Throwing light on social media's ROI.

• Author: Brennick, Joshua
• Position: SOCIAL MEDIA - Return on investment

SELLING THE IDEA OF SOCIAL MEDIA TO MANAGEMENT CAN SOMETIMES BE A PROBLEM. There are always one or two objections that are raised. One common objection is that there is no way to measure return on investment (ROI). There are ways for advocates of social media to respond to this objection.

When it comes to social media, it is possible to measure ROI only indirectly. Yes, you can get a solid, traditional ROI if you were to run advertisements on social media platforms. However, calculating a traditional ROI is much harder, especially when it comes to the overall impact of your social media efforts.

According to a study published by RightNow, a customer service consulting firm, 85 percent of U.S. consumers say they would pay 5 percent to 25 percent more to ensure a superior customer experience. Take a moment and ask yourself, what is the ROI for superior customer service? There is no formula that calculates how many positive interactions it takes to result in a sale or in a recommendation. Yet successful managers and salespeople spend a great deal of time and effort on earning their customers' trust with outstanding service. This is something that you should remember when trying to measure social media ROI, since superior customer service and communication are two primary functions handled by a bank's social media presence.

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Customer service and communications

Many banks have experienced the power of social media to earn the trust of their customers and forestall service problems before they lead to a dissatisfied customer. For example, one of our client banks had a comment posted on its Facebook page about online banking not working. The bank responded quickly and explained the situation. The inquiring customer publicly thanked the bank for its swift response. Without social media, this client would have been left in the dark and could have begun to question the quality of the bank's systems and service. Instead, because of the "conversation" that social media allows...