Facebook and Twitter: Measuring ROI
June 5, 2010 2 Comments
I got a little upset this week when a small business owner told me that they were told at a presentation at a local business networking session that, “If you aren’t out on Facebook and Twitter, you are going to be left behind.” Obviously, I believe in social media, so why did this upset me?
First, in my diary I have a page called “The Evil Queen” that has all kinds of antiquated forms of marketing which include The Yellow Pages, The Mid-Day News Briefing, Direct Mail, Faxing and other marketing artifacts that just aren’t effective.
Furthermore, I am the first to admit that many businesses are not suited for online marketing and I’m pretty good at picking them out and suggesting more conventional marketing. What upset me about a blanket statement telling a small business owner that they need to be on Facebook and Twitter is that there was absolutely no guidance given in terms of return on investment (ROI).
Yes, these services are free and you can expose yourself to millions of people. However, success on these services requires time; time that could be spent harvesting opportunity in existing customer bases, meeting new people, or using other more proven forms of online marketing such as SEM and SEO.
ROI Advice When Testing a Facebook/Twitter Marketing Campaign
Please understand, I am not against Facebook or Twitter, at all. I just think that whenever a small business is going to embark on this venture, they need to be ready. Social media outlets like Facebook and Twitter are absolutely changing the way that the world is marketed to. Facebook Pages can be an excellent tool to expand your brand and connect with your network in a viral way. Twitter is an excellent way to gain quick access to a lot of interesting people and to easily connect with people that have interest in what you are promoting. However, without specific checks and balances in place, your small business’s efficiency and effectiveness could plummet. Here are three critical things to consider if you decide to expand your marketing efforts to include Facebook, Twitter or another social networking website.
- Know Your Demographic – 77% of the Facebook Community are under 34 years old, according to a recent Quantcast report. A TIME Magazine article reported that Twitter’s “largest age demographic is 35-to-44-year-old, who make up 25.9% of its users.” If your business isn’t catering to the Facebook or Twitter demographics, then you’ll be wasting your time.
- Define Your Strategy – As with any effective marketing campaign, networking with no defined strategy will eat away at efficiency, productivity and the bottom-line. Remember, the goal of tools like Twitter and Facebook is to keep you online as long as possible. Appropriate guidelines must be established before the campaigns are launched.
ROI Guidance on Facebook and Twitter:
Setup a quantitative business goal. This could be as aggressive as, “sell Rs.x of product or services in the next 90 days” to something more realistic like, “expand my business network by x% or meet 10 new people who will be at an upcoming conference and schedule at least 5 One on One’s at the conference.”
Keep detailed track of your time. You have to be able to show that the man hours your company is spending on social media is paying off.
Classify time spent as “extra hours” or detail what daily tasks took a back seat. Also, list out a wish list of “To Do” items that you would have been doing had you not been working on social media (opportunity cost).
Talk to other business owners who are embarking on Facebook and Twitter campaigns and understand how they are hoping to improve business results. Understand all the capabilities of Facebook Pages and Twitter Searches and use them appropriately. - Evaluate – After 90 days of connecting, tweeting, and doing your thing, sit down and run your numbers. As with any sales oriented process, meetings, introductions, and information exchanges are nice, but any ROI calculation must be made on cheques that cleared the bank
