3 minute read
Commit to tracking social media ROI in 2014
Online marketing budgets are increasing in 2014, and a larger piece of the pie is being attributed to trackable ROI. 77% of organizations polled in the Econsultancy Marketing Budgets 2014 Report are "committed to partnering, and implementing technology solutions to optimise marketing ROI." Agencies are less optimistic, only 54% believe that their clients are committed to actually optimising ROI.
Marketers are going to have a harder time getting budget approval for Social Media Marketing in 2014. Only 60% of companies surveyed plan on increasing their social media spend, down from 62% from last year. One of the reasons for the decline is that digital marketers consider social media to be part of branding. They perceive social media to have an untrackable ROI. That isn't true. Not only is social media ROI trackable, it has a distinct advantage over other forms of digital marketing. That advantage is trust.
Social media ROI you can trust
According to a 2012 Nelson Report, 92% of consumers trust referrals from people they know. Additionally, the New York Times reports that 65% of all new business comes from referrals. Internally, we've seen companies attribute up to 25% of their customer base to referrals. Savvy marketers tap into the trust between consumers that know each other. They leverage customer trust in referrals to boost sales. Making social even more attractive, 43% of consumers are more likely to buy a new product when learning about it on social media.
Proof of the benefits of reaching consumers through social media is abundant. Despite this, many marketers lack the tools to generate trackable ROI through the channel.
The easiest way to generate and track revenue through social media is to start a customer referral program. There are many great referral programs out there. The best programs share these four characteristics:
- The program provides value.
- The program is available to both new and loyal customers.
- Customers are encouraged to interact with the brand and refer their peers.
- The program is web based. It offers automated enrollment and tracking.
Providing value is the most important element of any referral program. Customers must perceive value in a referral program or will not bother to share a brand with their social circles. Rewards are the best way to encourage sharing. Some marketers choose hard rewards like discounts, cash or free products. Others go with soft rewards like increased reputation within the community, early access to deals or the opportunity to skip lines. A discount may appear to be the best reward but isn't always. Marketers should give careful thought to choosing the right incentive structure.
Encourage customers to share referrals by providing rewards that the customer values.
Tracking is what many perceive to be the biggest challenge in starting a referral program. This doesn't have to be the case. There are a few companies out there solving this problem. My company is one of those and our software Ambassador tracks referrals, return on investment, rewards and more.
An effective referral program needs to provide unique tracking URLs for each customer. This encourages customers to share their link on social media. The ambassador's friends will give preference the referred brand due to the source of mention. This is important since 49% of US consumers say friends and family are their top sources of brand awareness.
It is never too late to setup a customer referral program and get a better grasp of social ROI. It is easier than most marketers think and it helps a brand stand out against its competitors.