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Want to Know Your Social Media’s True Value?

Forget your social media’s Return on Investment – look instead for a “Return on Engagement”.


Ask a direct selling executive what frustrates him or her about social media, they’re likely to tell you that social media doesn’t seem to generate a “Return on Investment (ROI).” For centuries, the business world has relied on this key metric. If you put money in, you should get more money out, right? It’s standard business practice.

But traditional metrics don’t always work well in the world of social media. If you are measuring the ROI of social, you’re measuring the wrong thing.

Different from traditional marketing

Part of the reason many businesspeople tend to rely on ROI for determining their social media success is that they view social media as merely a sub-function of traditional marketing, where determining ROI is often the very heart of the effort. For instance, online advertising is extremely ROI-driven. You can determine exactly how many people clicked on an ad and how many of those bought your product. ROI is easily discovered, measured and optimized.

More difficult to determine is how many people bought your product because they felt more included in your community or felt important and were listened to. Not so easy.

So, understanding how social media success is measured can lead to better decisions about how to best implement and manage it.

Concept shift

Like all modern business in our social, smart phone enabled world, it requires a new way of looking at things.

As Gary Vaynerchuk asks …

“What’s the ROI of your mother? Your mother raised you, believed in you, nurtured and encouraged you. Your mother helped you become who you are today, and perhaps much of your success today can be traced back to your mother. So, what’s her ROI? It’s everything. It’s priceless.”

Similarly, investment results in social media can be difficult to quantify — but the value is absolutely there. It is found in increasing excitement, stronger relationships, and exponential growth of your networks. What are those worth? Just like mum, everything. Priceless.

Return on engagement

How can you measure social media success from a key performance point-of-view? It’s called “Return on Engagement”, or ROE. ROE is a measure not of cash returns but of the value that grows over time through relationships, viral exposure and loyalty.

Return on Engagement, while difficult to measure at a granular level is more quantifiable when looking at the big picture. For instance, you may find that a robust social presence can be mapped to your top line sales volume. One of our recent clients tells us that after our first year of building their social presence, their sales grew 30% — as other companies in their category faltered. They attribute nearly all that sales gain to their social efforts. Nothing else had changed – they merely added intensive social community building to the mix, which led to increased engagement, loyalty, and visibility across their networks (and their friend’s networks). Needless to say, social media has since become their most important communications activity.

Measuring up

Surprisingly, real metrics and success indicators are easy to determine in social media. Measurement is possible. Any kind of social initiative can be measured quite easily through the sites themselves as well as a plethora of available tools.

The important thing to know is that the subject of measurement is different: conversations, trust, loyalty, and engagement. These can be found in Facebook Insights, for example. There you’ll find growth in fans, how often they take action (Like, Comment), how often they return, content they like, what’s working and what isn’t.

Indeed, when measuring social media, the outcomes, tweets, comments, followers etc. are more pertinent (and accessible) than financial metrics.

Have faith

The idea of measuring “Likes” and then extrapolating financial information is little solace to those whose education and careers were built on achieving ROI. But just because they didn’t teach these metrics business school twenty years ago doesn’t make them any less relevant.

Look around. Who is winning in this industry? Are the winners embracing social media? Of course, they are. They are ahead of the game. Losers are declining and being out-smarted and out-maneuvered by more socially enabled players. This industry is fully engaged in social media, of that there is no doubt, and in today’s connected, relationship-driven marketplace, it is now a major financial driver for many direct selling companies.

If your company has yet to fully embrace social media, it’s time. Your company can have a social media presence that brings returns beyond measure.

To learn more about how Momentum Factor’s BrandDefense™ can help with your online reputation management, contact our team today!

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