Creating a Profitable ROI with Social Media Marketing in 2010

The most common question I hear as a Social Media Marketing Consultant is this:

How do I get the highest ROI from my social media marketing campaign?

Businesses want to know what the return on investment is for using social media, but it's a complex question to answer for many reasons. Like any other marketing plan it depends greatly on the investment you put in.

The most important thing to remember is that you actually have to make an investment to expect any kind of return. Another interesting point is that looking only at the bottom line does not give you a full scope of what your return has been. The main difference is that social media is not only a tool for marketing; it is also a great customer service tool and provides open interaction with your consumers.

Another common question is what are other businesses doing? It's a good question to ask especially if you are looking at direct competition, but ultimately looking at how other businesses use social media can only reveal a fraction of what you need to know. Social media is based on the relationships you build with people and the consumers you are interacting with. That is going to be different for every business.

So how do you get the best ROI from social media marketing?

There is no magic formula that will get you results because this marketing plan should be customized for every business or professional individually. You actually do need to invest time and money in order to expect the best return. The biggest problem with most business is that spend tons of money setting up a social media marketing plan and then never consistently engage consumers with it. Social Media is not something you can set up and forget. For example a Facebook page for your business with no updates or calls to action for your consumers is doing nothing for you. You have to actually engage your consumers in order to get a return on your investment and that requires consistent plans to develop content and engage interaction.

The number one reason businesses fail with social media is that they try to go it alone and end up feeling like they waste all of their time with social media getting no return at all. This can often be one of the biggest mistakes-simply because most businesses do not have the skills to successfully implement this type of marketing plan. You end up wasting time and resources because you don't know how to use social media efficiently or effectively. What this means is that you can not think of social media as a one time project-this is something that takes time and effort to work effectively. Consider using a professional social media consultant to help develop or manage your plan.

Generally in business you need to realize that your return is only as good as your investment-this means if you plan and use your resources wisely then you will end up with a better return. The strict picture of ROI is the bottom line-but that is not the approach you need to have when considering social media. There are more advantages to your business in developing a strong social media presence than just the bottom line return. By engaging your consumers you can gain valuable insight into what they want and with excellent customer service you will increase your consumers' loyalty and referral business as well. Yes, businesses need to think of the bottom line-but they also need to recognize that to get to the bottom line investments must be made, processes need to developed, and relationships need to be built. Without these things, a profitable bottom line cannot be achieved.

Social media is one of the only ways to directly target your demographics, you can advertise directly to your consumers based on exact demographics giving you higher conversion rates on your ads. With all these things being said I encourage you to consider using social media because it can be one of the most profitable forms of marketing for your business if you do it the right way.

For those who want to learn more about how to create a profitable ROI using our practical guide to social media marketing download our free e-book here:

A Practical Guide To Social Media Marketing: The Essential Steps to creating a profitable ROI

If you had any lingering doubts that social networking is here to stay, doubt no longer.

Here are some interesting facts about social media:

Social Media is currently the #1 activity on the Web

The American Dialect Society announced that "tweet: is the top word for 2009, and "Google" is the top word of the past decade.

By 2010 Gen Y will outnumber Baby Boomers....96% of them have joined a social network

78% of consumers trust peer recommendations & only 14% trust advertisements

80% of Twitter usage is outside of Twitter...people update anywhere, anytime...imagine what that means for bad customer experiences? Twitter also grew by over 500% this year.

Facebook has over 350,000,000 active users world wide and they share over 1.5 million items daily-do you know what they are saying about you and your brand?

Facebook reaches 56% of the active U.S. Internet universe with an average usage of 6 hrs a month per user

Time spent on social networking sites in the U.S. increased 277% this year

Sources: Socialnomics, Techcrunch, Facebook, Twitter