ROI is tough to measure on Social Media. Many businesses have a difficult time allotting a budget for Social Media for this reason. They don’t think post updates is going to help get business or think that the updates posted by employees here and there are enough. Though posting updates does help with SEO and visibility, Social Media Marketing goes beyond just updates and must include an advertising campaign to be fully effective.
Understanding the importance of Social Media in every business plan is crucial to success. Of course, the main goal and measure of success for the majority of businesses using Social Media is revenue. Obviously businesses are in business to make money. That is just common sense.
However, aside from generating revenue, new customers, leads, SEO and visibility there is one piece of the ROI puzzle that many businesses overlook – Retention.
“Customer retention is the activity that a selling organization undertakes in order to reduce customer defections. Successful customer retention starts with the first contact an organization has with a customer and continues throughout the entire lifetime of a relationship. A company’s ability to attract and retain new customers, is not only related to its product or services, but strongly related to the way it services its existing customers and the reputation it creates within and across the marketplace.” (Wikipedia)
Businesses that rely on return customers or memberships need to start understanding that a solid Marketing Strategy on Social Media will retain customers and keep that revenue stream flowing.
Most are so focused on sales and new customers they overlook the necessity of their current customers to keep their business running. Happy customers lead to continued purchases, referrals to their friends and, as a result, increased revenue.
Keep your customers happy, because your competitors are trying to win them over.
Additionally, with Lookalike Audience Advertising available on Facebook your current customers are likely receiving ads from your competitors. Your current customers are on Facebook, whether you are there or not. They may not be attached to any of your competitors Business Pages on Facebook, but because of their interest in your industry they are likely receiving ads in their personal News Feeds on Facebook for your competitors.
Problem is if your competitors are offering a better deal or something more enticing and you are not providing enough customer service and interest on your Facebook account you run the risk of losing customers to your competitors.
Customers want to interact with businesses they buy from, they want to learn, get special offers and deals and most importantly they want to be acknowledged.
Whether they are on Facebook, Twitter, Pinterest or Google + and making a general comment, leaving a good review or looking for help with an issue it is imperative that your business be there to acknowledge them and assist them in the way they have asked for assistance – through your Social Sites.
What could you lose?
If you are a business with a monthly membership and your membership is $ 25 a month, your customers typically spend $ 300 a year. If you have 5,000 customers that is $ 150,000 a year.
If you are a service provider, an HVAC company for example, and your customers purchase air conditioning cleanings at $ 100 one time per year and furnace cleanings at $ 100 a year, that comes to $ 200 a year per customer. Multiply that by the number of return customers you have yearly for the total.
This equates to the ROI for keeping a customer happy, and Social Media is a great place to keep them happy.
If you don’t start paying attention to your current customers and considering retention as an important part of ROI you may start to lose those people and their revenue and referrals.Digital & Social Articles on Business 2 Community