Why We Need to Stop Measuring the “ROI” of Social Media Marketing

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When starting and running a business, you will continually have expenses arise and investment decisions to consider – because the truth is that you have to spend money to make money. Especially as a small business owner, this fact can be daunting with weighing the tricky balance of finances when you are personally connected with and invested in the future of your company. Thankfully, there are some investments that have a clear and direct return, such as advertising a landing page with an email capture – in which we can analyze how much money is spent advertising for each email address to be entered. You can then take the analysis further by keeping track of how many these email leads convert into paid customers and clients. Depending on your particular goals, you can determine whether or not your strategy is resulting in an effective campaign. However, some business expenses can’t be as clearly connected to profit. This is particularly true when it comes to marketing strategies – particularly social media marketing. Despite the necessity of a professional social media presence, business owners often have a hard time committing to the expense and worry themselves out of the investment by attempting to make a positive “ROI” off of social media posts. Eventually, the inability to measure leaves individuals at a standstill and their marketing strategy suffers. The answer? We need to stop measuring the ROI of social media marketing.

There are some expenses you will inevitably have that you simply can’t link to sales – despite the fact that they are essential to your sales strategy. For example, imagine you have a flower shop. You have the initial necessities: the building, a line of products and several employees. Any additions are expenses you would make to draw in sales. However, many of these expenses don’t actually directly lead to sales, but will instead support your sales. Currently, your flower shop is a building with bouquets and arrangements scattered messily all over the bare ground. Customers can’t find what they’re looking for, don’t know what you offer and would definitely never tell their friends and family to shop at your business. Now, you decide to invest in shelves, cabinets and floral coolers. These are expensive and require frequent maintenance with additional costs, but now all of the products are beautifully organized and elegantly resting on display. Your customers can navigate through the store and are much more likely to make a purchase than they were in its original state. Can you directly measure how many sales the shelves created? No. Can you safely assume that the shelves did have an impact sales? Absolutely. Just because it can’t be measured numerically doesn’t mean it isn’t important.

In the same sense, your online presence is much like the flower shop. You have the initial necessities: your website, a line of products and any number of employees. Now, you have big decisions to make. You must be able to draw your audience in, show what you offer and facilitate a community that hopefully spreads the word. This is where social media comes in. Social media, much like the shelves of the flower shop, makes your online presence look beautiful and organized. You may not be able to determine exactly how many sales a Facebook post will convert to, but you can take solace in knowing that the post supports sales by making your brand look good.

“Looking good” is what you’re paying for when you invest in social media marketing services. So, as long as you’re hiring the right agency or employee to handle social media, you automatically receive a positive return on your investment since the point shouldn’t be about getting sales – rather, it should be about marketing your business.  That is why measuring the ROI of social media is flawed logic – because marketing and sales are two different industries. They work together but shouldn’t be analyzed in the same way. For example, sales is all about numbers. If you hire a new salesperson at $4000/month, and he or she sells $4500 worth of products in the first month, you can clearly see that the investment is paying off at a 12.5% increase. Marketing, on the other hand, is not about numbers; it’s about the human touch. It’s an art and a science; it’s design and psychology. Marketing connects people with businesses and evokes emotion. Despite the cliché that a good salesperson can sell anything, the truth is that even the best salesperson in the world can’t sell a product that isn’t marketable. The better your business looks, the easier it is to sell.

Social media has paved a path to a new world of marketing opportunities – allowing businesses the invaluable (yes, invaluable!) ability to showcase expertise and directly communicate with potential customers. It’s important to want to make sure you’re making decisions that are within your business’s best financial interest; however, it’s equally important to understand how to measure each investment properly. Instead of measuring social media marketing by its ROI, consider it a tool for becoming a more appealing, reachable business.