Is There an ROI on Social Media for all Companies?
Many companies have inactive or dormant social media accounts. Sometimes one or two social media channels are so successful; the others get sidelined. When one social media channel takes over, it’s okay since they’re likely operating in a niche where their audience or network has a clear preference for a particular medium.
A professional photographer might find that people love their Pinterest or Instagram accounts, but ignore their Twitter or LinkedIn. That allows for focusing on what the audience wants and makes complete sense. This article isn’t for those companies.
This article is for those who’ve set up social media accounts, that all lie dormant with no posts or followers. That’s the worst scenario, worse than having no social media accounts at all.
That might sound odd, that making an effort to set up the accounts is worse than making no effort at all. The reason is concerning new visitors who don’t know you. If new people visit your empty and lifeless social media account, they’ll see that there’s a lack of interest from your customers. It also shows a lack of effort.
They see something negative, whereas if there were no social media accounts, they would’ve clicked somewhere else.
So, we need to either make some effort, or ignore social media
The problem in ignoring social media is that people are spending more and more time on it. Each new generation is spending increasing amounts of time on their choice of social media channels. That applies to people of all ages.
By not having a social media presence, it’s as if you are opting out on having your storefront on the high street. Instead, you’re choosing to have it in a back alley on the outskirts of ‘internet town’. You’ll be harder to find, as many of your competitors embrace social media and put in the effort.
There are no half measures if you have an eye on the future. You either make an effort or decide to place yourself on a back street, at least as far as new customers are concerned. A raving fan will always find you, but growth may suffer, and the opportunity for relatively cheap marketing will be lost.
What’s the ROI on social media?
That’s a common question and leads to a good point. Perhaps we ‘slave away’ for a couple of hours a day on social media, for what? How many new customers come through our social media postings? The answer depends on who you ask, what business they’re in, and how well they’re executing their social media strategy.
If you’re using paid advertising, and then track purchases or email sign-up rates, an ROI can be determined. If you’re using the unpaid options of posting, commenting and liking, an ROI can be harder to determine.
The same applies to many facets of a business.
What’s the direct ROI on:
- Office cleaning
- Staff team-building exercises
- Ongoing staff training
- Performance-related bonus schemes
- Hiring a public relations company
- Awareness advertising on TV or in Newspapers where there’s no call to action
- Sponsoring the local kids’ football team
- Extra maternity leave or paternity leave for staff
- Staff car parking facility
- A free coffee machine in the staff room
- Additional management training and certification
The list goes on. Unless there’s a specific call to action, or a hotline telephone number designated to a particular marketing scheme, most expenses won’t have a measurable ROI.
There are two crucial questions to ask, however.
How do we want to run our company?
As leaders, founders, or those responsible for sections of a company, we all have a vision of how the business ought to get run. Of course, we want our offices cleaned and our staff to feel clear benefits in working for us. We also want to keep up with the competition, especially in the eyes of our customers.
We want to be ahead of our competition, don’t we? If we’re genuinely rocking it on social media, and our competitors aren’t, it’s hard to imagine a scenario where they’ll overtake us.
This is because:
Social media allows direct access to the upper management in a way that cold calling, direct mail, or showing up at the office doesn’t. If you post a relevant question to the CEO of a company on their company social media page, you’re likely to get a thoughtful response.
Try getting through the bosses gatekeepers on the phone or in person, or try to send a cold email, your chances of a response are slim. This accessibility means that successful companies on social media are closer to their network and audience.
Your target audience can feel the intimacy and will reject competitors who only use the old fashioned communication channels. This closeness and interaction help you keep your finger on the pulse of the industry. You can also get instant feedback on how your company is interacting with it.
What’ll happen if we don’t do it?
- What’ll happen if you don’t clean your office?
- What’ll happen if you decide not to train your staff?
- What’ll happen if you decide to hold onto obsolete technology, when your competition is embracing the new?
Imagine that your company decides to still use fax machines rather than email? What if it determines that the new factory equipment that pays for itself in five years, then increases margins by 20% after that, can wait?
That is what you’re doing if you avoid social media. It’s not that critical for all businesses just yet, but if we extrapolate the trend lines, this is where it’s heading.