It’s as old as social media themselves. The debate surrounding social media ROI might just rage on forever.
On one side are those who look at ROI as a straightline proposition. ROI = the difference between an investment and the revenue it generates. Done.
On the other side, mainly populated by social marketers, community managers and influencers, the point is made that direct financial return isn’t the overriding purpose of social media, and it’s misguided to use direct ROI as a measure of your social media marketing success.
What’s the ROI of Your Telephone?
Instead, social media ROI depends on the value of the marketing and sales tactics it fosters. Like your office telephone, which by itself produces little direct ROI, social media are communication channels to/from your customers. How you use your telephone and social channels determines your ROI, not the telephone or channels themselves.
From driving traffic to your site to post-sales support, there are many ways that social media can be used to provide indirect ROI.
Using Social Media for Conversion Optimization
If you use an end-to-end sales and marketing funnel, social media and conversions couldn’t be further apart. Social media is a linchpin of online awareness, or initial contact with a customer, and conversion happens when you close a sale or achieve your some other conversion goal. (If the you are thinking “advocacy” right now, see point #5 below).
In that way, social media’s first role in increasing conversions and/or improving conversion rates is to:
1. Create Awareness: Almost 80% of digital marketing budgets are spent on attracting new customers. And awareness is where that begins. Online, awareness comes from being found on search engines, through paid advertising, earned media and social media.
Do you have an active YouTube channel? The fact that YouTube is the second largest search engine, and the second largest social media platform (some say it’s the largest) is the “invisible elephant” in the digital marketing room.
An “elephant” because of the implications of its high ranking as a search engine, combined with social interaction and the ever-increasing popularity of visual content. “Invisible” because relatively few recognize the marketing power of that combination.
YouTube aside, the best start you can give your company on social media, to create awareness and get more people to your landing pages (and presumably more conversions) is to use the social platforms that best suit your business, make sure you have optimized account descriptions and, perhaps most importantly, keep each account active – and interactive – with relevant content and pertinent conversations.
2. Choose the Best Channels: Yes. The number of conversions you ultimately get from social media, and the value of those conversions, relies heavily on the platforms you choose. Here’s a quick example:
- 1,200,000,000 – Number of registered users on Facebook
- 80,000,000 – Number of registered users on Pinterest
- Therefore, generally speaking, you’d reach the widest audience on Facebook
- 70% of those on Pinterest use the platform “to get inspiration on what to buy” versus only 17% on Facebook who use it for the same thing
- On average, Pinners outspend Facebook users $180 to $85
- Sites like Bottica, Time Inc.’s Real Simple and Hubspot report a higher number of sales/referrals from their Pinterest channel than than their Facebook Page
Lack of trust is a potent conversion killer.
Now, pretend you want to find conversion optimization services for your business. You’re down to your final two picks and you decide to do a little more research. They are both neck and neck, but one has an active, engaging presence on Twitter, Facebook and YouTube. The other has none. Which are you more likely to choose? Yes, it’s an extreme example, but you get the point.
Social Proof – Let’s do some more pretending. This time you’re at a home show looking for ideas to update your house. The show’s in a massive convention center. To save time, you look down each aisle first to see if anything catches your eye. In one aisle there’s a large crowd around a booth. And suddenly you’re heading towards it.
That crowd is social proof. Whether or not we want to admit it, we are all interested in what captures the interest of others. Social media shows the interest people have in your business and that helps to attract new social followers. And you can use point number four to get them to your site.
When you distribute that content on most social media, it’s accompanied by a link to your site or landing page.
When potential or existing customers find that content, they are one click away from you.
5. Encourage Advocacy: Close the Loop on Your Marketing Funnel – Ecommerce and online lead generation offer great opportunities for you to change your marketing and sales funnel from a one-way proposition into a never ending loop. When you close a sale or confirm a lead, you generally have enough information to engage with them post-conversion. That not only helps you bring them back (and revenue per visit for returning ecommerce customers is two to five times higher than for first-time customers), but it helps you turn them into advocates for your business.
Want to make it easier for customers to spread your message on social? Pre-populate the message so they only need to click one button to post it.
The book on social media ROI is still being written. Indeed, the ways and means of social ROI are still being discovered. None of them has more potential to boost the bottom line than using social media to increase conversions.