eMarketing reflections

How to measure the ROI of your social media projects April 20, 2010

Introduction
Measuring the ROI of a social media project is like the Holy Grail of online marketing; everybody is searching for it but only few have seen the light of wisdom. In principle it should not be difficult at all to measure your ROI. You just have to do what you have always done: plan your project well with clear defined goals and KPI’s and then measure those KPI’s. So, what is so difficult about it?

Social media is different
Well, your first problem is that you are trying to compare apples with pears. Return on investment is a financial measurement, while social media programs are emotional. Therefore it is not possible to determine the ROI of your project directly.

Your second problem is that in general marketing campaigns are limited to a certain period, which enables you to measure the ROI over that period. Social media projects however tend to be ongoing. You cannot just tell your customers you are going back to your former ivory tower behaviour after you “finished” your project. You can of course look at your sales and see what happened during the period you first started with social media, but there are so many more factors involved that this can only give you an indication.

And your third problem is that you are still thinking as a marketer; as a brand manager. Social media is the total online presence of your customers, talking about you and expecting total transparency and an excellent customer service from you. (Do not think you cannot afford to be totally transparent, because if you will not be transparent, then your customers will make sure they create it themselves!) This means, you should not aim for a financial ROI, but for a social success through an excellent customer service.

Hence you will have to accept that with your social media campaign you need to focus on measuring the social impact; the relationship you build with your customer and accept that this will directly influence your sales.

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