Estimating costs

Estimating costs

Estimating costs from the bottom up is rather tricky, and this approach
rarely includes a cap. Consequently, costs often wildly exceed your budget.
Instead, establish first how much money you’re willing to invest in the overall
effort, including in-house labor, outside contractors, and miscellaneous
hard costs such as purchasing software or equipment. Enter those amounts
in the Cost section.

Then prioritize your social marketing efforts based on what you can afford,
allocating or reallocating funds within your budget as needed. This approach
not only keeps your total social marketing costs under control but also lets
you assess the results against expenses.

To make cost-tracking easier, ask your bookkeeper or CPA to set up an
“activity” or a “job” within your accounting system for social media marketing.
Then you can easily track and report all related costs and labor.

Valuing social media ROI
Return on investment (ROI) is your single most important measure of success
for social media marketing. In simple terms, ROI is the ratio of revenue
divided by costs for your business or, in this case, for your social media
marketing effort.

You also need to set a realistic term in which you will recover your investment.
Are you willing to wait ten weeks? Ten months? Ten years? Some
forms of social media are unlikely to produce a fast fix for drooping sales, so
consider what you’re trying to accomplish.

Costs usually turn out to be simpler to track than revenues that are traceable
explicitly to social media. blogs discusses techniques for
figuring out ROI and other financial metrics in detail.
Whatever you plan online will cost twice as much and take twice as long as
anticipated.

A social media service is likely to produce results only when your customers
or prospects are already using it or are willing to try. Pushing people toward
a service they don’t want is quite difficult. If in doubt, first expand other
online and offline efforts to drive traffic toward your hub site.