There’s no two ways about it, to run your social media effectively it takes time and effort, which in turn equates to costs for your business. Just like any other area of your business, you should be measuring social media ROI (return on investment). How else would you know if what you are doing is effective and impacting on your bottom line?
Let’s start with what is not an important factor when it comes to measuring social media ROI – it is NOT just about how many fans or followers you have. The world of social media marketing has already moved on from simply acquiring new fans. It’s no longer all about getting hold of large numbers of people but understanding that loyalty and retention are so much more important.
Depending on the size of your social media involvement and the number of networks you maintain determines the difficulty of measuring ROI. The first thing you need to ask is what you want to track and find out where you can monitor this information. Whilst at the end of the day you may want to scrutinize the monetary value of social media, there are many other examples that ultimately lead to sales. Here are a few other measurements you can follow.
- Completion of a contact form
- Using an online quote system
- Clicking on a link to your website
- Signing up for a newsletter
- Watching a video
- Downloading a PDF
These are all actions that are measurable and the conversion success shows the worth of your social media efforts.
There are several different routes you can go down to measure your social media ROI. Whilst there are complex software packages that you can purchase, it is a good idea to take advantage of the excellent free packages available such as Google Analytics and the tracking that each social media platform also offers.
If you are intent to work out the pound and pence of your social media efforts then a good idea is to look at your PPC (pay per clicks) costs. By taking the average cost per person from a PPC campaign, you can put that cost against the number of visitors who arrive at your website via social media. Google Analytics tells you the number of visitors from each network so you can then see whether Facebook or Twitter for example is more cost effective.
Another good test to see if your social media is working is to base a social media campaign around a specific product or service then monitor the increase in sales. It is a simple but is an effective way to measure social media ROI.
Don’t forget that social media creates great brand awareness along the way, but be realistic when it comes to working out the ROI for your social media campaigns and involvement. Unlike dealing with e-commerce ROI, it may never result in the perfect answer simply because of the nature of social media. If you take it to the eighth degree, you could end up trying to find the ROI for the time taken measuring your social media ROI!!