What’s the ROI of Social Media Marketing for Small Businesses?
A lot of small business owners know they should be on social media but, as a small business owner, have you ever asked yourself, “What’s the ROI of social media marketing? Why should my business be on social media? What’s the benefit of social media marketing?” Social media marketing can be very time-consuming and expensive (especially if you’ve hired an in-house employee to help with your presence online). But, social media marketing can also grow your business in ways you’d never imagine. Let’s talk about what you can expect to get out of investing your time (and sometimes, money) into social media marketing for small businesses.
What Does ROI Stand For in Social Media?
Traditionally, ROI stands for return on investment. Meaning, a calculation of the monetary value of an investment versus its cost. The ROI formula is known as: (profit minus cost) / cost. That’s your percentage return. Although, it’s really not that simple.
Social media marketing is defined as the use of social media platforms to interact with customers to build brands, increase sales, and drive website traffic (Investopedia). Logically, we could say that our ultimate goal on social media as small business owners is to execute the origin of its purpose - meaning, building brand awareness, increasing sales, and/or driving website traffic to our small business platforms outside of the apps.
Social Media ROI Examples
So, how exactly do we measure social media ROI efforts? A lot of small business owners think that success on social media is directly correlated to the number of increased followers, impressions, likes, and/or views on their business page. Contrary to popular belief, it’s not.
Metrics like follower count, likes, impressions, and views certainly help indicate the success of your social media efforts, but it’s not telling the entire story of your small business’s digital marketing success online. Back in the day, likes, follower count, and the number of views were the primary focus of all chronological algorithms on social platforms such as Instagram, YouTube, and Facebook. But, as the platforms grew, they got smarter.
In order to get your content out to the most amount of people possible without paying a single dollar in ad revenue, your content should do three things:
Keep the viewer engaged for as long as possible (this is called watch time, or percentage viewed).
Get the viewer to watch a piece of content multiple times.
Keep the viewer coming back for more over and over again.
This is known as organic marketing. A.k.a the most affordable type of marketing for your small business and a huge perk of social media platforms. If you are able to accomplish these three things in today’s social media algorithms, that is the social media recipe for success. Now, that might be the recipe for success on the platforms, but is that actually a recipe for success for your small business?
What are the Relevant Metrics for Tracking ROI on Social Media?
It can be hard to gauge what is and is not successful on social media. Here at MP Media, we like to look at the use of social media for your small business as logically as possible.
If you have a small business, it is likely that you offer a product or service that ultimately fuels your small business (and as we like to say, keeps the lights on). Naturally, your goal as a business owner isn’t necessarily going to be the same goal as the algorithms that are feeding your content (i.e. Instagram, Facebook, YouTube, etc.).
As small business owners ourselves, we encourage our clients to always think about their business first when incorporating a digital marketing strategy. What keeps your lights on? Is it more sales? More butts in seats? More subscriptions being sold?
Our goal on social media is to help you reach YOUR small business goals by working WITH the algorithms, not FOR the algorithms. Social media algorithms are designed to keep the viewers on the app for as long as possible. This is because the more time spent on an app, the more advertising dollars that those apps can sell (and hence, profit from - see, they’re a business too!).
Our goal when we work with our clients to come up with a social media marketing strategy is to understand how we can use the rules within each app to better serve your clients and customers – not the algorithms. Although, that does play a significant role in our strategy.
How to Calculate ROI on Social Media Marketing
Calculating social media marketing efforts is interesting because it’s not always measurable. If you keep up with our weekly marketing articles, you would know that it takes the average consumer 7 times to be exposed to a product or service before they will even begin to consider making a purchasing decision. Yes, 7 times! This is where social media marketing can help.
Social media has also become so normalized in today’s digital society that consumers expect your business to be on social media, especially if you’re a small business. We guarantee that if a new customer is going to make a purchase at your small business, they’re going to do their due diligence online to learn more about your business, before they’re going to whip out any credit card credentials.
Lastly, social media establishes your authority in your industry online by giving your small business and voice and a personality, before anyone else can. You are the trusted source in your community for whatever it is that you’re an expert in, and it is your job as a small business owner to continue to educate your clients and customers if you want them to come back for more – whether you do that on social media, or another digital platform that can be accessed with an internet connection.
The Takeaway
Does your business absolutely HAVE to be on social media to be successful? Absolutely not. But, social media is a free tool (for now) that gives your business a voice, and a chance to easily connect with potential and ongoing clients and customers.
Always remember, social media is your marketing tool, not your business – and we encourage our clients to treat it as such. Meaning, don’t put all your eggs in one basket, but feel free to take an egg or two and run with it.
The ROI of social media marketing is endless, but it starts with what your goals as a small business owner are. Think about your small business goals before you start investing time or money into social media marketing.
Let’s Get Coffee (or tea if that’s your thing!)
If social media marketing totally overwhelms you, but you know it’s something your small business is lacking in and needs help with, let’s get a coffee (or tea if that’s your thing)! Here at MP Media, we’re small business owners ourselves who have made it our goal to be as accessible and helpful to other small businesses as possible at the right price when it comes to marketing.
See you in the next one!
