It's commonly thought that social media is a great way to market your business because it's a free tool that allows you to get your message and brand in front of a lot of people. However, what many people don't account for or bother to calculate is how much the social media campaign really costs.
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Before digging completely into this article, I have an assignment for you to complete. I want you to write down which social networks you spend time on and about how much of your time per day is spent on each network. If you keep records of how people find your business, you might also want to note how many of your current customers or clients have come to you from each. Don't take too long to do this.
Now, how much do you make per hour? $20? $50? $100? More? Already, perhaps you see where this is going. For those who don't, don't fret, I will walk you through the reasons you want to take stock of how you've been spending your time.
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Learning the Network
How long did it take you to learn how to optimize your use of the social network? Many people spend money on books, ebooks or courses to learn how to more effectively use the social networks they belong to. That's a cost you'll want to take into account. Most computer books cost between $15 and $30.
Let's take the low road and assume you spent $20 on average for each social networking guidebook. We'll only discuss the main venues: LinkedIn, Twitter, Facebook, and Google+. Right there, you have four social networks. If you also maintain a presence on MySpace, that brings the total to five, and if you only bought one book for each network, that's $100 already.
Most likely, you did not let the book sit on your shelf and collect dust. Instead, you read through each book, taking careful note of each tip. The average length of each book is, say, 200 pages. Because you were trying to learn the material well enough to implement it, your reading speed was only about 40 pages an hour, at the low-end of the average reading speed. For 1,000 pages (the total number of pages in all five books), it took approximately 25 hours to work through all the information. If you make $20 an hour, that's $500. If you make $50 an hour, that's $1250. If you make $100 an hour, that's $2500.
Already, you've spent a significant amount of money just on learning how to use the network. That figure is between $600 and $2600 depending upon your hourly rate.
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Building Your Network
Naturally, you will want more than just your friends and family following you on the social networks. So, you will have to invest some time into actually building the network. It's not enough to just have any followers, though. You're going to want people who follow you who may actually use your products or services. This will require research.
Let's say for now, you spend about an hour or two a day for all of your social networks building the network through research and targeted following. That's assuming you don't get distracted and pulled into discussions, follow links or play games when you should be building a network. That's 5-10 hours a week, or $100-$200; $250-$500; or $500-$1,000 a week.
Your total is now up to between $700 and $3600—and that's only counting a week of network building. Network-building is something that needs to occur over time for it to be effective. Would you pay someone that much money to build your social networks?
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Maintaining Your Network
So, you've gone through and built a starting network. You'll need to maintain that network. Some social networking gurus recommend posting at least five times a day—one of those posts will be a quote (which you will need to research), one will be an article by someone else that you think is of interest to your followers, one will be a statement about what you're working on or a marketing statement, you might want to compliment someone or retweet a post and you might want to start a discussion that's related to your field.
Let's imagine that you're being really pro-active and trying to save time, so you find a tool like HootSuite that makes it so you can post to all of your networks at once. Phew. Imagine 25 posts a day, and that's if you only have the five basic networks! Accounting for research, it will take probably an hour each day to plan out and schedule your network updates.
Additionally, you're going to need to interact with your followers! It's no fun to be on a social network or to follow someone who never talks to you. That takes time too. Add in another hour.
Once you have a following, you'll probably be spending between one and three hours a day on your networks if you're committed to keeping up on them. You could be like some people and get a following then completely forget to update statuses or interact with others. That won't serve you very well, however. If you want to be effective, you'll have to put in the grunt work. That's $100-$300; $250-$750; or $500-$1500 a week to maintain your following list. Those figures account for the research, interaction, and distraction likely to happen when maintaining your networks.
So now, for a month, we're up to $1150-$10,350 in work hours that has been spent on social networking. Please, pick your jaw up off the floor. We're not done yet.
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Ouch! Now Look at Your Projects
Now that you have a ballpark figure for how much your networking campaign has cost you for just one month of starting and maintaining the campaign for five networks, how much have you made from those networks? How many clients did you sign a contract with last month who came from the networks?
It's important to know where your clients or customers are hearing about you from. Are they getting the information from the social networking sites? Is it coming from your website? That Craigslist ad? A blog? Make sure your CRM tracking system accounts for how people are finding you. That way, you can do the calculations.
If you're making $5000 a month just from your social networking sites, maybe they're worth it. You won't know if you're not tracking it. Part of your client or customer intake process should include finding out where that person heard about you from. That's where you'll want to spend your time (and money). If no one ever finds you from MySpace, why continue to market yourself on MySpace? It's only costing you money.
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Tracking Time and Money
Track how much time you spend on social networking for a month. Track your income sources and lead sources for that month. How many leads led to a profit? From where did they come? How much did you spend on your social networking? If you're spending more in billable hours than you're making, perhaps you'll want to consider a form of more traditional advertising, which may have a greater return on investment.
If you're making money hands over fists, but finding time tight, perhaps you'll want to look into hiring a social media expert to help you with your tasks. Unless you do the math, you won't really know where you stand—and knowing where you stand is vital when you spend a significant amount of money on something. How much are you spending on your social media marketing efforts? Is it worth it?