There is a very distinct and dividing line in social media. In one corner we have those that firmly believe that there is a definite return on investment from social media, and in the opposing corner those that firmly believe that there isn’t. Articles pop up on a weekly basis defending both sides and the discussion goes on. Naturally, ROI will need to focus on different numbers and metrics. On the one hand you have the cost of resources such as a person’s time spent managing or reaching out on social networks, and the cost of using software. On the other hand you might have metrics relating to the bottom line such as sales. Tracking sales resulting from social media doesn’t just help to justify the time or investment spent. It can also help identify what networks are the most valuable to a brand.

Lead Generation

Before looking at sales let’s take a step back and look at lead generation. Social media can be an extremely effective tool to drive interest, leads and potential sales. Social media monitoring and monitoring of online media provide the ability to track express needs, giving companies the ability to reach out proactively and pick up a request and action it in a matter of minutes. Beyond just monitoring, social networks can be an additional shop window, providing prospects with an avenue for inquiry aside from a website, the phone or a store. At relatively little cost companies can use social media to diversify their presence to a greater extent. However, much like real shops on the high street, these too need to be managed in order to ensure inquiries don’t land in a black hole never to resurface. As such, a conscious decision to be present on social network ‘x’ over social network ‘y’ must be drawn from previous research in conjunction with active oversight and management of these social networks.

Seeing It Through

If finding potential leads is at one end of the spectrum, conversions and sales are at the opposite. Understanding the link between both can go a long way towards ensuring that an investment and commitment to social media is valuable and is positively impacting the bottom line. Going beyond awareness and likes and retweets, companies may also consider traffic resulting in inquiries or purchases that were directly fed through to their site from social networks, which can be determined using web analytics tools, paid for or free. Whether social media traffic is diverted or not before a real opportunity substantiates, diligence in tracking the beginning to end process will go a long way to helping to make the case for social.

One of the first questions to ask should be how are leads tracked outside of social media? While some might use Excel, for large organizations this is likely achieved in the form of Customer Relationship Management (CRM) systems. These CRM systems or (even spreadsheets) will host contact information, history and sales but also leads and the source for these leads. So when tracking ‘website’ inquiries one can just as easily track ‘social media’ or ‘Twitter’ as another lead source. This will make it easier to track new leads as a result of either a DM Twitter inquiry or a Facebook wall post through the sales cycle, starting at the point of entry. Analyzing this type of data at the end of the month will provide a clear picture of exactly how many leads the various social sources have generated, if they have closed and if so the amount of the sale.

Rocket Science

Tracking leads through all avenues including social media is not complicated, but often times proving social media ROI means you don’t see the wood for the trees. The conversation around ROI needs to become more specific. It isn’t necessarily about social media in and of itself but the overarching objectives that are to be achieved through social media (in addition to other mediums or initiatives). Simply put, social underpins and can help achieve or supplement sales, leads or outreach. There is no need to reinvent the wheel and apply a whole new set of measurements for social media when it comes to sales. A diligent process and tracking system will be a good start to providing ‘real’ numbers, helping brands make informed decisions on their social strategy.

What do you think? And which side of the dividing line do you stand on? Can you define a clear return on social media engagement? As always, we appreciate your thoughts, please leave your comments below.

Tags: Facebook, lead generation, social CRM, Social Media, social media ROI, The Future of Analytics, twitter