It is important to get clear metrics on your social media return on investment (ROI). Don’t let people fool you into believing that social media is optional and not measurable. Social media gives you the largest audience you desire and should be a key component of your business strategy. You have to measure the effect of ROI after adoption to confirm that your marketing efforts are working.
Brands that don’t measure ROI do so because they find it difficult keeping up with changes in algorithms and implementing the new tools that hit the marketplace.
These 5 steps will simplify measuring your social media ROI.
1. Set Social Media Goals. ROI can be measured in a variety of ways: through customer acquisition, lead generation, clicks, revenue, contest entries, etc. It all depends on your goals. Before you can track and measure your ROI, you need to determine your goals, so you know which factors you ’re, and what success looks like. Reach, traffic, leads, customers and conversion rate are the metrics Pamela Vaughan on HubSpot suggests you consider determining social media marketing success.
2. Determine the Right Platforms. Your social media goals and resulting strategies must align with your platforms. Some fan bases are primarily on Twitter, others on Facebook, Pinterest or Instagram. Find where your audience spends their time so you can position your plan to be successful. For your campaign to be meaningful and measurable, the big picture must be broken down into smaller goals. Again, these goals differ based on your overarching KPIs. For businesses looking to map revenue to social media, your social media goals might be product purchases, customer signups or free trials. For companies wanting to track brand awareness, social media goals might be brand mentions, followers or impressions.
3. Set up Google Analytics to track conversions. Knowing the right tool to use is essential in measuring social media ROI. Google Analytics is a free tool that you can use to set up trackable goals and monitor how often visitors complete the actions you define. Your ability to retain and convert your audience depends on how informed you are about their behaviour on your site.
4. Report Findings and assign values to KPI. Reporting your findings is crucial to the social media ROI process. It should be done correctly and consistently. You can choose to do it weekly, monthly, quarterly, yearly or all of the above. Once you have selected your goals and set up your tracking, tackle the monetary value of these goals next. There are several different methods to choose from:
• Lifetime value: How much do you earn from each customer on average?
• Lifetime value multiplied by conversion rate: How much is each possible visit worth to you based on the percentage that converts?
• Average sale: How much is the average purchase through your site?
• PPC valuation: How much would you end up paying if you were to use ads to achieve the same social media results?
Zoomcar, the largest car rental company in India, is an example that helps to illustrate the value of assigning dollar values to KPIs. The company uses social marketing to drive mobile app installs, where users can make a purchase (its key conversion metric). Zoomcar knows that its lifetime value of a customer is $70 and that 40% of its mobile app users make a purchase. Therefore, it knows a mobile app download is worth $28 and can strategise accordingly.
5. Benchmark against your competitors. Benchmarking is a good practice to keep your firm in the marketplace. Compare your social media efforts to your competitors, and you can uncover areas of opportunity for your organisation to stand out and be heard through the noise. Learn what platforms are most successful in reaching your targeted audience. Learn how many posts competitors are publishing per day so you can see what works.