Mark Wilson

Some of the questions that have come up over the past few years are how do you measure the sales generated by ‘word of mouth’ or your return on investment from a customer service telephone line and social media outlets?
While we do want to accurately calculate our returns, some of the above tools might not need a specific ‘return on investment’. For example, a telephone isn’t something we’re going to drop if it doesn’t provide returns, because it’s just part of business and a tool we use to communicate with customers on a daily basis.

The big question comes into play when we discuss Social Media.

There are two sides to this topic.

From one perspective, social media has become something like the telephone. Companies use items such as a webpage, Facebook, Twitter, or YouTube as a general means of communicating with their customers. Some might question which tools are best used for the wide variety of companies out there, but the thing about marketing is that… “It depends”. There is no single answer to this question. A person marketing themselves or creating a personal brand (i.e. Model or Celebrity) would definitely want to utilize all free social media communication tools available to them (assuming they are used properly). These are simply ways of building their reputation and name, while communicating with the general public. Whereas, a mobile toilet manufacturer might not need to invest in Facebook, because who wants to be a ‘fan’ or ‘like’ the ‘Jiffy John’? This company might be better off joining the online Yellow Pages.
As you can see, by using social media you can gain exposure and build upon your company reputation, but it doesn’t always have to generate a measured ROI.

From the other perspective, some ‘experts’ think we should be capitalizing on the free metrics available and generating reports on how our social media is benefitting us.
There are many free analytics tools available for social media monitoring, but we need to determine WHAT should be analyzed in the first place.

If company X was looking to monitor its customer interaction online, they could use tools such as socialmention.com, Facebook insights or Google analytics. With these, they could see how often their brand is mentioned and whether or not it’s in a positive or negative light. They could also determine whether or not they have experienced an increase in ‘likes’ or ‘followers’. These simple measures and tools available online can help companies keep track of their online brand development. It also assists them by ensuring their online image is positive and allows them to rectify any negative comments.
But if they wanted to monitor the effects social media has on online purchasing patterns, it gets a bit trickier. For example, company X could monitor IP address clicks on their social media page links, then follow those IP addresses through their site and see how many resulted in a purchase. They could also monitor the bounce rate and see where the majority of customers are turning away from their pages (Facebook vs. Twitter vs. Webpage, etc.). These statistics will help them determine their online strengths and weaknesses, where customer purchase intentions start, and whether or not social media is generating any returns.

While most aspects of social media are free to use, they do still take manpower to create and manage. Companies are right to monitor whether or not these outlets are generating profitable returns. But they also need to take into considerations the impact on their brand and overall market presence. Depending on their industry, social media might be something they need to have in order to remain competitive online. They can use free tools to determine its profitability, but the bottom line is that social media is becoming like the telephone, a necessary tool to remain in contact with valued customers.