Both Facebook and Twitter are adding ‘Buy’ buttons to their social networking sites, which could make it easier to connect social marketing to sales. But the ‘Buy’ button may not be the key to social marketing ROI. Unfortunately, marketers may not be ready to connect the dots between social marketing and ROI. Although business and marketing leaders are asking “What is our social marketing ROI?” They’re still not asking the most important question.
Social marketing is about relationships—establishing connections with customers; engaging in two-way conversations; sharing informative, interesting and entertaining content; fostering conversation and content sharing among an online community of customers and prospects. But how can you value these connections if you don’t know the value of your customers?
Instead of asking, “What is our social marketing ROI?” or “How much are our fans and followers worth?” Start asking, “What is it worth to our company if that like, fan or follower becomes a buyer?” ” How much are local customers and vocal advocates worth?” Your CMO wants to know your social marketing ROI ? It has to start with the ROI of converting and retaining another customer.
Part of the challenge facing digital marketers is that most companies don’t know the answers to these questions. They haven’t yet calculated lifetime customer value so it becomes nearly impossible to value activities, like social marketing, which can attract new customers or make existing ones more valuable.
For companies that can answers to these questions, this intelligence typically lies in Finance, Sales or Strategy, not necessarily Marketing. Take a walk over to these departments. That’s where you might find the foundation for measuring social marketing ROI.