I Have 1000s of Likes on Facebook, So Why Am I Not Getting a ROI?
“Should I spend more time and money on social media to grow my business?”
That's a question often asked by businesses owners and marketers. Up to 88% of marketers want to know the return on investment (ROI) on their social media activities. With over 1 billion daily active users on Facebook, one can’t miss on that opportunity.
It’s the trend and social media is where everyone's attention is.
So if you're a content marketer, you'll need to know how to break your efforts down into numbers. Because remember, anything can be measured these days, including content.
If you're a content writer producing the content, remember that you're part of the investment, and knowing how to produce returns on your client's investment is what makes you a valuable asset.
You're probably thinking, "But there are so many quantifying metrics out there! Which one do I take into consideration and how does it contribute to my ROI?"
It really depends on what matters to the client. Do they want likes, shares, engagement, sales, sign ups, downloads, or so on?
The key here is to pick and choose best metric for your business goals.
Here we’ll talk about one so-called predictor of ROI: Likes (Likes on the Facebook page and individual posts). Let’s start.
How is social media ROI measured?
First, know the basic formula for ROI:
(Return - Investment) / Investment.
Net Profit / Total Investment.
For social media to work, this means your Return should be a bit higher (or much higher) than your Investment. This way, the amount you’re spending (including time and money) will be worthwhile.
- How is Investment measured?
Add the direct costs of creating a post including the text content and visuals, personnel, and management. Also add the training and setup costs.
- How is Return measured?
If a Facebook post resulted in a purchase or a new signup, add it. Also, calculate the lifetime value of each customer acquired.
How is social media ROI increased?
Measuring the ROI itself is complicated. Increasing it gets even more complex. This is where it gets tricky.
The first metric many marketers use to measure and predict ROI is by Reach. If you reach more people, you get a better chance of making a sale or gaining a new customer.
The question then is: How do you reach more people?
In social media, especially Facebook, one way to reach more people is by increasing Engagement for your FB page and individual posts. If more people are engaged or interacting with your Facebookpage and posts, there’s an increased chance of reaching more people.
It’s the result of a Facebook Newsfeed algorithm change. If more people care about your Page and posts, it’s likely your posts will show more to your fans and even non-fans. Facebook’s goal is to show more of what the users care about.
So if you know that you can reach more people by increasing Engagement, the next question is: How?
What do 'Likes' really mean for ROI?
Do more Likes equal to higher Engagement?
Engagement is defined as how many peopleinteracted with your Page. Maybe they clicked a link, added a comment, "Liked" a comment, or "Liked" the post itself. This means people paid Attention to your Page and Attention is the main currency of any marketing campaign.
This means the more Likes a post got, the more people paid attention to it. Also, the more Likes a Page has (more fans), the greater chance of reaching more people. It also accumulates results and becomes a positive feedback loop because of social proof, or when we copy what others do.
In other words, more Likes result to higher Engagement. This then leads to more Reach, which in turn results to more purchases and customers.
But wait, there’s a catch
Up to 6 out of 10 small business owners say they weren’t seeing ROI from their social media activities. Yet there’s a good chance that their Facebook Pages and posts are gaining a significant number of Likes and Engagement.
So where does all the time and money go?
The answer is: Quantity doesn’t always equal Quality.
More Likes doesn’t guarantee more customers. One reason is that you may be attracting the wrong kind of Likes.
The goal of marketing, whether online or traditional, is to get the attention of the people most likely to buy from you. It doesn’t matter if you have a million Likes but no one buys. Instead, it's better if you only have a hundred likes, but 50% of those people buy.
Take the content marketing website Copyblogger for example. Their Facebook page had 38,000 "fans" but when they post great content or ask questions on their page, they received only single-digit responses.
So what did they do? They killed their Facebook page. It came to a point where it was more effort than it was worth.
What matters in the end, is whether you’re getting any tangible results from your social media activities.
The reality is, more Likes don’t always increase ROI. Also, people have a variety of reasons for liking your page or posts. Keep in mind that hitting the Like button is quick and easy. Maybe they just accidentally Liked the post. Or they just liked your jokes and quotes about life. This kind of reason won’t guarantee they would turn into customers later on.
So why are 'Likes' such a big deal?
Mainly the reason for this is that it’s easy to see, report and understand. Just keep in mind that often, the number of Likes has no direct link to your overall business goal, which is to gain more customers and sales.
It’s what marketers and business owners call one of the vanity metrics. It looks and feels good when you see the numbers go up. But when you check the sales and profits, nothing has changed.
If a Page has over 1 million fans, does it automatically mean more customers for their business? For multinational corporations with big names, it matters (they have their brand awareness goals). But for most other businesses, the main goal is to get more customers in the least amount of time and money.
How can Facebook be maximized for ROI?
Keep it a part of your marketing mix. To get better results, follow the "10:1" rule when posting (some even go up to 20:1).
The 10:1 Rule
You publish 10 interesting and helpful posts and then 1 post about your products or services. This is to make your Facebook Page more human and less of a business.
Facebook best complements other marketing channels and tactics. Often, it’s not alone in spreading the word about your business. Maybe people saw a flyer and decided to visit your Page. Maybe they went to your Facebook page through your blog or website.
Gaining more Facebook Likes is not the end-all of your marketing.
The goal is to attract more qualified customers and make more sales. Also, it’s about getting the most out of your effort and money. It may or may not involve using Facebook, as long as you achieve your business goal.
Should I still use Facebook for marketing?
Now that you’ve learned more Likes doesn’t always equal to more ROI, does that mean you should stop using Facebook to promote your business?
Not at all. Think of Facebook marketing as a necessity. Today it’s almost an intrinsic part of almost any business. If you’re just starting out, try it and see if it works for you.
Use all available resources possible and try out different social media platforms. You might gain great results with LinkedIn, Twitter, Google Plus, Instagram, Snapchat or others. Give it a couple of months or so - it'll give you enough traction and data to ascertain which one's the better platform. If you’re seeing big results after some time, then that’s the platform for your business and you could focus on that.
Do you have a Facebook marketing fail story you'd like to share? Let us know in the comments - we'd love to hear from you.