Social media ROI: Six ways it can be done!by
Millions of dollars are being invested by organisations to develop social media communications programs, and social media spending, as a percentage of marketing budgets, is expected to more than double over the next five years according to The CMO Survey. However, research shows a clear disconnect between what consumers want from brands and what marketers think they want, and for a number of years now companies have wanted to get onto the social media bandwagon without really knowing why: the same study above that showed a disconnect between consumers and brands also found that 80 percent of UK businesses claim their social media campaigns are effective but over one third said they have no solid way of measuring the impact on the company’s profitability!
I draw a parallel to the ‘dot.com’ business back in the early noughties, when money was thrown at any company with an idea, then suddenly people realised - how do we derive value and prove the ROI? Author and professor of digital marketing, Erik Qualman, says: “The ROI of social media is that your business will still exist in five years”. That’s a great promise, but, just like any other part of the marketing mix, businesses need to really prove that social media investments are justified commercially.
Here are six ways to harness the power and value of social media:
1. Set social free: integrate channels
Organisations tend to create silos around new technologies to ensure best practices. However, it is vital that the silo approach be avoided with social media. Consumers are connecting with brands through multiple touch points, and often several at one time. However, to date, marketers have dabbled in this channel with little, if any, connection to other channels. Instead, organisations should train key stakeholders in many departments on social media dos and don’ts like activity frequency, which channels to use and the appropriate type of messages, and then give them access to use social at will. Social media is meant to democratise communications; democratising access to it within an organisation will ensure its success.
2. Realise that social fatigue is a real thing
It’s important to remember – especially for social media - that customers have a comfort zone. With a smartphone, customers can access their social, email, voice, web, and any other channel from one point. The last thing they want is to get brand overload on every one of them! Because of social media’s personal nature, a ‘less is more’ approach is generally best. It may also be wise to let social activity frequency dictate the volume and flow of communications on other channels, too.
3. Use customer data to personalise communications
Traditional 'broadcast' style marketing approaches and tactics cannot be applied to social mediums. Only 26% of consumers follow or keep up-to-date with brands via social, and 65% of consumers say they would stop using a brand that upset or irritated them as a result of their social media behaviour.
Perhaps more than any other communication channel, it is important to effectively analyse customer data to create personalised and timely social media messages. Social media is a highly personal communications format, and customers expect you to treat them as individuals on these channels. When data is not used to determine the next best step for each customer, the consequences can be felt immediately, and there is no point in using social media if your messages fall on deaf ears.
4. Location, location, location
Social media’s rise is closely attached to the rise of smartphones and other mobile devices. Consumers basically never let their mobile devices out of their sight and are increasingly using social media apps and services while on the go, so using location-based services to offer something truly customer centric presents a large opportunity. It is important to make sure geographic information systems (GIS) technologies in your organisation can produce meaningful data for the right people to use quickly and easily for developing relevant offers and communications via social media.
5. Apply analytics to understand retention and recommendation opportunities
68% of social media users are persuaded to investigate or even purchase something as a result of recommendations from their online ‘friends’. Companies can derive huge value from stimulating their followers to share recommendations and making their brand a ‘talked about’ topic. With the right analytics, businesses can find ways to develop a deep understanding of how customer needs, likes and peer-to-peer recommendations influence retention and development strategies, cross-sell and up-sell opportunities, and brand recognition and endorsement.
6. Use the right social channels
Businesses struggle to identify the most appropriate communication channels to use, and social media is no exception. Twitter is usually seen as the default social channel, and it is certainly a good start. But, YouTube, for example, is hugely underutilised by brands – and yet this is the second most used channel by consumers. This emphasises the need for brands to do more on YouTube – it’s such an engaging channel!
If you are a B2B organisation, LinkedIn, and more recently Slideshare (which LinkedIn owns), should be a high priority, as they can be used to communicate more nuanced, detailed messages and create direct connections and new leads from social interactions. The ROI of such connections is then easy to track and understand.
Investment in social media marketing is business critical and it needs to be taken seriously to be effective. Collection and analysis of customer data, response rates and outcomes of social media campaigns can feed back into measuring commercial success, as well as shaping future communications plans.
Kieran Kilmartin is VP of international marketing at Pitney Bowes.
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