SMEs and Social Media: The Importance of ROI
Australian SMEs’ commitment to Social Media has grown considerably in 2010. According to a recent study conducted by Melbourne IT, one third of Australian SMEs have established a Social Media presence. Is Social Medial working for SMEs? What benefits do SMEs get from Social Media? Do they generate revenue from Social Media?
Melbourne IT’s eBiz Review 2010 reveals that SMEs benefit from Social Media. Among Social Media users, 85% cite benefits to their business, with 57% saying they are attracting new customers via Social Media. Just under half said it helped them explain their products and services in new ways and just over half said it helped put a ‘human face’ to their business.
Increase in Revenue?
The study also revealed that SMEs generating 20 percent or more of their revenues from their website were more likely to use Social Media. More importantly, it showed that there is actually a correlation between Social Media and increasing online revenue. SMEs that used Social Media as part of their online business strategy were more likely to achieve bigger revenue returns from their website. However, are these companies able to track the revenue that was generated through Social Media and assess the effectiveness of their Social Media Strategy?
Measuring the ROI
Measuring the effectiveness of a Marketing Strategy and calculating its return on investment is imperative. That applies to Social Media. Like any other branding or promotion tool, implementing a Social Media Strategy costs businesses in terms of strategy, execution, maintenance and review time. It is not as simple as setting up a Facebook Business Page and hoping for the best. It is therefore crucial for SMEs to think about how Social Media fits their overall online strategy and more importantly how they can measure the ROI. While it’s quite easy to measure ROI from traditional Online Marketing, it’s more difficult to measure ROI from Social Media Marketing. Since the beginning of this year, companies have tried to address that issue. Webtrends, for example, released a tool that allows marketers to measure deep metrics of all major Facebook features and help them track conversions and measure their ROI. Marketers can also use a free opensource application (Facebook Google Analytics Tracker) to track their Facebook Business Page visitor’s statistics, traffic sources, visitor countries and keyword searches through Google Analytics.
Before jumping on Social Media and to make the most of it, we recommend SMEs to develop a Social Media Strategy and define their goals. Seeking professional advice can help businesses implement the strategy that is right for their specific industry and target market and get the best return on investment.