Is Social Media worth the effort?
It all depends. And it depends on one thing and one thing only: the ROI of the campaign or effort.
A social media as a case effort or campaign that isn’t measured isn’t effective because there’s no way to tell if it worked. The specifics of measuring a social media campaign vary with every business, but let’s use a basic example to illustrate the approach. Let’s say you’re an office cleaning business and a typical customer spends $250 per month on your service, staying with you for 3 years.
Let’s keep it straightforward and also assume you have no additional ongoing servicing costs while they are your customer. Reverting back to the lifetime value concept, this lifetime value is $9000 and the cost per acquisition is $900. In the past, you might have used direct mail as your primary tool to generate leads and convert those leads into sales. If the conversion rate on your direct mail campaigns was 0.5%, you’d send out 200 direct mail pieces to acquire a customer. If your printing, postage, and marketing costs for those direct mail pieces was $2 each, then the math works out to $400. But let’s say you want to start a social media campaign against the existing direct mail campaign. The costs associated with setting up, launching and running a social media campaign are often under-estimated. Since the paid media for social media is close to $0, people assume that social media is inexpensive because there are no media costs for using Twitter, YouTube, Facebook, or LinkedIn.
However, the manpower required for a social media campaign can be significant. So can the costs for producing content for your social media campaign. If you’re a large business with a brand to protect, you’ll want to create top-notch landing pages on your website which costs money, and so do well-produced viral videos and effective Facebook promotions. For example, a 2-minute clip to YouTube could cost anywhere from $500 to $5,000 to produce and package.
You need to be impressing by being able to clearly show the investor where the money is and how you and he (she) can get there. You need to impress that you are the one to invest in now and not someone else, later.
The point is, you’ll need to take some risk with the hidden costs of social media. You can take a stab at some of the costs, but you may need to embrace the mantra of business: “Things take twice as long as estimated and cost twice as much.” You must get a good, clear understanding of the ROI of your campaign. In the above illustration, if your goal was to double the size of your business from say 100 customers to 200 over a 6 month period, you have about a $40,000 bill to play with in order to justify a social media campaign.