April 30, 2018
The short answer is that anything you invest time and money into should require focus. However, if you are unaware of how social return on investment (SROI) can have a positive outcome on your business, why pay attention in the first place? To comprehend the value of a method, you must first understand the mechanics behind it.
As they say, there is a certain madness to genius, and social media is no different. It’s not an exact science. It never has been, and it never will be, so organizations must adjust accordingly. One of the ways companies have found to regulate their social media efforts is by focusing on the social return on investment.
SROI is an outcome-based method that examines the worth of social interactions. It places a definitive value on economic, social, and environmental factors in ways that seem unquantifiable. When calculating a social return on investment, some of the following concepts are taken into consideration:
A recent survey by Nielsen showed that 93% of consumer purchasing decisions are influenced by social media. Therefore, it’s an important form of communication to consider when developing a budget. It helps paint a bigger picture of what the community surrounding your brand is doing. Here are some ways in which SROI helps drive positive business outcomes:
Examining SROI starts with a robust social monitoring strategy. This simply entails creating alerts for whenever your brand is mentioned online. You can use free tools like Google Alerts to set a trigger that shoots you an email every time someone is chatting you up. Doing this will show you where your audience is and when they are talking about you.
Paying attention to SROI, in this case, enables a business to gather higher quality leads in a more efficient manner. It takes the guessing game out of where interested customers lie. Social metrics will clearly define where consumers are the most engaged with your brand and what they like about it.
An effective SROI strategy complements progressive analytics. When a business understands the nature of their audience, it’s easier to predict future outcomes. Paying attention to social metrics and how they affect your bottom line, should direct future goals. Just ask communication conglomerate Verizon. They studied social customer data for a year and used it to engineer 85% of new features in a product release.
Verizon listened to the community around their brand to drive product development. The social return on investment was important in this case because it essentially guaranteed revenue. If you are giving people 85% of exactly what they want, while reserving a mere 15% for your own spin, how can consumers not be happy? It’s win-win when you let them drive ideas.
Describing the importance of social media to big investors can be a daunting task. They are often far removed from the daily operations of such things like posting on Facebook. However, that is not to undermine the critical importance of social media marketing and social return on investment. Calculating SROI helps put a number to social media efforts that stakeholders can work with. It speaks to them in a language they understand.
SROI makes social media more pliable, which lends it a higher sense of credibility. Investors like numbers and when you are working with activities that are hard to quantify, social data can speak volumes. This process also opens a dialogue with stakeholders where they can examine the activities that are meeting their expectations and establish those that are not (i.e. marketing campaigns that aren’t making money).
A decade ago, people scoffed when you told them social media was important, but the ones that paid attention are now far ahead of the game. Once you have a robust social media marketing strategy in place, pay attention to the metrics. Use SROI to generate leads, establish a customer-centric approach, and predict future outcomes. You can then represent the results to important investors and develop strategies to ensure future success.
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