A few weeks ago we talked about how to review social media metrics. As stated in our post, metrics are “the data you gather and use to measure the performance of your social media campaigns and what that means for your company’s bottom line. Metrics help you determine whether the time you’re spending on social media marketing is paying off as far as your company’s ROI.” And ROI—return on investment—is what we’re talking about today.
Social media ROI is, basically speaking, the return (whether in new leads or actual dollars) you get from the effort (from paying a social media manager or consultant to running an ad campaign) you’ve put into your social media marketing.
What to Measure
Think metrics, ROI, and social media marketing is a bit confusing? You’re not alone. One of the reasons social media measuring can be so convoluted is that social media isn’t always attached to or measured by revenue. How can you tell if that awesomely worded and exactly 140-character tweet earned your company a few dollars? You can’t—not necessarily. But that’s why measuring your social media efforts from different angles is important.
As we stated in our post on metrics, social media is more than an advertising campaign. It’s a place to build brand awareness, to enhance customer service, and to boost public relations. So, although you can’t necessarily state for a fact that your specific tweet gave your company X amount of dollars, you can tie it to how much awareness was raised about your company, which led to more visits to your site, which turned into email sign-ups or product purchases.
If your goal is to increase brand awareness, and you’re measuring that by engagement on a certain post, then the return would be X number of shares or retweets. But if your goal is to obtain a certain number of downloads on a free product, you’d measure that by tracking how many clicks to download came from the link on your post, and the return would be based on how many downloads you achieved.
Seem like an obvious question, but it’s actually not as simple as you might think. Of course, you want to ensure that the money and/or time you’re putting toward building your business has a favorable ROI. But why, specifically, do you want to measure social media efforts? Think of it this way: you wouldn’t pay for an ad (either through a social media platform or through another outlet, such as a television ad, billboard, or sponsorship) and then not review how that ad is performing. You want to carefully track your social media activities—which platforms, posts, and campaigns are making the most impact—to know where to best focus your efforts. You don’t want to waste time on platforms your target audience isn’t active on. (Not sure where your audience is? This infographic gives you a few details about each platform and what kinds of audiences are hanging out on them.)
Still feeling a bit murky in navigating these social media waters? To help set your social media ship on the right course, here are a few basic steps for measuring your ROI.
Social Media Objectives
First, you need to have an objective. Do you want to raise brand awareness by increasing exposure, or do you want to increase traffic to your site? Are you hoping to get new followers or generate engagement with current followers?
Here are a few more ideas:
- Generate leads
- Improve sales
- Retain current followers
- Improve customer relationships
- Establish authority in your field
Social Media Goals
Once you have your objectives, you’ll need to set specific goals for those objectives. How many leads do you hope to get? Do you hope to sell a certain amount of a product during the first week of its launch? What about increasing newsletter sign-ups with expert blog content? Whatever your goals, be sure to link them to a specific campaign, aka social media activities based around a particular product or event.
For example, if you have an upcoming trade show, why not plan a social media campaign to let followers know you’ll be in attendance—and on the flip-side, to let the trade show’s followers know you’ll be there so they can get to know you better. Perhaps you’re offering a free sample of your product to the first fifty people who sign up for your pre-show demo session. You’d run your social media post and then determine how many people signed up for the session via that post. By using a social media measuring tool (we’ll talk more about tools in part 2 of this blog series), you can track the individual links you share on your social media platforms. You can also see where you are receiving the most clicks. Remember how we said that measuring social media can help you understand where your audience is? There they are!
And remember how not all social media are measured by revenue? If your objective is to raise brand awareness, one of your goals could be to have fifty shares of a blog post you crafted to introduce newcomers to your business. You’d measure this by audience reach and engagement with your social media posts, not in dollars and cents. However, do keep in mind that your goals should be based on actions that convert a browser to a lead—and then to a paying customer.
Think S.M.A.R.T. when planning objectives and goals.
S: Be specific in what you want to achieve. If you’re too general, it will be almost impossible to measure ROI.
M: Create measurable goals where you can see the results of your efforts.
A: Specific and measurable tie in with achievable, because you want to set goals that are challenging (otherwise your business can’t grow) but can be reasonably attained.
R: Your goals should be results-focused, not activity-focused. If you set a goal to post three times daily and you did it, well done! But what was the result? Did you gain new followers, which would indicate brand awareness?
T: Give your goals a time base. You can create a social media campaign to encourage a certain number of newsletter sign-ups, but within what timeframe? Within six months? Before a trade show or podcast? Be sure to set a time to measure the success of a campaign or else measuring it will be impossible.
Tools and Tips
Now that you know why you need to measure your ROI and how to set goals and objectives, you’ll need to know what the best tools and tips for measuring and tracking it are. We’ll be covering all of that in part 2 of this series. Stay tuned, but in the meantime, please share the ways you measure your social media ROI in the comments below!