Social Media ROI - Why Can't We Measure It?

Social media is a great technology for connecting brands to consumers, professionals to clients or people to people. But is it worth the effort?  Does the effort pay off?  The answer most often heard from business is "I just don't know!"

If you ask companies that use social media why they use it, only about 1/3 say that it has helped their business. Almost 2/3 say that the value is in the candid feedback they get from their customers. These answers reveal a fundamental fact about social media, few people know how to use it properly and fewer still know how to measure it. Why?

To answer that question, let's take a look at social media as a business activity. Normally, whenever a business begins a new activity, it does so with clear objectives. Right away we run into a problem with social media. Social media is a new medium that business is only beginning to embrace. Most businesses are not sure what it can do and how to do it. So how do they know if it's right for them, how do they know if it is working? The answer is metrics! Businesses say "We can measure social media", but can they? There are hundreds of metrics out there. Some, like the number of followers, are very soft metrics which is like measuring the number of people that you talk to at a networking meeting. There are more substantial metrics such as the number of on-line sales, but how do you measure the link between a follower and a sale? Some others are very difficult to quantify and measure, such as the value of listening.

This is why it is so critical to have clear objectives when starting a social media campaign. Social media is a very flexible tool that can do alot of good for your company. But without a clear idea of what you want to do, you can't measure, you won't know if it is working and you certainly won't get the results you were hoping for.

Many companies, in their haste to jump onto the social media bandwagon, find themselves on a runaway train. After struggling for a while with Facebook accounts, Twitter tweets and LinkedIn connections, they drop the whole idea, saying it doesn't work for them. What they don't consider is how these same tools work so well for their competitors. The answer is that their competitors planned their approach, set clear objectives, measured their results and adjusted their plan.

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