Hi,

I can't give you a direct response to this but we are using for brand awareness only and not as a sales tool. I just don’t think people want to be sold to during their leisure time.

Yet to be convinced that advertising on social media sites actually does anything for you apart from waste your time.

I do want to be convinced like you it is a worthy effort.

Hi Gareth,

I think it is very hard to create a financial ROI for sites like Facebook & Twitter. Social media is more about building an engaged community and creating/maintaining a positive online brand identity than direct ROI. It is a bit like the investment in TV advertising versus direct response. The very nature of a social networking site indicates people are there for social reasons, mainly to share content and not to buy. That's not say you can't get a sales but you have to find an audience that is willing to interact with your social media channels for buying purposes and you also have to understand the different communication channels available for each social media option.

If you look at the Dell Outlet account on Twitter, it has generated over $1m in sales. However, Dell has about 50 Twitter accounts and the Outlet one exists purely to offer discounted products - they also have excellent customer service and relationship building accounts so customers aren't being sold at, they are choosing to also follow a sales based service as part of their Dell “Twitter experience”.

If you look at Facebook, Wiggly Wigglers is using this effectively. The group page is based around adding value and engaging with members. Heather’s team post regular content, link to their podcasts and information & products on the website. This does drive traffic. However, the key marketing tool to generate sales is the weekly email that is sent to the group – this email is more like a story newsletter, fun & interesting but with a clear sales message and unique offers to the Facebook group. The reason it works is because the focus on the group page is to provide relevant, fresh content that people can use & share, so people are more willing to receive an email that is promoting products & offers. If you want I can post their latest email to this thread – the content is brilliant and whilst it directly sells, you just don’t feel that you are being sold to.

What are you doing on Facebook and Twitter at the moment? How much value are you adding to your fans/followers? Are you making it interesting and relevant for them to regularly visit your profiles? Also, are you promoting these social profiles across your marketing mix so that anyone who visits your website/blog etc can access these? Do you use the group email option in Facebook to give that audience unique offers?

With social media, I personally believe the key is brand reach. I also think that in time we will learn that the ROI comes from increased loyalty and repeat visits/purchases – perhaps now is the time to define loyalty metrics using your analytics tools and measure how the % of revenue from returning customers changes in comparison to new customers. If you can increase repeat purchase and lifetime value, perhaps that is a telling ROI measure for social media investment.

Thanks

james