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How to find your ROI on Twitter

Sun, 06/14/2009 - 17:02 — cynthia

 At the recent MITX forum, “To Tweet or Not to Tweet” the inevitable subject of how to measure your return on investment on Twitter came up. CC Chapman mentioned that social media guru Scott Monty, when asked this question, retorts back – what’s the ROI of putting on your pants in the morning? Kel Kelly compared debating the use of Twitter or not to deciding if you need a phone. I’d like to take it one step further, and say that asking what is the ROI on Twitter is like asking what is the ROI on your phone? The answer is none. It’s what you do with it. You have to have a goal and a plan. Putting on your pants before you go to the work in the morning is essential, but it doesn't get the job done.

 If a company is about to go out of business because sales are down, paying the phone bill isn’t a cure. But, a plan to use that phone to call 50 people who are interested in buying their product could be. Having a phone that works, along with the numbers of those clients, is a critical part of that plan. For starters, you need to have the client phone numbers. Building up a Twitter following is like collecting phone numbers. It takes time, but you don’t see profit from that time until you actually use them.
 
Say you own a coffee shop in Brooklyn and want to get more traffic into the store. Paying a social media consultant an enormous sum of money to send out daily tweets about you to 20,000 random people all over the country won’t be effective. But, if you build a Twitter account, get the word out to customers who start following and re-tweeting you, that’s instant advertising with a built in endorsement. Some of those new followers will be local, some of them will like coffee, and some will stop by to check you out. By following the model of some successful companies like Zappos or Trip Advisor and keeping the content interesting – what’s going on in the neighborhood, who’s coming into the store, what funny thing happened today, people will keep following you. Better yet – tweet a link to coupon for $1 off a coffee and see hot fast you get re-tweeted. How many people bring in those coupons? There’s your measurement on ROI. Bingo!
 

It all goes back to knowing your goal – and having a plan. Twitter (and Facebook, Linked-in, Sonico, or any other social media site) are great new shiny objects that everyone is running to as the next great way to save your business. But remember, that these tools in themselves are not the miracle.  Its still the marketing plan that you put behind them that is what counts. And that’s how you measure your ROI.