How to Guarantee Your Social Media ROI is Zero

5 Reasons Most Companies Think Social Media Has No ROI

Lots of marketers often complain they’re not getting any return on social media. Yet the truth is they’ve set up their social media marketing to guarantee that they’d have no social media ROI.

5 Reasons Most Companies Think Social Media Has No ROI

Without looking at their social media and related marketing, these marketers have set themselves up for failure from day one and it’s generally attributable to one of these five reasons.

  1. Social media isn’t captured in the sales cycle. Social media’s impact on the purchase process happens early in the sales cycle before most companies start tracking actions leading to a sale. Social media can have a significant impact on whether a company enters the consideration set since consumers ask their family, friends and social graph for input. One bad experience with your firm or a great experience with your competitor and you’re out before you’re even on the radar to strut your stuff. Also, marketers may neglect to measure the brand impact of social media despite the fact that social media is about branding and thought leadership, not just action.
  2. Social media doesn’t contain call-to-action. This is frequently the case with social media marketing. While marketers are used to asking for the sale in a promotional environment, they neglect to take this step in social media. It may be attributable to the fact they’re trained not to be promotional on social media. While asking for the sale may not be appropriate, you can link to relevant product in a blog post or other form of social media content. This works well for recipes, instructions and patterns. Alternatively, you can show your product being used, then link to the product page for more information. Your call-to-action isn’t for sale but rather to the next step in the process.
  3. Social media creates post-purchase relationships. Many companies are shortsighted. They overlook the need for additional content and engagement for post-sales support. Interestingly, data shows that consumers who have an issue that’s resolved tend to be more loyal over time. Therefore social media can reduce returns and provide the basis for related refills, accessories and future sales. Elements that may be difficult to track.
  4. Social media isn’t the last channel touched. This challenge isn’t unique to social media marketing. Since it’s difficult to get tracking for early cycle sales-related actions, sales are often attributed to the last marketing channel touched. This requires a more complex model that monitors more than just the sale. As digital marketing matures, the metrics and analysis become more complex. That said, many marketers may only give credit to the last marketing channel touched whether it’s search, email, affiliates or another option.
  5. Social media doesn’t have any goals. Often the problem is that social media is an experiment outside the marketing plan. As such it doesn’t have goals and related metrics. After the fact, people try to track whatever they can but this may not be appropriate or sufficient to meet marketer’s needs.

While this is understandable during a pilot, as social media becomes a core aspect of your marketing strategy, you need to return to basics and measure results.

What do you think? Do you have any suggestions to help other marketers track their social media ROI?

Happy marketing,
Heidi Cohen


If you enjoyed this column, you’ll enjoy Social Media’s Dirty Little Secret.

photo credit: geopungo via Flickr

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  • http://brianvickery.com Brian Vickery

    Well written as always, Heidi. I especially like the points about lacking a call-to-action and that social media is “an experiment outside the marketing plan”.

  • http://www.margieclayman.com margie clayman (@margieclayman)

    Hi Heidi,

    This is so terribly right on the money. I especially like your point about no call-to-action. I think a lot of people now understand that your website and your ads need calls to action, but we’re so afraid of actually explaining to people in the online world what we would like them to do. Even something as simple as saying, “Please subscribe to my blog” offers direction.

    It seems like common sense on the surface, but somehow we keep missing it.

    Fabulous post, as always!

  • http://melaniekissell.com/blog Melanie Kissell @SoloMompreneur

    Great topic, Heidi.

    I believe many companies’ complaints and criticisms surrounding not experiencing a social media ROI involves “inconsistency” and “inexperience”.

    There’s definitely a learning curve involved when you’re just starting out on social media. But you can’t just throw out a few Tweets every now and again or post a little something on your Facebook biz page once a month and expect a return on your (measly) investment of time.

    Social media marketing doesn’t work that way!

    It takes a village to raise a child, right? Well, it takes either outsourcing, a virtual assistant, a team of people, or at least one dedicated and designated social media manager to get a return on your investment. It can’t be done willy-nilly or mish-mashy. It has to be done consistently.

    Just my two cents worth,
    Melanie