One of the hottest topics within social media is ROI (aka return on investment), which has been thrust into the spotlight as corporate bean-counters and marketing executives try to measure and justify how much, if anything, a company is getting from investments in social media.
If ROI is broken down, there are clearly two elements: return (what are the benefits, how many leads or sales are being generated, etc.) and investment (how much money are we spending to operate social media).
Let’s focus on the “I” in ROI.
It is fair to say that most social media tools are free, which is one of the reasons why company, particularly small businesses, like the concept of using social media. But free only goes so far because once social media tools are embraced, you have to spend money.
The biggest cost is people and resources to operate social media programs. While some activity can be automated, people have to make social media happen. They have to create content (tweets, updates, blog posts, videos, etc.), they have monitor activity, and they have to engage with other social media users.
Regardless of whether a company initially uses someone part-time or eventually hires a person or people full-time, an investment has to be made.
Another cost is money spent to customize and enhance the social media tools being used to differentiate them from the crowd.
A Facebook Page, for example, can be transformed into something compelling by having a developer create new tabs, applications, surveys and contests. A blog can capture the imagination of visitors with a great design. Even Twitter’s UI can be customized. Of course, this means spending money.
Finally, there’s the cost to change corporate culture, which is a soft cost rather than something tangible.
To encourage a company to embrace social media and change how it engages with customers and potential customers takes a lot of work, and it has to be driven and led by people within an organization to make sure it becomes part of the corporate DNA. It’s not a cost that can easily be counted but it is an important investment.
Simply put, social media is far from free. In fact, social media can involve significant investment to be successful. . But if it’s done well, the ROI can be significant, which will no doubt make the bean-counters happy.
– Mark Evans