The ROI of Social Media for Small Businesses

If you’re a business owner or a marketer for a local business, you’ve likely heard people tell you about the impact social media can have for brands. But we get it—being active on social media adds more bullet points to your already jam-packed to-do list. Is it actually worth it? 

We’re here to tell you: Yes. Social media is absolutely worth your time, effort, and resources. And we’ll explain why. 

Why Every Local Business Should be Active on Social Media

Building a social media presence can help you:

• Build brand awareness—it allows lots of potential customers to discover your business.
• Lead those potential customers to your website, where they can eventually make a sale or book an appointment.
• Generate interest and RSVPs for upcoming events and new releases.
• Collect reviews and customer testimonials—which can massively impact your reputation. 
• Become more accessible to your customers because it opens up a new channel for communication.
• Improve your online reputation and build trust.

How to Get Started with Social Media

So social media is important…but where do you get started? 

First, think about what you’re looking to achieve on social media. Don’t overcomplicate it—Your end goal can be as simple as reaching new customers in your area or increasing clicks to your website. Having a clear goal will help you hone your efforts and make sure you’re investing your time into something that matters for your business.

A beginner-friendly way to create a goal for your social media efforts is to use the SMART framework: Come up with a goal that is Specific, Measurable, Achievable, Relevant, and Time-bound.

Once you have an objective in mind, think about what your strengths are. For example, if video skills are your strong suit, you can give TikTok and YouTube a try. If you’re better at writing, long-form formats (such as newsletters) or short-form, like Twitter, might work better for your business. Audience-wise, if you’re a B2B company, LinkedIn will be your go-to. 

Pro tip: You don’t necessarily need to be on every channel. Focus on what you like to do (or what you have the resources to do), what you can offer on each channel, and the attributes of the audience you’re trying to reach. 

Social Media Content Ideas for Small Businesses 

The best way to approach social media is through experimentation. With your overall goal and target audience in mind, try different types of content and have fun with it. If something you tried isn’t working, don’t get discouraged. Through trying different types of content and interacting with different communities, you can find your niche (the type of content that you’re good at and online communities that are passionate about your product or service). 

A lot of businesses get hung up on the what. What do you post? What kinds of content should you experiment with? Here are a few ideas and examples to get your creative juices flowing: 

→A video of the process of you packing up an order.

→A behind-the-scenes peek at the process of you making a product.

→Customer testimonials or quotes. (Hello, social proof!)

→The story behind one of your products or services 

→Your story—tell people what made you take the leap to start your own business.

→Celebrate an achievement or milestone. (Think: your hundredth sale, opening up a new location.)

→Employee spotlights—show off the great people behind your business.

→Remember to play into current trends if they’re relevant and can help show off your brand’s unique personality. 

What About Costs and ROI? 

Social media can be a really powerful tool for reaching new customers. However, seeing attribution like immediate sales won’t always be linear. Think of building your social media presence as part of enhancing your online reputation. 

In terms of cost to your business, you can choose what you’d like to invest in social media. Creating a business account on Facebook, Instagram, Twitter, TikTok, and LinkedIn is free. 

When it comes to creating content, you can shoot videos or create graphics directly on your phone or through free tools like Canva. 

You also need to think about how much time you have to dedicate to social media. If you can, block off a few hours per week to plan out posts, film or edit videos, create some Canva graphics, and post them natively to the platform. If you’re strapped for time, it might be helpful to hire a part-time content creator or social media manager.

Finally you need to think about tools. If you want more convenience and have some budget flexibility, you can make your life a lot easier by investing in the right tools like Hootsuite or Sprout.

How Do You Calculate the ROI of Social Media? 

Calculating ROI goes back to your overarching objective—based on your goal, you can choose which metrics make the most sense to measure. If your goal is to get your brand in front of new customers, you can measure follower growth or impressions to see how your community is growing and how many prospective customers are seeing your content. If you’re spending a lot of time and money on social media, but getting very few new followers or views, it might be time to re-strategize.

If your goal is new leads, it makes more sense to measure metrics like clicks and traffic to your website.

In short, the ROI of social media might be tied to a direct dollar amount, but depending on your objectives, the ROI might come from the fact that you’ve built a strong community which leads to more sales but doesn’t necessarily translate to an exact dollar amount. 

How Social Media Generates Conversions 

When it comes down to it, no matter what your social media goals may be, it all ties back to the fact that you want your business to grow. So let’s get into the juicy stuff—let’s talk about the journey your audience will take from the moment they find you on social media to the moment they make a purchase. 

1. Engagement

Engagement is when people interact with your posts. Likes, comments, shares—that sort of thing. Engagement is the first step in catching someone’s attention. Someone who engages with your content can be turned into a new follower or web visitor, and from there, you can move them further down the path to a sale.

2. Traffic

So, social media has led someone to your site. Now it’s time for you to convince them to take action—schedule an appointment, make a purchase, download something, etc. How does social media support this? If a future customer makes it to your site but isn’t quite ready to buy, their awareness of your social accounts is key. Your social accounts provide you with an opportunity to inform, educate, and share your personality, which helps foster a connection and keeps users interested.

3. Conversion

Someone found you on social media, followed you, and decided they wanted to do business with you. This is why you work so hard on your social media presence—to get to that sweet conversion. It takes time and effort, but once the conversions start rolling in, you’ll be glad you put in the work. 

4. Repeat Purchases 

Even after an initial conversion, your social media accounts can keep working for you. How? Community building. By making a customer feel like they’re a part of your community, you increase the likelihood that they’ll buy from you again. 

Pro tip: Share your social handles on your order confirmation emails or receipts and create a hashtag for customers to use when they talk about their purchases online. And remember, interacting with these posts from your customers is the key to building relationships and making your customers feel heard. 

Take Your Digital Presence to the Next Level

At the end of the day, being active on social media is all about growing your business and improving your online presence. 

If you’re ready to dive into the world of digital marketing and build a digital presence that will knock your competitors out of the park, check out the Guide to Digital Marketing we created with our friends at HubSpot and SimilarWeb.