3. Social Media Strategy and Return on Investment

In this chapter, the reader will learn that organizations should not use social media as such, just to use social media as a new hype. Instead, social media initiatives should serve social media strategies, which in turn should serve the organization’s strategies. Similarly, business models are underlying social media tools. The chapter shows how social media strategies and corresponding tactics can be derived from the business objectives and how key performance indicators (KPIs) and tactics can be formulated in a SMART way (i.e., as concrete as possible, in order to know what to evaluate). Possible initiatives to execute a social media strategy are covered in the subsequent chapters. While executing a social media strategy, an organization should constantly monitor its initiatives, evaluate whether they pay off, and possibly redirect the strategy. Particularly, social media initiatives do not pay off by merely having a lot of “followers” or many “likes” in social media tools, but by reaching a high return on investment (ROI). Consequently, this chapter also emphasizes the importance of evaluating a social media strategy by means of social actions, business actions (e.g., sales or the number of subscriptions to a newsletter), and ultimately ROI.