What’s The ROI of Social Media for Consultants

The big question with Social Media is “is this worth my time?”

It’s an important question to ask each and every time you weigh the options and decide where to invest your energy and resources. I will answer this question for you, but we need to address a few issues first…

When you think of Social Media as the ability to have conversations with far greater impact than ever before and in a way that allows you to create and foster a community more efficiently

Some people say “Social Media is a fad.”

The definition of a ‘fad’, according to Dictionary.com, is “an intense and widely shared enthusiasm for something…that is short-lived.”

Most fads come and go.

And if you’re looking to capitalize on them you need to catch them well before they hit their peak.

If you jump on board too late in the game you will still need to put in as much effort as the person who got involved months or years before you…and yet the return you can expect is often far less.

The Numbers May Not Add Up

When you take a look at the infographic below from Pagemodo, your first reaction about the ROI of Social Media may not be a positive one. Take for example, that only “20% say social marketing is producing a measurable ROI…”

And while this study showed that “64% of business owners investing in Social Media Marketing were confident it will deliver a return” on the same page it shows that only 25% of survey respondents can attribute an increase in sales to Social Media.

As astute marketers we all pride ourselves on our ability to track our advertising and marketing and make it accountable and measurable. If you read the headline of Eric Savitz’s article in Forbes from August 2012 titled “3 Reasons Why There’s No Measuring ROI on Social Media” you may come away with a sour taste in your mouth for Social Media.

Luckily there is hope. Savitz in fact does outline 3 suggestions on how marketers can make Social Media measurable. For example, he recommends that you “establish correlation” between what you are doing in Social Media, your brand’s performance and sales.

Brian Solis takes this a step further by outlining some great ways to think about ROI and Social Media. The key he says is “tying social media to business objectives and metrics [which] helps…see a clearer picture.”

In a report by Susan Etlinger from Altimeter Group, you’ll see exactly how this works.

Here you clearly see (and can imagine) how a company uses Social Media to resolve customer service issues more efficiently, which reduces call center traffic, which in turn improves the company’s financial performance.

At last! We now get a sense of how Social Media can impact ROI.

A Key Problem

The reason most people don’t get the results they are looking for with Social Media is because they go about it the wrong way.

“80 percent of marketers incorrectly begin with tactics instead of goals.” -eMarketer Report

As you can see from the above funnel image, the key problem is that people get all excited about social media and jump right into ‘tactics’ instead of first looking at their .mission and goals’.

Let’s Talk Sales

Okay, the above framework is nice…yet I’m sure you want to talk more about money, right?

Can you actually make money with Social Media?

The answer is a big YES!

Dennis Pang wrote a great article about the ROI of Social Media where he shared results that his company helped his restaurant client’s achieve. His full article is here…but here’s a juicy piece of it for you:

“We also ran a Facebook campaign, giving away over 500 gift cards to all those who ‘liked’ their page. Over a quarter of these gift cards were redeemed within one month. As a result of these two campaigns, the restaurant’s profits have increased by over 30% from where they were last year. And it all happened in less than two months.”

What About Consulting?

Great question, what about consulting? Does Social Media work for consultants?

Of course it does.

I consider myself fairly active in Social Media and have built up my online presence over the years. As a result of this involvement I’ve landed consulting and speaking opportunities.

One such engagement (which came directly from someone I didn’t know), led me to work with the Royal Bank of Canada, Canada’s largest bank.

Improve Your Social Media Results

MIT Sloan Management Review published an article that outlines a 7 step process to increase results from your online efforts.

Here are 3 of their suggestions…

“Identify social media users who are both influential and particularly interested in the company’s product or service category.

Incentivize those influencers to talk about the company’s product or service.

Use metrics to calculate the value of an individual’s influence.”

Taking this a step further, here is a presentation by Angie Schottmuller on “How to plan, justify and gauge the value of social media marketing efforts.”

Social Media: ROI Possible from Angie Schottmuller

Let’s Sump Up and Talk Abour Your Mother

Yes, I’ll get to talking about your Mother in just a second.

But first it’s important that you really understand what Social Media is about…

…it’s not a fad.

The technology and tools that we use such as Twitter, Facebook and Pinterest may turn out to be ‘fads’ of some kind.

Yet they are simply (and of course powerful) tools and platforms. “They” are not what makes Social Media valuable.

When you think of Social Media as the ability to have conversations with far greater impact than ever before and in a way that allows you to create and foster a community more efficiently…you start to see the power of Social Media.

Why It Matters for Consultants

As a consultant if I ask you what is the best way to land clients, without a doubt the vast majority of you will say “referrals”. And these are simply the result of what we like to call ‘word-of-mouth’ marketing. And Social Media is in fact ‘word-of-mouth’ marketing (for good and bad) on a serious dose of steroids.

So Why Bring Your Mother Into This?

Gary Vaynerchuk is one of the leading minds in the Digital (and Social Media) world these days. He regularly is paid between $25,000-$50,000 for keynote presentations according to CTI.

Gary has shared an interesting story about Social Media. The story goes that Gary was in a meeting. One executive in the room asked him “what’s the ROI of Social Media?” and Gary responded by asking “What’s the ROI of Your Mother?”

Sounds hardcore I know…but here’s how Jennifer Bourn describes Gary’s response:

“Gary went on to explain that his mother raised him, believed in him, supported him, encouraged him. His mother helped to make Gary who is he today. She instilled in him valuable life lessons, ethics, integrity, manners, caring. Gary’s success today can be traced back to his mother … So what’s the ROI of his mother? That’s not something you can easily track, but the answer is obvious. Priceless.”

Read that again. There is a subtle yet incredibly powerful message in that about Social Media.

When you’re so focused on the tactics and seeing an increase in sales and leads you may lose sight of the long-term value building relationships and a community can have on your business.

Jennifer Bourn explains it this way: “The key is making sure you’re using social media the right way. That means don’t just broadcast, push, promote, talk, sell, and throw up content. Instead, use social media for listening and answering and engaging, and learning.”

Is It Right For You?

Maybe, maybe not. That depends on your goals, plans and current situation and resources. For some consultants, building a strong online presence and being active in social media will be a huge benefit to their business.

Others may choose to continue focusing on different marketing avenues that are already providing them a strong return on investment.

What’s critical is that you do what makes sense for your business. If your clients aren’t on Social Media in any meaningful way, it may not be the best use of your time. On the other hand, if your clients are online, Social Media is a great way to connect with them, educate them, add value to their lives and be seen as an authority in the process.

What are your thoughts on Social Media? What has worked or not worked for you? I’d like to hear from you in the comments below.

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  • http://twitter.com/veroarosemena Verónica Arosemena

    As a consultant, I have landed important clients partly because of social media connections and exposure. I think that if you use it correctly, Internet and social media can be an excellent and accesible way of gaining new costumers. Greetings from Ecuador!

    • http://www.consulting-business.com Michael Zipursky

      Veronica – great to hear you’ve seen results from social media. If you’d like to share what has worked best for you with the community here that’d be great as well :)

  • Kullah Anderson

    This article has provided me with the least convoluted explanation for how social media can be utilized to further one’s business.
    It also provides a soberng reminder to begin with the end in mind.
    Thank you!

    • http://www.consulting-business.com Michael Zipursky

      Kullah – thanks for the kind words and glad you enjoyed it!

  • http://www.facebook.com/greggmedwid Gregg Medwid

    Gave me a lot to think about. Thanks for sharing this info!

    • http://www.consulting-business.com Michael Zipursky

      My pleasure Gregg and thanks for the comment!

  • http://www.buyselldial.com/ Buy Sell

    Very Interesting post, I must agree that is was the best article of traffic generating,This is simple and forward advice.

  • http://twitter.com/JMarceloFig Marcelo Figueroa

    This confirms my thinking…i’m convinced, if use wisely, that SM works. Just make sure you choose the right channel where your target audience is most likely to follow you otherwise it would be impossible to hit “them all”. What a good set of articles and all focus for consultants.

  • Trudy Phillips

    Thanks for all the clarification. Very straightforward info. In the past month, I am boosting my social media presence to be more relevant to my knowledge and consulting work

  • Theresa Putkey

    Thanks for the article – as a consultant it’s really important to measure the impact of any marketing effort, especially if one is a solo consultant and doing all the work herself!

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