Accountants that are using Social Media for business have either recognized and set specific goals that they expect to achieve, or at a minimum have anticipated general benefits that they feel they will realize from using it as a tool in their accounting firm. To find out if your strategy has been successful and is attaining the desired results you must quantify some things over time and measure your Return on Investment (ROI). So we now have to determine, is there an appropriate way of measuring the ROI of Social Media?

Business strategists say that everything that is done for and within the parameters of a business’s activity has to be measurable. Unless social media can be measured, its effectiveness as a business tool remains questionable. The argument for the measurement of everything, including social marketing expenditures, is that it provides a basis and a guide for decision makers whether or not to increase the budgetary requirements in the future. These statistics or measurements are used to calculate a “value” or perceived benefit that is being realized, your Return on Investment (ROI).

Wikipedia defines Return on Investment as: “The ratio of money gained or lost (whether realized or unrealized) on an investment relative to the amount of money invested.” Simply put, the definition of ROI is already in itself — a (1) RETURN on (2) INVESTMENT. But this definition is limiting because it is based purely on the assumption that there is an amount of money invested. Hence, the expected return is also an X amount of money.

In measuring the ROI in Social Media Marketing, assumptions can be easily skewed because there is no “monetary” investment, it is technically free. Does this mean that if there is no money “invested” that there is no tangible return to measure? The answer is no. The investment comes in a different form, your time. We can apply the same principles used to measure financial ROI to calculate the ROI of your non-monetary investments.

The first crucial step that every accounting firm must take is to set clear goals and expectations for their social media strategy. It will be difficult if not impossible to determine if you are making progress if you really have no idea of where you are going, or what you expect to achieve.

Baseline measurements must be obtained before you begin to track and monitor your progress. You must know where your accounting firm stands before you begin. Where are you today? You will be unable to measure your progress if you don’t know where you started.

In Social Media, a lot of your activities are based on human interactions and conversations on your firm’s Facebook, Twitter or LinkedIn sites. These types of interactions are not easily measured. In this case your firm will need to rely on a variety of statistical tools to accumulate your “metrics”.

Being Accountants, we love to play with numbers. A quick tip: Metrics alone will not provide you with a clear ROI measurement. You will need to use the metrics to recognize the trends and correlate them to activities within your business. Some examples of trends that Accounting Firm Partners might want to look out for.

Example 1: Your Accounting Firm Partner’s Twitter page’s followers increased 100% from the previous month – did this correlate to an increase in inquiries for your Accounting Firm’s services?

Example 2: Are your fans or friends on your Facebook site proceeding to your Accounting Firm’s corporate website after checking you out on your Social Network? After which, how many new clients did you get?

In closing, remember that measuring the ROI of Social Media is unlike any other typical calculation. You must first begin with clear goals and expectations, and baseline measurements. While “metrics” are required, they are not the sole determination of success. These numbers must be used to determine trends and correlation of these trends to changes in your business. You will then be able to make informed decisions about adjustments to your strategy for the benefit of your accounting firm.