Social media now holds a place alongside print and broadcast as a major, essential marketing channel for businesses. As such, social media now should be held to the same standard as those channels: your social media (Return On Investment) ROI needs to contribute to your bottom line.
To prove that your social media investment is truly warranted, you need to track how social is influencing every interaction you have with your clients. The following explains how to measure social media ROI for your business, in 4 easy steps.
1) Connect Your Social Media ROI Back to Your Business Goals
The first step involves setting social media goals that complement existing business and departmental goals. If you have set a specific number oaf leads you’re trying to attain this quarter, set the number of leads you want to specifically be driven by social media. If one of your goals is to increase landing page conversion by 10%, ensure that you’re tracking the conversion rate of people who land on the page through social channels. Audit your existing social media performance to establish baseline targets and then set appropriate goals for improvement.
2) Select Social Media Analytics Tools To Measure Your ROI
Once you’ve established your social media goals, you’ll need to identify and implement the tools and processes required to measure the ROI on your social media. This may involve adding tracking codes to URLs, building custom landing pages, and more.
There are a variety of social media analytics tools which service to track the diverse metrics you are after. Here are some to consider:
Google Analytics: Track website traffic, on-site conversions, and sign-ups originating from social media campaigns.
Salesforce: Add Salesforce tracking codes to the links you share on social networks. When paired with marketing automation software like Marketo, you’ll be able to track sales leads back to specific campaigns or social messages.
Hootsuite Analytics: Hootsuite offers a variety of analytics tools to help you track your reach, conversions and more.
3) Calculate social media expenditure
Here you need to calculate the amount that you spend on social media during the time of your campaign or just taking a specific campaign interval into consideration. Here are the steps on how to calculate the social media expenditure:
Hard costs: Calculate the hard costs which denote the work or costs associated with the actual project during the campaign or during a specific interval.
Soft costs: Calculate the soft costs which include the unseen work that composes the initial part of developing a project during the campaign.
Cost/Time spent: Unlike other investments, social media has a greater value when it comes to time spent on it. Calculate the money spent per time spent on social media during the campaign.
Sunk costs: Calculate the sunk costs involved during the campaign which include the costs that were required during a new addition or an internal fix during the campaign.
Social media expenditure (E) = Hard costs + Soft costs + Cost/Time spent + Sunk costs
4) Adjust to Improve
Once you have identified what works and what doesn’t work on social, it’s time to adjust your strategy. The point of tracking your social media ROI isn’t just to prove your social campaigns are valuable, it’s to increase their value over time.
Due to the short life cycle of social media campaigns, a failing campaign should be changed and improved as soon as possible. Social media is never static. To meet your social media ROI goals, you’ll need to constantly update and adapt your strategy taking into account the analytic data you’re tracking.
The key to being a good marketer is testing. If you go on your assumptions, in many cases, you will be off. The only way you can figure out what’s working and what’s not is through testing. Social media is one of those channels that you ought to test. From leveraging it organically to running paid social ads, you can generate a positive ROI. The big trick to generating a good return through social media is using your creativity. From wall postings to ads, the top social media campaigns that I see working tend to be the creative ones.