Twitter Facebook LinkedIn Flipboard 0 “Facebook!” was the answer of a hotel owner in Fairy Meadows, Gilgit, when I asked him where he gets his clients from. As baffling the answer was, it actually tells you about the state of social media, and how far it has spread in different parts of the world. Social media has gone from hip to being a serious business trend. From students to parents, and business owners, everyone’s using social media. Businesses are investing in Facebook, both in terms of time and money; here we look at what are the dos and don’ts of generating good ROI (return on investment) for a business on social media. Here are a couple of points to consider. Engagement is not ROI There is a common misconception, and one that is costing businesses and corporate entities a lot of money. There is a perception in the market that the more ‘likes’ you have, the more beneficial it will be for the brand/product. However, the benefits are rarely quantified in terms of sales or profits and that’s where the ROI is lost in translation. In terms of engagement, brands managers tend to believe that it will be more beneficial if they are able to engage more of their audience on the brand’s fan page – which will in return help them get a better ROI. A case-study which proves it so is yet to be seen. There are brand pages with over a million likes, and yet the conversion from ‘likes’ to revenue is not present. Don’t forget the web The web, no matter how stale or ugly, is still a part of the internet ecosystem and should not be ignored, regardless of whether you want to bring your business to social media or not. A very good example of this approach are the e-commerce websites, which are making a wise move by investing an equal amount in web and search functions along with investing in social media. Their ROI is not just governed by customers who see their promotions, product offerings and other such messages on their newsfeed at the right time, but also those customers that stumble upon their advertisements on Google and other sites. These advertisements trigger at the right time to generate sales. Social media is an extension Social media is not the only tool that is available, but is a vital part of the modern ‘communication’ ecosystem. It is important to realize the existence of other channels in the communication ecosystem, such as television, radio, print, email, websites, blogs and etc. It depends on the nature of your business, and is decided while drawing up the marketing budget. It is important to set an objective for social media spending and what you can expect to get out of it. Take the example of a woman who sells cakes through an online bakery on Facebook. For her, social media is just an extension of the work she does, and uses Facebook to only showcase her products and to get in touch with new clients. It is not a good idea for her to spend a large sum on advertising to get new clients. Play on scale Social media spreads the message quickly, and most social media users are impulsive buyers, therefore it is a good idea for you to invest in social media if your sales cycle has a quick turnover, combined with the fact that you can deliver high-volumes in a shorter time frame. Otherwise, it can wreck the reputation and ruin your business. An example of a t-shirt producer, which starts by investing into social media and then spends a heavy chunk on advertising, but fails to keep up with the customers’ demand and therefore ends up earning a bad reputation. In this case the business would have a negative ROI. Start small and go big Starting with a small investment mitigates the risks of losing big; it is one of the basic fundamentals of running a successful business, and investment in social media is no different. It helps by giving an understanding if the medium selected is suitable for your business or not. Moreover, it will help you understand the strategy and model, and provide insight if social media works for your business or not. Try to explore the positive effects of social media for the promotion of your business and avoid the negative ones! Social media on mobile devices would mean a whole new world altogether. Imagine one-click carts on screens, key message posts and tap-to-call buttons. Facebook has already started experimenting with special ad formats meant for mobile devices, and as the numbers grow it is going to become very challenging for businesses to figure out the returns for their investments. The key to surviving in this whole scenario is to have a strategy for ROI that involves small investments, full accounts for stability, and recognizing social media as an extension of your business operations. Twitter Tweet Facebook Share Email This article was written for Business 2 Community by Connor Brooke.Learn how to publish your content on B2C Author: Connor Brooke Connor is a Scottish financial expert, specialising in wealth management and equity investing. Based in Glasgow, Connor writes full-time for a wide selection of financial websites, whilst also providing startup consulting to small businesses. Holding a Bachelor’s degree in Finance, and a Master’s degree in Investment Fund Management, Connor has … View full profile ›More by this author:ACH Crypto Price Prediction 2022 – Is it a Buy?Lucky Block Partners with Dillian Whyte ahead of Heavyweight Showdown with Tyson FuryNFT Pixel Art – The Best NFT Collections for 2022