If you put in the time on social media in efforts to grow your business, you’re probably interested in what every business owner and marketer is interested in, ROI. Is the time and money you’re putting in worth it?
The number one reason why people reject forms of advertising is because they cannot measure what they’re getting back from it. They don’t know if it’s effective or not. Unlike many other forms of marketing and advertising, social media is actually very easy to measure! You can physically see proof that your social media marketing efforts are working. Usually, ROI has its roots in finance, but sometimes it’s not just about the dollars and cents. Money is always a factor, but you want to know if you’re time is being well invested as well.
Social Media ROI is what you get back from the time, effort and resources you designate towards social marketing. This can, in fact, be measured with dollars. Businesses struggle grasping the financial impact of social media marketing, but I can help simplify it!
Here’s a quick how-to on measuring your social ROI:
- Set goals. Don’t get stuck on vanity metrics. These are metrics like the number of new followers each month or how many Likes/Favorites a post/Tweet gets. If you’re worried about ROI, vanity metrics are meaningless if those posts aren’t helping you reach your strategic goals. Try going a little more in depth and set goals like:
- Increasing reach
- More website conversions
- Link clicks
- Online purchases
- Filled out entry form
- Signups or subscriptions
- E-book downloads
You’re probably wondering what some of these have to do with social media. Well, if your company website is connected to Google Analytics, you will be able to find out where these conversions, clicks and downloads are coming from.
- Assign a monetary value. Although it’s hard to give a Facebook post an exact monetary value, you can calculate the value and ROI of online purchases, subscriptions and entry forms.
Take the lifetime value of an average customer and multiply it by the conversion rate. Compare this to your average sale and how much you would end up paying if you were to use ads to achieve the same goal. The following table is an example from Think Digital of how this will look like in a report.
- Monitor and analyze. The easiest way to monitor your social media goals is through Google Analytics. If you want to measure reach or clicks, you can monitor directly through Facebook. The great thing about Google Analytics is you can create goals and quickly and easily view the progress of conversions.
- Calculate your investment. For you time, multiply labor-cost by the number of hours you put each week or each month. Also, some social media tools are not free. Add up the costs of the tools and services you use, such as scheduling tools, analytic tools and content generators. Find the weekly or monthly costs. Lastly, if you’ve spent any money on social media advertising, include it in your investment.
For a quick and easy solution, use this social media ROI calculator. Just remember, social media is just like any other form of advertising (but better). You need to set goals, track those goals, and be able to measure your ROI!