Social Media Marketing; Where’s the ROI for Retailers?
I get asked this question all the time. I read numerous blogs, articles, emails, newsletters, and hear casual conversations where this question is raised. While a straightforward answer may be hard to come by, I don’t think social media should be dismissed. Retailers should start exploring this medium as soon as possible. There are two questions a retailer needs to consider:
- What’s the cost in using social media?
- How do you measure the results?
The goal of any marketing effort/campaign must have results that are measurable. Otherwise, how do you know if you are spending your time & money wisely? How do you know if you are doing well? Let me be clear, these questions will not be easily answered but here are a few suggestions to think about.
Let’s take a closer look at each of these questions:
I. What’s the cost in using social media?
This is the easier question to answer. Social media is known for it’s very low cost of entry. While there are no significant development or production costs, time is needed and the more areas of social media entered and the more frequent postings made, the more time that will be needed. Nonetheless, costs for the amount of time and effort spent in this area can be easily measured.
II. How do you measure the results (ROI)?
This is not as easy a question to answer. First you have to state your goals/ojectives. Obviously the main goals will be to increase sales, traffic, and brand awareness. Why else spend time and energy in this area? The problem with these traditional goals, is that it will be difficult to measure. It will be difficult, if not impossible, to associate the impact on these goals as a direct result of what you are doing with social media. This is why, I believe that secondary goals must be set, so that you can measure the effectiveness of your social media campaign.
For example, set goals of actual numbers or percentage increases for the following:
- The number of visitors to your blog
- The number of comments/conversations on your blog
- The number of Facebook fans
- The number of Twitter followers.
- The number of online references to your brand or company name.
These results will at least indicate whether you are headed in the right direction. The thought is that as you increase your social media presence you will attract more loyal customers that will spend more money. Maybe you will be able to see such a correlation. Please take a look at this article (How to Measure Social Media ROI for Business) which offers further ideas/examples in this area.
While ROI may be difficult to measure at this very early stage, I believe the cost of NOT using social media is greater than the actual cost of using it. Social media is growing at an increasingly rapid rate. It takes time to build content, followers, and attention through this media. It can have a rapid and viral rate of increase, but does not simply happen overnight. If you are not starting to use social media, your competitors will, and eventually you will be playing catch up. Why not take the lead?
What do you think? How can retailers measure success with social media? What factors and costs should be considered?