It’s Not About Social Media ROI, It’s About Marketing ROI

Let’s say you are the CMO at your company, and the CEO is demanding that sales for Product A increase by 10% above your projections for the next fiscal year.  He also says that you can only make one change to the marketing mix.

 

Would you:

A – Move billboard placements in Product A’s Top 10 markets from the interstate to downtown locations?

B – Launch a company blog designed to better explain the features, qualities and benefits of Product A?

C – Divert budget to more television ads designed to show why Product A is a better fit for customers than the competitor’s Product B?

D – Move all grocery end-cap displays in Wal-Mart up to the front registers?

 

In Marketing 101 class we learned about the AIDA model of consumer behavior.

A = Awareness

I = Interest

D = Desire

A = Action

 

Awareness leads to Interest leads to Desire leads to Action.  Note that the purchasing happens at the Action portion of this model.  So if we are looking at the individual components of a marketing plan, how do you define the ROI of tactics that comprise the Awareness portion of your plan?  In theory, you cannot, because customers aren’t ready to buy at this stage of their purchase journey.  This is why you create a comprehensive marketing plan that makes customers Aware of your product, that builds Interest in the product, then a Desire to Act.

When the smoke clears, you have a marketing plan that you can judge the ROI of.  But it doesn’t make sense to judge the individual tactics of a comprehensive plan from a ROI perspective.  No matter how much it wants to, your billboard on Highway 23 can’t close a sale for you.  At best, it can make your customers Aware of your product and make them Interested and increase their Desire to buy, but it can’t convert on the Action of buying.

So what does that mean for you, the social media manager at your company that is trying to explain and perhaps even defend why your company should be using social media to connect with customers?

It starts with having an honest discussion about what social media can and cannot do for your business.  First, social media has never worked well as a channel to facilitate direct sales.  Social media works best as an interaction channel, as a way for people to engage each other and be social.  Direct sales isn’t an activity that functions well in the middle of social conversations online anymore than pitching strangers chatting on the front porch on Sunday afternoon does.

So if social media works well as a channel for people to have interactions and discussions and to share content, then your business needs to find its value within those functions of the channel.  You want to be aware of how your current and potential customers prefer to use these tools, and work within those constraints.

What type of interactions do they prefer?  And with who?  With your brand, or with fellow customers?

What type of content are they creating?

What type of content are they sharing?

The idea is that you want to use social media in a way to connect with your customers and create value for them.  You create value for your customers by enhancing their experience via social media tools.  By giving them the type of high-quality content they are looking for and need.  By helping to facilitate the type of interactions they want and need (Hint: They don’t want to be sold to, they do want help dealing with a problem setting up your new laptop they just bought).

The best way to achieve your goals for social media is to help customers achieve their goals for social media.  Understand why your customers are on social and you will understand how you can create value for them via these channels.  That value will enhance your overall marketing results, which will lead to an increase in marketing ROI.