ROI is the herpes of social media; just when you thought you got it cured, it boils up to the surface again.
In my last post for Sensei Blogs, I highlighted this ongoing feud between proponents of brand marketing and performance marketing, which seems like a never-ending story.
The debate festers because most marketers claim that you can’t measure the ROI of social media marketing or that ROI should never be the goal in the first place. Marketing is a business function and as such, must support the business’s goal of generating a profit.
However, marketing efforts developed with a focus on generating profits often fails to consider the customer experience and ends up negatively impacting the generation of revenue and/or profit. And so you end up back at square one.
There’s growing evidence that executives continue to think of the marketing function as an expense rather than a profit center. When revenue dips and economies suffer – just as the businesses need to drive more lead generation and conversion – marketing budgets get cut. In fact, marketing is often the first budget to get cut in tough economic times.
The only way to reverse this trend is to prove that marketing efforts offer a return on investment.
Influence Marketing Will Be the Tipping Point in Social Media ROI
In our upcoming book, Influence Marketing: How to Create, Manage and Measure Influence Marketing in Social Media Marketing, Danny Brown and I put forth a model that demonstrates how the growing practice of influence marketing can measurably impact purchase decisions instead of simply driving brand awareness.
Based on the interviews we’ve conducted with brand executives, there seems to be a growing sentiment that influence marketing might be the tipping point where marketers and business leaders finally connect the dots between social media engagement and that elusive return on investment.
Instead of identifying influencers with the biggest reach and activity on specific themes, imagine an influence marketing model that identifies how consumers make purchase decisions and then reacts in such a way as to favorably impact those decisions.
Properly executed, our influence marketing strategy supports both brand marketing and performance marketing by monitoring and measuring both social media engagement and the resulting activity to a single customer profile, which, when mapped to the lifetime value of a customer, highlights the overall impact on the business’s bottom line.
Marketing As A Sales Function
Influence marketing for general branding and product awareness to large masses of people can be helpful as a supporting strategy, but without a sales acquisition and conversion effort, results are hard to measure.
Just as the practice of influence marketing must shift towards measurable lead acquisition, nurturing and conversion, the entire practice of social media marketing must integrate with other business functions such as sales, customer service, and so on.
It’s a basic idea but one that seems to have eluded businesses and marketers that still gravitate towards social media networks, tools and strategies that isolate online engagements from business goals.
Ultimately, the true measurement for marketing is its contribution to the CLV or Customer Lifetime Value. In isolation, marketing departments will struggle to connect the dots from effort expended to bottom line results generated., and will continue to be the first on the chopping block when budgets are cut.
My next post in this series will delve further into CLV and why we must re-connect sales & marketing into a cohesive business function instead of standalone operations.
And if you’re ready to take the jump into the next wave of influence marketing and where it sits in the ROI and CLV funnel, make sure you pre-order the book using the details in the box below this post.
In the meantime, join the discussion: What are your thoughts on influence marketing as a sales tool vs. a marketing tool?
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