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What is ROI to You?

ROI or return on investments is one of the biggest hot-button issues in social media management relationships.  Some social media managers say that ROI can’t be a goal, while other claim their services offer immediate ROI.  So what’s the truth?  The truth is, ROI is a tricky subject.  No two companies are alike, and they aren’t going to measure the return on their investment in the same way.  For some businesses, ROI is all about clicks to the website, while for some, ROI is making actual money from a new customer obtained via their social media channels.  So how can it be measured when it isn’t the same for everyone?

Some social media customers simply want ROI; they’re not willing to look any further, and because of this, they’re not often willing to cooperate or stick around.  This type of client doesn’t understand that social media isn’t a sprint.  It’s not something that will turn around a failing business in a matter of weeks.  If your business is virtually unknown, your social media manager is going to have to get you some good and reliable exposure, while building a network for your business that focuses on trust and respect.  If people don’t know who you are, no social media manager is going to have you making money hand over fist in the first month, and if they say they can, RUN.

Other clients understand the process, but ROI is still, obviously, one of their goals.  Of course, a client is going to want to know they’re not just flushing money down the toilet with their social media efforts.  They want to know that it is actually doing something for them.  This type of client is often a lot more pleasant to deal with, because they tend to be realistic and are willing to wait for some return.  For these clients, as well, ROI isn’t as simple as dollars in their pockets.

One way to figure out what a client is looking for, is to ask them their goals, and ask them to give you concrete goals.  If those goals include ROI, ask the client to be more specific.  There is no way to accomplish ROI if you don’t understand the parameters of what ROI means to that specific business.  There are many different ways that a return on their investment can be accomplished.  In order to determine what their specific needs are, you’ll need to ask them what they would consider a proper return.

As I previously stated, for some businesses that return will be as simple as a click to their website from a link in their social media.  This means they’ve gotten some attention as a result of their efforts.  For other clients, ROI is going to a bit more complicated.  For the commercial real estate agent, it may mean a new client securing their services.  For a mom and pop shop in a small town, it may mean someone coming into their business and mentioning that they were seen on Facebook or Twitter.  Much like social media in general, ROI isn’t one size fits all.

You certainly can’t promise ROI for everyone, it’s just not realistic.  A new client needs to be made aware of your limitations immediately.  In a perfect world, social media would work perfectly for every client and they would get exactly what they want out of it and feel as though their investment was worth something.  However, there are too many variables when dealing with clients.  All too often, a client doesn’t want to listen to our advice and simply wants to go their own way, even though our way is tried and true.  For this client, there may never be a good sense of return on his investment.

There will also be the clients that listen to everything you say, never have corrections, and never have a negative comment.  Even for this type of client, things may not work out.  Of course, you’re doing everything you can for them, and they’re matching your efforts, but maybe their business doesn’t have a solid foundation, or they’ve got terrible customer service.  No amount of social is going to change these things, and you go into it fighting a losing battle.

When it comes to ROI, the definition is never concrete for each client.  I’ve experience clients that are a pleasure to work with that get new business within the first three months.  With others, it is like pulling teeth to get them to agree with anything we suggest, and they still see results.  Success in social media is such a relative term, and ROI isn’t easily definable, and for this reason, we need to make sure our future clients have realistic goals.  So in the wooing stage of obtaining a new client, if ROI is a topic of conversation, ask for a definition of what ROI means to them.  It will save you a lot of hassle in the long run.

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Comments

  • Agreed - tracking the ROI of marketing campaigns can be a tricky subject. Especially when it is hard to trace blog posts and social media marketing to conversions then to sales. Prospects can hear about your company through a post then call-in, which makes the entire process difficult to manage.

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