Measuring social media ROI can be incredibly tough because there is no real way to come up with one real number. To make things worse, many small businesses immediately jump to the conclusion that the amount of social shares is equal to your social ROI. While social shares are important and do play a role, social ROI encompasses much more than that. The moral of the story: there are ways to estimate what you’re getting back from your social efforts, it’s just important you have a plan and look at all of the information available.
Top 5 Ways to Measure Your Company’s Social Media ROI
Remember that your fist step is to give yourself a goal to work towards. Once you know what you’re aiming for and where you want your efforts to take you, your an start measuring ROI and making changes to your strategy to help improve that ROI based on your goals:
For most major social networks analytics are built right into the platform, but if you’re working with a social channel that does not offer analytics you can use a tool or several tools, which you can learn more about here, to gather data. In either case, once you have your analytics try and create conversion goals for your social media—such as number of links clicked or sign-ups you get for a newsletter—and then track those conversions to see where they’re coming from. Metrics such as website traffic will help give you an idea of how to form your conversion goals so that you can then use those to benchmark and compare for an ROI understanding.
Use Conversion Estimates.
One of the most popular and effective ways to measure the ROI of any online marketing efforts is to use conversion estimates. You do this by understanding the lifetime value of your customers, meaning how much they are worth (which you can learn more about here if you are unfamiliar).
According to a Search Engine People article, you can take the average lifetime value of a customer, divide that by the total number of users you have on social media, and then multiply that by the number of new customers you see on social to get a monetary value for each customer conversion. Once you have this number, you can then use it by multiplying it by the number of people who actually complete a conversion. This will show you how much money you’re approximately making for each social channel. If it’s more than what you’re spending to keep your channels up and running, you’re on a good path!
Use Webmaster Tools.
Webmaster tools can help you see both the traffic coming from your social media pages as well as how long visitors are remaining on your pages and clicking your links. Bounce rate is important here. Social media is about engagement, so you don’t want people to click off right away. If they are, then your ROI may not be where you want it in the long run. This isn’t an overly specific or strong metric to consider, but it is something you should take into account.
Social Media Followers Matter.
As discussed above, this is not the number one thing you should be looking for when it comes to understanding ROI, but it is still a factor. You want to make sure that your numbers, primarily your number of followers on your accounts; although shares are also important, continue to grow. Benchmark your success by setting a goal for yourself based on the amount of time you spend on social media. For example, maybe you want 10 new followers for every 1-hour you spend on social media. It’s true that followers can unfollow you quickly so this is another metric to take into consideration, but usually if you wait a few days before counting your numbers you’ll have some solid and real people who have connected with you.
Calculating ROI is important for all aspects of your business so that you know you’re using your resources effectively and your efforts are working. Check out here to learn more about calculating the ROI of your SEO, which is something that works in conjunction with social media. If you can create a strategy to calculate the ROI of both these efforts your online marketing will be in good shape in the future.
For more information, visit this article from our sister site HigherVisibility on this same topic with a few different options for calculating ROI. Once you give it a try, let us know what worked for you and what did not in the comment section below.