Measuring the effects of social media

It is heartening to see companies and executives finally waking up to the potential of social media and rushing to join the bandwagon. However, most of the people are still apprehensive whether social media would work for their businesses and brand needs. Measuring social media ROI (return on investment) may be difficult but it isn’t impossible because it is difficult to track many of the pieces that need to be evaluated. Here are a few pointers to help you track down those pieces and find out the ROI you’re getting on social media.

1. Traffic is one of the most palpable ways of measuring social media. Though quality often beats quantity, sadly enough, it is always true.
2. Participation and interaction is an important pointer for many brands. It tells one about the nature of traffic being drawn. Interaction may range from leaving comments to customer reviews and ratings. You need to keep an eye on this as it can happen on other websites as much as on your own.
3. Internet has changed the nature of public relations forever. What earlier used to be distinct, is now a blend of PR, customer service, and marketing. Every person has a blog these days, along with a place to shout things to their friends and followers with twitter and Google Buzz.
4. In a world full of choices and the ease with which consumers can switch from one brand to another, the most important thing is customer engagement. This engagement is relevant both offline and online, on your website, as well as on social media sites. One way of improving your business, products, and the level of your services is by interacting with customers. Ignoring customers can be hazardous as research has found that engaged customers recommend your brand, convert and purchase more often.
5. The most useful outcome of improved customer engagement is better customer retention. This one factor is extremely crucial for the success of your business in the coming years.
6. Greater and bigger profits are the natural outcome of engage customers. You generate more business from your existing customer base and these customers are more likely to recommend your business to their network of friends, family, and social media contacts. It not only reduces your budget for customer acquisition but also adds to your profits. In the long run this improved profitability translates into more efficient organisation.

Sooner businesses strike balance between acquisition and retention better it is from a resourcing point of view. A number of acquisition strategies are so ill conceived that long term retention is not planned. Old wisdom says that it is cheaper to retain existing customers than look for new ones.