Do you spend hours and hours on your social media, cultivating your followers and gathering new ones? Do you wonder if it’s actually worth it?
Most everyone will tell you there are countless reasons social media is absolutely worth it. But, you might be wondering if everyone says it’s worth it, how they go about proving it.
The best way to measure your social media efforts is with ROI. This term means return on investment. It’s the proof that the money you are spending on social media results in profits for your business.
In this article, we are going to show you how to evaluate the success of your social media. We’ll show you how to prove it’s working. Here are four ways you can measure ROI on social media.
Step #1: Set Your Goals
The most important part of measuring ROI is to set your goals. You need something to actually measure. Ask yourself what you’re trying to accomplish through your various social media platforms and make a list.
Your social media goals can be varied. Here are a few examples of things to measure:
- Increase in new followers
- Increase in reach
- Post engagement
- Post shares
- Website clicks/increased site traffic
- Generate leads
- Sign-Ups (email sign-ups or sign-ups for free downloads)
- Online purchases
- Contest Entries
Whichever goals you choose, they should complement your existing business goals. For example, are you trying to grow your page likes/followers, increase website clicks or increase purchases?
Let’s say you want to increase landing page conversions by a certain percentage point, set a beginning point and monitor the end result using your Google Analytics.
We suggest you measure reach, traffic, leads and conversion rates as a good place to start when evaluating your return on investment.
Step #2: Measure
This is where you decide how you’ll measure your social media engagement and conversions and what tools you’ll use.
Your goals are set, and it’s time to pick your tools for measurement. This often involves pixels, tracking codes, custom landing pages and more.
While platforms such as Facebook and Twitter provide robust analytics, you’ll also want to use your Google Analytics to track web traffic, sign-ups and landing page conversions.
The Google Analytics URL builder is a great way to track direct website links. Using this allows you to dig deeper on campaigns and learn exactly how many people visited your landing page through social media.
Step #3: Calculate Your ROI
Now it’s time to get into the real dollars and cents of measuring your ROI on social media. Here are a few things to consider:
- The Lifetime Value of your customer – what are they worth to you in a dollar amount. Here’s a handy calculator to help: Get calculator
- The Lifetime Value multiplied by the conversion rate is how much is each potential website visit worth to you.
- The average purchase price made online.
Be sure to account for labor costs, advertising spend and the cost of your advertising tools when figuring out your real dollar amounts.
If you know the Lifetime Value of your customer, you can determine the ROI. For example, if you know that amount is $200, and you know that for each eBook you offer, 1 in 20 people who request it will become your customer, then the value of getting a customer to that video is $10.
Step #4: Create Reports
The final step involves creating reports so you can monitor your results. Reports help you create a baseline for future social media ROI tracking.
You’ll want to evaluate your results and see if they met your goals. If they didn’t, why not? If they exceeded them, note what worked well. Be sure and set up a regular reporting schedule so you don’t fall behind in monitoring.
Regular monitoring allows you to adjust campaigns (especially important if you are A/B testing) for the best results.
Not only is it important to measure ROI on social media so you can prove that your efforts are worth it, but it’s important to increase their worthiness over time. Continual monitoring and adjustments will improve your campaigns and increase your return on investment.
Would you like to increase the ROI on your social media? Are you ready to leverage social media in your overall business goals? We are here for you. We can help you grow your following and increase your ROI.
We take social media posting very seriously as a way to create loyal followers, increase engagement and provide a valuable return on investment. Learn more about our services and how we can create engaging content that your customers will enjoy and appreciate.
Image: Simon Cunningham