The Two Types of ROI: Return on Investment vs. Return on Influence

The Two Types of ROI: Return on Investment vs. Return on Influence
By Christopher Tompkins

By Christopher Tompkins

In the marketing world, many businesses focus on ROI (return on Investment). However, when they don’t get the immediate monetary results they desire, they begin to pull away from social media marketing.


But there is another side of the coin: ROI 2.0 (return on Influence). Many businesses have begun investing more time and money into individuals or organizations who can represent their brand and bring credibility and value to them. Have you considered this?


Either way, both ROIs have a place in your marketing strategy – you just need to keep in mind that the value of each one will be unique for your business.


Return on Investment:


If you’re spending money trying to promote a product or service, it’s essential to be fully aware of your ROI. There are a few things to consider first:


  1. Know how to budget correctly.

So many people think that spending thousands of dollars on advertising will result in a huge win for their company.


Yes, more money can result in a greater ROI, but, what if you don’t have thousands to spend in order to acquire new customers? You need to be smart and strategic with what you do have. You’ll want to know as much about your target audience as possible. Don’t waste your money showing your ad to everyone in the world, when you could be showing your ad to JUST your target audience.


  1. Know your KPIs and marketing goals.

Speaking of being strategic, you must know your KPIs (key performance indicators). These are specific S.M.A.R.T. goals (specific, measurable, attainable, relevant, time-bound) that you can keep track of as your campaign progresses


Without these, you’re making business decisions that are based on feelings instead of figures. If you aren’t careful, you could be spending money on marketing efforts that end up in little to no results. 


  1. Know how to track your ROI using analytics.

If you don’t already have traffic tracker set up on your website, what are you waiting for? This is one of the easiest ways to see your website traffic, where they came from, and what pages on your website had a greater increase in visitors than others. Most social media sites offer their own specialized pixel so you can maximize your advertising spend with them, enabling you to only “pay” for when someone clicks through to your site.


Return on Influence:


While your return on investment is very matter-of-fact and measurable, this is not always the case with return on influence. This is categorized by the social media engagement factors that have a robust effect in terms of business visibility and a knock-on effect in generating leads, sales, and awareness.


The return on influence, while it may not be able to be transparently measured in dollars – has a direct effect on the overall campaign.


  1. Know your measurements…and what they mean.

When you are measuring your level of influence, there is not a fancy equation that will help you deliver the ideal metric. Each business has its own needs and its own unique focus.


Is it important for you to have a high number of people connected to your profiles? Then the size of your audience will be something that you will want to measure and keep track of. Are you looking to get your audience engaged with your content actively? Then you want to track likes, comments, reactions, and shares. Want to use social media links as calls to action to visit your website? Then you need to track the amount of traffic that you are generating via each site. 


  1. Tell your story. Your full story. In real-time.

One of the largest returns you can get on ROI in the influence category is being able to tell your brand’s story, in real-time, while you gauge and measure engagement. Social media marketing is a beautiful compliment and extension to a well-executed public relations campaign. Meaning, you can really tell your brand’s story fully – without being hampered by deadlines, timing, content lengths, restrictions, and more. You are able to comment in real-time to anything that is happening in the universe that you can tie your brand to.


This shows that you are available, have a finger on the pulse, and are trustworthy. Who do people do business with? Those that they trust.


  1. Positions you as an expert.

Your social media channels are an extension of your online presence. Consider it the more interactive version of your website or online point of sale. Here you are not just making claims, you are substantiating your business. You can craft and share content that helps bring your target audience closer to you. Showcase how your product/service/business solves a problem they face.


Each one of your social media channels acts as a branding and expertise hub where you can illustrate to your audience the value that you and your brand bring to the table and why they need to be interested. Having these authentic communications in real-time offers positioning like none other!


Now, it’s time to make the best out of both metrics…


While return on investment focuses on measurable goals, return on influence is about the results you gain from having a presence on social media, and of course, what your business does with this.


As you continue your marketing journey, look further into how both ROIs can be factored into your strategy, and how you can reap the benefits of these. Measuring your results from a monetary standpoint and an influential standpoint can only help your business grow.

About the author:

Christopher Tompkins is founder, head strategist, and CEO of The Go! Agency. His devotion to helping companies harness the power of online marketing impacts every aspect of The Go! Agency. A fundamental believer in online marketing education, Christopher speaks at national and international conferences. His latest book, The Go Method: 22 Simple Steps to Creating a Social Media Strategy That Works!, is now available! For more details, visit

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