Why you should invest in social media
After years of creating social media strategies for our clients, we have learned a lot through trial and error on what works and what does not work in the social media marketing realm. We have also learned that depending on industries, your ROI varies immensely and so is your approach to the market.
We have worked side by side with restaurants, retail, wholesale, E-commerce sites, doctors, spas, corporations and many more categories that we have enough data to prove and measure how a social media campaign will work for you and the metrics to look at when considering making a social media investment.
The following data are mainly applicable to small and mid-sized businesses, not big brands like Pepsi, Dove or M&M’s.
When first speaking to a business, we try to understand the full nature of the business, the customer base, demographics, the consistency of the brand, the efforts already done on marketing and their online reputation. This is called “Social Media Preparation”. It is no different from meeting a new person and getting to know them well before you jump into any type of relationship.
Based on the full understanding of the social media preparation, we move to “Social Media Expectancy and Projection”. This is where we start projecting numbers and reasonable estimation. Here are some examples based on industries:
Dentist: light marketing – Expected average monthly exposure over 12 month period: 300 new visits per month – possible conversion %1= 3 new customers per month– estimated transaction cost with each new customer is 3K – These customers are most likely to return for clean-up and maintenance in the next 12 months bringing an extra 2K which brings the value of each new customer to 5K.
Let’s do the math: 3 customers/mo x 12 mo x $5,000/yr = $180,000/yr
Social media spend should be 1/10 at the most which is $18,000/yr or $1,500 /mo
Dine-in Restaurant: Aggressive marketing- Expected average monthly exposure over 12 month period: 1000 new visits per month, through likes, recommendations, reviews, checkins, etc.. Conversion for the restaurant industry is slightly higher than other industries as it is an easy sell and a more needed commodity. So the conversion could go up to 3% if done right, which could reach 30 new customers per month. Assuming an average spend of $40 per visit for 2 people and an overall 6 visits a year for a decent restaurant. This is a total of $240 /year spent by each new acquired customer.
Let’s do the math: 30 customers/mo x 12 mo x $240/yr = $86,400/yr
Social media cost should be 1/10 at the most which is $7200/yr or $600/mo
Take-out Restaurant: This is relatively similar to the Dine-in except that the customer spend is half so if we split our metrics above in half would bring us to: $43,200/yr in return and a $300/mo spend on social media
Gym: Aggressive Marketing: Expected average monthly exposure over 12 month period: 700 new visits per month. Customer acquisition in this market is more difficult as end users are either already committed with another gym, or they are inactive to begin with or they are ready to commit. So let’s divide the exposure to a third with 1/3 of inactive users converting to interested gym goers: total exposure is 300.
With a conversion rate of 2 % 6 customers with 1 year commitment is almost $600 spend per each customer. Let’s do the math: 6 customers/mo x 12 mo x $600/year= $43,200/yr
Social media cost should be 1/10 which is $4,320/yr or $360/mo
And we can do similar projection with different industries.
The bottom line is you should not invest blindly in anything without understanding your ROI, but with social media, if you use the right tool, such as vbout.com, as well a s a good strategy, your ROI is guaranteed, and more.