Social Media ROI Cycle: Navigating the Stages

March 5, 2011 1 Comment

We like to keep our readers informed about social media and marketing and among our recent posts were an article on social media and mobile commerce and a look at how small businesses are using social media. Today though we wanted to take a look at return on investment and particularly the social media ROI cycle.

We wanted to look at how businesses go about establishing and running a social media campaign and an intriguing article by Jamie Turner over on Mashable gives us some insight into what he calls the “3 Stages of the Social Media ROI Cycle.” He sees this cycle as three clear stages, the launch, management and finally optimization and tells more on each stage. The launch cycle requires the focus to be on the main social media sites, Twitter, Facebook, LinkedIn and YouTube but may also include other sites. The approach is executional, and the objective is to quickly achieve a social media presence, although at this stage the results will be negligible.

Going on to Stage 2, which is the management stage, the approach moves to being more tactical with a mid-term focus and the objective being to engage with customers, while the results at this stage should be a growing increase in traffic. The final stage then is optimization which uses a strategic approach and long-term focus. The objective by now is social media ROI with the results being real revenue growth which is of course what all social media campaigns should be about.

Turner estimates that around 50% of businesses are still in the launch stage, around 40% in the management stage and only around 10% in the optimization stage but of course with more and more companies climbing on board the social media train we should see a real increase soon in companies reaching the optimization stage of sales and revenue growth. For much more detail on each stage and pictorial explanations head to the full article at the Mashable link above.

Does your company use social media marketing and if so which stage do you think your business has reached on the social media ROI cycle? Maybe your company has already reached the optimization stage? Let us know with your comments.

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  • http://blog.zuberance.com Crystal HPeterson

    I agree Debbie – this is a great article, but I think its important to take a step back and think about why social media is so powerful in the first place. People trust people overwhelming more than marketers or brands. When we talk about engaging with customers and prospects, wouldn't it be powerful if brands invited their best customers (aka Brand Advocates) to join the conversation too? Doing this also moves us one step beyond listening and engagement in Social Media marketing.

    Advocates are a distinct segment as compared to fans and followers. They do not merely like or love a brand – these highly enthusiastic customers go out of their way to recommend your brand.

    Every company has passionate defenders (even in categories like telecom, software and financial services), and by energizing them to Advocate for your brand via social media you amplify positive Word of Mouth.

    Here is a larger look at the power of the Advocate Channel to drive qualified leads and turn social media directly into sales. http://bit.ly/hSpcbw.