One of the biggest challenges social media marketers face is measuring ROI. While there are tons of metrics that you can use to gauge performance such as page fans, “likes” on posts, and other vanity metrics, it gets a bit trickier when you’re trying to define sales attribution and social media referrals. Like social media strategies, there really isn’t a one-size fits all way to measure ROI, but here are 5 steps that will help you understand what to look at when you’re trying to figure out how effective your social media efforts are in helping you towards reaching your broader marketing goals.
Establish your KPIs
Your key performance indicators will vary largely upon what your objectives are for your social media efforts. Are you using social to create brand awareness and build relationships with your customers and fan base? Or perhaps you’re using social as part of a larger sales funnel where you are trying to get users to convert by purchasing a product or service from your website. Either way, your KPIs will serve as benchmarks for performance. Some examples of KPI focus points are:
- Engagement: Tracking clicks, likes, shares, comments, tags (brand mentions), and profile visits.
- Reach: Tracking impressions (how many people saw your post/ how far your message is going) and traffic data (the number of people visiting your website from social media) are extremely useful in gauging effectiveness as well.
- Leads: Tracking of how many of your page fans are actually interested in purchasing your product or service.
- Customers: Tracking customer acquisition. Which social sites are bringing in new customers?
Make sure your social media goals align with your overall business objectives
In order for you to measure the effectiveness of your social media efforts, you have to be clear about what you’re trying to accomplish. If your social media presence is set to establish brand awareness and increase product consideration, then you would want to track metrics like tags, fans, and impressions. If you’re looking at sales as a KPI, you will want to pay attention to traffic data or email sign-ups.
Start tracking conversions
If your social media goal is to get social followers to your website for a desired action (signups, contact forms, purchases, etc.) then you should be tracking how often this is happening. A social conversion is simply when a person on a social media site performs your desired action, commonly your all to action (CTA). Most businesses do this is through Google Analytics which is free to use and very simple to set up. Additionally, Google Analytics allows you to easily see where all of your website traffic is coming from and will help you decided where to budget your time and ad spend.
Establish a monetary value for what your KPIs are worth
We suggest starting with finding out what you Customer Lifetime Value is. This is a monetary measurement that represents how much you earn, on average, from a customer. Understanding how much each customer is worth helps you understand how much to spend in acquiring and retaining them. If it costs you $40 to get a customer to buy a $20 product or service then you’re spending too much on acquisition. But if it costs you $40 to get a customer to buy a $120 product or service you’re on the right track.
See what your competition is up to
In this case, comparison is not the thief of joy, but rather a way to discover new opportunities for your own social media marketing efforts. Is your competition excelling on certain platforms with your target audience? Use this information to tweak your social strategy so that your efforts are more impactful. Learning from what works and what doesn’t work for your competition will help you establish what you can do to be successful on social for your own company.