Understanding Social Media and ROI

Social media is used everyday by millions of users. We as business owners or marketers understand that our audience is on more than one of these social media sites but what is their worth? Are we doing what we need to to optimize each post and conversation to create those conversions?

The Marketingsherpa has defined a marketing conversation as, “the point at which a recipient of a marketing message performs a desired action.”

Roi VS roc

Most business professionals want to only hear about the conversions that can be analyzed in an ROI report. However, we have to understand we have more call to actions on social media that will improve our overall business but they don’t always show up on those ROI reports.

As a consultant, this is one of the hardest conversations I can have with clients. We are all in business because we make money. We make money by getting our customers to buy our products and services. However, the key word here is not money, it is customer. We need to make sure we are doing everything in our power to make our customers happy. Let’s go back to some business 101, 80% of our revenue comes from 20% of our customers.

Respond to customers

Not only do those in the 20% bring in 80% of our revenue but it would cost us 5 times as much to acquire a new customer than to keep a current customer. Now, I am not saying to not try to acquire new customers, we have to! Each customer has their lifetime value and we have to keep bringing in new customers but we also need to have a heavy focus on our current customers.

This is where social media can have an important impact on your customers. These sites can actually make or break you. When you are listening to your customers you understand if there are any problems within the customer lifecycle journey. Knowing the problems your customers may have gives you such an advantage. You can publicly acknowledge the problem and tell your entire community how and when this problem will be resolved.

If you ignore the power of social media, you are ignoring your customers. That is why we need to focus less on ROI and more on the Return on Conversation (ROC). The following are just some of the important customer-based factors of social media:

Research and Development

When I talk about research and development on social media, some look at me as if I have 7 heads. However, I talked about listening earlier, social listening to use the correct terminology. While we are listening to our customers, we do know about any potential crisis but we also know what they want for products and services. We could find information of colors, features, and even pricing of our products. We just have to listen.

Customer Service

I talked about this quickly above but we all have to focus on our customers. They are the reason we are in business and without them, we don’t have a business. With social media we are connected every second of the day. We need to be constantly active and responding to any and every customer (with the exclusion of trolls) on social media. If we do not respond, we are missing out on the opportunity to create a real relationship with our customers.


How people view your brand is highly important to know. If people view your brand differently than you advertise yourself, you are confusing your customers and it means you actually don’t know what is going on in the market place. Now, I won’t go through rebranding right now but what I want to talk about is actually knowing your brand through the customer’s eyes. This could be done with surveys but that is time consuming and expensive. With social media, we can do a sentiment analysis. This analysis will show us how our business is being portrayed by the public. Take a look at my favorite Twitter sentiment analysis done by North Carolina State University.


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