It’s safe to say that by this point, credit unions that have a clue regarding the expectations of the marketplace actively engage consumers through social media.
So this article isn’t about the value of social media to your credit union, or do’s and don’ts. We’re way beyond Social Media 101.
Instead, let’s address a burning question—one that has no easy answers and at least two common opinions: How can my credit union measure the return on investment (ROI) of our social media efforts?
The easy answer is that establishing social media accounts is free. Therefore, it’s impossible to calculate a numerical ROI on something that costs nothing.
Simple enough, right? Not exactly.
Learn valuable information and discover key resources for compliance, marketing, human resources, and operations staff as you navigate the complexities of social media from a financial services perspective. All webinars will be held from 1 to 2:30 p.m. Central time, and are available as recordings. Information and registration
Aug. 19: Please Don’t Flickr My Twitter. Review various social media platforms and how people use them.
Aug. 26: Social Media FFIEC Guidance and a Credit Union Perspective. Hear a credit union’s implementation perspective.
Sept. 2: Social Media Strategy and Policy—A Compliance Perspective. Keys to collaborating with other departments.
Sept. 9: Measuring Social Media ROI—Two Schools of Thought. Recognize the validity of both sides of this debate.
Sept. 23: Social Media and the Hiring Process—A Compliance Perspective. Learn how employers must address individual privacy requirements.
Sept. 30: Social Media Advertising Requirements—Avoiding the Pitfalls. Recognize when additional disclosures will be required.
Sure, you don’t need to spend anything to simply set up the accounts and post content. But all the social media platforms offer products and platforms for advertising, promoting pages and posts, pay-per-click campaigns, etc. If you use any of these fee-based services, it becomes easier to determine a numerical ROI.
But how? First, you need to determine what specific metrics you want to use in ROI calculation. Some questions to answer include:
As you can probably tell by now, measuring ROI for social media isn’t as simple as it might seem. Many factors must be discussed, debated, and decided upon.
Consider this scenario: You design and launch a social media campaign related to acquiring new members. For the simple ROI calculation, you would divide the number of new members by the dollars spent.
So let’s say you spend $500 on advertising and you acquire 12 members. The simple (and often woefully inaccurate) ROI would be 0.024%.
But this number doesn’t include factors related to cost per member, identification of used services as assets or liabilities, and other data that will help determine whether the accounts are profitable.
Meanwhile, many credit unions use social media as an engagement tool. They want to tell stories, interact with members, create awareness, etc.
They have made the decision to not “sell” via social media. That’s a great strategy as long as you look at the quality of the interactions and leverage them to cross-sell or upsell more benefits and services to those with whom you converse.
Another common question that triggers ROI debate: Does the credit union need a full-time employee dedicated to social media?
There are no simple answers for this one either. It depends how social media and digital strategy fit into your credit union’s strategic plan, and what level of commitment you are willing to make.
It also depends on the feasibility of hiring someone in your price range. Digital media strategists don’t come cheap—at least the great ones don’t. Outsourcing your social media strategizing and efforts might be more cost-effective.
A true digital media strategy is more complex than posting to Facebook every couple of days. You must weigh many factors—including some you probably haven’t even thought about.
There is no “cookie-cutter” version of an effective digital media strategy. Every credit union is different. Therefore, “cut and paste” isn’t good enough.
If you don't have staff members who are knowledgeable about the many nuances and capabilities of social media and digital strategy, consider reaching out to companies that can help you.
Digital media and social interaction aren’t “the future.” They are “the present.” And they’re only going to get bigger. Get serious about it.
SEAN McDONALD is president of Your Full Potential LLC, which provides consulting, strategic planning, and training services to credit unions both nationally and internationally. Visit YFPTips.com for additional information and to schedule a phone consultation.