If you want to estimate the ROI of your social media presence you need to calculate its benefits and the costs. While estimating the benefits attributable to social media is quite a complicated task, measuring the costs in social media is not so difficult.
What it is recommended though is you hand this over to your accountant so he will be able to give you advice on some of the concepts.
Human resources costs
The first cost related to human resources you should consider is the initial consultation. If you are not a craftsman of the social media or do not have the time, willingness or enough knowledge to start a social media strategy, you will have to hire a skilled consultant.
As for the cost of starting a social media consultancy project, even if you can get an accurate quote, you should know that the amount will depend on the size of your project and the scope in which you want your brand to be developed. As you see, this will depend on your business model and how your value chain is structured. In addition, it will also depend on the reputation of the consultant.
Once you have started the project, the other major cost on the staff side will be the community manager. You must consider that this cost, unlike the consultancy one, will be incurred every month regardless of whether you decide that this person or team is internal or external. If you hire someone external, follow the same process you would use to hire a consultant. In fact, maybe your chosen consultant will recommend someone to perform such work in your community management tasks. f you hire someone internal, calculate the costs based on the gross wages, national insurance contributions, and other personnel costs.
In the section of personnel costs, the entrepreneur or the managing director often forgets to include the cost of his time. Have you considered that? Your time also has a cost: the opportunity cost.
The cost of technology
You probably do not need to buy a computer for community management, but whether you have had to buy it as if you are using what you already had, you should estimate the monthly cost attributable to social media.
On the software side, nowadays there are many tools that allow you to manage and monitor your community. Usually there are good free options that allow you to manage your social networks in a very professional manner. Sometimes you will need to pay for the “pro” versions. You will have to account for this cost.
Under this heading I include other costs you should consider:
- Web design, images, infographics, logos…
- Offline advertising (why not? Evangelise in the physical world and attract people to your community; Out Of Home advertising, linear TV, door drops…) and online (SEO/SMO, SEM/SMM).
- Gifts and Promotions.
- Other costs associated with the activity (i.e. travel, training, lodging…).
Then, when you have calculated your starting up costs and your monthly costs you are ready to proceed with the next step to be able to calculate your social media ROI: the benefits.
But we leave that for other post. In the meantime, do you have some questions?