Many social media initiatives lack senior management support because they have no solid business plan behind them, they are expensive and use soft rather than hard metrics to justify return on investment.
This is the key finding of a survey among 300 businesses undertaken by Hypatia Research. The study entitled ‘Benchmarking Social Media Investment: Best Practices’ also revealed that, while more organisations go down the social media route for sales and marketing reasons rather than customer service purposes, one in five invest in the channel simply because ‘customers expect it’.
This is despite the fact that social media platforms “aren’t cheap”, according to the report, and are likely to require investment in everything from upfront planning, implementation and skills, whether in-house or external.
“Social media requires a great deal of expertise and staff time. Hence many organisations are compromising with a hybrid option for staffing social media – some services from the software vendor and/or consultant, some existing staff, and maybe a temporary worker or two to get things going,” the study said.
While customer satisfaction and retention are the top two ROI metrics used by most companies, many are struggling to calculate concrete financial returns. While expected ROI varied from between ½% to more than 20%, a quarter of respondents achieved an annual return of only between 0.5% and 2%.
“While social media may be an investment that companies need to make just to stay competitive, it should not be made in the dark, especially given the huge range of software and services options on the market and the time that will be invested in planning, implementing and managing the community,” the report said.