Social Media: Measuring Your Company's ROI
Michael Sinkin, D.D.S. practices dentistry near Grand Central Station in New York City. He took over his practice from a dentist who retired, and inherited many patients who were near or past retirement themselves. So Sinkin set out to add some younger patients to round out the practice.
Reaching this age group meant going online. "No one uses the phone book anymore; everyone is Googling," he notes. But that presented a marketing problem, because other, much larger practices in midtown Manhattan were making heavy use of Google AdWords, in which advertisers bid on such search terms as "New York City dentist." "A lot of these practices were investing $25,000 to $30,000 a month in pay-per-click advertising," notes Betsy Kent, president of Be Visible Associates, an Internet marketing firm that works with Sinkin. "That just didn't make sense for us."
Instead, they devised a social media-based strategy with the goal of bringing in new patients, especially those in their 20s, 30s, and 40s. Sinkin was already writing short items about amusing or interesting things he encountered in the course of his work, so they began publishing these as blog entries. In addition, Kent began searching Twitter for local tweets with the words "dentist" or "dentistry" in them. When she found someone complaining of a painful trip to the dentist or dreading an upcoming visit, she would send words of comfort and commiseration.
Some of these tweeters appreciated the kind words, followed the links to Sinkin's website, and liked what they saw. "We've been doing this for about 10 weeks, and I've already gotten four new patients," Sinkin says. In his profession, a new patient can become a lifelong customer, as well as a source of ongoing referrals, so the increase is very significant. "And I'm not even counting two patients who just came in for emergency service," he says.
Who says you can't measure ROI for social media?
As Sinkin's experience shows, it's perfectly possible to set concrete goals for social media, beyond the vague "increasing visibility." In fact, it's imperative, says Dallas Lawrence, chair of the social media practice at Levick Strategic Communications. "Be wary of the salesperson who says social media isn't trackable," he says. "It's absolutely possible to calculate the return on investment (ROI) for a social media campaign."
Here are some tips for making sure your social media efforts really do have a positive effect on your company's P&L:
Set goals, not just benchmarks. "It's critical to establish an objective in advance," Lawrence says. "That objective has to relate to your business model, to whatever your ultimate goal is. So setting a target for, say, 10,000 Twitter followers is not a goal in itself, though it can be a good benchmark for whether the campaign is working."
At Home Creations, a home builder in Oklahoma that caters to people building their first homes, marketing director Jan Astani recently achieved her goal of 1,000 fans on Facebook. To get there, the company offered incentives, such as a $50 Target gift card for two randomly selected Facebook members who became fans during December. But the goal serves a business-focused purpose. "For 2009, our goal was to put an emphasis on Internet marketing," she says, noting that at least 75 percent of Americans start their search for a new home online. "We're trying to drive traffic to our website with everything we do." It appears to be working: Website traffic was up 50 percent in 2009 over 2008, Astani reports, and there were a record number of sales that began as Internet-based sales leads.
Think long-term vs. short-term. "Decide up front if you're trying to reach a long-term goal or a short term objective, because the approach will vary dramatically," Lawrence says. "For instance, if you've got a promotion or a new store opening coming up, you can jump-start something very effective with Twitter, but it might not have a long term effect. If you want to build sustained momentum, you might want to think about reaching out to the blogosphere with thought leadership."
Whatever you do, he adds, don't look at your various social media efforts in isolation. "A big mistake that I often see is when customers say, 'Give me a Twitter program, give me a Facebook program, give me blog outreach, and let's do SEO.' They're not separate. In order to get the impact you want, you have to intertwine all those pieces and let them build on one another."
Use the Internet's power to reach precisely the audience you want. "People are shocked when I tell them that, with Facebook's user applications for small businesses, I can find my key customer base right down to the block he or she might be on," Lawrence says. "I can find the information they readily provide: age, race, single or dating status, ethnicity, parents or childless, military or civilian, based on the groups they've self-selected to follow. And you can often figure out income status from the other information."
Be prepared for a mid-course correction. What if you fail to meet the goals for your social media campaign? "Take another look at your goals," Lawrence advises. "Make sure that they were reasonable." Perhaps a different goal would be more appropriate realistic. But, he says, "Make sure your overall objectives are never forgotten."