Social Media & Networking, Is There an R.O.I.?

It’s been an argument since businesses starting venturing into the area called social media/networking. How, if at all, does a business measure social media’s return on investment?

Some say it’s not important to measure because social media usage is invaluable-and mandatory-to build your brand, and is a cost of doing business in today’s modern marketplace. Others say calculating ROI is important in every aspect of a well-run business. Others say it’s less about return on investment and more about return on customer engagement.

Retailers across the country vary in social media use-whether it’s Facebook, Twitter or any other site-but most agree that it’s red hot.

Amaya Chalker, whose family owns Alpine Sports, a ski retailer in Santa Fe, N.M., says she doesn’t utilize the store’s Facebook account to its fullest.

“I don’t have enough time in the day to sit down and do it,” Chalker says.

With between five and 10 employees depending on the season, Alpine Sports’ staff is focused elsewhere-but Chalker says she plans to use the seldom-updated page more often when Alpine Sports launches a redesigned website in October.

“We’re just trying to keep up-to-date with the whole Internet (phenom),” she says.

But social media sites are still among the cheapest ways to market a business, and the “return on engagement” potential is huge.

Social media is a way to leverage small staffs and limited resources. Seth Haber, owner of Trek Light Gear, a company that sells lightweight hammocks primarily online from its headquarters in Boulder, Colo., has a small staff. He’s it. Harber says a good portion of his business comes from social media use.

“The more you get the name out there the more things come to you,” Haber says.

For Haber, social media use takes time and dedication. Followers and fans won’t come overnight. Interactions may be few-and-far between in the beginning. And it won’t necessarily entice customers to walk through the door or click on a link to buy products.

“It took a little time to grow,” says Mike Tracy, Seattle Ski and Snowboard’s store manager.

- SkiingBusiness.com

Even though Seattle Ski and Snowboard didn’t start using Facebook until a year ago because of the time involved, he says setting up the page and consistently posting to it is worth the effort.

“Putting anything on Facebook is a reminder about Seattle Ski,” he says.

Like Tracy, Sepp Kober, co-owner of Freestyle, a ski retailer in Charlottesville, Va., wants people to think of his shop when they think of Virginia ski retailers. And social media is a way to keep the shop visible.

“It is by far, in my opinion, one of the best ways to reach a certain segment of your consumer base,” Kober says.

If it gets someone in the door-even if the customer doesn’t initially buy anything-Kober views it as a success because hopefully the customer will return to make a purchase.

But many social media gurus say the customer engagement is crucial when developing an online reputation. People want to interact.

“The most important aspect of the whole medium itself is that it has to be a two-way conversation,” Haber says.

-SkiingBusiness.com