why your social media efforts might not provide ROI in the way you think it should
Would it surprise you to learn that nearly half of all companies surveyed can’t trace how social media marketing is directly impacting their revenue? A few reasons for this: 1) social media is used in a big way to create brand awareness, which may not create immediate sales, or 2) they didn’t know what they wanted to get from social media in the first place.
Let’s break down the first one: brand awareness is critical. If no one knows about your brand, no one can or will buy from your brand. Social media platforms allow people to learn about your brand, or see your current customers talking about your brand–and users expect you to have the platforms available for them to learn. If you don’t use social media, you’re leaving a critical–and extremely inexpensive by comparison–tool out of your toolbox. It typically takes between seven and eight marketing touches before a potential customer becomes an actual customer–social media can count for several of those touches, if done correctly. While it may not be the final touch that pushes the customer to buy, it can be touches #2 through #5 that drive them closer to making an actual purchase. Doesn’t that sound valuable?
Remember that brand awareness isn’t just fluff–it drives results. Those who aren’t aware of your brand can’t buy from it. Sumit Sharma, Social Media Engagement Manager for Brafton, had this to say about brand awareness:
If I see a promotion for LG on social media, I’m not necessarily going to click on it and buy a new TV. But a few months down the line when I’m in a store, ready to spend $2,000 on a new flatscreen, guess whose logo, images and messages are likely to come to mind? Brand awareness is ROI in the long run.
For the traditional folks in the back who just aren’t convinced that social media is the right revenue driver for you, Lux Narayan of Unmetric has this for you:
In terms of social media today, we often hear questions like “what is the monetary value of a fan?” Ironic, considering that we still have not fully defined the value of a TV commercial viewer. In fact, we continue to ‘invest’ in television and other mass media advertising, notwithstanding the fact that we still don’t know which (proverbial) 50% of our budget is working.
Finally, do you know what it is you even hope to achieve from social media? Too often, companies start with marketing efforts and it looks a little like this:
“I think that we should do email for sure, because our customers have email addresses and we can talk to them about specials. And social media, so we can talk about the cool stuff we’re doing. And also, we should blog about stuff that we know–maybe about our business. And I know that website things are important–maybe we should get a new one?”
Cut to six months later: “Why isn’t any of this stuff working?”
This is not meant to poke fun at all–it’s meant to show that we often start the race from the wrong line. Our first question should be, “Who do we want to reach?” Our second question should be, “How will we know we are successful?” When we instead start with all the methods and not with the goals, we often realize halfway into the race that we aren’t getting what we want out of it.
Try this instead: figure out what you want to gain from your marketing efforts. Is it leads? Email addresses? Downloads? Reservations? Buyers? And then ask yourself (or a professional), “Can social media help me do that?” If you know right away that social media will help move it along, but may not drive the conversion to your goal, you at least have that expectation set from the beginning. Maybe you’ll also learn that another marketing option that you hadn’t yet thought of would be a great partner to your social media efforts–integrated strategies are the best kind of strategies because they provide many different ways to reach the people you need to reach.
Let me be clear: social media can drive conversions. That’s why call-to-action buttons and advertising options exist. But it’s important to have appropriate expectations of your efforts (and of the quality of your efforts) before you begin.
So, in a nutshell, will social media be your heavy-hitting revenue stream? Probably not. But marketers everywhere are spending more and more money on social media in the coming years, which means that no one’s lost faith in it yet. Not to mention that social media is pretty much a non-negotiable for the vast majority of businesses. After all, why wouldn’t you use every option available to you and your budget to drive more people to your brand?
If you’re concerned that your social media efforts aren’t accomplishing what you want them to, or if you’re unsure about what they should be accomplishing, let us know! We would be happy to sit down and discuss your goals and how we can construct a strategy together to help you get there!