For a lot of folks in the digital marketing world, social media marketing has become a can't-live-with-it-can't-live-without-it proposition. Why? Because they know their customers are using Twitter, Facebook and Pinterest and so they must be, too. But when it comes to measuring the bottom-line results of a social media campaign? Forget it.
As a result, many marketers -- and their counterparts in finance -- are passive about the ROI on social media campaigns. Too often companies are happy with what digital marketing strategist David Edelman, tongue in cheek, calls an '"'F' — Friends, Fans or Followers." Focusing exclusively on the intangibles is a mistake, he says. There are ways to measure the actual ROI of customer relationship management and the direct payoff from a social media marketing campaign.
Quantitative returns: from ‘likes’ to dollar signs
Turns out, there are ways to link rising sales to a social media marketing campaign. With services like Facebook Connect, customers can choose to ‘login’ on retail sites through their social media profiles, effectively handing over their profile and personal data to companies. And it’s gaining in popularity, with more than 50% of customers currently using ‘social login’ today.
However, ‘social login’ isn’t the only way to measure ROI on social media.
Here's a closer look at how two retailers used social media to increase the likelihood that its followers would buy their products.
Company: Warby Parker, a New York City-based online seller of vintage eyewear
Company: Henry’s Camera, a Canadian camera and accessory store
Qualitative returns: calculating the ROI of relationships
"Likes," "shares" and "retweets" are all signs of an active audience, and that's good. But they don't tell marketers whether their efforts are boosting sales. BugOut, a Southern California exterminator company, found a way to convert 25 percent of its social media followers into leads.
They recognized that realtors are a huge source of new business. So BugOut turned its Twitter and Facebook pages into must-reads for information on common household pests.
"Bugs are emotional," explained Anne Austen-Lewis, the social media manager at BugOut, on Mashable. "Every time we post or tweet a photo of termites or bees, we get five new followers immediately." BugOut says it generated 100 sales leads from 135 Facebook fans and 270 Twitter followers.
“We build our emotional attachments with companies and brands like the way we build our friendships — through lots of small, consistent interactions that lead to deeper forms of engagement," writes Mark Schaefer, a social media strategist and author of A Different Way to Think About Social Media ROI. "The goal is to drive that level of interest and engagement up over time until they take some action like a purchase, a registration, a call — whatever you are trying to do to support your business goals.”