Posted July 19, 2010 10:07 am by with 6 comments

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There are many ways to measure the ROI of social media marketing. One that Forrester recommends in its new report The ROI of Social Media Marketing is the “risk management perspective.”

Essentially, how does a social media marketing initiative help reduce the financial impact of a reputation management crisis?

The costs of a social PR crisis can be substantial. To generate a value for the risk management perspective, consider how your social media preparedness and assets can reduce these costs across several different social media crisis scenarios. For instance, a midsized company might consider the social implications of a batch of defective products caused by unforeseen manufacturing issues in an overseas plant — and find that involvement in social media helps insure them against an average annual possible risk of $25,000.
In other words, even a mid-size company can realize an annual ROI of $25k by simply looking at the benefits to reputation management.
Combine that with all of the other positive ROI possibilities–more sales, less customer service costs, etc–and it becomes clear why social media marketing should be an integral part of any company’s online efforts.
  • Social media will add money to a companies bottom line. Besides saving your brand or helping create a better brand perception, it can make and save a company money. Companies, please interact with customers because they will be loyal customers and thank you for caring. Test it out and try your hand at it, social media is no longer the undiscovered phenomenon but it is in books and in articles online everywhere.

  • At the very least it could really build up a nice wall to soften the blow if something does find its way into the search results.

  • The closer connection with your customers that you gain with social media allows you to address their concerns quicker and more concisely,

    Great post if you are trying to show an additional benefit of social media marketing to a client

  • Great post. It is important to understand that just creating profiles on social media websites is not enough. Google will ignore these accounts until they “see” you are really updating them and really using them. Most people make the mistake of just creating the accounts, dropping a back link and moving on. Not good from an SEO perspective or from a marketing perspective. This is an opportunity to build a relationship with potential clients.

  • Social media not only caters to bringing a convenient and effective communication and marketing medium but also a tool for operational advantage in attaining a lower cost for some advertising cost.

  • amaizing,thanks for the information. I was looking for some inspiring articles. Social media marketing can be really good if done correctly