Measuring Social Media Marketing ROI

We recently read a step by step guide on how to make more of your business’ social media on SproutSocial. We think it is a great atricle so here’s a summary on what was covered in the guide.

Background

Nowadays it is undeniable that social media is not only for private users. It has become essential for every business. Facebook business pages and Ads, Instagram influencers, LinkedIn content and so much more.

Nonetheless, most companies invest more and more in social media and seem not to get the results they’re hoping for. In fact, measuring the Return on Investment of social media is the number one challenge in social media marketing according to Sprout Social’s Index 2018.

Four Tips to make more of your Investment

Not everything you do on social media is or should be about sales. It needs to also be about connection. Here’s 4 tips to make more of the time you investment in social media.

1. Find your WHY of social media

There are great reasons to go social are brand awareness, customer service and lead generation. Social media is a very good tool to remind your buyers that you’re there and what you stand for.

Giving feedback on social media is so much easier than filling out a form on a website, email or google. That’s why going social with your customer service will take it to the next level. Not only will it be easier for your customers to get in touch with you, communication will be much quicker and they will feel like they’re getting the attention they deserve from you. And they will reward you for it.

Last but not least there is, of course, paid ads and in this case it makes sense to not throw the money away like freebies.

Bottom line, it doesn’t matter what you decide to do on social media you just have to make sure you know why you’re doing it and how it affects your ROI (that is not always measured in money).

2. Set goals

This shouldn’t be any news but I’ll say it anyway - in order to be able to measure where you’re standing you need to define and track some metrics. With social media it makes sense to have engagement goals for example likes or commennts but it is just as important to set and track results goals like clicks and conversions. This enables you to see if your social media efforts pay off and gives you deeper insights than just measuring user’s engagement.

You should be able to see if someone becomes a customer or not by tracing back their clicks using specific links or URL trackers for every campaign or promo. This is a powerful way to optimise your social traffic and get a better understanding of what your audience engages with, how they interact with your content and what works best for them to buy your product or service.

So don’t only set an engagement goal, set results goals as well.

3. Measure your goals

The most powerful tool to track is Google Analytics. I know the options with Google Analytics can be overwhelming but here is a blog post to get you started with the basics.

Once you've got the basics sorted, set your goals in the “Conversion” tab. This gives you the opportunity to measure with minimum effort. So, you can estimate exactly how much you’ve earned from each conversion, then calculate what the lifetime value of a customer is, measure how much the average sale is worth and so much more.

Analytics

4. Track your social media expenses

When you do paid social media you need to know if it’s worth your investment. And there are four things to consider.

  • Time: Whether you do it yourself or have someone to do it, setting up social media can be time consuming.

  • Content: Sometimes it seems easier to get content created by a professional. If you do that, remember to calculate it in your ROI. If you create the content yourself, count it as a time investment.

  • Tools: While  Facebook and Instagram posts are free you still have to pay for certain tools that help you organise your social media. Again, remember to calculate the costs campaign-wise and not per year.

  • Ad costs: Finally, calculate the budget you spend on ads.

Now, here’s an easy formula to calculate your actual spending, considering all the items above:

  • (Earnings-costs) x 100 / costs

  • Earnings is everything you calculated with your measurements,

  • Costs is what’s listed above (time etc.).

Now, if you use that formula for all the platforms you use it will help you figure out which ones are performing well and then focus on these instead of doing all.

Three final tips

Although Google Analytics is the tool that covers most of what you need, don’t forget to study social media dashboards for a deeper insight of which content gets most engagement. Focus on similarities and use it when you plan your next move.

Whenever you’re not sure about a piece of content, run a test campaign. It makes sure you get the result you wanted before actually spending money on it.

If necessary use a tool to measure your social media performance such as SproutSocial, Buffer or Hootsuite etc. These will also help you break down your ROI calculation. 

 

Summary

Being on social media can be overwhelming but with the right mindset and strategies it can be great for your business. So, before starting on doing whatever comes to your mind, take a minute and step back, think about why you are going social and what you want to achieve. Measure the output and calculate your ROI to stay on track and get the maximum of your social media marketing. 

Not sure?

If you need to revisit or create a social media strategy or need someone to cast an independent eye over your marketing or sales strategies, we'd love to help to make this happen for your business. You can reach us on (02) 9125 0520 or visit our website. 

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Kym Heffernan

Kym Heffernan

Kym works with Businesses and Professional Practices through The Marketing Strategy Company, to increase their revenues through analysing, improving and optimising their marketing and sales activities.

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