I do believe the power of social media to small businesses, but entering a year into social media, I start to wonder whether small business owners are wasting their valuable time, mingling with social media or not.
Let us take Twitter for example.
I, like many small business owners/bloggers out there, use my Twitter accounts (both my personal account and my Noobpreneur one) to have a short chit-chat (in 140 characters or less, of course) with some friends and colleagues, as well as sharing ideas and news while occasionally pitching followers with business opportunities and products they might find interest in.
I do follow as much best practices as possible, and do reap benefits from the social media I’ve been involving with, such as Twitter, in term of delivering traffic and affiliate sales to my sites.
But a question popped in my head (and this question has been discussed at times on events and forums): What’s my ROI with social media?
Social media and small business ROI
Of course, to correctly measure my ROI – return on investment – with social media, in term of the impacts on my sites, I use some tracking tools, such as Google Analytics and other traffic reporting tools.
I’m not investing any money in my social media activities, so the ROI is calculated against the time I spend for social networking purpose. What to measure? The percentage of traffic referred from social media, and the amount of money directly generated from my social media activities (which is not a lot.)
There are Internet marketers claiming to make thousands of dollar a month from Twitter, YouTube or FaceBook, but I’m not convinced, yet, whether the social media can deliver such amount of money to their users – unless, or course, what the Internet marketers sell is the tools to help social media users to aim for the big bucks (and selling the tools can make you way much more money than using the tools yourself!)
Overall analysis result, as of today: My social media activities are a waste of time, in term of ROI. My bad.
Some nice amount of traffic from Twitter and other social media to my sites, with a couple of hundreds of dollar in affiliate sales and several business leads (with no sales closed) – All in a year of social media activities. Not quite the results I expected.
The good thing about my social networking activities is definitely the buzz (that includes brand image and reputation building), which is intangible, but I can see the impact, nevertheless, reviewing the comments, messages and feedback from fellow social media users.
Consider this diagram and the analysis from Intersection Consulting Flickr account:
Here is their explanation why ROI on social media is pretty much vague:
Some people ignore or abandon social media because of its digital nature – they might not view the benefits of online social networking in the same way they see the ROI of being a member at their local Chamber of Commerce.
And here is their opinion about social media:
In my opinion, online social media and face-to-face networking need to be viewed through the same lens. Both involve social interaction, contributing to a community and getting out what you put in – The only difference being the medium.
Small business owners: To social media or not to social media?
Sure, the blame is on me – I should find a way to use social media more effectively (and indeed, I’m on continuous learning mode, days in and days out.) But with some colleagues indicating the same results, I doubt that social media can bring you more than buzz (and the good feeling of socialising.) Maybe I should invest more than a couple of hours a day in social networking? I don’t know.
One thing for sure: Just like Facebook that still looking for a way to make decent money out of millions of dollar invested, you should consider social media as a vehicle to help promoting and building the brand of your small business. Avoid having yourself trapped in social networking activities (yes, social media is addictive!) with no visible benefit for your business.
Any thoughts or stories to share? Please do so by commenting on this article.
Ivan Widjaya
Small business and the social media