It’s easy to get caught up in the hype of social media marketing, but like all other marketing strategies, it’s important to understand your ROI for these efforts. Which brings us to the question most marketers are asking: How do you determine the ROI of all your social media efforts?
There is no exact formula to calculate ROI on social media. However, there are certain metrics that can be implemented and modified for your business. Social media success should not be determined solely by the amount of Facebook page likes, Twitter followers, or connections you have. These numbers need to be analyzed in order to determine a more accurate ROI. Below are some metrics to consider when determining your social media ROI:
Measure Social Media Networks Together and Separately – Every social media network should be looked at separately. You may find that each social media network has its own set of strengths. For example, Facebook might drive the most traffic to your website but the quality of traffic from LinkedIn is much greater. Breaking down each network will allow you to determine which networks are helping you to reach specific marketing goals and which are not.
Measure Interactions-to-Users – Evaluate the number of interactions on your social media network per users (followers, likes, subscribers, etc.). Tracking interactions rather than the amount of users helps you to determine the significance of your social media community. Having over 5,000 followers on Twitter sounds great but if only 5 of those followers are interacting with your page it’s not going to do you much good. When it comes to social media marketing it is just as important to have consistent engagement.
Total interactions can easily be calculated on Facebook through the ‘Insights’ tab, but calculating interactions on other social media platforms may be more time consuming. For example to calculating interactions on Twitter requires you to add up the total number of times your business was re-tweeted, mentioned, included in a hashtag, and added as a favorite tweet within a specified period of time. With any social media platform, it is important to first determine what you consider to be an interaction for each network.
Visit-to-Lead Conversion and Lead-to-Customer Conversion – Social media helps to drive traffic to your website, but traffic does not necessarily mean business. Therefore you should track how many of your website’s visitors, coming from each social media network, convert into a lead. It is important to know how much of a role social media plays in your companies lead generation. Once you know how many leads are generated from each social media network the next step is to measure how many of those leads turn into customers. The lead-to-customer conversion will help you to determine the quality of leads generated from each social media network as well as the cost to acquire these leads.
Monitor Site Behaviors from Social Media Traffic – Traffic from social media networks should be analyzed to determine where the leads enter, leave, and spend time on your website. By studying your traffics behavior you can better determine what type of content best addresses their specific needs. It is important to understand where your social media website visitors are in the buying cycle when they visit your website.
Marketers are often faced with the challenge of the justifying the time and money spent on social media marketing. Tracking and evaluating these metrics gives marketers the ability to determine whether or not their social media marketing efforts generate new business.