What Is The Real ROI On Your Social Media Marketing?

It is now standard operating procedure for business owners and other self-employed professionals to have a visible presence on one or more social media platforms, in addition to a website. We’ve internalized the assumption that there is no way to launch or sustain a viable business without an active online presence spread over an array of platforms. The reality is that most of us in business are afraid to dial back the social media and so the practice continues. We fear that if we don’t participate, competitors will eat our lunch and customers will abandon us.

Many of our colleagues and competitors spend rather a large amount of time tweeting, posting photos to Instagram and videos to YouTube, friending and linking with 500 or more “connections.” But really folks, what is the demonstrable ROI of this activity? How does social media build and enhance your brand, generate leads, or result in sales?

Those who sell services depend on referrals that are based on trust and reputation. How can those attributes be communicated electronically to strangers? Beyond a certain point, I respectfully submit, social media activity results in little more than a creative way to waste time and money.

Alan Weiss, president of Summit Consulting and author of numerous books, including “Million Dollar Consulting,” has for several years offered to split his (large) consulting fee with anyone who shows him how to acquire a client purely through social media or any other online channels. To date, there have been no takers.

Still, I’ve observed that in certain businesses and organizations, social media and website marketing can yield a good ROI. Performing artists, clothing designers, restaurateurs and professional organizations come to mind as excellent candidates for Twitter, Facebook, YouTube and Instagram to provide outreach and engagement with past, present and future patrons.

On the other hand, there are social media and website holdouts and at least a few are making a good living. Maybe they possess valuable competitive advantages, such as excellent word-of-mouth, which is always the best form of advertising, and exceptional skills?

Among that group I am friendly with two interior designers who have more clients than can be handled (in three or four cities, mind you) and the owner of a small neighborhood breakfast and lunch restaurant that is nearly always packed. Moreover, three of the six most successful solopreneur consultants whom I know do not even show up in Google searches.

In a 2016 survey of 350 U.S. businesses with 10 or fewer employees and annual revenues of $1,000,000 or less, 46 percent have no website. Of that group, 12 percent rely on Facebook and other social media platforms in place of a website. Lack of demonstrable benefits, cost and the time required for online updates were the most frequently named reasons for opting out.

I do not advocate that solopreneurs and business owners close down your online presence. Rather, I recommend that you consider the ROI of your social media marketing investment, integrate with your traditional marketing and advertising strategies and confirm that what you feel are the correct social media metrics actually measure activities that benefit your organization.

Thanks for reading,

Kim