Three Simple Steps to Measure Social Media ROI
Business owners are acutely aware of their return on investment in any endeavor, yet in a white paper published by Adobe, 52% of marketing managers expressed frustration at the lack of ROI for their social media campaigns. Most companies today recognize the importance of having a presence on social media websites, but few are confident in their ability to track their returns against the time and money spent on social media promotional activities.
Calculating the ROI on social media activities isn't rocket science. By taking a few simple, basic business steps, and tracking easily accessible metrics, you company can gain greater confidence in its return on investment in social media campaigns, promotions and activities.
Step 1: Establish Baseline Metrics
If you wanted to lose weight, you'd need to know your starting weight so you could compare subsequent measurements against your starting numbers. The same goes for marketing campaigns, including social media campaigns. In order to measure change, you need to know your baseline numbers.
Several metrics are gleaned from your social media platforms. These include:
- Number of followers or fans.
- Number of posts you made that month.
- Number of interactions.
Other metrics are taken from your website data, such as:
- Overall visitors per month.
- How many visitors arrived from a specific social media link.
- Content they visited.
- Conversions to sales.
Step 2: Launch A Measurable Marketing Campaign
Direct marketers have been using this trick for decades, and it's easily applied to social media sites, too. Run unique coupons, sales or special offers that are only accessible from your social media site. Every time a customer clicks that unique link to download the coupon or special offer, you can track it. Every time they actually purchase something and use the coupon or special offer, you can track and measure that, too. It's a simple yet highly effective way to directly measure social media's impact on overall sales.
One caveat to the above: make sure that you run different sales on each social media platform, or include a separate, unique link, if you have multiple social media website presences. If you don't, you won't be able to separate out which leads came from which social media site. You may want to dig deeper into the data to see where to invest more time in the future in your social media marketing. The sites that get the best response rates are the sites where you have the most potential for future ROI.
Step 3: Quantify And Evaluate Impact On Website Traffic
Another area to assess the ROI of social media platforms is on your overall website traffic. Social media is great for generating inbound links and interaction with a company's website if it is done well. Review your website statistics to see which social media site generates the most click-throughs. Other clues may be sudden upticks in traffic to your company website after a particularly intensive engagement on a social media platform, or keyword searches rising on your site after you mention a specific product, brand or concept on your social media platform.
Websites And Software Tools To Measure Social Media's Impact
As social media marketing evolves, new software tools provide additional insights and data into social media ROI.
- Klout is a social media monitoring tool that can be used to assess influence. The "Klout Score" measures how much influence you have across various platforms, which posts were most effective, and more. A basic Klout account is free.
- HootSuite is another online tool for social media monitoring. It enables companies to schedule posts in advance and monitor their effectiveness. A basic account is free, but there are nominal fees for additional setups and advanced reporting.
- Individual social media website reporting: Facebook, Twitter and Google+ all provide analytics for clients. Look into free reporting tools available on each social media website your company engages in to see what tools and resources are already available.
It takes time and effort to monitor your businesses' social media platforms and interact with customers. But social media is here to stay. What was once a 'nice to have' is now a necessity for most businesses. Fortunately, as social media has evolved, so too has the ability to track and measure the return on investment for each platform. By taking simple steps to begin measuring your company's social media ROI, you can gain valuable insights into effective future marketing steps.
Image by LendingMemo.com. Licensed under Flickr Creative Commons