A 5-Minute Guide to Social Media ROI

Are your social media efforts worthwhile? A surprising number of companies don’t know: a survey from Convince & Convert found that 41% of companies have no idea if their social media efforts are paying off.[1]

Like all of your marketing efforts, the ultimate goals of social media activity are to attract and convert potential customers, then maintain those relationships. Gaining insight into your social media ROI can help you redistribute time, headcount, and resources to concentrate on more successful campaigns.

If you can articulate your social media ROI, you can demonstrate your value to the bottom line. Social media analytics reinforces the importance of social to your company, and establishes it as a central business strategy instead of a creative sideshow.

The latest CMO survey estimates that social media budgets will double by 2023.[2] Make sure you’re getting enough bang for your buck with goal-oriented content and data-driven strategy.

1. Evaluate the cost of each social media campaign. In addition to the budget spent on paid ads, this should include man-hours spent creating, publishing, and developing content, as well as the cost of any platforms like used to coordinate these posts.

2. Establish benchmarks to understand how your posts are currently performing and evaluate future posts in comparison. Record current website statistics, customer satisfaction rankings, such as the number of stars on Google or any relevant platforms, and the number of followers and average engagements for each social media platform.

With an accurate picture of where you stand, you can set reasonable goals and choose metrics for future campaigns.

3. Choose goals and metrics that matter to your bottom line. One of the major struggles with social media marketing, according to Altimeter, is an inability to connect social media to business outcomes.[3] Plan ahead to ensure that the goals, content, and metrics for each campaign are all in harmony. Do you want viewers to download an eBook? To sign up for your email list? Or to make a purchase?

Volume metrics, sometimes dismissed as “vanity metrics,” refer to audience statistics, number of followers and reach. While not directly tied to sales, these metrics are most useful to evaluate customers at the beginning of the buyer’s journey, when you’re hoping to make more people aware of your company and your offerings.

On their own, though, these metrics don’t give you a complete picture of the success of your social media campaigns — you know how many people are in your audience, but not how actively engaged they are with your brand. An account might have a lot of followers, for example, but without regular content to catch their interest, this potential audience doesn’t matter.

Engagement metrics can help you determine if you’re attracting quality leads that are a good fit for your business. These figures demonstrate relevancy and quality of content. Engagement metrics give you an accurate picture of how much your content connects with your audience, and what fraction of your overall audience is most interested and connected to your product offerings.

Lead generation and conversion metrics most clearly help you identify content that is moving customers further down the funnel and enticing them to purchase. Except for purely educational or entertaining posts, like Throwback Thursday posts, most social media posts should link back to your website and engage customers more deeply with your brand. Create unique URLs and custom landing pages for each social media campaign to track where traffic is coming from. Google Analytics allows you to measure sales and signups by URL with their goal tracking tool.

According to B2B and Marketscan, only 32% of marketers have a data-first strategy.[4] It can be difficult, after the fact, to go back and track a campaign’s success; build measurement into your campaign from the beginning with Google Analytics.

4. Calculate your ROI.

With some existing data, you can estimate a monetary value for each conversion. The lifetime value of a customer accounts for the purchases they’ll make over the course of their relationship with your company. For example, if a telecommunications company offers a package that costs $50 a month and the average customer uses the service for two years, the lifetime value would be $1,200.

Multiply the lifetime value by the conversion rate to estimate the value of each conversion. If the same telecommunications company converts one out of every hundred email subscribers, the value of each conversion would be $12.

For organic posts, another metric for conversion value is to compare it to the cost of paid social. How much would you have to pay for each of these clicks if they were on a sponsored post or campaign?

5. Analyze data to refine and perfect your strategy.

By measuring your ROI, you can effectively test specific changes, like focusing on Instagram or posting only certain types of content. A data-driven approach gives you quantifiable results that can help you adjust your strategy and maximize the impact of your marketing budget.

Social media is an amazing listening tool, so make sure you’re also using Twitter, Facebook, and LinkedIn to eavesdrop on what your customers are talking about. Engage in real-time conversation with customers to keep fostering those relationships. See what your competitors are posting about and identify gaps in their—and your—content strategy. With a heightened understanding of your audience, you can deliver more effective content with a measurable impact on your bottom line.

[1] http://www.convinceandconvert.com/social-media-measurement/not-tracking-social-media-roi-is-your-fault/

[2] https://cmosurvey.org/wp-content/uploads/sites/15/2017/08/The_CMO_Survey-Highlights_and_Insights-Aug-2017.pdf

[3] http://www.slideshare.net/Altimeter/the-social-media-roi-cookbook

[4] https://www.marketo.com/ebooks/measure-the-roi-of-your-social-media-campaigns/