Social Media and The Small Business: Calculating an ROI

2013, for those who have yet to be bombarded with the news, is a historic year for the tech industry, and not for reasons you may initially think. For the first time in history, more people are accessing the internet via a mobile device than a desktop computer. So what does this have to do with main street america and the small business? A lot more than you may think. 

As more and more consumers do everything from a four inch screen, something else is taking place. Consumer trust is shifting. Where just a few years ago consumers held the opinions and recommendations of business owners and government officials as highly credible (I know we can get into a whole other discussion on the latter) today's consumer actually considers the recommendation of other consumers to be more credible (src. Edelman Trust Barometer). User Generated Content (UGC) in the form of reviews and comments on social sites are today's "word of mouth", and in this mobile-centric world the consumer is constantly tethered to the source of that information. While some business owners argue that their presence on the social web isn't necessary, I am a firm believer that you can either be part of the conversation, or the topic of it. Getting into the social media world can be important, but having a strategy for it is perhaps even more important. 

So how can small business take advantage of this mobile revolution and become part of the conversation? Here's a few tips to help your small business employ an effective, and measurable, social media strategy:

Before we begin, a word on Social Media Policy

Before you do anything, your business should outline what is and is not acceptable on your social spaces. What content and who is allowed to post it to your Facebook, Twitter, Pinterest, etc. pages should be outlined. Having a well defined Social Media Policy in place from the start can alleviate a lot of headaches down the road.

1. The pursuit of "Likes"

Once you have a policy defined, and your profiles established, the race is on to start getting people to listen to what you have to say. For small businesses, I often encourage clients to "join the pack". Do some social exploring and see what other local businesses are engaging customers online, and like or follow them to cross-promote posts. Of course, if you have a website established for your business, announcing your social presence with a "Like Us!" or "Follow Us!" is a great way to garner followers. Your first goal in social media should be focused on cultivating an audience, so set your sites on a number, and work toward that end. 

Ex.   "We want to have 100 likes on Facebook and 50 Twitter followers in our first month"

Use these numbers as your first metric to watch. If they continue to grow, you're heading in the right direction.

2. Measuring Engagement

With a well-established following, keeping the group engaged in what you have to say is important. The quick-fix I always see is a business that takes to social media solely to promote their products and services. While it may sound like good business, it quickly leads to consumers who hide you from view because they're sick of hearing you sell them products.

Remember, a customer may walk through your doors once a month, but you have an opportunity to engage them online multiple times every week. Most research has shown that 3 - 5 posts a week keeps you from being an annoyance, and maximizes engagement with your customers. Creating posts that call for interaction rather than tell about product will increase the likelihood that your followers will interact. There are a myriad tools (Hootsuite, Sprout Social, Tweetdeck, etc.) that can help you publish and schedule posts to multiple sites at once, schedule posts for later, and measure how many people your content is reaching. Each like, retweet and share is a step towards maximizing your social media investment. 

3. Maximizing Relationships

When your following is engaged and interacting with you, dropping a post here and there to promote your latest product or special sale will get its maximum return. Keeping a high level of engagement is key to successful brand management on social media. Now its time to really start engaging your followers. Wish your followers a happy birthday, or send them a tweet and ask if they have anything they're looking for in particular from you. Tools like Google Analytics can help you track if that engagement is turning into website traffic or online purchases, while utilizing email surveys and in-store tracking at time of purchase can tell you how your customers came to visit you. 

Tracking your interactions can tell you if your being productive or wasting time. Being able to decipher which social efforts are effective can help you refine a social strategy and increase your productivity and return on your social investment.

4. Measuring Your Social ROI

Once you've gotten a good grip on the social landscape, as confusing as it can be, cross-referencing analytic data with your business' performance can help you define your social ROI. Did a recent increase in our followers on Twitter correspond with a surge in foot traffic? Was a widely shared Facebook post responsible for high volume sales of a particular product? Being able to correlate social marketing efforts to real world sales can help you refine your strategy and lead to an expand in your customer base, increase your brand reputation and awareness, and increase in sales. 

Simply put, social media is here to stay. Having a strategy that fits your business model and customer base is as important, if not more, to being present. A strong social presence can reap great returns for a business, but only if your goals are clearly identified and your efforts are measured.

About the Author:

Jayson Peters is the Co-Founder and Chief Creative Director at MiDynamic Group, a Marketing Consulting firm based in Wyandotte. Providing social media strategies and management services are just one in a portfolio of services they offer. 

Find them on Facebook or email jay@midynamic.com