Examples of a real-dollar Return on Investment (ROI) from social media marketing programs are rare. Unfortunately for most ecommerce teams, having hundreds of thousands of fans often doesn’t translate into revenue.
For your CEO and CFO to take social media campaigns seriously, you need to be able to demonstrate a direct measurable impact that either reduces costs (say in reduced customer service heads) or increases sales. At the moment, most social campaigns are doing neither.
Both Dell and Sony have both stated that they have generated real sales from social media program, but these are definitely exceptions.
But the majority of marketers don’t even measure ROI at a simple level let alone try and attribute sales. 
It’s not that there aren’t any tools to do so, or that there isn’t a formula for calculating ROI; it’s just that links to actual sales from social media programs are often tenuous. And where you have tenuous links, then ROI becomes very subjective and only as good as the assumptions that go into the formula. In my experience, CFOs don’t like subjective!
There are lots of tools becoming available to help you measure sentiment, comments and click through, but all of these are essentially measuring influence, not measuring what really counts. So perhaps the bigger question should be, “How do we turn fans into paying customers?”
Social media marketing is still a long way from reliably generating revenue. Generally these programs most often start with a ‘Broadcast’ stage where the approach is to use blogs and social pages to recruit fans and push a corporate message. The goal here is most often to build large follower bases and communicate with customers and prospects, and educate them about your products and services.
Some sites are delivering service as customers seek to get specific answers, to connect with the brand and get service, or just be heard and share their thoughts and experiences. Many brands struggle to deal with this stream, especially in the B2C space where the stream can potentially become an overwhelming torrent.
More often than not this demands dedicated headcount, and your CFO may well be asking where the savings or increased sales are.
This is where many brands are now: Their social media marketing has established a good fan following, but it’s costing more than they expected to service the requests and moderate the community. There are few attributable sales that can be put against all this effort.
Linking Ecommerce and Social Media
To convert fans into paying customers though requires more. In fact, it needs integration between ecommerce sites and social media sites so that the data can be linked and fans identified while on the ecommerce site. While your sites are disconnected, all your fans are anonymous; you have no idea whether they are a fan or not, so you can’t market to them in a relevant way. This type of integration is deeper than the commonly seen ‘Friend us on Facebook’ or ‘Follow us on Twitter’ hyperlinks which you see on many ecommerce sites.
What’s needed is to allow customers to log in to their social network accounts on your ecommerce site. Over time this will become commonplace and will surpass many registration processes. When this happens, you can then associate browsing behavior, purchases and abandoned shopping carts with the individual fan.
You May Ask ‘Why Would a Fan Sign in on my Site?’
The answer is simple. The number one reason why consumers friend a brand on a social network is to receive special offers and promotions. So by putting up a simple logo offering promotions via social networks, you’re giving customers a reason to share with you.
Once they are identified, then a whole spectrum of online marketing campaigns become possible for the first time. For example, you might choose to follow up abandoned shopping carts using their social network. Or you might want to run member-get-member promotions to encourage your customers to encourage their friends to buy. This is where the CEO and CFO will start getting interested: Now your campaigns can directly drive sales.